Exhibit 2(a)
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
AMONG
SPACE INDUSTRIES INTERNATIONAL, INC.,
ARGOTYCHE, L.P.
AND
SPACE ACQUISITION CORPORATION
AUGUST 14, 1995
TABLE OF CONTENTS
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(a) THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . . 5
(b) THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . 6
(c) ACTIONS AT AND IMMEDIATELY FOLLOWING THE CLOSING. . . . . . 6
(d) EFFECTS OF MERGER . . . . . . . . . . . . . . . . . . . . . 6
(e) PROCEDURE FOR PAYMENT . . . . . . . . . . . . . . . . . . . 7
(f) CLOSING OF TRANSFER RECORDS . . . . . . . . . . . . . . . . 9
(g) DISSENTING SHARES . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . 9
(a) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. . . . . . 10
(b) CAPITALIZATION. . . . . . . . . . . . . . . . . . . . . . . 10
(c) AUTHORIZATION OF TRANSACTION. . . . . . . . . . . . . . . . 10
(d) NONCONTRAVENTION. . . . . . . . . . . . . . . . . . . . . . 11
(e) FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . 11
(f) ABSENCE OF UNDISCLOSED LIABILITIES. . . . . . . . . . . . . 12
(g) LITIGATION AND LIABILITIES. . . . . . . . . . . . . . . . . 12
(h) CONSENTS AND APPROVALS. . . . . . . . . . . . . . . . . . . 12
(i) CERTAIN AGREEMENTS. . . . . . . . . . . . . . . . . . . . . 13
(j) ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . . 13
(k) BROKERS' FEES . . . . . . . . . . . . . . . . . . . . . . . 14
(l) DISCLOSURE. . . . . . . . . . . . . . . . . . . . . . . . . 14
(m) KNOWLEDGE OF OFFICERS OF PARENT OR PURCHASER. . . . . . . . 14
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER. . . . . 14
(a) ORGANIZATION. . . . . . . . . . . . . . . . . . . . . . . . 14
(b) CAPITALIZATION. . . . . . . . . . . . . . . . . . . . . . . 14
(c) AUTHORIZATION OF TRANSACTION. . . . . . . . . . . . . . . . 14
(d) NONCONTRAVENTION. . . . . . . . . . . . . . . . . . . . . . 15
(e) BROKERS' FEES . . . . . . . . . . . . . . . . . . . . . . . 15
(f) DISCLOSURE. . . . . . . . . . . . . . . . . . . . . . . . . 15
(g) CREDIT AGREEMENT. . . . . . . . . . . . . . . . . . . . . . 15
(h) XXXXX AGREEMENT . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(a) GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(b) NOTICES AND CONSENTS. . . . . . . . . . . . . . . . . . . . 16
(c) REGULATORY MATTERS AND APPROVALS. . . . . . . . . . . . . . 16
(d) OPERATION OF THE COMPANY'S BUSINESS . . . . . . . . . . . . 17
(e) FULL ACCESS . . . . . . . . . . . . . . . . . . . . . . . . 18
(f) NOTICE OF DEVELOPMENTS. . . . . . . . . . . . . . . . . . . 18
(g) ACQUISITION PROPOSALS . . . . . . . . . . . . . . . . . . . 18
(h) INSURANCE AND INDEMNIFICATION . . . . . . . . . . . . . . . 19
SECTION 6. CONDITIONS TO OBLIGATIONS TO CLOSE. . . . . . . . . . . . . . . 20
(a) CONDITIONS TO OBLIGATIONS OF PARENT AND PURCHASER . . . . . 20
(b) CONDITIONS TO OBLIGATIONS OF THE COMPANY. . . . . . . . . . 21
SECTION 7. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 8. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 24
(a) SURVIVAL. . . . . . . . . . . . . . . . . . . . . . . . . . 24
(b) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS . . . . . . . . . . 24
(c) NO THIRD PARTY BENEFICIARIES. . . . . . . . . . . . . . . . 24
(d) ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . 24
(e) SUCCESSION AND ASSIGNMENT . . . . . . . . . . . . . . . . . 24
(f) COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . 24
(g) HEADINGS. . . . . . . . . . . . . . . . . . . . . . . . . . 24
(h) NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(i) GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . 26
(j) AMENDMENTS AND WAIVERS. . . . . . . . . . . . . . . . . . . 26
(k) SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . 26
(l) EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . 26
(m) CONSTRUCTION. . . . . . . . . . . . . . . . . . . . . . . . 26
(n) INCORPORATION OF EXHIBITS AND SCHEDULES . . . . . . . . . . 26
EXHIBIT A -- Agreements to be Terminated (Consents and Approvals)
EXHIBIT B -- Form of Press Release
EXHIBIT C -- Indemnification Provision of the By-Laws of the Company
AGREEMENT AND PLAN OF MERGER
Agreement entered into as of August 14, 1995, by and among Argotyche,
L.P., a Delaware limited partnership ("Parent"), Space Acquisition
Corporation, a Delaware corporation ("Purchaser"), and Space Industries
International, Inc., a Delaware corporation (the "Company"). Parent,
Purchaser and the Company are referred to collectively herein as the
"Parties".
RECITALS
WHEREAS, Parent and Purchaser desire to engage in a transaction whereby
the Company will be merged with and into Purchaser, a wholly-owned subsidiary
of Parent, on the terms described herein (the "Merger");
WHEREAS, the Special Committee of the Board of Directors of the Company
has received the opinion of Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, dated July 18, 1995, to the effect that, as of such date, the
Merger Consideration (defined below) is fair, from a financial point of view,
to the Minority Stockholders (defined below) of the Company;
WHEREAS, the Special Committee has determined that the Merger, including
the Merger Consideration, is fair to and in the best interests of the
Minority Stockholders, and so advised the Board of Directors;
WHEREAS, the Board of Directors of the Company has determined that the
Merger, including the Merger Consideration, is fair to and in the best
interests of the Minority Stockholders and has approved this Agreement; and
WHEREAS, Xxxxx Industries, Inc., which beneficially owns approximately
70% of the outstanding Company Common Shares (defined below), has entered
into the Xxxxx Agreement (defined below), which, among other things, provides
that Xxxxx will vote all of the Company Common Shares held by Xxxxx in favor
of the Merger;
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties and
covenants herein contained, the Parties, intending to be legally bound
hereby, agree as follows.
SECTION 1. DEFINITIONS.
"AFFILIATE" has the meaning set forth in Rule 12b-2 under the Securities
Exchange Act.
"AGREEMENT" means this Agreement as executed as of the date first above
written or, if amended as provided herein, as amended.
"XXXXX" means Xxxxx Industries, Inc., an Indiana corporation.
"XXXXX AGREEMENT" means the Stockholder Agreement, dated as of the date
hereof, between Xxxxx and Parent relating, among other things, to the Company
Common Shares and Company Preferred Shares owned by Xxxxx.
"BENEFIT PLANS" shall mean all annuity, bonus, deferred compensation,
pension, retirement, incentive, group insurance, disability, employee
welfare, profit-sharing, thrift, savings, employee stock ownership, stock
bonus, stock purchase, restricted stock, phantom stock and stock option
plans, all employment, compensation, severance or termination contracts, all
collective bargaining agreements, other employee benefit plans and any
applicable "change of control" or similar provisions in any plan, contract or
arrangement which cover employees or former employees of the Company and any
of its Subsidiaries.
"BUSINESS DAY" shall mean any day of the week other than Saturday, Sunday
or a day that is a legal holiday in Washington, D.C., Chicago, Illinois or
Detroit, Michigan on which commercial banking institutions are obligated to
close for business.
"CERTIFICATE OF MERGER" has the meaning set forth in Section 2(c) below.
"CERTIFICATES" has the meaning set forth in Section 2(e)(ii) below.
"CLOSING" has the meaning set forth in Section 2(b) below.
"CLOSING DATE" has the meaning set forth in Section 2(b) below.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY" has the meaning set forth in the first paragraph of this
Agreement.
"COMPANY ACQUISITION PROPOSAL" shall mean any proposal (other than any
proposal by Parent or Purchaser with respect to the Merger) regarding (i) any
merger, consolidation, share exchange, business combination or other similar
transaction or series of related transactions involving the Company or any
Significant Subsidiary of the Company; (ii) any sale, lease, exchange,
transfer or other disposition of the assets of the Company or any of its
Subsidiaries, constituting 50% or more of the consolidated assets of the
Company or accounting for 50% or more of the consolidated revenues of the
Company in any one transaction or in a series of related transactions; and
(iii) any offer to purchase, tender offer, exchange offer or any similar
transaction or series of related transactions made by any Person involving
50% or more of the outstanding shares of any class of capital stock of the
Company.
