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AGREEMENT AND PLAN OF MERGER
among
XXXXX XXXXXX XXXXXXXXXXXX,
XXXXX XXXXXX MISSOURI, INC.,
XXXXX XXXXXX DELAWARE, INC.,
PETROLITE CORPORATION,
and
WM. X. XXXXXXXXX & COMPANY
Dated as of February 25, 1997
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TABLE OF CONTENTS
Page
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1. The Mergers 2
1.1. The Mergers 2
1.2. The Closing 2
1.3. Effective Times 2
2. Charter and Bylaws of the Surviving Corporations 3
2.1. Charter 3
2.2. Bylaws 3
3. Directors and Officers of the Surviving Corporations 3
3.1. Directors 3
3.2. Officers 3
4. Conversion of the Common Stock 4
4.1. Certain Definitions 4
4.2. Conversion of the Xxxxxxxxx Stock 5
4.3. Conversion of the Company Stock 6
4.4. Exchange of Certificates Representing Xxxxxxxxx
Common Stock and Company Common Stock 8
4.5. Adjustment of Company Share Value 10
4.6. Dissenting Stockholders 10
5. Representations and Warranties of the Company 11
5.1. Existence; Good Standing; Corporate Authority 11
5.2. Authorization, Validity and Effect of Agreements 12
5.3. Capitalization 12
5.4. Subsidiaries 12
5.5. No Violation of Law 13
5.6. No Conflict 13
5.7. SEC Documents 14
5.8. Litigation 14
5.9. Absence of Certain Changes 15
5.10. Taxes 15
5.11. Employee Benefit Plans 16
5.12. Labor Matters 17
5.13. Environmental Matters 17
5.14. Trademarks, Patents and Copyrights 17
5.15. Insurance 18
5.16. No Brokers 18
5.17. Opinion of Financial Advisor 18
5.18. Parent Stock Ownership 18
5.19. Reorganization 19
5.20. Vote Required 19
5.21. Amendment to the Company Rights Agreement 19
6. Representations and Warranties of Xxxxxxxxx 19
(i)
3
6.1. Existence; Good Standing; Corporate Authority 19
6.2. Authorization, Validity and Effect of Agreements 20
6.3. Capitalization 20
6.4. Subsidiaries 20
6.5. No Violation of Law 20
6.6. No Conflict 20
6.7. Financial Statements 21
6.8. Litigation 21
6.9. Absence of Certain Changes 21
6.10. Taxes 22
6.11. Employee Benefit Plans 22
6.12. Labor Matters 23
6.13. Environmental Matters 24
6.14. Trademarks, Patents and Copyrights 24
6.15. Insurance 24
6.16. No Brokers 24
6.17. Opinion of Financial Advisor 25
6.18. Parent Stock Ownership 25
6.19. Reorganization 25
6.20. Vote Required 25
7. Representations and Warranties of Parent, Merger Sub and
Merger Grandsub 25
7.1. Existence; Good Standing; Corporate Authority 25
7.2. Authorization, Validity and Effect of Agreements 26
7.3. Capitalization 26
7.4. Subsidiaries 26
7.5. No Violation of Law 27
7.6. No Conflict 27
7.7. SEC Documents 27
7.8. Litigation 28
7.9. Absence of Certain Changes 28
7.10. Taxes 28
7.11. Employee Benefit Plans 29
7.12. Environmental Matters 30
7.13. Trademarks, Patents and Copyrights 31
7.14. Insurance 31
7.15. No Brokers 31
7.16. Opinion of Financial Advisor 31
7.17. Xxxxxxxxx and Company Stock Ownership 31
7.18. Reorganization 31
7.19 Vote Required 31
8. Covenants 32
8.1. Acquisition Proposals 32
8.2. Conduct of the Company and Xxxxxxxxx'x Businesses 33
8.2A Conduct of Parent's Business 35
8.3. Meetings of Stockholders 36
8.4. Filings; Other Action 37
8.5. Inspection of Records 38
(ii)
4
8.6. Publicity 38
8.7. Registration Statement 38
8.8. Listing Application 39
8.9. Letters of Accountants 39
8.10. Agreements of Rule 145 Affiliates 40
8.11. Expenses 40
8.12. Indemnification and Insurance 41
8.13. Certain Benefits 42
8.14. Reorganization; Pooling 45
8.15. Certain Tax Agreements 45
8.16. Obligations of Merger Sub and Merger Grandsub 45
8.17. Rights Agreement 46
8.18. Mutuality of Mergers 46
9. Conditions 46
9.1. Conditions to Each Party's Obligation to Effect
the Mergers 46
9.2. Conditions to Obligation of the Company to Effect
the Company Merger 47
9.3. Conditions to Obligation of Xxxxxxxxx to Effect
the Xxxxxxxxx Merger 48
9.4. Conditions to Obligation of Parent, Merger Sub and
Merger Grandsub to Effect the Mergers 48
10. Termination 49
10.1. Termination by Mutual Consent 49
10.2. Termination by Parent, Xxxxxxxxx or the Company 49
10.3. Termination by the Company 50
10.4. Termination by Xxxxxxxxx 51
10.5. Termination by Parent 51
10.6. Effect of Termination 52
10.7. Extension; Waiver 54
11. General Provisions 55
11.1. Nonsurvival of Representations, Warranties and
Agreements 55
11.2. Notices 55
11.3. Assignment; Binding Effect; Benefit 56
11.4. Entire Agreement 57
11.5. Amendments 57
11.6. Governing Law 57
11.7. Counterparts 57
11.8. Headings 58
11.9. Interpretation 58
11.10. Waivers 58
11.11. Incorporation of Exhibits 58
11.12. Severability 58
11.13. Enforcement of Agreement 58
11.14. Obligation of Parent 58
11.15. Subsidiaries 59
(iii)
5
Exhibits
A. Form of Custodial Agreement (Sec. 1.2)
B. Form of Certificate of the Company
C. Form of Certificate of Xxxxxxxxx
D. Form of Certificate of Parent
(iv)
6
INDEX OF DEFINED TERMS
(Not Part of This Agreement)
1987 Plan Section 4.3(e)(i)
0000 Xxxx Xxxxxxx 4.3(e)(i)
Acquisition Proposals Section 8.1
Action Section 8.12(a)
Additional Xxxxx Assets Section 4.1(b)
Affiliates Section 8.10(a)
Agreement Preamble
Antitrust Laws Section 10.6(d)
Articles of Merger Section 1.3(a)
Benefit Continuation Period Section 8.13(a)
Xxxxx Preamble
Xxxxx Acquisition Proposal Section 8.1
Xxxxx Benefit Plans Section 6.11
Xxxxx Certificate Section 4.2(c)
Xxxxx Common Stock Section 4.2(b)
Xxxxx Disclosure Letter Section 6
Xxxxx Effective Time Section 1.3(a)
Xxxxx Estimate Section 4.1(b)(v)
Xxxxx Exchange Ratio Section 4.1(e)
Xxxxx Financial Statements Section 6.7
Xxxxx Material Adverse Effect Section 6.1
Xxxxx Merger Recitals
Xxxxx Share Value Section 4.1(a)
Xxxxx Surviving Corporation Section 1.1(a)
Xxxxx Value Section 4.1(b)
Cause Section 8.13(b)(ii)
Certificate of Merger Section 1.3(b)
Certificates Section 4.4(b)(i)
Closing Section 1.2
Closing Date Section 1.2
Code Recitals
Company Preamble
Company Acquisition Proposal Section 8.1
Company Benefit Plans Section 5.11
Company CEO Section 8.13(b)(ii)
Company Certificate Section 4.3(c)
Company Common Stock Section 4.3(b)
Company Disclosure Letter Section 5
Company Effective Time Section 1.3(b)
Company Employees Section 8.13(d)
Company Exchange Ratio Section 4.1(f)
Company Material Adverse Effect Section 5.1
Company Merger Recitals
Company Option Section 4.3(e)(i)
Company Options Section 4.3(e)(i)
Company Permits Section 5.5
Company Reports Section 5.7
Company Rights Section 5.3
Company Rights Agreement Section 5.3
Company Share Value Section 4.1(c)
(v)
7
Company Stock Options Plan Section 4.3(e)(i)
Company's Expenses Section 8.13(b)(i)
Confidentiality Agreements Section 11.4
Continuity Custodian Section 1.2
Continuity Fraction Section 4.4(b)
Custodial Agreement Section 1.2
Delaware Courts Section 11.6
DGCL Section 1.1(b)
Dissenting Stockholders Section 4.6(a)
Environmental Law Section 5.13(a)
ERISA Section 5.11
Exchange Act Section 5.6(b)
Exchange Agent Section 4.4(a)
Exchange Fund Section 4.4(a)
Executive and Employment Agreements Section 8.13(a)
Form S-4 Section 8.7(a)
HSR Act Section 5.6(b)
Incentive Plans Section 8.13(b)
Indemnified Parties Section 8.12(a)
Indemnified Party Section 8.12(a)
Injunction Section 9.4(c)
Interim Bonus Percentage Section 8.13(b)(ii)
IRS Section 5.11
Letter of Transmittal Section 4.4(b)(i)
Liens Section 5.4
Merger Grandsub Preamble
Merger Sub Preamble
Mergers Recitals
MGBCL Section 1.1(a)
NYSE Section 4.1(d)
Parent Preamble
Parent Benefit Plans Section 7.11
Parent Common Stock Section 4.2(b)
Parent Material Adverse Effect Section 7.1
Parent Preferred Stock Section 7.3
Parent Pricing Period Section 4.1(d)
Parent Reports Section 7.7
Parent Share Value Section 4.1(d)
Price Waterhouse Section 8.9(a)
Proxy Statement/Prospectus Section 8.7(a)
Regulatory Filings Section 5.6(b)
retained earnings Section 5.7
Rule 145 Affiliates Section 8.10
SEC Section 4.3(e)(ii)
Securities Act Section 4.4(d)
Subsidiary Section 11.15
Surviving Corporation Section 1.1(b)
tax Section 5.10
taxes Section 5.10
Third Party Provisions Section 11.3
Transaction Expenses Section 10.6(c)(iii)
(vi)
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of February
25, 1997 among Xxxxx Xxxxxx Incorporated, a Delaware corporation ("Parent"),
Xxxxx Xxxxxx Missouri, Inc., a Missouri corporation and a wholly owned
subsidiary of Parent ("Merger Sub"), Xxxxx Xxxxxx Delaware, Inc., a Delaware
corporation and a wholly owned subsidiary of Merger Sub ("Merger Grandsub"),
Petrolite Corporation, a Delaware corporation (the "Company") and Wm. X.
Xxxxxxxxx & Company, a Missouri corporation ("Xxxxxxxxx").
RECITALS
WHEREAS, Parent desires to acquire all of the outstanding capital stock
of the Company.
WHEREAS, Xxxxxxxxx holds approximately 47.1% of the outstanding Company
Common Stock (as defined in Section 4.3(b)) and certain other assets that
Parent desires to acquire.
WHEREAS, the parties hereto desire to merge Merger Sub with and into
Xxxxxxxxx (the "Xxxxxxxxx Merger"), with Xxxxxxxxx surviving as a wholly
owned subsidiary of Parent, pursuant to which each share of Xxxxxxxxx Common
Stock (as defined in Section 4.2(b)) will be converted into the right to
receive Parent Common Stock (as defined in Section 4.2(b)), and then to merge
Merger Grandsub with and into Company (the "Company Merger", and together
with the Xxxxxxxxx Merger, the "Mergers"), with the Company surviving as a
wholly owned subsidiary of Xxxxxxxxx, pursuant to which each share of Company
Common Stock will be converted into the right to receive Parent Common Stock,
in each case, as more fully provided for herein.
WHEREAS, the respective Boards of Directors of Parent, Merger Sub,
Merger Grandsub, the Company and Xxxxxxxxx have determined the Mergers, in
the manner contemplated herein, to be desirable and in the best interests of
their respective corporations and stockholders and, by resolutions duly
adopted, have approved and adopted this Agreement.
WHEREAS, it is intended that the Mergers provided for herein shall
qualify as reorganizations within the meaning of section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), for federal income
tax purposes.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE 1
1. The Mergers.
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1.1. The Mergers. (a) Subject to the terms and conditions of this
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Agreement, at the Xxxxxxxxx Effective Time (as defined in Section 1.3(a)),
Merger Sub shall be merged with and into Xxxxxxxxx in accordance with this
Agreement, and the separate corporate existence of Merger Sub shall thereupon
cease. Xxxxxxxxx shall be the surviving corporation in the Xxxxxxxxx Merger
(sometimes hereinafter referred to as the "Xxxxxxxxx Surviving Corporation").
The Xxxxxxxxx Merger shall have the effects specified in the General and
Business Corporation Law of the State of Missouri (the "MGBCL").
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(b) Subject to the terms and conditions of this Agreement,
at the Company Effective Time (as defined in Section 1.3(b)), Merger Grandsub
shall be merged with and into the Company in accordance with this Agreement,
and the separate corporate existence of Merger Grandsub shall thereupon cease.
The Company shall be the surviving corporation in the Company Merger
(sometimes hereinafter referred to as the "Surviving Corporation"). The
Company Merger shall have the effects specified in the Delaware General
Corporation Law (the "DGCL").
1.2. The Closing. Subject to the terms and conditions of this
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Agreement, the closing of the Mergers (the "Closing") shall take place (a) at
the offices of Xxxxx & Xxxxx, L.L.P., Xxx Xxxxx Xxxxx, 000 Xxxxxxxxx,
Xxxxxxx, Xxxxx, at 9:00 a.m., local time, on the first business day
immediately following the day on which the last to be fulfilled or waived of
the conditions set forth in Article 9 (excluding Section 9.2(d)) shall be
fulfilled or waived in accordance herewith or (b) at such other time, date or
place as Parent, Xxxxxxxxx and the Company may agree. The date on which the
Closing occurs is hereinafter referred to as the "Closing Date." At the
Closing, Xxxxxxxxx will enter into an agreement (the "Custodial Agreement")
substantially in the form attached hereto as Exhibit A. The Custodial
Agreement will name a custodian (the "Continuity Custodian") who will hold
shares of Parent Common Stock under the terms of the Custodial Agreement.
Custodial Agreement fees shall be paid by the Xxxxxxxxx Surviving Corporation
out of its own funds and no funds will be supplied, directly or indirectly
(including through Merger Sub), by Parent for payment of such fees.
1.3. Effective Times. (a) If all the conditions to the Xxxxxxxxx
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Merger set forth in Article 9 shall have been fulfilled or waived in
accordance herewith and this Agreement shall not have been terminated in
accordance with Article 10, Parent, Merger Sub and Xxxxxxxxx shall cause
articles of merger (the "Articles of Merger") meeting the requirements of
sections 351.430 and 351.435 of the MGBCL to be properly executed and filed
in accordance with such sections on the Closing Date. The Xxxxxxxxx Merger
shall become effective at the time of filing of the Articles of Merger with
the Secretary of State of the State of Missouri in accordance with the MGBCL
or at such later time which the parties hereto shall have agreed upon and
designated in such filing as the effective time of the Xxxxxxxxx Merger (the
"Xxxxxxxxx Effective Time").
(b) If all the conditions to the Company Merger set forth
in Article 9 shall have been fulfilled or waived in accordance herewith and
this Agreement shall not have been terminated as provided in Article 10,
Parent, Merger Grandsub and the Company shall cause a certificate of merger
(the "Certificate of Merger") meeting the requirements of section 251 of the
DGCL to be properly executed and filed in accordance with such section on the
Closing Date. The Company Merger shall become effective at the time of
filing of the Certificate of Merger with the Secretary of State of the State
of Delaware in accordance with the DGCL, which shall be immediately after the
filing of the Articles of Merger in accordance with Section 1.3(a) hereof, or
at such later time which the parties hereto shall have agreed upon and
designated in such filing as the effective time of the Company Merger (the
"Company Effective Time"), but in any case shall be after the Xxxxxxxxx
Effective Time.
ARTICLE 2
2. Charter and Bylaws of the Surviving Corporations.
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2.1. Charter. (a) The articles of incorporation of Xxxxxxxxx in
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effect immediately prior to the Xxxxxxxxx Effective Time shall be the
articles of incorporation of the Xxxxxxxxx Surviving Corporation, until duly
amended in accordance with applicable law.
(b) The certificate of incorporation of the Company in
effect immediately prior to the Company Effective Time shall be the
certificate of incorporation of the Surviving Corporation, until duly amended
in accordance with applicable law.
2
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2.2. Bylaws. (a) The bylaws of Merger Sub in effect immediately
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prior to the Xxxxxxxxx Effective Time shall be the bylaws of the Xxxxxxxxx
Surviving Corporation, until duly amended in accordance with applicable law.
(b) The bylaws of Merger Grandsub in effect immediately
prior to the Company Effective Time shall be the bylaws of the Surviving
Corporation, until duly amended in accordance with applicable law.
ARTICLE 3
3. Directors and Officers of the Surviving Corporations.
----------------------------------------------------
3.1. Directors. (a) The directors of Merger Sub immediately prior
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to the Xxxxxxxxx Effective Time shall be the directors of the Xxxxxxxxx
Surviving Corporation as of the Xxxxxxxxx Effective Time.
(b) The directors of Merger Grandsub immediately prior to
the Company Effective Time shall be the directors of the Surviving Corporation
as of the Company Effective Time.
3.2. Officers. (a) The officers of the Merger Sub immediately
--------
prior to the Xxxxxxxxx Effective Time shall be the officers of the Xxxxxxxxx
Surviving Corporation as of the Xxxxxxxxx Effective Time.
(b) The officers of the Company immediately prior to the
Company Effective Time shall be the officers of the Surviving Corporation as
of the Company Effective Time.
ARTICLE 4
4. Conversion of the Common Stock.
------------------------------
4.1. Certain Definitions. For purposes of this Article 4, the
-------------------
following terms shall have the following meanings:
(a) "Xxxxxxxxx Share Value" shall mean the Xxxxxxxxx Value
(as defined in Section 4.1(b)) divided by the number of shares of Xxxxxxxxx
Common Stock issued and outstanding at the Xxxxxxxxx Effective Time.
(b) "Xxxxxxxxx Value" shall mean the sum of (x) the product
of the Company Share Value (as defined in Section 4.1(c)) on the Closing Date
multiplied by the number of shares of Company Common Stock owned by Xxxxxxxxx
on the Closing Date (5,337,360 shares as of the date hereof) plus (y) the net
after-tax value of the remainder of Xxxxxxxxx'x assets (the "Additional
Xxxxxxxxx Assets") as of the Closing Date. For purposes of calculating the
net after-tax value referred to in clause (y) of the first sentence of this
Section 4.1(b):
(i) All cash and cash equivalents will be valued at
face value and all investment securities will be valued at their average
closing price for the 10 consecutive trading days ending immediately prior to
the second trading day prior to the Closing Date, as reported on the principal
exchange on which each such investment security trades, less 40% of the
aggregate net taxable gain (taking into account taxable losses only to the
extent of taxable gains) which would have been realized by Xxxxxxxxx were it
to have sold all such assets at such value on the Closing Date.
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(ii) All other assets will be valued at their book
value as recorded on Xxxxxxxxx'x books as of the Closing Date.
(iii) The book value of the liabilities (excluding
deferred income taxes relating to shares of Company Common Stock, cash
equivalents and investment securities) of Xxxxxxxxx as recorded on Xxxxxxxxx'x
books as of the Closing Date (including all fees and expenses of financial,
legal, tax, accounting and other advisors and any compensation to be paid to
directors and officers of Xxxxxxxxx in connection with this Agreement or
otherwise in excess of $950,000) will be deducted from the sum of items (i)
and (ii) above. All calculations made pursuant to this Section 4.1(b) shall
be made in accordance with generally accepted accounting principles, applied
on a consistent basis with prior periods, except as otherwise provided herein.
(iv) No later than five days prior to the scheduled
Closing Date, Xxxxxxxxx shall deliver to Parent a good faith estimate of the
net after-tax value of the Additional Xxxxxxxxx Assets calculated in
accordance with this Section 4.1(b) (the "Xxxxxxxxx Estimate"). Xxxxxxxxx
shall permit Parent's independent public accountants and other representatives
to observe and participate in the preparation of the Xxxxxxxxx Estimate and
agrees to incorporate to the extent appropriate their input into the
determination of the Xxxxxxxxx Estimate. The net after-tax value of the
Additional Xxxxxxxxx Assets referred to in clause (y) of the first sentence of
this Section 4.1(b) shall be based upon the Xxxxxxxxx Estimate, adjusted as
mutually agreed to by Parent and Xxxxxxxxx, after good faith consultation, to
reflect any change in the value of the Additional Xxxxxxxxx Assets as of, and
as computed immediately prior to, the Closing Date and although the Xxxxxxxxx
Surviving Corporation has the right to sell any or all of the Additional
Xxxxxxxxx Assets at any time after the Company Effective Time, any such sales
shall not affect the net after-tax value.
(c) "Company Share Value" shall mean $61.00; provided,
however, if subsequent to the date of this Agreement, but prior to the Company
Effective Time, Parent or any Subsidiary of Parent purchases any shares of
Company Common Stock at a per share price in excess of the Company Share
Value, the Company Share Value shall be increased to equal such higher
per share price.
(d) "Parent Share Value" shall mean the average of the per
share closing prices of Parent Common Stock as reported on the consolidated
transaction reporting system for securities traded on the New York Stock
Exchange, Inc. ("NYSE") (as reported in the New York City edition of The Wall
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Street Journal or, if not reported thereby, another authoritative source) for
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the ten consecutive trading days ending immediately prior to the second
trading day prior to the Closing Date (the "Parent Pricing Period"),
appropriately adjusted for any stock splits, reverse stock splits, stock
dividends, recapitalizations or other similar transactions.
(e) "Xxxxxxxxx Exchange Ratio" shall mean the quotient of
the Xxxxxxxxx Share Value divided by the Parent Share Value (rounded to four
decimal places).
(f) "Company Exchange Ratio" shall mean the quotient of
the Company Share Value divided by the Parent Share Value (rounded to four
decimal places).
4.2. Conversion of the Xxxxxxxxx Stock. (a) At the Xxxxxxxxx
---------------------------------
Effective Time, each share of the common stock, $.01 par value per share, of
Merger Sub outstanding immediately prior to the Xxxxxxxxx Effective Time
shall be converted into and become one fully paid and non-assessable share of
common stock, $100.00 par value per share, of the Xxxxxxxxx Surviving
Corporation.
(b) At the Xxxxxxxxx Effective Time, each share of the
common stock, $100.00 par value per share (the "Xxxxxxxxx Common Stock"), of
Xxxxxxxxx issued
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and outstanding immediately prior to the Xxxxxxxxx Effective Time (other than
shares of Xxxxxxxxx Common Stock (i) held in Xxxxxxxxx'x treasury, (ii) owned
by Parent, Merger Sub or any other wholly owned Subsidiary (as defined in
Section 11.15) of Parent or Xxxxxxxxx or (iii) held by Dissenting Stockholders
(as defined in Section 4.6(a)) shall, by virtue of the Xxxxxxxxx Merger and
without any action on the part of the holder thereof, be converted into the
right to receive a number of shares of common stock, $1.00 par value per share
(the "Parent Common Stock"), of Parent equal to the Xxxxxxxxx Exchange Ratio.
(c) As a result of the Xxxxxxxxx Merger and without any action on
the part of the holder thereof, each share of the Xxxxxxxxx Common Stock shall
cease to be outstanding and shall be canceled and retired and shall cease to
exist, and each holder (other than Dissenting Stockholders) of a certificate
representing any shares of the Xxxxxxxxx Common Stock (a "Xxxxxxxxx
Certificate") shall thereafter cease to have any rights with respect to such
shares of the Xxxxxxxxx Common Stock, except the right to receive, without
interest, Parent Common Stock and cash for fractional shares of Parent Common
Stock in accordance with Sections 4.2(b) and 4.4(e) upon the surrender of
such Xxxxxxxxx Certificate.
(d) Each share of the Xxxxxxxxx Common Stock issued and held in
Xxxxxxxxx'x treasury, and each share of the Xxxxxxxxx Common Stock owned by
Parent, Merger Sub or any other wholly owned Subsidiary of Parent or
Xxxxxxxxx, shall, at the Xxxxxxxxx Effective Time and by virtue of the
Xxxxxxxxx Merger, cease to be outstanding and shall be canceled and retired
and no stock of Parent or any other consideration shall be delivered in
exchange therefor.
4.3. Conversion of the Company Stock. (a) At the Company Effective
-------------------------------
Time, each share of the common stock, $.01 par value per share, of Merger
Grandsub outstanding immediately prior to the Company Effective Time shall be
converted into and become one fully paid and non-assessable share of capital
stock, without par value, of the Surviving Corporation.
(b) At the Company Effective Time, each share of the
capital stock, without par value (the "Company Common Stock"), of the Company
issued and outstanding immediately prior to the Company Effective Time (other
than shares of Company Common Stock (i) held in the Company's treasury or (ii)
owned by Parent, Merger Grandsub, Xxxxxxxxx Surviving Corporation or any
other wholly owned Subsidiary of Parent or the Company) shall, by virtue of
the Company Merger and without any action on the part of the holder thereof,
be converted into the right to receive a number of shares of Parent Common
Stock equal to the Company Exchange Ratio.
(c) As a result of the Company Merger and without any
action on the part of the holder thereof, each share of the Company Common
Stock shall cease to be outstanding and shall be canceled and retired and
shall cease to exist, and each holder of a certificate (a "Company
Certificate") representing any shares of the Company Common Stock shall
thereafter cease to have any rights with respect to such shares of the Company
Common Stock, except the right to receive, without interest, Parent Common
Stock and cash for fractional shares of Parent Common Stock in accordance with
Sections 4.3(b) and 4.4(e) upon the surrender of such Company Certificate.
