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EXHIBIT 2.1
MERGER AGREEMENT
THIS MERGER AGREEMENT (this "AGREEMENT"), dated as of May 15, 1998, by
and between the following parties:
CMI MANAGEMENT, INC., a Delaware corporation ("HOLDINGS"),
CMI ACQUISITIONS, INC., a Delaware corporation ("CMI ACQUISITIONS"),
and
CMI INDUSTRIES, INC., a Delaware corporation ("CMI")
WITNESSETH
WHEREAS, CMI Acquisitions is a wholly-owned subsidiary of Holdings; and
WHEREAS, the parties wish to undertake a merger of CMI Acquisitions
with and into CMI pursuant to which CMI will be the surviving
corporation and will become a wholly-owned subsidiary of Holdings (the
"MERGER"); and
WHEREAS, it is the intention of the parties that prior to the effective
time of the Merger certain stockholders of CMI will
(i) exchange their shares of CMI Common Stock (as defined in
Section 2.1) for shares of Holdings Common Stock (as defined
in Section 2.1), and
(ii) exchange their existing options to purchase CMI Common Stock
for equivalent options to purchase Holdings Common Stock
(collectively the "EXCHANGE") pursuant to an Exchange Agreement, dated
as of even date herewith, between those stockholders and Holdings (the
"EXCHANGE AGREEMENT"); and
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WHEREAS, pursuant to the Merger the remaining shares of CMI Common
Stock and options to purchase CMI Common Stock will be converted into
the right to receive cash and shares of Holdings Common Stock as set
forth in this Agreement; and
WHEREAS, it is the intention of Holdings and CMI Acquisitions that
funding for the cash payments to be made to the holders of CMI Common
Stock in connection with the Merger will be obtained from the following
transactions:
(i) the issuance and sale by Holdings to BancBoston Ventures,
Inc., or one of its affiliates ("BBV") of approximately
200,000 shares of Holdings Common Stock (the ("NEW SHARES")
the proceeds of which will be contributed by Holdings to CMI
Acquisitions; and
(ii) the issuance by CMI Acquisitions or CMI of approximately
$175,000,000 principal amount of Senior Subordinated Notes
(the "NEW NOTES") the proceeds of which will also be used for
the repurchase of CMI's existing Senior Subordinated Notes
(the "OLD NOTES"); and
(iii) borrowings of approximately $28 million by CMI under its
existing credit facilities (as such facilities are to be
amended) or borrowings of such an amount by CMI Acquisitions
(the "NEW SENIOR CREDIT FACILITY")
(the Exchange, the issuance of the New Shares and the New Notes and the
borrowings under the New Senior Credit Facility are referred to herein
collectively as the "RELATED TRANSACTIONS");
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained in this Agreement, the parties agree
as follows:
ARTICLE 1 -- MERGER
1.1 THE MERGER. At the Effective Time (as defined in Section 1.3), CMI
Acquisitions shall be merged with and into CMI in accordance with the
provisions of this Agreement and the Delaware General Corporation Law
(the "DGCL"), and the separate existence of CMI Acquisitions shall
thereupon cease, and CMI, as the surviving corporation in the Merger
(the "SURVIVING CORPORATION"), shall continue its corporate existence
under the laws of the State of Delaware as a wholly-owned subsidiary of
Holdings. The Merger shall have the effect provided under the
applicable laws of the State of Delaware including, but not limited to,
Section 259 of the DGCL.
1.2 CLOSING. The closing of the transactions contemplated by this Agreement
(the "CLOSING") shall take place at the offices of Xxxxxxxxxx, Xxxxxx &
Xxxxxxx, 000 Xxxxxxxxx Xxxxxx, X.X.,
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Xxxxxxx, Xxxxxxx 00000-0000, on June 30, 1998 or such later date and
time after all conditions set forth in Article 6 have been satisfied or
waived in writing but in no event later than the third business day
after all such conditions shall have been satisfied or waived or such
other date as may be agreed upon by the parties hereto (the "CLOSING
DATE"). At the Closing the parties shall confirm the satisfaction or
waiver of the conditions set forth in Article 6.
1.3 EFFECTIVE TIME OF THE MERGER. Simultaneously with or immediately after
the Closing, the parties shall cause the certificate of merger attached
as Exhibit A (the "CERTIFICATE OF MERGER") to be executed, delivered
and filed with the Secretary of State of Delaware in accordance with
the provisions of the DGCL. The Merger shall become effective at the
time of such filing unless a different effective time is specified in
the Certificate of Merger pursuant to the DGCL (such time being the
"EFFECTIVE TIME").
1.4 EFFECT OF THE MERGER. At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of the DGCL. Without
limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and
franchises of CMI and CMI Acquisitions shall vest in the Surviving
Corporation, and all debts, liabilities, obligations, restrictions,
disabilities and duties of each of CMI and CMI Acquisitions shall
become the debts, liabilities, obligations, restrictions, disabilities
and duties of the Surviving Corporation.
1.5 CERTIFICATE OF INCORPORATION; BY-LAWS. The Certificate of Incorporation
and By-laws of CMI as in effect immediately prior to the Effective Time
shall continue as the Certificate of Incorporation and By-laws of the
Surviving Corporation, until duly amended in accordance with applicable
law.
1.6 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. At the Effective
Time, the persons who are directors and officers of CMI Acquisitions at
the Effective Time will become the directors and officers of the
Surviving Corporation until such time as they may be replaced in
accordance with the By-laws of the Surviving Corporation.
ARTICLE 2 -- CONVERSION OF SHARES AND OPTIONS
2.1 CONVERSION OF SHARES. At the Effective Time, by virtue of the Merger
and without any action on the part of CMI, CMI Acquisition or any
holder of any of the following securities:
(a) CMI Common Stock. Each issued and outstanding share of $1.00
par value common stock of CMI ("CMI COMMON STOCK"), excluding
any such shares held in the treasury of CMI, any such shares
held by Holdings or its subsidiaries, and any such shares
exchanged for shares of $1.00 par value common stock of
Holdings ("HOLDINGS COMMON STOCK") pursuant to the Exchange
Agreement, shall automatically be canceled and shall
thereafter be converted into only the right to
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receive the Common Merger Consideration. The term "COMMON
MERGER CONSIDERATION" shall mean the right to receive for each
share of CMI Common Stock:
(i) $43.00; and
(ii) 2/45 of a share of Holdings Common Stock.
(b) Treasury; Holdings Shares. Each share of CMI Common Stock held
in the treasury of CMI or held by Holdings or any of its
subsidiaries shall be automatically canceled and extinguished,
and no payment shall be made in respect thereof.
(c) CMI Acquisitions Common Stock. Each issued and outstanding
share of CMI Acquisitions common stock, par value $1.00, at
the Effective Time shall be converted into and shall
thereafter represent one validly issued, fully paid and
nonassessable share of common stock of the Surviving
Corporation.
