EXHIBIT 1
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
by and among
Xxxxxxx Xxxxx, Inc.,
Merger Sub
and
Oxford Resources Corp.
Dated as of January 14, 1997
TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER
1.1. The Merger . . . . . . . . . . . . . . . . . 2
1.2. Effective Time; Effects of the Merger . . . . 2
1.3. Conversion of Company Common Stock . . . . . 3
1.4. Stock Options . . . . . . . . . . . . . . . . 5
1.5. Parent Common Stock . . . . . . . . . . . . . 7
1.6. Conversion of Merger Sub Common Stock . . . . 7
1.7. Restated Certificate of Incorporation,
By-laws . . . . . . . . . . . . . . . . . . 7
1.8. Directors and Executive Officers . . . . . . 8
1.9. Tax Consequences. . . . . . . . . . . . . . . 8
ARTICLE II
EXCHANGE OF SHARES
2.1. Parent to Make Shares Available . . . . . . . 8
2.2. Exchange of Shares . . . . . . . . . . . . . 9
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.1. Corporate Organization . . . . . . . . . . . 14
3.2. Capitalization . . . . . . . . . . . . . . . 16
3.3. Authority; No Violation . . . . . . . . . . . 19
3.4. Consents and Approvals . . . . . . . . . . . 21
3.5. Reports; Examinations . . . . . . . . . . . . 22
3.6. Financial Statements . . . . . . . . . . . . 23
3.7. Broker's Fees . . . . . . . . . . . . . . . . 25
3.8. Absence of Certain Changes or Events . . . . 25
3.9. Legal Proceedings . . . . . . . . . . . . . . 26
3.10 Taxes . . . . . . . . . . . . . . . . . . . . 27
3.11. Employees . . . . . . . . . . . . . . . . . . 31
3.12. Company Information . . . . . . . . . . . . . 34
3.13. Compliance with Applicable Law . . . . . . . 35
3.14. Certain Contracts . . . . . . . . . . . . . . 36
3.15. SEC Reports. . . . . . . . . . . . . . . . . 38
3.16. Undisclosed Liabilities . . . . . . . . . . . 39
3.17. State Takeover Laws . . . . . . . . . . . . . 39
3.18. Property. . . . . . . . . . . . . . . . . . . 40
3.19. Reorganization. . . . . . . . . . . . . . . . 40
3.20. Insurance. . . . . . . . . . . . . . . . . . 40
3.21. Intellectual Property. . . . . . . . . . . . 41
3.22. Environmental Matters. . . . . . . . . . . . 42
3.23. Contracts and Leases . . . . . . . . . . . . 44
3.24. Securitization Transactions . . . . . . . . . 47
3.25. Affiliated Party Transactions . . . . . . . . 48
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT
4.1. Corporate Organization . . . . . . . . . . . 49
4.2. Capitalization . . . . . . . . . . . . . . . 50
4.3. Authority; No Violation . . . . . . . . . . . 53
4.4. Consents and Approvals . . . . . . . . . . . 56
4.5. Reports; Examinations. . . . . . . . . . . . 57
4.6. Financial Statements . . . . . . . . . . . . 57
4.7. Broker's Fees. . . . . . . . . . . . . . . . 59
4.8. Absence of Certain Changes or Events . . . . 60
4.9. Legal Proceedings. . . . . . . . . . . . . . 60
4.10. Parent Information. . . . . . . . . . . . . . 61
4.11. Compliance with Applicable Law . . . . . . . 61
4.12. SEC Reports . . . . . . . . . . . . . . . . . 62
4.13. Undisclosed Liabilities. . . . . . . . . . . 63
4.14. Ownership of Company Common Stock. . . . . . 63
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1. Covenants of the Company. . . . . . . . . . . 64
5.2. Covenants of Parent. . . . . . . . . . . . . 70
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1. Regulatory and Other Matters . . . . . . . . 71
6.2. Access to Information . . . . . . . . . . . . 73
6.3. Legal Conditions to Merger. . . . . . . . . . 77
6.4. Affiliates . . . . . . . . . . . . . . . . . 78
6.5. Employee Benefit Plans . . . . . . . . . . . 78
6.6. Indemnification . . . . . . . . . . . . . . . 78
6.7. Stock Exchange Listing. . . . . . . . . . . . 81
6.8. Subsequent Interim Financial Statements. . . 81
6.9. Advice of Changes. . . . . . . . . . . . . . 81
6.10. Current Information . . . . . . . . . . . . . 82
6.11. Merger Sub. . . . . . . . . . . . . . . . . . 83
6.12. Accountant's Letter. . . . . . . . . . . . . 83
6.13. Reconciliation of Accounts . . . . . . . . . 83
6.14. Lease Financing . . . . . . . . . . . . . . . 84
6.15. Termination of Certain Activities . . . . . . 84
ARTICLE VII
CONDITIONS PRECEDENT
7.1. Conditions to Each Party's Obligation
To Effect the Merger . . . . . . . . . . . . 85
7.2. Conditions to Obligations of Parent
and Merger Sub. . . . . . . . . . . . . . . 86
7.3. Conditions to Obligations of the Company. . . 90
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1. Termination . . . . . . . . . . . . . . . . . 94
8.2. Effect of Termination . . . . . . . . . . . . 97
8.3. Amendment . . . . . . . . . . . . . . . . . . 98
8.4. Extension; Waiver . . . . . . . . . . . . . . 98
ARTICLE IX
GENERAL PROVISIONS
9.1. Closing . . . . . . . . . . . . . . . . . . . 99
9.2. Alternative Structure . . . . . . . . . . . . 99
9.3. Nonsurvival of Representations,
Warranties and Agreements . . . . . . . . . 99
9.4. Expenses . . . . . . . . . . . . . . . . . 100
9.5. Notices . . . . . . . . . . . . . . . . . . 100
9.6. Interpretation . . . . . . . . . . . . . . 101
9.7. Counterparts . . . . . . . . . . . . . . . 102
9.8. Entire Agreement . . . . . . . . . . . . . 102
9.9. Governing Law . . . . . . . . . . . . . . . 102
9.10. Severability . . . . . . . . . . . . . . . 102
9.11. Publicity . . . . . . . . . . . . . . . . . 103
9.12. Assignment; No Third Party Beneficiaries . 103
9.13. Enforcement of Agreement . . . . . . . . . . 104
9.14. Waiver . . . . . . . . . . . . . . . . . . . 104
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of
January 14, 1997, by and among Xxxxxxx Xxxxx, Inc., a
Florida corporation ("Parent"), a corporation to be
organized under the laws of the State of New York as a
direct wholly owned subsidiary of Parent ("Merger Sub")
and Oxford Resources Corp., a corporation organized under
the laws of the State of New York (the "Company").
WHEREAS, the Boards of Directors of Parent and
the Company have determined that it is in the best
interests of their respective companies and their
shareholders to consummate the business combination
transaction provided for herein in which Merger Sub will,
subject to the terms and conditions set forth herein,
merge with and into the Company; and
WHEREAS, the parties desire to make certain
representations, warranties and agreements in connection
with the Merger and also to prescribe certain conditions
to the Merger.
NOW, THEREFORE, in consideration of the mutual
covenants, representations, warranties and agreements
contained herein, and intending to be legally bound
hereby, the parties agree as follows:
ARTICLE I
THE MERGER
1.1. The Merger. Subject to the terms and
conditions of this Agreement, in accordance with the
applicable provisions of the New York Business
Corporation Law (the "BCL"), at the Effective Time (as
defined in Section 1.2 hereof), Merger Sub shall merge
with and into the Company (the "Merger"). The Company
shall be the surviving corporation (hereinafter sometimes
called the "Surviving Corporation") in the Merger, and
shall continue its existence as a corporation under the
laws of the State of New York. The name of the Surviving
Corporation shall be Oxford Resources Corp. Upon
consummation of the Merger, the separate existence of
Merger Sub shall terminate.
1.2. Effective Time; Effects of the Merger.
The Merger shall become effective as set forth in the
certificate of merger (the "Certificate of Merger") which
shall be filed with the Secretary of State of the State
of New York (the "Secretary") on the Closing Date (as
defined in Section 9.1 hereof). The term "Effective
Time" shall be the date and time when the Merger becomes
effective, as set forth in the Certificate of Merger. At
and after the Effective Time, the Merger shall have the
effects set forth in Section 906 of the BCL.
1.3. Conversion of Company Common Stock. (a)
At the Effective Time, subject to Section 2.2(e) hereof,
each share of the Class A Common Stock, par value $.01
per share, of the Company (the "Class A Common Stock")
and each share of the Class B Common Stock, par value
$.01 per share, of the Company (the "Class B Common
Stock" and, together with the Class A Common Stock, the
"Company Common Stock") issued and outstanding
immediately prior to the Effective Time (other than
Dissenting Shares (as defined in Section 1.3(b) hereof)
and other than shares of Company Common Stock owned
directly or indirectly by Parent or the Company (except
for shares held in managed accounts, trust accounts or
otherwise in a fiduciary capacity that are beneficially
owned by third parties)) shall, by virtue of this
Agreement and without any action on the part of the
holder thereof, be converted into and exchangeable for
.9085 shares (the "Exchange Ratio") of the common stock,
par value $2.00 per share, of Parent (together with the
number of Parent Rights (as defined in Section 4.2
hereof) associated therewith) ("Parent Common Stock").
All of the shares of Company Common Stock converted into
Parent Common Stock pursuant to this Article I shall no
longer be outstanding and shall automatically be
cancelled and shall cease to exist, and each certificate
(each a "Certificate") previously representing any such
shares of Company Common Stock shall thereafter only
represent the right to receive (i) the number of whole
shares of Parent Common Stock and (ii) the cash in lieu
of fractional shares of Parent Common Stock into which
the shares of Company Common Stock represented by such
Certificate have been converted pursuant to this
Agreement. Certificates previously representing shares
of Company Common Stock shall be exchanged for
certificates representing whole shares of Parent Common
Stock and cash in lieu of fractional shares issued in
consideration therefor upon the surrender of such
Certificates in accordance with Section 2.2 hereof,
without any interest thereon. If prior to the Effective
Time, Parent should split or combine the Parent Common
Stock, or pay a dividend or other distribution in the
Parent Common Stock, then the Exchange Ratio shall be
appropriately adjusted to reflect such split,
combination, dividend or distribution. At the Effective
Time, all shares of Company Common Stock owned directly
or indirectly by Parent or the Company (except for shares
held in managed accounts, trust accounts or otherwise in
a fiduciary capacity that are beneficially owned by third
parties)) shall be cancelled and shall cease to exist and
no stock of Parent or other consideration shall be
delivered in exchange therefor.
(b) Notwithstanding anything in this Agreement
to the contrary, any shares of Company Common Stock which
are outstanding immediately prior to the Effective Time
and which are held by shareholders who shall not have
voted such shares in favor of the Merger and who shall
have filed with the Company a written objection to the
Merger and a demand for appraisal of such shares in the
manner provided in Section 623 of the BCL ("Dissenting
Shares") shall not be converted into the right to
receive, or be exchangeable for, the consideration
provided for in Section 1.3(a) hereof, but, instead, the
holders thereof shall be entitled to payment of the
appraised value of such Dissenting Shares in accordance
with the provisions of Section 623 of the BCL. The
Company shall (x) give Parent prompt written notice of
the receipt of any notice from a shareholder of his
intent to demand payment for his shares, (y) not settle
or offer to settle any such demands without the prior
written consent of Parent and (z) not, without the prior
written consent of Parent, waive any failure to timely
deliver a written objection to the Merger and a demand
for appraisal of such shares in accordance with Section
623 of the BCL.
1.4. Stock Options. At the Effective Time,
each option granted by the Company to purchase shares of
Class A Common Stock pursuant to the Company's 1993 Stock
Option Plan (the "Stock Option Plan") which is
outstanding and unexercised immediately prior thereto
shall be converted automatically into an option to
purchase shares of Parent Common Stock in an amount and
at an exercise price determined as provided below (and
otherwise be subject to the terms of the Stock Option
Plan):
(i) The number of shares
of Parent Common Stock to be subject
to the new option shall be equal to
the product of the number of shares
of Class A Common Stock subject to
the original option and the Exchange
Ratio, provided that any fractional
shares of Parent Common Stock
resulting from such multiplication
shall be rounded down to the nearest
share; and
(ii) The exercise price
per share of Parent Common Stock
under the new option shall be equal
to the exercise price per share of
Class A Common Stock under the
original option divided by the
Exchange Ratio, provided that such
exercise price shall be rounded up to
the nearest cent.
The adjustment provided herein with respect to
any options which are "incentive stock options" (as
defined in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code")) shall be and is intended
to be effected in a manner which is consistent with
Section 424(a) of the Code. The duration and other terms
of the new option shall be the same as the original
option, except that all references to the Company shall
be deemed to be references to Parent.
1.5. Parent Common Stock. The shares of
Parent Common Stock issued and outstanding immediately
prior to the Effective Time shall be unaffected by the
Merger and at the Effective Time, such shares shall
remain issued and outstanding.
1.6. Conversion of Merger Sub Common Stock.
At the Effective Time, each of the shares of capital
stock of Merger Sub issued and outstanding immediately
prior to the Effective Time shall, by virtue of the
Merger, automatically and without any action on the part
of Parent, become and be converted into one share of
Class A Common Stock, which shall thereafter constitute
all of the issued and outstanding shares of the capital
stock of the Surviving Corporation.
1.7. Restated Certificate of Incorporation,
By-laws. At the Effective Time, the Restated Certificate
of Incorporation (the "Restated Certificate") and By-laws
of the Company, as in effect at the Effective Time, shall
be the Restated Certificate and By-laws of the Surviving
Corporation.
1.8. Directors and Executive Officers. The
directors and executive officers of the Company
immediately prior to the Effective Time along with such
directors and officers that Parent shall designate shall
be the directors and executive officers of the Surviving
Corporation, each to hold office in accordance with the
Restated Certificate and By-Laws of the Surviving
Corporation until their respective successors are duly
elected or appointed and qualified.
1.9. Tax Consequences. It is intended that
the Merger constitute a reorganization within the meaning
of Section 368(a) of the Code, and that this Agreement
constitute a "plan of reorganization" for purposes of
Section 368 of the Code.