"COMPANY COMMON SHARE" means any share of the Common Stock, $.01 par
value per share, of the Company.
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"COMPANY DISCLOSURE SCHEDULE" means the disclosure schedule delivered by
the Company concurrently with this Agreement which shall be arranged in
paragraphs corresponding to the lettered and numbered paragraphs contained in
Section 3.
"COMPANY PREFERRED SHARE" means any share of the Series A Convertible
Redeemable Preferred Stock, $.01 par value per share, of the Company.
"COMPANY STOCKHOLDER" means any Person who or which holds any of the
Company Common Shares.
"COMPANY STOCKHOLDER VOTE" has the meaning set forth in Section 5(c)(ii)
below.
"COMPANY TRIGGERING EVENT" shall be deemed to have occurred if (i) the
Board of Directors of the Company shall have failed to recommend, shall have
withdrawn or shall have modified, in a manner adverse to either Parent or
Purchaser, its recommendation or approval of this Agreement for any reason;
(ii) the Board of Directors of the Company shall have approved, endorsed or
recommended any Company Acquisition Proposal; (iii) the Company shall have
entered into any Contract to consummate any Company Acquisition Proposal; or
(iv) any Person or group (as defined in Section 13(d) of the Securities
Exchange Act) (other than either Parent or Purchaser or any of their
Affiliates and other than Xxxxx) shall have become the beneficial owner of
20% or more of the outstanding shares of any class of capital stock of the
Company.
"CONTRACT" means any loan or credit agreement, note, bond, indenture,
mortgage, deed of trust, lease, franchise, permit, authorization, license,
contract, instrument, employee benefit plan or practice or other agreement,
obligation, instrument or commitment of any nature.
"CREDIT AGREEMENT" means the Amended and Restated Credit Agreement, dated
as of the date hereof, by and among Purchaser, Xxxxx, the Subsidiary
Guarantors set forth on the signature pages thereof, the Banks set forth on
the signature pages thereof and NBD Bank, as Agent.
"DELAWARE GENERAL CORPORATION LAW" means the General Corporation Law of
the State of Delaware, as amended.
"DISSENTING SHARES" has the meaning set forth in Section 2(g).
"EFFECTIVE TIME" has the meaning set forth in Section 2(d)(i) below.
"ERISA" means the Employer Retirement Income Security Act of 1974, as
amended.
"EXCHANGE AGENT" means Xxxxxx Trust and Savings Bank, Chicago, Illinois.
"EXPENSE REIMBURSEMENT AMOUNT" has the meaning set forth in Section 7(c)
below.
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"FINANCIAL STATEMENTS" has the meaning set forth in Section 3(e) below.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"GOVERNMENT CONTRACT" means with respect to any Person, any contract
between such Person and the United States government or any department,
agency or instrumentality thereof, and any subcontract at any time held by
such Person under a prime government contract.
"INCLUDING" means "including, but not limited to."
"IRS" means the Internal Revenue Service.
"MERGER" has the meaning set forth in the first recital above.
"MERGER CONSIDERATION" has the meaning set forth in Section 2(d)(v) below.
"MINORITY STOCKHOLDERS" means the Company Stockholders, other than Xxxxx,
Parent, Purchaser and the officers and directors of Parent and Purchaser.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity
and frequency).
"PARENT" has the meaning set forth in the first paragraph of this
Agreement.
"PARTIES" has the meaning set forth in the first paragraph of this
Agreement.
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an
unincorporated organization, or a governmental entity (or any department,
agency, or political subdivision thereof).
"PREFERRED CONSIDERATION" has the meaning set forth in Section 2(d)(v)
below.
"PROXY MATERIALS" means the definitive notice of meeting, proxy statement
(including exhibits) and proxy card to be distributed to the Company
Stockholders in connection with the Company Stockholder Vote.
"PURCHASER" has the meaning set forth in the first paragraph of this
Agreement.
"PURCHASER COMMON STOCK" means the Common Stock, $.01 par value per share
of the Purchaser.
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"PURCHASER DISCLOSURE SCHEDULE" means the disclosure schedule delivered
by Parent and Purchaser concurrently with this Agreement which shall be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in Section 4.
"REQUISITE COMPANY STOCKHOLDER APPROVAL" has the meaning set forth in
Section 3(c)(ii) below.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, OTHER THAN (a) mechanic's, materialmen's,
and similar liens, (b) liens for taxes not yet due and payable or for taxes
that the taxpayer is contesting in good faith through appropriate
proceedings, (c) purchase money liens and liens securing rental payments
under capital lease arrangements, and (d) other liens arising in the Ordinary
Course of Business and not incurred in connection with the borrowing of money.
"SERIES A WARRANTS" means the Series A Warrants of the Company issued
pursuant to the Warrant Agreement, dated as of July, 16, 1993, between the
Company and Xxxxxx Trust and Savings Bank, as Warrant Agent.
"SERIES B WARRANTS" means the Series B Warrants of the Company issued
pursuant to the Warrant Agreement, dated as of July, 16, 1993, between the
Company and Xxxxxx Trust and Savings Bank, as Warrant Agent.
"SIGNIFICANT SUBSIDIARY" shall have the meaning set forth in Rule 1-02 of
Regulation S-X of the Rules and Regulations of the SEC.
"SPECIAL COMMITTEE" means the Special Committee of the Board of Directors
of the Company established to consider the Merger.
"SUBSIDIARY" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has
the power to vote or direct the voting of sufficient securities to elect a
majority of the directors.
"SURVIVING CORPORATION" has the meaning set forth in Section 2(a) below.
"TERMINATION FEE" has the meaning set forth in Section 7(d) below.
"WARRANTS" means the Series A Warrants and the Series B Warrants.
SECTION 2. THE MERGER.
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(a) THE MERGER. Upon and subject to the terms and conditions of
this Agreement and in accordance with the relevant provisions of the Delaware
General Corporation Law, the Merger shall take place at the Effective Time.
Following the Merger, except as provided in the following sentence, Purchaser
shall be the corporation surviving the Merger (the "Surviving Corporation")
and shall continue its existence under the laws of Delaware, and the separate
corporate existence of the Company shall cease. At the election of Parent
and Purchaser, the Merger may be structured so that (i) Purchaser shall be
merged with and into the Company, with the result that the Company shall be
the Surviving Corporation, (ii) a wholly owned subsidiary of Purchaser
("Acquisition Sub") shall be merged with and into the Company in the Merger,
with the result that the Company shall be the Surviving Corporation in the
Merger, or (iii) the Company shall be merged with and into Acquisition Sub,
with the result that Acquisition Sub shall be the Surviving Corporation;
PROVIDED, HOWEVER, such restructuring shall not adversely affect any
representation, warranty or covenant made herein or adversely affect the
rights of any Company Stockholder or the Company. The Company agrees that if
Parent and Purchaser make any election under the preceding sentence, the
Company shall enter into an amendment to this Agreement that will implement
such election, and shall take all other action necessary or desirable to
implement such election; PROVIDED, HOWEVER, neither such amendment nor such
other action adversely affects the rights of any Company Stockholder or the
Company hereunder.
(b) THE CLOSING. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Xxxxxxx &
Xxxxx L.L.P. in Washington, D.C., or such other place as the Parties may
mutually determine, commencing at 9:00 a.m. local time on the second Business
Day following the satisfaction or waiver of all conditions to the obligations
of the Parties to consummate the transactions contemplated hereby (other than
conditions with respect to actions the respective Parties will take at the
Closing itself) or such other date and time as the Parties may mutually
determine (the "Closing Date").
(c) ACTIONS AT AND IMMEDIATELY FOLLOWING THE CLOSING.
(i) At the Closing, (A) the Company will deliver to
Parent and Purchaser the various certificates, instruments, and
documents referred to in Section 6(a) below, (B) Parent and Purchaser
will deliver to the Company the various certificates, instruments,
and documents referred to in Section 6(b) below and (C) Parent will
deliver to the Exchange Agent (without duplication) the Merger
Consideration, the Preferred Consideration and the amount, if any,
for the Dissenting Shares in the manner provided below in this
Section 2.
(ii) following the Closing, the Company and Purchaser
(or another corporation which is a direct or indirect subsidiary of
Parent) shall execute and acknowledge a Certificate of Merger in due
and proper form (the "Certificate of Merger") and shall cause such
Certificate of Merger to be filed with the Secretary of State of the
State of Delaware.