2.2 CONVERSION OF CMI STOCK OPTIONS. At the Effective Time, the issued and
outstanding options to purchase shares of CMI Common Stock ("CMI
OPTIONS") will be treated as follows:
(a) Each CMI Option exchanged pursuant to the Exchange Agreement
will be canceled and exchanged for an option to purchase
shares of Holdings Common Stock in accordance with the terms
of the Exchange Agreement.
(b) Each CMI Option
(i) which is not exchanged pursuant to the Exchange
Agreement and
(ii) which the holder thereof has agreed to convert into
the Option Merger consideration,
shall automatically be canceled and converted into the right
to receive the Option Merger Consideration for each share of
CMI Common Stock that is subject to the CMI Option.
(c) All other CMI Options shall remain outstanding in accordance
with the terms of such Options provided that the right to
purchase each share of CMI Common Stock shall be converted
into the right to purchase Common Merger Consideration. No
interest shall accrue on the cash portion of the Common Merger
Consideration.
(d) The term "OPTION MERGER CONSIDERATION" shall mean the right to
receive for each such share:
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(i) an amount equal to (A) $43.00 minus (B) the exercise
price per share pursuant to such CMI Option (its
"EXERCISE PRICE"), and
(ii) 2/45 of a share of Holdings Common Stock; provided
that
(A) if the Exercise Price is more than $43.00
but less than $45.00, then the number of
shares of Holdings Common Stock to be issued
under this clause (ii) shall be calculated
in accordance with the following formula:
Number of shares = 2/45 x ($45 minus Exercise Price),
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(B) if the Exercise Price is $45.00 or more then
this clause (ii) shall be inapplicable and
no shares of Holdings Common Stock will be
issued under this clause (ii).
2.3 NO FRACTIONAL SHARES. No scrip or fractional shares of Holdings Common
Stock shall be issued in the Merger upon conversion of CMI Common Stock
or CMI Options as provided in Section 2.1 or 2.2. Each registered
holder of CMI Common Stock or CMI Options who would otherwise have been
entitled to receive a fractional share of Holdings Common Stock upon
conversion of his CMI Common Stock or CMI Options shall be entitled to
receive a cash payment with respect to such fractional share in an
amount equal to $45.00 multiplied by a fraction equivalent to such
fractional share.
2.4 STOCK TRANSFER BOOKS. From and after the Effective Time, no transfer of
CMI Common Stock outstanding prior to the Effective Time shall be
registered on the stock transfer books of CMI. If, after the Effective
Time, certificates for CMI Common Stock are presented to the Surviving
Corporation for transfer, such certificates shall be canceled and
exchanged for the Common Merger Consideration (together with the Option
Merger Consideration, the "MERGER CONSIDERATION"). From and after the
Effective Time, the holders of shares of CMI Common Stock or CMI
Options outstanding immediately prior to the Effective Time shall cease
to have any rights with respect to shares of CMI Common Stock or CMI
Options except as otherwise provided herein or by applicable law.
2.5 SURRENDER AND EXCHANGE OF CERTIFICATES REPRESENTING CMI COMMON STOCK.
(a) Surrender of Certificates. Subject to Section 2.6 with respect
to dissenting holders of CMI Common Stock, at the Closing, the
following actions shall be taken:
(i) Each holder of a certificate representing CMI Common
Stock (a "CMI CERTIFICATE") or any document
evidencing a CMI Option (a "CMI OPTION DOCUMENT")
shall surrender it to Holdings, together with a duly
endorsed
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transfer power and a letter of transmittal (a "LETTER
OF TRANSMITTAL") in the form attached as Exhibit B
(such Letter of Transmittal to be provided to the
holder by CMI Acquisitions at least three business
days prior to the Closing). Letters of Transmittal,
together with any documents, transfer powers, or
certificates accompanying such Letter of Transmittal,
received by Holdings or CMI Acquisitions prior to the
Closing shall be held in escrow until the Closing, at
which time such documents shall, for purposes of this
Agreement, be deemed surrendered to Holdings as if
they were surrendered at the Closing.
(ii) Holdings shall deliver to each holder of CMI Common
Stock that is eligible for conversion pursuant to
Section 2.1 who surrenders his CMI Certificates, and
to each holder of any CMI Options who has agreed to
receive Option Merger Consideration pursuant to
Section 2.2 who surrenders his CMI Option Documents
(A) payment, by wire transfer in immediately
available funds to an account specified by
such holder not less than two business days
before the Closing Date, of an amount equal
to the sum of
(I) $43.00 multiplied by the number of
shares of CMI Common Stock
represented by such CMI
Certificates, plus
(II) if applicable, the cash amount
payable to that holder pursuant to
Section 2.2 with respect to any CMI
Options surrendered in accordance
with this Section 2.5.
(B) a certificate representing that number of
shares of Holdings Common Stock equal to (I)
2/45 multiplied by (II) the number of shares
of CMI Common Stock represented by such CMI
Certificates,
(C) if applicable, a certificate representing
that number of shares of Holdings Common
Stock to be issued to such holder pursuant
to Section 2.2 with respect to any CMI
Options surrendered in accordance with this
Section 2.5, and
(D) if applicable, as to any fractional share of
Holdings Common Stock, a check payable to
the holder representing the cash
consideration to which such holder shall
have become entitled pursuant to Section
2.3.
(iii) The CMI Certificates and CMI Option Documents so
surrendered shall be deemed canceled.
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To those shareholders of record or CMI Option holders entitled
to receive consideration hereunder who do not surrender, or on
whose behalf there is not surrendered, their CMI Common Stock
or CMI Options at the Closing, the Surviving Corporation shall
cause to be mailed promptly after the Effective Time, the
Letter of Transmittal and the instructions thereto. After the
Effective Time, the holders of CMI Common Stock or CMI Options
shall be entitled to look to Holdings for payment of the
Merger Consideration and Holdings shall promptly pay to such
holder the Merger Consideration upon the surrender by such
holder of his or her CMI Certificates to Holdings in
accordance with this Section 2.5.
From the Effective Time until surrender in accordance with the
provisions of this Section 2.5, each share of CMI Common Stock
and any CMI Certificate evidencing such shares (other than
shares of CMI Common Stock that are held in CMI's treasury or
are owned by Holdings or its subsidiaries or have been
exchanged pursuant to the Exchange Agreement) and each CMI
Option with respect to which the holder agrees to receive the
Option Merger Consideration pursuant to Section 2.2 shall
represent for all purposes only the right to receive the
Common Merger Consideration or the Option Merger Consideration
from Holdings promptly upon surrender to Holdings of such
documents. All payments in respect of shares of CMI Common
Stock or CMI Options that are made in accordance with the
terms of this Agreement shall be deemed to have been made in
full satisfaction of all rights pertaining to such securities.
(b) Lost Certificates. In the case of any lost, misplaced, stolen
or destroyed CMI Certificate, the holder thereof may be
required, as a condition precedent to delivery to such holder
of the Common Merger Consideration, to deliver to Holdings (i)
an affidavit swearing before a notary that such certificates
have been lost, misplaced, stolen or destroyed and cannot be
located after a thorough search and (ii) an indemnity
agreement in customary form.