ARTICLE II
EXCHANGE OF SHARES
2.1. Parent to Make Shares Available. At or
prior to the Effective Time, Parent shall deposit, or
shall cause to be deposited, with a bank or trust company
(the "Exchange Agent"), selected by Parent and reasonably
satisfactory to the Company, for the benefit of the
holders of Company Common Stock, for exchange in
accordance with this Article II, certificates
representing the shares of Parent Common Stock and the
cash in lieu of fractional shares (such cash and/or
certificates for shares of Parent Common Stock, together
with any dividends or distributions with respect thereto,
being hereinafter referred to as the "Exchange Fund") to
be issued pursuant to Section 1.3(a) and paid pursuant to
Section 2.2(a) in exchange for outstanding shares of
Company Common Stock.
2.2. Exchange of Shares. (a) As soon as
practicable after the Effective Time, the Exchange Agent
shall mail to each holder of record of Company Common
Stock as of the Effective Time a form letter of
transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the
Exchange Agent) and instructions for use in effecting the
surrender of the Certificates in exchange for
certificates representing the shares of Parent Common
Stock and the cash in lieu of fractional shares into
which the shares of Company Common Stock represented by
such Certificate shall have been converted pursuant to
the Merger. Upon surrender of a Certificate for exchange
and cancellation to the Exchange Agent, together with
such letter of transmittal, duly executed, the holder of
such Certificate shall be entitled to receive in exchange
therefor (x) a certificate representing that number of
whole shares of Parent Common Stock to which such holder
of Company Common Stock shall have become entitled
pursuant to the provisions of Article I hereof and (y) a
check representing the amount of cash in lieu of a
fractional share of Parent Common Stock, if any, which
such holder has the right to receive in respect of the
Certificate surrendered pursuant to the provisions of
this Article II, and the Certificate so surrendered shall
forthwith be cancelled. No interest will be paid or
accrued on the cash in lieu of fractional shares and
unpaid dividends and distributions, if any, payable to
holders of Company Common Stock.
(b) No dividends or other distributions
declared after the Effective Time with respect to Parent
Common Stock and payable to the holders of record thereof
shall be paid to the holder of any shares of Company
Common Stock until the holder thereof shall surrender the
Certificate representing such shares in accordance with
this Article II. After such surrender, the record holder
thereof shall be entitled to receive any such dividends
or other distributions, without any interest thereon,
which theretofore had become payable with respect to
shares of Parent Common Stock to which such holder shall
become entitled pursuant to Article I hereof.
(c) If any certificate representing
shares of Parent Common Stock is to be issued in a name
other than that in which the Certificate surrendered in
exchange therefor is registered, it shall be a condition
of the issuance thereof that the Certificate so
surrendered shall be properly endorsed (or accompanied by
an appropriate instrument of transfer) and otherwise in
proper form for transfer, and that the person requesting
such exchange shall pay to the Exchange Agent in advance
any transfer or other taxes required by reason of the
issuance of a certificate representing shares of Parent
Common Stock in any name other than that of the
registered holder of the Certificate surrendered, or
required for any other reason, or shall establish to the
satisfaction of the Exchange Agent that such tax has been
paid or is not payable.
(d) After the Effective Time, there shall
be no transfers on the stock transfer books of the
Company of the shares of Company Common Stock which were
issued and outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates
representing such shares are presented for transfer to
the Exchange Agent, they shall be cancelled and exchanged
for certificates representing shares of Parent Common
Stock as provided in this Article II.
(e) Notwithstanding anything to the
contrary contained herein, no certificates or scrip
representing fractional shares of Parent Common Stock
shall be issued upon the surrender for exchange of
Certificates, no dividend or distribution with respect to
Parent Common Stock shall be payable on or with respect
to any fractional share, and such fractional share
interests shall not entitle the owner thereof to voting
rights or to any other rights of a shareholder of Parent.
In lieu of the issuance of any such fractional share,
Parent shall pay to each former shareholder of the
Company who otherwise would be entitled to receive a
fractional share of Parent Common Stock an amount in cash
determined by multiplying (i) the average of the closing
sales prices of Parent Common Stock on the New York Stock
Exchange (the "NYSE") as reported by The Wall Street
Journal (or, if not reported thereby, another
authoritative source) for the five trading days
immediately preceding the date on which the Effective
Time shall occur by (ii) the fraction of a share of
Parent Common Stock to which such holder would otherwise
be entitled to receive pursuant to Section 1.3 hereof.
(f) Any portion of the Exchange Fund that
remains unclaimed by the shareholders of the Company for
six months after the Effective Time shall be paid to
Parent. Any shareholders of the Company who have not
theretofore complied with this Article II shall
thereafter look only to Parent for payment of their
shares of Parent Common Stock, cash in lieu of fractional
shares and unpaid dividends and distributions on the
Parent Common Stock deliverable in respect of each share
of Company Common Stock such shareholder holds as
determined pursuant to this Agreement, in each case,
without any interest thereon. Notwithstanding the
foregoing, none of Parent, the Company, the Exchange
Agent or any other person shall be liable to any former
holder of shares of Company Common Stock for any amount
properly delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws.
(g) In the event any Certificate shall
have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming such
Certificate to be lost, stolen or destroyed and, if
required by Parent, the posting by such person of a bond
in an amount equal to such value as indemnity against any
claim that may be made against it with respect to such
Certificate, the Exchange Agent will issue in exchange
for such lost, stolen or destroyed Certificate the shares
of Parent Common Stock, cash in lieu of fractional shares
and unpaid dividends and distributions on the Parent
Common Stock deliverable in respect thereof pursuant to
this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to
Parent as follows:
3.1. Corporate Organization. (a) The Company
is a corporation duly organized, validly existing and in
good standing under the laws of the State of New York.
The Company has the corporate power and authority to own
or lease all of its properties and assets and to carry on
its business as it is now being conducted, and is duly
licensed or qualified to do business in each jurisdiction
in which the nature of the business conducted by it or
the character or location of the properties and assets
owned or leased by it makes such licensing or
qualification necessary, except where the failure to be
so licensed or qualified has not had and would not be
reasonably likely to have a Material Adverse Effect (as
defined below) on the Company. Attached hereto as
Exhibit 3.1 are true, complete and correct copies of the
Restated Certificate and By-laws of the Company as in
effect as of the date of this Agreement. As used in this
Agreement, the term (i) "Material Adverse Effect" means,
with respect to Parent or the Company, as the case may
be, a material adverse effect on the business,
properties, assets, liabilities, results of operations or
financial condition of such party and its Subsidiaries,
taken as a whole, and (ii) "Subsidiary" when used with
respect to any party means any corporation, partnership
or other organization, whether incorporated or
unincorporated, which is consolidated with such party for
financial reporting purposes.
(b) Each of the Company's Subsidiaries is
a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of
incorporation or organization. Each of the Company's
Subsidiaries has the corporate power and authority to own
or lease all of its properties and assets and to carry on
its business as it is now being conducted and is duly
licensed or qualified to do business in each jurisdiction
in which the nature of the business conducted by it or
the character or the location of the properties and
assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be
so licensed or qualified has not had and would not be
reasonably likely to have a Material Adverse Effect on
the Company. The certificate of incorporation, by-laws
or similar governing documents of each Subsidiary of the
Company, copies of which have previously been delivered
to Parent, are true, complete and correct copies of such
documents as in effect as of the date of this Agreement.
(c) The minute books of the Company and
each of its Subsidiaries contain true and accurate
records in all material respects of all meetings and
other corporate actions held or taken since December 31,
1993 of their respective shareholders and Boards of
Directors (including committees of their respective
Boards of Directors).
3.2. Capitalization. (a) The authorized
capital stock of the Company consists of 62,000,000
shares of Class A Common Stock, 8,000,000 shares of Class
B Common Stock and 10,000,000 shares of preferred stock,
par value $.01 per share (the "Preferred Stock"). As of
the date of this Agreement, there are (x) 7,845,285
shares of Class A Common Stock issued and outstanding,
7,102,774 shares of Class B Common Stock issued and
outstanding and no shares of Company Common Stock held in
the Company's treasury, (y) no shares of Company Common
Stock reserved for issuance upon exercise of outstanding
stock options or otherwise except for (i) 1,300,000
shares of Class A Common Stock reserved for issuance
pursuant to the Stock Option Plan (including shares of
Class A Common Stock previously issued pursuant to the
exercise of options granted thereunder), (ii) 7,102,744
shares of Class A Common Stock reserved for issuance upon
the conversion of a like number of shares of Class B
Common Stock, (iii) shares to be issued pursuant to the
terms of the Agreement and Plan of Reorganization, dated
November 22, 1996, between the Company and the
shareholders of Electronic Vehicle Remarketing, Inc. (the
"EVRI Agreement") and (iv) 2,974,658 shares of Class A
Common Stock reserved for issuance upon exercise of the
option issued to Parent pursuant to the Stock Option
Agreement, dated as of the date hereof, between Parent
and the Company (the "Option Agreement") and (z) no
shares of Preferred Stock issued or outstanding, held in
the Company's treasury or reserved for issuance upon
exercise of outstanding stock options or otherwise. All
of the issued and outstanding shares of Company Common
Stock have been duly authorized and validly issued and
are fully paid, nonassessable and free of preemptive
rights, with no personal liability attaching to the
ownership thereof. Except as referred to above or
reflected in Section 3.2(a) of the Disclosure Schedule
which is being delivered to Parent concurrently herewith
(the "Company Disclosure Schedule"), the Company does not
have and is not bound by any outstanding subscriptions,
options, warrants, calls, commitments or agreements of
any character calling for the purchase or issuance of any
shares of Company Common Stock or Preferred Stock or any
other equity security of the Company or any securities
representing the right to purchase or otherwise receive
any shares of Company Common Stock or Preferred Stock or
any other equity security of the Company. The names of
the optionees, the date of each option to purchase Class
A Common Stock granted, the number of shares of Class A
Common Stock subject to each such option, the expiration
date of each such option, and the price at which each
such option may be exercised under the Stock Option Plan
are set forth in Section 3.2(a) of the Company Disclosure
Schedule.
(b) Section 3.2(b) of the Company
Disclosure Schedule sets forth a true and correct list of
all of the Subsidiaries of the Company as of the date of
this Agreement. Except as set forth in Section 3.2(b) of
the Company Disclosure Schedule, the Company owns,
directly or indirectly, all of the issued and outstanding
shares of the capital stock of each of such Subsidiaries,
free and clear of all liens, charges, encumbrances and
security interests whatsoever, and all of such shares are
duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof.
No Subsidiary of the Company has or is bound by any
outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character calling for
the purchase or issuance of any shares of capital stock
or any other equity security of such Subsidiary or any
securities representing the right to purchase or
otherwise receive any shares of capital stock or any
other equity security of such Subsidiary and none of the
options granted under the Stock Option Plan have related
stock appreciation rights. Assuming compliance by Parent
with Section 1.4 hereof, at the Effective Time, there
will not be any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any
character by which the Company or any of its Subsidiaries
will be bound calling for the purchase or issuance of any
shares of the capital stock of the Company or any of its
Subsidiaries.
3.3. Authority; No Violation. (a) The
Company has full corporate power and authority to execute
and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and
validly approved by the Board of Directors of the
Company. The Board of Directors of the Company has
directed that this Agreement and the transactions
contemplated hereby be submitted to the Company's
shareholders for approval at a meeting of such
shareholders and, except for the adoption of this
Agreement by the vote of two-thirds of the votes eligible
to be cast at such meeting by the holders of the Class A
Common Stock and Class B Common Stock voting together as
a class, no other corporate proceedings on the part of
the Company are necessary to approve this Agreement and
to consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed and
delivered by the Company and (assuming due authorization,
execution and delivery by Parent and Merger Sub)
constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance
with its terms, except as enforcement may be limited by
general principles of equity whether applied in a court
of law or a court of equity and by bankruptcy, insolvency
and similar laws affecting creditors' rights and remedies
generally.
(b) Except as set forth in Section 3.3(b)
of the Company Disclosure Schedule, neither the execution
and delivery of this Agreement by the Company nor the
consummation by the Company of the transactions
contemplated hereby nor compliance by the Company with
any of the terms or provisions hereof will (i) violate
any provision of the Restated Certificate or By-laws of
the Company, or (ii) assuming that the consents and
approvals referred to in Section 3.4 hereof are duly
obtained, (x) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction
applicable to the Company or any of its Subsidiaries, or
any of their respective properties or assets, or (y)
violate, contravene, result in a breach of any provision
of or the loss of any benefit under, constitute a default
(or an event which, with notice or lapse of time, or
both, would constitute a default) under, result in the
termination of or a right of termination or cancellation
under, accelerate the performance required by, or result
in the creation of any lien, pledge, security interest,
charge or other encumbrance upon any of the respective
properties or assets of the Company or any of its
Subsidiaries under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed
of trust, license, lease, agreement or other instrument
or obligation to which the Company or any of its
Subsidiaries is a party, or by which they or any of their
respective properties or assets may be bound or affected,
except (only in the case of clause (y) above) for such
violations, conflicts, breaches or defaults which, either
individually or in the aggregate, have not had and would
not be reasonably likely to have a Material Adverse
Effect on the Company.
3.4. Consents and Approvals. Except for (a)
the approval of this Agreement by the requisite vote of
the shareholders of the Company, (b) the filing with the
Securities and Exchange Commission (the "SEC") of a proxy
statement in definitive form relating to the transactions
contemplated hereby (the "Proxy Statement") and the
mailing of such Proxy Statement to the Company's
shareholders, (c) review of this Agreement and the
transactions contemplated hereby by the U.S. Department
of Justice ("DOJ") and the Federal Trade Commission
("FTC") under federal antitrust laws and any filings or
notifications in connection therewith, (d) the filing of
the Certificate of Merger with the Secretary pursuant to
the BCL, (e) any filings, authorizations or approvals as
may be required under the New Jersey Industrial Site
Recovery Act ("ISRA"), and (f) such filings,
authorizations or approvals as may be set forth in
Section 3.4 of the Company Disclosure Schedule, no
consents or approvals of or filings or registrations with
any court, administrative agency or commission or other
governmental authority or instrumentality, in each case,
whether federal, state or local (each a "Governmental
Entity") or with any third party are necessary in
connection with the execution and delivery by the Company
of this Agreement and the consummation by the Company of
the Merger and the other transactions contemplated
hereby.
3.5. Reports; Examinations. Each of the
Company and its Subsidiaries has timely filed all
material reports, registrations and statements, together
with any amendments required to be made with respect
thereto, that it was required to file since December 31,
1991 with any Governmental Entity and has paid all fees
and assessments due and payable in connection therewith.