(d) Each share of the Company Common Stock issued and held in the
Company's treasury, and each share of the Company Common Stock owned by
Parent, Merger Grandsub, Xxxxxxxxx Surviving Corporation or any other wholly
owned Subsidiary of Parent or the Company (other than shares issued pursuant
to Section 4.3(a)), shall, at the Company Effective Time and, by virtue of
the Company Merger, cease to be outstanding and shall, be canceled and
retired without payment of any consideration therefor and no stock of Parent
or other consideration shall be delivered in exchange therefor.
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(e) (i) At the Company Effective Time, all options (individually,
a "Company Option" and collectively, the "Company Options") then outstanding
under the Company's 1987 Incentive Stock Option Plan (the "1987 Plan"), 1993
Stock Incentive Option Plan (the "1993 Plan") and the Stock Option Agreement,
dated August 11, 1995, between the Company and Xxxx X. Xxxxxxxx
(collectively, the "Company Stock Option Plans") shall remain outstanding
following the Company Effective Time. At the Company Effective Time, the
Company Options shall, by virtue of the Company Merger and without any
further action on the part of the Company or the holder of any Company
Option, be assumed by Parent in such manner that Parent (i) is a corporation
"assuming a stock option in a transaction to which [s]ection 424(a) applied"
within the meaning of section 424 of the Code or (ii) to the extent that
section 424 of the Code does not apply to any Company Option, would be such a
corporation were section 424 of the Code applicable to such option. Each
Company Option assumed by Parent shall be exercisable upon the same terms and
conditions as under the applicable Company Stock Option Plan and the
applicable option agreement issued thereunder, except that (i) each Company
Option shall be exercisable for that whole number of shares of Parent Common
Stock (rounded to the nearest whole share) into which the number of shares of
the Company Common Stock subject to such Company Option immediately prior to
the Company Effective Time would be converted under Section 4.3(b), and (ii)
the option price per share of Parent Common Stock shall be an amount equal to
the option price per share of Company Common Stock subject to such Company
Option in effect immediately prior to the Company Effective Time divided by
the Company Exchange Ratio (the price per share, as so determined, being
rounded upward to the nearest full cent). Pursuant to Section 2.9 of each of
the 1987 Plan and the 1993 Plan and Section 5.8 of the 1993 Plan, all Company
Options (as adjusted pursuant to this Section 4.3(e)) granted under such
Company Stock Options Plans will immediately become exercisable upon
consummation of the Company Merger and will remain exercisable in full for a
period of 12 months following consummation of the Company Merger; provided,
--------
however, no Company Option granted under the 1987 Plan may be exercised more
-------
than 11 years after the date of grant thereof and no Company Option granted
under the 1993 Plan may be exercised more than 10 years after the date of
grant thereof. Upon the expiration of the aforementioned 12 month period,
any unexpired Company Options issued under the 1987 Plan or the 1993 Plan
held by holders who continue to be employed by Parent or its Subsidiaries
shall, pursuant to the terms of such Company Stock Option Plans, no longer be
governed by Section 2.9 thereof, but shall continue to be and become
exercisable pursuant to the other provisions of the applicable Company Stock
Option Plan and the applicable option agreements issued thereunder.
(ii) Parent shall take all corporate action necessary to reserve for
issuance a number of shares of Parent Common Stock equal to the number of
shares of Parent Common Stock issuable upon the exercise of the Company
Options assumed by Parent pursuant to this Section 4.3(e). From and after
the date of this Agreement, except as provided in Section 8.2(f), no
additional options shall be granted by the Company or its Subsidiaries under
the Company Stock Option Plans or otherwise. As soon as practicable
following the Company Effective Time, Parent shall file with the Securities
and Exchange Commission (the "SEC") a Registration Statement on Form S-8
covering all shares of Parent Common Stock to be issued upon exercise of the
Company Options and shall cause such registration statement to remain
effective for as long as there are outstanding any Company Options.
4.4. Exchange of Certificates Representing Xxxxxxxxx Common Stock
------------------------------------------------------------
and Company Common Stock. (a) As of the Xxxxxxxxx Effective Time, Parent
------------------------
shall deposit, or shall cause to be deposited, with an exchange agent selected
by Parent, which shall be Parent's transfer agent for the Parent Common Stock
or such other party reasonably satisfactory to Xxxxxxxxx and the Company (the
"Exchange Agent"), for the benefit of the holders of shares of Xxxxxxxxx
Common Stock and Company Common Stock, for exchange in accordance with this
Article 4, certificates representing the shares of Parent Common Stock and
the cash in lieu of fractional shares (such cash and certificates for shares
of Parent Common Stock, together with any dividends or distributions with
respect thereto, being hereinafter referred to as the "Exchange
6
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Fund") to be issued pursuant to Sections 4.2 and 4.3 and paid pursuant to this
Section 4.4 in exchange for outstanding shares of Xxxxxxxxx Common Stock or
Company Common Stock.
(b) (i) Promptly after the Xxxxxxxxx Effective Time and the
Company Effective Time, respectively, Parent shall cause the Exchange Agent to
mail to each holder of record of one or more Xxxxxxxxx Certificates or Company
Certificates (collectively, the "Certificates") (other than to holders of
Xxxxxxxxx Common Stock or Company Common Stock that, pursuant to Sections
4.2(d) and 4.3(d), respectively, are canceled without payment of any
consideration therefor): (A) a letter of transmittal (the "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 Exchange Agent and shall be in such form and have such
other provisions as Parent, the Company and Xxxxxxxxx may reasonably specify
and (B) instructions for use in effecting the surrender of the Certificates
in exchange for certificates representing shares of Parent Common Stock and
cash in lieu of fractional shares. Upon surrender of a Certificate for
cancellation to the Exchange Agent together with such Letter of Transmittal,
duly executed and completed in accordance with the instructions thereto, the
holder of such Certificate shall be entitled to receive in exchange therefor
(x) a certificate representing that number of whole shares of Parent Common
Stock and (y) a check representing the amount of cash in lieu of fractional
shares, if any, and unpaid dividends and distributions, if any, which such
holder has the right to receive in respect of the Certificate surrendered
pursuant to the provisions of this Article 4, after giving effect to any
required withholding tax, and the Certificate so surrendered shall forthwith
be canceled; provided, however, that in the case of surrenders of Xxxxxxxxx
-------- -------
Certificates, the Parent Common Stock issued in exchange therefor shall be
delivered as set forth in paragraph (ii) of this Section 4.4(b). No interest
will be paid or accrued on the cash in lieu of fractional shares and unpaid
dividends and distributions, if any, payable to holders of Certificates. In
the event of a transfer of ownership of Xxxxxxxxx Common Stock or Company
Common Stock which is not registered in the transfer records of Xxxxxxxxx or
the Company, respectively, a certificate representing the proper number of
shares of Parent Common Stock, together with a check for the cash to be paid
in lieu of fractional shares, may be issued to such a transferee if the
Certificate representing such Xxxxxxxxx Common Stock or Company Common Stock
is presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and to evidence that any applicable stock
transfer taxes have been paid.
(ii) Certificates representing shares of Parent Common Stock
issued in exchange for Xxxxxxxxx Certificates shall be delivered to or for the
benefit of each of the holders of such Xxxxxxxxx Certificates as follows:
(A) a certificate representing a fraction of
such shares (rounded up to the next largest share) equal to the Continuity
Fraction (as hereinafter defined) shall be delivered to the Continuity
Custodian, to be held for the account of such holder pursuant to the terms of
the Custodial Agreement; and
(B) a certificate representing the remainder of
such shares shall be delivered to such holder, as specified in the Letter of
Transmittal.
"Continuity Fraction" shall mean the fraction derived by
dividing (x) one-half of the total number of shares of Xxxxxxxxx Common Stock
outstanding as of the date of this Agreement by (y) the total number of shares
of Xxxxxxxxx Common Stock so outstanding less the number of shares of
Xxxxxxxxx Common Stock held by Dissenting Stockholders.
(c) Notwithstanding any other provisions of this Agreement,
no dividends or other distributions declared or made after the Xxxxxxxxx
Effective Time or the Company Effective Time, as applicable, with respect to
Parent Common Stock with a record date after the Xxxxxxxxx Effective Time or
the Company Effective Time, as applicable, shall be paid
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with respect to the shares to be issued upon conversion of any Certificate
until such Certificate is surrendered for exchange as provided herein.
Subject to the effect of applicable laws, following surrender of any such
Certificate, there shall be paid to the holder of the certificates
representing whole shares of Parent Common Stock issued in exchange therefor,
without interest, (i) at the time of such surrender, the amount of dividends
or other distributions with a record date after the Xxxxxxxxx Effective Time
or the Company Effective Time, as applicable, theretofore payable with respect
to such whole shares of Parent Common Stock and not paid, less the amount of
any withholding taxes which may be required thereon, and (ii) at the
appropriate payment date, the amount of dividends or other distributions with
a record date after the Xxxxxxxxx Effective Time or the Company Effective
Time, as applicable, but prior to surrender and a payment date subsequent to
surrender payable with respect to such whole shares of Parent Common Stock,
less the amount of any withholding taxes which may be required thereon.
(d) At or after the Xxxxxxxxx Effective Time or the Company
Effective Time, respectively, there shall be no transfers on the stock
transfer books of Xxxxxxxxx of the shares of Xxxxxxxxx Common Stock which were
outstanding immediately prior to the Xxxxxxxxx Effective Time and no transfers
on the stock transfer books of the Company of the shares of Company Common
Stock which were outstanding immediately prior to the Company Effective Time.
If, after the Xxxxxxxxx Effective Time, Xxxxxxxxx Certificates are presented
to the Xxxxxxxxx Surviving Corporation, or, after the Company Effective Time,
Company Certificates are presented to the Surviving Corporation, the
presented Certificates shall be canceled and exchanged for certificates for
shares of Parent Common Stock and cash in lieu of fractional shares, if any,
deliverable in respect thereof pursuant to this Agreement in accordance with
the procedures set forth in this Article 4. Certificates surrendered for
exchange by any person constituting an "affiliate" of Xxxxxxxxx or the
Company for purposes of Rule 145(c) under the Securities Act of 1933, as
amended (the "Securities Act"), shall not be exchanged until Parent has
received a written agreement from such person as provided in Section 8.10.
(e) No fractional shares of Parent Common Stock shall be
issued pursuant hereto. In lieu of the issuance of any fractional share of
Parent Common Stock pursuant to Section 4.2(b) or Section 4.3(b), cash
adjustments will be paid to holders in respect of any fractional share of
Parent Common Stock that would otherwise be issuable, and the amount of such
cash adjustment shall be equal to such fractional proportion of the Parent
Share Value.
(f) Any portion of the Exchange Fund (including the
proceeds of any investments thereof and any shares of Parent Common Stock)
that remains unclaimed by the former stockholders of Xxxxxxxxx or the Company
one year after the Company Effective Time shall be delivered to Parent. Any
former stockholders of Xxxxxxxxx or the Company who have not theretofore
complied with this Article 4 shall thereafter look only to Parent for payment
of their shares of Parent Common Stock, cash in lieu of fractional shares and
unpaid dividends and distributions on the Parent Common Stock deliverable in
respect of each Certificate such former stockholder holds as determined
pursuant to this Agreement.
(g) None of Parent, the Xxxxxxxxx Surviving Corporation,
the Surviving Corporation, the Exchange Agent or any other person shall be
liable to any former holder of shares of Xxxxxxxxx Common Stock or Company
Common Stock for any amount properly delivered to a public official pursuant
to applicable abandoned property, escheat or similar laws.
(h) In the event any Certificate shall have been 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 Xxxxxxxxx Surviving Corporation or the Surviving Corporation,
as the
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case may be, the posting by such person of a bond in such reasonable amount as
the Xxxxxxxxx Surviving Corporation or the Surviving Corporation, as the case
may be, may direct as indemnity against any claim that may be made against it
with respect to such Certificate, the Exchange Agent will issue in exchange
for such lost, stolen or destroyed Certificate the shares of Parent Common
Stock and cash in lieu of fractional shares, and unpaid dividends and
distributions on shares of Parent Common Stock as provided in Section 4.3(c),
deliverable in respect thereof pursuant to this Agreement.
4.5. Adjustment of Company Share Value. In the event that,
---------------------------------
subsequent to the date of this Agreement but prior to the Company Effective
Time, the Company changes the number of shares of Company Common Stock issued
and outstanding as a result of a stock split, reverse stock split, stock
dividend, recapitalization or other similar transaction, the Company Share
Value and other items dependent thereon shall be appropriately adjusted.
4.6. Dissenting Stockholders. (a) Notwithstanding any provision
------------------------
of this Agreement to the contrary, shares of Xxxxxxxxx Common Stock that are
outstanding immediately prior to the Xxxxxxxxx Effective Time and that are
held by stockholders who (i) shall have filed with Xxxxxxxxx, prior to or at
the meeting of stockholders of Xxxxxxxxx at which this Agreement will be
submitted to a vote, a written objection to the Xxxxxxxxx Merger, (ii) shall
have not voted in favor of the Xxxxxxxxx Merger and (iii) shall have demanded
properly in writing the fair value for such shares of Xxxxxxxxx Common Stock
in accordance with section 351.455 of the MGBCL ("Dissenting Stockholders"),
shall not be converted into or represent the right to receive the Parent
Common Stock or cash for fractional shares of Parent Common Stock in
accordance with Sections 4.2(b) and 4.4(e) but shall become the right to
receive payment of the fair value of such shares of Xxxxxxxxx Common Stock in
accordance with the provisions of section 351.455 of the MGBCL, provided,
--------
however, that any Dissenting Stockholder who shall have failed to comply with
-------
the requirements of Section 351.455 of the MGBCL shall be conclusively
presumed to have consented to the Xxxxxxxxx Merger and shall be bound by the
terms thereof and the shares of Xxxxxxxxx Common Stock held by such
Dissenting Stockholder shall thereupon be deemed to have been converted into
and to have become exchangeable for, as of the Xxxxxxxxx Effective Time, the
right to receive the Parent Common Stock and cash for fractional shares of
Parent Common Stock, if any, in accordance with Sections 4.2(b) and 4.4(e),
without any interest thereon, upon surrender in the manner provided in
Section 4.4(b) of the Xxxxxxxxx Certificate or Certificates that formerly
evidenced such Xxxxxxxxx Common Stock. The right of a Dissenting Stockholder
to be paid the fair value of his or her shares pursuant to Section 351.455 of
the MGBCL shall cease if and at such time Xxxxxxxxx shall abandon the
Xxxxxxxxx Merger. Any payments to Dissenting Stockholders shall be paid by
Xxxxxxxxx Surviving Corporation out of its own funds and no funds will be
supplied, directly or indirectly, by Parent for payment to Dissenting
Stockholders, nor will Parent directly or indirectly (including through
Merger Sub) reimburse Xxxxxxxxx Surviving Corporation for any payments to
Dissenting Stockholders.
(b) Xxxxxxxxx shall give Parent (i) prompt notice and
copies of any written objections to this Agreement received by Xxxxxxxxx, any
demands for fair value of shares of Xxxxxxxxx Common Stock or other
instruments served pursuant to the MGBCL and received by Xxxxxxxxx and
withdrawals of such demands and (ii) the opportunity to participate in all
negotiations and proceedings with respect to demands for fair value under the
MGBCL. Xxxxxxxxx shall not, except with the prior written consent of Parent,
make any payment (except to the extent that any such payment is made pursuant
to a final, nonappealable court order) with respect to any demands for the
fair value of Xxxxxxxxx Common Stock or offer to settle or settle any such
demands.
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ARTICLE 5
5. Representations and Warranties of the Company. Except as set
---------------------------------------------
forth in the disclosure letter delivered to Parent concurrently with the
execution hereof (the "Company Disclosure Letter") or as disclosed with
reasonable specificity in the Company Reports (as defined in Section 5.7),
the Company represents and warrants to Parent that:
5.1. Existence; Good Standing; Corporate Authority. The Company
---------------------------------------------
is a corporation duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation. The Company is duly
qualified to do business as a foreign corporation and is in good standing
under the laws of any jurisdiction in which the character of the properties
owned or leased by it therein or in which the transaction of its business
makes such qualification necessary, except where the failure to be so
qualified would not have, individually or in the aggregate, a Company Material
Adverse Effect (as defined below). The Company has all requisite corporate
power and authority to own, operate and lease its properties and to carry on
its business as now conducted. The copies of the Company's certificate of
incorporation and bylaws previously made available to Parent are true and
correct and contain all amendments as of the date hereof. As used in this
Agreement, the phrase "Company Material Adverse Effect" shall mean a material
adverse effect on (a) the business, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries on a consolidated
basis or (b) the ability of the Company to consummate the transactions
contemplated by this Agreement.
5.2. Authorization, Validity and Effect of Agreements. The Company
------------------------------------------------
has the requisite corporate power and authority to execute and deliver this
Agreement and all agreements and documents contemplated hereby. The
consummation by the Company of the transactions contemplated hereby has been
duly authorized by all requisite corporate action, other than, with respect
to the Company Merger, the approval and adoption of this Agreement by the
Company's stockholders. This Agreement constitutes the valid and legally
binding obligation of the Company, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium or other similar
laws relating to creditors' rights and general principles of equity. The
Company has taken all action necessary to render the restrictions set forth
in Section 203 of the DGCL inapplicable to this Agreement and the Company
Merger.
5.3. Capitalization. The authorized capital stock of the Company
--------------
consists of 35,000,000 shares of Company Common Stock and, as of January 3,
1997, there were 11,364,948 shares of Company Common Stock issued and
outstanding and 663,100 shares of Company Common Stock reserved for issuance
upon exercise of outstanding Company Options. All such issued and
outstanding shares of Company Common Stock are duly authorized, validly
issued, fully paid, nonassessable and free of preemptive rights. One capital
stock purchase right (each, a "Company Right") issued pursuant to the Rights
Agreement, dated as of March 28, 1994 (the "Company Rights Agreement"), as
amended, between the Company and Society National Bank is associated with and
attached to each outstanding share of Company Common Stock. As of the date
of this Agreement, except as set forth in this Section 5.3 and except for any
shares of Company Common Stock issued pursuant to Company Options outstanding
as of January 3, 1997, there are no outstanding shares of capital stock and
there are no options, warrants, calls, subscriptions, convertible securities,
or other rights, agreements or commitments which obligate the Company or any
of its Subsidiaries to issue, transfer or sell any shares of capital stock or
other voting securities of the Company or any of its Subsidiaries. The
Company has no outstanding bonds, debentures, notes or other obligations the
holders of which have the right to vote (or which are convertible into or
exercisable for securities having the right to vote) with the stockholders of
the Company on any matter.
5.4. Subsidiaries. Each of the Company's Subsidiaries is a
------------
corporation or partnership duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization,
has the corporate or partnership power and
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authority to own, operate and lease its properties and to carry on its
business as it is now being conducted, and is duly qualified to do business
and is in good standing in each jurisdiction in which the ownership, operation
or lease of its property or the conduct of its business requires such
qualification, except for jurisdictions in which such failure to be so
qualified or to be in good standing would not have a Company Material Adverse
Effect. All of the outstanding shares of capital stock of, or other ownership
interests in, each of the Company's Subsidiaries is duly authorized, validly
issued, fully paid and nonassessable, and is owned, directly or indirectly, by
the Company free and clear of all liens, pledges, security interests, claims
or other encumbrances ("Liens"). Schedule 5.4 to the Company Disclosure
Letter sets forth the following information for each Subsidiary of the
Company, as applicable: (i) its name and jurisdiction of incorporation or
organization; (ii) its authorized capital stock or share capital; and (iii)
the number of issued and outstanding shares of capital stock or share capital.
5.5. No Violation of Law. To the Company's knowledge (as defined
-------------------
in Section 11.9), neither the Company nor any of its Subsidiaries is in
violation of any order of any court, governmental authority or arbitration
board or tribunal, or any law, ordinance, governmental rule or regulation to
which the Company or any of its Subsidiaries or any of their respective
properties or assets is subject, except as would not have, individually or in
the aggregate, a Company Material Adverse Effect. The Company and its
Subsidiaries hold all permits, licenses, variances, exemptions, orders,
franchises and approvals of all governmental authorities necessary for the
lawful conduct of their respective businesses (the "Company Permits"), except
where the failure so to hold would not have a Company Material Adverse
Effect. The Company and its Subsidiaries are in compliance with the terms of
the Company Permits, except where the failure so to comply would not have a
Company Material Adverse Effect. As of the date of this Agreement, to the
knowledge of the Company, no investigation by any governmental authority with
respect to the Company or any of its Subsidiaries is pending or threatened,
other than those the outcome of which would not have a Company Material
Adverse Effect.
5.6. No Conflict. (a) Neither the execution and delivery by the
-----------
Company of this Agreement nor the consummation by the Company of the
transactions contemplated hereby in accordance with the terms hereof, will:
(i) conflict with or result in a breach of any provisions of the certificate
of incorporation or bylaws of the Company; (ii) violate, or conflict with, or
result in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default)
under, or result in the termination or in a right of termination or
cancellation of, or give rise to a right of purchase under, or accelerate the
performance required by, or result in the creation of any Lien upon any of
the properties of the Company or its Subsidiaries under, or result in being
declared void, voidable, or without further binding effect, or otherwise
result in a detriment to the Company or any of its Subsidiaries under, any of
the terms, conditions or provisions of, any note, bond, mortgage, indenture,
deed of trust, license, franchise, permit, lease, contract, agreement, joint
venture or other instrument or obligation to which the Company or any of its
Subsidiaries is a party, or by which the Company or any of its Subsidiaries
or any of their properties is bound or affected; or (iii) contravene or
conflict with or constitute a violation of any provision of any law, rule,
regulation, judgment, order or decree binding upon or applicable to the
Company or any of its Subsidiaries, except, in the case of matters described
in clause (ii) or (iii), as would not have, individually or in the aggregate,
a Company Material Adverse Effect.
(b) Neither the execution and delivery by the Company of
this Agreement nor the consummation by the Company of the transactions
contemplated hereby in accordance with the terms hereof will require any
consent, approval or authorization of, or filing or registration with, any
governmental or regulatory authority, other than (i) the filings provided for
in Article 1 and (ii) filings required under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), the Securities Act or
applicable state securities and "Blue Sky" laws ((i) and
11
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(ii) collectively, the "Regulatory Filings"), except for any consent, approval
or authorization the failure of which to obtain and for any filing or
registration the failure of which to make would not have a Company Material
Adverse Effect.
5.7. SEC Documents. The Company has made available to Parent each
-------------
registration statement, report, proxy statement or information statement
(other than preliminary materials) filed by the Company with the SEC since
October 31, 1995, each in the form (including exhibits and any amendments
thereto) filed with the SEC (collectively, the "Company Reports"). As of
their respective dates, the Company Reports (i) were prepared in all material
respects in accordance with the applicable requirements of the Securities
Act, the Exchange Act, and the rules and regulations thereunder and (ii) did
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading except for such statements, if any, as have been
modified by subsequent filings with the SEC prior to the date hereof. Each
of the consolidated balance sheets of the Company included in or incorporated
by reference into the Company Reports (including the related notes and
schedules) fairly presents the consolidated financial position of the Company
and its Subsidiaries as of its date and each of the consolidated statements
of income, cash flows and changes in stockholders' equity ("retained
earnings") of the Company included in or incorporated by reference into the
Company Reports (including any related notes and schedules) fairly presents
the results of operations, cash flows or retained earnings, as the case may
be, of the Company and its Subsidiaries for the periods set forth therein
(subject, in the case of unaudited statements, to (x) such exceptions as may
be permitted by Form 10-Q of the SEC and (y) normal year-end audit
adjustments), in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved, except as may be
noted therein. Except as and to the extent set forth on the consolidated
balance sheet of the Company and its Subsidiaries at October 31, 1996,
including all notes thereto, neither the Company nor any of its Subsidiaries
has any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) that would be required to be reflected on, or
reserved against in, a balance sheet of the Company or in the notes thereto
prepared in accordance with generally accepted accounting principles
consistently applied, other than liabilities or obligations which would not
have, individually or in the aggregate, a Company Material Adverse Effect and
liabilities and obligations arising in the ordinary course of business since
such date.
5.8. Litigation. There are no actions, suits or proceedings
----------
pending against the Company or any of its Subsidiaries or, to the Company's
knowledge, threatened against the Company or any of its Subsidiaries, at law
or in equity, or before or by any federal or state commission, board, bureau,
agency or instrumentality, that are likely to have, individually or in the
aggregate, a Company Material Adverse Effect. There are no outstanding
judgments, decrees, injunctions, awards or orders against the Company or any
of its Subsidiaries that are likely to have, individually or in the
aggregate, a Company Material Adverse Effect. Schedule 5.8 of the Company
Disclosure Letter contains, as of the date of this Agreement, an accurate and
complete list of all actions, suits and proceedings pending or, to the
knowledge of the Company, threatened against the Company or its Subsidiaries.
5.9. Absence of Certain Changes. Since October 31, 1996, there has
--------------------------
not been (i) any change in the financial condition or business of the Company
or its Subsidiaries which has had or is likely to have an adverse effect
which is material to the financial condition or business of the Company and
its Subsidiaries on a consolidated basis, other than any adverse change
resulting from adverse changes in general economic conditions, stock market
fluctuations or conditions or adverse changes in or affecting the oil
services or specialty chemical industries generally, (ii) any material change
by the Company in its accounting methods, principles or practices or its tax
methods, practices or elections, (iii) any declaration, setting aside or
payment of any dividend or distribution in respect of any capital stock of
the Company or any redemption, purchase or other acquisition of any of its
securities, except dividends on the Company Common
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Stock at a rate of not more than $.28 per share per quarter, or (iv) any
increase in or establishment of any bonus, insurance, severance, deferred
compensation, pension, retirement, profit sharing, stock option, stock
purchase or other employee benefit plan, except in the ordinary course of
business.
