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EXHIBIT 10.27
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
SHADE/ALLIED INC.
AND
AMERICAN PAD AND PAPER COMPANY OF DELAWARE, INC.
DATED AS OF JANUARY 6, 1997
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TABLE OF CONTENTS
Page
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ARTICLE I THE MERGER 1
1.1 The Merger 1
1.2 Effective Time of the Merger 1
1.3 Effect of Merger 1
1.4 Stockholders' Meeting 2
ARTICLE II THE SURVIVING CORPORATION 2
2.1 Certificate of Incorporation 2
2.2 By-Laws 2
2.3 Directors 2
2.4 Officers 2
ARTICLE III CONVERSION OF SHARES 3
3.1 Conversion of Shares 3
3.2 No Further Transfers 3
ARTICLE IV PAYMENT OF PURCHASE PRICE 3
4.1 Definitions 3
4.2 Certain Transactions 5
(a) Indebtedness 5
(b) Stay Bonus Costs 5
(c) Transaction Costs 5
(d) Mechanics of Payments 5
(e) Transaction Price 6
(f) Investor Documents 6
(g) Employment Agreement 6
4.3 Dissenting Common Shares 6
ARTICLE V CLOSING 7
5.1 Closing Transactions 7
(a) Closing; Delayed Closing 7
(b) Closing Transactions 7
5.2 Conditions to Parent's Obligations 7
5.3 Conditions to the Company's Obligations 9
ARTICLE VI PRE-CLOSING COVENANTS 11
6.1 Operation and Maintenance of the Business 11
6.2 Negative Covenants of the Company 12
6.3 Information 13
(a) Interim Reports 13
(b) Access 13
(c) Exclusivity 13
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6.4 Consents Generally 14
6.5 Notice and Cooperation Generally 14
(a) Notice of Breach 14
(b) Efforts to Close 14
6.6 Real Estate Matters 14
(a) Title Insurance. 14
(b) Surveys. 15
(c) Lease-Related Materials. 15
(d) Costs and Expenses. 15
6.7 Copies of New Contracts 16
6.8 HSR Act 16
6.9 Schedules 16
(a) Delivery of Schedules 16
(b) Disclosure on Schedules 16
6.10 Tax Settlements 16
6.11 Sierra Employees 16
6.12 Closing Agreement 17
6.13 Credit Agreement 17
6.14 Acquisition 17
ARTICLE VIIREPRESENTATIONS AND WARRANTIES OF THE COMPANY 18
7.1 Corporate Organization, Power and Authorizations 18
7.2 Authorization of Transactions 18
7.3 Capital Stock and Related Matters 18
7.4 Absence of Conflicts 19
7.5 Subsidiaries 19
7.6 Financial Statements 19
7.7 Certain Developments 19
7.8 Title to, Condition and Sufficiency of Assets 20
(a) Owned Properties 20
(b) Leased Properties 20
(c) Leasehold Improvements. 21
(d) Real Property Used in The Business. 21
(e) No Proceedings 21
(f) Current Use 21
(g) Condition and Operation of Improvements 21
(h) Ownership of Assets 22
(i) Condition of the Assets 22
7.9 Taxes 22
7.10 Contracts and Commitments 23
(a) Listing 23
(b) Absence of Breach, Cancellation or Repudiation 24
(c) Copies 24
7.11 Proprietary Rights 25
(a) Listing. 25
(b) Ownership; Infringement 25
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7.12 Litigation; Proceedings 25
7.13 Brokerage 25
7.14 Governmental Licenses and Permits 25
7.15 Employees 26
7.16 Employee Benefit Plans 26
7.17 Affiliate Transactions 27
7.18 Compliance with Laws 27
7.19 Environmental Matters. 27
(a) Compliance Generally 27
(b) Permits 27
(c) Claims 27
(d) Storage Tanks, Asbestos, PCBs, Disposal Areas. 28
(e) Hazardous Substance Liabilities. 28
(f) Other Environmental Liabilities 28
(g) Transaction-Triggered Requirements 28
(h) Assumption of Liabilities 28
(i) Environmental Liens 28
7.20 Absence of Undisclosed Liabilities 29
7.21 Disclosure 29
7.22 Sierra Assets. 29
ARTICLE VIIIREPRESENTATIONS AND WARRANTIES OF PARENT 29
8.1 Organization and Power 29
8.2 Authorization of Transaction 29
8.3 Absence of Conflicts 30
8.4 Brokerage 30
8.5 Litigation 30
8.6 Disclosure 30
ARTICLE IXTERMINATION 31
9.1 Termination 31
9.2 Effect of Termination 31
ARTICLE XADDITIONAL AGREEMENTS 32
10.1 Press Releases and Announcements 32
10.2 Expenses 32
10.3 Directors, Officers and Fiduciary Indemnification 32
10.4 Tax Treatment 33
10.5 Attorneys' Fees 33
10.6 Specific Performance 33
10.7 Severance Policy 33
ARTICLE XI MISCELLANEOUS 33
11.1 Non-Survival of Representations and Warranties 33
11.2 Amendment and Waiver 34
11.3 Notices 34
11.4 Binding Agreement; Assignment 35
11.5 Severability 35
11.6 No Strict Construction 35
11.7 Captions 35
11.8 Entire Agreement 36
11.9 Counterparts 36
11.10 Governing Law 36
11.11 Parties in Interest 36
11.12 Other Definitional Provisions 36
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INDEX OF DEFINED TERMS
Acquisition 1
Additional Bonus 4
Agreement 1
Alternative Transaction 13
Approval Date 2
Authorizations 25
Basic Price 3
Board 1
Bonus Plan 4
Certificate of Merger 1
CIT 4
Closing Date 7
Closing Transactions 7
Common Stock A-1
Company 1
Consent A-1
Constituent Corporations 1
Contract A-1
Controlled Group 27
Credit Agreement 17
closing agreement 23
Dissenting Common Shares 3
DOJ 16
defined benefit plan 26
defined contribution plan 26
Effective Time 1
Employment Agreement 4
Environmental and Safety Requirements A-1
Environmental Lien A-1
ERISA 17
Excludable Contract A-1
Financial Statements 19
Finova 4
FTC 16
GAAP A-2
Governmental Entity A-2
HLE 4
hereunder 36
hereof 36
herein 36
HSR Act 8
Improvements 21
Insider A-2
Investigating Parties 13
including 36
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Investors 4
Knowledge A-2
Lancaster Property 14
Latest Balance Sheet 19
Leased Real Property A-2
Leasehold Improvements A-2
Leases 20
Legal Requirement X-0
Xxxx X-0
multiemployer plan 26
Mandatory Consent A-2
Material Adverse Effect X-0
Xxxxxx 0
Xxxxxxx X-0
Owned Real Property A-3
Parent 1
Parties A-3
Paying Agent 5
PBGC 27
Per Share Price 4
Permitted Liens A-3
Person A-3
Plans 26
Preferred Price 4
Preferred Share Price 4
Preferred Stock 3
Priority Agreement 6
Proprietary Rights A-3
qualifying event 17
Real Property 21
Sale Bonuses 4
Senior Debt 4
Sierra 12
Sierra Closing Date 16
Sierra Employees 16
Sierra Proceeds 4
Sierra Transactions 12
Special Bonus 4
Stay Bonus Costs 4
Stockholders A-4
Stockholders' Meeting 2
Subordinated Debt 4
Surveys 15
Surviving Corporation 1
Tax A-4
Tax Code A-4
Tax Return A-4
7
Taxable X-0
Xxxxx X-0
Xxxxxx X-0
Xxxxxxxxxxx Date 31
Title Commitments 14
Title Company 14
Title Policies 14
transaction-triggered 28
Transaction Costs 5
Transaction Documents A-4
Transaction Price 4
Unanimous Consent 2
Warrants A-4
WBCL 1
Welfare Plans 17
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this Agreement") is entered
into as of January 6, 1997, by and between Shade/Allied Inc., a Wisconsin
corporation ( Company"), and American Pad & Paper Company of Delaware, Inc., a
Delaware corporation ( Parent"). Unless defined herein, capitalized terms used
in this Agreement are defined in Exhibit A attached hereto.
WITNESSETH
The boards of directors of the Company (the Board") and Parent
deem advisable and in their best interests to consummate the merger of Shade
Acquisition, Inc., a Wisconsin corporation to be formed by Parent (
Acquisition"), with and into the Company (the Merger") upon the terms and
conditions set forth herein and in accordance with the provisions of the
Wisconsin Business Corporation Law ("WBCL"). At the Effective Time (as defined
below), Parent shall own all of the issued and outstanding shares of capital
stock of Acquisition. Acquisition and the Company are sometimes collectively
referred to herein as the Constituent Corporations" and the Company, following
the effectiveness of the Merger, is sometimes referred to herein as the
Surviving Corporation."
NOW, THEREFORE, in consideration of the premises, the mutual
representations, warranties, covenants, agreements and conditions contained
herein, and in order to set forth the terms and conditions of the Merger and
the mode of carrying the same into effect, the parties hereby agree as follows:
ARTICLE 1.
THE MERGER
1. The Merger. Subject to the terms and conditions hereof,
at the Effective Time (as defined below), Acquisition shall be merged with and
into the Company and the separate existence of Acquisition shall thereupon
cease, and the Company shall be the surviving corporation in the Merger.
2. Effective Time of the Merger. The Merger shall become
effective as of the time and date of the filing of the articles of merger
attached hereto as Exhibit B (the Certificate of Merger") with the Wisconsin
Department of Financial Institutions in accordance with the provisions of the
WBCL, or at the time specified in the Certificate of Merger, if later than the
time of filing. The Certificate of Merger shall be filed as soon as
practicable after the Closing. The date and time when the Merger shall become
effective is herein referred to as the Effective Time."
3. Effect of Merger. At the Effective Time, the Constituent
Corporations shall become a single corporation which shall be the Surviving
Corporation. At such time, the separate existence of the Constituent
Corporations shall cease and the Surviving Corporation shall have all the
rights, privileges, immunities and powers and shall be subject to all the
duties and liabilities of a corporation organized under the WBCL. The
Surviving Corporation shall thereupon and thereafter possess all liabilities of
the Constituent Corporations. The title to all property owned by the
Constituent Corporations shall henceforth be vested in the Surviving
Corporation without reversion or impairment.
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4. Stockholders' Meeting. If required by applicable law in
order to consummate the Merger, the Company, acting through the Board, shall,
in accordance with applicable law, duly call, give notice of, convene and hold
a special meeting of its Stockholders (a Stockholders' Meeting") as soon as
practicable following the date hereof for the purpose of considering and taking
action upon this Agreement. The Company shall, following the date of this
Agreement, attempt to obtain the unanimous written consent of the Stockholders
of the Company to the approval and adoption of the Merger, this Agreement and
the transactions described in this Agreement (the Unanimous Consent"). The
date on which the Stockholders of the Company approve the Merger, this
Agreement and the transactions described in this Agreement by Unanimous Consent
or at the Stockholders Meeting is hereinafter referred to as the Approval
Date."
ARTICLE 1.
THE SURVIVING CORPORATION
5. Certificate of Incorporation. The Fourth Amended and
Restated Articles of Incorporation of the Company, as in effect at the
Effective Time, shall be the Articles of Incorporation of the Surviving
Corporation after the consummation of the Merger until amended in accordance
with law.
6. By-Laws. The By-laws of the Company, as in effect at the
Effective Time, shall be the By-laws of the Surviving Corporation immediately
after the consummation of the Merger.
7. Directors. The directors of Acquisition, as in effect at
the Effective Time, shall be the directors of the Surviving Corporation
immediately after the consummation of the Merger.
8. Officers. The officers of Acquisition, as in effect at
the Effective Time, will be the officers of the Surviving Corporation
immediately after the consummation of the Merger.
ARTICLE 1.
CONVERSION OF SHARES
9. Conversion of Shares. As of the Effective Time, by virtue
of the Merger and without any action on the part of any holder:
10. Each issued and outstanding share of Acquisition's common
stock, par value $.01 per share, shall be converted into one share of the
Surviving Corporation's common stock, par value $.01 per share.
11. Each issued and outstanding share of Common Stock (other
than shares pursuant to which dissenter's rights have been exercised in
accordance with the WBCL ( Dissenting Common Shares")), excluding any such
shares held in the treasury of the Company, shall be converted into the right
to receive an amount equal to the Per Share Price (as defined below).