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(d) EFFECTS OF MERGER.
(i) GENERAL. The Merger shall become effective at the
time (the "Effective Time") the Parties file the Certificate of
Merger with the Secretary of State of the State of Delaware. The
Merger shall have the effect set forth in the Delaware General
Corporation Law. The Surviving Corporation may, at any time after
the Effective Time, take any action (including executing and
delivering any document) in the name and on behalf of either
Purchaser or the Company in order to fully carry out and effectuate
the Merger.
(ii) CERTIFICATE OF INCORPORATION. The Certificate of
Incorporation of the Surviving Corporation at and as of the Effective
Time shall be the same as the Certificate of Incorporation of
Purchaser immediately prior to the Effective Time (except that the
name of the Surviving Corporation shall be "Calspan SRL Corporation").
(iii) BY-LAWS. The By-laws of Purchaser in effect at
and as of the Effective Time will become the By-laws of the Surviving
Corporation without any modification or amendment in the Merger.
(iv) DIRECTORS AND OFFICERS. The directors and officers
of Purchaser in office at and as of the Effective Time will become
the directors and officers of the Surviving Corporation (retaining
their respective positions and terms of office) until their
successors are duly elected and qualified.
(v) CONVERSION OF COMPANY SHARES AND COMPANY PREFERRED
SHARES. At and as of the Effective Time, (A) each Company Common
Share (including the Warrants attached thereto) issued and
outstanding immediately prior to the Effective Time (other than (x)
Company Common Shares owned by Purchaser or held in the treasury of
the Company or by any Subsidiary of the Company, all of which shall
be canceled and no payment shall be made with respect thereto and (y)
Dissenting Shares) shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into the right
to receive $4.10 in cash (the "Merger Consideration"), payable to the
holder thereof, without interest thereon, upon surrender of the
certificate representing such share; and (B) each Company Preferred
Share issued and outstanding immediately prior to the Effective Time
shall, by virtue of the Merger and without any action on the part of
the holder thereof, be converted into the right to receive $100, plus
an amount representing the accrued and unpaid dividends thereon, to
the Effective Time, in cash (the "Preferred Consideration") upon
surrender of the certificate representing such share. No Company
Common Share or Company Preferred Share that is exchanged in
connection with the transactions contemplated by this Agreement shall
be deemed to be outstanding or
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to have any rights other than those set forth above in this Section
2(d)(v) after the Effective Time.
(vi) PURCHASER COMMON STOCK. At and as of the
Effective Time, each share of Purchaser Common Stock shall remain
outstanding.
(vii) COMPANY OPTIONS. Each stock option or warrant
granted to employees and directors of the Company and its
Subsidiaries or to any other Persons, with respect to Company Common
Shares shall not be cancelled by the Merger and shall be governed in
accordance with its terms or applicable law, as the case may be.
(e) PROCEDURE FOR PAYMENT.
(i) Immediately after the Effective Time, the Purchaser
shall deposit in trust with the Exchange Agent cash in an aggregate
amount necessary (A) to make the payments pursuant to Section 2(d)(v)
hereof to holders (other than the Purchaser or Parent or any of their
respective subsidiaries or affiliates) of Company Common Shares and
Company Preferred Shares (such amount being hereinafter referred to
as the "Exchange Fund"), and (B) to make cash payments, at the rate
of $4.10 per share, to holders of Dissenting Shares, if any. The
Exchange Agent shall, pursuant to irrevocable instructions, make the
payments provided for in the preceding sentence out of the Exchange
Fund. The Exchange Agent shall invest portions of the Exchange Fund
as Purchaser directs, provided that all such investments shall be in
obligations of or guaranteed by the United States of America with
remaining maturities not exceeding 180 days, in commercial paper
obligations receiving the highest rating from either Moody's
Investors Services, Inc. or Standard & Poor's Corporation, or in
certificates of deposit or banker's acceptances of commercial banks
with capital exceeding $500 million (collectively, "Permitted
Investments"); provided, however, that the maturities of Permitted
Investments shall be such as to permit the Exchange Agent to make
prompt payment to former stockholders of the Company entitled thereto
as contemplated by this Section. The Purchaser shall promptly
replenish the Exchange Fund to the extent of any losses incurred as a
result of Permitted Investments. All earnings on Permitted
Investments shall be paid to the Purchaser. If for any reason
(including losses) the Exchange Fund is inadequate to pay the amounts
to which holders of Company Common Shares or Company Preferred Shares
shall be entitled under this Section, the Purchaser shall in any
event be liable for payment thereof. The Exchange Fund shall not be
used except as provided in this Agreement.
(ii) As soon as practicable after the Effective Time,
the Surviving Corporation shall cause the Exchange Agent to mail to
each record holder, as of the Effective Time, of an outstanding
certificate or certificates which immediately prior to the Effective
Time represented Company Common Shares or Company Preferred
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Shares (the "Certificates"), a form of letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon proper delivery of
the Certificates to the Exchange Agent) and instructions for use in
effecting the surrender of the Certificate or payment therefor. Upon
surrender to the Exchange Agent of a Certificate representing Company
Common Shares (together with the Warrants attached thereto), together
with such letter of transmittal duly executed, the holder of such
Certificate shall be paid in exchange therefor cash in an amount
equal to the product of the number of Company Common Shares
represented by such Certificate multiplied by the Merger
Consideration and such Certificate (and the Warrants attached
thereto) shall forthwith be cancelled. Upon surrender to the
Exchange Agent of a Certificate representing Company Preferred
Shares, together with such letter of transmittal duly executed, the
holder of such Certificate shall be paid in exchange therefor cash in
an amount equal to the product of the number of Company Preferred
Shares represented by such Certificate multiplied by the Preferred
Consideration and such Certificate shall forthwith be cancelled. No
interest will be paid or accrued on the cash payable upon the
surrender of the Certificates. If payment is to be made to a Person
other than the Person in whose name the Certificate surrendered is
registered, it shall be a condition of payment that the Certificate
so surrendered shall be properly endorsed or otherwise in proper form
for transfer and that the Person requesting such payment shall pay
any transfer or other taxes required by reason of the payment to a
Person other than the registered holder of the Certificate
surrendered or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. After
the Effective Time, until surrendered in accordance with the
provisions of this Section 2(e), each Certificate (other than
Certificates representing shares owned by the Purchaser or any
affiliate of the Purchaser and Dissenting Shares) shall represent for
all purposes solely the right to receive the Merger Consideration or
the Preferred Consideration, as the case may be, in cash multiplied
by the number of Company Common Shares or Company Preferred Shares
evidenced by such Certificate, without any interest thereon.
(iii) After the Effective Time, there shall be no
transfers of Company Common Shares or Company Preferred Shares that
were outstanding immediately prior to the Effective Time on the stock
transfer books of the Surviving Corporation. If, after the Effective
Time, Certificates are presented to the Surviving Corporation, they
shall be cancelled and exchanged for cash as provided in this Section
2.
(iv) Any portion of the Exchange Fund (including the
proceeds of any investments thereof) that remains unclaimed by the
stockholders of the Company more than 180 days after the Effective
Time shall be repaid to the Surviving Corporation and holders of
Certificates shall thereafter look only to the Surviving Corporation
only as general creditors thereof for payment of any Merger
Consideration payable upon due surrender of their Certificates.
Notwithstanding the
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foregoing, neither the Purchaser nor the Surviving Corporation shall
be liable to a holder of a Certificate for amounts delivered to a
public official pursuant to any applicable abandoned property,
escheat or similar laws.
(f) CLOSING OF TRANSFER RECORDS. After the close of business on the
day of the Effective Time, the stock transfer ledger of the Company shall be
closed and transfers of Company Common Shares and Company Preferred Shares
outstanding prior to the Effective Time shall not be made on the stock
transfer books of the Surviving Corporation.