5.10. Taxes. (a) The Company and its Subsidiaries have (i) duly
-----
filed (or there has been filed on their behalf) on a timely basis with
appropriate governmental authorities all tax returns, statements, reports,
declarations, estimates and forms required to be filed by them, on or prior to
the date hereof, except to the extent that any failure to file would not have,
individually or in the aggregate, a Company Material Adverse Effect and (ii)
duly paid or deposited in full on a timely basis or made adequate provisions
in accordance with generally accepted accounting principles (or there has
been paid or deposited or adequate provision has been made on their behalf)
for the payment of all taxes required to be paid by the Company or its
Subsidiaries for all periods ending through the date hereof, except to the
extent that any failure to pay or deposit or make adequate provision for the
payment of such taxes would not have, individually or in the aggregate, a
Company Material Adverse Effect.
(b)(i) The federal income tax returns of the Company and each
of its Subsidiaries have been examined by the IRS (as defined in Section 5.11)
(or the applicable statutes of limitation for the assessment of federal income
taxes for such periods have expired) for all periods through and including
October 31, 1994; (ii) except to the extent being contested in good faith,
all material deficiencies asserted as a result of such examinations and any
other examinations of the Company and its Subsidiaries by any taxing
authority have been paid, fully settled or adequately provided for in the
financial statements contained in the Company Reports; (iii) as of the date
hereof, neither the Company nor any of its Subsidiaries has granted any
requests, agreements, consents or waivers to extend the statutory period of
limitations applicable to the assessment of any taxes with respect to any tax
returns of the Company or any of its Subsidiaries; (iv) neither the Company
nor any of its Subsidiaries is a party to any tax sharing or tax indemnity
agreement; and (v) neither the Company nor any of its Subsidiaries is a party
to an agreement that provides for the payment of any amount that would
constitute a "parachute payment" within the meaning of Section 280G of the
Code.
For purposes of this Agreement, "tax" or "taxes" means all net income,
gross income, gross receipts, sales, use, ad valorem, transfer, accumulated
earnings, personal holding company, excess profits, franchise, profits,
license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property, disability, capital stock, or windfall profits
taxes, customs duties or other taxes, fees, assessments or charges of any
kind whatsoever, together with any interest and any penalties, additions to
tax or additional amounts imposed by any taxing authority (domestic or
foreign).
5.11. Employee Benefit Plans. Schedule 5.11 of the Company
----------------------
Disclosure Letter contains a list of all material employee benefit plans and
other benefit arrangements, including all "employee benefit plans" as defined
in the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
covering employees of the Company and its Subsidiaries (the "Company Benefit
Plans"). True and complete copies of the Company Benefit Plans and, if
applicable, the most recent Form 5500 and annual reports for each such plan
have been made available to Parent. All applicable reporting and disclosure
requirements have been met with respect to the Company Benefit Plans except
for any noncompliance that would not result in a material liability to the
Company. There has been no "reportable event," as that term is defined in
Section 4043 of ERISA, with respect to the Company Benefit Plans subject to
Title IV of ERISA, which event is likely to result in a material liability to
the Company. To the extent applicable, the Company Benefit Plans comply, in
all material respects, with the requirements of ERISA and the Code, and any
Company Benefit Plan intended to be qualified under section 401(a) of the
Code has been determined by the Internal Revenue Service (the "IRS") to be so
qualified. The Company Benefit Plans have been maintained and operated, in
all material
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respects, in accordance with their terms and there is no material liability
for breaches of fiduciary duty in connection with the Company Benefit Plans.
To the Company's knowledge, there are no pending or anticipated claims against
or otherwise involving any Company Benefit Plan and no suit, action or other
litigation (excluding claims for benefits incurred in the ordinary course of
Company Benefit Plan activities) has been brought against or with respect to
any such Company Benefit Plan, except for any of the foregoing which would not
have a Company Material Adverse Effect. All material contributions required to
be made as of the date hereof to the Company Benefit Plans have been made or
provided for. The Company does not maintain or contribute to any material
plan or arrangement which provides or has any liability to provide life
insurance, medical or other employee welfare benefits to any employee or
former employee upon his retirement or termination of employment and the
Company has not represented, promised or contracted (whether in oral or
written form) to any employee or former employee that such benefits would be
provided. With respect to the Company Benefit Plans or any "employee pension
benefit plans," as defined in Section 3(2) of ERISA, that are subject to Title
IV of ERISA and have been maintained or contributed to within six years prior
to the Company Effective Time by the Company, its Subsidiaries or any trade or
business (whether or not incorporated) which is under common control, or which
is treated as a single employer, with the Company or any of its Subsidiaries
under Sections 414(b), (c), (m), or (o) of the Code, (i) neither the Company
nor any of its Subsidiaries has incurred any direct or indirect liability
under title IV of ERISA in connection with any termination thereof or
withdrawal therefrom; (ii) there does not exist any accumulated funding
deficiency within the meaning of section 412 of the Code or section 302 of
ERISA, whether or not waived; and (iii) the actuarial value of the assets
equal or exceed the actuarial present value of the benefit liabilities, within
the meaning of Section 4041 of ERISA, based upon reasonable actuarial
assumptions and asset valuation principles, except, in each case, for any
liability or any excise tax which would not have a Company Material Adverse
Effect. No prohibited transaction has occurred with respect to any Company
Benefit Plan that would result in the imposition of any excise tax or other
liability under the Code or ERISA which would have a Company Material Adverse
Effect. Neither the Company nor any of its Subsidiaries nor any trade or
business (whether or not incorporated) which is under common control, or which
is treated as a single employer, with the Company or any of its Subsidiaries
under Sections 414(b), (c), (m), or (o) of the Code, contributes to, or has an
obligation to contribute to, and has not within six years prior to the Company
Effective Time contributed to, or had an obligation to contribute to, a
multiemployer plan within the meaning of Section 3(37) of ERISA. The
execution of, and performance of the transactions contemplated in, this
Agreement will not (either alone or upon the occurrence of any additional or
subsequent events) constitute an event under any benefit plan, policy,
arrangement or agreement or any trust or loan that will or may result in any
payment (whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligations to
fund benefits with respect to any employee.
5.12. Labor Matters. Neither the Company nor any of its
-------------
Subsidiaries is a party to, or bound by, any collective bargaining agreement,
contract or other agreement or understanding with a labor union or labor
organization. To the Company's knowledge, there are no organizational efforts
with respect to the formation of a collective bargaining unit presently being
made or threatened involving employees of the Company or any of its
Subsidiaries.
5.13. Environmental Matters. To the knowledge of the Company, and
---------------------
except as would not have, individually or in the aggregate, a Company
Material Adverse Effect:
(a) there are not any past or present conditions or
circumstances that interfere with the conduct of the business of the Company
and each of its Subsidiaries in the manner now conducted or which interfere
with compliance with any order of any court, governmental authority or
arbitration board or tribunal, or any law, ordinance, governmental rule or
regulation related to human health or the environment ("Environmental Law");
14
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(b) there are not any past or present conditions or
circumstances at, or arising out of, any current or former businesses, assets
or properties of the Company or any Subsidiary of the Company, including but
not limited to on-site or off-site disposal or release of any chemical
substance, product or waste, which may give rise to: (i) liabilities or
obligations for any cleanup, remediation, disposal or corrective action under
any Environmental Law or (ii) claims arising for personal injury, property
damage, or damage to natural resources; and
(c) neither the Company nor any of its Subsidiaries has (i)
received any notice of noncompliance with, violation of, or liability or
potential liability under any Environmental Law or (ii) entered into any
consent decree or order or is subject to any order of any court or
governmental authority or tribunal under any Environmental Law or relating to
the cleanup of any hazardous materials contamination.
5.14. Trademarks, Patents and Copyrights. Except as previously
----------------------------------
disclosed to Parent in writing, to the knowledge of the Company, the Company
and its Subsidiaries own or possess adequate licenses or other valid rights
to use all patents, patent rights, trademarks, trademark rights and
proprietary information used or held for use in connection with their
respective businesses as currently being conducted, except where the failure
to own or possess such licenses and other rights would not have, individually
or in the aggregate, a Company Material Adverse Effect, and to the knowledge
of the Company, there are no assertions or claims challenging the validity of
any of the foregoing which are likely to have, individually or in the
aggregate, a Company Material Adverse Effect. To the knowledge of the
Company, the conduct of the Company's and its Subsidiaries' respective
businesses as currently conducted does not conflict with any patents, patent
rights, licenses, trademarks, trademark rights, trade names, trade name
rights or copyrights of others in any way likely to have, individually or in
the aggregate, a Company Material Adverse Effect. To the knowledge of the
Company, there is no material infringement of any proprietary right owned by
or licensed by or to the Company or any of its Subsidiaries which is likely
to have, individually or in the aggregate, a Company Material Adverse Effect.
5.15. Insurance. The Company has previously delivered to Parent a
---------
schedule listing the officers' and directors' liability insurance policies,
primary and excess casualty insurance policies providing coverage for bodily
injury and property damage to third parties, including products liability and
completed operations coverage, and worker's compensation insurance policies
maintained by the Company and its Subsidiaries. The Company and its
Subsidiaries maintain insurance coverage reasonably adequate for the
operation of their respective businesses (taking into account the cost and
availability of such insurance).
5.16. No Brokers. The Company has not entered into any contract,
----------
arrangement or understanding with any person or firm which may result in the
obligation of the Company or Parent to pay any finder's fees, brokerage or
agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the
transactions contemplated hereby, except that the Company has retained
Xxxxxxx, Xxxxx & Co. as its financial advisor and X.X. Xxxxxxx & Sons, Inc.
as financial advisor to the Special Committee to the Company's board of
directors, the arrangements with which have been disclosed in writing to
Parent prior to the date hereof.
5.17. Opinion of Financial Advisor. The Company has received (a)
----------------------------
the opinion of Xxxxxxx, Xxxxx & Co. to the effect that, as of the date thereof,
the Company Exchange Ratio is fair to the holders of the Company Common Stock
(other than Xxxxxxxxx) and (b) the opinion of X.X. Xxxxxxx & Sons, Inc. to
the effect that, as of the date thereof, the Company Exchange Ratio is fair,
from a financial point of view, to the holders of Company Common Stock (other
than Xxxxxxxxx); it being understood and acknowledged by Parent that such
opinions have been rendered for the benefit of the Board of Directors of the
Company, and
15
23
are not intended to, and may not, be relied upon by Parent, its affiliates or
their respective Subsidiaries.
5.18. Parent Stock Ownership. Neither the Company nor any of its
----------------------
Subsidiaries owns any shares of Parent Common Stock or other securities
convertible into or otherwise exercisable to acquire Parent Common Stock.
5.19. Reorganization. To the Company's knowledge, neither the
--------------
Company nor any of its stockholders has taken or failed to take any action, as
a result of which the Company Merger would not qualify as a reorganization
within the meaning of section 368(a) of the Code (and comparable provisions
of applicable state or local law).
5.20. Vote Required. Except as provided by Section 9.2(c), the
-------------
affirmative vote of the holders of at least a majority of the outstanding
shares of Company Common Stock is the only vote of the holders of any class
or series of Company capital stock necessary to approve this Agreement and
the transactions contemplated hereby.
5.21. Amendment to the Company Rights Agreement. The Board of
-----------------------------------------
Directors of the Company has resolved to amend the Company Rights Agreement
so that none of the execution and delivery of this Agreement, the conversion
of shares of Company Common Stock and Xxxxxxxxx Common Stock into the right
to receive Parent Common Stock in accordance with Article 4 of this
Agreement, and the consummation of the Company Merger and the Xxxxxxxxx
Merger or any other transaction contemplated hereby will cause (i) the
Company Rights to become exerciseable under the Company Rights Agreement,
(ii) Xxxxxxxxx, Parent or any of its Subsidiaries to be deemed an "Acquiring
Person" (as defined in the Company Rights Agreement), (iii) any such event to
be deemed a "flip-over transaction or event" or (iv) the "Stock Acquisition
Date" or the "Distribution Date" (each as defined in the Company Rights
Agreement) to occur upon any such event, and so that the "Expiration Date"
(as defined in the Company Rights Agreement) of the Company Rights will occur
immediately prior to the Xxxxxxxxx Effective Time. The Company has delivered
to Parent a true and complete copy of the Company Rights Agreement, as
amended to date.
ARTICLE 6
6. Representations and Warranties of Xxxxxxxxx. Except as set
-------------------------------------------
forth in the disclosure letter delivered to Parent concurrently with the
execution hereof (the "Xxxxxxxxx Disclosure Letter"), Xxxxxxxxx represents and
warrants to Parent that:
6.1. Existence; Good Standing; Corporate Authority. Xxxxxxxxx is a
---------------------------------------------
corporation duly incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation. Xxxxxxxxx is duly qualified
to do business as a foreign corporation and is in good standing under the
laws of any jurisdiction in which the character of the properties owned or
leased by it therein or in which the transaction of its business makes such
qualification necessary, except where the failure to be so qualified would
not have, individually or in the aggregate, a Xxxxxxxxx Material Adverse
Effect (as defined below). Xxxxxxxxx has all requisite corporate power and
authority to own, operate and lease its properties and to carry on its
business as now conducted. The copies of Xxxxxxxxx'x articles of
incorporation and bylaws previously made available to Parent are true and
correct and contain all amendments as of the date hereof. As used in this
Agreement, the phrase "Xxxxxxxxx Material Adverse Effect" shall mean a
material adverse effect on (a) the business, condition (financial or
otherwise) or results of operations of Xxxxxxxxx or (b) the ability of
Xxxxxxxxx to consummate the transactions contemplated by this Agreement.
16
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6.2. Authorization, Validity and Effect of Agreements. Xxxxxxxxx
------------------------------------------------
has the requisite corporate power and authority to execute and deliver this
Agreement and all agreements and documents contemplated hereby. The
consummation by Xxxxxxxxx of the transactions contemplated hereby has been
duly authorized by all requisite corporate action, other than, with respect
to the Xxxxxxxxx Merger, the approval and adoption of this Agreement by
Xxxxxxxxx'x stockholders. This Agreement constitutes the valid and legally
binding obligation of Xxxxxxxxx, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium or other similar
laws relating to creditors' rights and general principles of equity.
6.3. Capitalization. The authorized capital stock of Xxxxxxxxx
--------------
consists of 8,800 shares of Xxxxxxxxx Common Stock and, as of December 31,
1996 and the date hereof, there were 8,800 shares of Xxxxxxxxx Common Stock
issued and outstanding. All such issued and outstanding shares of Xxxxxxxxx
Common Stock are duly authorized, validly issued, fully paid, nonassessable
and free of preemptive rights. As of the date of this Agreement, except as
set forth in this Section 6.3, there are no outstanding shares of capital
stock and there are no options, warrants, calls, subscriptions, convertible
securities, or other rights, agreements or commitments which obligate
Xxxxxxxxx to issue, transfer or sell any shares of capital stock or other
voting securities of Xxxxxxxxx. Xxxxxxxxx has no outstanding bonds,
debentures, notes or other obligations the holders of which have the right to
vote (or which are convertible into or exercisable for securities having the
right to vote) with the stockholders of Xxxxxxxxx on any matter.
6.4. Subsidiaries. Xxxxxxxxx has no Subsidiaries. As of the date
------------
of this Agreement, Xxxxxxxxx owns beneficially 5,337,360 shares of Company
Common Stock, free and clear of all Liens. As of October 31, 1970, Xxxxxxxxx
was the sole beneficial owner of 667,170 shares of Company Common Stock, and
the only change in Xxxxxxxxx'x ownership of Company Common Stock since such
date has been receipt of shares as a result of three two-for-one stock
splits.
6.5. No Violation of Law. To Xxxxxxxxx'x knowledge, Xxxxxxxxx is
-------------------
not in violation of any order of any court, governmental authority or
arbitration board or tribunal, or any law, ordinance, governmental rule or
regulation to which Xxxxxxxxx or any of its properties or assets is subject,
except as would not have, individually or in the aggregate, a Xxxxxxxxx
Material Adverse Effect.
6.6. No Conflict. (a) Neither the execution and delivery by
-----------
Xxxxxxxxx of this Agreement nor the consummation by Xxxxxxxxx of the
transactions contemplated hereby in accordance with the terms hereof, will:
(i) conflict with or result in a breach of any provisions of the articles of
incorporation or bylaws of Xxxxxxxxx; (ii) violate, or conflict with, or
result in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default)
under, or result in the termination or in a right of termination or
cancellation of, or give rise to a right of purchase under, or accelerate the
performance required by, or result in the creation of any Lien upon any of
the properties of Xxxxxxxxx under, or result in being declared void,
voidable, or without further binding effect, or otherwise result in a
detriment to Xxxxxxxxx under, any of the terms, conditions or provisions of,
any note, bond, mortgage, indenture, deed of trust, license, franchise,
permit, lease, contract, agreement, joint venture or other instrument or
obligation to which Xxxxxxxxx is a party, or by which Xxxxxxxxx or any of its
properties is bound or affected; or (iii) contravene or conflict with or
constitute a violation of any provision of any law, rule, regulation,
judgment, order or decree binding upon or applicable to Xxxxxxxxx, except, in
the case of matters described in clause (ii) or (iii), as would not have,
individually or in the aggregate, a Xxxxxxxxx Material Adverse Effect.
(b) Neither the execution and delivery by Xxxxxxxxx of
this Agreement nor the consummation by Xxxxxxxxx of the transactions
contemplated hereby in accordance with the terms hereof will require any
consent, approval or authorization of, or filing
17
25
or registration with, any governmental or regulatory authority, other than
Regulatory Filings, except for any consent, approval or authorization the
failure of which to obtain and for any filing or registration the failure of
which to make would not have a Xxxxxxxxx Material Adverse Effect.
6.7. Financial Statements. Xxxxxxxxx has made available to Parent
--------------------
its audited balance sheets at October 31, 1996 and 1995 and audited statements
of income, retained earnings and cash flows for the years then ended (the
foregoing financial statements being collectively referred to herein as the
"Xxxxxxxxx Financial Statements"). The Xxxxxxxxx Financial Statements are
complete and correct in all material respects. Each of the balance sheets of
Xxxxxxxxx included in Xxxxxxxxx Financial Statements (including the related
notes and schedules) fairly presents the financial position of Xxxxxxxxx as
of its date and each of the statements of income, retained earnings and cash
flows of Xxxxxxxxx included in the Xxxxxxxxx Financial Statements (including
any related notes and schedules) fairly presents the results of operations,
retained earnings or cash flows, as the case may be, of Xxxxxxxxx for the
periods set forth therein, in each case in accordance with generally accepted
accounting principles consistently applied during the periods involved,
except as may be noted therein. Except as and to the extent set forth on the
balance sheet of Xxxxxxxxx at October 31, 1996, including all notes thereto,
Xxxxxxxxx has no liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) that would be required to be reflected on,
or reserved against in, a balance sheet of Xxxxxxxxx or in the notes thereto
prepared in accordance with generally accepted accounting principles
consistently applied, other than liabilities or obligations which would not
have, individually or in the aggregate, a Xxxxxxxxx Material Adverse Effect
and liabilities and obligations arising in the ordinary course of business
since such date.
6.8. Litigation. Except as disclosed in the Xxxxxxxxx Financial
----------
Statements, there are no actions, suits or proceedings pending against
Xxxxxxxxx or, to Xxxxxxxxx'x knowledge, threatened against Xxxxxxxxx, at law
or in equity, or before or by any federal or state commission, board, bureau,
agency or instrumentality, that are likely to have, individually or in the
aggregate, a Xxxxxxxxx Material Adverse Effect. There are no outstanding
judgments, decrees, injunctions, awards or orders against Xxxxxxxxx that are
likely to have, individually or in the aggregate, a Xxxxxxxxx Material
Adverse Effect. Schedule 6.8 of the Xxxxxxxxx Disclosure Letter contains, as
of the date of this Agreement, an accurate and complete list of all actions,
suits and proceedings pending or, to the knowledge of Xxxxxxxxx, threatened
against Xxxxxxxxx.
6.9. Absence of Certain Changes. Since October 31, 1996, there has
--------------------------
not been (i) any change in the financial condition or business of Xxxxxxxxx
which has had or is likely to have an adverse effect which is material to the
financial condition or business of Xxxxxxxxx, other than any adverse change
resulting from adverse changes in general economic conditions or stock market
fluctuations, (ii) any material change by Xxxxxxxxx in its accounting
methods, principles or practices or its tax methods, practices or elections,
(iii) any declaration, setting aside or payment of any dividend or
distribution in respect of any capital stock of Xxxxxxxxx or any redemption,
purchase or other acquisition of any of its securities, except dividends on
the Xxxxxxxxx Common Stock disclosed in the Xxxxxxxxx Disclosure Letter and
dividends after the date hereof permitted by Section 8.2, or (iv) any
increase in or establishment of any bonus, insurance, severance, deferred
compensation, pension, retirement, profit sharing, stock option, stock
purchase or other employee benefit plan, except in the ordinary course of
business.
6.10. Taxes. (a) Xxxxxxxxx has (i) duly filed (or there has been
-----
filed on its behalf) on a timely basis with appropriate governmental
authorities all tax returns, statements, reports, declarations, estimates and
forms required to be filed by it, on or prior to the date hereof, except to
the extent that any failure to file would not have, individually or in the
aggregate, a Xxxxxxxxx Material Adverse Effect and (ii) duly paid or
deposited in full on a timely basis or made adequate provisions in accordance
with generally accepted accounting principles (or there has been paid or
deposited or adequate provision has been made on its behalf) for the payment
of all taxes required to be paid by Xxxxxxxxx for all periods ending through
the date hereof, except to
18
26
the extent that any failure to pay or deposit or make adequate provision for
the payment of such taxes would not have, individually or in the aggregate, a
Xxxxxxxxx Material Adverse Effect.
(b)(i) The federal income tax returns of Xxxxxxxxx have been examined
by the IRS (or the applicable statutes of limitation for the assessment of
federal income taxes for such periods have expired) for all periods through
and including October 31, 1993; (ii) except to the extent being contested in
good faith, all material deficiencies asserted as a result of such
examinations and any other examinations of Xxxxxxxxx by any taxing authority
have been paid fully, settled or adequately provided for in the Xxxxxxxxx
Financial Statements; (iii) as of the date hereof, Xxxxxxxxx has not granted
any requests, agreements, consents or waivers to extend the statutory period
of limitations applicable to the assessment of any taxes with respect to any
tax returns of Xxxxxxxxx; (iv) Xxxxxxxxx is not a party to any tax sharing or
tax indemnity agreement; and (v) Xxxxxxxxx is not a party to an agreement
which provides for the payment of any amount that would constitute a
"parachute payment" within the meaning of Section 280G of the Code.
6.11. Employee Benefit Plans. Schedule 6.11 of the Xxxxxxxxx
----------------------
Disclosure Letter contains a list of all material employee benefit plans and
other benefit arrangements, including all "employee benefit plans" as defined
in ERISA, covering employees of Xxxxxxxxx (the "Xxxxxxxxx Benefit Plans").
True and complete copies of the Xxxxxxxxx Benefit Plans and, if applicable,
the most recent Form 5500 and annual reports for each such plan have been
made available to Parent. All applicable reporting and disclosure
requirements have been met with respect to the Xxxxxxxxx Benefit Plans except
for any noncompliance that would not result in a material liability to
Xxxxxxxxx. There has been no "reportable event," as that term is defined in
Section 4043 of ERISA, with respect to the Xxxxxxxxx Benefit Plans subject to
Title IV of ERISA, which event is likely to result in a material liability to
Xxxxxxxxx. To the extent applicable, the Xxxxxxxxx Benefit Plans comply, in
all material respects, with the requirements of ERISA and the Code, and any
Xxxxxxxxx Benefit Plan intended to be qualified under section 401(a) of the
Code has been determined by the IRS to be so qualified. The Xxxxxxxxx
Benefit Plans have been maintained and operated, in all material respects, in
accordance with their terms and there is no material liability for breaches
of fiduciary duty in connection with the Xxxxxxxxx Benefit Plans. To
Xxxxxxxxx'x knowledge, there are no pending or anticipated material claims
against or otherwise involving any Xxxxxxxxx Benefit Plan and no suit, action
or other litigation (excluding claims for benefits incurred in the ordinary
course of Xxxxxxxxx Benefit Plan activities) has been brought against or with
respect to any such Xxxxxxxxx Benefit Plan, except for any of the foregoing
which would not have a Xxxxxxxxx Material Adverse Effect. All material
contributions required to be made as of the date hereof to Xxxxxxxxx Benefit
Plans have been made or provided for. Xxxxxxxxx does not maintain or
contribute to any material plan or arrangement which provides or has any
liability to provide life insurance, medical or other employee welfare
benefits to any employee or former employee upon his retirement or
termination of employment and Xxxxxxxxx has not represented, promised or
contracted (whether in oral or written form) to any employee or former
employee that such benefits would be provided. With respect to the Xxxxxxxxx
Benefit Plans or any "employee pension benefit plans," as defined in Section
3(2) of ERISA, that are subject to Title IV of ERISA and have been maintained
or contributed to within six years prior to the Xxxxxxxxx Effective Time by
Xxxxxxxxx or any trade or business (whether or not incorporated) which is
under common control, or which is treated as a single employer, with
Xxxxxxxxx under Sections 414(b), (c), (m), or (o) of the Code, (i) Xxxxxxxxx
has not incurred any direct or indirect liability under title IV of ERISA in
connection with any termination thereof or withdrawal therefrom; (ii) there
does not exist any accumulated funding deficiency within the meaning of
section 412 of the Code or section 302 of ERISA, whether or not waived; and
(iii) the actuarial value of the assets equal or exceed the actuarial present
value of the benefit liabilities, within the meaning of Section 4041 of
ERISA, based upon reasonable actuarial assumptions and asset valuation
principles, except, in each case, for any liability or any excise tax which
would not have a Xxxxxxxxx Material Adverse Effect. No prohibited
transaction has occurred with respect to any Xxxxxxxxx Benefit Plan that
would result in the imposition of any excise tax or other liability under the
Code or ERISA which
19
27
would have a Xxxxxxxxx Material Adverse Affect. Neither Xxxxxxxxx nor any
trade or business (whether or not incorporated) which is under common control,
or which is treated as a single employer, with Xxxxxxxxx under Sections
414(b), (c), (m), or (o) of the Code, contributes to, or has an obligation to
contribute to, and has not within six years prior to the Xxxxxxxxx Effective
Time contributed to, or had an obligation to contribute to, a multiemployer
plan within the meaning of Section 3(37) of ERISA. The execution of, and
performance of the transactions contemplated in, this Agreement will not
(either alone or upon the occurrence of any additional or subsequent events)
constitute an event under any benefit plan, policy, arrangement or agreement
or any trust or loan that will or may result in any payment (whether of
severance pay or otherwise), acceleration, forgiveness of indebtedness,
vesting, distribution, increase in benefits or obligations to fund benefits
with respect to any employee.