12. Each share of Common Stock and Preferred Stock which is
held in the Company's treasury shall be cancelled, and no payment shall be made
in respect thereof.
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(d) Each issued and outstanding Option and Warrant to purchase
shares of Common Stock shall be converted into the right to receive an amount
equal to the Per Share Price multiplied by the number of shares of Common Stock
covered by such Option or Warrant and the Options and Warrants shall be
canceled.
(e) Each issued and outstanding share of the Company's 1993
Cumulative Preferred Stock, par value $.01 per share (the "Preferred Stock"),
shall be converted into the right to receive an amount equal to the Preferred
Share Price and the Preferred Stock shall be cancelled.
13. No Further Transfers. At the Effective Time, the stock
transfer books of the Company shall be closed and no transfer of Common Stock
or Preferred Stock shall thereafter be made.
ARTICLE 1.
PAYMENT OF PURCHASE PRICE
14. Definitions.
As used in this Agreement, the following terms shall have the
meanings specified:
15. The Basic Price" shall be that amount equal to
$10,089,337.22.
16. The "Transaction Price" shall be that amount equal to: (i)
the Basic Price; plus (ii) the amount of the Sierra Proceeds; minus (iii) the
amount of the Transaction Costs; minus (iv) the amount of the Stay Bonus Costs.
17. The "Sierra Proceeds" shall be the proceeds received by
the Company net of all costs incurred or to be incurred (including, without
limitation, any tax costs) by the Company in the Sierra Transactions described
in Section 6.1(i) hereof.
18. The Per Share Price" shall be that amount equal to the
Transaction Price dividend by 322,072.962.
19. The Senior Debt" means the amount of all of the
outstanding and unpaid principal, accrued interest, accrued fees and other
charges relating to all outstanding senior indebtedness of the Company for
borrowed money to The CIT Group/Business Credit, Inc. ("CIT") and FINOVA
Capital Corporation ("Finova") and any prepayment premium or penalties due upon
payment of such indebtedness at Closing.
20. The Subordinated Debt" means the outstanding and unpaid
principal, accrued interest, accrued fees and other charges relating to all
outstanding subordinated indebtedness of the Company for borrowed money to
those persons listed and identified on Schedule 4.1(f) to this Agreement (the
Investors") and any prepayment premium or penalties due upon payment of such
indebtedness at Closing.
21. The Preferred Price" shall be that amount equal to
$10,009,550 plus the aggregate amount of all accrued and unpaid dividends on
the Preferred Stock as of the Effective Time.
22. The Preferred Share Price" shall be that amount equal to
the Preferred Price divided by 10,009.550.
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23. The Stay Bonus Costs" shall mean the amount representing
the following:
1. the amounts payable by the Company to Xxxxxx X.
Xxxxxxxxx ("HLE") as a Special Bonus" and an Additional Bonus" pursuant to
Section 12 of the Employment and Noncompetition Agreement between the Company
and HLE dated as of September 1, 1994, as amended on January 3, 1997 (the
Employment Agreement"); plus
2. all costs associated with the termination of the
Employment Agreement as of the Closing; plus
3. the amounts payable by the Company to employees
of the Company as Sale Bonuses" pursuant to the Company's Key Employee Sale
Incentive Plan adopted by the Board of Directors of the Company on November 8,
1996 (the "Bonus Plan").
24. The Transaction Costs" shall be the amount representing
the sum of all fees and expenses incurred by the Company and the Investors in
connection with the Merger, this Agreement and the transactions contemplated by
this Agreement, including the fees and expenses of counsel, investment bankers,
brokers, accountants and other experts incident to the negotiation and
preparation of this Agreement and the consummation of the Merger, the Sierra
Transactions and the other transactions described in this Agreement.
Transaction Costs shall be evidenced by invoices delivered to Parent on or
prior to the Closing Date.
25. Certain Transactions.
26. Indebtedness. At the Closing, the Company shall prepay
the Senior Debt and the Subordinated Debt in full. Parent and Acquisition will
provide to the Company the amounts necessary to fund the payments required of
the Company under this Section 4.2(a) of this Agreement.
27. Stay Bonus Costs. At the Closing, the Company shall pay
the Stay Bonus Costs in full. Parent and Acquisition will provide to the
Company the amounts necessary to fund the payments required of the Company
under this Section 4.2(b) of this Agreement.
28. Transaction Costs. At the Closing, the Company shall pay
the Transaction Costs in full. Parent and Acquisition will provide to the
Company the amounts necessary to fund the payments required of the Company
under this Section 4.2(c) of this Agreement.
29. Mechanics of Payments. At the Closing, the Parent and
Acquisition shall pay the Transaction Price and the Preferred Price to, or at
the direction of, the Company. All payments under or pursuant to this
Agreement shall be made by wire transfer of immediately available funds to an
account designated by the recipient of such payment or by certified check if
requested by the Company. At or prior to the Closing, the Company may
designate Firstar Trust Company, or some other bank or trust company mutually
acceptable to the Parent and the Company, to act as the "Paying Agent" for the
receipt and disbursement of the Transaction Price and the Preferred Price and,
in such event, the Parent, the Company and Acquisition shall execute a typical
Paying Agent Agreement. All disbursements to the Stockholders shall be made:
(i) only after delivery by such Person of executed stock certificates, Option
Agreements, Warrants, stock powers and other documents as are reasonably
satisfactory to Parent and the Company; and (ii) using the information
contained on Schedule 4.2(d)-1 to this Agreement for the number of shares of
Common Stock, and the number of shares of Common Stock covered by Options and
Warrants, owned by each Stockholder; and (iii) using the information contained
on Schedule 4.2(d)-2 to this Agreement for the number of shares of Preferred
Stock owned by each Stockholder. Prior to the Closing Date, the Company may
update the information on Schedules 4.1(f), 4.2(d)-1 and 4.2(d)-2 by written
notice to the
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Parent to reflect any changes which occur from and after the date of this
Agreement in the information set forth in such Schedules; provided that, except
as set forth in this Agreement, prior to the Closing Date, the Company shall
not issue, authorize or sell any shares of its capital stock, or rights to
acquire shares of its capital stock or enter into any agreement providing for
the issuance or sale of its capital stock, except upon the exercise of any of
the Options or Warrants listed on Schedule 4.2(d)-1 to this Agreement.
30. Transaction Price. The Transaction Price shall be paid as
follows:
(i) each holder of Common Stock shall receive that
amount equal to the Per Share Price multiplied by the number of shares of
Common Stock owned by such holder; and
(ii) each holder of an Option or a Warrant shall
receive that amount equal to the Per Share Price multiplied by the number of
shares of Common Stock purchasable pursuant to the terms of such Option or
Warrant, provided that for these purposes: (A) there shall be no deduction for
the Option or Warrant exercise price and the Company shall be deemed to fully
and irrevocably waive its rights to such exercise prices; and (B) all Options
and Warrants shall be deemed to be fully vested and exercisable in full.
31. Investor Documents. At the Closing, the Company and the
Investors shall execute such documents and materials as are necessary or
appropriate to terminate the Priority and Amendment Agreement dated as of
August 5, 1994 (the Priority Agreement"), the Subordinated Loan Agreements
described in the Priority Agreement, all Shareholder Agreements in force and
effect among the Investors and the Company and such other documents and
agreements relating to loans to, and investments in, the Company by the
Investors.
32. Employment Agreement. At the Closing, the Company and HLE
shall execute such documents and materials as are necessary or appropriate to
terminate the Employment Agreement.
33. Dissenting Common Shares. Notwithstanding anything to the
contrary in this Agreement, Dissenting Common Shares shall not be converted
into the right to receive the Per Share Price as provided in this Agreement but
shall become the right to receive such consideration as may be determined to be
due to the holder of the Dissenting Common Shares pursuant to the WBCL. If any
holder of Dissenting Common Shares shall, after the Effective Time, withdraw or
otherwise lose the rights of appraisal provided in the WBCL, the Dissenting
Common Shares shall be deemed to be converted, as of the Effective Time, into
the Per Share Price as is set forth in this Agreement without any interest
thereon.
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ARTICLE 1.
CLOSING
34. Closing Transactions.
35. Closing; Delayed Closing. The Closing will occur at the
offices of Xxxxxxx and Xxxxx, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx
at 10:00 a.m. on that date which is the earliest of: (i) that date which is
five business days after the date on which the Company notifies the Parent that
the Unanimous Consent has been obtained; or (ii) that date which is the date on
which the Stockholders Meeting occurs; or (iii) that date which is agreed to by
the Company and the Parent; provided that, the Closing shall occur no earlier
than January 15, 1997. Notwithstanding the foregoing, if, on any date for the
Closing described in the preceding sentence, any condition of Parent or the
Company specified in Section 5.2 or Section 5.3 has not been satisfied (and
will not be satisfied by the delivery of documents or actions taken by the
parties at the Closing) or waived by Parent or the Company, as the case may be,
then the date for the Closing will be extended to any date specified by Parent
to the Company, or by the Company to Parent, with not less than five business
days' prior notice (subject to Parent's and the Company's respective conditions
to Closing being satisfied or waived on such specified date). The date upon
which the Closing actually occurs is referred to as the Closing Date".
36. Closing Transactions. Subject to the conditions set forth
in Sections 5.2 and 5.3, the parties will consummate the following transactions
at the Closing (the Closing Transactions"):
37. there will be delivered to Parent, Acquisition and the
Company, as applicable, the opinions, certificates and other documents and
instruments required to be delivered to such parties under Sections 5.2 and
5.3;
38. the Parent, Acquisition and the Company shall cause the
Certificate of Merger to be filed in accordance with the WBCL, and shall take
any and all other lawful actions, and do any and all lawful other things
necessary to effect the Merger and to enable the Merger to become effective;
and
39. the Parties shall complete the transactions described in
Section 4.2 of this Agreement.
40. Conditions to Parent's Obligations. The obligation of
Parent to consummate the Closing Transactions is subject to the satisfaction
(or waiver by Parent in writing) of the following conditions as of the time of
the Closing:
41. The representations and warranties set forth in Article
VII will be true and correct in all material respects at and as of the time of
the Closing as if the Closing Date were substituted for the date of this
Agreement throughout such representations and warranties;
42. The Company will have performed and complied in all
material respects with all of the covenants and agreements required to be
performed under this Agreement at or prior to the Closing;
43. No action or proceeding before any Governmental Entity
will be pending or threatened wherein an unfavorable judgment, decree,
injunction or order could prevent the consummation of the Closing Transactions
or result in the Closing Transactions being declared unlawful or rescinded, or
have a Material Adverse Effect;
44. There will have occurred no Material Adverse Effect;
45. All Mandatory Consents will have been obtained and be in
full force and effect;
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46. All filings (if any) required by the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the HSR Act"), in connection
with the Closing Transactions will have been made, and any waiting period
required by the HSR Act in connection with the Closing Transactions will have
expired or been terminated;
47. Parent will have received opinions, dated the Closing
Date, of Xxxxxxx & Xxxxx, legal counsel to the Company, in a form reasonably
satisfactory to Parent;
48. Prior to Closing, no more than 155 shares of the
outstanding Common Stock will have become Dissenting Shares in accordance with
the requirements of the WBCL;
49. Parent will have obtained consent of the requisite lenders
pursuant to the Credit Agreement;
50. On or prior to the Closing Date, the Company will have
delivered to Parent all of the following (dated as of the Closing Date, except
as otherwise indicated):
51. Copies of all Consents which have been obtained prior to
the Closing;
52. A release and termination of each Lien on any asset which
is not a Permitted Lien;
53. A certificate, dated not earlier than the third day prior
to the Closing Date, of the secretary of state or similar governmental agency
of the state under the laws of which Company is organized and each state in
which Company is required to be qualified to do business stating that Company
is in good standing or has comparable active status in such state;
54. A certificate from the Company certifying that each of the
conditions set forth in Sections 5.2(a) and 5.2(b) have been and are satisfied
as of the time of the Closing;
55. A certificate from the Secretary or an Assistant Secretary
of the Company certifying that, in accordance with the Company's Articles of
Incorporation, the holders of at least 67% of the issued and outstanding shares
of Common Stock (on a fully diluted basis) have approved the Merger;
56. An agreement with each holder of Senior Debt and
Subordinated Debt certifying that such holder will raise no objections and will
agree to the retirement of their indebtedness pursuant to Section 4.2 of this
Agreement;
1. Invoices evidencing the Transaction Costs;
57. Certificates from Xxxxx Xxxxxxxx, Xxxxxx Xxxxxx, Xxxx
Xxxxxxxxx, Xxxxxx Xxxxxxx, Xxxxxx Xxxx and Xxxxxxx Xxxxxxx certifying that each
such Person shall release the Company (and all of its successors and assigns)
from all obligations and liabilities in connection with or arising out of the
Bonus Plan, upon the payment of the Stay Bonus Costs at the Closing;
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58. A certificate from HLE certifying that the Employment
Agreement shall automatically terminate upon the payment of the Stay Bonus
Costs at the Closing; and
59. Such other documents or instruments as Parent reasonably
requests and are reasonably necessary to effect the transactions contemplated
by this Agreement.