Except for normal examinations conducted by a
Governmental Entity in the regular course of the business
of the Company and its Subsidiaries and except as set
forth in Section 3.5 of the Company Disclosure Schedule,
no Governmental Entity has initiated any proceeding or,
to the Best Knowledge of the Company, investigation into
the business or operations of the Company or any of its
Subsidiaries since December 31, 1991. There is no
unresolved material violation, criticism, or exception by
any Governmental Entity with respect to any report or
statement relating to any examinations of the Company or
any of its Subsidiaries. As used herein, the term "Best
Knowledge" means with respect to the Company the actual
knowledge of any of the persons set forth on Schedule
3.5.
3.6. Financial Statements. The Company has
previously delivered to Parent copies of (a) the
consolidated balance sheets of the Company and its
Subsidiaries as of June 30 for the fiscal years 1995 and
1996, and the related consolidated statements of
operations, shareholders' equity and cash flows for the
fiscal years 1994 through 1996, inclusive, as reported in
the Company's Annual Report on Form 10-K for the fiscal
year ended June 30, 1996 (the "10-K") filed with the SEC
pursuant to the rules and regulations of the SEC, in each
case accompanied by the audit report of BDO Xxxxxxx LLP,
independent public accountants with respect to the
Company, and (b) the unaudited consolidated balance
sheets of the Company and its Subsidiaries as of
September 30, 1996 and September 30, 1995 and the related
unaudited consolidated statements of operations for the
three month periods then ended as reported in the
Company's Quarterly Report on Form 10-Q for the period
ended September 30, 1996 filed with the SEC pursuant to
the rules and regulations of the SEC. The June 30, 1996
consolidated balance sheet of the Company and its
Subsidiaries (including the related notes, where
applicable) fairly presents the consolidated financial
position of the Company and its Subsidiaries as of the
date thereof, and the other financial statements referred
to in this Section 3.6 (including the related notes,
where applicable) fairly present, and the financial
statements of the Company referred to in Section 6.8 will
fairly present (subject, in the case of the unaudited
statements, to recurring audit adjustments normal in
nature and amount), the results of the consolidated
operations and financial position of the Company and its
Subsidiaries for the respective fiscal periods or as of
the respective dates therein set forth; each of such
statements (including the related notes, where
applicable) comply, and the financial statements of the
Company referred to in Section 6.8 will comply, in all
material respects with applicable accounting requirements
and with the published rules and regulations of the SEC
with respect thereto; and each of such statements
(including the related notes, where applicable) has been,
and the financial statements of the Company referred to
in Section 6.8 will be, prepared in accordance with
generally accepted accounting principles ("GAAP")
consistently applied during the periods involved, except
as indicated in the notes thereto. The books and records
of the Company and its Subsidiaries have been, and are
being, maintained in all material respects in accordance
with GAAP and any other applicable legal and accounting
requirements and reflect only actual transactions.
3.7. Broker's Fees. Neither the Company nor
any of its Subsidiaries nor any of their respective
officers or directors has employed any broker or finder
or incurred any liability for any broker's fees,
commissions or finder's fees in connection with any of
the transactions contemplated by this Agreement or the
Option Agreement, except that the Company has engaged,
and will pay a fee or commission to, Prudential
Securities Incorporated ("Prudential") as set forth on
Exhibit 3.7.
3.8. Absence of Certain Changes or Events.
(a) Except as may be set forth in Section 3.8(a) of the
Company Disclosure Schedule, (i) since June 30, 1996, no
event, circumstance or condition has occurred or has
failed to occur which has caused, or is reasonably likely
to cause, individually or in the aggregate, a Material
Adverse Effect on the Company, and (ii) since June 30,
1996, the Company and its Subsidiaries have carried on
their respective businesses in the ordinary course
consistent with their past practices (excluding the
execution of this Agreement and related matters).
(b) Except as set forth in Section 3.8(b)
of the Company Disclosure Schedule, since June 30, 1996,
neither the Company nor any of its Subsidiaries has (i)
increased the wages, salaries, compensation, pension, or
other fringe benefits or perquisites payable to any
executive officer, employee, or director from the amount
thereof in effect as of June 30, 1996 (which amounts have
been previously disclosed to Parent) other than increases
as would be permitted under Section 5.1 hereof, granted
any severance or termination pay, entered into any
contract to make or grant any severance or termination
pay, or paid any bonus other than year-end bonuses for
fiscal 1996 as listed in Section 3.8(b) of the Company
Disclosure Schedule, (ii) suffered any strike, work
stoppage, slow-down or other labor disturbance, (iii)
been a party to a collective bargaining agreement,
contract or other agreement or understanding with a labor
union or organization, or (iv) to the Best Knowledge of
the Company, had any union organizing activities.
3.9. Legal Proceedings. Except as set forth
in Section 3.9 of the Company Disclosure Schedule,
neither the Company nor any of its Subsidiaries is a
party to any, and there are no pending or, to the Best
Knowledge of the Company, threatened, legal,
administrative, arbitral or other proceedings, claims,
actions or governmental or regulatory investigations of
any nature against the Company or any of its Subsidiaries
or challenging the validity or propriety of the
transactions contemplated by this Agreement as to which
in either case there is a reasonable probability of an
adverse determination and which, if adversely determined,
would, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect on the Company
or materially impair the ability of the Company or Parent
to consummate the transactions contemplated hereby.
There is no injunction, order, judgment, decree, or
regulatory restriction imposed upon the Company or any of
its Subsidiaries or any of their respective assets or
properties which has had, or could reasonably be expected
to have, a Material Adverse Effect on the Company.
3.10. Taxes. (a) Except as set forth in
Section 3.10(a) of the Company Disclosure Schedule, each
of the Company and its Subsidiaries has (i) duly and
timely filed or will duly and timely file (including
applicable extensions granted without penalty) all Tax
Returns (as hereinafter defined) required to be filed at
or prior to the Effective Time, and such Tax Returns are
true, correct and complete in all material respects, and
(ii) paid in full or made adequate provision in the
financial statements of the Company (in accordance with
GAAP) for all Taxes (as hereinafter defined) and will pay
in full or make adequate provision for all Taxes. No
deficiencies for any Taxes have been proposed, asserted,
assessed or, to the Best Knowledge of the Company,
threatened against or with respect to the Company or any
of its Subsidiaries. Except as set forth in Section
3.10(a) of the Company Disclosure Schedule, (i) there are
no liens for Taxes upon the assets of either the Company
or its Subsidiaries except for statutory liens for
current Taxes not yet due, (ii) neither the Company nor
any of its Subsidiaries has requested any extension of
time within which to file any Tax Returns in respect of
any fiscal year which have not since been filed and no
request for waivers of the time to assess any Taxes are
pending or outstanding, (iii) with respect to each
taxable period of the Company and its Subsidiaries, the
federal and state income Tax Returns of the Company and
its Subsidiaries have been audited by the Internal
Revenue Service (the "IRS") or appropriate state tax
authorities or the time for assessing and collecting
income Tax with respect to such taxable period has closed
and such taxable period is not subject to review, (iv)
neither the Company nor any of its Subsidiaries has filed
or been included in a combined, consolidated or unitary
income Tax Return other than one in which the Company was
the parent of the group filing such Tax Return, (v)
neither the Company nor any of its Subsidiaries is a
party to any agreement providing for the allocation or
sharing of Taxes (other than the allocation of federal
income taxes as provided by Treasury regulation Section
1.1552-1(a)(1)) or indemnification for Taxes (including
without limitation, with respect to the spin-off of WLNY-
TV, Inc. ("WLNY")), (vi) neither the Company nor any of
its Subsidiaries is required to include in income any
adjustment pursuant to Section 481(a) of the Code (or any
similar or corresponding provision or requirement of
state, local or foreign income Tax law), by reason of the
voluntary change in accounting method (nor has any taxing
authority proposed in writing any such adjustment or
change of accounting method), (vii) neither the Company
nor any of its Subsidiaries has filed a consent pursuant
to Section 341(f) of the Code, (viii) neither the Company
nor any of its Subsidiaries has made any payment or will
be obligated to make any payment (by contract or
otherwise) which will not be deductible by reason of
Section 280G of the Code, (ix) neither the Company nor
any of its Subsidiaries has undergone an "ownership
change" within the meaning of Section 382 of the Code,
(x) neither the Company nor any of its Subsidiaries has
any losses which are subject to a "separate return
limitation year" limitation within the meaning of
Treasury regulation Section 1.1502, and (xi) each of the
Company and its Subsidiaries has complied and will comply
with all applicable laws, rules and regulations relating
to the payment and withholding of Taxes and has, within
the time and in the manner prescribed by law, withheld
from employee wages and paid over to the proper
governmental authorities all amounts required to be so
withheld and paid over under all applicable laws.
(b) Except as set forth in Section
3.10(b) of the Company Disclosure Schedule, neither the
Company nor any of its Subsidiaries owns, directly or
indirectly (including, without limitation, through
partnerships, corporations, trusts or other entities),
interests in real property ("Real Property Interests")
situated in (A) New York State, which by reason of the
Merger would be subject to the New York State Real
Property Transfer Tax (the "New York Transfer Taxes"), or
(B) any state other than New York State which by reason
of the Merger would be subject to any tax similar to the
New York Transfer Taxes. For purposes of this Section
3.10(b), Real Property Interests include, without
limitation, titles in fee, leasehold interests,
beneficial interests, encumbrances, development rights or
any other interests with the right to use or occupy real
property or the right to receive rents, profits or other
income derived therefrom, or any options or contracts to
purchase real property.
(c) As of June 30, 1996, the Company had
federal net operating loss carryforwards of approximately
$123,400,000 and state net operating loss carryforwards
of the approximate amounts set forth in Section 3.10(c)
of the Company Disclosure Schedule.
(d) For purposes of this Agreement,
"Taxes" shall mean all taxes, charges, fees, levies,
penalties or other assessments imposed by any United
States federal, state, local or foreign taxing authority,
including, but not limited to income, use, ad valorem,
luxury, excise, property, sales, transfer, franchise,
payroll, withholding, social security or other taxes,
including any interest, penalties or additions
attributable thereto.
(e) For purposes of this Agreement, "Tax
Return" shall mean any return, report, information return
or other document (including any related or supporting
information) with respect to Taxes.
3.11. Employees. (a) Section 3.11(a) of the
Company Disclosure Schedule sets forth a true and
complete list of each employee benefit plan, arrangement
or agreement (including, without limitation, each
employment, severance and similar agreement) that is
maintained or contributed to or required to be
contributed to as of the date of this Agreement (the
"Plans") by the Company or any of its Subsidiaries or by
any trade or business, whether or not incorporated (an
"ERISA Affiliate"), all of which together with the
Company would be deemed a "single employer" within the
meaning of Section 4001 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), for the
benefit of any employee or former employee of the
Company, any of its Subsidiaries or any ERISA Affiliate.
(b) The Company has heretofore delivered
to Parent true and complete copies of each of the Plans
and all related documents, including but not limited to
(i) the actuarial report for such Plan (if applicable)
for each of the last two years, and (ii) the most recent
determination letter from the IRS (if applicable) for
such Plan.
(c) Except as set forth in Section
3.11(c) of the Company Disclosure Schedule, (i) each of
the Plans has been operated and administered in all
material respects in accordance with its terms and
applicable law, including but not limited to ERISA and
the Code, (ii) each of the Plans intended to be
"qualified" within the meaning of Section 401(a) of the
Code either (1) has received a favorable determination
letter from the IRS, or (2) is or will be the subject of
an application for a favorable determination letter, and
the Company is not aware of any circumstances likely to
result in the revocation or denial of any such favorable
determination letter, (iii) with respect to each Plan
which is subject to Title IV of ERISA, the present value
of accrued benefits under such Plan, based upon the
actuarial assumptions used for funding purposes in the
most recent actuarial report prepared by such Plan's
actuary with respect to such Plan, did not, as of its
latest valuation date, exceed the then current value of
the assets of such Plan allocable to such accrued
benefits, (iv) no Plan provides benefits, including
without limitation death or medical benefits (whether or
not insured), with respect to current or former employees
of the Company, its Subsidiaries or any ERISA Affiliate
beyond their retirement or other termination of service,
other than (w) coverage mandated by applicable law, (x)
death benefits or retirement benefits under any "employee
pension plan," as that term is defined in Section 3(2) of
ERISA, (y) deferred compensation benefits accrued as
liabilities on the books of the Company, its Subsidiaries
or the ERISA Affiliates or (z) benefits the full cost of
which is borne by the current or former employee (or his
beneficiary), (v) no liability under Title IV of ERISA
has been incurred by the Company, its Subsidiaries or any
ERISA Affiliate that has not been satisfied in full, and
no condition exists that presents a material risk to the
Company, its Subsidiaries or an ERISA Affiliate of
incurring a material liability thereunder, (vi) no Plan
is a "multiemployer pension plan," as such term is
defined in Section 3(37) of ERISA, (vii) all
contributions or other amounts payable by the Company,
its Subsidiaries or any ERISA Affiliates as of the
Effective Time with respect to each Plan in respect of
current or prior plan years have been paid or accrued in
accordance with GAAP and Section 412 of the Code, (viii)
neither the Company, its Subsidiaries nor any ERISA
Affiliate has engaged in a transaction in connection with
which the Company, its Subsidiaries or any ERISA
Affiliate could be subject to either a civil penalty
assessed pursuant to Section 409 or 502(i) of ERISA or a
tax imposed pursuant to Section 4975 or 4976 of the Code,
(ix) there are no pending, or, to the Best Knowledge of
the Company, threatened or anticipated claims (other than
routine claims for benefits) by, on behalf of or against
any of the Plans or any trusts related thereto and (x)
the consummation of the transactions contemplated by this
Agreement will not (A) entitle any current or former
employee or officer of the Company or any ERISA Affiliate
to severance pay, termination pay or any other payment,
except as expressly provided in this Agreement or (B)
accelerate the time of payment or vesting or increase the
amount of compensation due any such employee or officer.
3.12. Company Information. The information
provided in writing by the Company relating to the
Company and its Subsidiaries to be contained in the Proxy
Statement and in the registration statement on Form S-4
(the "S-4") of which the Proxy Statement will be included
as a prospectus, or in any other document filed with any
Governmental Entity in connection herewith, will not
contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements
therein, in light of the circumstances in which they are
made, not misleading.
3.13. Compliance with Applicable Law. The
Company and each of its Subsidiaries hold, and have at
all times held, all material licenses, registrations,
franchises, permits and authorizations, or written
exemptions therefrom, necessary for the lawful conduct of
their respective businesses under and pursuant to all,
and have complied with and are not in default in any
respect under any, applicable law, statute, order, rule,
regulation, policy and/or guideline of any Governmental
Entity relating to the Company or any of its Subsidiaries
(including, without limitation, each statute, rule or
regulation set forth under the caption "Regulatory
Matters" contained in the 10-K), except where the failure
to hold such license, franchise, permit or authorization
or such noncompliance or default has not had and would
not, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect on the Company,
and neither the Company nor any of its Subsidiaries knows
of, or has received any notice of, any material
violations of any of the above.