6.12. Labor Matters. Xxxxxxxxx is not a party to, or bound by, any
-------------
collective bargaining agreement, contract or other agreement or understanding
with a labor union or labor organization. To Xxxxxxxxx'x knowledge, there
are no organizational efforts with respect to the formation of a collective
bargaining unit presently being made or threatened involving employees of
Xxxxxxxxx.
6.13. Environmental Matters. To the knowledge of Xxxxxxxxx, and
---------------------
except as would not have, individually or in the aggregate, a Xxxxxxxxx
Material Adverse Effect:
(a) there are not any past or present conditions or
circumstances that interfere with the conduct of the business of Xxxxxxxxx in
the manner now conducted or which interfere with compliance with any order of
any court, governmental authority or arbitration board or tribunal, or any
Environmental Law;
(b) there are not any past or present conditions or
circumstances at, or arising out of, any current or former businesses, assets
or properties of Xxxxxxxxx, including but not limited to on-site or off-site
disposal or release of any chemical substance, product or waste, which may
give rise to: (i) liabilities or obligations for any cleanup, remediation,
disposal or corrective action under any Environmental Law or (ii) claims
arising for personal injury, property damage, or damage to natural resources;
and
(c) Xxxxxxxxx has not (i) received any notice of
noncompliance with, violation of, or liability or potential liability under
any Environmental Law or (ii) entered into any consent decree or order or is
subject to any order of any court or governmental authority or tribunal under
any Environmental Law or relating to the cleanup of any hazardous materials
contamination.
6.14. Trademarks, Patents and Copyrights. Except as previously
----------------------------------
disclosed to Parent in writing, to the knowledge of the Xxxxxxxxx, Xxxxxxxxx
owns or possesses adequate licenses or other valid rights to use all patents,
patent rights, trademarks, trademark rights and proprietary information used
or held for use in connection with its business as currently being conducted,
except where the failure to own or possess such licenses and other rights
would not have, individually or in the aggregate, a Xxxxxxxxx Material
Adverse Effect, and to the knowledge of Xxxxxxxxx, there are no assertions or
claims challenging the validity of any of the foregoing which are likely to
have, individually or in the aggregate, a Xxxxxxxxx Material Adverse Effect.
To the knowledge of Xxxxxxxxx, the conduct of Xxxxxxxxx'x business as
currently conducted does not conflict with any patents, patent rights,
licenses, trademarks, trademark rights, trade names, trade name rights or
copyrights of others in any way likely to have, individually or in the
aggregate, a Xxxxxxxxx Material Adverse Effect. To the knowledge of
Xxxxxxxxx, there is no material infringement of any proprietary right owned
by or licensed by or to Xxxxxxxxx which is likely to have, individually or in
the aggregate, a Xxxxxxxxx Material Adverse Effect.
20
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6.15. Insurance. Xxxxxxxxx has previously delivered to Parent a
---------
schedule listing the officers' and directors' liability insurance policies,
primary and excess casualty insurance policies providing coverage for bodily
injury and property damage to third parties, including products liability and
completed operations coverage, and worker's compensation insurance policies
maintained by the Xxxxxxxxx. Xxxxxxxxx maintains insurance coverage
reasonably adequate for the operation of its business (taking into account
the cost and availability of such insurance).
6.16. No Brokers. Xxxxxxxxx has not entered into any contract,
----------
arrangement or understanding with any person or firm which may result in the
obligation of Xxxxxxxxx or Parent to pay any finder's fees, brokerage or
agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the
transactions contemplated hereby, except that Xxxxxxxxx has retained Xxxxxx
Xxxxxxx & Co. Incorporated as its financial advisor, the arrangements with
which have been disclosed in writing to Parent prior to the date hereof.
6.17. Opinion of Financial Advisor. Xxxxxxxxx has received the
----------------------------
opinion of Xxxxxx Xxxxxxx & Co. Incorporated, to the effect that, as of the
date thereof, the Xxxxxxxxx Exchange Ratio is fair, from a financial point of
view, to the holders of Xxxxxxxxx Common Stock; it being understood and
acknowledged by Parent that such opinion has been rendered for the benefit of
the Board of Directors of Xxxxxxxxx, and is not intended to, and may not, be
relied upon by Parent, its affiliates or their respective Subsidiaries.
6.18. Parent Stock Ownership. Xxxxxxxxx owns no shares of Parent
----------------------
Common Stock or any other securities convertible into or otherwise
exercisable to acquire Parent Common Stock.
6.19. Reorganization. To Xxxxxxxxx'x knowledge, neither Xxxxxxxxx
--------------
nor any of its stockholders has taken or failed to take any action, as a
result of which the Xxxxxxxxx Merger or the Company Merger would not qualify
as a reorganization within the meaning of section 368(a) of the Code (and
comparable provisions of applicable state or local law).
6.20. Vote Required. The affirmative vote of the holders of at
-------------
least two-thirds of the outstanding shares of Xxxxxxxxx Common Stock is the
only vote of the holders of any class or series of Xxxxxxxxx capital stock
necessary to approve this Agreement and the transactions contemplated hereby.
ARTICLE 7
7. Representations and Warranties of Parent, Merger Sub and
--------------------------------------------------------
Merger Grandsub. Except as disclosed with reasonable specificity in the
---------------
Parent Reports (as defined in Section 7.7), Parent, Merger Sub and Merger
Grandsub, jointly and severally, represent and warrant to each of the Company
and Xxxxxxxxx that:
7.1. Existence; Good Standing; Corporate Authority. Parent, Merger
---------------------------------------------
Sub and Merger Grandsub are corporations duly incorporated, validly existing
and in good standing under the laws of their respective jurisdictions of
incorporation. Parent is duly qualified to do business as a foreign
corporation and is in good standing under the laws of any jurisdiction in
which the character of the properties owned or leased by it therein or in
which the transaction of its business makes such qualification necessary,
except where the failure to be so qualified would not have, individually or
in the aggregate, a Parent Material Adverse Effect. Parent has all requisite
corporate power and authority to own, operate and lease its properties and to
carry on its business as now conducted. The copies of Parent's certificate
of incorporation and bylaws previously made available to the Company and
Xxxxxxxxx are true and correct and contain all amendments as of the date
hereof. As used in this Agreement, the phrase "Parent Material
21
29
Adverse Effect" shall mean a material adverse effect on (a) the business,
condition (financial or otherwise) or results of operations of Parent and its
Subsidiaries on a consolidated basis or (b) the ability of Parent, Merger Sub
or Merger Grandsub to consummate the transactions contemplated by this
Agreement.
7.2. Authorization, Validity and Effect of Agreements. Each of
------------------------------------------------
Parent, Merger Sub and Merger Grandsub has the requisite corporate power and
authority to execute and deliver this Agreement and all agreements and
documents contemplated hereby. The consummation by Parent, Merger Sub and
Merger Grandsub of the transactions contemplated hereby including the
issuance and delivery by Parent of shares of Parent Common Stock pursuant to
the Mergers has been duly authorized by all requisite corporate action other
than, if required by the rules of the NYSE, approval of the issuance of the
shares of Parent Common Stock pursuant to the Mergers contemplated hereby by
Parent's stockholders. This Agreement constitutes the valid and legally
binding obligation of each of Parent, Merger Sub and Merger Grandsub,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditors' rights
and general principles of equity.
7.3. Capitalization. The authorized capital stock of Parent
--------------
consists of 400,000,000 shares of Parent Common Stock and 15,000,000 shares of
preferred stock, par value $1.00 per share, of Parent ("Parent Preferred
Stock"), and, as of December 27, 1996, there were 145,175,748 shares of
Parent Common Stock issued and outstanding and no shares of Parent Preferred
Stock issued and outstanding. All such issued and outstanding shares of
Parent Common Stock are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. The shares of Parent Common
Stock to be issued in connection with the Mergers, when issued in accordance
with this Agreement, will be validly issued, fully paid and nonassessable.
As of the date of this Agreement, except as set forth in this Section 7.3 and
except for any shares of Parent Common Stock issued pursuant to plans
described in the Parent Reports (as defined in Section 7.7), there are no
outstanding shares of capital stock and there are no options, warrants,
calls, subscriptions, convertible securities or other rights, agreements or
commitments which obligate Parent or any of its Subsidiaries to issue,
transfer or sell any shares of capital stock or other voting securities of
Parent or any of its Subsidiaries. Parent has no outstanding bonds,
debentures, notes or other obligations the holders of which have the right to
vote (or which are convertible into or exercisable for securities having the
right to vote) with the stockholders of Parent on any matter except as
described in the Parent Reports.
7.4. Subsidiaries. (a) Each of Parent's Subsidiaries is a
------------
corporation or partnership duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization,
has the corporate or partnership power and authority to own, operate and
lease its properties and to carry on its business as it is now being
conducted, and is duly qualified to do business and is in good standing in
each jurisdiction in which the ownership, operation or lease of its property
or the conduct of its business requires such qualification, except for
jurisdictions in which such failure to be so qualified or to be in good
standing would not have a Parent Material Adverse Effect.
(b) All of the outstanding shares of capital stock of
Merger Sub are owned directly by Parent and all of the outstanding shares of
capital stock of Merger Grandsub are owned directly by Merger Sub. Each of
Merger Sub and Merger Grandsub was formed solely for the purpose of engaging
in the transactions contemplated hereby and has not engaged in any activities
other than in connection with the transactions contemplated by this Agreement.
7.5. No Violation of Law. To Parent's knowledge, neither Parent
-------------------
nor any of its Subsidiaries is in violation of any order of any court,
governmental authority or arbitration board or tribunal, or any law,
ordinance, governmental rule or regulation to which Parent or any
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of its Subsidiaries or any of their respective properties or assets is
subject, except as would not have, individually or in the aggregate, a Parent
Material Adverse Effect.
7.6. No Conflict. (a) Neither the execution and delivery by
-----------
Parent, Merger Sub and Merger Grandsub of this Agreement, nor the consummation
by Parent, Merger Sub and Merger Grandsub of the transactions contemplated
hereby in accordance with the terms hereof, will: (i) conflict with or
result in a breach of any provisions of the certificate of incorporation or
bylaws of Parent, Merger Sub or Merger Grandsub; (ii) violate, or conflict
with, or result in a breach of any provision of, or constitute a default (or
an event which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination or in a right of termination or
cancellation of, or give rise to a right of purchase under or accelerate the
performance required by, or result in the creation of any Lien upon any of
the properties of Parent or its Subsidiaries under, or result in being
declared void, voidable, or without further binding effect, or otherwise
result in a detriment to Parent or any of its Subsidiaries under any of the
terms, conditions or provisions of, any note, bond, mortgage, indenture, deed
of trust, license, franchise, permit, lease, contract, agreement, joint
venture or other instrument or obligation to which Parent or any of its
Subsidiaries is a party, or by which Parent or any of its Subsidiaries or any
of their properties is bound or affected; or (iii) contravene or conflict
with or constitute a violation of any provision of any law, rule, regulation,
judgment, order or decree binding upon or applicable to Parent or any of its
Subsidiaries, except, in the case of matters described in clause (ii) or
(iii), as would not have, individually or in the aggregate, a Parent Material
Adverse Effect.
(b) Neither the execution and delivery by Parent, Merger
Sub or Merger Grandsub of this Agreement nor the consummation by Parent,
Merger Sub or Merger Grandsub of the transactions contemplated hereby in
accordance with the terms hereof will require any consent, approval or
authorization of, or filing or registration with, any governmental or
regulatory authority, other than Regulatory Filings, except for any consent,
approval or authorization the failure of which to obtain and for any filing or
registration the failure of which to make would not have a Parent Material
Adverse Effect.
7.7. SEC Documents. Parent has made available to the Company each
-------------
registration statement, report, proxy statement or information statement
(other than preliminary materials) filed by Parent with the SEC since
September 30, 1995, each in the form (including exhibits and any amendments
thereto) filed with the SEC (collectively, the "Parent Reports"). As of
their respective dates, the Parent Reports (i) were prepared in all material
respects in accordance with the applicable requirements of the Securities
Act, the Exchange Act, and the rules and regulations thereunder and (ii) did
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading except for such statements, if any, as have been
modified by subsequent filings with the SEC prior to the date hereof. Each
of the consolidated balance sheets included in or incorporated by reference
into the Parent Reports (including the related notes and schedules) fairly
presents the consolidated financial position of Parent and its Subsidiaries
as of its date and each of the consolidated statements of income, cash flows
and retained earnings included in or incorporated by reference into the
Parent Reports (including any related notes and schedules) fairly presents
the results of operations, cash flows or retained earnings, as the case may
be, of Parent and its Subsidiaries for the periods set forth therein
(subject, in the case of unaudited statements, to (x) such exceptions as may
be permitted by Form 10-Q of the SEC and (y) normal year-end audit
adjustments), in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved, except as may be
noted therein. Except as and to the extent set forth on the consolidated
balance sheet of Parent and its Subsidiaries at September 30, 1996, including
all notes thereto, neither Parent nor any of its Subsidiaries has any
liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) that would be required to be reflected on, or
reserved against in, a balance sheet of Parent or in the notes thereto
prepared in accordance with generally accepted accounting principles
consistently
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applied, other than liabilities or obligations which would not have,
individually or in the aggregate, a Parent Material Adverse Effect and
liabilities and obligations arising in the ordinary course of business since
such date.
7.8. Litigation. There are no actions, suits or proceedings
----------
pending against Parent or any of its Subsidiaries or, to Parent's knowledge,
threatened against Parent or any of its Subsidiaries, at law or in equity, or
before or by any federal or state commission, board, bureau, agency or
instrumentality, that are likely to have, individually or in the aggregate, a
Parent Material Adverse Effect. There are no outstanding judgments, decrees,
injunctions, awards or orders against Parent or any of its Subsidiaries that
would have, individually or the in aggregate, a Parent Material Adverse
Effect.
7.9. Absence of Certain Changes. Since October 31, 1996, there has
--------------------------
not been (i) any change in the financial condition or business of Parent or
its Subsidiaries which has had or is likely to have an adverse effect which
is material to the financial condition or business of Parent and its
Subsidiaries, other than any adverse change resulting from adverse changes in
general economic conditions, stock market fluctuations or conditions or
adverse changes in or affecting the oilfield service and process industries
generally, (ii) any material change by Parent in its accounting methods,
principles or practices or its tax methods, practices or elections, (iii) any
declaration, setting aside or payment of any dividend or distribution in
respect of any capital stock of Parent or any redemption, purchase or other
acquisition of any of its securities, except dividends on the Parent Common
Stock at a rate of not more than $0.115 per share per quarter, or (iv) any
increase in or establishment of any bonus, insurance, severance, deferred
compensation, pension, retirement, profit sharing, stock option, stock
purchase or other employee benefit plan, except in the ordinary course of
business.
7.10. Taxes. (a) Parent and its Subsidiaries have (i) duly filed
-----
(or there has been filed on their behalf) on a timely basis with appropriate
governmental authorities all tax returns, statements, reports, declarations,
estimates and forms required to be filed by them, on or prior to the date
hereof, except to the extent that any failure to file would not have,
individually or in the aggregate, a Parent Material Adverse Effect and (ii)
duly paid or deposited in full on a timely basis or made adequate provisions
in accordance with generally accepted accounting principles (or there has
been paid or deposited or adequate provision has been made on their behalf)
for the payment of all taxes required to be paid by Parent or its
Subsidiaries for all periods ending through the date hereof, except to the
extent that any failure to pay or deposit or make adequate provision for the
payment of such taxes would not have, individually or in the aggregate, a
Parent Material Adverse Effect.
(b)(i) The federal income tax returns of Parent and each of its
Subsidiaries have been examined by the IRS (or the applicable statutes of
limitation for the assessment of federal income taxes for such periods have
expired) for all periods through and including September 30, 1991; (ii)
except to the extent being contested in good faith, all material deficiencies
asserted as a result of such examinations and any other examinations of
Parent and its Subsidiaries by any taxing authority have been paid fully,
settled or adequately provided for in the financial statements contained in
the Parent Reports; (iii) as of the date hereof, neither Parent nor any of
its Subsidiaries has granted any requests, agreements, consents or waivers to
extend the statutory period of limitations applicable to the assessment of
any taxes with respect to any tax returns of Parent or any of its
Subsidiaries except that Parent and its Subsidiaries have agreed to extend
the applicable Federal statutory period of limitations to January 31, 1998
for the fiscal years ended September 26, 1992 and October 2, 1993; and (iv)
neither Parent nor any of its Subsidiaries is a party to any tax sharing or
tax indemnity agreement.
7.11. Employee Benefit Plans. True and complete copies of all
----------------------
material employee benefit plans and other benefit arrangements, including all
"employee benefit plans" as defined in ERISA, covering employees of Parent
and its Subsidiaries (the "Parent Benefit Plans")
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and, if applicable, the most recent Form 5500 and annual reports for each such
plan have been made available to each of the Company and Xxxxxxxxx. All
applicable reporting and disclosure requirements have been met with respect to
the Parent Benefit Plans except for any noncompliance that would not result in
a material liability to Parent. There has been no material "reportable
event," as that term is defined in Section 4043 of ERISA, with respect to the
Parent Benefit Plans subject to Title IV of ERISA, which event is likely to
result in a material liability to Parent. To the extent applicable, the
Parent Benefit Plans comply, in all material respects, with the requirements
of ERISA and the Code, and any Parent Benefit Plan intended to be qualified
under section 401(a) of the Code has been determined by the IRS to be so
qualified. The Parent Benefit Plans have been maintained and operated, in all
material respects, in accordance with their terms and there is no material
liability for breaches of fiduciary duty in connection with the Parent Benefit
Plans. To Parent's knowledge, there are no pending or anticipated claims
against or otherwise involving any Parent Benefit Plan and no suit, action or
other litigation (excluding claims for benefits incurred in the ordinary
course of Parent Benefit Plan activities) has been brought against or with
respect to any such Parent Benefit Plan, except for any of the foregoing which
would not have a Parent Material Adverse Effect. All material contributions
required to be made as of the date hereof to the Parent Benefit Plans have
been made or provided for. Parent does not maintain or contribute to any
material plan or arrangement which provides or has any liability to provide
life insurance, medical or other employee welfare benefits to any employee or
former employee upon his retirement or termination of employment and Parent
has not represented, promised or contracted (whether in oral or written form)
to any employee or former employee that such benefits would be provided. With
respect to the Parent Benefit Plans or any "employee pension benefit plans,"
as defined in Section 3(2) of ERISA, that are subject to Title IV of ERISA
and have been maintained or contributed to within six years prior to the
Company Effective Time by Parent, its Subsidiaries or any trade or business
(whether or not incorporated) which is under common control, or which is
treated as a single employer, with Parent or any of its Subsidiaries under
Sections 414(b), (c), (m), or (o) of the Code, (i) neither Parent nor any of
its Subsidiaries has incurred any direct or indirect liability under title IV
of ERISA in connection with any termination thereof or withdrawal therefrom;
(ii) there does not exist any accumulated funding deficiency within the
meaning of section 412 of the Code or section 302 of ERISA, whether or not
waived; and (iii) the actuarial value of the assets equal or exceed the
actuarial present value of the benefit liabilities, within the meaning of
Section 4041 of ERISA, based upon reasonable actuarial assumptions and asset
valuation principles, except, in each case, for any liability or any exercise
tax which would not have a Parent Material Adverse Effect. Neither Parent nor
any of its Subsidiaries nor any trade or business (whether or not
incorporated) which is under common control, or which is treated as a single
employer, with Parent or any of its Subsidiaries under Sections 414(b), (c),
(m), or (o) of the Code, contributes to, or has an obligation to contribute
to, and has not within six years prior to the Company Effective Time
contributed to, or had an obligation to contribute to, a multiemployer plan
within the meaning of Section 3(37) of ERISA. No prohibited transaction has
occurred with respect to any Parent Benefit Plan that would result in the
imposition of any excise tax or other liability under the Code or ERISA which
would have a Parent Material Adverse Effect. The execution of, and
performance of the transactions contemplated in, this Agreement will not
(either alone or upon the occurrence of any additional or subsequent events)
constitute an event under any benefit plan, policy, arrangement or agreement
or any trust or loan that will or may result in any payment (whether of
severance pay or otherwise), acceleration, forgiveness of indebtedness,
vesting, distribution, increase in benefits or obligations to fund benefits
with respect to any employee.
7.12. Environmental Matters. To the knowledge of Parent, and except
---------------------
as would not have, individually or in the aggregate, a Parent Material Adverse
Effect:
(a) there are not any past or present conditions or
circumstances that interfere with the conduct of the business of Parent and
each of its Subsidiaries in the manner
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now conducted or which interfere with compliance with any order of any court,
governmental authority or arbitration board or tribunal, or any Environmental
Law;
(b) there are not any past or present conditions or
circumstances at, or arising out of, any current or former businesses, assets
or properties of Parent or any Subsidiary of Parent, including but not limited
to on-site or off-site disposal or release of any chemical substance, product
or waste, which may give rise to: (i) liabilities or obligations for any
cleanup, remediation, disposal or corrective action under any Environmental
Law or (ii) claims arising for personal injury, property damage, or damage to
natural resources; and
(c) neither Parent nor any of its Subsidiaries has (i)
received any notice of noncompliance with, violation of, or liability or
potential liability under any Environmental Law or (ii) entered into any
consent decree or order or is subject to any order of any court or
governmental authority or tribunal under any Environmental Law or relating to
the cleanup of any hazardous materials contamination.
7.13. Trademarks, Patents and Copyrights. Except as previously
----------------------------------
disclosed to the Company and Xxxxxxxxx in writing, to the knowledge of
Parent, Parent and its Subsidiaries own or possess adequate licenses or other
valid rights to use all patents, patent rights, trademarks, trademark rights
and proprietary information used or held for use in connection with their
respective businesses as currently being conducted, except where the failure
to own or possess such licenses and other rights would not have, individually
or in the aggregate, a Parent Material Adverse Effect, and to the knowledge
of Parent, there are no assertions or claims challenging the validity of any
of the foregoing which are likely to have, individually or in the aggregate,
a Parent Material Adverse Effect. To the knowledge of Parent, the conduct of
Parent's and its Subsidiaries' respective businesses as currently conducted
does not conflict with any patents, patent rights, licenses, trademarks,
trademark rights, trade names, trade name rights or copyrights of others in
any way likely to have, individually or in the aggregate, a Parent Material
Adverse Effect. To the knowledge of the Parent, there is no material
infringement of any proprietary right owned by or licensed by or to Parent or
any of its Subsidiaries which is likely to have, individually or in the
aggregate, a Parent Material Adverse Effect.
7.14. Insurance. Parent and its Subsidiaries maintain insurance
---------
coverage reasonably adequate for the operation of their respective businesses
(taking into account the cost and availability of such insurance).
7.15. No Brokers. Parent has not entered into any contract,
----------
arrangement or understanding with any person or firm which may result in the
obligation of the Company, Xxxxxxxxx or Parent to pay any finder's fees,
brokerage or agent's commissions or other like payments in connection with
the negotiations leading to this Agreement or the consummation of the
transactions contemplated hereby, except that Parent has retained Xxxxxxx
Xxxxx & Co. as its financial advisor, the arrangements with which have been
disclosed in writing to the Company and Xxxxxxxxx prior to the date hereof.
7.16. Opinion of Financial Advisor. Parent has received the opinion
----------------------------
of Xxxxxxx Xxxxx & Co. to the effect that, as of the date thereof, the
consideration to be paid by Parent pursuant to the Mergers is fair to Parent
from a financial point of view.
7.17. Xxxxxxxxx and Company Stock Ownership. Neither Parent nor any
-------------------------------------
of its Subsidiaries owns any shares of capital stock of the Company or of
Xxxxxxxxx or any other securities convertible into capital stock of Xxxxxxxxx
or of the Company.
7.18. Reorganization. To Parent's knowledge, neither Parent nor any
--------------
of its stockholders has taken or failed to take any action, as a result of
which the Company Merger or
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the Xxxxxxxxx Merger would not qualify as a reorganization within the meaning
of section 368(a) of the Code (and comparable provisions of applicable state
or local law).
