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AGREEMENT AND PLAN OF MERGER
By and Among
XXXXXXX BROS. CRANES, INC.
00XX XXXXXX ACQUISITION CORP.
and
REXWORKS INC.
August 15, 1997
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TABLE OF CONTENTS
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ARTICLE I
THE MERGER
1.01 The Merger.................................................. 1
1.02 Effective Time.............................................. 1
1.03 Effect of the Merger........................................ 1
1.04 Certificate of Incorporation; By-Laws....................... 1
1.05 Directors and Officers...................................... 1
1.06 Taking Necessary Action; Further Action..................... 2
1.07 The Closing................................................. 2
ARTICLE II
CONVERSION OF SECURITIES
2.01 Conversion of Securities.................................... 2
2.02 Dissenting Shares........................................... 2
2.03 Exchange of Certificates.................................... 3
2.04 Stock Options............................................... 4
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.01 Organization and Qualification; Subsidiaries................ 4
3.02 Certificate of Incorporation; By-Laws....................... 5
3.03 Capitalization.............................................. 5
3.04 Authority; Vote Required.................................... 5
3.05 No Conflict; Required Filings and Consents.................. 6
3.06 Permits; Compliance......................................... 7
3.07 Reports; Financial Statements............................... 7
3.08 Absence of Certain Changes or Events........................ 7
3.09 Absence of Litigation....................................... 8
3.10 Contracts; No Default....................................... 8
3.11 Employee Benefit Plans; Labor Matters....................... 8
3.12 Taxes....................................................... 9
3.13 Intellectual Property Rights................................ 9
3.14 Insurance................................................... 9
3.15 Brokers..................................................... 9
3.16 Title to Properties......................................... 9
3.17 Labor Matters............................................... 10
3.18 Proxy Statement............................................. 10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND ACQUIROR SUB
4.01 Organization and Qualification; Subsidiaries................ 10
4.02 Authority................................................... 10
4.03 No Conflict; Required Filings and Consents.................. 11
4.04 Ownership of Acquiror Sub; No Prior Activities.............. 11
4.05 Financing................................................... 11
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ARTICLE V
COVENANTS
5.01 Affirmative Covenants of the Company........................ 11
5.02 Negative Covenants of the Company........................... 12
5.03 Confidentiality Agreement................................... 13
5.04 Acquisition Proposals....................................... 13
5.05 Sale of Divisions........................................... 14
ARTICLE VI
ADDITIONAL AGREEMENTS
6.01 Proxy Statement............................................. 14
6.02 Meeting of Shareholders..................................... 15
6.03 Appropriate Action; Consents; Filings....................... 15
6.04 Update Disclosure; Breaches................................. 16
6.05 Public Announcements........................................ 16
6.06 Indemnification............................................. 16
6.07 Obligations of Acquiror Sub................................. 17
6.08 Employee Benefits and Compensation.......................... 17
ARTICLE VII
CLOSING CONDITIONS
7.01 Conditions to Obligations of Each Party Under This
Agreement................................................... 17
7.02 Additional Conditions to Obligations of Acquiror and
Acquiror Sub................................................ 18
7.03 Additional Conditions to Obligations of the Company......... 20
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.01 Termination................................................. 21
8.02 Effect of Termination....................................... 22
8.03 Expenses.................................................... 22
ARTICLE IX
GENERAL PROVISIONS
9.01 Non-Survival of Representations and Warranties.............. 23
9.02 Notices..................................................... 23
9.03 Amendment................................................... 23
9.04 Waiver...................................................... 24
9.05 Headings.................................................... 24
9.06 Severability................................................ 24
9.07 Entire Agreement............................................ 24
9.08 Assignment.................................................. 24
9.09 Parties in Interest......................................... 24
9.10 Governing Law............................................... 24
9.11 Counterparts................................................ 24
9.12 Press Releases and Public Announcements..................... 24
9.13 Construction................................................ 24
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER dated as of August 15, 1997 (the
"Agreement"), is made and entered into among XXXXXXX BROS. CRANES, INC., a
Delaware corporation ("Acquiror"), 00XX XXXXXX ACQUISITION CORP., a Delaware
corporation and a wholly-owned subsidiary of Acquiror ("Acquiror Sub") and
REXWORKS INC., a Delaware corporation (the "Company").
RECITAL
The respective Boards of Directors of Acquiror, Acquiror Sub and the
Company have determined that it is advisable and in the best interests of the
respective corporations and their shareholders that Acquiror Sub be merged with
and into the Company in accordance with the Delaware General Corporation Law
(the "Delaware Law") and the terms of this Agreement, pursuant to which the
Company will be the surviving corporation and will become a wholly-owned
subsidiary of Acquiror (the "Merger").
AGREEMENTS
In consideration of the representations, warranties, covenants and
agreements set forth in this Agreement, the parties agree:
ARTICLE I
THE MERGER
1.01 The Merger. Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the Delaware Law, at the Effective Time,
Acquiror Sub shall be merged with and into the Company. As a result of the
Merger, the separate corporate existence of Acquiror Sub shall cease and the
Company shall continue as the surviving corporation of the Merger (the
"Surviving Corporation"). Acquiror Sub and the Company are sometimes
collectively referred to in this Agreement as the "Constituent Corporations."
1.02 Effective Time. As promptly as practicable after the satisfaction or,
if permissible, waiver of the conditions set forth in Article VII, the parties
shall cause the Merger to be consummated by filing the Certificate of Merger
(the "Certificate of Merger") with the Secretary of State of the State of
Delaware in such form as required by, and executed in accordance with, the
relevant provisions of the Delaware Law and shall take all such further actions
as may be required by law to make the Merger effective upon the filing of the
Certificate of Merger (the date and time of such effectiveness being the
"Effective Time"); provided, however, that the Effective Time shall not be
earlier than November 1, 1997.
1.03 Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of the Delaware Law. Without
limiting the generality of, and subject to the provisions of, the Delaware Law,
at the Effective Time, except as otherwise provided in this Agreement, all the
property, interests, assets, rights, privileges, immunities, powers and
franchises of Acquiror Sub and the Company shall vest in the Surviving
Corporation, and all debts, liabilities, duties and obligations of Acquiror Sub
and the Company shall become the debts, liabilities, duties and obligations of
the Surviving Corporation.
1.04 Certificate of Incorporation; By-Laws. At the Effective Time, the
Certificate of Incorporation, as amended by the amendments thereto set forth in
Exhibit A (which amendments shall become effective only at the Effective Time),
and the By-Laws of Acquiror Sub shall be the Certificate of Incorporation and
the By-Laws of the Surviving Corporation. The name of the Surviving Corporation
shall be Rexworks Inc.
1.05 Directors and Officers. The directors of Acquiror Sub immediately
prior to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-Laws of the Surviving Corporation, and the officers of
Acquiror Sub immediately prior to the Effective Time shall be the initial
officers of the Surviving Corporation, in each case until their respective
successors are duly elected or appointed and qualified.
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1.06 Taking Necessary Action; Further Action. Acquiror, Acquiror Sub and
the Company, respectively, shall each use its reasonable efforts to take all
such action as may be necessary or appropriate to effectuate the Merger under
the Delaware Law at the time specified in section 1.02. If, at any time after
the Effective Time, any further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all properties, interests, assets, rights,
privileges, immunities, powers and franchises of either of the Constituent
Corporations, the officers of the Surviving Corporation are fully authorized in
the name of each Constituent Corporation or otherwise to take, and shall take,
all such lawful and necessary action.
1.07 The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") will take place at the offices of Reinhart, Boerner,
Van Deuren, Xxxxxx & Xxxxxxxxxx, s.c., 0000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxx 00000, or at such other place as the parties hereto shall mutually
agree, and will be effective at the Effective Time.
ARTICLE II
CONVERSION OF SECURITIES
2.01 Conversion of Securities. At the Effective Time by virtue of the
Merger and without any further action on the part of Acquiror, Acquiror Sub, the
Company, the Surviving Corporation or the holders of any of the following
securities:
(a) each share of the common stock, $.12 par value, of the Company
("Company Common Stock") issued and outstanding immediately prior to the
Effective Time (other than (i) shares of Company Common Stock owned by
Acquiror, Acquiror Sub or the Company or any direct or indirect subsidiary
of Acquiror, Acquiror Sub or the Company and (ii) any Dissenting Shares (as
defined in section 2.02)) shall be canceled and extinguished and be
converted into and become a right to receive a cash payment of $1.6139 per
share, without interest (the "Purchase Price" or the "Merger
Consideration"); provided, however, that the Purchase Price shall be
subject to equitable adjustment in the event of any stock split, stock
dividend, reverse stock split or other change in the number of shares of
Acquiror Common Stock outstanding;
(b) each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time and owned by Acquiror, Acquiror Sub
or the Company or any direct or indirect subsidiary of Acquiror, Acquiror
Sub or the Company shall be canceled and extinguished and no payment shall
be made with respect thereto;
(c) each share of common stock, $.01 par value, of Acquiror Sub issued
and outstanding immediately prior to the Effective Time shall be converted
into one fully paid and nonassessable share of common stock, $.01 par
value, of the Surviving Corporation ("Surviving Corporation Common Stock");
and
2.02 Dissenting Shares.
(a) Notwithstanding anything in this Agreement to the contrary, if
section 262 of the Delaware Law ("Subchapter 262") shall be applicable to
the Merger, shares of Company Common Stock that are issued and outstanding
immediately prior to the Effective Time and which are held by shareholders
who have not voted such shares in favor of the Merger, who shall have
delivered, prior to any vote on the merger, a written objection to the
Merger in the manner provided in Subchapter 262 and who as of the Effective
Time, shall not have effectively withdrawn or lost such right to
dissenters' rights ("Dissenting Shares") shall not be converted into or
represent a right to receive the Merger Consideration pursuant to section
2.01, but the holders thereof shall be entitled only to such rights as are
granted by Subchapter 262. Each holder of Dissenting Shares who becomes
entitled to payment for such shares pursuant to Subchapter 262 shall
receive payment therefor from the Surviving Corporation in accordance with
the Subchapter 262; provided, however, that if any such holder of
Dissenting Shares shall have effectively withdrawn such holder's demand for
appraisal of such shares or lost such holder's right to appraisal and
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payment of such shares under Subchapter 262, such holder or holders (as the
case may be) shall forfeit the right to appraisal of such shares and each
such share shall thereupon be deemed, as of the Effective Time, to have
been canceled, extinguished and converted into and represent the right to
receive payment from the Surviving Corporation of the Merger Consideration
as provided in section 2.01.