3.14. Certain Contracts. (a) Except as set
forth in Section 3.14(a) of the Company Disclosure
Schedule or in the exhibit index to the 10-K, neither the
Company nor any of its Subsidiaries is a party to or is
bound by any contract, arrangement, commitment or
understanding (whether written or oral) (i) with respect
to the employment of any directors, officers, employees
or consultants which, solely in the case of consultants,
provide for payments in excess of $100,000 per annum or
cannot be terminated upon 30 days' or less notice without
penalty, (ii) which, upon the consummation of the
transactions contemplated by this Agreement will (either
alone or upon the occurrence of any additional acts or
events) result in any payment (whether of severance pay
or otherwise) becoming due from Parent, the Company, the
Surviving Corporation or any of their respective
Subsidiaries to any director, officer or employee
thereof, (iii) which is a material contract (as defined
in Item 601(b)(10) of Regulation S-K of the SEC) to be
performed after the date of this Agreement, (iv) which is
a contract or agreement not otherwise described by clause
(iii) hereof involving the payment of more than $100,000
per annum, (v) which materially restricts the conduct of
any line of business by the Company or any of its
Subsidiaries or (vi) under which any of the benefits will
be increased, or the vesting of the benefits will be
accelerated, by the occurrence of any of the transactions
contemplated by this Agreement, or the value of any of
the benefits of which will be calculated on the basis of
any of the transactions contemplated by this Agreement.
Each contract, arrangement, commitment or understanding
of the type described in this Section 3.14(a), whether or
not set forth in Section 3.14(a) of the Company
Disclosure Schedule or in the exhibit index to the 10-K,
is referred to herein as a "Company Contract". The
Company has previously delivered to Parent true and
correct copies of each Company Contract.
(b) Except as set forth in Section
3.14(b) of the Company Disclosure Schedule, (i) each
Company Contract is valid and binding and in full force
and effect, (ii) the Company and each of its Subsidiaries
have in all material respects performed all obligations
required to be performed by it to date under each Company
Contract, except where such noncompliance, individually
or in the aggregate, has not had and would not be
reasonably likely to have a Material Adverse Effect on
the Company, (iii) no event or condition exists which
constitutes or, after notice or lapse of time or both,
would constitute, a material default on the part of the
Company or any of its Subsidiaries under any such Company
Contract, except where such default, individually or in
the aggregate, has not had and would not be reasonably
likely to have a Material Adverse Effect on the Company
and (iv) no other party to such Company Contract is, to
the Best Knowledge of the Company, in default in any
respect thereunder, except where such default,
individually or in the aggregate, has not had and would
not be reasonably likely to have a Material Adverse
Effect on the Company.
3.15. SEC Reports. The Company has previously
made available to Parent an accurate and complete copy of
each (a) final registration statement, prospectus,
report, schedule and definitive proxy statement filed
since December 1, 1993 by the Company with the SEC
pursuant to the Securities Act of 1933, as amended (the
"Act"), or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or the rules and
regulations of the SEC (the "Company Reports") and (b)
communication mailed by the Company to its shareholders
since December 1, 1993, and no such Company Report or
communication contained any untrue statement of a
material fact or omitted to state any material fact
required to be stated therein or necessary in order to
make the statements therein, in light of the
circumstances in which they were made, not misleading,
except that information as of a later date shall be
deemed to modify information as of an earlier date. The
Company has timely filed all Company Reports and other
documents required to be filed by it pursuant to the Act
and the Exchange Act, and, as of their respective dates,
all Company Reports complied in all material respects
with the published rules and regulations of the SEC with
respect thereto.
3.16. Undisclosed Liabilities. Except (a) as
set forth in Section 3.16 of the Company Disclosure
Schedule, (b) for those liabilities that are fully
reflected or reserved against on the consolidated balance
sheet of the Company and its Subsidiaries as of June 30,
1996, (c) for expenses incurred in connection with the
transactions contemplated by this Agreement and (d) for
liabilities incurred in the ordinary course of business
consistent with past practice since June 30, 1996 that,
either alone or when combined with all similar
liabilities, have not had, and could not reasonably be
expected to have, a Material Adverse Effect on the
Company, neither the Company nor any of its Subsidiaries
has incurred any liability of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and
whether due or to become due).
3.17. State Takeover Laws. Assuming the
accuracy of the representation set forth in Section 4.14,
the Company has taken all such actions so that the
provisions of Section 912 of BCL will not apply to this
Agreement or any of the transactions contemplated hereby,
and no other state takeover law imposes requirements on
this Agreement or the transactions contemplated hereby.
3.18. Property. Each of the Company and its
Subsidiaries has good and marketable title free and clear
of all liens, encumbrances, mortgages, pledges, charges,
defaults or equitable interests to all of the properties
and assets, real and personal, tangible or intangible,
which, individually or in the aggregate, are material,
and which are reflected on the balance sheet of the
Company as of June 30, 1996 or acquired after such date,
except for (i) liens for taxes not yet due and payable,
(ii) such imperfections of title, easements and
encumbrances, if any, as are not material in character,
amount or extent or (iii) dispositions and encumbrances
of, or on, such properties or assets for adequate
consideration in the ordinary course of business. All
leases pursuant to which the Company or any Subsidiary of
the Company, as lessee, leases real or personal property
which, individually or in the aggregate, are material are
valid and enforceable in accordance with their respective
terms and neither the Company nor any of its Subsidiaries
nor, to the Best Knowledge of the Company, any other
party thereto is in default in any material respect
thereunder.
3.19. Reorganization. The Company has no
reason to believe that the Merger will fail to qualify as
a reorganization under Section 368(a) of the Code.
3.20. Insurance. The Company and each of its
Subsidiaries maintain insurance in amounts reasonably
necessary for their operations and, to the Best Knowledge
of the Company, similar in scope and coverage to that
maintained by other entities engaging in the same
businesses. Since June 30, 1996, neither the Company nor
any of its Subsidiaries have received any notice of a
premium increase or cancellation with respect to any of
its insurance policies or bonds, and since December 31,
1993, neither the Company nor any of its Subsidiaries has
been refused any insurance coverage sought or applied
for, and the Company has no reason to believe that
existing insurance coverage cannot be renewed as and when
the same shall expire, upon terms and conditions as
favorable as those presently in effect, other than
possible increases in premiums or unavailability in
coverage that have not resulted from any extraordinary
loss experience of the Company or any Subsidiary of the
Company.
3.21. Intellectual Property. Except as set
forth in Section 3.21 of the Company Disclosure Schedule,
the Company and its Subsidiaries own or possess all
trademarks, service marks, trade names, licenses,
copyrights and proprietary or other confidential
information currently employed by them in connection with
their respective businesses, and neither the Company nor
any such Subsidiary has received any notice of
infringement of or conflict with asserted rights of any
third party with respect to any of the foregoing which,
individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would be
reasonably likely to result in a Material Adverse Effect
on the Company.
3.22 Environmental Matters. (a) Except as
set forth in Section 3.22(a) of the Company Disclosure
Schedule, each of the Company and its Subsidiaries is in
material compliance with all applicable Environmental
Laws and with the requirements set forth in Section 8.3
of the Agreement of Sale, dated August 28, 1995,
regarding the purchase by a Subsidiary of the Company of
real property located in New Jersey (the "New Jersey
Property"). Except as set forth in Section 3.22(a) of
the Company Disclosure Schedule, neither the Company nor
any of its Subsidiaries has received any communication
(written or oral), whether from a Governmental Entity,
citizens group, employee or otherwise, that alleges that
the Company or any of its Subsidiaries is not in such
material compliance, and to the Best Knowledge of the
Company, there are no circumstances that may prevent or
interfere with such material compliance in the future.
There has been no change in the use of the New Jersey
Property since the closing of the Company's purchase
thereof in November, 1995.
(b) Except as set forth in Section
3.22(b) of the Company Disclosure Schedule, there is no
Environmental Claim pending or, to the Best Knowledge of
the Company, threatened against the Company or any of its
Subsidiaries or, to the Best Knowledge of the Company,
against any person or entity whose liability for any
Environmental Claim the Company or any of its
Subsidiaries has or may have retained or assumed either
contractually or by operation of law.
(c) Except as set forth in Section
3.22(c) of the Company Disclosure Schedule, there are no
past or present actions, activities, circumstances,
conditions, events or incidents, including, without
limitation, the release, emission, discharge or disposal
of any Material of Environmental Concern, that could form
the basis of any material Environmental Claim against the
Company or any of its Subsidiaries or, to the Best
Knowledge of the Company, against any person or entity
whose liability for any Environmental Claim the Company
or any of its Subsidiaries has or may have retained or
assumed either contractually or by operation by law.
(d) As used herein the term,
"Environmental Claim" means any notice (written or oral)
by any person or entity alleging potential liability
(including, without limitation, potential liability for
investigatory costs, cleanup costs, governmental response
costs, natural resources damages, property damages,
personal injuries, or penalties) arising out of, based on
or resulting from (i) the presence, or release into the
environment, of any Material of Environmental Concern at
any location that is owned or operated by the Company or
any of its Subsidiaries or (ii) circumstances forming the
basis of any violation, or alleged violation, of any
Environmental Law.
As used herein the term, "Environmental Laws"
means all federal, state, local and foreign laws and
regulations relating to pollution or protection of human
health or the environment (including, without limitation,
ambient air, surface water, ground water, land surface or
subsurface strata), including, without limitation, laws
and regulations relating to emissions, discharges,
releases or threatened releases of Materials of
Environmental Concern, or otherwise relating to the
manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of
Environmental Concern.
As used herein the term, "Materials of
Environmental Concern" means chemicals, pollutants,
contaminants, wastes, toxic substances, petroleum and
petroleum products.
3.23. Contracts and Leases. (a) Except where
the failure, individually or in the aggregate, to be true
and correct has not had and would not be reasonably
likely to have a Material Adverse Effect on the Company,
all of the following are true and correct: (i) all
Contracts (as defined in the 10-K) and all leases (the
"Leases") pursuant to which the Company or any of its
Subsidiaries, as lender, lessor or sublessor, finances,
leases or subleases automobiles, have been duly executed
by a borrower or lessee, as the case may be, of legal
capacity, are enforceable against the borrower or the
lessee, as the case may be, in accordance with their
terms (except as enforcement thereof may be limited by
bankruptcy, insolvency or other similar laws affecting
the enforcement of creditors' rights generally and by
general principles of equity (whether applied in a
proceeding in equity or at law)), and conform to all
applicable Regulations (as defined below), (ii) the
Documents (as defined below) were, upon origination or
purchase of the Contract or Lease, as the case may be,
and currently are in compliance with applicable
Regulations and are complete in all material respects,
(iii) there exist no facts or circumstances which would
entitle an Investor (as defined below) to demand the
repurchase of a Contract, and (iv) no event or condition
exists which constitutes or, after notice or lapse of
time or both, would constitute, a material default on the
part of the Company or any of its Subsidiaries under any
Document entered into with a Lender (as defined in the
10-K) in connection with a Lease.
(b) As used herein, the term "Regulations
means all (i) Federal, state and local laws, rules and
regulations with respect to the origination, purchase,
sale, pooling, servicing, subservicing, master servicing
or filing of claims in connection with a Contract or
Lease, (ii) the responsibilities and obligations set
forth in any agreement between the Company or any of its
Subsidiaries and any purchaser of a Contract (an
"Investor"), any trust, corporation, partnership or other
entity (a "Securitization Entity") which holds Contracts
in connection with a Securitization Transaction, any
Affiliate (as such term is defined under the rules and
regulations of the SEC) of the Company which is the
issuer or depositor of securities issued in a
Securitization Transaction (a "Securitization Issuer") or
any entity which is a trustee for any Securitization
Transaction (a "Securitization Trustee"), and (iii) the
laws, rules, regulations, guidelines, handbooks and other
requirements of an Investor, Securitization Entity,
Securitization Issuer or Securitization Trustee.
(c) As used herein, the term "Documents"
means the agreements, instruments, certificates, or other
documents at any time evidencing, governing, executed in
connection with, or as security for, or otherwise
relating to, a Contract or Lease, and all amendments,
modifications, renewals, extensions, rearrangements, and
substitutions with respect to any of the foregoing.
3.24 Securitization Transactions. Except
where the failure, individually or in the aggregate, to
be true and correct has not had and would not be
reasonably likely to have a Material Adverse Effect on
the Company, all of the following are true and correct:
(a) each Affiliate of the Company which is the servicer
(a "Securitization Servicer") of any outstanding
transaction under which the Company or any of its
Affiliates sold or pledged Contracts in a securitization
registered or not registered under the Act (a
"Securitization Transaction") has complied with all
agreements and all conditions to be performed or
satisfied by it with respect to all agreements and
arrangements pursuant to which it is bound under such
Securitization Transaction (such agreements and
arrangements are collectively referred to as the
"Securitization Instruments"), (b) each Securitization
Issuer, Securitization Trustee and Securitization
Servicer has performed all of its respective obligations
under the Securitization Instruments and, if applicable,
under the Exchange Act or any other existing law relating
to Securitization Transactions, and has made all filings
required to be made by or under the Exchange Act, (c) no
Securitization Issuer, Securitization Trustee or
Securitization Servicer has taken any action which would
adversely affect the characterization or tax treatment
for federal, state or local income or franchise tax
purposes, of any Securitization Entity or any securities
issued in a Securitization Transaction, and all required
federal, state and local tax and information returns
relating to any Securitization Transaction have been
properly filed, and (d) there is no breach or violation
of any representation, warranty or covenant made by the
Company, any Affiliate of the Company, or any other
person pursuant to the Securitization Instruments. No
Securitization Issuer, Securitization Trustee, or
Securitization Servicer has taken any action which would
cause any Securitization Entity to be registered as an
investment company pursuant to the Investment Company Act
of 1940, as amended (the "Investment Company Act"), or
which would cause any Securitization Entity to be
"controlled by" an investment company within the meaning
of the Investment Company Act.