7.19. Vote Required. No vote of the holders of any class or series
-------------
of Parent capital stock is necessary to approve the issuance of Parent Common
Stock pursuant to this Agreement and the transactions contemplated hereby
unless the rules of the NYSE require the vote of Parent stockholders as a
result of the aggregate number of shares of Parent Common Stock to be issued
in the Mergers.
ARTICLE 8
8. Covenants.
---------
8.1. Acquisition Proposals. (a) Each of the Company and Xxxxxxxxx
---------------------
agrees that (i) prior to the Company Effective Time, neither it nor any of
its Subsidiaries shall, and each of them shall not knowingly permit any of
its officers, directors, employees, agents or representatives (including,
without limitation, any investment banker, attorney or accountant retained by
it or any of its Subsidiaries) to, solicit or encourage (including by way of
furnishing material non-public information), directly or indirectly, any
inquiry, proposal or offer (including, without limitation, any proposal or
offer to its stockholders) with respect to a tender offer, merger,
consolidation or similar transaction involving, or any purchase of 20% or
more of the assets on a consolidated basis or 20% or more of the capital
stock of, the Company (any such proposal or offer being hereinafter referred
to as a "Company Acquisition Proposal") or Xxxxxxxxx (any such proposal or
offer being hereinafter referred to as a "Xxxxxxxxx Acquisition Proposal"
and, collectively with a Company Acquisition Proposal, "Acquisition
Proposals") or engage in any negotiations concerning an Acquisition Proposal;
and (ii) it will immediately cease and cause to be terminated any existing
negotiations with any parties conducted heretofore with respect to any of the
foregoing; provided that nothing contained in this Agreement shall prevent
--------
the Company, Xxxxxxxxx or their respective Board of Directors from (A)
complying with Rule 14e-2 promulgated under the Exchange Act with regard to a
Company Acquisition Proposal or a Xxxxxxxxx Acquisition Proposal, as the case
may be, or (B) providing information (pursuant to a confidentiality agreement
in reasonably customary form) to or engaging in any negotiations or
discussions with any person or entity who has made an unsolicited bona fide
Acquisition Proposal that is superior to the Company Merger or the Xxxxxxxxx
Merger, as the case may be, and is reasonably capable of being financed, if
the Board of Directors of the Company or the Board of Directors of Xxxxxxxxx,
as the case may be, after consultation with such party's outside legal
counsel, determines that the failure to do so would be inconsistent with its
fiduciary obligations.
(b) Prior to taking any action referred to in Section 8.1(a),
if the Company or Xxxxxxxxx intends to participate in any such discussions or
negotiations or provide any such information to any such third party, the
Company or Xxxxxxxxx, as the case may be, shall give reasonable prior notice
to Parent of each such action. The Company or Xxxxxxxxx, as the case may be,
will promptly notify Parent of any such requests for such information or the
receipt of any Acquisition Proposal, including the identity of the person or
group engaging in such discussions or negotiations, requesting such
information or making such Acquisition Proposal, and the material terms and
conditions of any Acquisition Proposal.
(c) Nothing in this Section 8.1 shall permit the Company or
Xxxxxxxxx to enter into any agreement with respect to an Acquisition Proposal
during the term of this Agreement, it being agreed that during the term of
this Agreement, neither the Company nor Xxxxxxxxx shall enter into any
agreement with any person that provides for, or in any way facilitates, an
Acquisition Proposal, other than a confidentiality agreement in reasonably
customary form.
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8.2. Conduct of the Company and Xxxxxxxxx'x Businesses. Prior to
-------------------------------------------------
the Company Effective Time, except as set forth in the Company Disclosure
Letter or the Xxxxxxxxx Disclosure Letter or as contemplated by any other
provision of this Agreement, unless the other parties have consented in
writing thereto, each of the Company and Xxxxxxxxx:
(a) shall, and shall cause each of their respective
Subsidiaries to, conduct its operations according to their usual, regular and
ordinary course in substantially the same manner as heretofore conducted;
(b) shall use their best efforts, and shall cause each of
their respective Subsidiaries to use its best efforts, to preserve intact
their business organizations and goodwill, keep available the services of
their respective officers and employees and maintain satisfactory
relationships with those persons having business relationships with them;
(c) shall not amend their certificate or articles of
incorporation or bylaws;
(d) shall promptly notify the other parties of any material
change in its condition (financial or otherwise) or business or any material
litigation or material governmental complaints, investigations or hearings (or
communications indicating that the same may be contemplated), or the breach
in any material respect of any representation or warranty contained herein;
(e) shall promptly deliver to the other parties true and
correct copies of any report, statement or schedule filed with the SEC
subsequent to the date of this Agreement;
(f) shall not (i) except pursuant to the exercise of
options, warrants, conversion rights and other contractual rights existing on
the date hereof, or referred to in clause (ii) below and disclosed pursuant to
this Agreement, issue any shares of its capital stock, effect any stock split
or otherwise change its capitalization as it existed on the date hereof, (ii)
grant, confer or award any option, warrant, conversion right or other right
not existing on the date hereof to acquire any shares of its capital stock
except, in the case of the Company, the automatic awards to non-employee
directors pursuant to Article V of the 1993 Plan, (iii) increase any
compensation or enter into or amend any employment agreement with any of its
present or future officers or directors, except for normal increases
consistent with past practice and the payment of cash bonuses to officers
pursuant to and consistent with Section 8.13(e) hereof, or (iv) adopt any new
employee benefit plan (including any stock option, stock benefit or stock
purchase plan) or amend any existing employee benefit plan in any material
respect, except for changes which are less favorable to participants in such
plans;
(g) shall not (i) declare, set aside or pay any dividend or
make any other distribution or payment with respect to any shares of its
capital stock or (ii) redeem, purchase or otherwise acquire any shares of its
capital stock or, in the case of the Company, capital stock of any of its
Subsidiaries, or make any commitment for any such action, except (x) in the
case of the Company, for the declaration and payment of regular, quarterly
dividends, consistent with past practice, not to exceed $0.28 per share of
Company Common Stock per quarter and (y) in the case of Xxxxxxxxx, except for
the declaration and payment of cash dividends consistent with past practice
and Section 8.14;
(h) shall not, and shall not permit any of its Subsidiaries
to, sell, lease or otherwise dispose of any of its assets (including capital
stock of Subsidiaries) which are material, individually or in the aggregate,
except in the ordinary course of business, and except in the case of
Xxxxxxxxx, sales of portfolio securities;
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(i) shall not, and shall not permit any of its Subsidiaries
to, acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial equity interest in or a substantial portion of the
assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof
or otherwise acquire or agree to acquire any assets or securities in each
case which are material, individually or in the aggregate, except in the case
of Xxxxxxxxx, investments in cash equivalents and investment-grade
securities;
(j) except as may be required as a result of a change in
law or in generally accepted accounting principles, change any of the
accounting principles or practices used by it;
(k) shall, and shall cause any of its Subsidiaries to, use
reasonable efforts to maintain with financially responsible insurance
companies insurance in such amounts and against such risks and losses as are
customary for companies engaged in their respective businesses;
(l) shall not (i) make or rescind any material express or
deemed election relating to taxes unless it is reasonably expected that such
action will not materially and adversely affect the Company or Xxxxxxxxx, as
the case may be, including elections for any and all joint ventures,
partnerships, limited liability companies, working interests or other
investments where the Company or Xxxxxxxxx, as the case may be, has the
capacity to make such binding election, (ii) settle or compromise any
material claim, action, suit, litigation, proceeding, arbitration,
investigation, audit or controversy relating to taxes, except where such
settlement or compromise will not materially and adversely affect the Company
or Xxxxxxxxx, as the case may be, or (iii) change in any material respect any
of its methods of reporting income or deductions for federal income tax
purposes from those expected to be employed in the preparation of its federal
income tax return for the taxable year ending October 31, 1996, except as may
be required by applicable law or except for such changes that are reasonably
expected not to materially and adversely affect the Company or Xxxxxxxxx, as
the case may be;
(m) in the case of the Company, shall not, nor shall it
permit any of its Subsidiaries to, (i) incur any indebtedness for borrowed
money (except for working capital under the Company's existing credit
facilities, and (x) refinancings of existing debt and (y) other immaterial
borrowings that, in the case of either (x) or (y), permit prepayment of such
debt without penalty (other than LIBOR breakage costs)) or guarantee any such
indebtedness or issue or sell any debt securities or warrants or rights to
acquire any debt securities of such party or any of its Subsidiaries or
guarantee any debt securities of others, (ii) except in the ordinary course of
business, enter into any material lease (whether such lease is an operating or
capital lease) or create any material mortgages, liens, security interests or
other encumbrances on the property of the Company or any of its Subsidiaries
in connection with any indebtedness thereof, or (iii) make or commit to make
aggregate capital expenditures in excess of $3 million over the fiscal 1997
capital expenditures budget previously disclosed to Parent by the Company;
(n) in the case of Xxxxxxxxx, shall not (i) incur any
indebtedness for borrowed money or guarantee any such indebtedness or issue or
sell any of its debt securities or warrants or rights to acquire any of its
debt securities or guarantee any debt securities of others, (ii) enter into
any lease (whether such lease is an operating or capital lease) or create any
mortgages, liens, security interests or other encumbrances on the property of
Xxxxxxxxx in connection with any indebtedness thereof or (iii) commit to
aggregate capital expenditures in excess of $10,000;
(o) shall not purchase any shares of Parent Common Stock
and, in the case of Xxxxxxxxx shall not (i) sell or dispose of or encumber any
shares of Company Common Stock or (ii) purchase or otherwise acquire any
shares of Company Common Stock;
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37
(p) shall not, nor shall it permit any of its Subsidiaries
to, agree in writing or otherwise to take any action inconsistent with the
foregoing; and
(q) shall not take any action that is likely to delay
materially (but in any event by more than 10 business days) or adversely
affect the ability of any of the parties hereto to obtain any consent,
authorization, order or approval of any governmental commission, board or
other regulatory body or the expiration of any applicable waiting period
required to consummate the transactions contemplated by this Agreement.
8.2A Conduct of Parent's Business. Prior to the Company Effective
----------------------------
Time, except as expressly contemplated by any other provision of this
Agreement, unless the other parties have consented in writing thereto,
Parent:
(a) shall not amend its Restated Certificate of Incorporation or
Bylaws in any way that materially and adversely affects the rights of holders
of Parent Common Stock;
(b) shall promptly notify the other parties of any material change
in its condition (financial or otherwise ) or business or any material
litigation or material governmental complaints, investigations or hearings
(or communications indicating that the same may be contemplated), or the
breach in any material respect of any representation or warranty contained
herein;
(c) during the period beginning five business days prior to the
Parent Pricing Period and ending at the Company Effective Time, shall not
(and shall cause its Subsidiaries not to) issue or sell any shares of
Parent's capital stock or the capital stock of any of its Subsidiaries (or
securities convertible into or exchangeable for capital stock) for less than
the fair market value thereof, except for issuances pursuant to employee
benefit plans or pursuant to outstanding options, warrants or convertible
securities in accordance with their terms, in each case as in existence on
the date hereof, and shall not issue to holders of Parent's capital stock any
rights to purchase any shares of Parent's capital stock for less than the
fair market value thereof if the ex-dividend date for such distribution would
be during the period beginning five business days prior to the Parent Pricing
Period and ending at the Company Effective Time;
(d) shall not (and shall cause its Subsidiaries not to) engage in
any substantial repurchase at a material premium, recapitalization,
restructuring or reorganization with respect to the Parent Common Stock;
(e) during the period beginning five business days prior to the
mailing of the Proxy Statement/Prospectus and ending at the Company Effective
Time, shall not (and shall cause its Subsidiaries not to) redeem, repurchase
or otherwise acquire any shares of Parent Common Stock (other than pursuant
to existing employee benefit plans);
(f) shall not declare, set aside or pay any dividend or make any
other distribution or payment with respect to any shares of Parent Common
Stock, or make any commitment for any such action, except regular quarterly
cash dividends in amounts consistent with past practice;
(g) shall not, and shall not permit any of its Subsidiaries to,
acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial equity interest in or a substantial portion of the
assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof
or otherwise acquire or agree to acquire any assets if (i) such entity or
business is engaged in the U.S. oilfield production chemicals business with
revenues in SIC codes in which either Parent or the Company has revenues or
(ii) such action is likely to (a) have a material adverse effect on the
ability of Parent to consummate the transactions contemplated by this
Agreement or (b) delay materially (but in
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any event by more than 10 business days) the Xxxxxxxxx Effective Time or the
Company Effective Time;
(h) other than any acquisition as to which the purchase price is
not in excess of $200 million, shall not, and shall not permit any of its
Subsidiaries to, acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial equity interest in or a substantial
portion of the assets of, or by any other manner, any business or any
corporation, partnership, association or other business organization or
division thereof the principal business of which is not related to the
oilfield service industry, the manufacture and sale of products for use in,
or the provision of services relating to the exploration, development or
production of oil or natural gas or other minerals or other businesses
engaged in by Parent on the date hereof; and
(i) subject to Section 8.4, shall not take any action that is
likely to delay materially (but in any event by more than 10 business days) or
adversely affect the ability of any of the parties hereto to obtain any
consent, authorization, order or approval of any governmental commission,
board or other regulatory body or the expiration of any applicable waiting
period required to consummate the transactions contemplated by this
Agreement.
8.3. Meetings of Stockholders. (a) Each of Parent, if a vote of
------------------------
its stockholders is required by the rules of the NYSE, Xxxxxxxxx and the
Company will take all action necessary in accordance with applicable law and
its certificate or articles of incorporation and bylaws to convene a meeting
of its stockholders as promptly as practicable to consider and vote upon (i)
in the case of Parent, the approval of the issuance of the shares of Parent
Common Stock pursuant to the Mergers contemplated hereby and (ii) in the case
of Xxxxxxxxx and the Company, the approval of this Agreement and the
transactions contemplated hereby. Xxxxxxxxx and the Company shall coordinate
and cooperate with respect to the timing of such meetings and shall use their
best efforts to hold such meetings on the same day and in any event, the vote
of the Company stockholders shall be taken prior to the vote of the Xxxxxxxxx
stockholders.
(b) Parent, if a vote of its stockholders is required by the rules
of the NYSE, Xxxxxxxxx and the Company, through their respective Boards of
Directors, shall recommend approval of such matters subject to the
determination by the Board of Directors of the Company and the Board of
Directors of Xxxxxxxxx after consultation with their respective counsel that
recommending approval of such matters would not be inconsistent with its
fiduciary obligations. Additionally, the Board of Directors of the Company
or the Board of Directors of Xxxxxxxxx may at any time prior to the Company
Effective Time withdraw, modify, or change any recommendation and declaration
regarding this Agreement or the Mergers, or recommend and declare advisable
any other offer or proposal, if in the opinion of such Board of Directors
after consultation with its counsel the failure to so withdraw, modify, or
change its recommendation and declaration would be inconsistent with its
fiduciary obligations.
8.4. Filings; Other Action. Subject to the terms and conditions
---------------------
herein provided, the Company, Xxxxxxxxx and Parent shall: (a) promptly (but
in not more than 10 business days from the date hereof) make their respective
filings and thereafter make any other required submissions under the HSR Act
with respect to the Mergers; (b) use their best efforts to cooperate with one
another in (i) determining which filings are required to be made prior to the
Company Effective Time with, and which consents, approvals, permits or
authorizations are required to be obtained prior to the Company Effective
Time from, governmental or regulatory authorities of the United States, the
several states and foreign jurisdictions in connection with the execution and
delivery of this Agreement and the consummation of the Mergers and the
transactions contemplated hereby and (ii) timely making all such filings and
timely seeking all such consents, approvals, permits or authorizations; (c)
furnish the others with copies of all correspondence, filings and
communications (and memoranda setting forth the substance thereof) between
them and their affiliates and their respective representatives, on the one
hand, and any governmental or regulatory authority or members or their
respective staffs, on the other
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hand, with respect to this Agreement and the transactions contemplated hereby;
(d) furnish the others with such necessary information and reasonable
assistance as such other parties and their respective affiliates may
may reasonably request in connection with their preparation of necessary
filings, registrations or submissions of information to any governmental or
regulatory authorities, including without limitation any filings necessary
under the provisions of the HSR Act; (e) use their commercially reasonable
efforts to take, or cause to be taken, all other action and do, or cause to be
done, all other things necessary, proper or appropriate to consummate and make
effective the Mergers and the transactions contemplated by this Agreement
including, without limitation, the resolution of objections, if any, as may be
asserted by any governmental authority with respect to the Mergers and the
transactions contemplated hereby under any antitrust or trade or regulatory
laws or regulations of any governmental authority and (f) use their
commercially reasonable efforts to lift or rescind any injunction or
restraining order or other order adversely affecting the ability of the
parties to consummate the transactions contemplated hereby and use their
commercially reasonable efforts to defend any litigation seeking to enjoin,
prevent or delay the consummation of the Mergers or the transactions
contemplated hereby or seeking material damages. In complying with the
foregoing, Parent, Xxxxxxxxx and the Company shall each use all commercially
reasonable measures available to them to consummate the transactions
contemplated hereby, so long as such measures would not have a material
adverse effect on the U.S. oilfield production chemicals businesses
of the Company or Parent (including any Subsidiaries thereof), but shall not
be required to take measures that would have such a material adverse effect.
8.5. Inspection of Records. From the date hereof to the Company
---------------------
Effective Time, each of the Company and Xxxxxxxxx, on the one hand, and
Parent, on the other hand, shall allow all designated officers, attorneys,
accountants and other representatives of Parent or the Company and Xxxxxxxxx,
as the case may be, access at all reasonable times upon reasonable notice to
the records and files, correspondence, audits and properties, as well as to
all information relating to commitments, contracts, titles and financial
position, or otherwise pertaining to the business and affairs of Parent, the
Company and Xxxxxxxxx and their respective Subsidiaries; provided that no
--------
investigation pursuant to this Section 8.5 shall affect any representation or
warranty given by any party hereunder, and provided further that
notwithstanding the provision of information or investigation by any party,
no party shall be deemed to make any representation or warranty except as
expressly set forth in this Agreement. Notwithstanding the foregoing, no
party shall be required to provide any information which it reasonably
believes it may not provide to the other party by reason of applicable law,
rules or regulations, which constitutes information protected by
attorney/client privilege, or which it is required to keep confidential by
reason of contract or agreement with third parties. The parties hereto will
make appropriate substitute disclosure arrangements under circumstances in
which the restrictions of the preceding sentence apply. Each of Parent,
Xxxxxxxxx and the Company agrees that it will not, and will cause its
respective representatives not to, use any information obtained pursuant to
this Section 8.5 for any purpose unrelated to the consummation of the
transactions contemplated by this Agreement. All non-public information
obtained pursuant to this Section 8.5 shall be governed by the
Confidentiality Agreements (as defined in Section 11.4).
8.6. Publicity. The parties will consult with each other and will
---------
mutually agree upon any press releases or public announcements pertaining to
this Agreement or the transactions contemplated hereby and shall not issue
any such press releases or make any such public announcements prior to such
consultation and agreement, except as may be required by applicable law or by
obligations pursuant to any listing agreement with any national securities
exchange, in which case the party proposing to issue such press release or
make such public announcement shall use its best efforts to consult in good
faith with the other party before issuing any such press releases or making
any such public announcements.
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8.7. Registration Statement. (a) Each of Parent, the Company and
----------------------
Xxxxxxxxx shall cooperate and promptly prepare and Parent shall file with the
SEC as soon as practicable a Registration Statement on Form S-4 (the "Form S-
4") under the Securities Act, with respect to the Parent Common Stock
issuable in the Mergers, a portion of which Registration Statement shall also
serve as the joint proxy statement with respect to the meetings of the
stockholders of Parent, if a vote of the stockholders of Parent is required
by the rules of the NYSE, of the Company and of Xxxxxxxxx in connection with
the Mergers (the "Proxy Statement/Prospectus"). The respective parties will
cause the Proxy Statement/Prospectus and the Form S-4 to comply as to form in
all material respects with the applicable provisions of the Securities Act,
the Exchange Act and the rules and regulations thereunder. Parent shall use
its best efforts, and the Company and Xxxxxxxxx will cooperate with Parent,
to have the Form S-4 declared effective by the SEC as promptly as
practicable. Parent shall use its reasonable best efforts to obtain, prior
to the effective date of the Form S-4, all necessary state securities law or
"Blue Sky" permits or approvals required to carry out the transactions
contemplated by this Agreement and will pay all expenses incident thereto.
Parent will advise the Company and Xxxxxxxxx, promptly after it receives
notice thereof, of the time when the Form S-4 has become effective or any
supplement or amendment has been filed, the issuance of any stop order, the
suspension of the qualification of the Parent Common Stock issuable in
connection with the Mergers for offering or sale in any jurisdiction, or any
request by the SEC for amendment of the Proxy Statement/Prospectus or the
Form S-4 or comments thereon and responses thereto or requests by the SEC for
additional information.
(b) Each of Parent, if a vote of its stockholders is
required pursuant to the rules of the NYSE, Xxxxxxxxx and the Company will
each use its best efforts to cause the Proxy Statement/Prospectus to be mailed
to its stockholders as promptly as practicable after the date hereof.
(c) Each of Parent, the Company and Xxxxxxxxx agrees that
the information provided by it for inclusion in the Proxy Statement/Prospectus
and each amendment or supplement thereto, at the time of mailing thereof and
at the time of the respective meetings of stockholders of Parent, if any, of
Xxxxxxxxx and of the Company, or, in the case of information provided by it
for inclusion in the Form S-4 or any amendment or supplement thereto, at the
time it is filed or becomes effective, (i) will not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (ii) will
comply as to form in all material respects with the provisions of the
Exchange Act.
8.8. Listing Application. Parent shall promptly prepare and submit
-------------------
to the NYSE a listing application covering the shares of Parent Common Stock
issuable in the Mergers, and shall use its best efforts to obtain, prior to
the Xxxxxxxxx Effective Time, approval for the listing of such Parent Common
Stock, subject to official notice of issuance.
8.9. Letters of Accountants. (a) The Company shall use its
----------------------
reasonable best efforts to cause to be delivered to Parent "comfort" letters
of Price Waterhouse LLP ("Price Waterhouse"), the Company's independent
public accountants, dated the effective date of the Form S-4 and the Closing
Date, respectively, and addressed to Parent with regard to certain financial
information regarding the Company included in the Form S-4, in form and
substance reasonably satisfactory to Parent and customary in scope and
substance for "comfort" letters delivered by independent public accountants
in connection with registration statements similar to the Form S-4.
(b) Xxxxxxxxx shall use its reasonable best efforts to
cause to be delivered to Parent "comfort" letters of Price Waterhouse,
Xxxxxxxxx'x independent public accountants, dated the effective date of the
Form S-4 and the Closing Date, respectively, and addressed to Parent, with
respect to certain financial information regarding Xxxxxxxxx included in
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41
the Form S-4, in form and substance reasonably satisfactory to Parent and
customary in scope and substance for "comfort" letters delivered by
independent public accountants in connection with registration statements
similar to the Form S-4.
(c) Parent shall use its reasonable best efforts to cause to be
delivered to each of the Company and Xxxxxxxxx "comfort" letters of Deloitte
& Touche LLP, Parent's independent public accountants, dated the effective
date of the Form S-4 and the Closing Date, respectively, and addressed to
each of the Company and Xxxxxxxxx, with regard to certain financial
information regarding Parent included in the Form S-4, in form and substance
reasonably satisfactory to the Company and Xxxxxxxxx and customary in scope
and substance for "comfort" letters delivered by independent public
accountants in connection with registration statements similar to the Form S-4.
8.10. Agreements of Rule 145 Affiliates. Prior to the Xxxxxxxxx
---------------------------------
Effective Time, each of Xxxxxxxxx and the Company shall cause to be prepared
and delivered to Parent a list identifying all persons who, at the time of
the meeting of Xxxxxxxxx'x stockholders or the meeting of the Company's
stockholders pursuant to Section 8.3, as the case may be, may be deemed to be
"affiliates" of Xxxxxxxxx or of the Company, as the case may be, as that term
is used in paragraphs (c) and (d) of Rule 145 under the Securities Act (the
"Rule 145 Affiliates"). Parent shall be entitled to place restrictive
legends on any shares of Parent Common Stock received by such Rule 145
Affiliates. Xxxxxxxxx or the Company, as the case may be, shall use its best
efforts to cause each person who is identified as a Rule 145 Affiliate in
such list to deliver to Parent, at or prior to the Xxxxxxxxx Effective Time,
a written agreement, in the form to be approved by the parties hereto, that
such Rule 145 Affiliate will not sell, pledge, transfer or otherwise dispose
of any shares of Parent Common Stock issued to such Rule 145 Affiliate
pursuant to the Mergers, except pursuant to an effective registration
statement or in compliance with Rule 145 or an exemption from the
registration requirements of the Securities Act. Xxxxxxxxx or the Company,
as the case may be, shall, to the extent necessary, use its best efforts to
cause each person who is identified as a Rule 145 Affiliate in such list to
sign on or prior to the thirtieth day prior to the Xxxxxxxxx Effective Time,
a written agreement, in the form to be approved by Xxxxxxxxx or the Company,
as the case may be, and Parent, that such party will not sell or in any other
way reduce such party's risk relative to any shares of Parent Common Stock
received in the Mergers (within the meaning of Section 201.01 of the SEC's
Financial Reporting Release No. 1), until such time as financial results
(including combined sales and net income) covering at least 30 days of post-
merger operations have been published, except as permitted by Staff
Accounting Bulletin No. 76 (or any successor thereto) issued by the SEC.
8.11. Expenses. Whether or not the Mergers are consummated, all
--------
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses, except as expressly provided herein.