60. The Sierra Transactions (as defined below) shall have been
completed in accordance with Section 6.1(i) hereof.
61. All proceedings to be taken by the Company in connection
with the consummation of the Closing Transactions and the other transactions
contemplated by this Agreement and all certificates, opinions, instruments and
other documents required to be delivered to Parent to effect the transactions
contemplated by this Agreement will be reasonably satisfactory in form and
substance to Parent.
62. Conditions to the Company's Obligations. The obligation
of the Company to consummate the Closing Transactions is subject to the
satisfaction (or waiver by the Company in writing) of the following conditions
as of the Closing Date:
63. The representations and warranties set forth in Article
VIII will be true and correct in all material respects at and as of the time of
the Closing as if the Closing Date were substituted for the date of this
Agreement throughout such representations and warranties;
64. Parent and Acquisition will have performed and complied :
(i) in all respects with the obligations of Acquisition and the Parent under
Section 4.2 of this Agreement; and (ii) in all material respects with all of
the other covenants and agreements required to be performed by Parent and
Acquisition under this Agreement at or prior to the Closing;
65. All filings (if any) required by the HSR Act in connection
with the Closing Transactions will have been made, and any waiting period
required by the HSR Act in connection with the Closing Transactions will have
expired or been terminated;
66. No action or proceeding before any Governmental Entity
will be pending or threatened wherein an unfavorable judgment, decree,
injunction or order could prevent the consummation of the Closing Transactions
or result in the Closing Transactions being declared unlawful or rescinded;
67. The Company will have received opinions, dated the Closing
Date, of Xxxxxxxx & Xxxxx, legal counsel to Parent and Acquisition, in a form
reasonably satisfactory to the Company;
68. On or prior to the Closing Date, Parent will have
delivered to the Company all of the following:
69. Certificates, each dated not earlier than the third
business day prior to the Closing Date, of the secretary of state or similar
governmental agency of the state under the laws of which Parent and Acquisition
are organized and each state in which Parent and Acquisition are required to be
qualified to do business stating that Parent and Acquisition are in good
standing or have comparable active status in such state;
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70. A certificate of Parent and Acquisition dated as of the
Closing Date certifying that each of the conditions set forth in Sections
5.3(a) and 5.3(b) has been and is satisfied as of the time of the Closing; and
71. Such other documents or instruments as the Company
reasonably request and are reasonably necessary to effect the transactions
contemplated by this Agreement; and
72. The Sierra Transactions shall have been completed in
accordance with Section 6.1(i) hereof;
73. In accordance with the Company's Articles of
Incorporation, the holders of at least 67% of the issued and outstanding shares
of Common Stock (on a fully diluted basis) shall have approved the Merger; and
74. All proceedings to be taken by Parent and Acquisition in
connection with the consummation of the Closing Transactions and the other
transactions contemplated by this Agreement and all certificates, opinions,
instruments and other documents required to be delivered to the Company to
effect the transactions contemplated by this Agreement will be reasonably
satisfactory in form and substance to the Company.
ARTICLE 1.
PRE-CLOSING COVENANTS
75. Operation and Maintenance of the Business. Prior to the
Closing, unless disclosed on Schedule 6.1 or unless the Parent otherwise
consents in writing, the Company will:
76. conduct its business and operations only in the ordinary
course of business consistent with past practice (including with respect to
maintenance of working capital balances, collection of accounts receivable and
payment of accounts payable);
77. cause its current insurance (or reinsurance) policies not
to be cancelled or terminated or any of the coverage thereunder to lapse,
unless simultaneously with such termination, cancellation or lapse, replacement
policies providing coverage equal to or greater than the coverage under the
cancelled, terminated or lapsed policies are in full force and effect;
78. use commercially reasonable efforts, consistent with sound
business practice, to keep in full force and effect its existence and all
material rights, franchises, Proprietary Rights and contractual rights relating
or pertaining to its business;
79. carry on its business in a manner consistent with the
Company's past practices and, consistent with such past practices and to the
extent prudent, use reasonable efforts to keep intact its present business
organization, including the present business operations, physical facilities,
working conditions and employees and its present relationships with lessors,
licensors, suppliers, customers, independent contractors and others having
business relations with it;
80. maintain its assets in such general state of repair as is
reasonably necessary for the conduct of its business consistent with
then-present needs and past practices, including replacement in accordance with
reasonably prudent business practices of any inoperable, worn out or obsolete
assets with assets of quality consistent with reasonably prudent business
practices and then-current needs and, in the event of a
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condemnation, casualty, loss or other material damage to any of the assets
prior to the Closing Date, whether or not the Company is insured, use
commercially reasonable efforts either to repair or replace such condemned or
damaged property or to use the proceeds of such condemnation or insurance in
such other manner as mutually agreed upon by Acquisition and the Company;
81. make capital and promotional expenditures in accordance
with its past custom and practice;
82. maintain its books, accounts and records in accordance
with past custom and practice as used in the preparation of the Latest Balance
Sheet and the accompanying interim financial statements;
83. comply in all material respects with all applicable Legal
Requirements, and all contractual obligations, applicable to its operations and
business, and pay all applicable Taxes which are due and payable (other than
any such Taxes which are being contested in good faith).
84. contribute its Sierra Coating Technologies Division (with
the assets of such division described on Schedule 7.23A and Schedule 7.23B), to
the capital of a subsidiary of the Company ( Sierra") and shall (no later than
as of the close of the Company's business on the day immediately preceding the
Closing Date) (A) spin off to the Company's stockholders the capital stock of
Sierra; or (B) sell the capital stock or assets of Sierra to a group controlled
by the stockholders of the Company or to a third party; or (C) shut down the
business operations of Sierra and sell the assets of Sierra to a third party
(collectively, the Sierra Transactions"); provided that, prior to such spin
off or sale, Parent shall have the opportunity to review and approve such spin
off or sale (such approval not to be unreasonably withheld).
85. Negative Covenants of the Company. Prior to the Closing,
without Parent's prior written consent, the Company will not:
86. take any action that would require disclosure under
Section 7.7(b), 7.7(c), 7.7(d) or 7.7(e);
87. enter into any contract, agreement or transaction, except
for any Excludable Contract;
88. directly or indirectly declare or pay any dividends or
make any distributions upon any of its capital stock or other equity securities
except for dividends on the Preferred Stock; and
89. directly or indirectly redeem, purchase or otherwise
acquire any of the Company's capital stock or other securities (including,
without limitation, warrants, options and other rights to acquire such capital
stock or other equity securities) except as set forth in this Agreement.
90. Information.
91. Interim Reports. The Company will provide to Parent
copies of all financial statements, budgets or other summaries of actual
financial information, if any, as and when the same are prepared on a monthly,
quarterly, annual or other basis by the Company for internal management or
reporting purposes.
92. Access. Without limiting the foregoing, from time to time
at Parent's request upon reasonable prior notice and at reasonable times, the
Company will provide to representatives of Parent and its financing parties and
each of their agents, employees and accounting, tax, legal and other advisors
(collectively, the Investigating Parties"):
93. access to the assets of the Company;
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94. access to all records of account, insurance policies, Tax
Returns, Contracts, and other books and records concerning the Company and its
business and operations (except employee medical records) and such other
relevant information and materials as may be reasonably requested (including
the ability to make copies and abstracts thereof); and
95. the opportunity to discuss the affairs, finances and
accounts of the Company with those directors (or equivalent officials), senior
management employees, key sales representatives and present and former
independent accountants of the Company which would reasonably be presumed to
have information which would be relevant for the purposes of preparing for the
financing and consummation of the Closing Transactions and the conduct of the
Company's business and operations thereafter or the performance of such
person's duty and responsibilities to the Company.
All information derived by Parent or any of the Investigating Parties as a
result of the above shall be governed by the terms and conditions of that
certain Confidentiality Agreement between the Company and American Pad & Paper
Company dated August 19, 1996, by which Parent agrees to be bound in the same
manner as if it were an original party thereto.
96. Exclusivity. Until this Agreement is terminated by its
terms and other than with respect to any Sierra Transaction, the Company will
not (and the Company will not cause or permit any affiliate, director, officer,
employee, stockholder or agent of the Company to) (collectively, Alternative
Transaction"):
1. solicit, initiate or encourage the submission of any proposal or
offer from any Person (including any of them) relating to any (A) liquidation,
dissolution or recapitalization of, (B) merger or consolidation with or into,
(C) acquisition or purchase of any material asset (or any material portion of
the assets) of, or any equity interest in, or (D) similar transaction or
business combination involving, the Company; or
2. participate in any discussions or negotiations regarding, furnish
any information with respect to, assist or participate in, or facilitate in any
other manner any effort or attempt by any other Person to do or seek any of the
foregoing.
1. Consents Generally. The Company will use commercially
reasonable efforts to (a) obtain or cause to be obtained prior to the Closing
Date all Mandatory Consents, and (b) cause each such Mandatory Consent to be
effective as of the Closing Date (whether it is granted or entered into prior
to or after the Closing), and Acquisition will use commercially reasonable
efforts not to interfere with such efforts.
2. Notice and Cooperation Generally.
3. Notice of Breach. Promptly after it obtains Knowledge
thereof, but in all events prior to the Closing, Parent will inform the
Company, and the Company will inform Parent, of any fact or circumstance which,
if it existed on the Closing Date, would constitute a breach of any
representation or warranty of itself set forth in this Agreement or any breach
of any of its covenants or agreements set forth in this Agreement, or any
threatened or instituted proceeding of a type described in Section 5.2(c) or
Section 5.3(d).
4. Efforts to Close. Each Party will use commercially
reasonable efforts to cause the conditions to Parent's and the Company's
obligations to consummate the Closing Transactions to be satisfied
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(including the preparation, execution and delivery of all agreements and
instruments contemplated hereunder to be executed and delivered by such Party
in connection with or prior to the Closing).
5. Real Estate Matters.
6. Title Insurance. Parent acknowledges receipt of a
commitment for an ALTA Owner's Title Insurance Policy for each parcel of Owned
Real Property and the Leased Real Property located in Lancaster, Pennsylvania
(the "Lancaster Property") (collectively, the Title Commitments"), issued by
Commonwealth Land Title Insurance Company (the Title Company"). At the
Closing, the Company shall cause the Title Company to issue title insurance
policies (which may be in the form of a xxxx-up of the Title Commitments) in
accordance with the Title Commitments, insuring the Company's fee simple or
lease-hold interest in each such parcel of Owned Real Property or the Lancaster
Property as of the Closing Date (including all recorded easements benefitting
such parcel) with gap coverage through the date of recording, subject only to
the Permitted Liens, in such amount as Parent determines to be the fair market
value (including all Improvements thereon) of such Owned Real Property or
Lancaster Property insured thereunder (collectively, the Title Policies").
Each of the Title Policies shall include the following
endorsements (to the extent available in the respective jurisdiction, but
regardless of whether any additional fee is charged for such endorsements): (a)
an extended coverage endorsement (insuring over the general or standard
exceptions) to the extent permitted by the Title Company; (b) an ALTA Form 3.1
zoning endorsement (with parking); (c) a survey endorsement (insuring that the
parcel described therein is the same parcel shown on the Survey with respect to
such parcel and that such Survey is an accurate survey thereof); (d) an access
endorsement (insuring that such parcel has direct and unencumbered pedestrian
and vehicular access to a public street); (e) if the Real Property covered by
such policy includes two or more adjacent parcels, a contiguity endorsement
(insuring that all of such adjacent parcels are contiguous to one another); (f)
a tax parcel number endorsement (insuring the tax parcel number in the
endorsement includes all of the Real Property insured thereunder and no other
real property); (g) an ALTA Form 9 owner's comprehensive endorsement; (h) a
non-imputation endorsement (insuring that coverage will not be defined to the
Company on the basis of any knowledge imputed to the Company by any of its
shareholders, directors, officers or employees prior to the Closing Date) and
(i) such other endorsements as reasonably requested by Parent or Parent's
lender (if any). The Company agrees to execute and deliver all affidavits,
indemnities and such other agreements reasonably requested by the Title Company
to obtain the Title Policies as set forth above.