3.25 Affiliated Party Transactions. Except as
set forth in Section 3.25 of the Company Disclosure
Schedule, no director or officer of the Company or any of
its Subsidiaries, nor any of their respective Affiliates
(i) has any ownership interest directly or indirectly, in
any competitor, supplier or customer of the Company or
any of its Subsidiaries; (ii) has any outstanding loan or
other extension of credit to or from the Company or any
of its Subsidiaries; (iii) is a party to, or has any
interest in, any contract or agreement with the Company
or any of its Subsidiaries; or (iv) has engaged in any
transaction with the Company or any of its Subsidiaries
during the periods covered by the financial statements
referred to in Section 3.6.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT
Parent hereby represents and warrants to the
Company as follows:
4.1. Corporate Organization. (a) Parent is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Florida. Parent
has the corporate power and authority to own or lease all
of its properties and assets and to carry on its business
as it is now being conducted, and is duly licensed or
qualified to do business in each jurisdiction in which
the nature of the business conducted by it or the
character or location of the properties and assets owned
or leased by it makes such licensing or qualification
necessary, except where the failure to be so licensed or
qualified would not have a Material Adverse Effect on
Parent. Parent is duly registered as a bank holding
company under the BHC Act.
(b) Upon its formation, Merger Sub will
be a corporation duly organized, validly existing and in
good standing under the laws of the State of New York.
Each of Parent's Subsidiaries that is a "Significant
Subsidiary" (as such term is defined in Regulation S-X
promulgated by the SEC) is duly organized, validly
existing and in good standing under the laws of the
jurisdiction of its incorporation. Each Significant
Subsidiary of Parent has the corporate power and
authority to own or lease all of its properties and
assets and to carry on its business as it is now being
conducted, and is duly licensed or qualified to do
business in each jurisdiction in which the nature of the
business conducted by it or the character or location of
the properties and assets owned or leased by it makes
such licensing or qualification necessary, except where
the failure to be so licensed or qualified would not have
a Material Adverse Effect on Parent.
4.2. Capitalization. (a) As of December 31,
1996, the authorized capital stock of Parent consists of
400,000,000 shares of Parent Common Stock and 20,000,000
shares of preferred stock, par value $0.10 per share
("Parent Preferred Stock"). As of December 31, 1996,
there were (x) 189,668,922 shares of Parent Common Stock
issued and outstanding, (y) 8,489 shares of Parent
Preferred Stock issued and outstanding, which have been
designated as Series B Preferred Stock, (z) no shares of
Parent Company Stock held in Parent's treasury and (zz)
8,000,000 shares of Parent Common Stock issued to the
Parent rabbi trust. As of December 31, 1996, no shares
of Parent Common Stock or Parent Preferred Stock were
reserved for issuance, except that (w) 11,094,645 shares
of or held by Parent Common Stock were reserved for
issuance pursuant to Parent's Shareholder Investment
Plan, Employee Stock Purchase Plan, BEST Plan, Management
Plan and Retirement Plan and the Parent rabbi trust
plans, (x) 16,033,233 shares of Parent Common Stock were
reserved for issuance upon the exercise of stock options
pursuant to the Parent 1989 Long Term Incentive Plan, (y)
2,000,000 shares of Parent Junior Participating Preferred
Stock were reserved for issuance upon exercise of the
rights (the "Parent Rights") distributed to holders of
Parent Common Stock pursuant to the Shareholder Rights
Agreement, dated as of February 21, 1990, between Parent
and First Chicago Trust Company of New York, as Rights
Agent (the "Rights Agreement"), (z) 44,510 shares of
Parent Common Stock were reserved for issuance upon
conversion of issued and outstanding shares of Parent
Preferred Stock. All of the issued and outstanding
shares of Parent Common Stock and Parent Preferred Stock
have been duly authorized and validly issued and are
fully paid, nonassessable and free of preemptive rights,
with no personal liability attaching to the ownership
thereof. As of December 31, 1996, except as referred to
above or reflected in Section 4.2(a) of the Disclosure
Schedule which is being delivered by Parent to the
Company herewith (the "Parent Disclosure Schedule") and
except for the Rights Agreement, Parent does not have and
is not bound by any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any
shares of Parent Common Stock or Parent Preferred Stock
or any other equity securities of Parent or any
securities representing the right to purchase or
otherwise receive any shares of Parent Common Stock or
Parent Preferred Stock. The shares of Parent Common
Stock to be issued pursuant to the Merger will be duly
authorized and validly issued and, at the Effective Time,
all such shares will be fully paid, nonassessable and
free of preemptive rights, with no personal liability
attaching to the ownership thereof.
(b) Except as set forth in Section 4.2(b)
of the Parent Disclosure Schedule, Parent owns, directly
or indirectly, all of the issued and outstanding shares
of capital stock of each of the Significant Subsidiaries
of Parent, free and clear of all liens, charges,
encumbrances and security interests whatsoever, and all
of such shares are duly authorized and validly issued and
are fully paid, nonassessable and free of preemptive
rights, with no personal liability attaching to the
ownership thereof. As of the date of this Agreement, no
Significant Subsidiary of Parent has or is bound by any
outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character with any party
that is not a direct or indirect Subsidiary of Parent
calling for the purchase or issuance of any shares of
capital stock or any other equity security of such
Significant Subsidiary or any securities representing the
right to purchase or otherwise receive any shares of
capital stock or any other equity security of such
Significant Subsidiary.
4.3. Authority; No Violation. (a) Parent has
full corporate power and authority to execute and deliver
this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby have been duly and validly approved
by the Board of Directors of Parent, and, except as set
forth in Section 4.3(b), no other corporate proceedings
on the part of Parent are necessary to consummate the
transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by Parent
and (assuming due authorization, execution and delivery
by the Company) constitutes a valid and binding
obligation of Parent, enforceable against Parent in
accordance with its terms, except as enforcement may be
limited by general principles of equity whether applied
in a court of law or a court of equity and by bankruptcy,
insolvency and similar laws affecting creditors' rights
and remedies generally.
(b) Upon its formation, Merger Sub will
have full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby will be duly and validly approved by
the Board of Directors of Merger Sub and by Parent as the
sole shareholder of Merger Sub, and, upon such approval,
no other corporate proceedings on the part of Merger Sub
will be necessary to consummate the transactions
contemplated hereby. This Agreement will be duly and
validly executed and delivered by Merger Sub and
(assuming due authorization, execution and delivery by
the Company) will constitute a valid and binding
obligation of Merger Sub, enforceable against Merger Sub
in accordance with its terms, except as enforcement may
be limited by general principles of equity whether
applied in a court of law or a court of equity and by
bankruptcy, insolvency and similar laws affecting
creditors' rights and remedies generally.
(c) Except as set forth in Section 4.3(c)
of the Parent Disclosure Schedule, neither the execution
and delivery of this Agreement by Parent or Merger Sub,
nor the consummation by Parent or Merger Sub of the
transactions contemplated hereby, nor compliance by
Parent or Merger Sub with any of the terms or provisions
hereof, will (i) violate any provision of the Certificate
of Incorporation or By-Laws of Parent, or the articles of
incorporation or by-laws or similar governing documents
of Merger Sub or (ii) assuming that the consents and
approvals referred to in Section 4.4 are duly obtained,
(x) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction
applicable to Parent, Merger Sub or any of Parent's
Subsidiaries or any of their respective properties or
assets, or (y) violate, conflict with, result in a breach
of any provision of or the loss of any benefit under,
constitute a default (or an event which, with notice or
lapse of time, or both, would constitute a default)
under, result in the termination of or a right of
termination or cancellation under, accelerate the
performance required by, or result in the creation of any
lien, pledge, security interest, charge or other
encumbrance upon any of the respective properties or
assets of Parent, Merger Sub or any of Parent's
Subsidiaries under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed
of trust, license, lease, agreement or other instrument
or obligation to which Parent, Merger Sub or any of
Parent's Subsidiaries is a party, or by which they or any
of their respective properties or assets may be bound or
affected, except (only in the case of clause (y) above)
for such violations, conflicts, breaches or defaults
which either individually or in the aggregate will not
have or be reasonably likely to have a Material Adverse
Effect on Parent.
4.4. Consents and Approvals. Except for (a)
the filing of applications and notices, as applicable,
with the Federal Reserve Board under the BHC Act and
approval of such applications and notices, (b) the filing
with the SEC of the S-4, (c) the filing of the
Certificate of Merger with the Secretary pursuant to the
BCL, (d) review of this Agreement and the transactions
contemplated hereby by the DOJ and the FTC and any
filings or notifications in connection therewith, (e) the
filing of an application with the NYSE to list the Parent
Common Stock to be issued in the Merger on the NYSE and
the approval of such application, (f) such filings as are
required to be made in connection with the formation of
Merger Sub and (g) such filings, authorizations or
approvals as may be set forth in Section 4.4 of the
Parent Disclosure Schedule, no consents or approvals of
or filings or registrations with any Governmental Entity
or with any third party are necessary in connection with
the execution and delivery by Parent and Merger Sub of
this Agreement and the consummation by Parent and Merger
Sub of the transactions contemplated hereby.
4.5. Reports; Examinations. Except where the
failure of any of the following to be true and correct
would not, individually or in the aggregate, have a
Material Adverse Effect on Parent: (i) each of Parent
and its Subsidiaries has timely filed all material
reports, registrations and statements, together with any
amendments required to be made with respect thereto, that
it was required to file since December 31, 1991 with any
Governmental Entity and has paid all fees and assessments
due and payable in connection therewith; (ii) except for
normal examinations conducted by a Governmental Entity in
the regular course of the business of Parent and its
Subsidiaries, no Governmental Entity has initiated any
proceeding or, to the best knowledge of Parent,
investigation into the business or operations of Parent
or any of its Subsidiaries since December 31, 1991; and
(iii) there is no unresolved material violation,
criticism, or exception by any Governmental Entity with
respect to any report or statement relating to any
examinations of Parent or any of its Subsidiaries.
4.6. Financial Statements. Parent has
previously delivered to the Company copies of (a) the
consolidated balance sheets of Parent and its
Subsidiaries as of December 31, 1994 and 1995 and the
related consolidated statements of income, changes in
shareholders' equity and cash flows for the fiscal years
1993 through 1995, inclusive, as reported in Parent's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 filed with the SEC under the Exchange
Act, in each case accompanied by the audit report of
Xxxxxx Xxxxxxxx LLP, independent public accountants with
respect to Parent, and (b) the unaudited consolidated
balance sheets of Parent and its Subsidiaries as of
September 30, 1996 and September 30, 1995 and the related
unaudited consolidated statements of income, changes in
shareholders' equity and cash flows for the nine-month
periods then ended as reported in Parent's Quarterly
Report on Form 10-Q for the period ended September 30,
1996 filed with the SEC under the Exchange Act. The
December 31, 1995 consolidated balance sheet of Parent
(including the related notes, where applicable) fairly
presents the consolidated financial position of Parent
and its Subsidiaries as of the date thereof, and the
other financial statements referred to in this Section
4.5 (including the related notes, where applicable)
fairly present, and the financial statements of Parent
referred to in Section 6.8 will fairly present (subject,
in the case of the unaudited statements, to recurring
audit adjustments normal in nature and amount), the
results of the consolidated operations and changes in
shareholders' equity and consolidated financial position
of Parent and its Subsidiaries for the respective fiscal
periods or as of the respective dates therein set forth;
each of such statements (including the related notes,
where applicable) comply, and the financial statements of
Parent referred to in Section 6.8 will comply, in all
material respects with applicable accounting requirements
and with the published rules and regulations of the SEC
with respect thereto; and each of such statements
(including the related notes, where applicable) has been,
and the financial statements of Parent referred to in
Section 6.8 will be, prepared in accordance with GAAP
consistently applied during the periods involved, except
as indicated in the notes thereto or, in the case of
unaudited statements, as permitted by Form 10-Q. The
books and records of Parent and its Subsidiaries have
been, and are being, maintained in all material respects
in accordance with GAAP and any other applicable legal
and accounting requirements and reflect only actual
transactions.
4.7. Broker's Fees. Neither Parent nor any of
its Subsidiaries nor any of their respective officers or
directors has employed any broker or finder or incurred
any liability for any broker's fees, commissions or
finder's fees in connection with any of the transactions
contemplated by this Agreement, except that Parent has
engaged, and will pay a fee or commission to, Xxxxxx
Xxxxxxx & Co. Incorporated ("Xxxxxx") in accordance with
the terms of a letter agreement between Xxxxxx and
Parent, a true, complete and correct copy of which has
been previously delivered by Parent to the Company.
4.8. Absence of Certain Changes or Events.
Except as may be set forth in Section 4.8 of the Parent
Disclosure Schedule, since December 31, 1995, no event,
circumstance or condition has occurred or has failed to
occur which has caused, or is reasonably likely to cause,
individually or in the aggregate, a Material Adverse
Effect on Parent.
4.9. Legal Proceedings. Except as set forth
in Section 4.9 of the Parent Disclosure Schedule, neither
Parent nor any of its Subsidiaries is a party to any, and
there are no pending or, to the best of Parent's
knowledge, threatened, legal, administrative, arbitral or
other proceedings, claims, actions or governmental or
regulatory investigations of any nature against Parent or
any of its Subsidiaries or challenging the validity or
propriety of the transactions contemplated by this
Agreement as to which there is a reasonable probability
of an adverse determination and which, if adversely
determined, would, individually or in the aggregate, have
or be reasonably likely to have a Material Adverse Effect
on Parent or materially impair the ability of the Company
or Parent to consummate the transactions contemplated
hereby. There is no injunction, order, judgment, decree,
or regulatory restriction imposed upon the Parent or any
of its Subsidiaries or any of their respective assets or
properties which has had, or could reasonably be expected
to have, a Material Adverse Effect on Parent.
4.10. Parent Information. The information
relating to Parent and its Subsidiaries to be contained
in the S-4, or in any other document filed with any
Governmental Entity in connection herewith, will not
contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements
therein, in light of the circumstances in which they are
made, not misleading.
4.11. Compliance with Applicable Law. Parent
and each of its Subsidiaries hold, and have at all times
held, all material licenses, franchises, permits and
authorizations necessary for the lawful conduct of their
respective businesses under and pursuant to all, and have
complied with and are not in default in any respect under
any, applicable law, statute, order, rule, regulation,
policy and/or guideline of any Governmental Entity
relating to Parent or any of its Subsidiaries, except
where the failure to hold such license, franchise, permit
or authorization or such noncompliance or default would
not, individually or in the aggregate, have or be
reasonably likely to have a Material Adverse Effect on
Parent, and neither Parent nor any of its Subsidiaries
knows of, or has received any notice of, any material
violations of any of the above.