(c) No Interest. No interest shall be paid or accrued on any
portion of the Merger Consideration regardless of the cause of
delay in payment of the Merger Consideration.
(d) Dividends on Holdings Common Stock. No holder of a CMI
Certificate or a CMI Option shall be entitled to payment of
any dividend or other distribution from Holdings having a
record date after the Effective Time until surrender of such
holder's CMI Certificate and CMI Option Documents pursuant to
this Section 2.5. Upon such surrender, there shall be paid to
the holder the amount of any dividends or other distributions
(without interest) that previously became payable by Holdings,
but were not paid by reason of the foregoing, with respect to
the number of whole shares of Holdings Common Stock
represented by the certificate or certificates issued upon
such surrender. From and after the Effective Time, Holdings
shall, however, be
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entitled to treat any such CMI Certificate or CMI Option
Document that has not yet been surrendered for exchange as
evidencing the ownership of the aggregate Merger Consideration
into which the CMI Common Stock or CMI Option represented by
such CMI Certificate or CMI Option Document shall have been
converted, notwithstanding any failure to surrender such CMI
Certificate or CMI Option Document.
(e) No Liability. Neither Holdings nor CMI shall be liable to any
holder of shares of CMI Common Stock or CMI Options for any
shares of Holdings Common Stock (or dividends or distributions
with respect thereto) delivered to a public official pursuant
to any abandoned property, escheat or similar law.
(f) Withholding Rights. Holdings shall be entitled to deduct and
withhold from the Merger Consideration otherwise payable
pursuant to this Agreement to any holder of shares of CMI
Common Stock or CMI Options such amounts as Holdings is
required to deduct and withhold with respect to the making of
such payment under the Internal Revenue Code, or any provision
of state, local or foreign tax law. To the extent that amounts
are so withheld by Holdings, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid
to the holder of the shares of CMI Common Stock or CMI Options
in respect of which such deduction and withholding was made by
Holdings.
2.6 DISSENTING CMI STOCKHOLDERS. Notwithstanding any provision of this
Agreement to the contrary, shares of CMI Common Stock that are
outstanding immediately prior to the Effective Time and which are held
by stockholders who shall have not voted in favor of the Merger or
consented thereto in writing and who shall have demanded properly in
writing appraisal for such shares in accordance with Section 262 of the
DGCL (collectively, the "DISSENTING SHARES") shall not be converted
into or represent the right to receive the Common Merger Consideration.
Such stockholders shall be entitled to receive payment of the appraised
value of such shares of CMI Common Stock held by them in accordance
with the provisions of such Section 262, except that all Dissenting
Shares held by stockholders who shall have failed to perfect or who
shall have withdrawn or lost their rights to appraisal of such shares
of CMI Common Stock under such Section 262 shall thereupon be deemed to
have been converted into and to have become exchangeable for, as of the
Effective Time, the right to receive the Common Merger Consideration,
without any interest thereon, upon surrender, in the manner provided in
Section 2.5, of the certificate or certificates that formerly evidenced
such shares.
ARTICLE 3 -- REPRESENTATIONS AND WARRANTIES OF CMI
CMI hereby represents and warrants to Holdings and CMI Acquisitions as
follows:
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3.1 ORGANIZATION AND AUTHORITY OF CMI. CMI is a Delaware corporation duly
organized and existing in good standing under the DGCL. CMI has all
necessary corporate power and authority to enter into this Agreement,
to carry out its obligations hereunder and to consummate the Merger.
Except for the approval of the holders of the requisite percentage of
CMI Common Stock contemplated by Section 6.1(a), the execution and
delivery of this Agreement by CMI, the performance by CMI of its
obligations hereunder and the consummation by CMI of the Merger and the
other Transactions to which CMI is a party have been duly authorized by
all requisite action on the part of CMI. This Agreement has been duly
executed and delivered by CMI, and (assuming due authorization,
execution and delivery by Holdings and CMI Acquisitions) this Agreement
constitutes a valid and binding obligation of CMI enforceable against
it in accordance with its terms.
3.2 CAPITALIZATION. The authorized capital stock of CMI consists of
2,100,000 shares of CMI Common Stock, of which 1,695,318 shares are
issued and outstanding, 83,000 shares are held in CMI's treasury and
225,000 shares are reserved for issuance upon the exercise of CMI
Options. All of the issued and outstanding shares of CMI Common Stock
have been duly authorized and are validly issued, fully paid and
nonassessable.
3.3 NO CONFLICT. Except as specified on Schedule 3.3 of the Disclosure
Schedule and assuming that the Merger is approved by the holders of the
requisite percentage of CMI Common Stock, the execution, delivery and
performance of this Agreement and the consummation by CMI of the Merger
and the other Transactions to which CMI is a party do not and will not
(a) violate, conflict with or result in the breach of any
provision of the Certificate of incorporation or By-laws of
CMI,
(b) conflict with or violate any law or governmental order
applicable to CMI, or
(c) conflict with, or result in any breach of, constitute a
default (or event which with the giving of notice or lapse or
time, or both, would become a default) under, require any
consent under, or give to others any rights of termination,
amendment, acceleration, suspension, revocation, or
cancellation of, or result in the creation of any lien,
encumbrance or any other charges of whatsoever nature on any
of the assets or properties of CMI pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease,
sublease, license, permit, franchise or other instrument or
arrangement to which CMI is a party or by which any of such
assets or properties are bound or subject to.
3.4 GOVERNMENTAL CONSENTS AND APPROVALS. The execution, delivery and
performance of this Agreement and the consummation of the Transactions
by CMI do not and will not require any consent, approval, authorization
or other order of, action by, filing with, or notification to, any
governmental authority other than the filing of the appropriate merger
documents with the Secretary of State of Delaware as required by the
DGCL.
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3.5 ABSENCE OF LITIGATION. There is no action pending or, to the knowledge
of CMI, threatened against CMI, or any of its assets, before any
governmental authority which would prevent or delay consummation of the
transactions contemplated by this Agreement, or otherwise prevent CMI
from performing any of its obligations under this Agreement and the
consummation of the transactions contemplated thereby.
3.6 BROKERS. Except for
(a) fees and expenses payable to Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx, Inc.,
(b) fees and expenses payable in connection with the acquisition
or repayment of the Old Notes and the placement of the New
Notes,
(c) fees and expenses payable to BBV in connection with the
issuance and sale of the New Shares under certain
circumstances and fees and expenses payable in connection with
the New Senior Credit Facilities, and
(d) fees and expenses payable to The Xxxxxxxx-Xxxxxxxx Company,
LLC in connection with the issuance of the fairness opinion
referred to in Section 6.1(j),
no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the Merger or
any of the Related Transactions based upon arrangements made by or on
behalf of CMI.
3.7 DISCLAIMER. No representation or warranty is made by CMI except as
expressly set forth in this Article 3.