(g) DISSENTING SHARES. Notwithstanding anything in this Agreement
to the contrary, in the event that dissenters' rights are available in
connection with the Merger pursuant to Section 262 of the Delaware General
Corporation Law, Company Common Shares that are issued and outstanding
immediately prior to the Effective Time and that are held by stockholders who
did not vote in favor of the Merger and comply with all of the relevant
provisions of Section 262 of the Delaware General Corporation Law (the
"Dissenting Shares") shall not be converted into or be exchangeable for the
right to receive the Merger Consideration, unless and until such holders
shall have failed to perfect or shall have effectively withdrawn or lost such
right, and such holder's Company Common Shares shall thereupon be deemed to
have been converted into and to have become exchangeable for the right to
receive, as of the Effective Time, the Merger Consideration without any
interest thereon. The Company shall give the Purchaser (i) prompt notice of
any written demands for appraisal of Company Common Shares received by the
Company and (ii) the opportunity to direct all negotiations and proceedings
with respect to any such demands. The Company shall not, without the prior
consent of the Purchaser, voluntarily make any payment with respect to, or
settle or offer to settle, any such demands.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to Parent and Purchaser (except as set forth in the
Company Disclosure Schedule) as follows. With respect to any representations
or warranties in this Section 3 indicated to be limited to the knowledge of
the Company (or words to like effect), such knowledge will be deemed to
include the knowledge of officers of the Company who are also affiliated (as
defined in Rule 405 under the Securities Act) with Parent or Purchaser.
(a) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. Each of the
Company and its Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation. Each of the Company and its Subsidiaries is duly authorized
to conduct business and is in good standing under the laws of each
jurisdiction where such qualification is required, except for failures that
would not have a material adverse effect on the Company and its Subsidiaries
taken as a whole.
(b) CAPITALIZATION.
(i) As of May 31, 1995, the entire authorized capital
stock of the Company consisted of (A) 19,000,000 shares of Company
Common Stock, of which
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9,973,243 shares (excluding treasury shares) were issued and
outstanding, and (B) 1,000,000 shares of preferred stock, of
which 12,184 shares of Company Preferred Stock were issued and
outstanding. To the best of the Company's knowledge, at and as of
the Closing Date, all Warrants will be attached to shares of
Company Common Stock in the form of units, consisting of one
Company Common Share, one Series A Warrant and one Series B Warrant,
and will not be separately transferable.
(ii) To the best of the Company's knowledge, other than
the Warrants and except as set forth in the Company Disclosure
Schedule, there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange
rights, or other contracts or commitments that could require the
Company to issue, sell, or otherwise cause to become outstanding any
of its capital stock or any other securities convertible into or
evidencing the right to subscribe for any of its capital stock. To
the best of the Company's knowledge, there are no outstanding or
authorized stock appreciation, phantom stock, profit participation,
or similar rights with respect to the Company. At and as of the
Closing, the Company will not be a party to any agreement relating to
the registration of shares of capital stock of the Company or any
successor entity.
(iii) The Company Disclosure Schedule correctly sets
forth the name of each Subsidiary, the jurisdiction of its
incorporation and the Persons owning its outstanding capital stock.
(c) AUTHORIZATION OF TRANSACTION.
(i) The Company has corporate power and authority to
execute and deliver this Agreement, and to consummate the
transactions contemplated hereby. The Board of Directors of the
Company, at a meeting duly called and held and at which a quorum was
present and acting throughout by the requisite vote of all directors
present, has approved this Agreement and the Merger in accordance
with the applicable provisions of the Delaware General Corporation
Law and (i) determined that the Merger is fair to and in the best
interest of the Company's stockholders, (ii) recommended approval of
this Agreement and the Merger by the Company's stockholders, and
(iii) duly and validly authorized the execution and delivery of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby. Except for the approval of the
Company's stockholders, no other corporate proceedings on the part of
the Company are necessary to authorize this Agreement or to
consummate the transactions so contemplated. This Agreement has been
duly executed and delivered on behalf of the Company and constitutes
the valid and legally binding obligation of the Company, enforceable
against the Company in accordance with its terms and conditions,
except that (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in
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effect relating to creditors' rights and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(ii) The only votes of Company Stockholders required to
adopt the Agreement are (A) the affirmative vote of the holders of a
majority of Company Common Shares pursuant to Section 251 of the
Delaware General Corporation Law and (B) the affirmative vote of a
majority of the Minority Stockholders, represented in person or by
proxy, at the special stockholder meeting called by the Company for
the purpose of considering and voting upon the Merger (collectively,
the "Requisite Company Stockholder Approval").
(d) NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which any of the Company and its
Subsidiaries is subject or any provision of the charter or bylaws of any of
the Company and its Subsidiaries, except for any such matters which, both
individually and in the aggregate, would not have a material adverse effect
on the Company or on its ability to consummate the transactions contemplated
hereby. Other than in connection with the provisions of the Delaware General
Corporation Law and as set forth on the Company Disclosure Schedule, none of
the Company and its Subsidiaries needs to give any notice to, make any filing
with, or obtain any authorization, consent, permit or approval of any
government or governmental agency or regulatory authority in order for the
Parties to consummate the transaction contemplated by this Agreement.
(e) FINANCIAL STATEMENTS.
(i) The Company has prepared and distributed to its
stockholders a quarterly report titled "Modified Form 10-Q
Equivalent" for the fiscal quarter ended April 2, 1995 (the "Form
10-Q Equivalent") and an annual report titled "Modified Form 10-K
Equivalent" for the fiscal year ended January 1, 1995 (the "Form 10-K
Equivalent" and, together with the Form 10-Q Equivalent, the
"Stockholder Reports").
(ii) The (A) audited consolidated statements of
operations, cash flows and stockholders' equity of the Company for
the years ended January 2, 1994 and January 1, 1995 and the audited
consolidated balance sheets of the Company as of January 1, 1995 and
January 2, 1994, including the footnotes thereto, included in the
Form 10-K Equivalent (the "Annual Financial Statements") have been
prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered thereby, present fairly the financial
condition of the Company and its Subsidiaries as of the indicated
dates and the results of operations of the Company and its
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Subsidiaries for the indicated periods, and are consistent with the
books and records of the Company and its Subsidiaries, and (B)
interim unaudited consolidated statements of operations, cash flows
and stockholders' equity of the Company for the three months ended
April 2, 1995 and the consolidated balance sheet of the Company and
its Subsidiaries as of such date included in the Form 10-Q Equivalent
and previously provided to Parent and Purchaser (the "Interim
Statements" and, together with the Annual Financial Statements, the
"Financial Statements") have been prepared on the same basis as the
Annual Financial Statements except that such Interim Statements are
subject to normal recurring adjustments and omit certain footnote
disclosure.
(f) ABSENCE OF UNDISCLOSED LIABILITIES. To the best of the
Company's knowledge, except as described in the Proxy Materials, neither the
Company nor any of its Subsidiaries has any liability or obligation of any
kind, accrued, absolute, asserted or unasserted, contingent or otherwise,
including any guaranty with respect to any obligation, except (i) such
liabilities or obligations as are reflected, reserved against or disclosed in
the Financial Statements and (ii) such liabilities or obligations as have
been incurred since April 2, 1995, which do not singly or in the aggregate
have a material adverse effect on the Company and its Subsidiaries taken as a
whole.
(g) LITIGATION AND LIABILITIES. Except as disclosed in the Proxy
Materials and the Stockholder Reports, to the best of the Company's
knowledge, there are no (i) actions, suits, proceedings or investigations
pending or threatened against the Company or any of its Subsidiaries or (ii)
obligations or liabilities, whether or not accrued, contingent or otherwise,
or any fact or circumstances of which the Company is aware (including those
relating to tax, environmental, product liability and occupational safety and
health matters), in any case, that could reasonably be expected to result in
any claims against or obligations or liabilities of the Company or any of its
Subsidiaries, that, alone or in the aggregate, could have a material adverse
effect on the financial condition, properties, business, or result of
operations of the Company and its Subsidiaries taken as a whole. To the best
of the Company's knowledge, the Company is not subject to any outstanding
order, writ, injunction or decree that could have a material adverse effect
on the Company or could prevent or delay in any material respect the
consummation of the transactions contemplated hereby.
(h) CONSENTS AND APPROVALS. To the best of the Company's knowledge,
neither the execution and delivery of this Agreement by the Company nor the
consummation of the transactions contemplated hereby will (i) conflict with
or result in any breach of any provision of the respective certificates of
incorporation or by-laws (or other similar governing documents) of the
Company or any of its Significant Subsidiaries; (ii) except as set forth on
the Company Disclosure Schedule and except for the Company's existing Credit
Agreement, dated as of March 3, 1994 with NBD Bank, N.A., result in a default
(or give rise to any right of termination, cancellation or acceleration)
under any of the terms, conditions or provisions of any note, license,
agreement or other instrument or obligation to which the Company or any of
its Subsidiaries or by which the Company or any of its Subsidiaries or any of
their respective assets may be bound, except for such defaults (or rights of
termination, cancellation, or acceleration) which, in the aggregate, would
not have a
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material adverse effect on the Company and its Subsidiaries taken as whole
and would not prevent or delay in any material respect the consummation of
the transactions contemplated hereby; or (iii) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Company,
any of its Subsidiaries or any of their respective assets, except for
violations which would not in the aggregate have a material adverse effect on
the Company and its Subsidiaries taken as whole and would not prevent or
delay in any material respect the consummation of the transactions
contemplated hereby.