8.12. Indemnification and Insurance. (a) From and after the
-----------------------------
Company Effective Time, Parent shall indemnify, defend and hold harmless to
the fullest extent permitted under applicable law each person who is now, or
has been at any time prior to the date hereof, an officer or director of the
Company or Xxxxxxxxx (or any Subsidiary or division thereof), (individually,
an "Indemnified Party" and, collectively, the "Indemnified Parties"), against
all losses, claims, damages, liabilities, costs or expenses (including
reasonable attorneys' fees), judgments, fines, penalties and amounts paid in
settlement in connection with any claim, action, suit, proceeding or
investigation arising out of or pertaining to acts or omissions, or alleged
acts or omissions, by them in their capacities as such, whether commenced,
asserted or claimed before or after the Company Effective Time. In the event
of any such claim, action, suit, proceeding or investigation (an "Action"),
(i) Parent shall pay, as incurred, the reasonable fees and expenses of
counsel selected by the Indemnified Party, which counsel shall be reasonably
acceptable to Parent, in advance of the final disposition of any such Action
to the fullest extent permitted by applicable law, upon receipt of any
undertaking required by applicable law, and (ii)
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Xxxxxxxxx Surviving Corporation and Surviving Corporation will cooperate in
the defense of any such matter; provided, however, that Parent shall not be
-------- -------
liable for any settlement effected without its written consent (which consent
shall not be unreasonably withheld), and provided further, that Parent shall
not be obligated pursuant to this Section 8.12 to pay the fees and
disbursements of more than one counsel for all Indemnified Parties in any
single Action, unless, in the opinion of counsel for any of the Indemnified
Parties, there is a conflict of interests between two or more of such
Indemnified Parties.
(b) The parties agree that the rights to indemnification,
including provisions relating to advances of expenses incurred in defense of
any action or suit, in the certificate or articles of incorporation and bylaws
of the Company and Xxxxxxxxx with respect to matters occurring through the
Company Effective Time, shall survive the Mergers and shall continue in full
force and effect for a period of six years from the Company Effective Time;
provided, however, that all rights to indemnification in respect of any
-------- -------
Action pending or asserted within such period shall continue until the
disposition of such Action.
(c) (i) For a period of six years after the Company
Effective Time, Parent shall cause to be maintained officers' and directors'
liability insurance covering the Indemnified Parties who are currently
covered, in their capacities as officers and directors, by the Company's
existing officers' and directors' liability insurance policies on terms
substantially no less advantageous to the Indemnified Parties than such
existing insurance.
(ii) For a period of six years after the Xxxxxxxxx
Effective Time, Parent shall cause to be maintained officers' and directors'
liability insurance covering the Indemnified Parties who are currently
covered, in their capacities as officers and directors, by Xxxxxxxxx'x
existing officers' and directors' liability insurance policies on terms
substantially no less advantageous to the Indemnified Parties than such
existing insurance.
(d) Parent shall pay all expenses, including reasonable
attorneys' fees, that may be incurred by any Indemnified Parties in enforcing
the indemnity and other obligations provided for in this Section 8.12.
(e) The rights of each Indemnified Party hereunder shall
be in addition to any other rights such Indemnified Party may have under the
certificate or articles of incorporation or bylaws of the Company or
Xxxxxxxxx, under the DGCL or the MGBCL or otherwise. The provisions of this
Section 8.12 shall survive the consummation of the Mergers and expressly are
intended to benefit each of the Indemnified Parties.
(f) In the event Parent, Surviving Corporation or Xxxxxxxxx
Surviving Corporation or any of their respective successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity in such consolidation or merger
or (ii) transfers all or substantially all of its properties and assets to any
person, then and in either such case, proper provision shall be made so that
the successors and assigns of Parent, Surviving Corporation or Xxxxxxxxx
Surviving Corporation, as the case may be, shall assume the obligations set
forth in this Section 8.12.
(g) Xxxxxxxxx Surviving Corporation and Surviving
Corporation shall be jointly and severally liable with Parent for all of
Parent's obligations under this Section 8.12.
8.13. Certain Benefits. (a) From and after the Company Effective
----------------
Time, Parent and its Subsidiaries will honor in accordance with their terms
and this Agreement the executive, employment and other agreements and
arrangements set forth in Section 8.13(a)(i) of the Company Disclosure Letter
between the Company or its Subsidiaries and certain employees and former
employees thereof (the "Employment Agreements") and certain executives and
35
43
former executives thereof ("Executive Agreements") and one other individual,
and all of the Company Benefit Plans; provided, however, that nothing herein
-------- -------
shall preclude any change in any Company Benefit Plan effected on a
prospective basis that is permitted pursuant to this Section 8.13. Parent
hereby acknowledges that the consummation of the Company Merger will result
in a "change of control" under the Executive Agreements and the Employment
Agreements. Parent shall cause the Surviving Corporation (i) to assume the
obligations of the Company under the Company Benefit Plans set forth on
Schedule 8.13(a)(ii) of the Company Disclosure Letter substantially as in
effect immediately prior to the Company Effective Time, to cover all Company
Employees (as defined in Section 8.13(g)) who are participants therein
immediately prior to the Company Effective Time and who remain eligible to
participate in such Company Benefit Plans pursuant to the terms thereof;
provided, that the Surviving Corporation may amend such plans, other than the
--------
Petrolite Corporation Vacation Plan and the Petrolite Corporation Severance
Plan, at any time following the Company Effective Time to provide benefits to
Company Employees which in the aggregate are comparable to those applicable
to similarly situated employees of Parent or, (ii) in lieu thereof, to
provide benefits to such Company Employees under Parent Benefit Plans so that
the aggregate benefits to such Company Employees are comparable to those that
are applicable to similarly situated employees of Parent. After the Company
Effective Time, any Company Employee who is or becomes entitled to continued
medical coverage pursuant to an agreement with the Company set forth in
Section 8.13(a)(i) of the Company Disclosure Letter will be entitled to
participate under any medical plan sponsored by Parent or the Surviving
Corporation which covers Company Employees under the same terms and for
payment of the same level of premiums as specified in his or her agreement.
The Surviving Corporation and Parent shall not be obligated hereunder to
cover any employee who is hired or assigned to work at a Company facility
after the Company Effective Time under any employee benefit plan, program or
arrangement. With respect to the Parent Benefit Plans, Parent and the
Surviving Corporation shall grant to all Company Employees, from and after
the Company Effective Time, credit for all service with the Company and its
affiliates and predecessors prior to the Company Effective Time for
seniority, eligibility to participate, eligibility for benefits and vesting
purposes. To the extent Parent Benefit Plans provide medical or dental
welfare benefits, such plans shall waive any pre-existing conditions and
actively-at-work exclusions with respect to Company Employees (but only to
the extent such Company Employees were provided coverage under the Company
Benefit Plans) and shall provide that any expenses incurred on or before the
Company Effective Time by or on behalf of any Company Employees shall be
taken into account under the Parent Benefit Plans for purposes of satisfying
applicable deductible, coinsurance and maximum out-of-pocket provisions.
(b) Parent agrees to maintain the Petrolite Corporation
Severance Plan as in effect on the date hereof for a period of one year from
the Company Effective Time for the benefit of Company Employees.
(c) Parent agrees that any Company Employee who continues
to be employed by the Surviving Corporation or Parent or any Subsidiary
thereof on November 1, 1997 will continue to be entitled to take the same paid
vacation he or she would have earned under the Petrolite Corporation Vacation
Policy as in effect on the date hereof to be taken during the period ending
October 31, 1998.
(d) Promptly following the Company Effective Time, Parent
shall cause the Surviving Corporation to amend the Petrolite Corporation
Retirement Plan (the "PCRP") to provide that any Company Employee who
continues in employment for at least three (3) months following the Company
Effective Time or whose employment is terminated during such period without
Cause (as defined in Section 8.13(e)) shall be provided with one additional
year of service under the PCRP, for all purposes for which such service is
recognized under the PCRP. If required by applicable law, the additional
benefits with respect thereto will be provided under a supplemental
arrangement.
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(e) (i) With respect to the Company's Annual Bonus Plan
and Division Cash Incentive and Bonus Plans (collectively, the "Incentive
Plans"), the determination of whether the performance targets have been met
for the fiscal year ending October 31, 1997, shall be made based on the actual
performance for such fiscal year or applicable portion thereof; provided,
--------
however, that the impact that the Company Expenses may have on the applicable
-------
performance results used to determine whether the performance targets have
been met under the Incentive Plans shall be disregarded. As used herein,
"Company Expenses" shall mean all fees and expenses (including, without
limitation, all fees and expenses of counsel, financial advisors, accountants,
environmental and other experts and consultants and all printing and
advertising expenses) actually incurred or accrued by the Company or incurred
on the Company's behalf, or incurred by Parent, Merger Sub, Merger Grandsub or
Xxxxxxxxx and assumed by the Company, whether pursuant to this Agreement or as
a result of the Company Merger or otherwise, in connection with this Agreement
and the transactions contemplated hereby (including, without limitation, in
connection with the previously announced proposed consent solicitation by
Xxxxxxxxx, the negotiation, preparation, execution and performance of this
Agreement, the structuring of the Mergers, any agreements related hereto or
thereto and any filings to be made in connection therewith) whether incurred
or accrued prior to or after the Company Effective Time.
(ii) Bonuses payable pursuant to the Incentive Plans
for the period from November 1, 1996 to October 31, 1997 (the "Bonus Period")
will be determined and paid pursuant to the provisions of such Incentive Plans
except as provided in this Section 8.13(e). Schedule 8.13(e) lists the
Incentive Plans and the sets forth the aggregate maximum bonus amount payable
to participants thereunder ("Participants") for the Bonus Period. The Company
shall determine the bonus amounts to be paid to each Participant for the
period from November 1, 1996 through the Closing Date based on the criteria
established for the applicable Incentive Plan, and shall pay such amounts to
the Participant on or before the Closing Date. The bonus amount paid to a
Participant by the Company pursuant to this Section 8.13(e) shall not exceed
such Participant's maximum bonus amount for the Bonus Period under the
applicable Incentive Plan (the "Maximum Bonus Amount") multiplied by a
fraction, the numerator of which is the number of calendar days from November
1, 1996 through and including the Closing Date and the denominator of which
is 365 (the "Prorated Maximum Bonus Amount"). Before December 1, 1997,
Parent shall determine the bonus amount to be paid to each Participant for
the period from the Closing Date through October 31, 1997, based on criteria
established by Parent, and the Surviving Corporation shall pay that amount to
the Participant; provided, however, (i) the bonus so paid to each
-------- -------
Participant shall not be less than 80% of the amount determined by
multiplying the difference between such Participant's Maximum Bonus Amount
and such Participant's Prorated Maximum Bonus Amount by a fraction, the
numerator of which is the bonus amount paid to such Participant by the
Company on or before the Closing Date pursuant to this Section 8.13(e) and
the denominator of which is such Participant's Prorated Maximum Bonus Amount;
and (ii) the Surviving Corporation shall pay the minimum amount determined
in accordance with clause (i) above to any Participant whose employment is
terminated without Cause after the Closing Date and before payment is made by
the Surviving Corporation pursuant to this Section 8.13(e). "Cause" shall
mean acts of theft, unethical conduct or dishonesty affecting the assets,
properties or business of the Surviving Corporation or Parent, willful
misconduct or material dereliction of duty. Notwithstanding the foregoing,
no payment shall be made with respect to the Bonus Period following the date
hereof to any Participant who is a party to an Executive Agreement unless
such Participant agrees in advance in writing that to the extent that the
receipt of any such payment would cause other payments payable to such
Participant pursuant to his or her Executive Agreement which would otherwise
be deductible by the Company for federal income tax purposes to become non-
deductible for such purposes pursuant to Section 280G of the Code, such
excess payment shall reduce any severance amounts payable to such Participant
pursuant to his or her Executive Agreement.
(f) It is the intent of Parent that for a period of two
years following the Company Effective Time, any reductions in workforce in
respect of employees of Parent and
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the Surviving Corporation shall be made on a fair and equitable basis, without
regard to whether employment commenced with Parent or the Company or their
respective Subsidiaries, and that any Company Employee whose employment is
terminated or job is eliminated by Parent or any of its Subsidiaries during
such period shall be entitled to participate on a fair and equitable basis in
the job opportunity and employment placement programs offered by Parent or any
of its Subsidiaries.
(g) For purposes of this Section 8.13, the term "Company
Employees" shall mean all individuals employed by the Company and its
Subsidiaries (including those on lay-off, disability or leave of absence, paid
or unpaid) immediately prior to the Company Effective Time.
8.14. Reorganization; Pooling. (a) From and after the date hereof
-----------------------
and until the Company Effective Time, none of Parent, the Company, Xxxxxxxxx
or any of their respective Subsidiaries shall knowingly (i) take any action,
or fail to take any action, as a result of which the Xxxxxxxxx Merger or the
Company Merger would fail to qualify as a reorganization within the meaning
of section 368(a) of the Code (and any comparable provisions of applicable
state or local law); or (ii) enter into any contract, agreement, commitment
or arrangement to take or fail to take any such action. Each of the parties
shall use its reasonable efforts to obtain the opinions of counsel referred
to in Sections 9.2(b) and 9.3(b).
(b) From and after the date hereof and until the Company
Effective Time, none of the Company, Xxxxxxxxx or any of their respective
Subsidiaries shall, to the extent necessary, knowingly take any action, or
fail to take any action, that would prevent the treatment of the Xxxxxxxxx
Merger or the Company Merger as a "pooling of interests" for financial
accounting purposes.
(c) Following the Company Effective Time, neither Parent
nor any of its Subsidiaries shall knowingly take any action or knowingly cause
any action to be taken which would cause the Xxxxxxxxx Merger or the Company
Merger to fail to qualify as a reorganization within the meaning of section
368(a) of the Code (and any comparable provisions of applicable state or
local law).
(d) From and after the Xxxxxxxxx Effective Time and until
the Company Effective Time, Parent agrees that it will not take any actions
that would cause either (i) Xxxxxxxxx not to be a wholly owned Subsidiary of
Parent or (ii) Merger Grandsub not to be a wholly owned Subsidiary of
Xxxxxxxxx.
8.15. Certain Tax Agreements. At or before the Closing, Xxxxxxxxx
----------------------
will (i) provide to Parent a duly executed statement described in U.S.
Treasury regulation section 1.897-2(h)(1), which is issued by Xxxxxxxxx and is
dated not more than 30 days before the Closing Date, certifying that the
Xxxxxxxxx Common Stock is not a United States real property interest and (ii)
provide to the IRS a duly executed notice described in U.S. Treasury
regulation section 1.897-2(h)(2).
8.16. Obligations of Merger Sub and Merger Grandsub. Parent will
---------------------------------------------
take all action necessary to cause each of Merger Sub and Merger Grandsub to
perform its obligations under this Agreement and to consummate the Xxxxxxxxx
Merger and the Company Merger, respectively, on the terms and conditions set
forth in this Agreement. Neither Merger Sub nor Merger Grandsub will issue
any shares of its capital stock, any securities convertible into or
exchangeable for its capital stock, or any option, warrant or other right to
acquire its capital stock to any person or entity other than Parent.
8.17. Rights Agreement. Prior to the Xxxxxxxxx Effective Time, the
----------------
Board of Directors of the Company shall take any action (including, if
necessary, amending or terminating
38
46
(but with respect to termination, only as of immediately prior to the
Xxxxxxxxx Effective Time) the Rights Agreement) necessary so that none of the
execution and delivery of this Agreement, the conversion of shares of Company
Common Stock and Xxxxxxxxx Common Stock into the right to receive Parent
Common Stock in accordance with Article 4 of this Agreement, and the
consummation of the Company Merger and the Xxxxxxxxx Merger or any other
transaction contemplated hereby will cause (i) the Company Rights to become
exerciseable under the Company Rights Agreement, (ii) Xxxxxxxxx, Parent or any
of its Subsidiaries to be deemed an "Acquiring Person" (as defined in the
Company Rights Agreement), (iii) any such event to be deemed a "flip-over
transaction or event" or (iv) the "Stock Acquisition Date" or the
"Distribution Date" (each as defined in the Company Rights Agreement) to occur
upon any such event, and so that the "Expiration Date" (as defined in the
Company Rights Agreement) of the Company Rights will occur immediately prior
to the Xxxxxxxxx Effective Time. Neither the Board of Directors of the
Company nor the Company shall take any other action to terminate the Company
Rights Agreement, redeem the Company Rights, cause any person not to be or
become an "Acquiring Person" or otherwise amend the Company Rights Agreement
in a manner adverse to Parent.
8.18. Mutuality of Mergers. Each of Parent, Merger Sub and
--------------------
Xxxxxxxxx agrees that it shall not effect the Xxxxxxxxx Merger until all
conditions precedent to the obligations of Parent, Merger Grandsub and the
Company to effect the Company Merger have been satisfied or waived, other than
the condition to the Company Merger set forth in Section 9.2(d) hereof.
ARTICLE 9
9. Conditions.
----------
9.1. Conditions to Each Party's Obligation to Effect the Mergers.
-----------------------------------------------------------
The respective obligation of each party to effect the Mergers shall be subject
to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) (i) This Agreement, the Company Merger and the
transactions contemplated hereby shall have been approved by the affirmative
vote of holders of a majority of the issued and outstanding shares of Company
Common Stock entitled to vote thereon.
(ii) This Agreement, the Xxxxxxxxx Merger and the
transactions contemplated hereby shall have been approved by the affirmative
vote of the holders of at least two-thirds of the issued and outstanding
shares of Xxxxxxxxx Common Stock entitled to vote thereon.
(iii) The issuance of the shares of Parent Common
Stock pursuant to the Mergers shall have been approved by the holders of
issued and outstanding shares of Parent Common Stock as and to the extent
required by the rules of the NYSE.
(b) The waiting period applicable to the consummation
of the Mergers under the HSR Act shall have expired or been terminated.
(c) None of the parties hereto shall be subject to any
decree, order or injunction of a court of competent jurisdiction which
prohibits the consummation of the transactions contemplated by this Agreement;
provided, however, that prior to invoking this condition each party agrees to
-------- -------
comply with Section 8.4, and with respect to other matters, to use its
commercially reasonable efforts to have any such decree, order or injunction
lifted or vacated; and no statute, rule or regulation shall have been enacted
by any governmental authority which prohibits or makes unlawful the
consummation of either of the Mergers.
39
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(d) The Form S-4 shall have become effective and no stop
order with respect thereto shall be in effect.
(e) The shares of Parent Common Stock to be issued pursuant
to the Mergers shall have been authorized for listing on the NYSE, subject to
official notice of issuance.
9.2. Conditions to Obligation of the Company to Effect the Company
-------------------------------------------------------------
Merger. The obligation of the Company to effect the Company Merger shall be
------
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) Parent shall have performed in all material respects
its covenants and agreements contained in this Agreement required to be
performed on or prior to the Closing Date and the representations and
warranties of Parent, Merger Sub and Merger Grandsub contained in this
Agreement and in any document delivered in connection herewith shall be true
and correct in all material respects as of the date of this Agreement and as
of the Closing Date (except for representations and warranties made as of a
specified date, which need be true and correct in all material respects only
as of the specified date), and the Company shall have received a certificate
of the President or a Vice President of Parent, dated the Closing Date,
certifying to such effect.
(b) The Company shall have received the opinion of Fried,
Frank, Harris, Xxxxxxx & Xxxxxxxx, special counsel to the Company, in form and
substance reasonably satisfactory to the Company, dated the Closing Date, to
the effect that the Company Merger will be treated for federal income tax
purposes as a reorganization within the meaning of section 368(a) of the
Code. In rendering such opinion, special counsel to the Company shall be
entitled to rely upon representations of officers of the Company, Xxxxxxxxx
and Parent and stockholders of the Company substantially in the form of
Exhibits B, C and D hereto and as to such other matters as such counsel may
reasonably request.
(c) This Agreement, the Company Merger and the transactions
contemplated hereby shall have been approved by the holders of a majority of
the outstanding shares of Company Common Stock voting on such matter,
excluding for these purposes shares of Company Common Stock owned by
Xxxxxxxxx.
(d) The Xxxxxxxxx Merger shall have been consummated.
9.3. Conditions to Obligation of Xxxxxxxxx to Effect the Xxxxxxxxx
-------------------------------------------------------------
Merger. The obligation of Xxxxxxxxx to effect the Xxxxxxxxx Merger shall be
------
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) Parent shall have performed in all material respects
its covenants and agreements contained in this Agreement required to be
performed on or prior to the Closing Date and the representations and
warranties of Parent, Merger Sub and Merger Grandsub contained in this
Agreement and in any document delivered in connection herewith shall be true
and correct in all material respects as of the date of this Agreement and as
of the Closing Date (except for representations and warranties made as of a
specified date, which need be true and correct in all material respects only
as of the specified date) and Xxxxxxxxx shall have received a certificate of
the President or a Vice President of Parent, dated the Closing Date,
certifying to such effect.
(b) Xxxxxxxxx shall have received the opinion of Xxxxxxxxxx
& Xxxxxxxx, L.L.C., special counsel to Xxxxxxxxx, in form and substance
reasonably satisfactory to Xxxxxxxxx, dated the Closing Date, to the effect
that the Xxxxxxxxx Merger will be treated for federal income tax purposes as
a reorganization within the meaning of section 368(a) of the
40
48
Code. In rendering such opinion, special counsel to Xxxxxxxxx shall be
entitled to rely upon representations of officers of the Company, Xxxxxxxxx
and Parent and stockholders of Xxxxxxxxx substantially in the form of Exhibits
B, C and D hereto and as to such other matters as such counsel may reasonably
request,
(c) All conditions to the Company Merger other than the
condition set forth in Section 9.2(d) hereto shall have been satisfied or
waived.
9.4. Conditions to Obligation of Parent, Merger Sub and Merger
---------------------------------------------------------
Grandsub to Effect the Mergers. The obligations of Parent and Merger Sub to
------------------------------
effect the Xxxxxxxxx Merger and the obligations of Parent and Merger Grandsub
to effect the Company Merger shall be subject to the fulfillment at or prior
to the Closing Date of the following conditions:
(a) The Company shall have performed in all material
respects its covenants and agreements contained in this Agreement required to
be performed on or prior to the Closing Date and the representations and
warranties of the Company contained in this Agreement and in any document
delivered in connection herewith shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date (except
for representations and warranties made as of a specified date, which need be
true and correct in all material respects only as of the specified date), and
Parent shall have received a certificate of the President and the Chief
Financial Officer of the Company, dated the Closing Date, certifying to such
effect.
(b) Xxxxxxxxx shall have performed in all material
respects its covenants and agreements contained in this Agreement required to
be performed on or prior to the Closing Date and the representations and
warranties of Xxxxxxxxx contained in this Agreement and in any document
delivered in connection herewith shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date (except
for representations and warranties made as of a specified date, which need be
true and correct in all material respects only as of the specified date), and
Parent shall have received a certificate of the President or a Vice President
of Xxxxxxxxx, dated the Closing Date, certifying to such effect.
(c) No decree, order or injunction of a court of competent
jurisdiction, and no order of any governmental authority and no other legal
restraint or prohibition in any such case arising under any Antitrust Law (as
defined in Section 10.6(d)) ("Injunction") shall be in effect (i) imposing
any limitation upon the ability of Parent or any of its Subsidiaries
effectively to control the business or operations of the Company, Xxxxxxxxx
or any of their respective Subsidiaries or (ii) prohibiting or imposing any
limitation upon Parent's or any of its Subsidiaries' ownership or operation
of all or any portion of the business or assets or properties of Parent, the
Company or Xxxxxxxxx or any of their respective Subsidiaries or compelling
Parent, the Company or Xxxxxxxxx or any of their respective Subsidiaries to
divest or hold separate all or any portion of the business or assets or
properties of Parent, the Company or Xxxxxxxxx or any of their respective
Subsidiaries, or imposing any other limitation upon any of them in the
conduct of their businesses, which in the case of (i) or (ii) would have a
material adverse effect on the U.S. oilfield production chemicals business of
the Company or Parent (including any Subsidiaries thereof), and no suit or
proceeding by a governmental authority seeking such an Injunction or an
Injunction preventing or making illegal the consummation of any of the
Mergers shall be pending; provided, however, prior to invoking this
-------- -------
condition, Parent agrees to comply with Section 8.4.
(d) At the Xxxxxxxxx Effective Time, the aggregate number
of shares of Xxxxxxxxx Common Stock held by Dissenting Stockholders shall not
exceed 10% of the total number of issued and outstanding shares of Xxxxxxxxx
Common Stock.
41
49
ARTICLE 10
10. Termination.
-----------
10.1. Termination by Mutual Consent. This Agreement may be
-----------------------------
terminated at any time prior to the Company Effective Time, before or after
the approval of this Agreement by the stockholders of the Company, Xxxxxxxxx
or, if applicable, Parent by the mutual written consent of the Company,
Xxxxxxxxx and Parent.