7. Surveys. The Company shall obtain and deliver to Parent
no later than ten (10) days prior to Closing, an update of the Company's most
recent survey or if there is no existing survey, a new survey for each parcel
of Owned Real Property and the Lancaster Property dated no earlier than the
date of this Agreement for which a Title Policy is required, prepared by the
previous surveyor, or if there is no existing survey, by Xxxx & Xxxxx National
Surveyors Network or other licensed surveyor satisfactory to Acquisition, and
conforming to 1992 ALTA/ACSM Minimum Detail Requirements for Urban Land Title
Surveys, including Table A Items Nos. 1 through 4 and 6 through 13, and such
other standards as the Title Company requires as a condition to the removal of
any survey exceptions from the Title Policies, and certified to the Company,
Parent, Parent's lender (if any) and the Title Company, in a form satisfactory
to such parties (collectively, the Surveys"). The Surveys shall not disclose
any material survey defect or encroachment from or onto any of the Real
Property which has not been cured or insured over prior to the Closing. Parent
shall notify the Company of such survey defects or encroachment within five
business days after delivery of the Surveys to Parent and Parent's counsel.
8. Lease-Related Materials. Prior to the Closing, the
Company will obtain, with respect to each parcel of Leased Real Property other
than the executive offices listed as items 5 through 8 on Schedule 7.8B, the
following documents, in such forms as Acquisition may reasonably request: (i)
estoppel letters
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and memoranda of lease in recordable form from the lessor and/or sublessor(s)
thereof, and (ii) non-disturbance agreements from the lender(s) of any such
lessor and/or sublessor(s).
9. Costs and Expenses. All costs and expenses incurred
pursuant to this Section 6.6 of this Agreement shall be the responsibility of
the Parent and shall not be Transaction Costs for any purposes of this
Agreement.
10. Copies of New Contracts. Promptly after it is entered
into, the Company will deliver to Acquisition a true and correct copy of any
written Contract (other than any Excludable Contract), and a complete and
correct summary of the material terms and conditions of any oral Contract
(other than any Excludable Contract), which is entered into by the Company
after the date of this Agreement and prior to the Closing, whether or not
Parent's consent to the entry into such Contract is required pursuant to
Section 6.1 or Section 6.2.
11. HSR Act. Each party will use reasonable best efforts to
prepare and, at such time as Acquisition designates, file with the United
States Federal Trade Commission (the _FTC") and the Antitrust Division of the
United States Department of Justice (the _DOJ"), any materials and information
required to be filed with or provided to the FTC or the DOJ pursuant to the HSR
Act with respect to the transactions contemplated by this Agreement. Parent
shall cause Acquisition to pay the filing fees associated with any such filing.
Parent, Acquisition and Company each will promptly supply any additional
information which reasonably may be required or requested by the FTC or the
DOJ. Parent, Acquisition and Company each will take all such actions and will
file and use reasonable best efforts to have declared effective or approved,
all documents and notifications with any governmental or regulatory bodies, as
may be necessary or may reasonably be requested under federal antitrust laws
for the consummation of the transactions contemplated by this Agreement.
12. Schedules.
13. Delivery of Schedules. Contemporaneously with the
execution and delivery of this Agreement, the Company is delivering to the
Parent the Schedules (other than Schedule 8.3) described in this Agreement,
which are accompanied by a certificate signed by the President of the Company
stating the Schedules are being delivered pursuant to this Agreement and are
the Schedules referred to in this Agreement. The Schedules are deemed to
constitute an integral part of this Agreement and to modify the
representations, warranties, covenants or agreements of the Company contained
in this Agreement.
14. Disclosure on Schedules. If a document or matter is
disclosed in any Schedule to this Agreement, it shall be deemed to be disclosed
for all purposes of this Agreement without necessity of specific repetition or
cross- reference. All capitalized terms used in any Schedule shall have the
definitions specified in this Agreement.
15. Tax Settlements. Prior to the Closing, the Company shall
not enter into any Tax settlements, arrangements, agreements or resolutions
with any Person without the prior written approval of Parent.
16. Sierra Employees. Effective as of the closing of the
Sierra Transactions (the Sierra Closing Date"), employees of Sierra (the
Sierra Employees") shall cease being covered under the Plans (as defined in
Section 7.16 of this Agreement). On and after the Sierra Closing Date, Sierra
shall assume and have sole responsibility for: (i) all liabilities under the
Plans that are employee welfare benefit plans" (as such term is defined in
Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended
( ERISA")) (the Welfare Plans") for any unpaid claims incurred but not
reported thereunder prior to the Sierra Closing Date by the Sierra Employees
(and the dependents thereof); (ii) all liabilities, obligations and commitments
arising under Part 6 of Subtitle B of Title I of ERISA and Section 4980B of the
Tax Code relating to any qualifying event" (as such term is defined in Section
603 of ERISA) occurring with respect to any Sierra Employee at any time after
the Sierra Closing Date; (iii) all liabilities, obligations and commitments for
any post-retirement medical, dental or life insurance coverage for any
individuals (and the dependents of such individuals) who are or have been
Sierra
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Employees and participants in the Welfare Plans at any time on or prior to the
Sierra Closing Date to the extent such individuals (or dependents thereof) are
entitled thereto under the terms of the Welfare Plans; and (iv) all
liabilities, obligations and commitments for the payment of any life and
disability insurance benefits to all employees and former employees of Sierra
(other than the Sierra Employees) who, immediately prior to the Closing Date,
are receiving or entitled to receive any such benefits under the Welfare Plans.
17. Closing Agreement. The Company has this day executed a
Closing Agreement with certain of the Stockholders relating to the transactions
described in this Agreement and has delivered a copy of the Closing Agreement
to Parent. Prior to the Effective Time, the Company will comply with the
Closing Agreement in all respects and will enforce any of its rights thereunder
with respect to any of the Investors, Employees and Trusts (as such terms are
defined in the Closing Agreement).
18. Credit Agreement. The Parent is a party to a Credit
Agreement, dated July 8, 1996, with American Pad & Paper Company, WR
Acquisition, Inc., Bankers Trust Company, Bank of Tokyo-Mitsubishi Trust
Company, Bank Xxx Xxxxx, X.X., xxx Xxxx xx Xxxx Xxxxxx, the First National Bank
of Boston and the lending institutions party thereto (the "Credit Agreement").
The Parent hereby represents and warrants to the Company, and agrees with the
Company, that: (i) the Parent has, and will maintain at all times from and
after the date hereof up to and including the Closing Date, sufficient
borrowing availability under the Credit Agreement to close the Merger and the
transactions described in this Agreement; and (ii) promptly after the date of
this Agreement, Parent will use its reasonable best efforts to obtain all
consents required under the Credit Agreement to the consummation of the Merger
and the other transactions described in this Agreement.
19. Acquisition. Insofar as this Agreement purports to create
any obligations or duties on the part of Acquisition (which is not a party
hereto), Parent agrees to cause Acquisition to fully perform, satisfy and
comply with all such obligations and duties.
20. Certain Employees. Prior to the Closing, the Company will
use reasonable efforts to obtain a Certificate from each of Xxxxxxx Xxxxxxx,
Xxxx Xxxx and Xxxxxx Xxxxxxx certifying that each such Person shall release the
Company (and all of its successors and assigns) from all obligations and
liabilities in connection with or arising out of the Bonus Plan upon the
payment of the Stay Bonus Costs at the Closing.
ARTICLE 1.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As a material inducement to Parent to enter into this Agreement,
the Company hereby makes the representations and warranties set forth in this
Article VII.
21. Corporate Organization, Power and Authorizations.
22. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Wisconsin and is
qualified to do business in every jurisdiction in which the nature of its
business or its ownership of property requires it to be qualified. (All such
jurisdictions in which the Company is qualified are set forth on Schedule 7.1A
attached hereto). The Company has all requisite corporate power and authority
and all licenses, permits and authorizations necessary to own and operate its
properties, to carry on its business as now conducted and to carry out the
transactions contemplated by this Agreement.
23. The Company has previously delivered to Parent's counsel
complete and correct copies of the Company's Articles of Incorporation and
By-laws, as are presently in effect and with all amendments thereto, and
complete and current copies of all minutes of meetings of the Board and
Stockholders of the past five years. The Company is not in default in the
performance, observation or fulfillment of either of its Articles of
Incorporation or By-laws.
22
24. Authorization of Transactions. Except for obtaining
stockholder approval as contemplated by Section 1.4 and in accordance with the
applicable provisions of the WBCL, (i) the Company has full power and authority
to execute and deliver this Agreement and all other Transaction Documents to
which the Company is a party and to perform its obligations hereunder and
thereunder, and (ii) no other proceeding or action on the part of the Company
is necessary to approve and authorize the Company's execution and delivery of
this Agreement or any other Transaction Document to which the Company is a
party or the performance of the Company's obligations hereunder or thereunder.
This Agreement and all other Transaction Documents to which the Company is a
party have been, or will be at Closing, duly executed and delivered by the
Company and, assuming the due authorization, execution and delivery hereof and
thereof by the parties other than the Company, constitute the valid and binding
agreements of the Company, enforceable against the Company in accordance with
their terms, except as enforceability hereof or thereof may be limited by
bankruptcy, insolvency or other laws affecting creditors' rights generally and
limitations on the availability of equitable remedies.
25. Capital Stock and Related Matters. The authorized capital
stock of the Company consists of (a) 9,975,000 shares of Common Stock, of which
2,497.002 shares are issued and outstanding, and (b) 25,000 shares of Preferred
Stock, of which 10,009.55 shares are issued and outstanding. All of the issued
and outstanding shares of Common Stock and Preferred Stock are owned of record
and beneficially by the individuals or entities set forth on Schedules 4.2(d)-1
and 4.2(d)-2, with the number and type of stock owned set across their name.
Except for the Options and Warrants set forth in Schedule 4.2(d)-1, the Company
does not have outstanding any stock or securities convertible into or
exchangeable for any shares of its capital stock, nor does it have outstanding
any rights or options to subscribe for or to purchase its capital stock or any
stock or securities convertible into or exchangeable into its capital stock.
Except as set forth on Schedule 7.3, the Company is not subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital stock. All of the outstanding shares of the
Common Stock and Preferred Stock are validly issued, fully paid and
nonassessable, and such shares are not subject to, nor were they issued in
violation of, any preemptive rights.
26. Absence of Conflicts. Except for Consents required under
the HSR Act, or as set forth in Schedule 7.4, neither the execution, delivery
and performance of this Agreement or any other Transaction Document by the
Company nor the consummation by the Company of the transactions contemplated
hereby or thereby (a) does or will (i) conflict with or result in any breach of
any of the provisions of, (ii) constitute a default under, (iii) result in a
violation of, (iv) give any third party the right to terminate or to accelerate
any obligation under, or (v) result in the creation of any Lien upon any asset,
in each case under the provisions of any indenture, mortgage, lease, loan
agreement or other agreement, instrument or Contract or any Legal Requirement
by which the Company is bound or by which Stockholders or any asset may be
affected, or to which the Company or any asset is subject, or (b) without
limiting the foregoing, requires any Consent of any Governmental Entity or any
other Person.
27. Subsidiaries. Except as set forth on Schedule 7.5 and as
may result from the Sierra Transactions, the Company does not own, directly or
indirectly, any stock, partnership interest or joint venture interest in, or
any security issued by, any other corporation, organization or entity.
28. Financial Statements. Attached to this Agreement as
Schedule 7.6 are the following (collectively, the Financial Statements"):
29. the audited balance sheets of the Company and the related
statements of income and cash flows for its fiscal years ending March 31 for
each of 1994, 1995 and 1996; and
30. the November 30, 1996 unaudited balance sheet of the
Company (the Latest Balance Sheet") and the related statements of income and
cash flows for the eight-month period ending on November 30, 1996.
Each such financial statement (in each case including the notes thereto, if
any) has been prepared in accordance with GAAP subject (in the case of the
statements described in clause (b) above) to
23
the lack of footnote disclosure and changes resulting from normal year-end
adjustments, none of which changes would, if properly presented, in the
aggregate, reflect a Material Adverse Effect.