(i) CERTAIN AGREEMENTS. Except as set forth on the Company
Disclosure Schedule, there are no contracts, agreements, arrangements or
understandings to which the Company or any of its Subsidiaries is a party
which create, govern or purport to govern the right of another party (other
than Parent or Purchaser) to acquire the Company.
(j) ENVIRONMENTAL MATTERS.
(i) As used in this Agreement "Hazardous Material"
shall mean: (1) any "hazardous substance" as now defined pursuant to
the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. Section 9601(14); (2) any "pollutant or contaminant"
as defined in 42 U.S.C. Section 9601(33); (3) any material now
defined as "hazardous waste" pursuant to 40 C.F.R. Part 261; (4) any
petroleum, including crude oil and any fraction thereof; (5) natural
synthetic gas usable for fuel; (6) any "hazardous chemical" as
defined pursuant to 29 C.F.R. Part 1910; and (7) any asbestos,
polychlorinated biphenyl ("PCB"), radium, or isomer of dioxin, or any
material or thing containing or composed of such substance or
substances.
(ii) As used in this Agreement "Environmental Laws"
shall mean: any federal, state or local law, rule, or regulation or
common law, relating to public health or safety, worker health or
safety, or pollution, damage to or protection of the environment
including, without limitation, laws relating to emissions,
discharges, releases or threatened release of Hazardous Materials
into the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface), or otherwise
relating to the manufacture, processing, distribution, use,
treatment, storage, generation, disposal, transport or handling of
any Hazardous Material.
(iii) Except as indicated on the Company Disclosure
Schedule, there are no specific facts or circumstances known to the
Company that would indicate that the Company or any of its
Subsidiaries will likely be subject to liability in respect of a
violation or alleged violation of any Environmental Laws, which would
be material to the Company and its Subsidiaries, taken as a whole.
(k) BROKERS' FEES. The Company does not have any liability or
obligation to pay any fees or commissions to any broker, finder, or similar
agent with respect to the transactions
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contemplated by this Agreement, except for the fees payable to Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated under its engagement letter with the
Company, dated June 2, 1995.
(l) DISCLOSURE. The Company Information contained in the Proxy
Materials will not, on the date the Proxy Materials are first mailed to
stockholders, and the Proxy Materials, if amended, will not, on the date of
the Company Stockholder Vote contain any statement which, at the time and in
light of the circumstances under which it is made, is false or misleading
with respect to any material fact or which omits to state any material fact
necessary in order to make the statements therein not false or misleading in
light of the circumstances in which they are made. As used herein, "Company
Information" means all information with respect to the Company or any of its
Subsidiaries provided for use in the Proxy Materials, as the case may be.
(m) KNOWLEDGE OF OFFICERS OF PARENT OR PURCHASER. The
representations and warranties set forth in this Section 3 shall not be
breached by the existence of facts, conditions or events that Xxxxxx X. Xxxxx
or Xxxxx X. Xxxxxxxxx, as directors and officers of the Company, in the
performance of their duties on behalf of the Company, knew of as of the date
of this Agreement.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.
Parent and Purchaser represent and warrant to the Company (except as set
forth in the Purchaser Disclosure Schedule) as follows:
(a) ORGANIZATION. Parent is a limited partnership duly organized
and validly existing under the laws of the State of Delaware. Purchaser is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware. Parent and Purchaser have delivered to the
Company true and correct copies of their organizational documents.
(b) CAPITALIZATION. The entire authorized capital stock of
Purchaser consists of (i) 19,000,000 shares of Common Stock, $.01 par value
per share, of which 100 shares are issued and outstanding, and (ii) 1,000,000
shares of preferred stock, of which, as of the date of this Agreement, no
shares are issued or outstanding.
(c) AUTHORIZATION OF TRANSACTION. Each of Parent and Purchaser has
requisite power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby to be consummated by it.
This Agreement has been duly authorized by the general partner of Parent and
by the board of directors of Purchaser, has been duly executed and delivered
on behalf of each of Parent and Purchaser, and constitutes the valid and
legally binding obligation of each of Parent and Purchaser, enforceable
against Parent and Purchaser in accordance with its terms and conditions,
except that (i) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.
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(d) NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement, nor the consummations of the transactions contemplated
hereby, will (i) violate any constitution, statue, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of
any government, governmental agency, or court to which either of Parent or
Purchaser is subject or any provision of the charter or bylaws of either
Parent or Purchaser or (ii) conflict with, result in a breach of, constitute
a default under, result in the acceleration of, create in any party a put
right or repurchase obligation or the right to accelerate, terminate, modify
or cancel, or require any notice under, any material agreement, contract,
lease, license, instrument, or other material arrangement to which either
Parent or Purchaser is a party or by which it is bound or to which any of its
material assets is subject, except for any such matters which, both
individually and in the aggregate, would not have a material adverse effect
on either Parent or Purchaser or on either Parent's or Purchaser's ability to
consummate the transactions contemplated hereby. Other than in connection
with the provisions of the Delaware General Corporation Law, neither Parent
nor Purchaser needs to give any notice to, make any filing with, or obtain
any authorization, consent, or approval for any government or governmental
agency in order for the Parties to consummate the transactions contemplated
by this Agreement.
(e) BROKERS' FEES. Neither Parent nor Purchaser has any liability
or obligation to pay any fees or commission to any broker, finder, or similar
agent with respect to the transaction contemplated by this Agreement.
(f) DISCLOSURE. The information regarding Parent and Purchaser
contained in the Proxy Materials will not, on the date the Proxy Materials
are first mailed to stockholders of the Company, and the Proxy Materials, if
amended, will not, on the date of the Company Stockholder Vote, contain any
statement which, as the time and in light of the circumstances under which it
is made, is false or misleading with respect to any material fact or which
omits to state any material fact necessary in order to make the statements
therein not false or misleading; PROVIDED, HOWEVER, that this representation
is limited to information regarding Parent or Purchaser that was provided by
Parent or Purchaser to the Company, specifically for use in the Proxy
Materials.
(g) CREDIT AGREEMENT. Parent has provided to the Company a true and
correct copy of the Credit Agreement to provide debt financing in an amount
that, together with the equity financing referred to in Section 6(a)(ix),
will be sufficient to enable Purchaser to consummate the Merger. Such Credit
Agreement is in full force and effect as of the date hereof and neither
Parent nor Purchaser is aware of any information that indicates that Parent
or Purchaser (as the case may be) will not be able, in any material respect,
to satisfy all conditions precedent to the availability of funds thereunder.
(h) XXXXX AGREEMENT. Parent has provided to the Company a true and
correct copy of the Stockholder Agreement among Xxxxx, Purchaser and Parent,
which agreement is currently in effect and provides, among other things, that
said Stockholder Agreement shall terminate if the Company terminates this
Agreement pursuant to Section 7(a)(ii) hereof.
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(i) Except as set forth in the Company Disclosure Schedule, the
Proxy Materials and the Stockholder Reports, or as disclosed to the Board of
Directors, the directors and officers of Purchaser and Parent who are
directors and officers of the Company are not as of the date hereof aware of
any material favorable facts concerning the business, financial condition,
operations or results of operations of the Company and its Subsidiaries,
taken as a whole.
SECTION 5. COVENANTS. The Parties agree that, from and after the
execution of this Agreement and until the Effective Time, unless otherwise
set forth in the Company Disclosure Schedule or the Purchaser Disclosure
Schedule (as the case may be):
(a) GENERAL. Each of the Parties will use all commercially
reasonable efforts to take all action and to do all things necessary, proper,
or advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of
the closing conditions set forth in Section 6 below).
(b) NOTICES AND CONSENTS. The Company will give any notices (and
will cause each of its Subsidiaries to give any notices) to third parties,
and will use all commercially reasonable efforts to obtain (and will cause
each of its Subsidiaries to use all commercially reasonable efforts to
obtain) any third party consents or approvals, that either Parent or
Purchaser reasonably may request in connection with the matters referred to
in Section 3(d) above. The Company will cooperate with Parent and Purchaser
and assist Parent and Purchaser in connection with obtaining the consents and
approvals of third parties to the termination of the agreements set forth on
EXHIBIT A hereto and such other agreements of the Company (other than
agreements governing employee stock options) that require the consent of
third parties for their termination as may be identified by Parent or
Purchaser to the Company in writing prior to the Closing.