ARTICLE 4 -- REPRESENTATIONS AND WARRANTIES OF HOLDINGS
Holdings and CMI Acquisitions hereby jointly and severally represent
and warrant to CMI as follows:
4.1 ORGANIZATION AND AUTHORITY OF HOLDINGS AND CMI ACQUISITIONS. Each of
Holdings and CMI Acquisitions is a Delaware corporation duly organized
and existing in good standing under the DGCL. Each of Holdings and CMI
Acquisitions has all necessary corporate power and authority to enter
into this Agreement, to carry out its obligations hereunder and to
consummate the Merger. The execution and delivery of this Agreement by
Holdings and CMI Acquisitions, the performance by Holdings and CMI
Acquisitions of their respective obligations hereunder and the
consummation by Holdings and CMI Acquisitions of the Merger has been
duly authorized by all requisite action on the part of Holdings and CMI
Acquisitions. This Agreement has been duly executed and delivered by
Holdings and CMI Acquisitions, and (assuming due authorization,
execution and delivery by CMI) this
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Agreement constitutes a valid and binding obligation of Holdings and
CMI Acquisitions enforceable against Holdings and CMI Acquisitions in
accordance with its terms.
4.2 CAPITALIZATION. The authorized capital stock of Holdings consists of
750,000 shares of Holdings Common Stock of which 100 shares are issued
and outstanding. The authorized capital stock of CMI Acquisitions
consists of 1,000 shares of $1.00 par value common stock of which 1,000
shares are outstanding. All of the issued and outstanding shares of
Holdings Common Stock and common stock of CMI Acquisitions have been
duly authorized and are validly issued, fully paid and nonassessable.
As of the date of this Agreement, the shares of Holdings capital stock
are owned beneficially and of record as set forth in Schedule 4.2.
4.3 NO CONFLICT. Except as specified in Schedule 4.3, the execution,
delivery and performance of this Agreement and the consummation of the
Merger by Holdings and CMI Acquisitions do not and will not
(a) violate, conflict with or result in the breach of any
provision of the Certificate of incorporation or By-laws of
Holdings or CMI Acquisitions,
(b) conflict with or violate any law or governmental order
applicable to Holdings or CMI Acquisitions, or
(c) conflict with, or result in any breach of, constitute a
default (or event which with the giving of notice or lapse or
time, or both, would become a default) under, require any
consent under, or give to others any rights of termination,
amendment, acceleration, suspension, revocation, or
cancellation of, or result in the creation of any lien,
encumbrance or any other charges of whatsoever nature on any
of the assets or properties of Holdings and CMI Acquisitions
pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, sublease, license, permit, franchise or
other instrument or arrangement to which Holdings and CMI
Acquisitions is a party or by which any of such assets or
properties are bound or subject to.
4.4 SOLVENCY; FRAUDULENT CONVEYANCE. Each of Holdings and CMI Acquisitions
is solvent and will not be rendered insolvent by the Merger or the
Related Transactions and, after giving effect to the Merger and the
Related Transactions, neither Holdings nor the Surviving Corporation
will be left with an unreasonably small amount of capital with which to
engage in its business. Neither Holdings nor CMI Acquisitions intends
to incur, or believes that it has incurred, debts beyond its ability to
pay such debts as they mature. Neither Holdings nor CMI Acquisitions
contemplates the commencement of insolvency, bankruptcy, liquidation or
consolidation proceedings or the appointment of a receiver, liquidator,
conservator, trustee or similar official in respect of Holdings or CMI
Acquisitions or any of their assets. Neither Holdings nor CMI
Acquisitions is entering into this Agreement or consummating the Merger
or any of the Related Transactions with any intent to hinder, delay or
defraud any creditors of Holdings, CMI Acquisitions, the Surviving
Corporation or CMI.
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4.5 GOVERNMENTAL CONSENTS AND APPROVALS. The execution, delivery and
performance of this Agreement and the consummation of the Transactions
by Holdings and CMI Acquisitions do not and will not require any
consent, approval, authorization or other order of, action by, filing
with, or notification to, any governmental authority other than the
filing of the appropriate merger documents with the Secretary of State
of Delaware as required by the DGCL.
4.6 ABSENCE OF LITIGATION. There is no action pending or, to the knowledge
of Holdings or CMI Acquisitions, threatened against Holdings or CMI
Acquisitions, or any assets of either corporation, before any
governmental authority which would prevent or delay consummation of the
transactions contemplated by this Agreement, or otherwise prevent
either corporation from performing any of their obligations under this
Agreement and the consummation of the transactions contemplated
thereby.
4.7 HOLDINGS AND MERGER SUB INCORPORATION. CMI Acquisitions and Holdings
have been incorporated for the sole purpose of acting as a vehicle for
the facilitation of the transactions contemplated by this Agreement and
have not undertaken and will not undertake prior to the Effective Date
any activities other than those specifically contemplated by this
Agreement or otherwise required for such purpose. Each of Holdings and
CMI Acquisitions has no subsidiaries, other than in the case of
Holdings, CMI Acquisitions. CMI Acquisitions will at all times through
the Closing be 100% owned by Holdings.
4.8 FINANCING. Holdings has received a letter agreement from BBV addressed
to CMI attached hereto as Exhibit C which contemplates the purchase by
BBV of approximately 200,000 shares of Holdings Common Stock. Holdings
has received a proposal attached as Exhibit D from NationsBanc
Xxxxxxxxxx Securities LLC addressed to CMI for the issuance of the New
Notes. The payment of the Merger Consideration shall be funded from the
proceeds, if any, received from the sale of the New Shares, the
issuance of the New Notes and borrowings under the New Senior Credit
Facility.
4.9 BROKERS. Except for fees and expenses detailed in Section 3.6, no
broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the Merger or
any of the Related Transactions based upon arrangements made by or on
behalf of Holdings or CMI Acquisitions.
4.10 DISCLAIMER. No representation or warranty is made by either Holdings or
CMI Acquisitions except as expressly set forth in this Article 4.
ARTICLE 5 -- COVENANTS
The parties agree as follows with respect to the period from and after
the execution of this Agreement.
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5.1 GENERAL. Each of the Parties will use its reasonable best efforts to
take all action and to do all things necessary in order to consummate
and make effective the Merger (including the satisfaction of the
closing conditions set forth in Article 6 below). Holdings and CMI
Acquisitions will use their reasonable best efforts to take all actions
and to do all things necessary in order to consummate and make
effective the Related Transactions and to obtain the financing required
to consummate and make effective the Merger and the transactions
contemplated by this Agreement.
5.2 NOTICES AND CONSENTS. CMI will give any notices to third parties, and
will use its reasonable best efforts to obtain any third-party
consents, that are required in connection with the Merger or any of the
Related Transactions to which it is a party.