4.12. SEC Reports. Parent has previously made
available to the Company to the extent requested an
accurate and complete copy of each (a) final registration
statement, prospectus, report, schedule and definitive
proxy statement filed since January 1, 1994 by Parent
with the SEC pursuant to the Act or the Exchange Act
(the "Parent Reports") and (b) communication mailed by
Parent to its shareholders since January 1, 1994, and no
such registration statement, prospectus, report,
schedule, proxy statement or communication contained any
untrue statement of a material fact or omitted to state
any material fact required to be stated therein or
necessary in order to make the statements therein, in
light of the circumstances in which they were made, not
misleading, except that information as of a later date
shall be deemed to modify information as of an earlier
date. Parent has timely filed all Parent Reports and
other documents required to be filed by it under the Act
and the Exchange Act, and, as of their respective dates,
all Parent Reports complied in all material respects with
the published rules and regulations of the SEC with
respect thereto.
4.13. Undisclosed Liabilities. Except (a) as
set forth in Section 4.13 of the Parent Disclosure
Schedule, (b) for those liabilities that are fully
reflected or reserved against on the consolidated balance
sheet of Parent and its Subsidiaries as of December 31,
1995, (c) for expenses incurred in connection with the
transactions contemplated by this Agreement, and (d) for
liabilities incurred in the ordinary course of business
consistent with past practice since December 31, 1995
that, either alone or when combined with all similar
liabilities, have not had, and could not reasonably be
expected to have, a Material Adverse Effect on Parent,
neither Parent nor any of its Subsidiaries has incurred
any liability of any nature whatsoever (whether absolute,
accrued, contingent or otherwise and whether due or to
become due).
4.14. Ownership of Company Common Stock.
Except for the Option Agreement, neither Parent nor any
of its affiliates or associates (as such terms are
defined under Section 912 of the BCL), (i) beneficially
own, directly or indirectly, or (ii) is a party to any
agreement, arrangement or understanding for the purpose
of acquiring, holding, voting or disposing of any shares
of capital stock of the Company (other than shares of
Company Common Stock (x) held directly or indirectly in
trust accounts, managed accounts and the like or
otherwise held in a fiduciary capacity that are
beneficially owned by third parties and (y) held by
Parent or any of its Subsidiaries in respect of a debt
previously contracted).
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1. Covenants of the Company. During the
period from the date of this Agreement and continuing
until the Effective Time, except as expressly
contemplated or permitted by this Agreement or with the
prior written consent of Parent, each of the Company and
its Subsidiaries shall carry on its business in the
ordinary course consistent with past practice. The
Company will use all reasonable efforts to (x) preserve
its business organization and that of its Subsidiaries
intact, (y) keep available to itself and Parent the
present services of the employees of the Company and its
Subsidiaries and (z) preserve for itself and Parent the
goodwill of the customers of the Company and its
Subsidiaries and others with whom business relationships
exist. Without limiting the generality of the foregoing,
and except as set forth on Section 5.1 of the Company
Disclosure Schedule or as otherwise contemplated by this
Agreement or consented to in writing by Parent, the
Company shall not, and shall not permit any of its
Subsidiaries to:
(a) solely in the case of the Company,
declare or pay any dividends on, or make other
distributions in respect of, any shares of its capital
stock;
(b) (i) split, combine or reclassify any
shares of its capital stock or issue or authorize or
propose the issuance of any other securities in respect
of, in lieu of or in substitution for the outstanding
shares of its capital stock, or (ii) repurchase, redeem
or otherwise acquire any shares of the capital stock of
the Company, or any securities convertible into or
exercisable for any shares of the capital stock of the
Company;
(c) issue, deliver or sell, or authorize
or propose the issuance, delivery or sale of, any shares
of its capital stock or any securities convertible into
or exercisable for, or any rights, warrants or options to
acquire, any such shares, or enter into any agreement
with respect to any of the foregoing, other than (i) the
issuance of Company Common Stock pursuant to stock
options or similar rights to acquire Company Common Stock
granted pursuant to the Stock Option Plan and outstanding
prior to the date of this Agreement, in each case in
accordance with their present terms and (ii) the Option
Agreement;
(d) amend its Restated Certificate,
By-laws or other similar governing documents;
(e) authorize or permit any of its
officers, directors, employees or agents to directly or
indirectly solicit, initiate or encourage any inquiries
relating to, or the making of any proposal which
constitutes, a "takeover proposal" (as defined below),
or, except to the extent legally required for the
discharge of the fiduciary duties of the Board of
Directors of the Company, (i) recommend or endorse any
takeover proposal, (ii) participate in any discussions or
negotiations with respect to a takeover proposal, or
(iii) provide third parties with any nonpublic
information, relating to any such inquiry or proposal;
provided, however, that the Company may communicate
information about any such takeover proposal to its
shareholders if such communication is required under
applicable law. The Company will immediately cease and
cause to be terminated any existing activities,
discussions or negotiations previously conducted with any
parties other than Parent with respect to any of the
foregoing. The Company will take all actions necessary
or advisable to inform the appropriate individuals or
entities referred to in the first sentence hereof of the
obligations undertaken in this Section 5.1(e). The
Company will notify Parent immediately if any such
inquiries or takeover proposals are received by, any such
information is requested from, or any such negotiations
or discussions are sought to be initiated or continued
with, the Company, and the Company will inform Parent
immediately in writing of all of the relevant details
with respect to the foregoing. As used in this
Agreement, "takeover proposal" shall mean any tender or
exchange offer, proposal for a merger, consolidation or
other business combination involving the Company or any
Subsidiary of the Company or any proposal or offer to
acquire in any manner a substantial equity interest in,
or a substantial portion of the assets of, the Company or
any Subsidiary of the Company other than the transactions
contemplated or permitted by this Agreement and the
Option Agreement;
(f) make any capital expenditures other
than expenses which (i) are made in the ordinary course
of business or are necessary to maintain existing assets
in good repair and (ii) in any event are in an amount of
no more than $25,000 individually and $100,000 in the
aggregate and other than the purchase of automobiles for
sale or lease;
(g) enter into any new line of business;
(h) acquire or agree to acquire, by
merging or consolidating with, or by purchasing a
substantial equity interest in or a substantial portion
of the assets of, or by any other manner, any business or
any corporation, partnership, association or other
business organization or division thereof or otherwise
acquire any assets, which would be material, individually
or in the aggregate, to the Company;
(i) take any action that is intended or
may reasonably be expected to result in any of its
representations and warranties set forth in this
Agreement being or becoming untrue in any material
respect, or in any of the conditions to the Merger set
forth in Article VII not being satisfied, or in a
violation of any provision of this Agreement, except, in
every case, as may be required by applicable law;
(j) change its methods of accounting in
effect at June 30, 1996, except as required by changes in
GAAP as concurred to by the Company's independent
auditors;
(k) (i) except as required by applicable
law or to maintain qualification pursuant to the Code,
adopt, amend, renew or terminate any Plan or any
agreement, arrangement, plan or policy between the
Company or any Subsidiary of the Company and one or more
of its current or former directors, officers or employees
or (ii) except for normal increases in the ordinary
course of business consistent with past practice or
except as required by applicable law, increase in any
manner the compensation or fringe benefits of any
director, officer or employee or pay any benefit not
required by any plan or agreement as in effect as of the
date hereof (including, without limitation, the granting
of stock options, stock appreciation rights, restricted
stock, restricted stock units or performance units or
shares);
(l) take or cause to be taken (or fail to
take or cause to be taken) any action which would
disqualify the Merger as a tax free reorganization under
Section 368 of the Code, provided, however, that nothing
contained herein shall prevent the Company from taking
any action required by the Option Agreement;
(m) other than activities in the ordinary
course of business consistent with past practice, sell,
lease, encumber, assign or otherwise dispose of, or agree
to sell, lease, encumber, assign or otherwise dispose of,
any of its material assets, properties or other rights or
agreements;
(n) other than in the ordinary course of
business consistent with past practice, incur any
indebtedness for borrowed money, assume, guarantee,
endorse or otherwise as an accommodation become
responsible for the obligations of any other individual,
corporation or other entity;
(o) create, renew, amend or terminate or
give notice of a proposed renewal, amendment or
termination of, any material contract, agreement or lease
for goods, services or office space to which the Company
or any of its Subsidiaries is a party or by which any of
them or their respective assets or properties is bound;
or
(p) agree to do any of the foregoing.
5.2. Covenants of Parent. Except as set forth
in Section 5.2 of the Parent Disclosure Schedule or as
otherwise contemplated by this Agreement or consented to
in writing by the Company, Parent shall not, and shall
not permit any of its Subsidiaries to:
(a) solely in the case of Parent, declare
or pay any extraordinary or special dividends on or make
any other extraordinary or special distributions in
respect of any of its capital stock; provided, however,
that nothing contained herein shall prohibit Parent from
increasing the quarterly cash dividend on the Parent
Common Stock;
(b) take any action that is intended or
may reasonably be expected to result in any of its
representations and warranties set forth in this
Agreement being or becoming untrue in any material
respect, or in any of the conditions to the Merger set
forth in Section 7.1 or Section 7.3 not being satisfied,
or in a violation of any provision of this Agreement,
except, in every case, as may be required by applicable
law;
(c) take or cause to be taken (or fail to
take or cause to be taken) any action which would
disqualify the Merger as a tax-free reorganization under
Section 368 of the Code;
(d) amend its Certificate of
Incorporation or By-laws or other governing instrument in
a manner which would adversely affect in any manner the
terms of the Parent Common Stock or the ability of Parent
to consummate the transactions contemplated hereby; or
(e) agree to do any of the foregoing.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1. Regulatory and Other Matters. (a) The
Company and Parent shall promptly prepare and file with
the SEC the S-4, in which the Proxy Statement will be
included as a prospectus. Each of the Company and Parent
shall use all reasonable efforts to have the S-4 declared
effective under the Act as promptly as practicable after
such filing, and the Company shall thereafter mail the
Proxy Statement to its shareholders. Parent and the
Company shall cooperate to ensure that all shares of
Parent Common Stock to be issued in the Merger are
registered with the SEC or are subject to agreements
which provide for such registration.
(b) The Company shall take all steps
necessary to duly call, give notice of, convene and hold
a meeting of its shareholders to be held as soon as is
reasonably practicable after the date on which the S-4 is
declared effective by the SEC for the purpose of voting
upon the approval of this Agreement and the consummation
of the transactions contemplated hereby. The Company
shall, through its Board of Directors, except to the
extent legally required for the discharge of the
fiduciary duties of such board, recommend to its
shareholders approval of this Agreement and the
transactions contemplated hereby.
(c) The parties hereto shall cooperate
with each other and use their best efforts to promptly
prepare and file all necessary documentation, to effect
all applications, notices, petitions and filings, and to
obtain as promptly as practicable all permits, consents,
approvals and authorizations of all third parties and
Governmental Entities which are necessary or advisable to
consummate the transactions contemplated by this
Agreement (it being understood that any amendments to the
S-4 as a consequence of a subsequent proposed merger,
stock purchase or similar acquisition by Parent or any of
its Subsidiaries shall not violate this covenant). The
parties hereto agree that they will consult with each
other with respect to the obtaining of all permits,
consents, approvals and authorizations of all third
parties and Governmental Entities necessary or advisable
to consummate the transactions contemplated by this
Agreement and each party will keep the other apprised of
the status of matters relating to completion of the
transactions contemplated herein.
(d) Parent and the Company shall, upon
request, furnish each other with all information
concerning themselves, their Subsidiaries, directors,
officers and shareholders and such other matters as may
be reasonably necessary or advisable in connection with
the Proxy Statement, the S-4 or any other statement,
filing, notice or application made by or on behalf of
Parent, the Company or any of their respective
Subsidiaries to any Governmental Entity in connection
with the Merger and the other transactions contemplated
by this Agreement.
6.2. Access to Information. (a) Upon
reasonable notice and subject to applicable laws relating
to the exchange of information, the Company shall afford
to the officers, employees, accountants, counsel and
other representatives of Parent, access, during normal
business hours during the period prior to the Effective
Time, to all its properties, books, contracts,
commitments, records, officers, employees, accountants,
counsel and other representatives and, during such
period, the Company shall make available to Parent (i) a
copy of each report, schedule, registration statement and
other document filed or received by it during such period
pursuant to the requirements of applicable Federal or
state laws (other than reports or documents which the
Company is not permitted to disclose under applicable
law) and (ii) all other information concerning its
business, properties and personnel as Parent may
reasonably request. The Company shall not be required to
provide access to or to disclose information where such
access or disclosure would violate or prejudice the
rights of the Company's customers, jeopardize any
attorney-client privilege or contravene any law, rule,
regulation, order, judgment, decree, fiduciary duty or
binding agreement entered into prior to the date of this
Agreement. The parties hereto will make appropriate
substitute disclosure arrangements under circumstances in
which the restrictions of the preceding sentence apply.
(b) Upon reasonable notice and subject to
applicable laws relating to the exchange of information,
Parent shall, and shall cause its Subsidiaries to, afford
to the officers, employees, accountants, counsel and
other representatives of the Company, access, during
normal business hours during the period prior to the
Effective Time, to such information regarding Parent and
its Subsidiaries as shall be reasonably necessary for the
Company to confirm that the representations and
warranties of Parent contained herein are true and
correct and that the covenants of Parent contained herein
have been performed in all material respects. Neither
Parent nor any of its Subsidiaries shall be required to
provide access to or to disclose information where such
access or disclosure would violate or prejudice the
rights of Parent's customers, jeopardize any
attorney-client privilege or contravene any law, rule,
regulation, order, judgment, decree, fiduciary duty or
binding agreement entered into prior to the date of this
Agreement. The parties hereto will make appropriate
substitute disclosure arrangements under circumstances in
which the restrictions of the preceding sentence apply.
(c) All information furnished by a party
to the other party or its representatives pursuant hereto
shall be treated as the sole property of the furnishing
party and, if the Merger shall not occur, each party
receiving information and its representatives shall
return to the furnishing party all of such written
information and all documents, notes, summaries or other
materials containing, reflecting or referring to, or
derived from, such information. Each party receiving
information shall, and shall use its best efforts to
cause its representatives to, keep confidential all such
information, and shall not directly or indirectly use
such information for any competitive or other commercial
purpose. The obligation to keep such information
confidential shall continue for five years from the date
the proposed Merger is abandoned and shall not apply to
(i) any information which (w) was already in the
receiving party's possession prior to the disclosure
thereof by the furnishing party; (x) was then generally
known to the public other than as a result of disclosure
by the receiving party in violation of the provisions
hereof; (y) was already in the receiving party's
possession as a result of the pre-existing business
relationship between the receiving party and the
furnishing party or (z) was disclosed to the receiving
party by a third party not known by the receiving party
to be bound by an obligation of confidentiality or (ii)
disclosures made as required by law. If the receiving
party is requested or required (by oral question or
request for information or documents in legal
proceedings, interrogatories, subpoena, civil
investigative demand or similar process) to disclose any
information concerning the receiving party, the receiving
party will promptly notify the furnishing party of such
request or requirement so that the furnishing party may
seek an appropriate protective order and/or waive the
receiving party's compliance with the provisions or this
Agreement. It is further agreed that, if in the absence
of a protective order or the receipt of a waiver
hereunder the receiving party is nonetheless, in the
opinion of its counsel, compelled to disclose information
concerning the furnishing party to any tribunal or
governmental body or agency or else stand liable for
contempt or suffer other censure or penalty, the
receiving party may disclose such information to such
tribunal or governmental body or agency to the extent
necessary to comply with such order as advised by counsel
without liability hereunder.