(c) REGULATORY MATTERS AND APPROVALS. Each of the Parties will (and
the Company will cause each of its Subsidiaries to) give any notices to, make
any filings with, and use all commercially reasonably efforts to obtain any
authorizations, consents, and approvals of governments, governmental agencies
and regulatory authorities in connection with the matters referred to in
Section 3(d) and Section 4(d) above. Without limiting the generality of the
foregoing:
(i) PROXY STATEMENT. The Company will prepare and mail
to its stockholders the Proxy Materials relating to the Company
Stockholder Vote. Parent and Purchaser agree to furnish to the
Company all information regarding Parent and Purchaser reasonably
requested by the Company in connection with the preparation of the
Proxy Materials.
(ii) THE COMPANY STOCKHOLDER VOTE. The Company will call a
special meeting of its stockholders as soon as reasonably practicable
to obtain the Requisite Company Stockholder Approval (the "Company
Stockholder Vote"). The Company will mail the Proxy Materials to its
stockholders as soon as reasonably practicable. The Proxy Materials
will contain the affirmative recommendations of the board of
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directors of the Company in favor of the adoption of this Agreement
and the approval of the Merger. Notwithstanding the foregoing,
nothing in this Section 5(c)(ii) shall be construed to require any
director of the Company to take any actions or permit any event
described above to the extent that any director, upon advice of legal
counsel to the Special Committee, determines in good faith that such
action would cause him to be subject to a substantial risk of a
breach of his fiduciary duties under applicable law.
(iii) REGULATORY FILINGS. Each of the Parties will file
(and the Company will cause each of its Subsidiaries to file) any
form or report or related material that it may be required to file
with any governmental entity under the laws of the United States or
any foreign jurisdiction, will use all commercially reasonable
efforts to obtain (and the Company will cause each of its
Subsidiaries to use all commercially reasonable efforts to obtain)
termination of any applicable waiting periods, and will make (and the
Company will cause each of its Subsidiaries to make) any further
filings that may be necessary, proper, or advisable.
(d) OPERATION OF THE COMPANY'S BUSINESS. From and after the date
hereof until the Effective Time, the Company will not (and will not cause or
permit any of its Subsidiaries to) engage in any practice, take any action,
or enter into any transaction outside the Ordinary Course of Business, unless
(i) Purchaser shall otherwise agree in writing, (ii) expressly contemplated
hereby or (iii) otherwise provided in a Contract to which the Company or any
of its Subsidiaries is a party which is in effect prior to the date hereof.
Without limiting the generality of the foregoing:
(i) none of the Company and its Subsidiaries will
authorize or effect any change in its charter or bylaws;
(ii) none of the Company and its Subsidiaries will
grant any options, warrants, or other rights to purchase or obtain
any of its capital stock or issue, sell, or otherwise dispose of any
of its capital stock (except upon the conversion or exercise of
options and warrants outstanding on the date hereof and identified on
the Disclosure Schedule);
(iii) none of the Company and its Subsidiaries will
declare, set aside, or pay any dividend or distribution with respect
to its capital stock (whether in cash or in kind), or redeem,
repurchase, or otherwise acquire any of its capital stock;
(iv) none of the Company and its Subsidiaries will
issue any note, bond, or other debt security or create, incur,
assume, or guarantee any indebtedness for borrowed money or
capitalized lease obligation outside the Ordinary Course of Business;
(v) none of the Company and its Subsidiaries will grant
any Security Interest on any of its assets outside the Ordinary
Course of Business; or transfer, lease, license, sell, mortgage,
pledge, dispose of or encumber any assets or incur or modify any
indebtedness or other liability other than in the Ordinary Course of
Business;
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(vi) none of the Company and its Subsidiaries will make
any capital investment in, make any loan to, acquire the securities
or assets of, or merge or consolidate with, any other Person outside
the Ordinary Course of Business;
(vii) none of the Company and any of its Subsidiaries
will make any acquisition of a material amount of assets or
securities or enter into any material contract or any release or
relinquishment of any material contract rights, not in the Ordinary
Course of Business;
(viii) none of the Company and its Subsidiaries will
make any change in employment terms for any of its directors,
officers, and employees outside the Ordinary Course of Business;
neither the Company nor any of its Subsidiaries will grant any
severance or termination pay to, or enter into any employment or
severance agreement with any director, officer or other employee of
the Company or any of its Subsidiaries, other than pursuant to
Benefit Plans in existence as of the date of this Agreement and in
the Ordinary Course of Business; and neither the Company nor any of
its Subsidiaries will establish, adopt, enter into, or, except as
required by law, amend any Benefits Plans, or make any new grants or
awards under any Benefit Plans other than in the Ordinary Course of
Business; and
(ix) none of the Company and it Subsidiaries will
commit to any of the foregoing.
The covenants of the Company set forth in this Section 5(d) shall not
be breached by actions taken or omitted by Xxxxxx X. Xxxxx or Xxxxx X.
Xxxxxxxxx, in their capacities as officers of the Company, unless such
actions were taken or omitted, directly or indirectly, at the direction, or
with the consent or approval, of the Board of Directors of the Company.
(e) FULL ACCESS. The Company will (and will cause each of its
Subsidiaries to) permit representatives of each of Parent and Purchaser
(including representatives of potential financing sources) to have full
access at all reasonable times, and in a manner so as not to interfere with
the normal business operations of the Company and its Subsidiaries, to all
premises, properties, personnel, books, records (including tax and accounting
records), contracts, and documents of or pertaining to each of the Company
and its Subsidiaries.
(f) NOTICE OF DEVELOPMENTS. The Company will give prompt written
notice to Parent and Purchaser of any material adverse development causing a
breach of any of its
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representations and warranties in Section 3 above and Parent and Purchaser
will give prompt written notice to the Company of any material adverse
development causing a breach of any of their representations and warranties
in Section 4 above. No disclosure by the Company, Parent or Purchaser
pursuant to this Section 5(f), however, shall be deemed to amend or
supplement the Disclosure Schedule or to prevent or cure any
misrepresentation, breach of warranty, or breach of covenant.
(g) ACQUISITION PROPOSALS. The Company shall not, and it shall not
authorize or permit any of its Subsidiaries, officers, directors or employees
or any advisors or agents retained by the Company or its Subsidiaries,
directly or indirectly, to (i) solicit, initiate or knowingly encourage or
induce the making of any Company Acquisition Proposal, (ii) negotiate with
any third party with respect to any Company Acquisition Proposal, (iii)
endorse or recommend the Company Acquisition Proposal of any third party or
(iv) enter into any Contract with any third party with the intent to effect
any Company Acquisition Proposal. Notwithstanding the foregoing, nothing in
this Section 5(g)(i) shall limit or prohibit the Company from issuing a press
release, substantially in the form of EXHIBIT B to this Agreement, at any
time following the execution of this Agreement or (ii) shall limit or
prohibit the Company or any officer, director or employee of the Company or
any advisor or agent retained by the Company (in each case, as authorized by
the Special Committee) from (A) furnishing or causing to be furnished
information concerning the Company, (B) participating in discussions and
negotiations through its authorized representatives with persons who have
sought such information if the Special Committee, upon the advice of its
legal counsel, determines in good faith that the failure to provide such
information or to participate in such discussions or negotiations would cause
the members of the Board of Directors to be subject to a substantial risk of
a breach of their fiduciary duties under applicable law, and (C) entering
into a Contract to effect a Company Acquisition Proposal that the Special
Committee, with the advice of its legal and financial advisors, determines in
good faith is more favorable to the stockholders than the Merger contemplated
hereby. (The foregoing sentence shall not relieve any Person from the
responsibility of protecting confidential information of the Company when it
is furnished to a third party.)
(h) INSURANCE AND INDEMNIFICATION.
(i) Parent and Purchaser shall maintain, or cause to be
maintained, in effect for a period ending not sooner than the sixth
anniversary of the Effective Time of the Merger, at no expense to the
beneficiaries thereof, coverage under the current directors' and
officers' liability insurance policies ("D&O insurance") maintained
by Xxxxx on behalf of the directors, officers or other covered
employees of the Company with respect to matters occurring at or
prior to the Effective Time; PROVIDED, HOWEVER, that in the event
Xxxxx terminates, fails to renew or allows such D&O insurance
policies to lapse prior to the sixth anniversary of the Effective
Time, Parent and Purchaser at their election shall either (a) provide
or cause to be provided such D&O insurance coverage under a separate
policy which shall provide for coverage on the whole no less
favorable to the insured than that provided by the current policies,
or (b) cause Xxxxx to indemnify such officers, directors and covered
employees to the extent, and subject to the limitations of, the
coverage provided by
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such current policies for the period ending on the sixth anniversary
of the Effective Time.