(b) The Company shall give Acquiror (i) prompt notice of any written
demand for fair value, any withdrawal of a demand for fair value and any
other instrument served pursuant to Subchapter 262 received by the Company,
and (ii) the opportunity to direct all negotiations and proceedings with
respect to demands for fair value under such Subchapter 262. The Company
shall not, except with the prior written consent of Acquiror, voluntarily
make any payment with respect to any demand for fair value or offer to
settle or settle any such demand.
2.03 Exchange of Certificates.
(a) Prior to the Effective Time, Acquiror shall designate a bank or
trust company (the "Exchange Agent") to act as exchange agent in effecting
the exchange of the Merger Consideration for certificates representing
shares of Company Common Stock entitled to payment pursuant to section 2.01
(the "Certificates"). Immediately prior to the Effective Time, Acquiror
shall deposit with the Exchange Agent an amount equal to the aggregate
Merger Consideration (assuming there are no Dissenting Shares). The deposit
will consist of cash sufficient in the aggregate for the Exchange Agent to
make full payment of the Merger Consideration to the holders of all of the
outstanding shares of Company Common Stock. The Exchange Agent shall hold
such sums in escrow for the purposes set forth in section 2.01(b).
(b) Promptly after the Effective Time, the Exchange Agent shall mail
to each record holder of Certificates a letter of transmittal and
instructions for use in surrendering Certificates and receiving the
applicable Merger Consideration therefor. The form of the transmittal
letter shall have been prepared by Acquiror, subject to the approval of the
Company, prior to the Effective Time. Upon the surrender of each
Certificate, together with such letter of transmittal duly executed and
completed in accordance with the instructions thereto, the holder of such
Certificate shall be entitled to receive in exchange therefor an amount
equal to the applicable Merger Consideration multiplied by the number of
shares of Company Common Stock represented by such Certificate, and such
Certificate shall be canceled. Until so surrendered and exchanged, each
such Certificate shall represent solely the right to receive an amount
equal to the Merger Consideration multiplied by the number of shares of
Company Common Stock represented by such Certificate. No interest shall be
paid or accrued on the Merger Consideration upon the surrender of the
Certificates.
If any Merger Consideration is to be paid to a person other than the
person in whose name the Certificate surrendered in exchange therefor is
registered, it shall be a condition to such exchange that the person
requesting such exchange shall pay to the Exchange Agent any transfer or
other similar taxes required by reason of the payment of such Merger
Consideration to a person other than the registered holder of the
Certificate surrendered, or such person shall establish to the satisfaction
of the Exchange Agent that such tax has been paid or is not applicable.
Notwithstanding the foregoing, neither the Exchange Agent nor any party
hereto shall be liable to a holder of shares of Company Common Stock for
any Merger Consideration delivered to a public official pursuant to
applicable abandoned property, escheat and similar laws.
(c) Promptly following the date which is 180 days after the Effective
Time, the Exchange Agent's duties shall terminate and any portion of the
fund not disbursed pursuant to section 2.01(b) shall be released to the
Surviving Corporation. Thereafter, each holder of a Certificate may
surrender Certificates to the Surviving Corporation and (subject to
applicable abandoned property, escheat and similar laws) receive in
exchange therefor an amount equal to the Merger Consideration multiplied by
the number of shares of Company Common Stock represented by such
Certificate, without any interest thereon, but shall have no greater rights
against the Surviving Corporation than may be accorded to general creditors
of the Surviving Corporation.
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(d) After the Effective Time there shall be no transfers on the stock
transfer books of the Surviving Corporation of any shares of Company Common
Stock. If, after the Effective Time, Certificates are presented to the
Surviving Corporation or the Exchange Agent, they shall be canceled and
exchanged for the Merger Consideration, as provided in this Article II,
subject to applicable law in the case of Dissenting Shares.
2.04 Stock Options. At the Effective Time, each outstanding option to
purchase shares of Company Common Stock (a "Company Stock Option") issued
pursuant to the Company's stock option plans described on Schedule 3.11(a)
(together, the "Company Stock Plans") shall be exercised by the holder or
canceled and extinguished in a manner to be agreed upon by Acquiror and the
Company, which shall not increase Acquiror's aggregate Purchase Price.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The term "Company Material Adverse Effect" as used in this Agreement shall
mean any change or effect that, individually or when taken together with all
other similar changes or effects, is materially adverse to the condition
(financial or otherwise), results of operations, businesses, properties, assets,
or liabilities of the Company and its Subsidiaries, taken as a whole; provided,
however, that the occurrence of any or all of the changes or events described on
Schedule 3.00(a) shall not, individually or in the aggregate, constitute a
"Company Material Adverse Effect."
The term "Person" as used in this Agreement shall mean an individual,
corporation, partnership, association, trust, unincorporated organization, other
entity or group (as defined in section 13(d) of the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder (the
"Exchange Act")).
The term "Affiliate" as used in this Agreement shall mean, with respect to
any Person, a Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with the
first mentioned Person. The term "control" (including the terms "controlled by"
and "under common control with") means the possession, directly or indirectly or
as trustee or executor, of the power to direct or cause the direction of the
management or policies of a Person whether through the ownership of stock or as
trustee or executor, by contract or credit arrangement or otherwise.
The term "Subsidiary" (or its plural) as used in this Agreement with
respect to the Company, Acquiror, the Surviving Corporation or any other person
shall mean any corporation, partnership, joint venture or other legal entity of
which the Company, Acquiror, the Surviving Corporation or such other Person, as
the case may be (either alone or through or together with any other Subsidiary),
owns, directly or indirectly, greater than 50% of the stock or other equity
interests the holders of which are generally entitled to vote for the election
of the board of directors or other governing body of such corporation or other
legal entity.
With respect to any representation, warranty or statement of the Company in
this Agreement that is qualified by or to the Company's knowledge, such
knowledge shall be deemed to exist only if, at the time as of which such
representation, warranty or statement was made, any of the individuals listed on
Schedule 3.00(b) had actual knowledge of the matter to which such qualification
applies.
Except as set forth in the disclosure schedules delivered by the Company to
Acquiror and Acquiror Sub prior to the execution of this Agreement, the Company
makes the following representations and warranties to Acquiror and Acquiror Sub.
Notwithstanding anything in this Agreement to the contrary, any matter disclosed
in any part of the disclosure schedules shall be deemed to be disclosed in all
parts of the disclosure schedules where such matter is required to be disclosed,
regardless of whether such matter is specifically cross-referenced. The
disclosure of any matter in the disclosure schedules shall not necessarily be
deemed an indication that such matter is material or is required to be
disclosed.
3.01 Organization and Qualification; Subsidiaries. Except as set forth on
Schedule 3.01(a), each of the Company and its Subsidiaries is a corporation duly
incorporated, validly existing and in good standing under
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the laws of the jurisdiction of its incorporation, has all requisite corporate
power and authority to own, lease and operate its properties and to carry on its
business as it is now being conducted and is duly qualified and in good standing
to do business in each jurisdiction in which the nature of the business
conducted by it or the ownership or leasing of its properties makes such
qualification necessary, except such jurisdictions if any, where the failure to
be so qualified would not have a Company Material Adverse Effect. A true and
complete list of all the Company's directly or indirectly owned Subsidiaries
together with the jurisdiction of incorporation or organization of each
Subsidiary and the percentage of each Subsidiary's outstanding capital stock or
other equity interest owned by the Company or another Subsidiary of the Company,
is set forth on Schedule 3.01(b).
3.02 Certificate of Incorporation; By-Laws. The Company has furnished to
Acquiror complete and correct copies of the Certificate of Incorporation and the
By-Laws, as amended or restated, of the Company and each of its Subsidiaries.
Neither the Company nor any Subsidiary is in violation of any of the provisions
of its Certificate of Incorporation or By-Laws, as amended or restated.
3.03 Capitalization.
(a) As of the date of this Agreement, the authorized capital stock of
the Company consists of 4,300,000 shares of Company Common Stock, of which
1,896,668 shares are issued and outstanding, 248,413 shares reserved for
issuance pursuant to the Company Stock Plans and 248,413 Company Stock
Options are outstanding.
(b) Information as of the date of this Agreement relating to the
amounts of the authorized and issued and outstanding capital stock of each
Subsidiary is listed on Schedule 3.03(b).
(c) No shares of Company Common Stock are reserved for any purpose
other than as described in this section 3.03. Since December 31, 1996, no
shares of Company Common Stock have been issued by the Company, except
pursuant to the exercise of outstanding Company Stock Options in accordance
with their terms. Except as contemplated by this Agreement or as described
on Schedule 3.03(c), there have been no changes in the terms of any
outstanding Company Stock Options or the grant of any additional Company
Stock Options since December 31, 1996. All outstanding shares of Company
Common Stock have been duly authorized and are validly issued, fully paid
and nonassessable and are not subject to preemptive rights under the
Delaware Law, the Company's Certificate of Incorporation or By-Laws or any
agreement to which the Company is a party. Each of the outstanding shares
of capital stock of, or other equity interests in, each of the Company's
Subsidiaries has been duly authorized and is validly issued, fully paid and
nonassessable, and such shares or other equity interests are owned by the
Company free and clear of all security interests, liens, claims, pledges,
agreements, limitations on the Company's voting rights, charges or other
encumbrances of any nature whatsoever, subject to federal and state
securities laws. Except as contemplated by this Agreement or described in
section 3.03(a) there are no options, warrants or other rights, agreements,
arrangements or commitments to which the Company or any of its Subsidiaries
is a party of any character relating to the issued or unissued capital
stock of, or other equity interests in, the Company or any of the
Subsidiaries or obligating the Company or any of the Subsidiaries to grant,
issue, sell or register for sale any shares of the capital stock of, or
other equity interests in, the Company or any of the Subsidiaries. Except
as set forth on Schedule 3.03(c), as of the date of this Agreement, there
are no obligations, contingent or otherwise, of the Company or any of its
Subsidiaries to (i) repurchase, redeem or otherwise acquire any shares of
Company Common Stock, or the capital stock of, or other equity interests
in, any Subsidiary of the Company, or (ii) provide funds to, or make any
investment in (in the form of a loan, capital contribution or otherwise),
or provide any guarantee with respect to the obligations of, any Subsidiary
of the Company, except for the provision of funds to, making an investment
in (in the form of a loan, capital contribution or otherwise) or provision
of any guarantees of obligations of Subsidiaries in the ordinary course of
business.
3.04 Authority; Vote Required.
(a) The Company has the requisite corporate power and authority to
execute and deliver this Agreement, to perform its obligations under this
Agreement and to consummate the transactions
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contemplated by this Agreement, subject to required shareholder approval.
The execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action,
including such corporate action as may be required by section 251 of the
Delaware Law, and no other corporate proceedings on the part of the Company
are necessary to authorize this Agreement or to consummate the transactions
contemplated by this Agreement (other than with respect to the approval of
this Agreement by the holders of Company Common Stock in accordance with
the Delaware Law and the Company's Certificate of Incorporation and
By-Laws). This Agreement has been duly executed and delivered by the
Company and constitutes the valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, moratorium and other similar laws
relating to or affecting the rights and remedies of creditors generally and
by general principles of equity including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the possible
unavailability of specific performance, injunctive relief or other
equitable remedies, regardless of whether enforceability is considered in a
proceeding in equity or at law.
(b) The affirmative vote of the holders of at least a majority of the
outstanding shares of Company Common Stock is the only vote of the holders
of any class or series of capital stock of the Company necessary to approve
the Merger.
3.05 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the Company do
not, and the performance of this Agreement by the Company will not: (i)
violate the Certificate of Incorporation or By-Laws of the Company or any
of its Subsidiaries; (ii) subject to [a] obtaining the requisite approval
of this Agreement by the holders of at least a majority of the outstanding
shares of Company Common Stock in accordance with the Delaware Law and the
Company's Certificate of Incorporation and By-Laws, [b] obtaining the
consents, approvals, authorizations and permits of, and making filings with
or notifications to, any governmental or regulatory authority, domestic or
foreign ("Governmental Entities"), pursuant to the applicable requirements,
if any, of the Securities Act of 1933 (the "Securities Act"), the Exchange
Act, the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended,
and the rules and regulations thereunder (the "HSR Act"), the applicable
provisions of Delaware law and the rules and regulations thereunder, the
requirements of the National Association of Securities Dealers, Inc.
("NASD") or the NASDAQ National Market System, and the filing and
recordation of appropriate merger documents as required by the Delaware
Law, and [c] giving the notices and obtaining the consents, approvals,
authorizations or permits described on Schedule 3.05(a), violate any laws
applicable to the Company or any of its Subsidiaries or by which any of
their respective properties is bound, other than a potential violation
under any federal or state antitrust or similar laws, rules or regulations;
or (iii) except as set forth on Schedule 3.05(a), result in any breach of
or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of the
Company or any of its Subsidiaries pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any of its Subsidiaries is
a party or by which the Company or any of its Subsidiaries or any of their
respective properties is bound, except for such violations, breaches or
defaults as would not have a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement by the Company do
not, and the performance of this Agreement by the Company shall not,
require any consent, approval, authorization or permit of, or filing with
or notification to, any Governmental Entities, except for applicable
requirements, if any, of (i) the Securities Act, the Exchange Act, the HSR
Act, and the requirements of the NASD and the NASDAQ National Market
System, (ii) the consents, approvals, authorizations or permits described
on Schedule 3.05(a), and (iii) the filing and recordation of appropriate
merger documents as required by the Delaware Law, except for any consent,
approvals, authorizations, permits, filings or notifications that, if not
obtained, would not have a Company Material Averse Effect.
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3.06 Permits; Compliance. Except as set forth on Schedule 3.06, each of the
Company and its Subsidiaries is in possession of all franchises, authorizations,
licenses, permits, easements, variances, exemptions, consents, certificates,
approvals and orders necessary for the Company or any of its Subsidiaries to
own, lease and operate its properties or to carry on its business as it is now
being conducted (the "Company Permits"), except for any Company Permits the
absence of which would not have a Company Material Adverse Effect. To the
knowledge of the Company, no suspension, revocation or cancellation of any of
the Company Permits is pending or threatened. Neither the Company nor any of its
Subsidiaries is operating in default under or violation of (i) any law
applicable to the Company or any of its Subsidiaries or by which any of their
respective properties is bound or (ii) any of the Company Permits, except for
any such defaults or violations which would not have a Company Material Adverse
Effect.
3.07 Reports; Financial Statements.
(a) Since December 31, 1996, (i) the Company has filed all forms,
reports, statements and other documents required to be filed with [a] the
Securities and Exchange Commission (the "SEC") including, without
limitation, [i] all Annual Reports on Form 10-K, [ii] all Quarterly Reports
on Form 10-Q, [iii] all proxy statements relating to meetings of
shareholders (whether annual or special), [iv] all required Current Reports
on Form 8-K, [v] all other reports or registration statements and [vi] all
amendments and supplements to all such reports and registration statements,
which amendments and supplements have been, to the knowledge of the
Company, required to be filed (collectively, as amended or supplemented,
the "Company SEC Reports"), and [b] any applicable state securities
authorities; and (ii) the Company and each of its Subsidiaries have filed
all forms, reports, statements and other documents required to be filed
with any other applicable federal or state regulatory authorities, except
as set forth on Schedule 3.07(a) or where the failure to file such forms,
reports or statements would not have a Company Material Adverse Effect (all
such forms, reports, statements and other documents in clauses (i) and (ii)
of this section 3.07(a) being collectively referred to as the "Company
Reports"). Such Company SEC Reports and Company Reports do not contain any
untrue statement of a material fact or omit any material fact required to
be stated therein or necessary to make the statements therein not
misleading.
(b) Each of the consolidated financial statements (including, in each
case, any related notes to such statements) contained in the Company SEC
Reports (i) have been prepared in all material respects in accordance with
the published rules and regulations of the SEC and generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved (except to the extent required by changes in GAAP and as
may be indicated in the notes thereto) and (ii) fairly represent the
consolidated financial position of the Company and its Subsidiaries as of
the respective dates thereof and the consolidated results of operations and
cash flows for the periods indicated (subject to normal year-end
adjustments in the case of any unaudited interim financial statements).
(c) Except as and to the extent reflected on, or reserved against in,
the consolidated balance sheet of the Company and its Subsidiaries at
December 31, 1996, including all notes thereto (the "Company Balance
Sheet"), or as set forth on Schedule 3.07(c), neither the Company nor any
of its Subsidiaries has any liabilities or obligations (whether accrued,
absolute, contingent or otherwise) that would be required to be reflected
on, or reserved against in, a balance sheet of the Company or in the notes
thereto, prepared in accordance with the published rules and regulations of
the SEC and GAAP, except for liabilities or obligations incurred in the
ordinary course of business since December 31, 1996 that, individually or
in the aggregate, would not have a Company Material Adverse Effect.
3.08 Absence of Certain Changes or Events. Except as disclosed in the
Company SEC Reports (or the notes thereto) or as contemplated by this Agreement,
since December 31, 1996:
(a) each of the Company and its Subsidiaries has conducted its
business in the ordinary course and consistent with the Company's past
practice;
(b) there has not been any Company Material Adverse Effect;
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(c) except as set forth on Schedule 3.08, neither the Company nor any
Subsidiary has made any material increase in compensation to officers or
key employees or any material increase in any or created any new bonus,
insurance, pension or other employee benefit plan, payment or arrangement
(including, but not limited to, the granting of stock options) other than
in the ordinary course of business and consistent with the Company's past
practice;
(d) neither the Company nor any Subsidiary has made any loans or
advances to any officer, director, shareholder or Affiliate of the Company
or of any Subsidiary (except for travel and business expense payments);
(e) there has not been any change in the accounting methods or
practices followed by the Company or any Subsidiary, except as required by
GAAP;
(f) the Company has not sold or disposed of material assets outside of
the ordinary course of business, other than the sale of assets pertaining
solely to the grinder and compactor divisions of the Company and those
assets listed on Schedule 5.05(a); and
(g) neither the Company nor any Subsidiary has entered into any
commitment or other agreement to do any of the foregoing.
3.09 Absence of Litigation.
(a) Schedule 3.09(a) lists all claims, actions, suits, litigation, or
arbitrations or, to the knowledge of the Company, investigations or
proceedings affecting the Company or any of its Subsidiaries, at law or in
equity, which are pending or, to the knowledge of the Company, threatened,
and which has had or would reasonably be expected to have a Company
Material Adverse Effect. There is no action pending seeking to enjoin or
restrain the Merger.
(b) Except as set forth on Schedule 3.09(b), neither the Company nor
any of its Subsidiaries is subject to any continuing order of, consent
decree, settlement agreement or other similar written agreement with or, to
the knowledge of the Company, continuing investigation by, any Governmental
Entity.
3.10 Contracts; No Default. Schedule 3.10 lists each contract or agreement
to which the Company or any of its Subsidiaries is a party concerning a
partnership or joint venture with another Person or materially limiting the
right of the Company or any of its Subsidiaries prior to the Effective Time, or
Acquiror or any of its Subsidiaries at or after the Effective Time, to engage
in, or to compete with any Person in, any business including each contract or
agreement containing exclusivity provisions restricting the geographical area in
which, or the method by which, any business may be conducted by the Company or
any of its Subsidiaries prior to the Effective Time, or by the Acquiror or any
of its Subsidiaries after the Effective Time.
3.11 Employee Benefit Plans; Labor Matters.
(a) Schedule 3.11(a) lists or describes any pension, retirement,
savings, disability, medical, dental, health, life (including any
individual life insurance policy as to which the Company is the owner,
beneficiary or both), death benefit, group insurance, profit sharing,
deferred compensation, stock option, bonus incentive, vacation pay,
severance pay, "cafeteria" or "flexible benefit" plan under section 125 of
the Internal Revenue Code of 1986 as amended (the "Code"), or other
employee benefit plan, trust, arrangement, contract, agreement, policy or
commitment, under which employees of the Company or its Subsidiaries are
entitled to participate by reason of their employment with the Company or
its Subsidiaries, (i) to which the Company or a Subsidiary is a party or a
sponsor or a fiduciary thereof or (ii) with respect to which the Company or
a Subsidiary has made payments, contributions or commitments, or has any
liability (collectively, the "Employee Benefit Plans").
(b) The Employee Benefit Plans have been operated and administered by
the Company in compliance in all material respects with all applicable laws
relating to employment or labor matters, including without limitation, the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and
the Code.
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(c) Each Employee Benefit Plan that is intended to be tax qualified
under section 401(a) of the Code has received, or the Company has applied
for or will in a timely manner apply for, a favorable determination letter
from the Internal Revenue Service (the "IRS") stating that the Plan meets
the requirements of the Code and that any trust or trusts associated with
the plan are tax exempt under section 501(a) of the Code.
(d) The Company does not maintain any defined benefit plan covering
employees of the Company or its Subsidiaries within the meaning of section
3(35) of ERISA.