10.2. Termination by Parent, Xxxxxxxxx or the Company. This
-----------------------------------------------
Agreement may be terminated by action of the Board of Directors of Parent, of
Xxxxxxxxx or of the Company if:
(a) the Mergers shall not have been consummated by
September 5, 1997; provided, however, that the right to terminate this
-------- -------
Agreement pursuant to this clause (a) shall not be available to any party
whose failure to perform or observe in any material respect any of its
obligations under this Agreement in any manner shall have been the cause of,
or resulted in, the failure of the Mergers to occur on or before such date;
provided, further, if approval by Parent's stockholders of the issuance of
-------- -------
Parent Common Stock pursuant to the Mergers is required by the rules of the
NYSE and such approval has not yet been obtained, that such date may be
extended from time to time by the Company by written notice to Parent and
Xxxxxxxxx for up to an additional 120 days in the aggregate, but in no event
to a date earlier than the earliest date on which the Parent may obtain such
approval under SEC regulations, NYSE rules and the DGCL; or
(b) the approval of the Company's stockholders required by
Section 9.1(a) shall not have been obtained at a meeting duly convened
therefor or at any adjournment thereof; or
(c) the approval of Xxxxxxxxx'x stockholders required by
Section 9.1(a) shall not have been obtained at a meeting duly convened
therefor or at any adjournment thereof; or
(d) the approval of Parent's stockholders if required by
Section 9.1(a) shall not have been obtained at a meeting duly convened
therefor or at any adjournment thereof; or
(e) a United States federal or state court of competent
jurisdiction or United States federal or state governmental, regulatory or
administrative agency or commission shall have issued an order, decree or
ruling or taken any other action 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; provided, however, that the party seeking to terminate this
-------- -------
Agreement pursuant to this clause (e) shall have complied with Section 8.4 and
with respect to other matters shall have used its commercially reasonable
efforts to remove such injunction, order or decree.
10.3. Termination by the Company. This Agreement may be terminated
--------------------------
at any time prior to the Xxxxxxxxx Effective Time, before or after the
adoption and approval by the stockholders of the Company referred to in
Section 9.1(a)(i), by action of the Board of Directors of the Company after
consultation with its legal advisors and Xxxxxxxxx, if:
(a) the Board of Directors of the Company determines that
proceeding with the transactions contemplated hereby would be inconsistent
with its fiduciary obligations by reason of a Company Acquisition Proposal;
provided that the Company may not effect such termination pursuant to this
--------
Section 10.3(a) unless and until (i) Parent receives at
42
50
least one week's prior written notice from the Company of its intention to
effect such termination pursuant to this Section 10.3(a); (ii) during such
week, the Company shall, and shall cause its respective financial and legal
advisors to, consider any adjustment in the terms and conditions of this
Agreement that Parent may propose; and provided, further, that any termination
-------- -------
of this Agreement pursuant to this Section 10.3(a) shall not be effective
until the Company has made the payment required by Section 10.6(a)(i); or
(b) (i) there has been a breach by Parent, Merger Sub
or Merger Grandsub of any representation, warranty, covenant or agreement set
forth in this Agreement or if any representation or warranty of Parent, Merger
Sub or Merger Grandsub shall have become untrue, in either case such that the
conditions set forth in Section 9.2(a) would not be satisfied and (ii) such
breach is not curable, or, if curable, is not cured within 30 days after
written notice of such breach is given to Parent by the Company or Xxxxxxxxx;
provided, however, that the right to terminate this Agreement pursuant to this
-------- -------
Section 10.3(b) shall not be available to the Company if it, at such time, is
in material breach of any representation, warranty, covenant or agreement set
forth in this Agreement such that the condition set forth in Section 9.4(a)
shall not be satisfied; or
(c) the approval of the Company's stockholders required
by Section 9.2(c) shall not have been obtained at a meeting duly convened
therefor or at any adjournment thereof.
10.4. Termination by Xxxxxxxxx. This Agreement may be terminated at
------------------------
any time prior to the Xxxxxxxxx Effective Time, before or after the adoption
and approval by the stockholders of Xxxxxxxxx referred to in Section
9.1(a)(ii), by action of the Board of Directors of Xxxxxxxxx after
consultation with its legal advisors and the Company, if:
(a) the Board of Directors of Xxxxxxxxx determines that
proceeding with the transactions contemplated hereby would be inconsistent
with its fiduciary obligations by reason of a Xxxxxxxxx Acquisition Proposal;
provided that Xxxxxxxxx may not effect such termination pursuant to this
--------
Section 10.4(a) unless and until (i) Parent receives at least one week's prior
written notice from Xxxxxxxxx of its intention to effect such termination
pursuant to this Section 10.4(a); (ii) during such week, Xxxxxxxxx shall, and
shall cause its respective financial and legal advisors to, consider any
adjustment in the terms and conditions of this Agreement that Parent may
propose; and provided, further, that any termination of this Agreement
-------- -------
pursuant to this Section 10.4(a) shall not be effective until Xxxxxxxxx has
made the payment required by Section 10.6(b)(i); or
(b) (i) there has been a breach by Parent, Merger Sub
or Merger Grandsub of any representation, warranty, covenant or agreement set
forth in this Agreement or if any representation or warranty of Parent, Merger
Sub or Merger Grandsub shall have become untrue, in either case such that the
conditions set forth in Section 9.3(a) would not be satisfied and (ii) such
breach is not curable, or, if curable, is not cured within 30 days after
written notice of such breach is given to Parent by the Company or Xxxxxxxxx;
provided, however, that the right to terminate this Agreement pursuant to this
-------- -------
Section 10.4(b) shall not be available to Xxxxxxxxx if it, at such time, is in
material breach of any representation, warranty, covenant or agreement set
forth in this Agreement such that the condition set forth in Section 9.4(b)
shall not be satisfied.
10.5. Termination by Parent. This Agreement may be terminated at
---------------------
any time prior to the Xxxxxxxxx Effective Time, before or after any approval
by the stockholders of Parent referred to in Section 9.1(a)(iii), by action of
the Board of Directors of Parent, if:
(a) (i) there has been a breach by Xxxxxxxxx of any
representation, warranty, covenant or agreement set forth in this Agreement or
if any representation or warranty of Xxxxxxxxx shall have become untrue, in
either case such that the conditions set forth in Section
43
51
9.4(b) would not be satisfied and (ii) such breach is not curable, or, if
curable, is not cured within 30 days after written notice of such breach is
given by Parent to Xxxxxxxxx; or
(b) (i) there has been a breach by the Company of any
representation or warranty contained in this Agreement or if any
representation or warranty of the Company shall have become untrue, in either
case such that the conditions set forth in Section 9.4(a) would not be
satisfied and (ii) such breach is not curable, or, if curable, is not cured
within 30 days after written notice of such breach is given by Parent to the
Company; or
(c) the Board of Directors of Xxxxxxxxx shall have
withdrawn or materially modified, in a manner adverse to Parent, its approval
or recommendation of the Xxxxxxxxx Merger or recommended a Xxxxxxxxx
Acquisition Proposal, or resolved to do so; or
(d) the Board of Directors of the Company shall have
withdrawn or materially modified, in a manner adverse to Parent, its approval
or recommendation of the Company Merger or recommended a Company Acquisition
Proposal, or resolved to do so;
provided, however, that the right to terminate this Agreement pursuant
-------- -------
to Section 10.5(a) or (b) shall not be available to Parent if it, at such
time, is in material breach of any representation, warranty, covenant or
agreement set forth in this Agreement such that the conditions set forth in
either Section 9.2(a) or 9.3(a) shall not be satisfied.
10.6. Effect of Termination. (a) If this Agreement is terminated
---------------------
(i) by the Company pursuant to Section 10.3(a); or
(ii) after the public announcement of a Company
Acquisition Proposal, by Xxxxxxxxx, the Company or Parent pursuant to Section
10.2(b) (unless the condition Section 9.2(c) shall have been satisfied)or by
the Company pursuant to Section 10.3(c); or
(iii) after receipt by the Company's Board of
Directors or the public announcement of a Company Acquisition Proposal, by
Parent pursuant to Section 10.5(d);
then the Company shall pay Parent a fee of $27 million in cash by wire
transfer to an account designated by Parent; provided, however, that the fee
-------- ------
payable under this Section 10.6(a) shall be reduced by the amount of any
Transaction Expenses paid to Parent pursuant to Section 10.6(c).
(b) If this Agreement is terminated
(i) by Xxxxxxxxx pursuant to Section 10.4(a); or
(ii) by Xxxxxxxxx, the Company or Parent pursuant to
Section 10.2(c) (unless the stockholder vote required by Section 9.1(a)(i)
shall have been taken and the condition specified in Section 9.2(c) shall not
have been satisfied after the public announcement of a Company Acquisition
Proposal); or
(iii) after receipt by the Xxxxxxxxx Board of Directors
or the public announcement of a Company Acquisition Proposal, by Xxxxxxxxx,
the Company or Parent pursuant to Section 10.2(b), if the condition specified
in Section 9.2(c) shall have been satisfied; or
(iv) after receipt by Xxxxxxxxx'x Board of Directors
or the public announcement of a Xxxxxxxxx Acquisition Proposal or a Company
Acquisition Proposal, by Parent pursuant to Section 10.5(c);
44
52
then Xxxxxxxxx shall (x) pay Parent a fee of $20 million in cash by
wire transfer to an account designated by Parent; provided, however, that the
-------- -------
fee payable under this Section 10.6(b), shall be reduced by the amount of any
Transaction Expenses paid to Parent pursuant to Section 10.6(c) and (y)
reimburse the Company for all of its Transaction Expenses (as defined in
clause (c)(iv) below) upon receipt of reasonable documentation therefor. The
amount of any fees payable by Xxxxxxxxx to Parent pursuant to this Section
10.6(b) shall be further reduced by the amount of any fees payable by the
Company to Parent pursuant to Section 10.6(a).
(c) (i) If this Agreement is terminated pursuant to
Section 10.2(d) by reason of the failure of Parent's stockholders to approve
the issuance of the shares of Parent Common Stock pursuant to the Mergers
contemplated hereby (other than in a circumstance requiring the payment of the
amount provided for in Section 10.6(d)), then Parent shall, upon receipt of
reasonable documentation therefor, reimburse each of the Company and Xxxxxxxxx
for all of their respective Transaction Expenses.
(ii) If this Agreement is terminated (x) pursuant to
Section 10.2(b) by reason of the failure of the Company's stockholders to
approve and adopt this Agreement and the transactions contemplated hereby or
(y) pursuant to Section 10.3(c), by reason of the failure of the holders of a
majority of the outstanding shares of Company Common Stock voting on such
matter (excluding for these purposes Company Common Stock owned by Xxxxxxxxx)
to approve this Agreement and the transactions contemplated hereby, then the
Company shall, upon receipt of reasonable documentation therefor, reimburse
each of Parent and Xxxxxxxxx for all of their respective Transaction Expenses,
except that if the stockholder vote required by Section 9.2(c) shall have been
obtained, but the stockholder vote required by Section 9.1(a)(i) shall not
have been obtained, then Xxxxxxxxx, in lieu of the Company, shall reimburse
each of Parent and the Company for all of their respective Transaction
Expenses.
(iii) If this Agreement is terminated pursuant to
Section 10.2(c) by reason of the failure of the Xxxxxxxxx stockholders to
approve and adopt this Agreement and the transactions contemplated hereby,
then Xxxxxxxxx shall, upon receipt of reasonable documentation therefor,
reimburse each of Parent and the Company for all of its Transaction Expenses.
(iv) "Transaction Expenses" shall mean all
reasonable out-of-pocket expenses and fees (including, without limitation, all
fees and expenses of counsel, financial advisors, accountants, environmental
and other experts and consultants and all printing and advertising expenses)
actually incurred or accrued by a party or incurred on such party's behalf in
connection with this Agreement and the transactions contemplated hereby
(including, without limitation, in connection with the negotiation,
preparation, execution, performance and termination of this Agreement, the
structuring of the Mergers, any agreements related hereto or thereto and any
filings to be made in connection therewith) to the extent incurred or accrued
prior to the termination of this Agreement.
(d) If this Agreement is terminated (A) by Parent, the
Company or Xxxxxxxxx pursuant to Section 10.2(e) as a result of an Injunction
or other action relating to any antitrust, trade, or regulatory laws or
regulations of any governmental, regulatory or administrative authority,
agency or commission (U.S. or foreign) ("Antitrust Laws") or (B) by Parent,
the Company or Xxxxxxxxx pursuant to (i) Section 10.2(a) at a time when the
nonconsummation of the Mergers is a result of the failure to satisfy the
conditions set forth in Sections 9.1(b) or (c) or Section 9.4(c) by reason, in
any such case, of any Antitrust Law or (ii) Section 10.2(d) at a time when the
conditions set forth in Sections 9.1(b) or (c) or Section 9.4(c) shall not
have been satisfied by reason, in any such case, of any Antitrust Law, and
neither the Company nor Xxxxxxxxx shall have failed to perform or observe, in
any material respect, any of its obligations under this Agreement (including,
without limitation, Section 8.4), then Parent
45
53
shall, on the day of such termination, pay to the Company a fee of $30 million
in cash by wire transfer of immediately available funds to an account
designated by the Company.
(e) In the event of termination of this Agreement and
the abandonment of the Mergers pursuant to this Article 10, all obligations of
the parties hereto shall terminate, except the obligations of the parties
pursuant to this Section 10.6 and Section 8.11 and except for the provisions
of Sections 11.3, 11.4, 11.6, 11.8, 11.9, 11.12, 11.13 and 11.14. Moreover,
in the event of termination of this Agreement pursuant to Section 10.2(a),
10.2(e), 10.3, 10.4 or 10.5, nothing herein shall prejudice the ability of a
non-breaching party from seeking damages from any other party for any willful
breach of this Agreement, including, without limitation, attorneys' fees and
the right to pursue any remedy at law or in equity; provided, that (i) in the
--------
event Parent receives any fee pursuant to Section 10.6(a) or (b), as the case
may be, it shall not assert or pursue in any manner, directly or indirectly,
any claim or cause of action against either of the Company or Xxxxxxxxx or any
of its officers or directors based in whole or in part upon a breach of this
Agreement by them or their receipt, consideration, negotiation,
recommendation, or approval of a Xxxxxxxxx Acquisition Proposal or a Company
Acquisition Proposal or the exercise (x) by the Company of its right of
termination under Section 10.3(a) or (y) by Xxxxxxxxx of its right of
termination under Section 10.4(a); and (ii) in the event the Company receives
the payment pursuant to Section 10.6(d), such payment shall not prejudice the
ability of the Company to seek damages against Parent for any breach of the
provisions of Section 8.4. Any payment received by the Company pursuant to
Section 10.6(d) shall be credited against any such damages awarded to the
Company.
10.7. Extension; Waiver. At any time prior to the Company
-----------------
Effective Time, each party may by action taken by its Board of Directors, to
the extent legally allowed, (a) extend the time for the performance of any of
the obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties made to such party
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any of the agreements or conditions for the benefit of such
party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
ARTICLE 11
11. General Provisions.
------------------
11.1. Nonsurvival of Representations, Warranties and Agreements.
---------------------------------------------------------
All representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall not survive the
Mergers; provided, however, that the agreements contained in Article 4 and in
-------- -------
Sections 8.10, 8.11, 8.12, 8.13, 8.14, and this Article 11 and the
agreements delivered pursuant to this Agreement shall survive the Mergers.
The Confidentiality Agreements shall survive any termination of this
Agreement, and the provisions of such Confidentiality Agreements shall apply
to all information and material delivered by any party hereunder.
11.2. Notices. Any notice required to be given hereunder shall
-------
be sufficient if in writing, and sent by facsimile transmission or by courier
service (with proof of service), hand delivery or certified or registered mail
(return receipt requested and first-class postage prepaid), addressed as
follows:
(a) if to Parent, Merger Sub, or Merger Grandsub:
Xxxxxxxx X'Xxxxxxx, III
Xxxxx Xxxxxx Incorporated
0000 Xxxxx Xxxx
00
00
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
with a copy to:
J. Xxxxx Xxxxxxxx, Jr., Esq.
Xxxxx & Xxxxx, L.L.P.
Xxx Xxxxx Xxxxx
000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000-0000
Facsimile: (000) 000-0000
47
55
(b) if to the Company:
Xxxxxxx X. Xxxxxx
Petrolite Corporation
000 Xxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxx, Esq.
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
(c) if to Xxxxxxxxx:
Xxxxx Xxxxxxxx
Xxxxxxxxxx & Xxxxxxxx, L.L.C.
000 Xxxxxxxx, Xxxxx 000
Xx. Xxxxx, XX 00000
Facsimile: (000) 000-0000
with a copy to:
Xxx X. Xxxxx, Esq.
Xxxxx Xxxx LLP
One Metropolitan Square
000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
or to such other address as any party shall specify by written notice so
given, and such notice shall be deemed to have been delivered as of the date
so telecommunicated, personally delivered or mailed.
11.3. Assignment; Binding Effect; Benefit. Neither this Agreement
-----------------------------------
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto (whether by operation of law or otherwise) without
the prior written consent of the other parties. Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and assigns.
Notwithstanding anything contained in this Agreement to the contrary, except
for the provisions of Article 4 and Sections 8.12 and 8.13 (a) through (e)
and 10.6(e) and except as provided in any agreements delivered pursuant
hereto (collectively, the "Third Party Provisions"), nothing in this
Agreement, expressed or implied, is intended to confer on any person other
than the parties hereto or their respective heirs, successors, executors,
administrators and assigns any rights, remedies, obligations or liabilities
under or by reason of this Agreement. The Third Party Provisions may be
enforced by the beneficiaries thereof.
48
56
11.4. Entire Agreement. This Agreement, the exhibits to this
----------------
Agreement, the Company Disclosure Letter, the Xxxxxxxxx Disclosure Letter, the
confidentiality agreement dated January 9, 1997, between Parent and the
Company, the confidentiality agreement, dated July 19, 1996, between
Xxxxxxxxx and Parent and the Confidentiality Agreement dated February 23,
1997 among Parent, the Company and Xxxxxxxxx (collectively, the
"Confidentiality Agreements"), and any documents delivered by the parties in
connection herewith constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings among the parties with respect thereto. No addition to or
modification of any provision of this Agreement shall be binding upon any
party hereto unless made in writing and signed by all parties hereto. During
the term of this Agreement, no party hereto shall terminate any of the
foregoing Confidentiality Agreements.
11.5. Amendments. This Agreement may be amended by the parties
----------
hereto, by action taken or authorized by their Boards of Directors, at any
time before or after approval of matters presented in connection with the
Mergers by the stockholders of the Company, Xxxxxxxxx or Parent, but after any
such stockholder approval, no amendment shall be made which by law requires
the further approval of stockholders without obtaining such further approval.
This Agreement may not be amended except by an instrument in writing signed
on behalf of each of the parties hereto.
11.6. Governing Law. Except to the extent that Missouri law is
-------------
mandatorily applicable to the Xxxxxxxxx Merger, the obligations of the members
of Xxxxxxxxx'x Board of Directors and the rights of the stockholders of
Xxxxxxxxx, this Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware without regard to its rules of
conflict of laws. Each of the Company, Xxxxxxxxx and Parent hereby
irrevocably and unconditionally consents to submit to the exclusive
jurisdiction of the courts of the State of Delaware and of the United States
of America located in the State of Delaware (the "Delaware Courts") for any
litigation arising out of or relating to this Agreement and the transactions
contemplated hereby (and agrees not to commence any litigation relating
thereto except in such courts), waives any objection to the laying of venue
of any such litigation in the Delaware Courts and agrees not to plead or
claim in any Delaware Court that such litigation brought therein has been
brought in an inconvenient forum. Xxxxxxxxx hereby agrees to service of
process in any litigation arising out of or relating to this Agreement and
the transactions contemplated hereby by certified mail, return receipt
requested, postage prepaid to Xxxxxxxxx (with a copy as specified in Section
11.2) at its address for notice specified in Section 11.2.
11.7. Counterparts. This Agreement may be executed by the parties
------------
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all of the parties
hereto.
11.8. Headings. Headings of the Articles and Sections of this
--------
Agreement are for the convenience of the parties only, and shall be given no
substantive or interpretative effect whatsoever.
11.9. Interpretation. In this Agreement, unless the context
--------------
otherwise requires, words describing the singular number shall include the
plural and vice versa, and words denoting any gender shall include all genders
and words denoting natural persons shall include corporations and partnerships
and vice versa. In this agreement, the phrase "to the knowledge of" and
similar phrases relating to knowledge of the Company, Xxxxxxxxx or Parent, as
the case may be, shall mean the actual knowledge of its executive officers and
with respect to the Company, its Director of Safety, Health and Environmental
Affairs.
49
57
11.10. Waivers. Except as provided in this Agreement, no action
-------
taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement. The waiver
by any party hereto of a breach of any provision hereunder shall not operate
or be construed as a waiver of any prior or subsequent breach of the same or
any other provision hereunder.
11.11. Incorporation of Exhibits. The Company Disclosure Letter, the
-------------------------
Xxxxxxxxx Disclosure Letter, and all exhibits attached hereto and referred to
herein are hereby incorporated herein and made a part hereof for all purposes
as if fully set forth herein.
11.12. Severability. Any term or provision of this Agreement which
------------
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
11.13. Enforcement of Agreement. The parties hereto agree that
------------------------
irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with its specific terms or
was otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
Delaware Court, this being in addition to any other remedy to which they are
entitled at law or in equity.
11.14. Obligation of Parent. Whenever this Agreement requires Merger
--------------------
Sub or Merger Grandsub (or their respective successors) to take any action,
such requirement shall be deemed to include an undertaking on the part of
Parent to cause Merger Sub or Merger Grandsub, as the case may be, to take
such action and a guarantee of the performance thereof.
11.15. Subsidiaries. As used in this Agreement, the word
------------
"Subsidiary" when used with respect to any party means any corporation or
other organization, whether incorporated or unincorporated, of which such
party directly or indirectly owns or controls 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, or any
organization of which such party is a general partner.
50
58
IN WITNESS WHEREOF, the parties have executed this Agreement and caused
the same to be duly delivered on their behalf on the day and year first
written above.
XXXXX XXXXXX INCORPORATED
By: /s/ XXXX XXXXXXX
------------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
and Chief Financial Officer
XXXXX XXXXXX MISSOURI, INC.
By: /s/ XXXX XXXXXXX
------------------------------------
Name: Xxxx Xxxxxxx
Title: President
XXXXX XXXXXX DELAWARE, INC.
By: /s/ XXXX XXXXXXX
------------------------------------
Name: Xxxx Xxxxxxx
Title: President
PETROLITE CORPORATION
By: /s/ XXXX X. XXXXXXXX
------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chairman, President and
Chief Executive Officer
WM. X. XXXXXXXXX & COMPANY
By: /s/ V. XXXXXXX XXXXXXXXXXXX
------------------------------------
Name: V. Xxxxxxx Xxxxxxxxxxxx
Title: Vice President
51
59
EXHIBIT A
CUSTODIAL AGREEMENT
-------------------
This Custodial Agreement ("Agreement") is dated as of ------------, 1997 by
and between Wm. X. Xxxxxxxxx & Company, a Missouri corporation ("Xxxxxxxxx"),
Xxxxx Xxxxxx Incorporated, a Delaware corporation ("Parent"), and Boatmen's
Trust Company (and any successor thereto, "Continuity Custodian"). The
parties enter into this Agreement on behalf of certain third-party
beneficiaries referred to in the Agreement and Plan of Merger dated as of
February 25, 1997 ("Merger Agreement") involving Xxxxxxxxx and Parent, as
holders of Xxxxxxxxx Common Stock.
RECITALS
X. Xxxxxxxxx and Parent are parties to the Merger Agreement with
respect to the Xxxxxxxxx Merger which is intended to qualify as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended ("Code").
B. As part of the Xxxxxxxxx Merger, Parent will issue to each holder
of Xxxxxxxxx Common Stock the number of shares of Parent Common Stock to which
such holder is entitled under the Merger Agreement.
C. In order to facilitate qualification of the Xxxxxxxxx Merger as a
reorganization within the meaning of Section 368(a) of the Code, certificates
representing the Continuity Fraction of the shares of Parent Common Stock
issued to each holder of Xxxxxxxxx Common Stock shall be delivered by Parent
on behalf of such holder to the Continuity Custodian for deposit in a custody
account ("Continuity Account").
D. All capitalized terms used herein and not otherwise defined
herein shall have the respective meaning ascribed thereto in the Merger
Agreement. Now, therefore, in consideration of the foregoing and the covenants
and agreements set forth below, the parties hereto agree as follows:
ARTICLE I
CONTINUITY ACCOUNT
------------------
Section 1.01. Appointment. Xxxxxxxxx hereby appoints the Continuity
-----------
Custodian to act for the benefit of the holders of Xxxxxxxxx Common Stock in
accordance with the terms of this Agreement.
Section 1.02. Deposit of Parent Common Stock. Promptly upon surrender
------------------------------
of any Xxxxxxxxx Certificate for cancellation to the Exchange Agent together
with a Letter of Transmittal with respect thereto, Parent, on behalf of the
holder of record of such Xxxxxxxxx Certificate, shall deliver to the
Continuity Custodian for deposit a certificate standing in the name of such
holder representing the Continuity Fraction of the shares of Parent Common
60
Stock issued to such holder (less any fractional share) ("Continuity
Shares"). Such Continuity Shares shall remain titled on Parent's books in
the name of such holder (individually, "Continuity Shareholder" and together
with other such holders, "Continuity Shareholders"), and such holder shall
have all other rights of a shareholder, including the right to vote the
Continuity Shares, during the term of this Agreement.
Section 1.03. Continuity Custodian's Duties and Authority. Subject
-------------------------------------------
to the terms and conditions set forth on Annex I attached hereto, which is
incorporated herein by reference, the Continuity Custodian shall perform the
following duties and shall have the following authority:
(a) The Continuity Custodian shall hold and safely keep all Continuity
Shares in the Continuity Account until the fifth anniversary of the Closing
Date ("Termination Date"), unless earlier delivered to the Continuity
Shareholders in accordance with Section 1.03(b) of this Agreement, and shall
take reasonable steps to provide for the physical safety of such Continuity
Shares from theft, disappearance or destruction.