(d) No investigation by either of the
parties or their respective representatives shall affect
the representations, warranties, covenants or agreements
of the other set forth herein.
6.3. Legal Conditions to Merger. Each of
Parent and the Company shall, and shall cause its
Subsidiaries to, use their best efforts (a) to take, or
cause to be taken, all actions necessary, proper or
advisable to comply promptly with all legal requirements
which may be imposed on such party or its Subsidiaries
with respect to the Merger and, subject to the conditions
set forth in Article VII hereof, to consummate the
transactions contemplated by this Agreement and (b) to
obtain (and to cooperate with the other party to obtain)
any consent, authorization, order or approval of, or any
exemption by, any Governmental Entity and any other third
party which is required to be obtained by the Company or
Parent or any of their respective Subsidiaries in
connection with the Merger and the other transactions
contemplated by this Agreement (it being understood that
each party shall be responsible for obtaining all such
consents, authorizations, orders or approvals from such
parties with whom it is in contractual privity or from
such Governmental Entities that such party is required to
obtain under the applicable law, statute, order, rule,
regulation, policy and/or guideline), and to comply with
the terms and conditions of such consent, authorization,
order or approval.
6.4. Affiliates. The Company shall use its
best efforts to cause each director, executive officer
and other person who is an "affiliate" (for purposes of
Rule 145 under the Act) of the Company to deliver to the
Parent, as soon as practicable after the date of this
Agreement, a written agreement, in the form of Exhibit
6.4 hereto.
6.5. Employee Benefit Plans. Parent agrees to
use its best efforts to provide to all eligible employees
of the Company who remain employees of the Surviving
Corporation following the Effective Time ("Continuing
Employees") employee welfare and pension benefits
substantially equivalent (in the aggregate) to either (i)
those uniformly provided from time to time to similarly
situated employees of Parent and its Subsidiaries or (ii)
those currently provided by the Company and its
Subsidiaries.
6.6. Indemnification. (a) Following the
Effective Time, Parent shall indemnify, defend and hold
harmless each person who is or was prior to Effective
Time an officer or a director of the Company or any of
its Subsidiaries (each, an "Indemnified Party") against
all losses, expenses (including reasonable attorney's
fees and expenses in advance of the final disposition of
any claim, action, suit, proceeding or investigation to
each Indemnified Party upon receipt of any undertaking
required by applicable law), claims, damages or
liabilities arising out of actions or omissions occurring
on or prior to the Effective Time (including, without
limitation, the transactions contemplated by this
Agreement) to the full extent provided under New York law
and the Restated Certificate and By-laws of the Company
as in effect on the date hereof to the extent any such
provisions are, at the time indemnification pursuant to
this Section 6.6(a) is sought, permitted under New York
law. Any Indemnified Party wishing to claim
indemnification under this Section 6.6, upon learning of
any such claim, action, suit, proceeding or
investigation, shall notify Parent thereof, provided that
the failure to so notify shall not affect the obligations
of Parent under this Section 6.6 except to the extent
such failure to notify materially prejudices Parent.
Parent's obligations under this Section 6.6 continue in
full force and effect for a period of six (6) years from
the Effective Time; provided, however, that all rights to
indemnification in respect of any claim (a "Claim")
asserted or made within such period shall continue until
the final disposition of such Claim.
(b) In connection with its
indemnification obligations hereunder, Parent shall have
the right to assume the defense of any Claim and upon
such assumption Parent shall not be liable to any
Indemnified Party for any legal expenses of other counsel
or any other expenses subsequently incurred by any
Indemnified Party in connection with the defense thereof,
except that if Parent elects not to assume such defense
or counsel for the Indemnified Parties reasonably advises
the Indemnified Parties that there are issues which raise
conflicts of interests between Parent and the Indemnified
Parties, the Indemnified Parties may retain counsel
reasonably satisfactory to them after consultation with
Parent, and Parent shall pay the reasonable fees and
expenses of such counsel for the Indemnified Parties.
Parent shall be obligated pursuant to this paragraph to
pay for only one firm of counsel for all Indemnified
Parties. Parent shall not be liable for any settlement
effected without its prior written consent (which consent
shall not be unreasonably withheld).
(c) The provisions of this Section 6.6
are intended to be for the benefit of, and shall be
enforceable by, each Indemnified Party and his or her
heirs and representatives.
6.7. Stock Exchange Listing. Parent shall use
all reasonable efforts to cause the shares of Parent
Common Stock to be issued in the Merger (other than
shares that may be subject to a registration rights
agreement) to be approved for listing on the NYSE,
subject to official notice of issuance, as of the
Effective Time.
6.8. Subsequent Interim Financial Statements.
As soon as reasonably available, but in no event more
than 45 days after the end of each fiscal quarter ending
after September 30, 1996 (other than the last quarter of
each party's respective fiscal year), each party will
deliver to the other party such delivering party's
Quarterly Report on Form 10-Q, as filed with the SEC
under the Exchange Act, and as soon as reasonably
available, but in no event more than 90 days after the
end of each fiscal year, each party will deliver to the
other party such delivering party's Annual Report on Form
10-K, as filed with the SEC under the Exchange Act.
6.9. Advice of Changes. Parent and the
Company shall promptly advise the other party of any
change or event having a Material Adverse Effect on it or
which it believes would or would be reasonably likely to
cause or constitute a material breach of any of its
representations, warranties or covenants contained
herein. From time to time prior to the Effective Time
(and on the date prior to the Closing Date), each party
will promptly supplement or amend the Disclosure
Schedules delivered in connection with the execution of
this Agreement to reflect any matter which, if existing,
occurring or known at the date of this Agreement, would
have been required to be set forth or described in such
Disclosure Schedules or which is necessary to correct any
information in such Disclosure Schedules which has been
rendered inaccurate thereby. No supplement or amendment
to such Disclosure Schedules shall have any effect for
the purpose of determining satisfaction of the conditions
set forth in Sections 7.2(a) or 7.3(a) hereof, as the
case may be, or the compliance by the Company or Parent,
as the case may be, with the respective covenants and
agreements of such parties contained herein.
6.10. Current Information. During the period
from the date of this Agreement to the Effective Time,
the Company will cause one or more of its designated
representatives to confer on a regular and frequent basis
(not less than monthly) with designated representatives
of Parent and to report the general status of the ongoing
operations of the Company and its Subsidiaries. Each of
the parties will promptly notify the other of any
material change in the normal course of business or in
the operation of the properties of it or any of its
Subsidiaries and of any governmental complaints,
investigations or hearings (or communications indicating
that the same may be contemplated), or the institution or
the threat of significant litigation involving it or any
of its Subsidiaries, and will keep the other fully
informed of such events.
6.11. Merger Sub. Parent shall cause Merger
Sub to be duly organized and to execute and deliver a
letter agreeing to be bound by this Agreement and to take
all necessary action to complete the transactions
contemplated hereby, subject to the terms and conditions
hereof.
6.12. Accountant's Letter. The Company shall
use its reasonable efforts to cause to be delivered to
Parent a letter of its independent public accountants
dated (i) the date on which the S-4 shall become
effective and (ii) a date shortly prior to the Effective
Time, and addressed to Parent, in form and substance
customary for "comfort" letters delivered by independent
accountants in accordance with Statement of Financial
Accounting Standards No. 72.
6.13. Reconciliation of Accounts. As soon as
practicable after the date of this Agreement, the Company
shall reconcile to the general ledger of the Company as
of December 31, 1996 (i) all cash accounts on the books
and records of the Company or its Subsidiaries, (ii) any
accounts on the books and records of the Company or any
of its Subsidiaries having a balance in excess of
$2,000,000 and (iii) any other accounts on the books and
records of the Company representing suspense or any other
items.
6.14. Lease Financing. The Company shall, and
shall cause its Subsidiaries to, use reasonable efforts
to finance all automobile leases originated by the
Company or its Subsidiaries on terms designed to minimize
any pre-payment penalties that could be imposed on the
Company or any of its Subsidiaries.
6.15. Termination of Certain Activities. (a)
Immediately prior to the Effective Time, the Company
shall terminate the management services agreement with
WLNY without further payment by the Company as a result
of such termination.
(b) Immediately prior to the Effective Time,
the Company shall terminate (on terms reasonably
satisfactory to Parent) any activities conducted by the
Company that Parent determines cannot be conducted under
banking laws applicable to Parent or its Subsidiaries.
ARTICLE VII
CONDITIONS PRECEDENT
7.1. Conditions to Each Party's Obligation To
Effect the Merger. The respective obligation of each
party to effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of the
following conditions:
(a) Shareholder Approval. This Agreement
shall have been duly and validly approved and adopted by
the requisite vote of the shareholders of the Company.
(b) NYSE Listing. The shares of Parent
Common Stock which shall be issued to the shareholders of
the Company upon consummation of the Merger (other than
shares that may be subject to a registration rights
agreement) shall have been authorized for listing on the
NYSE, subject to official notice of issuance.
(c) Other Approvals. All regulatory
approvals or notifications required to consummate the
transactions contemplated hereby (including, without
limitation, any approvals required under ISRA and any
notifications under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, but not including
any approvals required under state sales finance laws)
shall have been obtained and shall remain in full force
and effect and all statutory waiting periods in respect
thereof shall have expired (all such approvals and the
expiration of all such waiting periods being referred to
herein as the "Requisite Regulatory Approvals").
(d) S-4. The S-4 shall have become
effective under the Act and shall not be subject to a
stop order or threatened stop order by the SEC.
(e) No Injunctions or Restraints;
Illegality. No order, injunction or decree issued by any
court or agency of competent jurisdiction or other legal
restraint or prohibition (an "Injunction") preventing the
consummation of the Merger or any of the other
transactions contemplated by this Agreement shall be in
effect. No statute, rule, regulation, order, injunction
or decree shall have been enacted, entered, promulgated
or enforced by any Governmental Entity which prohibits,
restricts or makes illegal consummation of the Merger.
7.2. Conditions to Obligations of Parent and
Merger Sub. The obligations of Parent and Merger Sub to
effect the Merger are also subject to the satisfaction or
waiver by Parent at or prior to the Effective Time of the
following conditions:
(a) Representations and Warranties. (I)
The representations and warranties of the Company set
forth in Sections 3.2, 3.3(a), 3.3(b)(ii)(x) and 3.17 of
this Agreement shall be true and correct in all respects
as of the date of this Agreement and (except to the
extent such representations and warranties speak as of an
earlier date) as of the Closing Date as though made on
and as of the Closing Date; and (II) the representations
and warranties of the Company set forth in this Agreement
other than those specifically enumerated in clause (I)
hereof shall be true and correct in all respects as of
the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier
date) as of the Closing Date as though made on and as of
the Closing Date; provided, however, that for purposes of
determining the satisfaction of the condition contained
in this clause (II), no effect shall be given to any
exception in such representations and warranties relating
to materiality or a Material Adverse Effect, and
provided, further, however, that, for purposes of this
clause (II), such representations and warranties shall be
deemed to be true and correct in all respects unless the
failure or failures of such representations and
warranties to be so true and correct, individually or in
the aggregate, represent a Material Adverse Effect on the
Company. Parent shall have received a certificate signed
on behalf of the Company by the Chief Executive Officer
and the Chief Financial Officer of the Company to the
foregoing effect.
(b) Performance of Obligations of the
Company. The Company shall have performed in all
material respects all obligations required to be
performed by it under this Agreement at or prior to the
Closing Date, and Parent shall have received a
certificate signed on behalf of the Company by the Chief
Executive Officer and the Chief Financial Officer of the
Company to such effect.
(c) Consents Under Agreements. The
consent, approval or waiver of each person (other than
the Governmental Entities referred to in Section 7.1(b))
whose consent or approval shall be required in order to
permit the succession by the Surviving Corporation
pursuant to the Merger to any obligation, right or
interest of the Company under any loan or credit
agreement, note, mortgage, indenture, lease, license or
other agreement or instrument shall have been obtained,
except where the failure to obtain such consent, approval
or waiver would not so materially adversely affect the
economic or business benefits of the transactions
contemplated by this Agreement to Parent as to render
inadvisable, in the reasonable good faith judgment of
Parent, the consummation of the Merger.
(d) No Pending Governmental Actions. No
proceeding initiated by any Governmental Entity seeking
an Injunction shall be pending.
(e) Amendment of Contract. The Company
shall have amended the EVRI Agreement to provide that (i)
the additional consideration payable in Class A Common
Stock under Section 3.01(a) thereunder shall instead be
payable in Parent Common Stock on the same terms and
conditions as contained in such Section 3.01(a) and in
the same manner as contemplated by Section 3.01(b)
thereunder and (ii) the maximum consideration payable (in
Parent Common Stock) shall not exceed $2,800,000.
(f) Federal Tax Opinion. Parent shall
have received an opinion of counsel to Parent (which
opinion if not rendered by Skadden, Arps, Slate, Xxxxxxx
& Xxxx LLP ("SASMF") shall be rendered by counsel
designated by the Company and reasonably acceptable to
Parent), in form and substance reasonably satisfactory to
Parent, dated as of the Effective Time, substantially to
the effect that, on the basis of facts, representations
and assumptions set forth in such opinion which are
consistent with the state of facts existing at the
Effective Time, the Merger will be treated as a
reorganization within the meaning of Section 368(a) of
the Code and that, accordingly, for federal income tax
purposes no gain or loss will be recognized by Parent,
Merger Sub or the Company as a result of the Merger. In
rendering such opinion, counsel to Parent may require and
rely upon representations and covenants contained in
certificates of officers of Parent, Merger Sub, the
Company and others.
(g) Legal Opinion. Parent shall have the
received the opinion of the Company's Counsel (as defined
below) as to the matters set forth in Exhibit 7.2(g).