31. Certain Developments. Other than pursuant to this
Agreement, since the date of the Latest Balance Sheet, the Company has not:
32. suffered any theft, damage, destruction or casualty loss
to any material asset or any material portion of the assets, or any substantial
destruction of the Company's books and records (in each case whether or not
covered by insurance);
33. sold, leased, assigned or transferred any material asset
or any material portion of the assets (other than dispositions of obsolete or
worn-out assets disposed of in the ordinary course of business and dispositions
of assets which have been replaced with assets of equal or greater value and
utility);
34. waived any right of material value;
35. entered into any other material transaction other than in
the ordinary course of business, or materially changed any material business
practice; or
36. made or granted any bonus or any wage, salary or
compensation increase in excess of 4% of the immediately preceding bonus, wage,
salary or other level of compensation paid to any employee or independent
contractor, except pursuant to the express terms of any written Contract which
is described on Schedule 7.10A or as otherwise described on Schedule 7.10A
under any oral Contract, or except in the case of a promotion, in which case
the increase may not be to an amount in excess of the top of the range of the
position to which the employee has been promoted.
37. Title to, Condition and Sufficiency of Assets.
38. Owned Properties. Schedule 7.8A sets forth the
address of all Owned Real Property, together with a true, correct and complete
legal description of the land for each Owned Real Property. With respect to
each parcel of Owned Real Property: (i) the Company has good and marketable
fee simple title to such parcel, free and clear of all Liens as of the Closing
Date, except Permitted Liens; (ii) except as set forth in Schedule 7.8A, there
are no leases, subleases, licenses, concessions, or other agreements, written
or oral, granting to any Person the right of use or occupancy of any portion of
such parcel; and (iii) there are no outstanding options or rights of first
refusal to purchase such parcel or any portion thereof or interest therein.
39. Leased Properties. Schedule 7.8B sets forth the address
and a list of all leases, subleases, licenses, concessions and other agreements
(written or oral) (collectively, the Leases") for all Leased Real Property.
The Company has furnished to the Parent true, correct and complete copies of
each written Lease (including all amendments, extensions, renewals, guaranties
and other documents with respect thereto), and in the case of any oral Leases a
written summary of the basic terms thereof.
With respect to each Lease: (i) such Lease is in full force and
effect; (ii) subject to obtaining any Consent described on Schedule 7.4, the
consummation of the Closing Transactions will not cause a breach or default
under such Lease or otherwise cause such Lease to cease to be in full force and
effect on substantially the same terms as are presently in effect; (iii) the
Company is not in breach or default in any material respect under, and no event
has occurred which, with notice and/or lapse of time, would constitute such a
24
breach or default of the Company or permit lessor's unilateral termination,
modification or acceleration of, such Lease; (iv) to the Company's Knowledge,
no other party to such Lease is in breach or default in any material respect
under such Lease, and no event has occurred which, with notice and/or lapse of
time, would constitute such a breach or default or permit the Company's
unilateral termination, modification or acceleration of such Lease; (v) the
Company has not (and, to the Company's Knowledge, no other party to such Lease
has) repudiated any provision thereof; (vi) there are no disputes, oral
agreements, or forbearances in effect as to such Lease; (vii) such Lease has
not been modified in any respect, except to the extent that such modifications
are disclosed by the documents delivered to Acquisition; and (viii) the Company
has not assigned, transferred, conveyed, mortgaged, deeded in trust or caused
any Lien (other than any Permitted Lien) to exist with respect to any interest
of the Company in such Lease, except for such Liens which shall be satisfied or
released on or before the Closing Date.
40. Leasehold Improvements. Except as set forth in Schedule
7.8C, the Company has good title to the Leasehold Improvements, which shall be
free and clear of all Liens as of the Closing Date, except Permitted Liens.
41. Real Property Used in The Business. Except as set forth
in Schedule 7.8D, the Owned Real Property, Leased Real Property and Leasehold
Improvements (collectively, the Real Property") include all of the real
property used by the Company in the operation of the Business.
42. No Proceedings. There is no proceeding in eminent domain
or any similar proceeding pending, or (to the Company's Knowledge) threatened,
affecting the Company's interest in any Owned Real Property or Leased Real
Property. There exists no writ, injunction, decree, order or judgment
outstanding, nor any litigation, pending, or (to the Company's Knowledge)
threatened, relating to the ownership, lease, use, occupancy or operation by
the Company of any Owned Real Property or Leased Real Property.
43. Current Use. Except as set forth on Schedule 7.8F, to the
Company's Knowledge: (i) the current use by the Company of the Real Property
does not violate in any material respect any Legal Requirement, instrument of
record or agreement affecting any Owned Real Property or Leased Real Property,
and (ii) there is no violation in any material respect of any applicable
covenant, condition, restriction, easement or agreement, in each case in any
manner which could reasonably be likely to have a Material Adverse Effect.
44. Condition and Operation of Improvements. To the Company's
knowledge, as to each parcel of Owned Real Property and, to the Company's
Knowledge, as to each parcel of Leased Real Property: (i) all components of
all buildings, fixtures and other improvements included upon or within such
Owned Real Property or Leased Real Property and the Leasehold Improvements (the
Improvements"), are in reasonably adequate condition to use, occupy or operate
such facilities in the ordinary course of the Company's business, and there are
no facts or conditions affecting any of the Improvements which would,
individually or in the aggregate, interfere in any significant respect with the
use, occupancy or operation thereof in the ordinary course of the Company's
business and (ii) there are no material structural deficiencies in any
Improvements.
45. Ownership of Assets. Other than with respect to the Real
Property (which is addressed above), except as set forth on Schedule 7.8H, the
Company owns good title in and to, or a valid leasehold interest in, all of the
assets (as defined in Section 7.8(i) below), free and clear of all Liens (other
than Permitted Liens).
46. Condition of the Assets. Other than with respect to the
Real Property (which is addressed above), the Company's assets (other than
assets, if any, that are not necessary for or material to the business or
operation of the Company) are in a condition which is reasonably sufficient for
the conduct of the business and operations of the Company in the ordinary
course and there are no known latent defects with respect thereto. The assets
include all non- affixed machinery, equipment and other tangible assets and
property interests, intangible assets and other assets, rights and properties
reasonably necessary for or material to the conduct of the business and
operation of the Company as currently conducted.
25
47. Taxes. Except as set forth in Schedule 7.9 for each
clause in this Section 7.9: the Company has timely filed all federal, state,
local and foreign income, information and other Tax Returns which are required
to be filed by it with respect to Taxes; all such Tax Returns have been
prepared in compliance with all applicable Legal Requirements and are true,
complete and accurate in all respects; all Taxes imposed upon the Company or
upon any of the assets, income or franchises of the Company have been timely
paid (or are being contested in good faith, in which case the Company has
disclosed the same to Parent in writing) or, if not yet due and payable, did
not, as of the date of the Latest Balance Sheet, exceed the reserve for Tax
liability set forth on the Latest Balance Sheet, and do not exceed that reserve
as adjusted for the passage of time through the Closing Date in accordance with
the practice adopted by the Company in preparing its Financial Statements; the
Company has withheld and paid all Taxes required to have been withheld and paid
in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party; the Company has
delivered to Parent correct and complete copies of all federal income Tax
Returns, examination reports, and statements of deficiencies assessed against
or agreed to by the Company since March 31, 1992; the Company has disclosed on
such Tax Returns all positions taken therein that could give rise to a
substantial understatement of federal income Tax within the meaning of Section
6662 of the Code; there are no actual or proposed Tax deficiencies, assessments
or adjustments with respect to the Company or any assets or operations of the
Company; no consent has been given with respect to the Company to extend the
time in which any Tax may be assessed or collected by any Taxing authority; the
Company has not extended the date on which any Tax Return was or is to be
filed; there are no ongoing or pending Tax audits by any Taxing authority
against the Company; the Company is not and, since November 4, 1988, has not
been a member of an affiliated group (as defined in Section 1504(a) of the Tax
Code) which files a consolidated return; since July 21, 1993, no material
written claim has ever been received by the Company from a Taxing authority in
a jurisdiction where the Company does not pay Taxes or file Tax Returns to the
effect that the Company is or may be subject to Taxes assessed by such
jurisdiction; the Company is not party to or bound by any agreement relating to
the allocation or payment of Taxes with any Person who, to the Company's
knowledge, has any current or potential contractual or other obligation to
indemnify any other Person with Taxes; the Company has not made any payments,
and is not and shall not become obligated (under any contract entered into on
or before the Closing Date) to make any payments, that shall be non-deductible
under Section 280G of the Code (or any corresponding provision of state, local
or foreign income Tax law); and the Company will not be required (A) as a
result of a change in method of accounting for a taxable year ending on or
prior to the Closing Date, to include any adjustment in taxable income for any
taxable year or portion thereof beginning after the Closing Date, (B) as a
result of any closing agreement," as described in Section 7121 of the Code (or
any corresponding provision of state, local or foreign income Tax law), to
include any item of income in, or exclude any item of deduction from, taxable
income for any taxable year or portion thereof beginning after the Closing Date
or (C) as a result of any deferred intercompany gain described in Treasury
Regulation Sections 1.1502-13 or any excess loss account described in Treasury
Regulation Sections 1.1502-19 (or any corresponding or similar provision or
administrative rule of federal, state, local or foreign income tax law), to
include any item of income in taxable income for any taxable year or portion
thereof beginning after the Closing Date.
48. Contracts and Commitments.
49. Listing. Except for the Transaction Documents, any
Contract described on Schedule 7.10A and any Excludable Contract, the Company
is not a party to or bound by, and the Company is not subject to, any Contract,
including any:
3. collective bargaining agreement or contract with any
labor union or any bonus, pension, profit sharing, retirement or any other form
of deferred compensation plan or any hospitalization insurance or similar plan
or practice;
4. contract for the employment or engagement of any
individual employee or other Person (including as an independent contractor or
on a consulting basis) other than at the will of the Company, or any agreement
to provide severance benefits upon any termination of employment or other
engagement;
26
5. agreement, indenture or other Contract placing a Lien
(other than any Permitted Lien) on any asset;
6. agreement with respect to the lending or investing of
funds by the Company;
7. affiliation, license or royalty agreement;
8. guaranty of any obligation of any other Person, other
than endorsements made for collection made in the ordinary course of business;
9. sales representation agreement;
10. agreement with any rating service or intellectual
property licensing organization;
11. lease or agreement under which it is lessee of, or
holds or operates, any personal property owned by any other party calling for
payments in excess of $25,000 annually or entered into outside of the ordinary
course of business;
12. lease or agreement under which it is lessor of or
permits any third party to hold or operate any property, real or personal,
owned or controlled by it;
13. agreement, contract or understanding pursuant to
which the Company subcontracts work to third parties;
14. Contract relating to environmental, health or safety
matters, including any relating to the treatment, storage, disposal, or
handling of toxic or otherwise hazardous materials, substances or wastes; or
15. other agreement material to the business or operation
of the Company, whether or not entered into in the ordinary course of business.
1. Absence of Breach, Cancellation or Repudiation.
Except for any Leases (the breach, cancellation or repudiation of which is
addressed in Section 7.8(d)), each of the items which is described or required
to be described on Schedule 7.10A is in full force and effect; no item which is
described or required to be described on Schedule 7.10A has been breached,
cancelled or repudiated by the Company or (to the Company's Knowledge) by any
other party thereto; no such other party has indicated in writing or orally to
the Company that it will stop or decrease the rate of business done with the
Company or that it desires to renegotiate its arrangements with the Company;
the Company has performed all material obligations required to be performed by
it in connection with the items which are described or required to be described
on Schedule 7.10A and is not in receipt of any claim of default under any such
item; and the Company has no present expectation or intention of not fully
performing any obligation pursuant to any item which is described or required
to be described on Schedule 7.10A.
2. Copies. The Company has furnished to the Parent
access to a true and correct copies of all written contracts and other items
which are described or required to be described on Schedule 7.10A, in each case
together with all amendments, waivers or other changes thereto.
3. Proprietary Rights.
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4. Listing. Schedule 7.11A sets forth a complete and
correct list of: (i) all registered Proprietary Rights and all pending
applications for registration of Proprietary Rights owned, filed or used by the
Company and (ii) all other licenses or similar agreements or arrangements to
which the Company is a party either as licensee or licensor for the Proprietary
Rights.