(b) If, at any time, or from time to time, before the Termination
Date, the Continuity Custodian receives written notice from Xxxxxxxxxx &
Chasnoff, L.L.C. (or any successor counsel appointed by a majority in interest
of the Continuity Shareholders) that such counsel is of the opinion that a
sale or other transfer of all or a portion of the Continuity Shares by a
Continuity Shareholder, which sale or transfer is described in reasonable
detail in a written notice provided to such counsel, would not violate the
"continuity of shareholder interest" requirements then imposed under Section
368 of the Code and the U.S. Treasury regulations thereunder with respect to
the Xxxxxxxxx Merger, the Continuity Custodian shall deliver certificates
representing any such Continuity Shares to the appropriate Continuity
Shareholder or in accordance with written instructions from such shareholder.
(c) As soon as practicable following the Termination Date (and in any
event within 90 days thereafter), the Continuity Custodian shall deliver
certificates representing any Continuity Shares remaining in the Continuity
Account to the appropriate Continuity Shareholders or in accordance with
written instructions from them.
Section 1.04. Parent's duties. Parent shall perform the following
---------------
duties:
(a) Parent shall cause all certificates representing Continuity
Shares to be endorsed with the following legend during the term of this
Agreement:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AND
TRANSFERABLE ONLY IN COMPLIANCE WITH THE TERMS AND CONDITIONS OF A CUSTODIAL
AGREEMENT DATED AS OF ---------, 1997; PROVIDED, THAT THIS LEGEND SHALL BE
VOID AND OF NO FURTHER EFFECT NOT LATER THAN THE FIFTH ANNIVERSARY OF SUCH
DATE. A COPY OF THE AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE
CORPORATION.
(b) Parent shall not issue any new certificate representing any
Continuity Share in lieu of any such certificate purportedly lost, stolen,
destroyed or mutilated without the written consent of the Continuity
Custodian.
(c) Parent shall direct all dividend payments and proxy and other
shareholder materials to each Continuity Shareholder at the address indicated
in such Continuity Shareholder's Letter of Transmittal or as subsequently
instructed by such Continuity Shareholder; provided, however, that dividends
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61
paid with respect to Continuity Shares in the form of additional shares of
Parent Common Stock shall be delivered to the Continuity Custodian and held
in the Continuity Account.
Section 1.05. Fees and Expenses.
-----------------
(a) The Continuity Custodian shall be entitled to an annual fee for
its services under this Agreement at the rate of $5,000 and to reimbursement
for all reasonable expenses, including reasonable attorney's fees.
(b) Xxxxxxxxxx & Chasnoff, L.L.C. (or any successor counsel appointed
by the Continuity Custodian) shall be entitled to reasonable attorney's fees for
services rendered prior to the Termination Date or, if earlier, the date that
no Continuity Shares remain in the Continuity Account for any services
provided by it in accordance with Section 1.03(b) of this Agreement;
provided, however, that Xxxxxxxxx Surviving Corporation's obligation to pay
for such services shall not exceed $25,000 in any 12-month period.
(c) All fees and expenses payable pursuant to clauses (a) and (b) of
this Section 1.05 shall be paid by Xxxxxxxxx Surviving Corporation out of its
own funds and no funds will be supplied, directly or indirectly, by Parent for
payment of such fees and expenses and Parent will not, directly or
indirectly, reimburse Xxxxxxxxx Surviving Corporation for payment of such
fees and expenses.
Section 1.06. Resignation. The Continuity Custodian may resign from
-----------
such position upon notice of such resignation to the Continuity Shareholders
and written acceptance of such position under the terms of this Agreement by
Mercantile Trust Company N.A., (or any successor thereto) or if it is unable
or unwilling to serve, Commerce Bank, N.A., (or any successor thereto) or if
it is unable or unwilling to serve, United Missouri Bank (or any successor
thereto).
Section 1.07. Assignment. Except in accordance with Section 1.03(b)
----------
of this Agreement or upon death, no Continuity Shareholder shall have any
power to sell, assign, transfer, encumber or in any other manner dispose of
any interest in any of the Continuity Shares or the Continuity Account before
the Termination Date.
ARTICLE II
MISCELLANEOUS
-------------
Section 2.01. Notices. All notices, requests, demands and other
-------
communications required or permitted under this Agreement shall be in writing
and shall be sufficiently given if (i) delivered personally, (ii) mailed by
certified or registered mail, return receipt requested; or (iii) transmitted
by facsimile. The address for notice to each party is as shown on the
signature page of this Agreement, or as subsequently modified by written
notice. The address for notice to each Continuity Shareholder shall be as
indicated in such Continuity Shareholder's Letter of Transmittal, or as
subsequently modified by written notice.
Section 2.02. Amendments and Waivers. No amendment of this Agreement
----------------------
shall be valid unless (i) written; (ii) agreed to by Continuity Shareholders
representing a majority of the Continuity Shares; and (iii) consented to by
Parent and the Continuity Custodian, which consent shall not be unreasonably
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62
withheld if such amendment would not have an adverse effect on Parent or the
Continuity Custodian. No waiver by a party of any covenant shall be deemed
to extend to any prior or subsequent covenant.
Section 2.03. Successors and Assigns. This Agreement shall be binding
----------------------
upon and inure to the benefit of the permitted successors and assigns of the
parties.
Section 2.04. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with Missouri law.
Section 2.05. Counterparts. This Agreement may be signed in any
------------
number of counterparts, each of which shall be deemed an original.
Section 2.06. Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the parties with respect to the subject matter hereof and
supersedes any prior oral or written understandings, agreements or
representations by or between the parties with respect thereto.
Section 2.07. Headings. The section headings of this Agreement are
--------
inserted for convenience only and shall not affect the meaning or
interpretation of this Agreement.
Section 2.08. Severability. Each provision of this Agreement is
------------
distinct and severable and if any such provision shall be held to be invalid,
illegal or against public policy, the validity or the legality of the
remainder of this Agreement shall not be affected thereby.
Section 2.09. Tax Reporting. Unless otherwise required by U.S.
-------------
Treasury regulations to be issued in the future, the parties to this Agreement
will treat the Continuity Shares and any other shares of Parent Common Stock
deposited with the Continuity Custodian hereunder for purposes of Section
468B(g) of the Code and for all other income tax purposes as being owned by
the Continuity Shareholders during the period such shares are held by the
Continuity Custodian hereunder. The parties to this Agreement will make any
elections or filings required to characterize such shares in a manner
consistent with the preceding sentence.
The parties have executed this Agreement as of the date first
above written.
XXXXX XXXXXX INCORPORATED
0000 Xxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxxx X'Xxxxxxx, III
By:------------------------------------
Title:---------------------------------
WM. X. XXXXXXXXX & COMPANY
x/x Xxxxx Xxxxxxxx
Xxxxxxxxxx & Xxxxxxxx, X.X.X.
00 X. Xxxxxxxx Xxxxx 000
Xx. Xxxxx, XX 00000
By:------------------------------------
Title:---------------------------------
BOATMEN'S TRUST COMPANY
000 Xxxxxx Xxxxxx
Xx. Xxxxx, XX 00000
Attn: Corporate Trust Division
By:------------------------------------
Title:---------------------------------
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63
ANNEX I
GENERAL TERMS AND CONDITIONS
The following provisions shall be part of the Agreement to which
this exhibit is attached:
1) The duties of Boatmen's Trust Company or any successor thereto,
(the "Custodian") shall be as expressed under the Agreement and the Custodian
shall have no implied duties. The permissive right or power to take any
action shall not be construed as a duty to take action under any
circumstances and the Custodian shall not be liable except in the event of
its gross negligence or willful misconduct.
2) The Custodian shall not be obligated to risk its own funds in the
administration of the account and shall have a lien against any funds,
securities or other property in its possession or control (the "Account") for
its fees, expenses and advancements. The Custodian need not take any action
under the Agreement which may involve it in any expense or liability until
indemnified to its satisfaction for any expense or liability it reasonably
believes it may incur.
3) Any recitals contained in the Agreement shall be deemed to be
those of the parties thereto and not the Custodian.
4) Unless specifically required by the Agreement, the Custodian
shall not be required to give any bond or surety or report to any Court
despite any statute, custom or rule to the contrary.
5) The Custodian shall be protected in acting upon any notice,
request, consent, certificate, order, affidavit, letter, telegram, or other
paper or document believed by it to be genuine and correct and to have been
signed or sent by the proper person and persons.
6) The Custodian may execute any of the duties under the Agreement
by or through agents or receivers.
7) The Custodian shall not be required to take notice or be deemed
to have notice of any default or other fact or event under the Agreement
unless the Custodian shall be specifically notified in writing of such
default, fact or event.
8) The Custodian may engage legal counsel, who may be counsel for
any party to the Agreement, and shall not be liable for any act or omission
taken or suffered pursuant to the opinion of such counsel. The fees and
expenses of such counsel shall be deemed to be a proper expense for which the
Custodian will have a lien against the Account.
9) Unless specifically required by the terms of the Agreement, the
Custodian need not take notice of or enforce any other document or
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64
relationship, including, without limiting the generality of the foregoing,
any contract, settlement, arrangement, plan, assignment, pledge, release,
decree or the like, but its duties shall be solely as set out in the
Agreement.
10) Acquiror hereby agrees to indemnify and save harmless the
Custodian from and against any loss, liability or expense reasonably incurred,
without negligence or bad faith on its part, arising out of or in connection
with the Agreement, including the expense of defending itself against any
claim or liability in the premises. This indemnity agreement shall survive
the termination of the Agreement.
-5-
65
EXHIBIT B
COMPANY
OFFICER'S CERTIFICATE
---------------------
The undersigned officer of Petrolite Corporation (the "Company") hereby
certifies that as of (i) the date hereof, (ii) the Xxxxxxxxx Effective Time
and (iii) the Company Effective Time:
1. Unless otherwise specified, capitalized terms shall have the
meanings assigned to them in the Agreement and Plan of Merger (the "Merger
Agreement") dated as of February 25, 1997 among the Company, Xxxxx Xxxxxx
Incorporated ("Parent"), Xxxxx Xxxxxx Missouri, Inc. ("Merger Sub"), Xxxxx
Xxxxxx Delaware, Inc. ("Merger Grandsub"), and Wm. X. Xxxxxxxxx & Company
("Xxxxxxxxx").
2. To the best knowledge of the management of the Company, the
Company has no shareholder that owns, directly or beneficially, 5% or more of
the Company Common Stock, other than Xxxxxxxxx and those shareholders listed
on Schedule A hereto. To the best knowledge of the management of the
Company, there is no plan or intention on the part of shareholders of the
Company to sell, exchange, or otherwise dispose of a number of shares of
Parent Common Stock received in the Company Merger that would reduce the
Company shareholders' ownership of Parent Common Stock (excluding shares
owned by Xxxxxxxxx and the 5% shareholders listed on Schedule A) to a number
of shares having a value, as of the date of the Company Merger, of less than
50 percent of the value of all of the formerly outstanding stock of the
Company (other than stock held by Xxxxxxxxx) as of the same date. For
purposes of this representation, shares of the Company Common Stock exchanged
for cash in lieu of fractional shares of Parent
[FN]
-----------------------------
Such percentage may be reduced to such lower amount as satisfactory
to special counsel to the Company.
66
Common Stock in the Company Merger will be treated as outstanding Company
Common Stock on the date of the Company Merger. Moreover, shares of Company
Common Stock and shares of Parent Common Stock held by the Company
shareholders and otherwise sold, redeemed, or disposed of prior or subsequent
to the Company Merger will be considered in making this representation.
3. The Company and the shareholders of the Company will pay their
respective expenses, if any, incurred in connection with the Company Merger.
4. On the date of the Company Merger, the Company will not have
outstanding any warrants, options, convertible securities, or any other type
of right pursuant to which any person could acquire stock in the Company
that, if exercised or converted, would affect Xxxxxxxxx'x acquisition or
retention of control of the Company, as defined in Section 368(c).
5. Less than 50% of the value of the Company's total assets are
invested in stocks and securities within the meaning of Section
368(a)(2)(F)(iii) and (iv).
6. The formula set forth in the Merger Agreement for the exchange of
Parent Common Stock for the stock of the Company is the result of arm's-
length bargaining. The fair market value of the Parent Common Stock received
by each Company shareholder in the Company Merger, plus the cash received in
lieu of a fractional share of Parent Common Stock, will be approximately
equal to the fair market value of the Company stock surrendered in the
Company Merger. Company shareholders will not receive any consideration in
exchange for the Company stock other than Parent Common Stock and cash in
lieu of fractional shares of Parent Common Stock.
[FN]
----------------------------
All references to "Section" are to the Internal Revenue Code of
1986, as presently in force.
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67
7. At the time of the Company Merger, the fair market value of the
assets of the Company will exceed the sum of its liabilities and the
liabilities to which its assets are subject.
8. No Company shareholder will receive Parent Common Stock as
separate consideration for, or allocable to, any employment agreement. No
shareholder of the Company who is also an employee of Xxxxxxxxx or the
Company will receive compensation as separate consideration for, or allocable
to, any of his or her stock.
9. The Company is not under the jurisdiction of a court in a title
11 or similar case within the meaning of Section 368(a)(3)(A).
10. In the Company Merger, shares of Company Common Stock will be
exchanged solely for shares of Parent Common Stock. For purposes of this
representation, shares of Company stock exchanged for cash or other property
originating with Parent or a direct or indirect subsidiary of Parent
(excluding cash received in lieu of fractional shares of Parent Stock) will
be treated as Company Common Stock outstanding at the time of the Company
Merger.
11. No liabilities of the Company or its shareholders will be assumed
by Parent in the Company Merger nor will any of the Company stock acquired in
the Company Merger be subject to any liabilities.
12. There will be no dissenters' rights in connection with the
Company Merger.
PETROLITE CORPORATION
Dated:----------------------------- By: ----------------------------
Name:
Title:
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EXHIBIT C
XXXXXXXXX
OFFICER'S CERTIFICATE
---------------------
The undersigned officer of Wm. X. Xxxxxxxxx & Company ("Xxxxxxxxx")
hereby certifies that as of (i) the date hereof, (ii) the Xxxxxxxxx Effective
Time and (iii) the Company Effective Time:
1. Unless otherwise specified, capitalized terms shall have the
meanings assigned to them in the Agreement and Plan of Merger (the "Merger
Agreement") dated as of February 25, 1997 among Xxxxxxxxx, Xxxxx Xxxxxx
Incorporated ("Parent"), Xxxxx Xxxxxx Missouri, Inc. ("Merger Sub"), Xxxxx
Xxxxxx Delaware, Inc. ("Merger Grandsub"), and Petrolite Corporation (the
"Company").
2. To the best knowledge of the management of Xxxxxxxxx, Xxxxxxxxx
has no shareholder that owns, directly or beneficially, 1% or more of the
Xxxxxxxxx Common Stock, other than those shareholders listed on Schedule A
hereto. To the best knowledge of the management of Xxxxxxxxx, there is no
plan or intention on the part of shareholders of Xxxxxxxxx to sell, exchange,
or otherwise dispose of a number of shares of Parent Common Stock received in
the Xxxxxxxxx Merger that would reduce the Xxxxxxxxx shareholders' ownership
of Parent Common Stock to a number of shares having a value, as of the date
of the Xxxxxxxxx Merger, of less than 50 percent of the value of all of the
formerly outstanding stock of Xxxxxxxxx as of the same date. For purposes of
this representation, shares of Xxxxxxxxx Common Stock exchanged in the
Xxxxxxxxx Merger for cash in lieu of fractional shares of Parent Common Stock
or surrendered by Dissenting Stockholders will be treated as outstanding
Xxxxxxxxx stock on the date of the Xxxxxxxxx Merger. Moreover, shares of
Xxxxxxxxx Stock and shares of Parent Common Stock held by Xxxxxxxxx
shareholders and otherwise sold, redeemed, or disposed of prior or subsequent
to the Xxxxxxxxx Merger will be considered in making this representation.
69
3. Xxxxxxxxx and the shareholders of Xxxxxxxxx will pay their
respective expenses, if any, incurred in connection with the Xxxxxxxxx
Merger, subject to the terms of the Custodial Agreement.
4. There is no intercorporate indebtedness existing between Parent
and Xxxxxxxxx or between Merger Sub and Xxxxxxxxx that was issued, acquired,
or will be settled at a discount.
5. On the date of the Xxxxxxxxx Merger, Xxxxxxxxx will not have
outstanding any warrants, options, convertible securities, or any other type
of right pursuant to which any person could acquire stock in Xxxxxxxxx that,
if exercised or converted, would affect Parent's acquisition or retention of
control of Xxxxxxxxx, as defined in Section 368(c).
6. At the Xxxxxxxxx Effective Time, Xxxxxxxxx will hold at least 90%
of the fair market value of its net assets and at least 70% of the fair
market value of its gross assets held immediately prior to the Xxxxxxxxx
Merger. For purposes of this representation, there shall be included as
assets of Xxxxxxxxx held immediately prior to the Xxxxxxxxx Merger amounts
originating with Xxxxxxxxx that are used (i) to pay Dissenting Stockholders,
(ii) to pay Xxxxxxxxx shareholders who receive cash in lieu of fractional
shares of Parent Stock in the Xxxxxxxxx Merger, (iii) to pay reorganization
expenses, (iv) to pay creditors of Xxxxxxxxx (other than amounts paid in the
course of ordinary business), and (v) to make redemptions and distributions
(except for regular, normal dividends). [This representation will be deleted
if it can not be given.]
7. In the Xxxxxxxxx Merger, shares of Xxxxxxxxx Common Stock will be
exchanged solely for shares of Parent Common Stock. For purposes of this
representation, shares of Xxxxxxxxx stock exchanged for cash or other
property originating with Parent or a direct or indirect subsidiary of Parent
(including cash received in lieu of fractional shares of Parent Common Stock)
will be treated as Xxxxxxxxx stock outstanding at the time of the Xxxxxxxxx
Merger.
[FN]
--------------------------
All references made to "Section" are to the Internal Revenue Code of
1986, as presently in force.
-2-
70
8. The formula set forth in the Merger Agreement for the exchange of
Parent Common Stock for the stock of Xxxxxxxxx is the result of arm's-length
bargaining. The fair market value of the Parent Common Stock received by
each Xxxxxxxxx shareholder in the Xxxxxxxxx Merger, plus the cash received in
lieu of a fractional share of Parent Common Stock, will be approximately
equal to the fair market value of the Xxxxxxxxx stock surrendered in the
Xxxxxxxxx Merger. Xxxxxxxxx shareholders will not receive any consideration
in exchange for the Xxxxxxxxx stock other than Parent Common Stock, cash in
lieu of fractional shares of Parent Stock, and cash or other property
received by Dissenting Stockholders.
9. At the time of the Xxxxxxxxx Merger, the fair market value of the
assets of Xxxxxxxxx will exceed the sum of its liabilities and the
liabilities to which its assets are subject.
10. No Xxxxxxxxx shareholder will receive Parent Common Stock as
separate consideration for, or allocable to, any employment agreement. No
shareholder of Xxxxxxxxx who is also an employee of Xxxxxxxxx or the Company
will receive compensation as separate consideration for, or allocable to, any
of his or her stock.
11. Xxxxxxxxx is not under the jurisdiction of a court in a title 11
or similar case within the meaning of Section 368(a)(3)(A).
12. Xxxxxxxxx directly owns 5,337,360 shares of Company Common Stock,
none of which was acquired either (i) after February 23, 1992 (other than
through a stock split) or (ii) in contemplation of the Mergers.
WM. X. XXXXXXXXX & COMPANY
Dated:----------------------------- By: ----------------------------
Name:
Title:
-3-
71
EXHIBIT D
PARENT
OFFICER'S CERTIFICATE
---------------------
The undersigned officer of Xxxxx Xxxxxx Incorporated, a Delaware
corporation ("Parent") hereby certifies as of (i) the date hereof, (ii) the
Xxxxxxxxx Effective Time and (iii) the Company Effective Time that:
1. Unless otherwise specified, capitalized terms shall have the
meanings assigned to them in the Agreement and Plan of Merger (the "Merger
Agreement") dated as of February 25, 1997 among Parent, Xxxxx Xxxxxx
Missouri, Inc. ("Merger Sub"), Xxxxx Xxxxxx Delaware, Inc. ("Merger
Grandsub"), Petrolite Corporation (the "Company") and Wm. X. Xxxxxxxxx &
Company ("Xxxxxxxxx").
2. Immediately prior to the Xxxxxxxxx Merger, Parent will own all of
the issued and outstanding stock of Merger Sub, and Merger Sub will own all
of the issued and outstanding stock of Merger Grandsub.
3. Neither Parent nor any of its affiliates has any plan or
intention to reacquire any of the Parent Common Stock issued in the Xxxxxxxxx
Merger or the Company Merger.
4. Parent has no plan or intention to liquidate Xxxxxxxxx or to
cause Xxxxxxxxx to liquidate the Company; to merge Xxxxxxxxx with and into
another corporation or to cause Xxxxxxxxx to merge the Company with and into
another corporation; to sell or otherwise dispose of the stock of Xxxxxxxxx;
to cause Xxxxxxxxx to sell or otherwise dispose of the stock of the Company;
or to cause either of Xxxxxxxxx or the Company to sell or otherwise dispose
of any of its assets or any of the assets acquired from Merger Sub, except
for (i) dispositions of assets of Xxxxxxxxx other than its stock of the
Company or (ii) dispositions made in the ordinary course of business.
5. Following the Mergers, Parent will cause Xxxxxxxxx to continue to
hold its stock of the Company and will cause the Company to continue its
historic business or use a significant portion of its historic business
assets in a business.
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6. Parent and Merger Sub will pay their respective expenses, if any,
incurred in connection with the Mergers.
7. There is no intercorporate indebtedness existing between Parent
and Xxxxxxxxx or between Merger Sub and Xxxxxxxxx that was issued, acquired,
or will be settled at a discount.
8. With respect to each of Parent (as of each of the Xxxxxxxxx
Effective Time and the Company Effective Time) and Merger Sub (as of the
Xxxxxxxxx Effective Time), less than 50 percent of the value of its total
assets are invested in stocks and securities within the meaning of Section
368(a)(2)(F)(iii) and (iv).
9. Parent does not own, nor has it owned during the past five years,
any shares of Xxxxxxxxx Common Stock or the Company Common stock.
10. Merger Sub will have no liabilities assumed by Xxxxxxxxx, and
will not transfer to Xxxxxxxxx any assets subject to liabilities, in the
Xxxxxxxxx Merger.
11. Parent has no plan or intention as part of the plan of the
Mergers to cause Xxxxxxxxx or the Company to issue after the Xxxxxxxxx
Effective Time or the Company Effective Time, respectively, additional shares
of stock of Xxxxxxxxx or the Company, or any warrants, options, convertible
securities, or any other type of right pursuant to which any person could
acquire stock in Xxxxxxxxx or the Company.
12. Immediately following the Xxxxxxxxx Merger, Xxxxxxxxx will hold
at least 90% of the fair market value of its net assets and at least 70% of
the fair market value of its gross assets held immediately prior to the
Xxxxxxxxx Merger.
13. In the Xxxxxxxxx Merger, shares of Xxxxxxxxx stock will be
exchanged solely for shares of Parent Common Stock. For purposes of this
representation, shares of Xxxxxxxxx Common Stock exchanged for cash or other
property originating with Parent or a direct or indirect subsidiary of Parent
(including cash received in lieu of fractional shares of Parent
[FN]
-----------------------------
All references to "Section" are to the Internal Revenue Code of
1986, as presently in force.
73
Common Stock) will be treated as Xxxxxxxxx stock outstanding at the time of
the Xxxxxxxxx Merger.
14. The formula set forth in the Merger Agreement for the exchange of
Parent Common Stock for the stock of Xxxxxxxxx is the result of arm's-length
bargaining. The fair market value of the Parent Common Stock received by
each Xxxxxxxxx shareholder in the Xxxxxxxxx Merger, plus the cash received in
lieu of a fractional share of Parent Common Stock, will be approximately
equal to the fair market value of the Xxxxxxxxx stock surrendered in the
Xxxxxxxxx Merger. Xxxxxxxxx shareholders will not receive any consideration
in exchange for the Xxxxxxxxx stock other than Parent Stock, cash in lieu of
fractional shares of Parent Stock, and cash or other property received by
Dissenting Stockholders.
15. No Xxxxxxxxx shareholder will receive Parent Stock as separate
consideration for, or allocable to, any employment agreement. No shareholder
of Xxxxxxxxx who is also an employee of Xxxxxxxxx or the Company will receive
compensation as separate consideration for, or allocable to, any of his or
her stock.
16. In the Company Merger, shares of Company Common Stock will be
exchanged solely for shares of Parent Common Stock. For purposes of this
representation, shares of Company stock exchanged for cash or other property
originating with Parent or a direct or indirect subsidiary of Parent
(excluding cash received in lieu of fractional shares of Parent Stock) will
be treated as Company stock outstanding at the time of the Company Merger.
17. No liabilities of the Company or its shareholders will be assumed
by Parent in the Company Merger nor will any of the Company stock acquired in
the Company Common Stock be subject to any liabilities.
18. The formula set forth in the Merger Agreement for the exchange of
Parent Common Stock for the stock of the Company is the result of arm's-
length bargaining. The fair market value of the Parent Common Stock received
by each Company shareholder in the Company Merger, plus the cash received in
lieu of a fractional share of Parent Common Stock, will be approximately
equal to the fair market value of the Company stock surrendered in the
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Company Merger. Company shareholders will not receive any consideration in
exchange for the Company stock other than Parent Common Stock, and cash in
lieu of fractional shares of Parent Common Stock.
19. No Company shareholder will receive Parent Common Stock as
separate consideration for, or allocable to, any employment agreement. No
shareholder of the Company who is also an employee of Xxxxxxxxx or the
Company will receive compensation as separate consideration for, or allocable
to, any of his or her stock.
XXXXX XXXXXX INCORPORATED
Dated:--------------------------- By:------------------------------
Name:
Title:
