Exhibit B
AGREEMENT AND PLAN OF MERGER
AMONG
PARENT,
ACQUISITION SUB
AND THE STROBER ORGANIZATION, INC.
Dated as of November 11, 1996
TABLE OF CONTENTS
Page
1. [INTENTIONALLY OMITTED] 2
2. THE MERGER 2
2.1 The Merger 2
2.2 Effective Time 2
2.3 Effects of the Merger 2
2.4 Certificate of Incorporation; By-Laws 2
2.5 Directors 3
2.6 Officers 3
2.7 Conversion of Securities 3
2.8 Company Stock Options and Related Matters 4
2.9 Taking of Necessary Action; Further Action 4
3. PAYMENT FOR SHARES; DISSENTING SHARES 4
3.1 Payment for Shares of Company Common Stock. 4
3.2 Dissenting Shares 6
4. REPRESENTATIONS AND WARRANTIES OF PARENT AND
ACQUISITION SUB 7
4.1 Organization and Qualification 7
4.2 Authority Relative to this Agreement 7
4.3 No Violations 8
4.4 Brokerage Fees 9
4.5 Financing 9
4.6 Arrangements 9
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY 10
5.1 Organization and Qualification 10
5.2 Authority Relative to this Agreement 10
5.3 No Violations; Consents and Approvals. 11
5.4 Capitalization 12
5.5 Commission Filings 12
5.6 Absence of Certain Changes or Events 13
5.7 Absence of Litigation 14
5.8 Employee Benefit Plans 14
5.9 Labor Matters 15
5.10 Taxes 16
5.11 Environmental Matters 17
5.12 Books and Records 19
5.13 Real and Personal Property 19
5.14 Contracts 23
5.15 Trade Names 24
5.16 Affiliate Transactions 25
5.17 Brokerage Fees 25
5.18 Subsidiaries 25
5.19 Disclosure 25
6. CONDUCT OF BUSINESS PENDING THE MERGER 26
6.1 Conduct of Business by the Company 26
7. ADDITIONAL AGREEMENTS 28
7.1 Proxy Statement; Other Filings 28
7.2 Meeting of the Company's Stockholders 29
7.3 Additional Agreements 30
7.4 Fees and Expenses 30
7.5 No Solicitations 31
7.6 Officers' and Directors' Insurance;
Indemnification 32
7.7 Access to Information; Confidentiality 32
7.8 Financial and Other Statements 33
7.9 Observer Rights 33
7.10 Advice of Change; Schedule Update 33
7.11 Xxxxxx Building Transaction 34
7.12 Certain Litigation 34
7.13 Public Announcements 34
7.14 Environmental Matters 35
7.15 Stop Transfer; Reorganization Agreement 35
7.16 Transfer Taxes 35
8. CONDITIONS TO THE MERGER 36
8.1 Conditions to the Obligations of Each Party to
Effect the Merger 36
8.2 Additional Conditions to the Obligations of the
Company 36
8.3 Additional Conditions to the Obligations of Parent
and Acquisition Sub 37
8.4 Certain Payments 39
9. TERMINATION, AMENDMENT AND WAIVER 39
9.1 Termination 39
9.2 Effect of Termination 40
9.3 Amendment 42
9.4 Extension; Waiver 42
10. GENERAL PROVISIONS 42
10.1 Notices 42
10.2 Interpretation 43
10.3 Non-Survival of Representations, Warranties,
Covenant and Agreements 43
10.4 Miscellaneous 44
10.5 Assignment 44
10.6 Knowledge; Best Efforts 44
10.7 Severability 44
10.8 Choice of Law/Consent to Jurisdiction 44
Third-Party Beneficiary 45
Schedules and Exhibits
Schedule Title
Schedule 2.8 Company Stock Options and Related
Matters
Schedule 5.1 Qualification
Schedule 5.2(b) Authority Relative to this Agreement
Schedule 5.3 No Violations; Consents and Approvals
Schedule 5.4 Capitalization
Schedule 5.5 Commission Filings
Schedule 5.6 Absence of Certain Changes or
Events
Schedule 5.7 Absence of Litigation
Schedule 5.8 Employee Benefit Plans
Schedule 5.9 Labor Matters
Schedule 5.10 Taxes
Schedule 5.11 Environmental Matters
Schedule 5.12 Books and Records
Schedule 5.13 Real and Personal Property
Schedule 5.14 Contracts
Schedule 5.15 Trade Names
Schedule 5.16 Affiliate Transactions
Schedule 5.18 Subsidiaries
Schedule 6.1 Conduct of Business by the Company
Schedule 8.3(f) Third Party Consents
Defined Term Cross Reference
(Not Part of this Agreement)
1995 Balance Sheet Section 5.5(e)
Agreement Introduction
Acquisition Property Section 5.13(a)
Acquisition Proposal Section 7.5(a)
Acquisition Sub Introduction
Affiliate Transactions Section 5.16
Blue Sky Laws Section 4.3(b)
Board Introduction
Certificate of Merger Section 2.2
Certificates Section 3.1(b)
Claim Section 7.6
Code Section 5.8(a)
Commission Section 5.5(a)
Commission Reports Section 5.5(b)
Company Introduction
Company Common Stock Introduction
Company's Certificate Section 2.4(a)
Company Expenses Section 9.2(d)
Confidentiality Agreement Section 7.7
Corporation Section 2.4(a)
Corporation Law Introduction
Dissenting Stockholders Section 3.2(a)
Dissenting Shares Section 3.2(a)
Effective Date Section 2.2
Effective Time Section 2.2
Environmental Laws Section 5.11(a)
Environmental Permits Section 5.11(a)
ERISA Section 5.8(a)
Exchange Act Section 4.3(b)
Financing Section 4.5
Financing Letters Section 4.5
Xxxx-Xxxxx-Xxxxxx Act Section 4.3(b)
Hazardous Substances Section 5.11(b)
Indemnification Agreement Section 7.12
Intellectual Property Rights Section 5.15
IRS Section 5.10(b)
ISRA Section 4.3(b)
Leases Section 5.13(b)(i)
Managee Introduction
Managees Introduction
Leased Real Property Section 5.13(b)
Material Adverse Effect Section 4.1
Material Contracts Section 5.14
Merger Introduction
Merger Consideration Section 2.7(b)
Mortgages Section 5.13(a)(ii)
Option Section 2.8
Option Consideration Section 2.8
Optionees Section 2.8
Other Filings Section 7.1
Owned Real Property Section 5.13(a)
Parent Introduction
Parent Expenses Section 9.2(b)
Paying Agent Section 3.1(a)
Payment Fund Section 3.1(a)
Pending Litigation Section 8.3(c)
Pending Legal Proceeding Section 8.3(c)
Permitted Encumbrances Section 5.13(a)(i)
Plans Section 5.8(a)
Port Authority Section 7.12
Port Authority Lease Section 7.12
Preferred Stock Section 5.4
Principal Stockholder Introduction
Principal Stockholders Introduction
Profit Sharing Plan Shares Section 2.7(a)
Proxy Agreement Introduction
Proxy Statement Section 7.1
Reorganization Agreement Section 7.15
Requisite Rights Section 5.15(b)(i)
Xxxxxx Building Products Section 7.11
Stock Option Plans Section 2.8
Stockholders' Meeting Section 7.2
Subsidiary Section (10.2)
Superior Proposal Section 7.5(b)
Surviving Corporation Section 2.1
Taxes Section 5.10(f)
Transfer Taxes Section 7.16
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated
as of November 11, 1996, by and among Xxxxxxxx Acquisition
LLC, a Delaware limited liability company ("Parent"),
Xxxxxxxx NY Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Parent ("Acquisition Sub"), and
The Strober Organization, Inc., a Delaware corporation (the
"Company").
WHEREAS, the Board of Directors of the Company (the
"Board") has, in light of and subject to the terms and
conditions set forth herein, (i) determined that the
consideration to be received by the stockholders of the
Company for each of the issued and outstanding shares of
common stock, par value $.01 per share, of the Company (the
"Company Common Stock"), in the Merger (as defined below) is
fair to and in the best interests of the Company and its
stockholders and (ii) resolved to approve this Agreement and
the transactions contemplated hereby and to recommend
approval and adoption of this Agreement and approval of the
Merger by the stockholders of the Company;
WHEREAS, also in furtherance of such transactions, the
manager or managers, as the case may be, of Parent (as the
case may be, the "Manager" or "Managers") and the Board of
Directors of Acquisition Sub have each unanimously approved
the merger of Acquisition Sub with and into the Company (the
"Merger") in accordance with the General Corporation Law of
the State of Delaware (the "Corporation Law") and the
provisions of this Agreement pursuant to which Merger the
holders of Company Common Stock (other than the Company,
Acquisition Sub, Parent and any direct or indirect
subsidiary of any them) shall receive the Merger
Consideration (as defined in Section 2.7(b) hereof); and
WHEREAS, as a condition to the willingness of Parent
and Acquisition Sub to enter into this Agreement, certain
stockholders of the Company (each individually a "Principal
Stockholder" and collectively the "Principal Stockholders")
have entered into a Proxy Agreement, dated as of the date
hereof, with Parent and Acquisition Sub (the "Proxy
Agreement") pursuant to which each Principal Stockholder
has, among other things, granted to Parent an irrevocable
proxy to vote all shares of Company Common Stock owned
(beneficially or otherwise) by such Principal Stockholder in
favor of the Merger, all upon the terms and conditions set
forth in the Proxy Agreement;
NOW, THEREFORE, in consideration of the mutual
covenants and agreements set forth herein, Parent,
Acquisition Sub and the Company hereby agree as follows:
I. [INTENTIONALLY OMITTED]
I. THE MERGER
A. The Merger. Upon the terms and subject to the
conditions contained in this Agreement, and in accordance
with the relevant provisions of the Corporation Law, at the
Effective Time (as hereinafter defined), Acquisition Sub
shall be merged with and into the Company. Following the
Merger, the Company shall continue its corporate existence
as the surviving corporation in the Merger (the "Surviving
Corporation") under the laws of the State of Delaware, and
the separate corporate existence of Acquisition Sub shall
cease. The name of the Surviving Corporation shall continue
to be "The Strober Organization, Inc."
A. Effective Time. As promptly as practicable after all of
the conditions set forth in Section 8 shall have been
satisfied or, if permissible, waived by the party entitled
to the benefit of the same, Acquisition Sub and the Company
shall duly execute and file a certificate of merger in form
and substance satisfactory to the parties hereto (the
"Certificate of Merger") with the Secretary of State of the
State of Delaware in accordance with the Corporation Law.
The Merger shall become effective at such time as the
Certificate of Merger is filed with the Secretary of State
of the State of Delaware or at such later time as is
specified in the Certificate of Merger (the "Effective
Time"). Prior to such filing, a closing shall be held at
the offices of Xxxxxxx, Procter & Xxxx XXX, Xxxxxxxx Xxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other place as the
parties shall agree, for the purpose of confirming the
satisfaction or waiver, as the case may be, of the
conditions set forth in Section 8 (the date of such closing
being, the "Effective Date").
A. Effects of the Merger. At the Effective Time, the
Merger shall have the effects set forth herein and in the
Corporation Law. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time all
the property, rights, privileges, powers and franchises of
the Company and Acquisition Sub shall vest in the Surviving
Corporation, and all debts, liabilities, obligations,
restrictions, disabilities and duties of the Company and
Acquisition Sub shall become the debts, liabilities,
obligations, restrictions, disabilities and duties of the
Surviving Corporation.
A. Certificate of Incorporation; By-Laws.
(a) At the Effective Time, the Certificate of
Incorporation of Acquisition Sub, or at the election of
Parent, the Company's Restated Certificate of Incorporation
(the "Company's Certificate"), in each case as in effect at
the Effective Time, which shall in either case include the
provisions required by Section 7.6 hereof, shall be the
Certificate of Incorporation of the Surviving Corporation
until duly amended in accordance with applicable law and
such Certificate of Incorporation, provided, however, that
at the Effective Time, Article First of the Certificate of
Incorporation of Acquisition Sub shall be amended to read as
follows: "FIRST, the name of the corporation is The Strober
Organization, Inc. (the "Corporation")."