5. Ownership; Infringement. Except as set forth on
Schedule 7.11B, (i) the Company owns and possesses all right, title and
interest in and to, or has a valid and enforceable right to use, each of the
registered Proprietary Rights described or required to be described on Schedule
7.11A, free and clear of all Liens (other than Permitted Liens), and no claim
by any third party contesting the validity, enforceability, use or ownership of
any of the foregoing has been made since July 21, 1993, is currently
outstanding or, to the Company's Knowledge, is threatened, (ii) no loss or
expiration of any Proprietary Right of any such type or group of such
Proprietary Rights is pending, reasonably foreseeable or, to the Company's
Knowledge, threatened, (iii) the Company has not received any notice of, nor is
the Company aware of any facts which indicate a likelihood of, any infringement
or misappropriation by, or any conflict with, any third party with respect to
any such Proprietary Right, including any demand or request that the Company
license rights from a third party, (iv) the Company has not knowingly
infringed, misappropriated or otherwise conflicted with any rights of any third
party and the Company is not aware of any infringement, misappropriation or
conflict which will occur as a result of the continued operation of the
Company's business as currently conducted, and (vi) to the Company's Knowledge,
the Proprietary Rights described or required to be described on Schedule 7.11A
have not been infringed, misappropriated or conflicted by any third party.
6. Litigation; Proceedings. Except as set forth in
Schedule 7.12 there are no actions, suits, proceedings, orders, judgments,
decrees or investigations pending or threatened against or affecting the
Company at law or in equity, or before or by any Governmental Entity, and there
is no known basis for any of the foregoing.
7. Brokerage. Following the Closing, there will be no
claims for brokerage commissions, finders' fees or similar compensation for
which the Company shall be liable in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of the Company.
8. Governmental Licenses and Permits. Schedule 7.14
contains a complete listing and summary description of all permits, licenses,
franchises, certificates, approvals and other authorizations of foreign,
federal, state and local governments or other similar rights (collectively, the
Authorizations"), owned or possessed by the Company or used by the Company in
the conduct of its business. The Company owns or possesses all right, title
and interest in and to all of the Authorizations which are necessary to conduct
its business as currently conducted. No loss or expiration of any
Authorization is pending, reasonably foreseeable or, to the Company's
Knowledge, threatened (including as a result of the transactions contemplated
by this Agreement).
9. Employees. Except as set forth in Schedule 7.15, to
the Company's Knowledge, no key executive employee and no group of employees or
independent contractors of the Company has any plans to terminate his, her or
its employment or relationship as an independent contractor with the Company.
The Company has complied with all material applicable Legal Requirements
relating to the employment of personnel and labor, including provisions thereof
relating to wages, hours, equal opportunity, collective bargaining and the
payment of social security and other taxes, the Worker Adjustment and
Retraining Act (other than in connection with the transactions contemplated
herein), and the Immigration Reform and Control Act of 1986. Since July 21,
1993, the Company has not experienced any strike, unfair labor practice claim
or other material employee or labor dispute except as set forth in Schedule
7.15. The Company has not engaged in any unfair labor practice. To the
Company's Knowledge, there is no organizational effort presently being made or
threatened by or on behalf of any labor union with respect to employees of the
Company. Schedule 7.15 sets forth the name and the annual or, as the case may
be, hourly rate of compensation (including salary, bonuses and commissions) as
of the date of this Agreement for each Person engaged by the Company (including
independent contractors) who received
28
in calendar 1995 or who will receive in calendar 1996 taxable compensation from
the Company in excess of $50,000 per year.
10. Employee Benefit Plans. Except as set forth on
Schedule 7.16, the Company has no obligation to contribute to (or any other
liability, including current or potential withdrawal liability, with respect
to) (a) any multiemployer plan" (as that term is defined in Section 3(37) of
ERISA), (b) any plan or arrangement, whether or not terminated, which provides
medical, health, life insurance or other welfare-type benefits for current
employees or current or future retired or terminated employees (except for
limited continued medical benefit coverage required to be provided under
Section 4980B of the Tax Code or as required under applicable state law), (c)
any employee plan which is a defined benefit plan" (as that term is defined in
Section 3(35) of ERISA), whether or not terminated, or (d) any employee plan
which is defined contribution plan" (as that term is defined in Section 3(34)
of ERISA), whether or not terminated. All such plans set forth on Schedule
7.16 shall be referred to herein collectively as the Plans". All Plans (and
related trusts and insurance contracts) comply in form and in operation in all
material respects with the applicable requirements of ERISA and the Tax Code.
All required reports and descriptions (including Form 5500 Annual Reports,
summary annual reports, PBGC-1s and summary plan descriptions) with respect to
all Plans have been properly filed with the appropriate government agency or
distributed to participants, and the Company has complied with the requirements
of Section 4980B of the Tax Code. With respect to each Plan, all
contributions, premiums or payments which are due on or before the Closing Date
have been paid to such Plan. The assets of each Plan which is a defined
benefit or defined contribution Plan exceed the liabilities accrued under each
such Plan as of the Closing Date, determined as though the Plan was terminated
on the Closing Date, or in the event the liabilities exceed the assets, the
shortfall is recorded on the Latest Balance Sheet. The Company has not
incurred any liability to the Pension Benefit Guaranty Corporation ( PBGC"),
the Internal Revenue Service, any multiemployer plan or otherwise with respect
to any employee pension benefit plan or with respect to any employee pension
benefit plan currently or previously maintained by members of the controlled
group of companies (as defined in Sections 414 of the Tax Code) that includes
the Company (the Controlled Group") that has not been satisfied in full, and no
condition exists that presents a material risk to the Company or any member of
the Controlled Group of incurring such a liability, other than liability for
premiums due the PBGC. With respect to any Plan that is a defined benefit
plan" (as defined above) that has been frozen, notice has been provided as
specified in and in accordance with Section 204(h) of ERISA.
11. Affiliate Transactions. Other than as described on
Schedule 7.17, no Insider (a) is a party to any agreement, contract, commitment
or transaction with the Company or which pertains to the business or operation
of the Company (other than (i) in such Insider's capacity as an employee of the
Company, the compensation for which is reflected on Schedule 7.17, and (ii) in
connection with the sale of stock forms by the Company to such Insider in the
ordinary course of business on commercially reasonable terms), or (b) has any
interest in any asset of the Company.
12. Compliance with Laws. Except as set forth on
Schedules 7.18 and 7.19, the Company and, to the Company's Knowledge, each of
its independent contractors, agents and employees have complied with all
applicable Legal Requirements which affect the business or operations of the
Company or any assets of the Company (except Real Property, as to which
compliance with laws is addressed in Section 7.8(f))and to which the Company is
subject, and no claim has been filed against the Company since July 21, 1993
alleging a violation of any such Legal Requirement. Except as set forth on
Schedules 7.18 and 7.19, the Company is not now subject (nor has the Company
been subject since July 21, 1993) to any investigation, penalty assessment, or
audit (in each case of which the Company has been made or became aware) by any
Governmental Entity or to any other allegation that the Company (including any
agent, representative or broker acting on behalf of the Company) violated the
regulations of any such Governmental Entity or made a material false statement
or omission to any Governmental Entity.
13. Environmental Matters. Except as set forth on
Schedule 7.19:
14. Compliance Generally. To the Company's Knowledge,
the Company has complied and is in material compliance with all Environmental
and Safety Requirements.
29
15. Permits. To the Company's Knowledge, the Company has
obtained and is in material compliance with, all permits, licenses and other
authorizations that are required pursuant to Environmental and Safety
Requirements for the occupation of its facilities and the operation of its
business (all of which are listed on Schedule 7.19 hereto).
16. Claims. The Company has not received any claim,
complaint, citation, report or other notice regarding any liabilities or
potential liabilities (whether accrued, absolute, contingent, unliquidated or
otherwise), including any investigatory, remedial or corrective obligations,
arising under Environmental and Safety Requirements.
17. Storage Tanks, Asbestos, PCBs, Disposal Areas. To
the Company's Knowledge, no above-ground or underground storage tank, asbestos
in any form or condition, polychlorinated biphenyls (PCBs) above 50 parts per
million in electrical equipment owned by the Company, or landfill, surface or
other disposal areas exists at any property currently or formerly owned, leased
operated or occupied by the Company (although a comprehensive analysis for
asbestos containing material has not been undertaken).
18. Hazardous Substance Liabilities. To the Company's
Knowledge, the Company has not stored, disposed of, arranged for or permitted
the disposal of, transported, handled or released any substance, including
without limitation any hazardous substance, pollutant, contaminant or waste, or
owned or operated any facility or property (and no such facility or property is
contaminated by any such substance), in a fashion not otherwise in material
compliance with Environmental and Safety Requirements so as to give rise to
liabilities (whether accrued, absolute, contingent, unliquidated or otherwise)
of the Company pursuant to the Environmental and Safety Requirements, including
without limitation any liability for response costs, corrective action, natural
resources damages, personal injury, property damage or attorneys fees.
19. Other Environmental Liabilities. To the Company's
Knowledge, no facts, events or conditions relating to the past or present
facilities, properties or operations of the Company will prevent, hinder or
limit continued compliance with Environmental and Safety Requirements, give
rise to any material investigatory, remedial or corrective obligations pursuant
to Environmental and Safety Requirements, or give rise to any other material
liabilities (whether accrued, absolute, contingent, unliquidated or otherwise)
pursuant to Environmental and Safety Requirements, including any Environmental
and Safety Requirement relating to onsite or offsite releases or threatened
releases of hazardous or otherwise regulated materials, substances or wastes,
personal injury, property damage or natural resources damage.
20. Transaction-Triggered Requirements. To the Company's
Knowledge, neither the execution and delivery of this Agreement nor the
consummation of the Closing Transactions imposes any obligations for site
investigation or cleanup, or notification to or consent of a Governmental
Entity or any other Person, pursuant to any transaction-triggered"
Environmental and Safety Requirement.
21. Assumption of Liabilities. To the Company's
Knowledge, the Company has not, either expressly or by operation of law,
assumed or undertaken any liability or corrective or remedial obligation of any
other Person relating to Environmental and Safety Requirements.
22. Environmental Liens. To the Company's Knowledge, no
Environmental Lien has attached to any property owned, leased or operated by
the Company arising out of any action or omission of the Company or any other
Person.
23. Absence of Undisclosed Liabilities. As of the
Closing, the Company will not have any known obligations or liabilities
(whether accrued, absolute, contingent, unliquidated or otherwise, or whether
due or to become due, regardless of when asserted) arising out of transactions
entered into at or prior to the Closing, or any action or inaction at or prior
to the Closing, or any state of facts existing at or prior to the Closing,
except (a) obligations under contracts or commitments described on Schedule
7.10A or under contracts or commitments which are not required to be disclosed
thereon (but not liabilities for breaches thereof), (b) liabilities reflected
on the Latest Balance Sheet, (c) liabilities which have arisen after the date
of the Latest Balance Sheet in the ordinary course of business (none of which
is a material and uninsured liability for breach of contract, breach of
warranty, tort, infringement, claim or lawsuit), and (d) obligations or
liabilities otherwise disclosed on Schedule 7.20.
30
24. Disclosure. With respect to the Company, neither
this Agreement, nor any of the Schedules or Exhibits hereto, contains any
untrue statement of a material fact or, when considered as a whole, omits a
material fact necessary to make the statements contained herein or therein, in
light of the circumstances in which they were made, not misleading.
25. Sierra Assets. Schedule 7.22A lists all of the
assets (having a value greater than $5,000) which have been or shall be
contributed to Sierra by the Company. Schedule 7.22B lists all other assets
(having a value greater than $5,000) of Sierra not described in Schedule 7.22A.
ARTICLE 1.
REPRESENTATIONS AND WARRANTIES OF PARENT
As a material inducement to the Company to enter into this
Agreement, Parent hereby makes the representations and warranties set forth in
this Article VIII.
26. Organization and Power. Parent (i) is a corporation
which is validly existing and in good standing (or has comparable active
status) under the laws of the State of Delaware, (ii) shall own as of the
Closing all of the outstanding capital stock of Acquisition, and (iii) is
qualified to do business in every jurisdiction in which the execution, delivery
and performance of its obligations under this Agreement require it to be so
qualified. Parent has full power and authority to execute, deliver and perform
its obligations under this Agreement and the other Transaction Documents to
which it is a party. Acquisition will be, at the time of Closing, (i) a
corporation which has been duly organized, is validly existing and is in active
status under the laws of the State of Wisconsin; and (ii) qualified to do
business in every jurisdiction which the performance of its obligations
described in this Agreement require it to be so qualified.