(e) Schedule 3.11(e) sets forth a list of all written employment
agreements, employment contracts or understandings relating to employment
(other than relating to "at-will" employment) to which the Company or any
of its Subsidiaries is a party.
3.12 Taxes. The Company has filed or caused to be filed with the
appropriate Governmental Entities, all federal, state, municipal, and local
income, franchise, excise, real and personal property, and other tax returns and
reports that are required to be filed, and the Company is not delinquent in the
payment of any material taxes shown on such returns or reports or on any
material assessments for any such taxes received by it and has otherwise
complied in all material respects with all legal requirements applicable to the
Company with respect to all income, sales, use, real or personal property,
excise or other taxes. The Company Balance Sheet includes adequate reserves for
the payment of all accrued but unpaid federal, state, municipal and local taxes
of the Company, including, without limitation, interest and penalties, whether
or not disputed, for the year ended December 31, 1996 and for all fiscal years
prior thereto. Except as set forth on Schedule 3.12, the Company has not
executed or filed with the Internal Revenue Service any agreement extending the
period for assessment and collection of any federal tax. The Company is not a
party to any pending action or proceeding, nor, to the knowledge of the Company,
has any action or proceeding been threatened, by any Governmental Entity for
assessment or collection of taxes, and no claim for assessment or collection of
taxes has been asserted against the Company.
3.13 Intellectual Property Rights. To the knowledge of the Company, the
Company and each of the Subsidiaries owns or possesses the right to use (in the
manner and the geographic areas in which they are currently used) all patents,
patents pending, trademarks, service marks, trade names, service names, slogans,
registered copyrights, trade secrets and other intellectual property rights it
currently uses, without any conflict or alleged conflict with the rights of
others, except where any such conflict would not have a Company Material Adverse
Effect.
3.14 Insurance. All policies and binders of insurance for professional
liability, directors and officers, property and casualty, fire, liability,
worker's compensation and other customary matters held by or on behalf of the
Company or its Subsidiaries ("Insurance Policies") have been made available to
Acquiror. The Insurance Policies are in full force and effect. To the knowledge
of the Company, the Company or its Subsidiaries have not failed to give any
notice of any claim under any Insurance Policy in due and timely fashion, nor to
the knowledge of the Company, has any coverage for claims been denied, which
failure or denial has had or would have a Company Material Adverse Effect.
3.15 Brokers. No broker, finder or investment banker other than The Chicago
Corporation is entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement based upon any
arrangements made by or on behalf of the Company.
3.16 Title to Properties.
(a) Schedule 3.16(a) lists all real property owned and leased by the
Company and its Subsidiaries. The Company and its Subsidiaries have good
title to all of their tangible properties and tangible assets, real and
personal, free and clear of all mortgage liens and free and clear of all
other liens, charges and encumbrances except liens for taxes not yet due
and payable, and such other imperfections of title, if any, as do not
materially detract from the value of or interfere with the present use of
the property effected thereby or which, individually or in the aggregate,
would not have a Company Material Adverse Effect.
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(b) To the knowledge of the Company, the leases for the real property
described on Schedule 3.16(a) are in full force and effect and the Company
holds a valid and existing leasehold interest under each of the leases. The
Company has delivered to Acquiror complete and accurate copies of each of
the leases described on Schedule 3.16.
(c) Neither the Company nor any Subsidiary is in violation of any
applicable material zoning ordinance or other law, regulation or
requirement relating to the operation of any properties used in the
operation of its business, which violation has had or would have a Company
Material Adverse Effect, and neither the Company nor any Subsidiary has
received any notice of any such violation, or the existence of any
condemnation proceeding with respect to any of its real property.
3.17 Labor Matters. Except for matters which will not cause a Company
Material Adverse Effect (a) the Company and its Subsidiaries are in compliance
with all applicable laws respecting employment and employment practices, terms
and conditions of employment and wages and hours, and are not engaged in any
unfair labor practice; (b) there is no unfair labor practice complaint against
the Company or its Subsidiaries pending before the National Labor Relations
Board; (c) there is no labor strike, dispute, slow down, representation campaign
or work stoppage actually pending or threatened against or effecting the Company
or its Subsidiaries; (d) no grievance or arbitration proceeding arising out of
or under collective bargaining agreements is pending and no claim therefore has
been asserted against the Company or its Subsidiaries; and (e) neither the
Company nor its Subsidiaries are experiencing any material work stoppage.
3.18 Proxy Statement. The definitive Proxy Statement and related materials
will comply with the Exchange Act in all material respects. The definitive proxy
materials will not contain a untrue statement of material fact or omit a
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they will be made, not misleading; provided,
however, that the Company makes no representation or warranty with respect to
any information that the Acquiror will supply for use in connection with such
proxy materials.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF ACQUIROR AND ACQUIROR SUB
The term "Acquiror Material Adverse Effect" as used in this Agreement shall
mean any change or effect that, individually or when taken together with all
such other changes or effects, is materially adverse to the condition (financial
or otherwise), results of operations business, properties, assets or liabilities
of Acquiror and its Subsidiaries, taken as a whole.
Acquiror and Acquiror Sub jointly and severally represent and warrant to
the Company that:
4.01 Organization and Qualification; Subsidiaries. Each of Acquiror and
Acquiror Sub is a corporation, duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, and has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as it is now being conducted.
4.02 Authority. Each of Acquiror and Acquiror Sub has the requisite
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder, and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Acquiror and Acquiror
Sub, and the consummation by Acquiror and Acquiror Sub of the transactions
contemplated hereby, have been duly authorized by all necessary corporate action
and no other corporate proceedings on the part of Acquiror or Acquiror Sub are
necessary to authorize this Agreement or to consummate the transactions
contemplated by this Agreement. This Agreement has been duly executed and
delivered by Acquiror and Acquiror Sub and constitutes a legal, valid and
binding obligation of Acquiror and Acquiror Sub enforceable against Acquiror and
Acquiror Sub in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws relating to or
affecting the rights and remedies of creditors generally and by general
principles of equity including, without
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limitation, concepts of materiality, reasonableness, good faith and fair dealing
and the possible unavailability of specific performance, injunctive relief or
other equitable remedies, regardless of whether enforceability is considered in
a proceeding in equity or at law.
4.03 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Acquiror and
Acquiror Sub do not, and the performance of this Agreement by Acquiror and
Acquiror will not, (i) violate the Certificate of Incorporation or By-Laws
or equivalent organizational documents of Acquiror or Acquiror Sub, (ii)
subject to obtaining the consents, approvals, authorizations and permits
of, and making filings with or notifications to, any Governmental Entities
pursuant to the applicable requirements, if any, of the Securities Act, any
stock exchange or quotation service on which Acquiror's securities are
listed or quoted, the HSR Act and the filing and recordation of appropriate
merger documents as required by the Delaware Law, conflict with or violate
any laws applicable to Acquiror or Acquiror Sub or by which any of their
respective properties is bound or affected, except such as would not have
an Acquiror Material Adverse Effect.
(b) The execution and delivery of this Agreement by Acquiror and
Acquiror Sub do not, and the performance of this Agreement by Acquiror and
Acquiror Sub shall not, require any consent, approval, authorization or
permit of, or filing with or notification to, any Governmental Entities,
except as described in section 4.03(a) above.
4.04 Ownership of Acquiror Sub; No Prior Activities.
(a) Acquiror Sub was formed for the purpose of engaging in the
transactions contemplated by this Agreement. As of the Effective Time, all
of the outstanding capital stock of Acquiror Sub will be owned directly by
Acquiror. As of the date hereof and the Effective Time, except for
obligations or liabilities incurred in connection with its incorporation or
organization and the transactions contemplated by this Agreement, Acquiror
Sub has not and will not have incurred, directly or indirectly, through any
Subsidiary or Affiliate, any obligations or liabilities or engaged in any
business activities of any type or kind whatsoever or entered into any
agreement or arrangements with any Person.
4.05 Financing. Acquiror has the ability to and intends to finance the
aggregate of the amounts payable pursuant to Article II with cash on hand and
utilization of existing credit facilities. Acquiror will use its best efforts to
ensure the continued availability of such financing and pay such amounts in
accordance with the terms of this Agreement and will not take any action between
the date hereof and the Effective Time which would impair its ability to obtain
such financing.
ARTICLE V
COVENANTS
5.01 Affirmative Covenants of the Company. With respect to the mixer
division assets, operations, business and employees, the Company covenants and
agrees that prior to the Effective Time, unless otherwise contemplated by this
Agreement or consented to in writing by Acquiror, the Company will and will
cause each of its Subsidiaries to:
(a) operate its business in the ordinary course of business and
consistent with its past practice;
(b) use reasonable efforts to preserve intact its business
organization and assets, maintain its rights and franchises, retain the
services of its respective officers and key employees and maintain the
relationships with its respective key customers and suppliers;
(c) subject to the provisions of the Acquiror Confidentiality
Agreement (as hereinafter defined), confer with Acquiror at its reasonable
request to report operational matters of a material nature and to report
the general status of the ongoing operations of the business of the Company
and its Subsidiaries;
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(d) Subject to the provisions of the Acquiror Confidentiality
Agreement, from the date hereof until the Closing Date, the Company (i)
will give, and will cause each of its Subsidiaries to give, Acquiror, its
counsel, financial advisors, auditors and other authorized representatives
reasonable access to the offices, properties, books and records of the
Company and its Subsidiaries, (ii) will furnish, and will cause each
Subsidiary to furnish, to Acquiror, its counsel, financial advisors,
auditors and other authorized representatives such financial and operating
data and other information relating to the Company and the Subsidiaries as
such persons may reasonably request, and (iii) will instruct the employees,
counsel and financial advisors of the Company and the Subsidiaries to
cooperate in all reasonable respects with Acquiror in its investigation of
the Company and the Subsidiaries. From the date of this Agreement until the
Effective Time, upon reasonable request, Acquiror shall be permitted to
have one or more of its personnel at the Company's premises for purposes of
due diligence and review of the business of the Mixer Division.
Notwithstanding the foregoing, Acquiror shall not have access to
information, analyses and materials prepared for the Company by ABN AMRO
Chicago Corporation, personnel records, medical histories or other
information which in the Company's good faith opinion is sensitive or the
disclosure of which could subject the Company to risk of liability.
5.02 Negative Covenants of the Company. Except as contemplated by this
Agreement or consented to in writing by Acquiror, from the date of this
Agreement until the Effective Time, the Company shall not do, and shall not
permit any of its Subsidiaries to do, any of the following:
(a) except as set forth on Schedule 5.02(a): (i) increase the
compensation payable to any director, officer or employee of the Company or
any of its Subsidiaries, except for increases in salary or wages payable or
to become payable in the ordinary course of business and consistent with
the policies currently in effect; (ii) grant any severance or termination
pay (other than pursuant to the severance policy and agreements of the
Company or its Subsidiaries currently in effect) to, or enter into any
severance agreement with, any director or officer; (iii) subject to clause
(i), enter into or amend any employment agreement with any director or
officer that would extend beyond the Effective Time except on an at-will
basis; or (iv) establish, adopt, enter into or amend any Employee Benefit
Plan, except as may be required to comply with applicable law;
(b) declare or pay any dividend on, or make any other distribution in
respect of, outstanding shares of capital stock;
(c) (i) redeem, purchase or otherwise acquire any shares of its or any
of its Subsidiaries' capital stock or any securities or obligations
convertible into or exchangeable for any shares of its or its Subsidiaries'
capital stock, or any options, warrants or conversion or other rights to
acquire any shares of its or its Subsidiaries capital stock; (ii) effect
any reorganization or recapitalization; or (iii) split, combine or
reclassify any of its or its Subsidiaries' capital stock (except for the
issuance of shares upon the exercise of options or warrants in accordance
with their terms);
(d) issue, deliver, award, grant or sell, or authorize the issuance,
delivery, award, grant or sale (including the grant of any security
interests, liens, claims, pledges, limitations on voting rights, charges or
other encumbrances) of, any shares of any class of its or its Subsidiaries'
capital stock, any securities convertible into or exercisable or
exchangeable for any such shares, or any rights, warrants or options to
acquire any such shares (except for the issuance of shares upon the
exercise of options or warrants in accordance with their terms), or amend
or otherwise modify the terms of any such rights, warrants or options the
effect of which shall be to make such terms more favorable to the holders
thereof, except as contemplated by this Agreement;
(e) to the extent material, acquire or agree to acquire, by merging or
consolidating with, by purchasing an equity interest in or a portion of the
assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division
thereof, or otherwise acquire or agree to acquire any assets of any other
Person (other than the purchase of assets from suppliers or vendors in the
ordinary course of business and consistent with the Company's past
practice);
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(f) sell, lease, exchange, mortgage, pledge, transfer or otherwise
dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer
or otherwise dispose of, any material amount of any of its or its
Subsidiaries' assets (other than assets pertaining solely to the grinder
and compactor divisions and the assets listed on Schedule 5.05(a)), except
for dispositions in the ordinary course of business and consistent with the
Company's past practice;
(g) adopt any amendments to its Certificate of Incorporation or
By-Laws;
(h) except as set forth in Schedule 5.02(h); (i) change any of its
methods of accounting in effect at December 31, 1996 or (ii) make or
rescind any express or deemed election relating to taxes, settle or
compromise any claim, action, suit, litigation, proceeding, arbitration,
investigation, audit or controversy relating to taxes, or change any of its
methods of reporting income or deductions for federal income tax purposes
from those employed in the preparation of the federal income tax returns
for the taxable year ending December 31, 1996, except in either case as may
be required by law, the IRS, or GAAP or in the ordinary course of business
consistent with past practice;
(i) incur any obligation for borrowed money or purchase money
indebtedness, whether or not evidenced by a note, bond, debenture or
similar instrument, except as approved by Acquiror in advance; or
(j) agree in writing or otherwise to do any of the foregoing.
5.03 Confidentiality Agreement. The parties will, and will cause their
respective officers, employees, accountants, consultants, legal counsel and
other representatives to, comply with all of their respective obligations under
the Confidentiality Agreement entered into by the Company and Acquiror on
February 11, 1997 concerning the Company's confidential information (the
"Acquiror Confidentiality Agreement").
5.04 Acquisition Proposals. Upon execution of this Agreement, the Company
and its Subsidiaries and their respective officers, directors, employees, agents
and advisors will immediately cease any existing discussions or negotiations
with any parties conducted heretofore with respect to any Acquisition Proposal
(as hereinafter defined). The Company may, directly or indirectly, furnish
information and access, in each case only in response to requests that were not
solicited by the Company (or any officer, director, employee, agent or advisor
on its behalf) after the date of this Agreement, to any corporation,
partnership, person or other entity or group (each, a "Potential Acquiror")
pursuant to confidentiality agreements, and may participate in discussions and
negotiate with a Potential Acquiror concerning any merger, sale of assets, sale
of shares of capital stock or similar transaction involving the Company or any
Subsidiary or division of the Company, if such Potential Acquiror has submitted
a written proposal to the Board of Directors relating to any such transaction,
and the Board of Directors determines in good faith after consultation with
independent legal counsel that the failure to provide such information or access
or to engage in such discussions or negotiations would be inconsistent with
their fiduciary duties to the Company's shareholders under applicable law. The
Company shall notify Acquiror immediately if any such request or proposal, or
any inquiry or contact with any Person with respect thereto, is made and shall
keep Acquiror apprised of all developments that could reasonably be expected to
culminate in the Board withdrawing, modifying or amending its recommendation of
the Merger and the other transactions contemplated by this Agreement. The
Company has entered into confidentiality agreements with other third parties
substantially in the form of the Acquiror Confidentiality Agreement. The Company
agrees not to release any third party from, or waive any provision of, any
confidentiality or standstill agreement to which the Company is a party unless,
in the opinion of the Board of Directors after consultation with independent
legal counsel, the failure to provide such release or waiver would be
inconsistent with its fiduciary duties to the Company's shareholders under
applicable law. For purposes of this section 5.04, the term "Acquisition
Proposal" means any proposal or offer for a merger, consolidation or similar
combination (other than the Merger contemplated by this Agreement) involving the
Company or any Subsidiary and any Potential Acquiror, or any proposal or offer
to acquire a significant equity interest in the Company, or a significant
portion of the real estate or mixer division assets of the Company by a
Potential Acquiror.
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5.05 Sale of Divisions.
(a) Notwithstanding anything else in this Agreement to the contrary,
the parties agree that prior to the Effective Time the Company may enter
into an agreement (the "Purchase Agreement") with CMI Corporation
("Purchaser") for the sale of assets pertaining solely to the grinder and
compactor divisions of the Company, together with the assets listed on
Schedule 5.05(a) (collectively, the "Divisional Assets"). Such agreement
shall be substantially consistent with the terms of the Company's Letter of
Intent with Purchaser as reviewed by Acquiror. At or prior to Closing, the
Company shall distribute to its shareholders all of the proceeds of the
sale of the Divisional Assets, less the amount of all tax liabilities and
unpaid transaction expenses pertaining to such sales.
(b) If the Purchase Agreement is terminated prior to Closing or the
Company gives written notice to Acquiror that the Company does not
reasonably expect the sale of the Divisional Assets to Purchaser to be
consummated, then Acquiror, Acquiror Sub and the Company will execute, upon
request of the Company or Acquiror, an amendment to this Agreement (the
"Amendment") providing, in lieu of the Merger contemplated by this
Agreement, for the formation of a holding company as the sole shareholder
of the Company ("Holdco"), the transfer of the Divisional Assets to Holdco
and the sale of all of the outstanding shares of capital stock of the
Company by Holdco to Acquiror.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.01 Proxy Statement.
(a) As promptly as practicable after the execution of this Agreement,
the Company shall prepare and file with the SEC a proxy statement and a
form of proxy to be sent to the shareholders of the Company in connection
with the meeting of the Company's shareholders to consider the Merger (the
"Shareholders' Meeting") (such proxy statement, together with any
amendments thereof or supplements thereto, in each case in the form or
forms mailed to the Company's shareholders, being the "Proxy Statement").
The Proxy Statement shall include the recommendation of the Company's Board
of Directors in favor of the Merger and approval of this Agreement, unless
outside legal counsel to the Company advise the Company's Board of
Directors that the directors' fiduciary duties under applicable law make
such recommendation inappropriate.
(b) The information included in the Proxy Statement shall not, at the
date the Proxy Statement (or any amendment thereof or supplement thereto)
is first mailed to shareholders or at the time of the Shareholders'
Meeting, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
are made, not misleading. If at any time prior to the Shareholders'
Meeting, any event or circumstance relating to the Company or any of its
Subsidiaries, or its or their respective officers or directors, is
discovered by the Company which should be set forth in a supplement to the
Proxy Statement, the Company shall promptly inform Acquiror. All documents
that the Company is responsible for filing with the SEC in connection with
the transactions contemplated herein will comply as to form and substance
in all material respects with the applicable requirements of the Exchange
Act.
(c) The Acquiror will provide the Company with whatever information
and assistance in connection with the foregoing filings that the Company
reasonably may request.
(d) The Acquiror agrees as the sole shareholder of the Acquiror Sub to
vote in favor of the Merger and to take all actions that may be required to
approve the Merger and to effect the transactions contemplated by this
Merger Agreement on behalf of the Acquiror Sub.
(e) Each of the Parties will file (and the Company will cause each of
its Subsidiaries to file) any Notification and Report Forms and related
material that it may be required to file with the Federal Trade Commission
and the Antitrust Division of the United States Department of Justice under
the HSR Act, will use its reasonable best efforts to obtain (and the
Company will cause each of its Subsidiaries to use
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its reasonable best efforts to obtain) an early termination of the
applicable waiting period, and will make (and the Company will cause each
of its Subsidiaries to make) any further filings pursuant thereto that may
be necessary, proper, or advisable.
6.02 Meeting of Shareholders. The Company shall take all action necessary
in accordance with the Delaware Law and its Certificate of Incorporation and
By-Laws to convene the Shareholders' Meeting, and the Company shall consult with
Acquiror in connection therewith. The Company shall use reasonable efforts to
solicit from the shareholders of the Company proxies in favor of the Merger and
shall take all other actions necessary or advisable to secure the vote or
consent of shareholders required by the Delaware Law to approve this Agreement,
including the retention of proxy solicitation agents if requested by Acquiror,
unless otherwise required by the applicable fiduciary duties of directors or
officers of the Company.
6.03 Appropriate Action; Consents; Filings.
(a) Subject to the terms and conditions herein provided, the Company,
Acquiror and Acquiror Sub shall use all reasonable efforts to (i) take, or
cause to be taken, all appropriate action, and do or cause to be done, all
things necessary, proper or advisable under applicable law or otherwise to
consummate and make effective the transactions contemplated by this
Agreement as promptly as practicable, (ii) obtain from any Governmental
Entities any consents, licenses or orders required to be obtained by
Acquiror or the Company or any of their respective Subsidiaries in
connection with the authorization, execution and delivery of this Agreement
and the consummation of the transactions contemplated by this Agreement,
including, without limitation, the Merger, and (iii) make all necessary
notifications and filings and thereafter make any other required
submissions with respect to this Agreement and the Merger required under
[a] the Securities Act, the Exchange Act and any other applicable federal
or state securities laws, [b] the HSR Act, and [c] any other applicable
law; provided that Acquiror and the Company shall cooperate with each other
in connection with the making of all such filings. The Company and Acquiror
shall furnish to each other all information required for any application or
other filing to be made pursuant to the rules and regulations of any
applicable law (including all information required to be included in the
Proxy Statement and Registration Statement) in connection with the
transactions contemplated by this Agreement.
(b) (i) The Company and Acquiror shall give (or cause their respective
Subsidiaries to give) any notices to third parties, and use, and cause
their respective Subsidiaries to use, all reasonable efforts to obtain any
third-party consents, [a] necessary to consummate the transactions
contemplated in this Agreement, [b] disclosed or required to be disclosed
in the disclosure schedules to this Agreement, or [c] required to prevent a
Company Material Adverse Effect from occurring prior to the Effective Time.
(ii) In the event that any party shall fail to obtain any third-party
consent described in subsection (b)(i) above, such party shall use
reasonable efforts, and shall take any such actions reasonably requested by
the Company and Acquiror to minimize any adverse effect upon the Company,
its Subsidiaries and its businesses resulting, or which could reasonably be
expected to result after the Effective Time, from the failure to obtain
such consent.
(c) From the date of this Agreement until the Effective Time, the
Company shall promptly notify Acquiror in writing of any pending or, to the
knowledge of the Company, threatened action, proceeding or investigation by
any Governmental Entity or any other Person (i) challenging or seeking
material damages in connection with the Merger, (ii) alleging that the
consent of such Governmental Entity or Person may be required in connection
with the Merger or this Agreement, or (iii) seeking to restrain or prohibit
the consummation of the Merger or otherwise limit the right of Acquiror or,
to the knowledge of the Company, its Subsidiaries, to own or operate all or
any portion of the businesses or assets of the Company or its Subsidiaries.
(d) From the date of this Agreement until the Effective Time, Acquiror
shall promptly notify the Company in writing of any pending or, to the
knowledge of Acquiror, threatened action, proceeding or investigation by
any Governmental Entity or any other Person (i) challenging or seeking
material damages in connection with the Merger or (ii) seeking to restrain
or prohibit the consummation of the
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Merger or otherwise limit the right of Acquiror or its Subsidiaries to own
or operate all or any portion of the business or assets of the Company or
its Subsidiaries.
6.04 Update Disclosure; Breaches. From and after the date of this Agreement
until the Effective Time, each party shall promptly notify the other parties
hereto by written update to its disclosure schedules ("Update Schedule") of (a)
the occurrence or non-occurrence of any event the occurrence or non-occurrence
of which would be reasonably likely to cause any condition to the obligations of
any party to effect the Merger and the other transactions contemplated by this
Agreement not to be satisfied, (b) the failure of the Company or Acquiror, as
the case may be, to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it pursuant to this Agreement which would be
reasonably likely to result in any condition to the obligations of any party to
effect the Merger and the other transactions contemplated by this Agreement not
to be satisfied, or (c) of any changes to the information contained in its
disclosure schedule (including any change to any representations or warranties
herein as to which no schedule has been created as of the date hereof but as to
which a schedule would have been required hereunder to have been created on or
before the date hereof if such change had existed on the date hereof).
6.05 Public Announcements. The parties to this Agreement shall consult in
good faith with each other before issuing any press release or otherwise making
any public statements with respect to the Merger and shall not issue any such
press release or make any such public statement without the prior written
agreement of the other party, except as may be required by law or the
requirements of the New York Stock Exchange or the NASDAQ National Market.
6.06 Indemnification.
(a) From and after the Effective Time, Acquiror shall, and shall cause
the Surviving Corporation to, indemnify, defend and hold harmless the
present and former officers, directors, employees, agents and
representatives of the Company and its Subsidiaries (collectively, the
"Indemnified Parties") against all losses, expenses, claims, damages or
liabilities arising out of actions or omissions occurring at or prior to
the Effective Time (including, without limitation, the transactions
contemplated by this Agreement) to the fullest extent permitted or required
under the Delaware Law or other applicable state law (and shall also
advance reasonable expenses as incurred to the fullest extent permitted
under the Delaware Law or other applicable state law, provided that the
persons to whom expenses are advanced provides an undertaking to repay such
advances contemplated by the Delaware Law). Acquiror and Acquiror Sub agree
that all rights to indemnification, including provisions relating to
advances of expenses incurred in defense of any claim, action, suit,
proceeding or investigation (a "Claim") existing in favor of the
Indemnified Parties as provided in the Company's Certificate of
Incorporation or By-Laws or other agreement or provisions, as in effect as
of the date hereof, with respect to matters occurring through the Effective
Time, shall survive the Merger and shall continue in full force and effect.
(b) Without limiting the foregoing, in the event any Claim is brought
against any Indemnified Party (whether arising before or after the
Effective Time) after the Effective Time (i) the Indemnified Parties may
retain counsel satisfactory to them (subject to approval by Acquiror and
the Surviving Corporation, which approval will not be unreasonably withheld
or delayed), (ii) Acquiror and the Surviving Corporation shall pay all
reasonable fees and expenses of such counsel for the Indemnified Parties
promptly as statements therefor are received subject to the ability of
Acquiror and the Surviving Corporation to receive such information relative
to the legal services provided as is customarily provided and reasonably
requested by Acquiror and the Surviving Corporation, and (iii) Acquiror and
the Surviving Corporation will use all reasonable efforts to assist in the
vigorous defense of any such matter, provided that neither Acquiror nor the
Surviving Corporation shall be liable for any settlement of any Claim
effected without its written consent, which consent, however, shall not be
unreasonably withheld or delayed. Any Indemnified Party wishing to claim
indemnification under this section 6.06, upon learning of any such Claim,
shall notify Acquiror (but the failure so to notify Acquiror shall not
relieve it from any liability which it may have under this section 6.06
except to the extent such failure materially prejudices Acquiror). The
Indemnified Parties as a group may retain only one law firm to represent
them with respect to each such matter unless there is, as evidenced by the
written opinion of counsel reasonably
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acceptable to Acquiror and the Surviving Corporation, under applicable
standards of professional conduct, a conflict on any significant issue
between the positions of any two or more Indemnified Parties.
(c) The Surviving Corporation shall use reasonable efforts to obtain
extended reporting endorsements on the fiduciary liability, professional
liability and directors and officers liability policies currently covering
the Company or any of its Subsidiaries or any of the Indemnified Parties,
and will submit to the applicable insurer a full and complete list of any
potential claims under the policy issued by such insurer. In the event the
Surviving Corporation is unable to obtain extended coverage under its
existing directors and officers liability insurance policies, Acquiror
shall use reasonable efforts to provide similar coverage for the
Indemnified Parties under policies then maintained by Acquiror; provided
that such similar coverage is available to Acquiror at a cost not
substantially higher than the Company's present coverage.
(d) This section 6.06 is intended to benefit the Indemnified Parties
and shall be binding on all successors and assigns of Acquiror, Acquiror
Sub, the Company and the Surviving Corporation.
6.07 Obligations of Acquiror Sub. Acquiror shall take all action necessary
to cause Acquiror Sub to perform its obligations under this Agreement and to
consummate the Merger on the terms and conditions set forth in this Agreement.
6.08 Employee Benefits and Compensation. After the Effective Time, the
employee benefit plans of the Surviving Corporation shall recognize for
eligibility, vesting, accrual and all other purposes the credited service of
employees of the Company and its Subsidiaries credited as of the Effective Time
under the Company's Employee Benefit Plans on a basis that is consistent with
the manner in which the Employee Benefit Plans of the Company recognized such
employment for similar purposes.
ARTICLE VII
CLOSING CONDITIONS
7.01 Conditions to Obligations of Each Party Under This Agreement. The
respective obligations of each party to effect the Merger and the other
transactions contemplated by this Agreement shall be subject to the satisfaction
at or prior to the Effective Time of the following conditions, any or all of
which may be waived, in whole or in part, to the extent permitted by applicable
law:
(a) Shareholder Approval. This Agreement and the Merger shall have
been approved by the requisite vote of the shareholders of the Company.
(b) No Action or Proceeding. There shall not have been instituted and
there shall not be pending any action or proceeding by a Governmental
Entity, and no such action or proceeding shall have been approved by a
Governmental Entity with authority to institute such an action or
proceeding, before any court of competent jurisdiction or governmental
agency or regulatory or administrative body, and no order or decree shall
have been entered in any action or proceeding before such court, agency or
body of competent jurisdiction: (i) imposing or seeking to impose
limitations on the ability of Acquiror to acquire or hold or to exercise
full rights of ownership of any securities of the Company or any of its
Subsidiaries; (ii) imposing or seeking to impose limitations on the ability
of Acquiror to combine and operate the business and assets of the Company
with any of Acquiror's Subsidiaries or other operations; (iii) imposing or
seeking to impose other sanctions, damages or liabilities arising out of
the Merger on Acquiror, Acquiror Sub, the Company or any of their officers
or directors; (iv) requiring or seeking to require divestiture by Acquiror
of all or any material portion of the business, assets or property of the
Company and its Subsidiaries; or (v) restraining, enjoining or prohibiting
or seeking to restrain, enjoin or prohibit the consummation of the Merger,
in each case, with respect to clauses (i) through (iv) above, which would
or is reasonably likely to result in a Company Material Adverse Effect at
or prior to or after the Effective Time or, with respect to clauses (i)
through (v) above, which would or is reasonably likely to subject any of
their respective officers or directors to any penalty or criminal
liability. Notwithstanding the foregoing, prior to invoking the condition
set forth in this section 7.01(b), the party seeking to invoke
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it shall have used its reasonable efforts to have any such pending or
approved action or proceeding withdrawn or dismissed or such order or
decree vacated.
(c) HSR Act. The applicable waiting period, together with any
extensions thereof, under the HSR Act shall have expired or been
terminated.
(d) Other Approvals or Notices. All other consents, waivers, approvals
and authorizations required to be obtained from, and all filings or notices
required to be made with, any Governmental Entity by Acquiror or the
Company or any Subsidiary prior to consummation of the transactions
contemplated in this Agreement (other than the filing and recordation of
Merger documents in accordance with the Delaware Law) shall have been
obtained from and made with all required Governmental Entities, except for
such consents, waivers, approvals or authorizations which the failure to
obtain, or such filings or notices which the failure to make, would not
have a Company Material Adverse Effect prior to or after the Effective Time
or an Acquiror Material Adverse Effect before or after the Effective Time
or be reasonably likely to subject the Company, Acquiror, Acquiror Sub or
any of their respective Subsidiaries or any of their respective officers,
directors, employees, agents or representatives to substantial penalty or
criminal liability.