5.3 REGULATORY MATTERS AND APPROVALS. Each of the Parties will give any
notices to, make any filings with, and use its reasonable best efforts
to obtain any authorizations, consents, and approvals of governments
and governmental agencies that are required in connection with the
Merger or any of the Related Transactions to which it is a party.
Holdings shall take any action required to be taken by it under any
applicable state securities laws in connection with the issuance of the
Holdings Common Stock pursuant to the Merger and the Exchange.
5.4 STOCKHOLDER MEETING AND DISCLOSURE DOCUMENT. CMI will call a special
meeting of its stockholders or will conduct a consent solicitation (the
"SPECIAL MEETING") as soon as reasonably practicable in order that the
stockholders may consider and vote upon or consent to the adoption of
this Agreement and the approval of the Merger in accordance with the
DGCL and all other applicable requirements. As soon as practicable
following the date of this Agreement, CMI and Holdings shall prepare an
Information Statement and Private Offering Memorandum with respect to
the Merger, the Exchange and the other Related Transactions (the
"DISCLOSURE DOCUMENT"). Subject to the board of directors of CMI's
fiduciary duties under applicable law (as determined in good faith by
the board after consultation with counsel)
(a) CMI will mail the Disclosure Document to its stockholders as
soon as reasonably practicable and
(b) the Disclosure Document will contain the affirmative
recommendation of the board of directors of CMI in favor of
the adoption of this Agreement and the approval of the Merger.
5.5 TERMS OF ADDITIONAL CAPITAL. Holdings and CMI Acquisition agree that,
in connection with the transactions contemplated by this Agreement and
the Related Transactions
(a) No shares of Holdings Common Stock or other capital stock will
be issued to any person or entity for an amount of
consideration, on a per share basis, less than $45 per share
(nor shall any options, warrants or any other type of security
convertible into
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shares of Holdings Common Stock or other capital stock be
issued at an exercise price less than $45 per share) on or
prior to the date 3 months after the Effective Date in
connection with the Merger, the Exchange or the Related
Transactions other than
(i) the Holdings Options issued pursuant to the Exchange
Agreement,
(ii) options issued to certain key executives of Holdings
which shall entitle the holders thereof to receive,
upon exercise of such options, not more than 50,000
shares of capital stock of Holdings, and
(iii) The rights granted to BBV pursuant to Section 5.9 of
the Holdings Stockholders Agreement (as defined in
Section 6.1(i)).
(b) Subject to the terms of the Holdings Stockholders Agreement,
the terms of the Holdings Common Stock issued in connection
with the Merger shall be identical to the terms of any common
stock of CMI issued to BBV or any other person or entity in
connection with the transactions contemplated by this
Agreement and the Related Transactions.
5.6 OLD NOTES. Prior to the Effective Time, either (a) Holdings, CMI
Acquisitions or CMI, as the parties shall agree shall make a tender
offer to purchase the debt of CMI then outstanding under the Indenture
(the "EXISTING INDENTURE") dated as of October 28, 1993 between CMI and
Chemical Bank, as trustee, or (b) if permitted by the Existing
Indenture and the parties so agree, CMI shall make arrangements to
discharge the Old Notes by payment to the Trustee of an amount
sufficient to repay the Old Notes in full. Holdings, CMI Acquisitions
or CMI will arrange for such tender offer or discharge, and for making
payment (or causing the Surviving Corporation to make payment) of the
amounts due such offer and shall take such reasonable actions as may be
necessary to facilitate such tender offer or discharge and payment,
provided that neither party shall be under any obligation to the other
in connection with this Agreement if less than the minimum amount of
Old Notes issued under the Existing Indenture specified in Section
6.1(e) are tendered in response to such tender offer or the Old Notes
cannot be discharged on terms satisfactory to Holdings or CMI. In
connection with the tender offer, CMI will solicit consents from
holders of Old Notes for a supplemental indenture on terms satisfactory
to Holdings and CMI.
5.7 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.
(a) The Certificate of Incorporation and By-laws of the Surviving
Corporation shall contain the respective provisions that are
set forth, as of the date of this Agreement, in Article IX of
the Certificate of Incorporation and Article V of the By-laws
of CMI, which provisions shall not be amended, repealed or
otherwise modified for a period of six years from the
Effective Time in any manner that would affect adversely the
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rights thereunder of individuals who at or at any time prior
to the Effective Time were directors, officers, employees,
fiduciaries or agents of CMI.
(b) For a period of six years after the Effective Time, Holdings
shall cause to be maintained in effect the current directors'
and officers' liability insurance policies maintained by CMI
(provided that Holdings or the Surviving Corporation may
substitute therefor policies that provide substantially
similar coverage) with respect to claims arising from facts or
events that occurred prior to the Effective Time.
ARTICLE 6 -- CONDITIONS TO CLOSING
6.1 CONDITIONS TO OBLIGATIONS OF CMI, HOLDINGS AND CMI ACQUISITIONS. The
obligations of CMI, Holdings and CMI Acquisitions to consummate the
Merger are subject to the satisfaction of the following conditions:
(a) CMI Stockholder Approval. This Agreement and the Merger shall
have been approved or consented to by the holders of not less
than 66 2/3's of the outstanding shares of CMI Common Stock in
accordance with CMI's Certificate of Incorporation, By-Laws,
applicable law and the existing CMI Stockholders' Agreement.
(b) Dissenting Stockholders. The number of shares of CMI Common
Stock with respect to which any CMI stockholders have
perfected their rights as dissenting stockholders under DGCL
ss.262 shall not exceed 5% of the outstanding shares of CMI
Common Stock.
(c) Exchange Agreement. The closing of the transactions
contemplated by the Exchange Agreement shall have occurred and
(i) all of the CMI Options specified as being exchanged
in the Exchange Agreement shall have been exchanged,
and
(ii) at least 190,000 shares of CMI Common Stock specified
as being exchanged in the Exchange Agreement shall
have been exchanged.
(d) New Shares. The New Shares shall have been issued and sold by
Holdings and Holdings shall have received not less than
$9,000,000 as the net proceeds of such issuance and sale.
(e) Old Notes. Either (i) holders of Old Notes that represent not
less than 80% of the aggregate outstanding principal amount of
such Old Notes shall have tendered and not withdrawn such Old
Notes in accordance with the tender offer contemplated by
Section 5.6, and sufficient consents to implement the
supplemental indenture shall have
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been received and not withdrawn; or (ii) the Old Notes shall
have been discharged in accordance with the terms of the
Existing Indenture and on terms satisfactory to Holdings.
(f) New Notes and Additional Funding. The parties shall have
received through the issuance of the New Notes and borrowings
under the New Senior Credit Facility, together with amounts
received from the sale of the New Shares, an amount sufficient
to fund the purchase or discharge of the Old Notes, the
repayment of any existing bank debt and the payment of the
Merger Consideration.
(g) CMI Stockholders Agreement. The Amended and Restated
Stockholders Agreement by and among CMI and its stockholders,
dated February 4, 1992, as amended, shall have been terminated
prior to the Exchange.
(h) Holdings' Stockholders Agreement. The Stockholders Agreement
by and among Holdings and its stockholders, of near or even
date herewith (the "HOLDINGS STOCKHOLDERS AGREEMENT" attached
as Exhibit E) shall have been executed and delivered by
persons who will receive not less than 95% of the shares of
Holdings Common Stock (including any Shares that are to be
issued in connection with the Exchange or the Merger) to be
outstanding on the Effective Date (other than those to be
issued to BBV).
(i) Fairness Opinion. The Board of Directors of CMI shall have
received an opinion in form and substance satisfactory to CMI
from The Xxxxxxxx-Xxxxxxxx Company, LLC or another investment
banking firm designated by CMI and reasonably satisfactory to
the holders of a majority of the outstanding shares of CMI
Common Stock to the effect that the Common Merger
Consideration is fair from a financial point of view to the
stockholders of CMI receiving the Common Merger Consideration.
(j) Governmental Consents, Authorizations etc.. All consents,
authorizations, orders and approvals of, and all filings and
registrations with, any applicable governmental authority
(other than the filing of the Certificate of Merger with the
Secretary of State of Delaware) which are required for or
necessary in connection with the execution and delivery by
CMI, Holdings or CMI Acquisitions of this Agreement, or the
consummation by CMI, Holdings or CMI Acquisitions of the
Merger and the Related Transactions, shall have been obtained
or made (or the requirement therefor shall have been duly and
validly waived), and, if applicable, any required waiting
period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
shall have expired.
(k) No Litigation. No action shall have been commenced or
threatened by or before any governmental authority against
CMI, Holdings or CMI Acquisitions seeking to restrain or
materially and adversely alter the form or substance of the
Merger or any
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of the Related Transactions which in the reasonable, good faith determination of
CMI, CMI Holdings or CMI Acquisitions is likely to render it impossible or
unlawful to consummate the Merger and the Related Transactions.
(l) Third Party Consents. All third party consents and approvals
necessary for the confirmation of the Merger and the Related
Transactions shall have been obtained, if the failure to
obtain such approvals or consents, individually or in the
aggregate could in the reasonable judgment of CMI, Holdings or
CMI Acquisitions have a materially adverse effect upon the
consummation of the Merger or upon CMI, its business or
operations.
(m) Financing. The terms and conditions of the issuance of the New
Shares to BBV, the issuance of the New Notes, the New Senior
Credit Facility and any other financing arrangement entered
into by Holdings or CMI Acquisitions in connection with the
transactions contemplated by this Agreement shall be in form
and substance reasonably satisfactory to CMI, in the good
faith exercise of CMI's judgment.
6.2 CONDITIONS TO OBLIGATIONS OF CMI. In addition to the provisions of
Section 6.1, the obligations of CMI to consummate the Merger are
subject to the satisfaction of the following conditions:
(a) Representations and Warranties. The representations and
warranties of CMI Acquisitions and Holdings contained in this
Agreement shall have been true and correct when made and shall
be true and correct in all material respects as of the
Closing, with the same force and effect as if made as of the
Closing Date, the covenants and agreements contained in this
Agreement to be complied with by either CMI Acquisitions or
Holdings on or before the Closing shall have been complied
with in all material respects, and CMI shall have received a
certificate from an officer of Holdings to such effect signed
by such officer.
6.3 CONDITIONS TO OBLIGATIONS OF HOLDINGS AND CMI ACQUISITIONS. In addition
to the provisions of Section 6.1, the obligations of Holdings and CMI
Acquisitions to consummate the Merger are subject to the satisfaction
of the following conditions:
(a) Representations and Warranties. The representations and
warranties of CMI contained in this Agreement shall have been
true and correct when made and shall be true and correct in
all material respects as of the Closing, with the same force
and effect as if made as of the Closing Date, the covenants
and agreements contained in this Agreement to be complied with
by either CMI on or before the Closing shall have been
complied with in all material respects, and Holdings shall
have received a certificate from an officer of CMI to such
effect signed by such officer.
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ARTICLE 7 -- TERMINATION
7.1 TERMINATION OF AGREEMENT. Any of the Parties may terminate this
Agreement with the prior authorization of its board of directors
(whether before or after stockholder approval) as provided below:
(a) the parties may terminate this Agreement by mutual written
consent at any time prior to the Effective Time;
(b) CMI or Holdings may terminate this Agreement by giving written
notice to the other parties at any time prior to the Effective
Time in the event the fairness opinion referred to in Section
6.1(j) is withdrawn;
(c) any party may terminate this Agreement by giving written
notice to the other parties at any time after the date 60 days
after the date hereof in the event this Agreement and the
Merger fail to receive the requisite stockholder approval;
(d) any party may terminate this Agreement by giving written
notice to the other parties if the Closing shall not have
occurred by September 1, 1998; provided, however, that the
right to terminate this Agreement under this Section 7.1(d)
shall not be available to any party whose failure to fulfill
any obligation under this Agreement shall have been the cause
of, or shall have resulted in, the failure of the Closing to
occur on or prior to such date.
7.2 EFFECT OF TERMINATION. If any party terminates this Agreement pursuant
to Section 7.1, all rights and obligations of the parties hereunder
shall terminate without any liability of any party to any other party,
except as provided in Section 8.1.
ARTICLE 8 -- MISCELLANEOUS
8.1 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The
representations and warranties and agreements in this Agreement and in
any certificate delivered pursuant hereto (excluding any
representations and warranties contained in the Letter of Transmittal)
are intended by the parties only to be conditions to their respective
obligations to consummate the Merger and shall be terminated and
extinguished by the occurrence of the Effective Time or upon the
termination of the Merger pursuant to Section 7.1, as the case may be;
provided however that the agreements set forth in Articles I and II and
Sections 5.5, 5.6 and 5.7 and Article VIII and the representations set
forth in Section 4.4 shall survive the Effective Time and those set
forth in Article VIII shall survive termination. The sole remedy of
Holdings and CMI Acquisitions, on the one hand, and CMI, on the other
hand, for breach of any representation, warranty or agreement made by
the other that does not survive termination pursuant to the first
sentence of this Section 8.1 shall be to terminate this Agreement in
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accordance with the terms of Section 7.1; provided, that nothing in
this Section 8.1 shall relieve any party from any willful breach of any
representation, warranty or agreement set forth in this Agreement.
8.2 EXPENSES. Except as otherwise specified in this Agreement, all costs
and expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection
with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses, whether or not the
Closing shall have occurred. Notwithstanding the foregoing, it is
agreed that, whether or not the Closing occurs, CMI shall be solely
responsible for the payment of all fees, expenses and disbursements of
Xxxxxxxxxx, Xxxxxx & Xxxxxxx, LLP and Shearman & Sterling.