27. Authorization of Transaction. Parent has full power
and authority to execute and deliver this Agreement and all other Transaction
Documents to which it is a party and to perform its obligations hereunder and
thereunder. No other proceedings or actions on the part of Parent are
necessary to approve and authorize Parent's execution and delivery of this
Agreement or any other Transaction Documents to which it is a party or the
performance of Parent's obligations hereunder or thereunder. This Agreement
constitutes, and each of the other Transaction Documents to which Parent is a
party will when executed constitute, a valid and binding obligation of Parent,
enforceable in accordance with their terms, except as enforceability hereof or
thereof may be limited by bankruptcy, insolvency or other laws affecting
creditors' rights generally and limitations on the availability of equitable
remedies. Acquisition will have full power and authority to execute and
deliver any Transaction Documents to which it may be a party and to perform its
obligations thereunder. Any such Transaction Documents to which Acquisition
may be a party will when executed constitute a valid and binding obligation of
Acquisition, enforceable against Acquisition in accordance with its terms,
except as enforceability thereof may be limited by bankruptcy, insolvency or
other laws affecting creditors' rights generally and limitations on the
availability or equitable remedies.
28. Absence of Conflicts. Except under the HSR Act,
neither the execution, delivery and performance of this Agreement or any other
Transaction Document by Parent or Acquisition, as the case may be, nor the
consummation by Parent or Acquisition, as the case may be, of the transactions
contemplated hereby or thereby, (a) does or will (i) materially conflict with
or result in a breach of any of the provisions of, (ii) constitute a material
default under, (iii) result in the violation of, (iv) give any third party the
right to terminate or to accelerate any obligation under, or (v) require any
consent, order, approval, authorization or other action of, or any filing with
or notice to, any Governmental Entity or other Person, in each case under the
certificate of incorporation or by-laws of Parent or Acquisition, as the case
may be, or under the provisions of any indenture, mortgage, lease, loan
agreement or other agreement or instrument to which Parent or Acquisition is
bound or by
31
which either Parent or Acquisition or any of their respective assets are
affected, or any Legal Requirement to which Parent or Acquisition or any of
their respective assets is subject, or (b) without limiting the foregoing,
require any Consent of any Governmental Entity or any other Person other than
as described on Schedule 8.3.
29. Brokerage. There are no claims for brokerage
commissions, finders' fees or similar compensation in connection with the
transactions contemplated by this Agreement based on any arrangement or
agreement made by or on behalf of Parent or Acquisition.
30. Litigation. There are no actions, suits,
proceedings, orders or investigations pending (or, to Parent's Knowledge,
threatened) against or affecting Parent or Acquisition at law or in equity, or
before or by any Governmental Entity, which could reasonably be expected to
adversely affect Parent's performance under this Agreement or the other
agreements contemplated hereby to which Parent is a party or the consummation
of the transactions contemplated hereby or thereby.
31. Disclosure. With respect to Parent and Acquisition,
neither this Agreement nor any of the Schedules or Exhibits hereto, contains
any untrue statement of a material fact or, when considered as a whole, omits a
material fact necessary to make the statements contained herein, in light of
the circumstances in which they were made, not misleading.
ARTICLE 1.
TERMINATION
32. Termination. This Agreement may be terminated at any
time prior to the Closing:
33. by mutual written agreement of the Company and
Parent;
34. by either the Company or Parent if (i) the
transactions contemplated by this Agreement have not been consummated by
February 15, 1997 (the Termination Date") or (ii) there has been a material
misrepresentation or breach on the part of the other party in the
representations and warranties set forth in this Agreement, or (iii) events
have occurred which have made it impossible to satisfy a condition precedent to
the terminating party's obligations to consummate the transactions contemplated
hereby (unless such terminating party's willful breach of this Agreement has
caused the condition to be unsatisfied);
35. by the Company, by written notice to Parent, on any
date determined for the Closing in accordance with Section 5.1(a) if each
condition set forth in Section 5.2 and Section 5.3 has been satisfied (or will
be satisfied by the delivery of documents or actions taken by the parties at
the Closing) or waived in writing on such date and Parent has nonetheless
refused to consummate the Closing Transactions; and
36. by Parent, by written notice to the Company, on any
date determined for the Closing in accordance with Section 5.1(a) if each
condition set forth in Section 5.2 and Section 5.3 has been satisfied (or will
be satisfied by the delivery of documents or actions taken by the parties at
the Closing) or waived in writing on such date and the Company has nonetheless
refused to consummate the Closing Transactions.
Notwithstanding the foregoing, (i) Parent may not rely on the failure of any
condition precedent set forth in Section 5.2 to be satisfied if such failure
was caused by Parent's failure to act in good faith or a breach of or failure
to perform any of its representations, warranties, covenants or other
obligations in accordance with the terms of this Agreement and (ii) the Company
may not rely on the failure of any condition precedent set forth in Section 5.3
to be satisfied if such failure was caused by the Company's failure to act in
good faith or a breach of or failure to perform any of its representations,
warranties, covenants or other obligations in accordance with the terms of this
Agreement.
32
37. Effect of Termination. If this Agreement is
terminated as provided in Section 9.1, then this Agreement will forthwith
become void and there will be no liability on the part of any Party to any
other Party or any other Person in respect thereof; provided that
38. the obligations of the parties described in Sections
6.6(d), 9.2(d), 10.1, 10.2 and 10.5 will survive any such termination,
39. no such termination will relieve Parent from
liability for any misrepresentation or breach of any representation, warranty,
covenant or agreement set forth in this Agreement prior to such termination,
and
40. no such termination of this Agreement will relieve
the Company from liability for any misrepresentation or breach of any
representation, warranty, covenant or agreement set forth in this Agreement
prior to such termination.
41. if this Agreement is terminated pursuant to Section
9.1(c) or 9.1(d) hereof based on the failure of the condition specified in
Section 5.2(i) hereof, the Parent shall promptly pay to the Company all
Transaction Costs incurred by the Company, provided that the maximum amount
payable by the Parent pursuant to this Section 9.2(d) of this Agreement shall
be $200,000.00.
ARTICLE 1.
ADDITIONAL AGREEMENTS
42. Press Releases and Announcements. Except for any
public disclosure which any Party in good faith believes is required by any
Legal Requirement (in which case, if practicable, the disclosing Party will
give the other Parties an opportunity to review and comment upon such
disclosure before it is made):
43. prior to the Closing, no press releases related to
this Agreement or any Closing Transaction will be issued or made without the
mutual approval of the Company and Parent; and
44. after the Closing, the Investors will not make any
press release or other public announcement of or with respect to the Company,
the Surviving Corporation, this Agreement or any Closing Transaction without
the Surviving Corporation's consent.
45. Expenses. Except as otherwise expressly provided
herein, the Company, Parent and Acquisition each will pay all of their own
fees, costs and expenses (including fees, costs and expenses of legal counsel,
investment bankers, accountants, brokers or other representatives and
consultants and appraisal fees, costs and expenses) incurred in connection with
the preparation, negotiation, execution and delivery of this Agreement and the
other Transaction Documents, the performance of its obligations hereunder and
thereunder, and the consummation of the transactions contemplated hereby and
thereby.
46. Directors, Officers and Fiduciary Indemnification.
For a period of at least eight (8) years after the Effective Time, the Parent
will, and will cause the Surviving Corporation to, maintain in effect (which in
each case shall cover the same matters and be on terms (including without
limitation, limits of liability in insurance policies) no less favorable than
such articles of incorporation, bylaws or agreements and insurance policies of
the Company as are in effect at the Effective Time):
33
47. bylaw provisions, articles of incorporation
provisions, or other agreements indemnifying present or former directors and
officers of the Company and its subsidiaries who serve or served as such at or
prior to the Effective Time and former, present or future fiduciaries of any
employee benefit plan of the Company who serve or served as such at or prior to
the Effective Time; and
48. policies of insurance: (i) insuring such officers
and directors of the Company and its subsidiaries against certain matters which
arose at or prior to the Effective Time; and (ii) insuring such fiduciaries
against certain matters which arose at or prior to, or which arise after, the
Effective Time.
49. Tax Treatment. The Parties agree that for federal
and state tax purposes they will treat the Merger as a sale of the Common Stock
by the Stockholders to the Parent.
50. Attorneys' Fees. In the event of litigation between
the Parties to enforce any provision of this Agreement, or for breach thereof,
the Party obtaining a final nonappealable judgment in its favor shall be
entitled to an award of its reasonable attorneys' fees and other expenses
incurred in prosecuting or defending such action, as the case may be.
51. Specific Performance. The Parties agree that the
assets and business of the Company as a going concern constitute unique
property. There is no adequate remedy at law for the damage which any Party
might sustain for failure of the other Parties to consummate the transactions
contemplated by this Agreement, and accordingly, each Party shall be entitled,
at its option, to the remedy of specific performance to enforce the
consummation of the transactions described in this Agreement.
52. Severance Policy. Any Person who is an employee of
the Company immediately prior to the Effective Time and whose employment with
the Surviving Corporation is terminated by the Surviving Corporation on or
prior to December 31, 1997 shall receive severance benefits from the Surviving
Corporation which shall be not less than those calculated in accordance with
the policies of the Company as in effect on December 1, 1996 and described in
the Schedules attached to this Agreement.
ARTICLE 1.
MISCELLANEOUS
53. Non-Survival of Representations and Warranties. The
representations and warranties made in this Agreement shall terminate at the
Effective Time and shall have no further force or effect, and shall not be
relied upon by any person, in any manner or for any reason, after the Effective
Time and the Parties shall have no liability or obligation of any kind with
respect to such representations and warranties from and after the Effective
Time.
54. Amendment and Waiver. This Agreement may only be
amended if such amendment is set forth in writing executed by the Company, the
Parent, and the Surviving Corporation (if so existing at such time) before or
after the Approval Date, but after the Approval Date, no amendment may be made
which materially adversely affects the Stockholders without prior approval of
the requisite Stockholders. No waiver of any provision of this Agreement shall
be binding unless such waiver is in writing and signed by the party against
whom such waiver is to be enforced. No failure by any Party to insist upon the
strict performance of any covenant, duty, agreement or condition of this
Agreement or to exercise any right or remedy consequent upon a breach thereof
will constitute a waiver of any such breach or any other covenant, duty,
agreement or condition.
55. Notices. All notices, demands and other
communications given or delivered under this Agreement will be in writing and
will be deemed to have been given when personally delivered or delivered by
express courier service or telephonic facsimile transmission. Notices, demands
and communications
34
to the Company, Parent or Surviving Corporation will, unless another address is
specified in writing, be sent to the address indicated below:
to Company prior to Closing:
Shade/Allied Inc.
X.X. Xxx 00000
Xxxxx Xxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx
Fax No. (000) 000-0000
with a copy (which copy will
not constitute notice to Company) to:
Xxxxxxx & Xxxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxx
Fax. No.: (000) 000-0000
to the Parent and the Surviving Corporation:
American Pad & Paper Company of Delaware, Inc.
00000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxx X. XxXxxxx
Fax No.: (000) 000-0000
with copies (which copies will not constitute
notice to Parent and Surviving Corporation) to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Learner
Fax No.: (000) 000-0000
56. Binding Agreement; Assignment. This Agreement and
all of the provisions hereof will be binding upon and inure to the benefit of
the parties and their respective successors and permitted assigns; provided
that
(i) prior to the Effective Time, neither this Agreement
nor any of the rights, interests or obligations
hereunder may be assigned by the Company without the
prior written consent of Parent (which consent will
not be unreasonably withheld) and
(ii) without the prior written consent of the Company
(which consent will not be unreasonably withheld),
neither this Agreement nor any
35
of the rights, interests or obligations hereunder may
be assigned by Parent prior to the Closing; provided
that, Parent may assign its rights under this
Agreement and any of the provisions hereof (but not
its obligations) to any affiliate of Parent
(including, without limitation, Acquisition) or to
any lenders providing financing to Parent (or their
permitted assigns) without the consent of the
Company.
57. Severability. Whenever possible, each provision of
this Agreement will be interpreted in such a manner as to be effective and
valid under applicable law, but if any provision of this Agreement is held to
be prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Agreement.