(e) Transfer of Divisional Assets. The sale of the Divisional Assets
to the Purchaser shall have been consummated on terms and conditions
reasonably satisfactory to the Company and Acquiror.
(f) Transfer of Real Property. The Company shall have completed the
transfer of the real property owned by the Company located at 000 Xxxx
Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx and at 000 Xxxx Xxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxx, to Acquiror, on terms and conditions reasonably
satisfactory to Company and the Acquiror, in exchange for the receipt by
the Company from Acquiror of immediately available funds in the amount of
$1,756,000.
(g) Fairness Opinion. The Company shall have received from ABN AMRO
Chicago Corporation an opinion, dated as of the date of the Proxy
Statement, to the effect that the consideration which the Company's
shareholders will receive pursuant to the Merger is fair to the Company's
shareholders from a financial point of view.
7.02 Additional Conditions to Obligations of Acquiror and Acquiror Sub. The
obligations of Acquiror and Acquiror Sub to effect the Merger and the other
transactions contemplated in this Agreement are also subject to the satisfaction
at or prior to the Effective Time of the following conditions, any or all of
which may be waived, in whole or in part:
(a) Representations and Warranties. Each of the representations and
warranties of the Company contained in this Agreement shall have been true
and correct in all material respects when made and the information
contained therein, as updated by any Update Schedule, taken as a whole,
shall not have materially adversely changed; and each of the
representations and warranties of the Company contained in this Agreement
shall be true and correct in all material respects as of the Effective
Time. Acquiror shall have received a certificate of the Chief Executive
Officer and Chief Financial Officer of the Company to that effect.
(b) Agreements and Covenants. The Company shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or
prior to the Effective Time, except to the extent failure to perform is
caused by or is consented to by Acquiror or Acquiror Sub. Acquiror shall
have received a certificate of the Chief Executive Officer and Chief
Financial Officer of the Company to that effect.
(c) Consents Under Agreements. The Company shall have obtained the
third-party consents described in subsection 6.03(b)(i), except those for
which the failure to obtain such consents and approvals would not have a
Company Material Adverse Effect prior to or after the Effective Time or an
Acquiror Material Adverse Effect before or after the Effective Time, other
than as contemplated by subsection 6.03(b)(ii).
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(d) Opinion of Counsel. The Acquiror and the Acquiror Sub shall have
received an opinion of Reinhart, Boerner, Van Deuren, Xxxxxx & Xxxxxxxxxx,
s.c. counsel to the Company, addressed to Acquiror and Acquiror Sub, dated
as of the Effective Time, and reasonably satisfactory in form and substance
to Acquiror, Acquiror Sub and its counsel, to the following effect:
(i) The Company and each Subsidiary is a corporation existing under
the laws of the State of Delaware and, based solely on a certificate of
the Secretary of State of Delaware, [a] has filed with the Secretary of
State during its most recently completed report year the required annual
report; [b] is not the subject of a proceeding under the Delaware Law,
to cause its administrative dissolution; [c] no determination has been
made by the Secretary of State that grounds exist for such action with
respect to the Company or any Subsidiary; [d] no filing has been made
with the Secretary of State of a decree of dissolution with respect to
the Company or any Subsidiary; and [e] Certificate of Dissolution of the
Company or any Subsidiary have not been filed with the Secretary of
State. Immediately prior to the Effective Time, the Company was the sole
registered holder of record of the number of shares of stock or equity
interests in its Subsidiaries as is set forth in the Agreement and the
Company Disclosure Schedule with respect to section 3.03(b). The Company
and its Subsidiaries have the corporate power to carry on their
respective businesses as currently being conducted.
(ii) The Agreement and Plan of Merger (the "Agreement") is a legal,
valid and binding obligation of the Company [a] except as the Agreement
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors'
rights generally; and [b] subject to general principles of equity
including, without limitation, concepts of materiality, reasonableness,
good faith and fair dealing and the possible unavailability of specific
performance, injunctive relief or other equitable remedies, regardless
of whether considered in a proceeding in equity or at law. Counsel
expresses no opinion with respect to section 8.03(e) of the Agreement.
The execution, delivery and performance by the Company of the Agreement
have been duly authorized by all necessary corporation action, including
the requisite approval of the shareholders of the Company. Under the
Delaware Law and the Company's Certificate of Incorporation and By-Laws,
the Company's shareholders and Board of Directors properly approved the
Merger in accordance with the terms of the Agreement. Upon filing the
Certificate of Merger as contemplated by the Agreement, the Merger shall
be effective under Delaware law.
(iii) The execution and delivery of the Agreement and the
performance by the Company of its terms do not [a] contravene or
conflict with any provision of the Certificate of Incorporation or By-
Laws of the Company; or [b] violate any order, judgment or decree of any
Delaware or federal court or governmental instrumentality to which the
Company is subject and of which such counsel has knowledge.
(iv) The authorized capital stock of the Company consists of
4,300,000 authorized shares of Company Common Stock, par value $.12 per
share, of which, to the knowledge of such counsel, 1,896,668 shares are
issued and outstanding, fully paid and nonassessable. To the knowledge
of such counsel, the Company does not have outstanding any stock or
securities convertible into or exchangeable for any shares of capital
stock or any preemptive rights or other rights to subscribe for or to
purchase, or any options for the purchase of, or any agreements
providing for the issuance (contingent or otherwise) of, or any calls,
commitments, rights or claims of any other character relating to the
issuance of, any capital stock or any stock or securities convertible
into or exchangeable for any capital stock other than as set forth in
[a] the Certificate of Incorporation and [b] the Agreement or the
Disclosure Schedules. To the knowledge of such counsel, except as set
forth in the Certificate of Incorporation and as set forth in the
Agreement or the Disclosure Schedules, the Company is not subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire
or retire any shares of capital stock of the Company.
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(v) There are no preemptive rights of stockholders under the
Certificate of Incorporation of the Company or as a matter of law under
the Delaware Law with respect to the Agreement or the Merger.
(vi) To the knowledge of such counsel, there is no action, suit,
investigation or proceeding pending or threatened against the Company or
any properties or rights of the Company by or before any court,
arbitrator or administrative or governmental body which questions the
validity of the Agreement or any action which has been or is to be taken
by the Company thereunder.
(e) Long-Term Debt. The Company's long-term debt, including any
current portions thereof, shall have been paid in full prior to the
Closing.
(f) Purchase Price. The aggregate Purchase Price payable pursuant to
Article II shall not be more than $200,000 higher than what the aggregate
Purchase Price would be if calculated as of the Closing Date in accordance
with the formula attached hereto as Exhibit B (the "Closing Date
Calculation"), provided that (i) the Closing Date Calculation will give
effect to any severance payments made by the Company on a net after-tax
basis by including the expected tax deduction that will accrue to the
Company as a result of such severance payments, and (ii) the value of any
inventory approved by Acquiror for inclusion in the calculation of the
Purchase Price as of the date of this Agreement will be the value of such
inventory for the Closing Date Calculation to the extent that the Company
retains such inventory on the Closing Date. Acquiror, however, may examine
the value of any inventory acquired by the Company after the date of this
Agreement. Prior to Closing, the parties will cooperate in preparing the
Closing Date Calculation to verify satisfaction of the foregoing condition.
Acquiror and the Company will endeavor in good faith to resolve any
disputes in the determination of the Closing Date Calculation. In the
absence of a resolution of the disputed items on the Closing Date, Acquiror
and the Company will promptly select an independent certified public
accountant (the "Independent Accountant") from a nationally recognized
public accounting firm to act as arbitrator to decide the disputed items
and to prepare the Closing Date Calculation. The Closing Date Calculation
as determined by the Independent Accountant will be conclusive and binding
on Acquiror and the Company. The fees and expenses of the Independent
Accountant will be divided equally between Acquiror and the Company.
7.03 Additional Conditions to Obligations of the Company. The obligation of
the Company to effect the Merger and the other transactions contemplated in this
Agreement is also subject to the satisfaction at or prior to the Effective Time
of the following conditions, any or all of which may be waived, in whole or in
part;
(a) Representations and Warranties. Each of the representations and
warranties of Acquiror contained in this Agreement shall have been true and
correct in all material respects when made and the information contained
therein, as updated by any Update Schedule, taken as a whole, shall not
have materially adversely changed; and each other representations and
warranties of the Acquiror contained in this Agreement shall be true and
correct in all material respects as of the Effective Time. The Company
shall have received a certificate of the Chief Executive Officer and Chief
Financial Officer of Acquiror to that effect.
(b) Agreements and Covenants. Acquiror and Acquiror Sub shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by
each of them on or prior to the Effective Time. The Company shall have
received a certificate of the Chief Executive Officer and Chief Financial
Officer of Acquiror to that effect.
(c) Opinion of Counsel. The Company shall have received an opinion of
Xxxxxxx & Philipp, counsel to Acquiror and Acquiror Sub, addressed to the
Company, dated as of the Effective Time, and reasonably satisfactory in
form and substance to the Company and its counsel, to the following effect:
(i) Acquiror is a corporation existing in good standing under the
laws of the State of Delaware, based solely on a certificate of the
Delaware Secretary of State. Acquiror Sub is a corporation existing in
good standing under the laws of the state of Delaware, based solely on a
certificate of the Delaware Secretary of State. Acquiror owns, directly
or indirectly, all of the capital stock of Acquiror Sub.
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(ii) The execution, delivery and performance of the Agreement and
Plan of Merger (the "Agreement") has been duly authorized by all
requisite corporate action on the part of Acquiror and Acquiror Sub. The
Agreement constitutes the legally valid and binding obligations of
Acquiror and Acquiror Sub, enforceable in accordance with its terms,
subject to the following qualifications: [a] the enforceability against
Acquiror or Acquiror Sub of the Agreement in accordance with its terms
may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally; [b] the
enforceability of the Agreement is subject to the effect of general
principles of equity and the possible unavailability of specific
performance or injunctive relief regardless of whether considered in a
proceeding in equity or at law; and [c] no opinion is expressed as to
any provision of the Agreement providing for the indemnification of
persons for liability under federal or other securities laws.