(b) At the Effective Time, the By-laws of
Acquisition Sub, or at the election of Parent, the By-laws
of the Company, in each case as in effect at the Effective
Time, which shall in either case include the provisions
required by Section 7.6 hereof, shall be the By-laws of the
Surviving Corporation, until duly amended in accordance with
applicable law, the Certificate of Incorporation of the
Surviving Corporation and such By-laws.
A. Directors. The directors of Acquisition 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.
A. Officers. The officers of the Surviving Corporation
shall be appointed by the directors of the Surviving
Corporation.
A. Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of
Acquisition Sub, the Company or the holders of Company
Common Stock:
1. Each issued and outstanding share of Company Common
Stock held by the Company as a treasury share or held by any
direct or indirect subsidiary of the Company (which does not
include the 23,500 shares of Company Common Stock held by
the Company's profit-sharing plan as of the date hereof (the
"Profit Sharing Plan Shares")) and each issued and
outstanding share of Company Common Stock owned by Parent,
Acquisition Sub or any other direct or indirect subsidiary
of Parent immediately prior to the Effective Time shall be
canceled and retired and cease to exist without any
conversion thereof and no payment or distribution shall be
made with respect thereto;
1. Each issued and outstanding share of Company Common
Stock immediately prior to the Effective Time, other than
(i) those shares of Company Common Stock referred to in
Section 2.7(a) and (ii) Dissenting Shares (as defined in
Section 3.2 below), shall be canceled and shall be converted
automatically into and represent the right to receive an
amount equal to six dollars ($6.00) in cash (such amount of
cash being referred to herein as the "Merger Consideration")
payable, without interest, to the holder of such share of
Company Common Stock upon surrender, in the manner provided
in Section 3.1, of the certificate that formerly evidenced
such share of Company Common Stock;
1. The shares of common stock, par value $.01 per share,
of Acquisition Sub issued and outstanding immediately prior
to the Effective Time shall be converted into and
exchangeable for, in the aggregate, One Thousand (1,000)
validly issued, fully paid and non-assessable shares of
common stock, par value $.01, of the Surviving Corporation,
which shall constitute all of the issued and outstanding
shares of the Surviving Corporation; and
(d) All of the certificates evidencing shares of
Company Common Stock, by virtue of the Merger and without
any action on the part of the stockholders of the Company or
the Company, shall be deemed to be no longer outstanding,
shall not be transferable on the books of the Surviving
Corporation, and shall represent solely the right to receive
the amount set forth in Section 2.7(b) hereof.
A. Company Stock Options and Related Matters. Commencing
at least fifteen (15) days prior to the Effective Time, each
holder of a then outstanding option to purchase shares of
Company Common Stock (an "Option") granted under the
Company's stock option plans identified on Schedule 2.8
hereto (collectively, the "Stock Option Plans") (it being
understood that the aggregate number of shares of Company
Common Stock subject to purchase under such Stock Option
Plans is not, or shall not at the Effective Time, be more
than 842,438 shares) shall be entitled to exercise such
Option (whether or not such Option would otherwise have been
exercisable), and if such Options are not so exercised prior
to the Effective Time, immediately prior to the Effective
Time, each such holder shall be entitled to receive from the
Company in consideration for cancellation of each such
Option, a cash payment (the "Option Consideration") in an
amount equal to the product of (w) the number of shares
provided for in such Option and (x) the excess, if any, of
the Merger Consideration over the exercise price per share
of Company Common Stock provided for in such Option,
provided that the foregoing shall be subject to the
obtaining of any necessary consents of the holders of such
Options (the "Optionees") and that, to the extent required
by applicable law, such Option Consideration shall be
treated as compensation and shall be net of any applicable
federal or state withholding tax. All such Option
Consideration shall be deemed allocable to the period
immediately prior to the Effective Time to the extent
permitted by applicable law. Subject to the foregoing, the
Stock Option Plans and all Options issued thereunder shall
terminate at the Effective Time. In connection with the
foregoing, the Company shall obtain the consent of the
Optionees to the cancellation of such Options and the
cancellation of any right to acquire equity securities of
the Company from and after the Effective Time in
consideration for the payment provided herein.