(ii) For a period of six years after the Effective
Date, the Surviving Corporation shall observe the indemnification
provision now existing in the Bylaws of the Company (a copy of which
provision is set forth in EXHIBIT C) for the benefit of any
individual who served as a director or officer of the Company at any
time in the Bylaws prior to the Effective Time notwithstanding any
amendment of such provisions after the Effective Time, and such
indemnification provisions in said Exhibit C shall be a part of this
Agreement as though set forth in this Section 5(h)(ii).
(iii) This Section 5(h) shall survive consummation of
the Merger.
(iv) STOCK OPTIONS. The Company shall cooperate with
Parent and Purchaser in the event Parent and Purchaser desire to
modify, cancel or grant substitutes for any stock options or
warrants granted to employees or directors of the Company or any of
its Subsidiaries or to any other Persons so long as such cooperation
does not result in a breach of any representation, warranty or
covenant of the Company herein (unless previously waived by Parent
and Purchaser).
(v) FINANCING. Parent and Purchaser will use their
best efforts to obtain the financing identified in Section 6(a)(viii)
on or prior to the Closing Date.
SECTION 6. CONDITIONS TO OBLIGATIONS TO CLOSE.
(a) CONDITIONS TO OBLIGATIONS OF PARENT AND PURCHASER. The
obligations of Parent and Purchaser to consummate the Merger are subject to
satisfaction of the following conditions:
(i) the Requisite Company Stockholder Approval shall
have been obtained;
(ii) the Company and its Subsidiaries shall have
procured all of the third party and governmental consents specified
in Section 5(b) and the first section of Section 5(c) above,
including any required consents under the agreements listed on the
Company Disclosure Schedule;
(iii) the representations and warranties set forth in
Section 3 above shall be true and correct in all material respects at
and as of the Closing Date; the Company shall have performed and
complied with all of its covenants hereunder in all material respects
through the Closing;
(iv) there shall be in effect no preliminary or
permanent injunction or any judgment, order, decree, ruling, or
charge which would (w) prevent the
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consummation of any of the transactions contemplated by this
Agreement, (x) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation, (y) affect
materially and adversely the right of the Surviving Corporation to
own the former assets, to operate the former businesses, and to
control the former Subsidiaries of the Company, or (z) affect
materially and adversely the right of any of the former Subsidiaries
of the Company to own its assets and to operate its businesses (and
no such injunction, judgment, order, decree, ruling, or charge shall
be in effect);
(v) there shall not have occurred any material adverse
change in the business, financial condition, operations or results of
operations of the Company and its Subsidiaries taken as a whole,
except (A) as contemplated by this Agreement or (B) as occurs after
the date hereof directly as a result of specific facts which were
known prior to the date hereof to Xxxxxx X. Xxxxx and Xxxxx X.
Xxxxxxxxx, as directors and officers of the Company in the
performance of their duties;
(vi) the Company shall have delivered to Parent and
Purchaser a certificate to the effect that each of the conditions
specified above in Section 6(a)(i)-(vi) is satisfied in all respects;
(vii) the Credit Agreement shall have been executed by
the parties thereto, and shall be in full force and effect and shall
provide available funds for the transactions contemplated by this
Agreement of not less than $39,000,000;
(viii) Purchaser and/or Parent shall have received
equity financing funds for the purpose of consummating the Merger of
not less than $5,000,000;
(ix) the Xxxxx Agreement shall be in full force and
effect; Xxxxx shall have consummated the transactions contemplated
under the Xxxxx Agreement; and Xxxxx shall not have withdrawn, or
communicated its intention to withdraw or challenge, its proxy given
thereunder to Parent;
(x) Parent and Purchaser shall have received all
applicable authorizations, consents, and approvals of governments and
governmental agencies referred to in Section 3(d) and Section 4(d)
above;
(xi) the number of Dissenting Shares shall not exceed
five percent of the total Company Common Shares outstanding on the
date hereof; and
(xii) all certificates, instruments and other documents
required to be delivered to Parent or Purchaser hereunder or
otherwise to effect the Merger shall be reasonably satisfactory in
form and substance to Parent and Purchaser.
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Parent and Purchaser may waive any condition specified in this Section 6(a)
if they execute a writing so stating at or prior to the Closing.
(b) CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligation of the
Company to consummate the Merger is subject to satisfaction of the following
conditions:
(i) the representations and warranties set forth in
Section 4 above shall be true and correct in all material respects at
and as of the Closing Date;
(ii) Parent and Purchaser shall have performed and
complied with all of their covenants hereunder in all material
respects through the Closing;
(iii) there shall be in effect no preliminary or
permanent injunction or any judgment, order, decree, ruling, or
charge which would (w) prevent consummation of any of the
transactions contemplated by this Agreement, (x) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, (y) affect adversely the right of the Surviving
Corporation to own the former assets, to operate the former
businesses, and to control the former Subsidiaries of the Company, or
(z) affect adversely the right of any of the former Subsidiaries of
the Company to own its assets and to operate its businesses (and no
such injunction, judgment, order, decree, ruling, or charge shall be
in effect);
(iv) Parent and Purchaser shall have delivered to the
Company a certificate to the effect that each of the conditions
specified above in Section 6(b)(i)-(iii) is satisfied in all respects;
(v) the Requisite Company Stockholder Approval shall
have been obtained;
(vi) the Parties shall have received all applicable
authorizations, consents, and approvals of governments and
governmental agencies referred to in Section 3(d) and Section 4(d)
above;
(vii) on the date of Closing, the Special Committee
shall have received an opinion (or a confirmation of such an opinion
delivered at an earlier date) of Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated, dated such date and in form and substance
reasonably satisfactory to the Special Committee, to the effect that
the consideration to be paid to the Minority Stockholders upon
consummation of the Merger is fair, from a financial point of view,
to such stockholders; and
(viii) all actions to be taken by each of Parent and
Purchaser in connection with consummation of the transactions
contemplated hereby and all certificates, opinions, instruments, and
other documents required to effect the transactions
-23-
contemplated hereby shall be reasonably satisfactory in form and
substance to the Company.
The Company may waive any condition specified in this Section 6(b) if it
executes a writing so stating at or prior to the Closing.
SECTION 7. TERMINATION. The Parties may terminate this Agreement
with the prior authorization of their respective board of directors or
general partner (whether before or after stockholder approval) as provided
below:
(a) The Parties may terminate this Agreement by mutual written
consent at any time prior to the Effective Time. In addition:
(i) Either of Parent or Purchaser may terminate this
Agreement by giving written notice to the Company at any time prior
to the Effective Time, if the Closing shall not have occurred on or
before November 30, 1995, by reason of the failure of any condition
precedent under Section 6(a) hereof (unless the failure results
primarily from either of Parent or Purchaser breaching any material
representation, warranty, or covenant contained in this Agreement).
(ii) The Company may terminate this Agreement by giving
written notice to Parent and Purchaser at any time (A) prior to the
Effective Time, if the Closing shall not have occurred on or before
November 30, 1995, by reason of the failure of any condition
precedent under Section 6(b) hereof (unless the failure results
primarily from the Company breaching any representation, warranty, or
covenant contained in this Agreement), (B) prior to the Effective
Time, at any time after the Company Stockholder Vote if the Requisite
Company Stockholder Approval is not obtained (unless such event
constitutes a Company Triggering Event, in which case the provisions
of Section 7(c) and Section 7(d) shall apply); or (C) prior to the
Effective Time, if the Company receives a bona fide offer to effect a
Company Acquisition Proposal which the Special Committee, upon advice
of its legal and financial advisors, determines in good faith is more
favorable to the stockholders than the Merger contemplated hereby,
provided that the Special Committee shall have recommended to the
Board of Directors approval of such Company Acquisition Proposal and
the Board of Directors shall have approved such Company Acquisition
Proposal.