(h) Key Employees. The Company shall
have entered into employment arrangements satisfactory to
it with those employees of the Company whose names are
set forth set forth on Exhibit 7.2(h) attached hereto,
such employees shall be employed by the Company and shall
not have indicated any intent to leave the employ of the
Company.
(i) Dissenter's Rights. Holders of less
than 5% of the Company Common Stock shall have elected to
exercise appraisal rights in accordance with the BCL in
connection with the Merger.
(j) Sales Finance Approvals. The Company
shall have received approval of the Merger under
applicable state sales finance laws, rules and
regulations from states in which the Company originated
at least 83% of the aggregate principal amount of its
retail installment contract portfolio for the prior six
months ending December 31, 1996. Notwithstanding
anything to the contrary contained herein, in the event
this condition is satisfied, Parent shall not be entitled
to assert any breach by the Company of any representation,
warranty or covenant to the extent such representation,
warranty or covenant relates to the obtaining of the
approvals contemplated by this Section 7.2(j).
7.3. Conditions to Obligations of the Company.
The obligation of the Company to effect the Merger is
also subject to the satisfaction or waiver by the Company
at or prior to the Effective Time of the following
conditions:
(a) Representations and Warranties. (I)
The representations and warranties of Parent set forth in
Sections 4.3(a), 4.3(b) and 4.3(c)(ii)(x) of this
Agreement shall be true and correct in all respects as of
the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier
date) as of the Closing Date as though made on and as of
the Closing Date; and (II) the representations and
warranties of Parent set forth in this Agreement other
than those specifically enumerated in clause (I) hereof
shall be true and correct in all respects as of the date
of this Agreement and (except to the extent such
representations and warranties speak as of an earlier
date) as of the Closing Date as though made on and as of
the Closing Date; provided, however, that for purposes of
determining the satisfaction of the condition contained
in this clause (II), no effect shall be given to any
exception in such representations and warranties relating
to materiality or a Material Adverse Effect, and
provided, further, however, that, for purposes of this
clause (II), such representations and warranties shall be
deemed to be true and correct in all respects unless the
failure or failures of such representations and
warranties to be so true and correct, individually or in
the aggregate, represent a Material Adverse Effect on
Parent. The Company shall have received a certificate
signed on behalf of Parent by the Chief Executive Officer
and the Chief Financial Officer (or other appropriate
executive officers reasonably satisfactory to the
Company) of Parent to the foregoing effect.
(b) Performance of Obligations of Parent.
Parent shall have performed in all material respects all
obligations required to be performed by it under this
Agreement at or prior to the Closing Date, and the
Company shall have received a certificate signed on
behalf of Parent by the Chief Executive Officer and the
Chief Financial Officer (or other appropriate executive
officers reasonably satisfactory to the Company) of
Parent to such effect.
(c) Consents Under Agreements. The
consent, approval or waiver of each person (other than
the Governmental Entities referred to in Section 7.1(b))
whose consent or approval shall be required in connection
with the transactions contemplated hereby under any loan
or credit agreement, note, mortgage, indenture, lease,
license or other agreement or instrument to which Parent
or any of its Subsidiaries is a party or is otherwise
bound, except those for which failure to obtain such
consents and approvals would not, individually or in the
aggregate, have a Material Adverse Effect on Parent
(after giving effect to the transactions contemplated
hereby), shall have been obtained.
(d) No Pending Governmental Actions. No
proceeding initiated by any Governmental Entity seeking
an Injunction shall be pending.
(e) Federal Tax Opinion. The Company
shall have received an opinion of Rosenman & Colin LLP
(the "Company's Counsel"), in form and substance
reasonably satisfactory to the Company, dated as of the
Effective Time, substantially to the effect that, on the
basis of facts, representations and assumptions set forth
in such opinion which are consistent with the state of
facts existing at the Effective Time, the Merger will be
treated as a reorganization within the meaning of Section
368(a) of the Code and that, accordingly, for federal
income tax purposes:
(i) No gain or loss will
be recognized by the Company as a
result of the Merger;
(ii) No gain or loss will
be recognized by the shareholders of
the Company who exchange all of their
Company Common Stock solely for
Parent Common Stock pursuant to the
Merger (except with respect to cash
received in lieu of a fractional
share interest in Parent Common
Stock);
(iii) The aggregate tax
basis of the Parent Common Stock
received by shareholders who exchange
all of their Company Common Stock
solely for Parent Common Stock
pursuant to the Merger will be the
same as the aggregate tax basis of
the Company Common Stock surrendered
in exchange therefor.
In rendering such opinion, the Company's
Counsel may require and rely upon representations and
covenants contained in certificates of officers of
Parent, the Company and others.
(f) Legal Opinion. The Company shall have the
received the opinion of SASMF (and, to the extent that
any such opinions involve matters relating to laws other
than Federal or New York law, of local counsel to Parent)
as to the matters set forth in Exhibit 7.3(f).
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1. Termination. This Agreement may be
terminated at any time prior to the Effective Time:
(a) by mutual consent of the Company and
Parent in a written instrument, which consent in the case
of the Company shall require a vote of a majority of the
members of the Company's entire Board of Directors;
(b) by either Parent or the Company upon
written notice to the other party (i) 30 days after the
date on which any request or application for a Requisite
Regulatory Approval shall have been denied or withdrawn
at the request or recommendation of the Governmental
Entity which must grant such Requisite Regulatory
Approval, unless within the 30-day period following such
denial or withdrawal a petition for rehearing or an
amended application has been filed with the applicable
Governmental Entity, provided, however, that no party
shall have the right to terminate this Agreement pursuant
to this Section 8.1(b)(i) if such denial or request or
recommendation for withdrawal shall be due to the failure
of the party seeking to terminate this Agreement to
perform or observe the covenants and agreements of such
party set forth herein or (ii) if any Governmental Entity
of competent jurisdiction shall have issued a final
nonappealable order enjoining or otherwise prohibiting
the consummation of any of the transactions contemplated
by this Agreement;
(c) by either Parent or the Company if
the Merger shall not have been consummated on or before
September 30, 1997, unless the failure of the Closing to
occur by such date shall be due to the failure of the
party seeking to terminate this Agreement to perform or
observe the covenants and agreements of such party set
forth herein;
(d) by either Parent or the Company
(provided that the terminating party is not then in
material breach of any representation, warranty, covenant
or other agreement contained herein) if there shall have
been a material breach of any of the representations or
warranties set forth in this Agreement on the part of the
other party, which breach is not cured within thirty days
following written notice to the party committing such
breach, or which breach, by its nature, cannot be cured
prior to the Closing; provided, however, that neither
party shall have the right to terminate this Agreement
pursuant to this Section 8.1(d) unless the breach of
representation or warranty, together with all other such
breaches, would entitle the party receiving such
representation not to consummate the transactions
contemplated hereby under Section 7.2(a) (in the case of
a breach of representation or warranty by the Company) or
Section 7.3(a) (in the case of a breach of representation
or warranty by Parent);
(e) by either Parent or the Company
(provided that the terminating party is not then in
material breach of any representation, warranty, covenant
or other agreement contained herein) if there shall have
been a material breach of any of the covenants or
agreements set forth in this Agreement on the part of the
other party, which breach shall not have been cured
within thirty days following receipt by the breaching
party of written notice of such breach from the other
party hereto; or
(f) by either Parent or the Company
(provided that the Company shall not be entitled to
terminate this Agreement pursuant to this Section 8.1(f)
if it is in material breach of any of its obligations
under Section 6.1(b) and any related obligations
hereunder) if any approval of the shareholders of the
Company required for the consummation of the Merger shall
not have been obtained at a duly held meeting of such
shareholders or at any adjournment or postponement
thereof.
8.2. Effect of Termination. In the event of
termination of this Agreement by either Parent or the
Company as provided in Section 8.1, this Agreement shall
forthwith become void and have no effect except
(i) Section 6.2(c) and Sections 8.2 and 9.4 shall survive
any termination of this Agreement, (ii) no party shall
have any liability hereunder arising out of such party's
non-willful breach of any provision of this Agreement and
(iii) that notwithstanding anything to the contrary
contained in this Agreement, no party shall be relieved
or released from any liabilities or damages arising out
of its willful breach of any provision of this Agreement.
8.3. Amendment. Subject to compliance with
applicable law, this Agreement may be amended by the
parties hereto, by action taken or authorized by their
respective Boards of Directors; provided, however, there
may not be, without further approval of the shareholders
of the Company, any amendment of this Agreement which
reduces the amount or changes the form of the
consideration to be delivered to the shareholders of the
Company hereunder. This Agreement may not be amended
except by an instrument in writing signed on behalf of
each of the parties hereto.
8.4. Extension; Waiver. At any time prior to
the Effective Time, the parties hereto, to the extent
legally allowed, (a) extend the time for the performance
of any of the obligations or other acts of the other
parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive
compliance with any of the agreements or conditions
contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid
only if set forth in a written instrument signed on
behalf of such party, but such extension or waiver or
failure to insist on strict compliance with an
obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
ARTICLE IX
GENERAL PROVISIONS
9.1. Closing. Subject to the terms and
conditions of this Agreement, the closing of the Merger
(the "Closing") will take place at 10:00 a.m. on a date
to be specified by the parties, which unless Parent shall
in its sole discretion determine otherwise, shall be the
first day which is (a) at least ten business days after
the satisfaction or waiver (subject to applicable law) of
the latest to occur of the conditions set forth in
Article VII hereof and (b) the first or last business day
of a month (the "Closing Date"), at the offices of
Parent.
9.2. Alternative Structure. Notwithstanding
anything to the contrary contained in this Agreement,
prior to the Effective Time, Parent shall be entitled to
revise the structure of the Merger in order to provide
that Merger Sub shall be owned by a Subsidiary of Parent
provided that any such revised structure shall (i) not
subject any of the shareholders of the Company to adverse
tax consequences or change the amount of consideration to
be received by such shareholders, (ii) not materially
delay the Closing and (iii) not jeopardize the
satisfaction of any of the conditions set forth in
Article VII. This Agreement and any related documents
shall be appropriately amended in order to reflect any
such revised structure.
9.3. Nonsurvival of Representations,
Warranties and Agreements. None of the representations,
warranties, covenants and agreements in this Agreement or
in any instrument delivered pursuant to this Agreement
shall survive the Effective Time, except for those
covenants and agreements contained herein and therein
which by their terms apply in whole or in part after the
Effective Time.
9.4. Expenses. All costs and expenses
incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the
party incurring such expense, provided, however, that the
costs and expenses of printing and mailing the
Information Statement to the shareholders of the Company,
and all filing and other fees paid to the SEC or any
other Governmental Entity in connection with the Merger
and the other transactions contemplated hereby, shall be
borne equally by Parent and the Company.
9.5. Notices. All notices and other
communications hereunder shall be in writing and shall be
deemed given if delivered personally, telecopied (with
confirmation), mailed by registered or certified mail
(return receipt requested) or delivered by an express
courier (with confirmation) to the parties at the
following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to Parent, to:
Xxxxxxx Xxxxx, Inc.
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxxxx, Xx.,
Executive Vice President
with a copy to:
Skadden, Arps Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxx, III, Esq.
and
(b) if to the Company, to:
Oxford Resources Corp.
000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Chief Executive Officer
with a copy to:
Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
9.6. Interpretation. When a reference is
made in this Agreement to Sections, Exhibits or
Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise
indicated. The phrases "the date of this Agreement",
"the date hereof" and terms of similar import, unless
the context otherwise requires, shall be deemed to refer
to January 14, 1997.
9.7. Counterparts. This Agreement may be
executed in counterparts, all of which shall be
considered one and the same agreement and shall become
effective when counterparts have been signed by each of
the parties and delivered to the other parties, it being
understood that all parties need not sign the same
counterpart.
9.8. Entire Agreement. This Agreement
(including the documents, the Company Disclosure
Schedule, the Parent Disclosure Schedule and the
instruments referred to herein) constitutes the entire
agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties
with respect to the subject matter hereof.
9.9. Governing Law. This Agreement shall be
governed and construed in accordance with the laws of
the State of New York, without regard to any applicable
conflicts of law principles thereof.
9.10. Severability. Any term or provision of
this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or
unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement
is so broad as to be unenforceable, the provision shall
be interpreted to be only so broad as is enforceable.
9.11. Publicity. Except as otherwise
required by law or the rules of the NYSE or NASDAQ, so
long as this Agreement is in effect, neither Parent nor
the Company shall, or shall permit any of its
Subsidiaries to, issue or cause the publication of any
press release or other public announcement with respect
to, or otherwise make any public statement concerning,
the transactions contemplated by this Agreement without
the consent of the other party, which consent shall not
be unreasonably withheld.
9.12. Assignment; No Third Party
Beneficiaries. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding
sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and
their respective successors and assigns. Except as
otherwise expressly provided herein, this Agreement is
not intended to confer upon any person other than the
parties hereto any rights or remedies hereunder.
9.13. Enforcement of Agreement. The parties
hereto agree that irreparable damage would occur in the
event that the provisions contained in this Agreement
were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly
agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and
provisions hereof in any court of the United States or
any state thereof having jurisdiction, this being in
addition to any other remedy to which they are entitled
in law or in equity.
9.14. Waiver. In any proceeding by or
against the Company or any of its current shareholders
(collectively, the "Company Parties") (x) wherein
Parent, Merger Sub or the corporation surviving the
Merger (the "Surviving Corporation" and, together with
Parent and Merger Sub, the "Parent Parties") assert or
prosecute any claim under, or otherwise seek to enforce,
this Agreement or any document, instrument or agreement
executed and delivered in connection therewith or (y)
wherein the Company Parties assert or prosecute any
claim under, or otherwise seek to enforce this Agreement
or any document, instrument or agreement executed and
delivered in connection therewith, each of the Parent
Parties agrees in connection with such proceeding (i)
that neither any of the Parent Parties nor its counsel
will move to seek disqualification of Rosenman & Colin
LLP and (ii) to consent to the representation of any
Company Party by Rosenman & Colin LLP, notwithstanding
that Rosenman & Colin LLP has or may have represented
such Company Party as counsel in connection with any
matter, including, without limitation, any transaction
(including, without limitation, the transaction
contemplated by this Agreement), negotiations,
investigation, proceeding or action, prior to the time
of the Closing.
IN WITNESS WHEREOF, Parent and the Company
have caused this Agreement to be executed by their
respective officers thereunto duly authorized as of the
date first above written.
XXXXXXX XXXXX, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Exec. Vice President
Attest:
/s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
OXFORD RESOURCES CORP.
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman
Attest:
/s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