58. No Strict Construction. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent. In the event an ambiguity or question of intent or
interpretation arises, this Agreement will be construed as if drafted jointly
by the parties, and no presumption or burden of proof will arise favoring or
disfavoring any Person by virtue of the authorship of any of the provisions of
this Agreement.
59. Captions. The captions used in this Agreement are
for convenience of reference only and do not constitute a part of this
Agreement and will not be deemed to limit, characterize or in any way affect
any provision of this Agreement, and all provisions of this Agreement will be
enforced and construed as if no caption had been used in this Agreement.
60. Entire Agreement. This Agreement and the documents
referred to herein contain the entire agreement between the parties and
supersede any prior understandings, agreements or representations by or between
the parties, written or oral, which may have related to the subject matter
hereof in any way.
61. Counterparts. This Agreement may be executed in one
or more counterparts, each of which will be deemed an original but all of which
taken together will constitute one and the same instrument.
62. Governing Law. ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL
BE GOVERNED BY THE INTERNAL LAW OF THE STATE OF WISCONSIN, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF
THE STATE OF WISCONSIN OR ANY OTHER JURISDICTIONS) THAT WOULD CAUSE THE
APPLICATION OF THE LAWS OF ANY JURISDICTIONS OTHER THAN THE STATE OF WISCONSIN.
63. Parties in Interest. Nothing in this Agreement,
express or implied, is intended to confer on any Person other than the parties
and their respective successors and assigns any rights or remedies under or by
virtue of this Agreement, provided that the provisions of Sections 10.3 and
10.7 of this Agreement may be enforced by the Company, the Stockholders or any
affected director, officer, fiduciary or employee of the Company or of the
Surviving Corporation.
64. Other Definitional Provisions. The terms hereof,"
herein" and hereunder" and terms of similar import will refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Section, clause, Exhibit and Schedule references contained in this Agreement
are references to Sections, clauses, Exhibits and Schedules in or attached to
this Agreement, unless otherwise specified. Each defined term used in this
Agreement has a comparable meaning when used in its plural or singular form.
Each gender-specific term used in this Agreement has a comparable meaning
whether used in a masculine, feminine or
36
gender-neutral form. Whenever the term including" is used in this Agreement
(whether or not that term is followed by the phrase but not limited to" or
without limitation" or words of similar effect) in connection with a listing of
items within a particular classification, that listing will be interpreted to
be illustrative only and will not be interpreted as a limitation on, or an
exclusive listing of, the items within that classification. Each reference in
this Agreement to any Legal Requirement will be deemed to include such Legal
Requirement as it hereafter may be amended, supplemented or modified from time
to time and any successor thereto, unless such treatment would be contrary to
the express terms of this Agreement. Any term used but not defined in this
Agreement shall have the meaning given to such term in Exhibit A to this
Agreement, which Exhibit A is hereby incorporated herein by reference.
* * * *
37
IN WITNESS WHEREOF, the parties have executed this Agreement
and Plan of Merger as of the date first written above.
SHADE/ALLIED INC.
-------------------------------------
Xxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
AMERICAN PAD & PAPER COMPANY OF DELAWARE, INC.
-------------------------------------
Xxxxx X. XxXxxxx
Chief Financial Officer
38
Exhibit A
DEFINED TERMS
As used in the Agreement and Plan of Merger to which this
Exhibit A is attached, the following terms will have the following respective
meanings:
"Common Stock" means the Company's common stock, par value
$.01 per share.
"Consent" means any consent, order, approval, authorization or
other action of, or any filing with or notice to or other action with respect
to, any Governmental Entity or any other Person which is required for any of
the execution, delivery or performance of this Agreement or any other
Transaction Document, the consummation of any Closing Transaction or other
transaction contemplated hereby or thereby, or the conduct of the business or
operation of the Company after the Effective Time, whether such requirement
arises pursuant to any Legal Requirement or Contract, including any of the
foregoing which is required in order to prevent a breach of or a default under
or a termination or modification of any Contract, which right of breach,
default, termination or modification results from the consummation of the
Closing Transactions.
"Contract" means any oral or written agreement, instrument,
document, lease, employee benefit or welfare plan or other business or
commercial arrangement (in each case, including any extension, renewal,
amendment or other modification thereof) to which the Company is a party or by
which it is bound or to which it is subject or which pertains to the business
or properties of the Company.
"Environmental and Safety Requirements" means all Legal
Requirements concerning public health and safety, worker health and safety, or
pollution or protection of the environment, including all those relating to the
presence, use, production, generation, handling, transport, treatment, storage,
disposal, distribution, labeling, testing, processing, discharge, release,
threatened release, control, or cleanup of any hazardous or otherwise regulated
materials, substances or wastes, chemical substances or mixtures, pesticides,
pollutants, contaminants, toxic chemicals, petroleum products or byproducts,
asbestos, polychlorinated biphenyls, noise or radiation.
"Environmental Lien" means any Lien, either recorded or
unrecorded, in favor of any Governmental Entity and relating to any liability
arising under Environmental and Safety Requirements.
"Excludable Contract" means any customer or supplier purchase
order and any other Contract entered into in the ordinary course of business
with a Person who is unrelated to the Company or any Insider and under which
the Company has monetary or in kind obligations which in the aggregate do not
exceed $10,000 (or equivalent value) so long as the termination of such
Contract could not reasonably be expected to have a Material Adverse Effect.
39
"GAAP" means generally accepted accounting principles applied
in a manner consistent with those principles applied in preparing the March 31,
1996 audited balance sheet of the Company.
"Governmental Entity" means any government, agency,
governmental department, commission, board, bureau, court, arbitration panel or
instrumentality of the United States of America or any state or other political
subdivision thereof (whether now or hereafter constituted and/or existing) and
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Insider" means any officer or director (or similar official)
or Stockholder of the Company, any affiliate or natural or adoptive member of
the immediate family of any of the foregoing Persons, or any Person in which
any of the foregoing Persons directly or indirectly owns any material
beneficial interest. The immediate family" of any individual means such
individual's (and such individual's present or former spouse's) grandparents,
parents, spouse, siblings, children and grandchildren.
"Knowledge" (and any derivation thereof, whether or not
capitalized) means only the current, actual knowledge and awareness (and shall
not include any deemed or constructive knowledge or awareness) of the
individuals specified in clause (i) or (ii) below, as the case may be, (i) in
the case of Acquisition and the Parent, Xxxxxxx X. Xxxxxx, III, Xxxxxxx X.
Xxxx and Xxxxxxx X. Xxxxxx, and (ii) in the case of the Company, Xxxxxx X.
Xxxxxxxxx, Xxxxx Xxxxxxxx, Xxxxxx X. Xxxxxxx, Xxxxxx Xxxx, Xxxxxx Xxxxxxx,
Xxxxxxx Xxxxxxx, Xxxxxx X. Xxxxxx and Xxxx X. Xxxxxxxxx.
"Leasehold Improvements" means all buildings, fixtures and
other improvements located on each Leased Real Property which are owned by the
Company under the terms and conditions of the Lease for such Leased Real
Property.
"Leased Real Property" means all real property for which the
Company has the right of use or occupancy pursuant to any leasehold,
subleasehold, license, concession or other similar real property interest which
are held by the Company.
"Legal Requirement" means all federal, state, foreign and
local laws, statutes, codes, rules, regulations, ordinances, judgments, orders,
decrees and the like of any Governmental Entity, including common law.
"Lien" means any mortgage, pledge, hypothecation, lien
(statutory or otherwise), preference, priority, security agreement, easement,
covenant, restriction or other encumbrance of any kind or nature whatsoever
(including any conditional sale or other title retention agreement and any
lease having substantially the same effect as any of the foregoing and any
assignment or deposit arrangement in the nature of a security device).
"Mandatory Consent" means any Consent listed on Schedule 7.4
and identified with an asterisk.
40
"Material Adverse Effect" means a material adverse effect on:
(i) business, operations, financial condition, prospects or results of
operations of the Company, taken as a whole, other than any such matters that
may arise as a result of the transactions described in this Agreement or the
announcement of the transactions described in this Agreement; or (ii) on the
ability of Stockholders and the Company to perform their material obligations
under this Agreement or any other Transaction Document.
"Options" means outstanding options to acquire Common Stock.
"Owned Real Property" means all land and all buildings,
fixtures and other improvements located thereon (including, without limitation,
all electrical, mechanical, plumbing and other building systems; fire
protection, security and surveillance systems; telecommunications, computer,
wiring and cable installations; irrigation and other water distribution
systems; and all landscaping), and all easements, rights of way, tenements,
hereditaments, appurtenances, privileges and other rights with respect thereto
which are owned by the Company.
"Parties" means Parent and the Company
"Permitted Liens" means (i) Liens for Taxes, assessments or
government charges or levies not yet delinquent, (ii) statutory and contractual
Liens granted by the Company to any landlord, lessor or licensor, (iii) Liens
reflected in the Financial Statements, (iv) those Liens reflected on Schedule
7.8H as of Closing and (v) with respect to any Real Property, in addition to
(i) - (iv), (A) zoning, entitlement, building and other land use and similar
laws or regulations imposed by any Governmental Entity having jurisdiction over
such Real Property which are not violated by the current use, occupancy or
operation thereof and any agreements entered into with respect to the same but
only to the extent copies of such agreements have been provided to Parent, (B)
easements, covenants, conditions, restrictions and other similar matters of
record affecting title to the Real Property which would not impair the use or
occupancy of such Real Property in the operation of the Company's business and
(C) such other Liens as may be designated on Schedule 7.8H.
"Person" means an individual, a partnership, a limited
liability company, a corporation, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization or any Governmental
Entity.
"Proprietary Rights" means all of the following items owned
by, issued to or licensed to, the Company, along with all income, royalties,
damages and payments due or payable at the Closing or thereafter, including
damages and payments for past, present or future infringements or
misappropriations thereof, the right to xxx and recover for past infringements
or misappropriations thereof and any and all corresponding rights that, now or
hereafter, may be secured throughout the world: patents, patent applications,
patent disclosures and inventions (whether or not patentable and whether or not
reduced to practice) and any reissue, continuation, continuation-in-part,
division, revision, extension or reexamination thereof; trademarks, service
marks, trade dress, logos, trade names and corporate names together with all
goodwill associated therewith, copyrights registered or unregistered and
copyrightable works; mask works; and all registrations, applications and
renewals for any of the foregoing; trade secrets and confidential information
(including ideas, know-how, research and development information, drawings,
41
specifications, designs, plans, proposals, technical data, financial, business
and marketing plans, and customer and supplier lists and related information if
known to the Company); computer software and software systems (including data,
databases and related documentation); other proprietary rights; licenses or
other agreements to or from third parties regarding the foregoing; and all
copies and tangible embodiments of the foregoing (in whatever form or medium),
in each case including the items set forth on Schedule 7.11A.
"Stockholders" shall mean all holders of Common Stock,
Preferred Stock, Options and Warrants.
"Tax" (and, with correlative meaning, Taxes", Taxable" and
Taxing") means any (A) federal, state, local or foreign income, gross receipts,
franchise, estimated, alternative minimum, add-on minimum, sales, use,
transfer, registration, value added, excise, natural resources, severance,
stamp, occupation, premium, windfall profits, environmental (including under
Section 59A of the Tax Code), customs, duties, real property, real property
gains, personal property, capital stock, social security, unemployment,
disability, payroll, license, employee or other tax of any kind whatsoever,
including any interest, penalties or additions to tax or additional amounts in
respect of the foregoing; (B) liability of any corporation for the payment of
any amounts of the type described in clause (A) arising as a result of being
(or ceasing to be) a member of any affiliated group" (as that term is defined
in Section 1504(a) of the Tax Code) (or being included in any Tax Return
relating thereto); and (C) liability for the payment of any amounts of the type
described in clause (A) or (B) as a result of any express or implied obligation
to indemnify or otherwise assume or succeed to the liability of any other
Person.
"Tax Code" means the Internal Revenue Code of 1986, as amended
(including, where applicable, the Internal Revenue Code of 1954, as amended).
"Tax Return" means any return, declaration, report, claim for
refund, information return or other document (including any related or
supporting schedules, statements or information) filed or required to be filed
in connection with the determination, assessment or collection of Taxes of any
Person or the administration of any Legal Requirement relating to any Taxes.
"Transaction Documents" means the agreements and instruments
delivered pursuant hereto or thereto.
"Warrants" means outstanding warrants to acquire Common Stock.
42
Exhibit B
CERTIFICATE OF MERGER