(b) Any nonbreaching Party may terminate this Agreement by giving
written notice to the other Parties at any time prior to the Effective Time
in the event a Party has breached any material representation, warranty or
covenant for the benefit of such non-breaching party contained in this
Agreement in any material respect, the terminating Party has notified the
breaching Party of the breach, and the breach has continued without cure for
a period of 10 days after the notice of breach. Termination by the Company
shall be by action of its Board of Directors after receipt of the
recommendation of the Special Committee.
-24-
(c) Either Parent or Purchaser may terminate this Agreement by
giving written notice to the Company at any time prior to the Effective Time
upon the occurrence of any Company Triggering Event.
(d) EFFECT OF TERMINATION. If this Agreement is terminated pursuant
to Section 7(a) or Section 7(c), this Agreement shall become void and of no
effect, without any liability on the part of any party hereto or its
Affiliates, directors, officers, stockholders or partners other than as
provided in this Section 7(d), which section is intended to serve as
liquidated damages. If this Agreement is terminated pursuant to Section
7(b), all rights and obligations of the Parties hereunder shall terminate
without any liability of any Party to any other Party, except for any
liability of any Party then in breach.
If this Agreement is terminated by the Company pursuant to Section
7(a)(ii)(C) or is terminated b either Parent or Purchaser in the event of a
Company Triggering Event pursuant to Section 7(c), the Company shall promptly
reimburse Parent for all of Parent's and Purchaser's actual, documented,
customary and reasonable fees and expenses (including the fees and expenses
of its counsel, bank and accountants) incurred in connection with the
transactions contemplated by this Agreement, not to exceed $500,000 in the
aggregate (the "Expense Reimbursement Amount"); PROVIDED, HOWEVER, that if a
Company Acquisition Proposal is in fact consummated, then promptly upon such
consummation the Company shall, in addition to the Expense Reimbursement
Amount, pay Parent, in cash, the termination fee described below (the
"Termination Fee"). The Termination Fee shall be in an amount determined by
subtracting the Expense Reimbursement Amount from the amount equal to 10% of
the difference between (A) the product of the Merger Consideration multiplied
by the number of Company Common Shares outstanding on the date hereof and (B)
the total consideration (in whatever form) paid to the holders of Company
Common Shares pursuant to the terms of such consummated Company Acquisition
Proposal; PROVIDED, HOWEVER, that the Termination Fee shall be not less than
$450,000 and not more than $900,000.
The provisions contained in this Section 7(d) shall survive the
termination of this Agreement.
SECTION 8. MISCELLANEOUS.
(a) SURVIVAL. None of the representations, warranties, and
covenants of the Parties (other than the provisions in Section 2 above
concerning the payment of the Merger Consideration and the provisions in
Sections 7(c) and (d) above) will survive the Effective Time.
(b) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. Except as provided in
Section 5(g), no Party shall issue any press release or make any public
announcement relating to the subject matter of this Agreement without the
prior written approval of the other Parties; PROVIDED, HOWEVER, that any
Party may make any public disclosure it believes in good faith is required by
applicable law (in which case the disclosing Party will use all commercially
reasonable efforts to advise the other Parties prior to making the
disclosure).
-25-
(c) NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer
any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns; PROVIDED, HOWEVER, that (i) the
provisions in Section 2 above concerning payment of the Merger Consideration
are intended for the benefit of the Company's Stockholders, and (ii) the
provisions in Section 5(h) above concerning insurance and indemnification are
intended for the benefit of the individuals specified therein.
(d) ENTIRE AGREEMENT. This Agreement (including the Company
Disclosure Schedule, the Purchaser Disclosure Schedule, and the documents
referred to herein) constitutes the entire agreement between the Parties and
supersedes any prior understandings, agreements, or representations by or
between the Parties, written or oral, to the extent they related in any way
to the subject matter hereof.
(e) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement
or any of its rights, interests, or obligations hereunder without the prior
written approval of the other Parties.
(f) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(g) HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(h) NOTICES.
(i) All notices, directions and other communications
hereunder (collectively, "Communications") shall be in writing and
shall be delivered by messenger, by first class mail (postage
prepaid), by telecopier or by overnight air courier, and shall be
addressed or sent to the telecopier number, as provided.
-26-
If to the Company: Copy to:
Space Industries International, Inc. Holland & Knight
000 Xxxxxxxxxxx Xxx., X.X. 0000 Xxxxxxxxxxxx Xxx., X.X.
Xxxxx 0000 Xxxxx 000
Xxxxxxxxxx, X.X. 00000 Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxxxx X. Xxxxxxx, Attention: Xxxxxxx X. Xxxxx
Vice President Telecopier No.: (000) 000-0000
Telecopier No.: (000) 000-0000 Verify No.: (000) 000-0000
Verify No.: (000) 000-0000
If to Parent or Purchaser: Copy to:
Argotyche, X.X. Xxxxxxx & Xxxxx L.L.P.
00000 Xxx Xxxxxxx Xxxx 000 Xxxxxxxxx Xxx.
Xxxxx, Xx. 00000 New York, N.Y. 10017
Attention: Xxxxx X. Xxxxxxxxx
Telecopier No.: (000) 000-0000 Attention: Xxxxxx Xxxxxxxx
Verify: No.: (000) 000-0000 Telecopier No.: (000) 000-0000
Verify No.: (000) 000-0000
and
Xxxxxxx & Xxxxx L.L.P.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
Telecopier No.: (000) 000-0000
Verify No.: (000) 000-0000
(ii) All Communications shall be presumed to have been
received: (i) when personally delivered by messenger, if personally
delivered; (ii) four Business Days after being deposited in the U.S.
mail (postage prepaid), if mailed; (iii) when receipt is confirmed,
if telecopied; and (iv) the next Business Day after timely delivery
to an overnight air courier, if sent by an overnight air courier
guaranteeing next day delivery.
(iii) Any party may change its address or the other
information provided above by notice given to the other party in
accordance with this section.
(i) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Delaware
without giving effect to any choice or
-27-
conflict of law provision or rule (whether of the State of Delaware) or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.
(j) AMENDMENTS AND WAIVERS. The Parties may mutually amend any
provision of this Agreement at any time prior to the Effective Time with the
prior authorization of the general partner of Parent, the board of directors
of Purchaser and the board of directors of the Company (after receipt of the
recommendation of the Special Committee); PROVIDED, HOWEVER, that any
amendment effected subsequent to stockholder approval shall be subject to the
restrictions contained in the Delaware General Corporation Law. No amendment
or other modification of any provision of this Agreement and no waiver of any
provision hereof or any right or benefit hereunder shall be valid unless the
same shall be in writing and signed by each of the Parties after receipt of
authorization as described above. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent
such occurrence.
(k) SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision
in any other situation or in any other jurisdiction.
(l) EXPENSES. Except as provided in Section 7(d), each of the
Parties will bear its own costs and expenses (including legal fees and
expenses) incurred in connection with this Agreement. Without limiting the
foregoing, the Company will bear the expenses of Holland & Xxxxxx, Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Steptoe & Xxxxxxx and KPMG Peat
Marwick.
(m) CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the Parties and no presumption or burden
of proof shall arise favoring or disfavoring any Party by virtue of the
authorship of any of the provisions of this Agreement. Any reference to any
federal, state, local, or foreign statue or law shall be deemed also to refer
to all rules and regulations promulgated thereunder, unless the context
otherwise requires.
(n) INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference
and made a part hereof.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
SPACE INDUSTRIES INTERNATIONAL, INC.
By: /S/ XXXXXXXXX X. XXXXXXX
------------------------------------
Xxxxxxxxx X. Xxxxxxx, Vice President
ARGOTYCHE, L.P.
By SANTAEUS, L.P.
General Partner of Argotyche, L.P.
By DANTAEUS CORP.,
General Partner of Santaeus, L.P.
By: /S/ XXXXX X. XXXXXXXXX
------------------------------------
Xxxxx X. Xxxxxxxxx, President
SPACE ACQUISITION CORPORATION
By: /S/ XXXXX X. XXXXXXXXX
------------------------------------
Xxxxx X. Xxxxxxxxx, President
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Set forth below is a list briefly identifying the contents of all
exhibits and schedules to the Agreement and Plan of Merger which have been
omitted. Registrant hereby agrees to furnish supplementally to the
Commission upon request a copy of any such exhibit or schedule.
------------------------------------
(A) List of Agreements to be Terminated
(B) Form of Press Release
(C) Indemnification Provisions of the Bylaws of Space Industries
International, Inc.
(D) Disclosure Schedule of Space Industries International, Inc.
pertaining to Capitalization, Subsidiaries and Affiliates and
Environmental Matters.
(E) Stock Option Database As of August 11, 1995.
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