8.3 NOTICES.
(a) All notices and other communications given or made pursuant to
this Agreement shall be in writing and shall be sent by an
overnight courier service that provides proof of receipt,
mailed by registered or certified mail (postage prepaid,
return receipt requested) or telecopy to the parties at the
following addresses (or at such other address for a party as
shall be specified by like notice):
(i) if to CMI to:
CMI Industries, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Chairman
Telecopy: (000) 000-0000
with a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx O'X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
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(ii) If to Holdings or CMI Acquisitions, to:
CMI Management, Inc., or
CMI Acquisitions, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxxxxx, Xxxxxx & Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xx Xxxxxx, Esq.
Telecopy: (000) 000-0000
8.4 HEADINGS. The descriptive headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
8.5 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public
policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected
in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of
being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that
the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
8.6 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof and
thereof and supersede all prior agreements and undertakings, both
written and oral, between the parties with respect to the subject
matter hereof. The Disclosure Schedules and Schedules attached hereto
are incorporated into this Agreement and made a part hereof.
8.7 ASSIGNMENT. Neither this Agreement nor any rights or obligations
hereunder may be assigned by operation of law or otherwise without the
express written consent of all of the other parties hereto (which
consent may be granted or withheld by any party hereto in the sole
discretion of such party).
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8.8 NO THIRD PARTY BENEFICIARIES. This Agreement shall be binding upon and
inure solely to the benefit of the parties hereto and their permitted
assigns and nothing herein, except for Section 5.7, express or implied,
is intended to or shall confer upon any other person or entity any
legal or equitable right, benefit or remedy of any nature whatsoever
under or by reason of this Agreement.
8.9 AMENDMENT. This Agreement may not be amended or modified except by an
instrument in writing signed by, or on behalf of each of the Parties.
8.10 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware, without
regard to principles of conflict of laws.
8.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopy shall be effective as deliver of a
manually executes counterpart of this Agreement.
8.12 PUBLIC ANNOUNCEMENTS. Unless otherwise required by applicable law, none
of the parties shall issue any press release or otherwise make any
public statements with respect to this Agreement or any transaction
contemplated thereby without the prior written consent of CMI and
Holdings.
8.13 HOLDINGS STOCKHOLDERS AGREEMENT. Holdings will execute the Holdings
Stockholders Agreement immediately after the execution of this
Agreement.
8.14 HOLDCO PAYMENT OBLIGATIONS. Holdco may delegate any payment obligation
hereunder to CMI Acquisitions or to the Surviving Corporation; provided
that no such delegation will relieve Holdco's obligations hereunder.
[signatures on following page]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first written above by their respective officers or
representatives thereunto duly authorized.
CMI INDUSTRIES, INC.
By:
--------------------------------------
Name:
Title:
CMI MANAGEMENT, INC.
By:
--------------------------------------
Name:
Title:
CMI ACQUISITIONS, INC.
By:
--------------------------------------
Name:
Title:
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EXHIBIT A TO
CMI INDUSTRIES/CMI MANAGEMENT/CMI ACQUISITIONS
MERGER AGREEMENT
CERTIFICATE OF MERGER
OF
CMI ACQUISITIONS INC.
WITH AND INTO
CMI INDUSTRIES, INC.
=====================
The undersigned corporation does hereby certify:
FIRST: That the name and state of incorporation of each of the constituent
corporations of the merger are as follows:
Name State Of Incorporation
---- ----------------------
CMI Industries, Inc. Delaware
CMI Acquisitions, Inc. Delaware
SECOND: That an agreement of merger among the parties to the merger has been
approved, adopted, certified, executed and acknowledged by each of the
constituent corpora tions in accordance with the requirements of
section 251 of the General Corporation Law of the State of Delaware.
THIRD: The name of the surviving corporation of the merger is CMI Industries,
Inc.
FOURTH: The Certificate of Incorporation of CMI Industries, Inc. shall be the
Certificate of Incorporation of the surviving corporation.
FIFTH: That the executed agreement of merger is on file at the principal place
of business of CMI Industries, Inc., the surviving corporation. The
address of said principal place of business is 0000 Xxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxx, XX 00000.
SIXTH: That a copy of the agreement of merger will be furnished by CMI
Industries, Inc., the surviving corporation, on request and without
cost, to any stockholder of any constituent corporation.
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SEVENTH: This Certificate of Merger shall be effective as of the opening of
business on ____________, 1998.
DULY EXECUTED, delivered and certified, under seal, by the duly
authorized officers of the Surviving Corporation on ___________ ____, 1998.
CMI INDUSTRIES, INC.
(Corporate Seal)
By:
-----------------------------------
Attest: Name:
-------------------------------- ------------------------------
Name: President
----------------------------------
Secretary
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EXHIBIT B TO
CMI INDUSTRIES/CMI MANAGEMENT/CMI ACQUISITIONS
MERGER AGREEMENT
LETTER OF TRANSMITTAL
To Accompany Certificates Representing Shares of Common Stock of
CMI Industries, Inc.
to be exchanged for cash and shares of CMI Investments, Inc.
By Mail or Hand Delivery to:
Xxxxx X. Xxxxxxx
CMI MANAGEMENT, INC.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
To call for additional information:
Xxxxx X. Xxxxxxx
(000) 000-0000
In connection with the merger of CMI Industries Inc. ("CMI") with a subsidiary
of CMI Management, Inc., which is to become effective on or about ________ __,
1998 (the "EFFECTIVE DATE", unless otherwise specified capitalized terms used
herein shall have the same meaning ascribed to such terms in the Merger
Agreement by and between CMI Management, Inc., CMI Acquisitions, Inc. and CMI
Industries, Inc. dated [__________] (the "MERGER AGREEMENT")):
1. Representations and warranties. The undersigned hereby represents and
warrants to CMI Management Inc. that
1.1 Ownership of the Shares. The undersigned is the beneficial and
record owner of all shares of $1.00 par value common stock of
CMI Industries, Inc. represented by the share certificates
that accompany this letter of transmittal (the "CMI SHARES"),
free and clear of all liens, encumbrances, options, rights of
first refusal or other transfer restrictions, adverse claims
or any other charges of whatsoever nature.
1.2 Authority. The undersigned has full right, capacity and
authority to vote such shares in connection with the Merger
contemplated by the Merger Agreement and to surrender them to
CMI Management Inc. together with this letter of transmittal.
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1.3 Disclosure Document. The undersigned or a duly authorized
representative or officer thereof has received and reviewed
the Disclosure Document (as defined in the Merger Agreement)
and understands the materials contained therein. The
undersigned has had an opportunity to ask questions of CMI and
Holdings concerning the Disclosure Document, the Merger
Agreement and the transactions contemplated by such documents
(the "TRANSACTIONS"), and CMI and Holdings has answered all
such questions to the full satisfaction of the Seller. The
undersigned has carefully read the New Stockholders Agreement
and has discussed their requirements and other applicable
limitations upon resale of the Securities with is counsel.
1.4 Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in
connection with the Merger Agreement or the transactions
contemplated by the Merger Agreement based upon arrangements
made by or on behalf of the undersigned.