(iii) Exclusion and delivery of the Agreement and the performance
of the Acquiror of its terms do not [a] contravene or conflict with any
provision of the Certificate of Incorporation or By Laws of the
Acquiror; or [b] violate any order, judgment or decree of any Delaware
or federal court or governmental instrumentality to which the Company is
subject and of which such counsel has knowledge.
(iv) To the knowledge of such counsel, there is no action, suit,
investigation or proceeding pending or threatened against the Acquiror
or any properties or rights of Acquiror by or before any court,
arbitrator or administrative or governmental body which questions
suability of the Agreement or any action which has been or is to be
taken by the Acquiror thereunder.
(d) Toll Manufacturing Agreement. The Company, Acquiror, Acquiror Sub
and Purchaser shall have entered into a Toll Manufacturing Agreement in a
form reasonably satisfactory to the Company, Acquiror and Purchaser.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.01 Termination. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval of this Agreement and the
Merger by the shareholders of the Company:
(a) by mutual written consent of Acquiror and the Company;
(b) by either Acquiror or the Company in the event the conditions to
such party's (the "Nonfailing Party") obligations under Article VII shall
not have been met or waived by the Nonfailing Party on or prior to December
31, 1997, but only if the party terminating has not caused the condition
giving rise to termination to be not satisfied through its own action or
inaction;
(c) by either Acquiror or the Company if any decree, permanent
injunction, judgment, order or other action by any court of competent
jurisdiction or any Governmental Entity preventing or prohibiting
consummation of the Merger shall have become final and nonappealable;
(d) by Acquiror, if (i) the Board of Directors of the Company
withdraws, modifies or changes in a manner materially adverse to Acquiror
its recommendation of this Agreement or Merger or shall have resolved to do
any of the foregoing, or (ii) the Board of Directors of the Company shall
have recommended to the shareholders of the Company any proposed
acquisition of the Company by any Person or any "group" (as such term is
defined under section 13(d) of the Exchange Act) other than Acquiror and
its Affiliates by [a] merger, consolidation, share exchange, business
combination or other similar transaction, [b] purchase of all or a
substantial part of the assets of the Company and its Subsidiaries, taken
as a whole, or [c] the acquisition of more than 50% of the Company's
outstanding equity securities (a "Competing Transaction") or resolved to do
so, or (iii) a tender offer or exchange offer for 50% or more of the
outstanding shares of capital stock of the Company is commenced, the Board
of Directors of the Company, within 10 business days after such tender
offer or exchange offer is so commenced, either fails to recommend against
acceptance of such tender offer or exchange offer by its
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shareholders or takes no position with respect to the acceptance of such
tender offer or exchange offer by its shareholders;
(e) by the Company if, in the exercise of its judgment as to its
fiduciary duties to its shareholders as imposed by applicable law and,
after consultation with and receipt of advice from outside legal counsel,
the Company's Board of Directors determines that such termination is
required by reasons of any Competing Transaction being made or proposed; or
(f) by either Acquiror or the Company, if any Update Schedule of the
other party contains disclosures of any fact or condition which makes
untrue, or shows to have been untrue, any representation or warranty by the
other party in this Agreement, unless concurrently with the delivery of the
Update Schedule, the other party represents and warrants that the disclosed
fact or condition can and will be corrected at the other party's expense
prior to the Effective Time; provided that the effect of the fact or
condition so disclosed upon the representation or warranty so affected
constitutes a Company Material Adverse Effect or Acquiror Material Adverse
Effect, as applicable.
8.02 Effect of Termination. Subject to the remedies of the parties set
forth in section 8.03(c), in the event of the termination of this Agreement
pursuant to section 8.01, this Agreement shall forthwith become void, and,
subject to sections 8.03(c) and (d) there shall be no liability under this
Agreement on the part of Acquiror, Acquiror Sub or the Company or any of their
respective officers or directors and all rights and obligations of each party
hereto shall cease. The Acquiror's Confidentiality Agreement shall survive any
termination of this Agreement.
8.03 Expenses.
(a) Except as provided in section 8.03(c), all Expenses incurred by
the parties shall be borne solely and entirely by the party which has
incurred the same. The Company shall pay for all Expenses related to
printing, filing and mailing the Proxy Statement and all SEC and other
regulatory filing fees incurred in connection with the Proxy Statement.
(b) "Expenses" as used in this Agreement shall include all reasonable
out-of-pocket expenses (including, without limitation, all fees and
expenses of counsel, accountants, investment bankers, experts and
consultants to a party and its Affiliates) incurred by a party or on its
behalf in connection with or related to the authorization, preparation,
negotiation, execution and performance of this Agreement, the preparation,
printing, filing and mailing of the Proxy Statement, the solicitation of
shareholder approvals and all other matters related to the closing of the
transactions contemplated by this Agreement.
(c) The Company and Acquiror each agree that with respect to any
termination of this Agreement pursuant to section 8.01(b) as a direct
result of a material intentional breach by a party of any of its covenants
or agreements contained in this Agreement, all remedies available to the
other party either in law or equity shall be preserved and survive the
termination of this Agreement.
(d) If all conditions to the obligations of a party at Closing
contained in Article VII of this Agreement have been satisfied (or waived
by the party entitled to waive such conditions), and the other party does
not proceed with the Closing, all remedies available to the other parties,
either at law or in equity, on account of such failure to close, including,
without limitation, the right to seek specific performance of this
Agreement as well as the right to pursue a claim for damages on account of
a breach of this Agreement, shall be preserved and shall survive any
termination of this Agreement.
(e) The Company agrees that if this Agreement is terminated pursuant
to section 8.01(d) or section 8.01(e), Company shall pay to Acquiror the
sum of $400,000. Such payment shall be made as promptly as practicable but
in no event later than the third business day following termination of this
Agreement and shall be made by wire transfer of immediately available funds
to an account designated by Acquiror. The Company and Acquiror each agree
that the payment provided for in section 8.03(e) shall be the sole and
exclusive remedy of Acquiror upon any termination of this Agreement as
described in section 8.03(e) and such remedies shall be limited to the sum
stipulated in section 8.03(e) regardless of the circumstances (including
willful or deliberate conduct) giving rise to such termination.
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ARTICLE IX
GENERAL PROVISIONS
9.01 Non-Survival of Representations and Warranties. The respective
representations and warranties of the parties in this Agreement shall expire
with, and be terminated and extinguished upon, consummation of the Merger or
termination of this Agreement, and thereafter neither the Company, Acquiror nor
any of their respective officers, directors or employees shall have any
liability whatsoever with respect to any such representation or warranty. This
section 9.01 shall have no effect upon any other obligation of the parties
hereto, whether to be performed before or after consummation of the Merger.
9.02 Notices. All notices and other communications given or made pursuant
to this Agreement shall be in writing and shall be deemed to have been duly
given or made upon receipt, if delivered personally, on the third business day
following deposit in the U.S. mail if mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
changes of address) or when sent by electronic transmission to the telecopier
number specified below with receipt acknowledged:
(a) If to Acquiror or Acquiror Sub:
Xxxxxxx Bros. Cranes, Inc.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxxxx, XX 00000
Telecopier No. 000-000-0000
Attention: Xx. Xxxxx Xxxxxxx, President
With a copy to:
Xxxxxx X. Xxxxxxxxxx, Esq.
000 Xxxxx 00xx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Telecopier No. 000-000-0000
(b) If to the Company:
Rexworks Inc.
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xx. Xxxxxxxx X. Xxxxxx, President and Chief Executive
Officer
With a copy to:
Reinhart, Boerner, Van Deuren,
Xxxxxx & Rieselbach, s.c.
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Telecopier No: 414-298-8097
Attention: Xxxxx X. Xxxxxx, Esq.
9.03 Amendment. This Agreement may be amended by the parties by action
taken by or on behalf of their respective Boards of Directors at any time prior
to the Effective Time; provided, however, that after approval of this Agreement
by the shareholders of the Company, no amendment may be made without further
approval of such shareholders, which amendment would reduce the amount or change
the type of consideration into which each share of Company Common Stock shall be
converted pursuant to this Agreement upon consummation of the Merger. This
Agreement may not be amended except by an instrument in writing signed by each
of the parties hereto.
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9.04 Waiver. At any time prior to the Effective Time, any party may (a)
extend the time for the performance of any of the obligations or other acts of
any other party, (b) waive any inaccuracies in the representations and
warranties of any other party contained in this Agreement or in any document
delivered pursuant to this Agreement, and (c) waive compliance by any other
party with any of the agreements or conditions contained in this Agreement.
Notwithstanding the foregoing, no failure or delay by either party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by a party or parties to be bound thereby.
9.05 Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
9.06 Severability. If any term or other provision of this Agreement is
finally adjudicated by a court of competent jurisdiction to be invalid, illegal
or incapable of being enforced by any rule of law or public policy, all other
conditions 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 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 to the end that
transactions contemplated hereby are fulfilled to the extent possible.
9.07 Entire Agreement. This Agreement (together with the Acquiror's
Confidentiality Agreement, the Exhibits, the disclosure schedules to this
Agreement and the other documents delivered pursuant hereto), constitutes the
entire agreement of the parties and supersedes all prior agreements and
undertakings, both written and oral, between the parties, or any of them, with
respect to the subject matter hereof. The parties hereby acknowledge that, no
party shall have the right to acquire or shall be deemed to have acquired shares
of common stock of the other party pursuant to the Merger until the consummation
thereof.
9.08 Assignment. This Agreement shall not be assigned, whether by operation
of law or otherwise.
9.09 Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of and be enforceable by each party and its respective
successors, and nothing in this Agreement, express or implied, other than
pursuant to section 2.04 and sections 6.06 and 6.08 or the right to receive the
consideration payable in the Merger pursuant to Article II, is intended to or
shall confer upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
9.10 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law.
9.11 Counterparts. This Agreement may be executed by facsimile and in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
but all of which taken together shall constitute one and the same agreement.
9.12 Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written approval of the other Party; provided,
however, that any Party may make any public disclosure it believes in good faith
is required by applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing Party will use its
reasonable best efforts to advise the other Party prior to making the
disclosure).
9.13 Construction. The Parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to
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any federal, state, local, or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the context
otherwise requires. The word "including" shall mean including without
limitation.
REXWORKS INC.
By /s/ XXXXXXXX X. XXXXXX
-------------------------------------
Xxxxxxxx X. Xxxxxx, President and
Chief Executive Officer
XXXXXXX BROS. CRANES, INC.
By /s/ XXXXX XXXXXXX
-------------------------------------
Xxxxx Xxxxxxx, President
00XX XXXXXX ACQUISITION CORPORATION
By /s/ XXXXX XXXXXXX
-------------------------------------
Xxxxx Xxxxxxx, President
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