1.5 Investment Considerations. The undersigned represents and
warrants that he is acquiring the shares of Holdings Common
Stock for his own account for the purpose of investment and
not with a view to or for sale in connection with any
distribution or other allocation thereof. The undersigned
further represents and warrants as follows:
(a) The undersigned shall not make any sale, transfer or
other disposition of shares of Holdings Common Stock
(the "SECURITIES") in violation of the Securities Act
of 1933, as amended (the "1933 Act") or any
applicable state securities laws (the "State Acts").
(b) The undersigned understands that the shares of
Holdings Common Stock have not been registered under
the Securities Act by reason of their issuance in a
transaction exempt from the registration requirements
of the Securities Act pursuant to Section 4(2) or
4(6) thereof, that the Securities are not being
registered under any State Acts on the ground that
this transaction is exempt from registration
thereunder and that reliance by Holdings on such
exemptions is predicated in part on his
representations set forth in this Agreement. The
undersigned agrees that Holdings may refuse to permit
him to sell, transfer or dispose of the Securities
unless there is in effect a registration statement
under any State Acts and the 1933 Act covering such
transfer or he furnishes an opinion of counsel,
satisfactory to counsel for Holdings, to the effect
that such registration is not required. The
undersigned also understands and agrees that stop
transfer instructions will be noted on the
appropriate records of Holdings and that there will
be placed on the certificate or certificates for the
shares, or
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any substitutions therefor, a legend reflecting the
fact that the shares have not been registered under
the 1933 Act or any State Act.
(c) The undersigned understands that he may not make any
sale of the Securities without registration under the
1933 Act except upon compliance with Regulation A,
Rule 144 or some other exemption from such
registration.
(d) The undersigned understands that his ownership of the
shares of Holdings Common Stock may be subject to the
terms of the New Stockholders Agreement, which
contains certain restrictions on transfer, options
and other limitations on his ownership of Holdings
Common Stock.
(e) The undersigned has received no public solicitation
or advertisement concerning an offer to sell the
shares.
(f) The undersigned acknowledges and understands that the
acquisition of the Securities involves a high degree
of risk and can afford to lose his entire investment
in the Securities.
The undersigned further understands that the exemption from
registration afforded by Rule 144 under the Securities Act
depends on the satisfaction of various conditions and that, if
applicable, Rule 144 affords the exemptions of sale of the
Shares of Holdings Common Stock only in limited amounts under
certain conditions. The undersigned acknowledges that he has
had a full opportunity prior to the date hereof to ask
questions about the Company and Holdings and to request from
Holdings and has received all information which he deems
relevant in making a decision to participate in the Merger.
2. Release. The undersigned releases CMI from any and all claims, rights
and causes of action which the undersigned may have or may have had
against CMI arising out of the purchase by the undersigned (or its
predecessors) of the CMI Shares; provided however that nothing in this
letter of transmittal waives, releases or restricts in any manner
whatsoever any of the rights of the undersigned that arise under the
Merger Agreement or this letter of transmittal.
3. Surrender of Certificates. The undersigned, as registered holder of the
stock certificate(s) listed below and accompanying this letter of
transmittal (the "CMI STOCK CERTIFICATES"), hereby surrenders the
attached certificates in exchange for a cash payment and a number
shares of CMI Investments, Inc. for each share of CMI Industries, Inc.
computed in accordance with the Merger Agreement.
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ALL HOLDERS MUST COMPLETE BOXES A, B, AND D AND ENCLOSE STOCK CERTIFICATES.
CERTIFICATES ENCLOSED
BOX B
Names and Address of Registered Holder(s) Certificate Number(s) Number of Shares
------------------------- ---------------------
------------------------- ---------------------
------------------------- ---------------------
------------------------- ---------------------
------------------------- ---------------------
------------------------- ---------------------
[ ] address change indicated above Total Shares:
We will process letters of transmittal as submitted; however, to receive your
full entitlement of shares on this exchange, please submit all shares.
BOX A
SIGN HERE (all registered holders)
---------------------------------------------
---------------------------------------------
Signature of owner(s)
---------------------------------------------
Phone number
[ ] I have lost my certificate(s) for ____________ shares and require assistance
with respect to replacing the shares.
BOX C
SIGNATURE GUARANTEE
Your signature must be notarized by a notary public
---------------------------------------------------
GENERAL INFORMATION
- SIGNATURE GUARANTEE: Box C (Notarization) only needs to be completed if
the registration of the new certificates will be different from the
current registration or if Box E is completed.
- LOST CERTIFICATES: If your certificates are lost, please check the
small box above Box C, complete the Letter of Transmittal and return it
to us as normal. There may be a fee required to replace lost
certificates.
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- FRACTIONAL SHARES: Any fractional share amount resulting from the
exchange will be paid in cash.
- DIVIDENDS: Payment of any dividends accrued will be paid at the time
the shares are submitted for exchange.
- ADDRESS CHANGES: If your permanent address should be changed on our
records, please indicate address change in Box A. An address in Box F
will be treated as the one time only, special instructions.
IMPORTANT TAX INFORMATION
PLEASE PROVIDE YOUR SOCIAL SECURITY OR OTHER TAX IDENTIFICATION NUMBER ON THIS
SUBSTITUTE FORM W-9 AND CERTIFY THEREIN THAT YOU ARE NOT SUBJECT TO BACKUP
WITHHOLDING. FAILURE TO DO SO WILL SUBJECT YOU TO 31% FEDERAL INCOME TAX
WITHHOLDING FROM YOUR PAYMENT CHECK.
BOX D
Substitute Form W-9
Please provide the Taxpayer Identification Number ("TIN") of the person
submitting this Letter of Transmittal in the box at right and certify by signing
and dating below.
Social Security Number
---------------------------------------
CERTIFICATION - Under penalties of perjury, the undersigned hereby certifies the
following: (1) The TIN shown above is the correct TIN of the person who is
submitting this Letter of Transmittal and who is required by law to provide such
TIN, or such person is waiting for a TIN to be issued, and (2) The person who is
submitting this Letter of Transmittal and who is required by law to provide such
TIN is not subject to backup withholding because such person has not been
notified by the Internal Revenue Service ("IRS") that such person is subject to
backup withholding, or because the IRS has not notified such person that he or
she is no longer subject to backup withholding, or because such person is an
exempt payee.
Signature: Date:
----------------------------------- --------------------------
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BOX E BOX F
---------------------------------------------------------- ----------------------------------------------------------
Special Payment Instructions Special Delivery Instructions
---------------------------------------------------------- ----------------------------------------------------------
To be completed ONLY if the certificate is to be To be completed ONLY if the certificate is to be delivered
registered in the name(s) of someone other than the to an address other than that in Box A.
registered holder(s) in Box A. This may be done only with
the written consent of CMI Investments, Inc. MAIL TO:
ISSUE TO
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----------------------------------------------------------- Name
Name
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----------------------------------------------------------- Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx
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----------------------------------------------------------- City, State and Zip Code
City, State and Zip Code
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Tax ID Number
30