A. Taking of Necessary Action; Further Action. Parent,
Acquisition Sub and the Company, respectively, shall each
use its best efforts to take all such action as may be
necessary or appropriate in order to effectuate the Merger
under the Corporation Law as promptly as practicable. 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 assets, property, rights,
privileges, powers and franchises of both of the Company and
Acquisition Sub, the officers of the Surviving Corporation
are fully authorized in the name of the Surviving
Corporation, as successor by merger to such corporations, or
otherwise to take, and shall take, all such lawful and
necessary action.
I. PAYMENT FOR SHARES; DISSENTING SHARES
A. Payment for Shares of Company Common Stock.
1. Prior to the Effective Time, Parent shall designate a
U.S. bank or trust company having at least $50,000,000 in
capital, surplus and undivided profits that shall be subject
to the Company's approval, such approval to not be
unreasonably withheld, to act as paying agent in the Merger
(the "Paying Agent") for purposes of effecting the exchange
for the Merger Consideration of certificates which, prior to
the Effective Time, represented shares of Company Common
Stock entitled to receive the Merger Consideration pursuant
to Section 2.7(b). The Paying Agent shall not be changed
without the prior written consent of the Company, which
shall not be unreasonably withheld. Immediately following
the Effective Time, Parent or Acquisition Sub shall deposit
in trust with the Paying Agent cash in an aggregate amount
equal to the product of (i) the number of shares of Company
Common Stock issued and outstanding on a fully diluted basis
immediately prior to the Effective Time (other than shares
owned by, or issuable to, upon conversion of other
securities, the Company, Parent, Acquisition Sub or any
direct or indirect subsidiary of Parent or the Company
(which shall be deemed to exclude the Profit Sharing Plan
Shares); and shares of Company Common Stock known
immediately prior to the Effective Time to be Dissenting
Shares (as defined in Section 3.2 below)) and (ii) the
Merger Consideration (such aggregate amount being
hereinafter referred to as the "Payment Fund"). The parties
hereto acknowledge that fully diluted shares of Company
Common Stock shall be determined in accordance with
generally accepted accounting principles. The Payment Fund
shall be invested by the Paying Agent as directed by the
Surviving Corporation (so long as such directions do not
impair the rights of the holders of certificates that
formerly evidenced shares of Company Common Stock) in:
direct obligations of the United States of America or
obligations for which the full faith and credit of the
United States of America is pledged to provide for the
payment of principal and interest and any net earnings with
respect thereto shall be paid to the Surviving Corporation
as and when requested by the Surviving Corporation. The
Paying Agent shall, pursuant to irrevocable instructions,
make the payments referred to in Section 2.7(b) out of the
Payment Fund. The Payment Fund shall not be used for any
other purpose except as provided herein.
1. Promptly after the Effective Time, the Surviving
Corporation shall cause the Paying Agent to mail to each
person who was a record holder of an outstanding certificate
or certificates which immediately prior to the Effective
Time represented shares of Company Common Stock (the
"Certificates") a form letter of transmittal (which shall
specify that delivery shall be effected and risk of loss and
title to Certificates shall pass, only upon proper delivery
of the Certificates to the Paying Agent) and instructions
for its use in surrendering Certificates and receiving
payment therefor. Upon the surrender to the Paying Agent of
such a Certificate, together with such properly completed
and duly executed letter of transmittal and other documents
that are customarily required by letters of transmittal in
similar situations, the holder thereof shall be paid,
without interest thereon, the Merger Consideration to which
such holder is entitled hereunder, and such Certificate
shall forthwith be canceled. Until so surrendered, except
with respect to Dissenting Shares, each such Certificate
shall, after the Effective Time, represent solely the right
to receive the Merger Consideration, without interest, into
which the shares of Company Common Stock such Certificate
theretofore represented shall have been converted pursuant
to Section 2.7(b), and the holder thereof shall not be
entitled to be paid any cash to which such holder otherwise
would be entitled. In case any payment pursuant to this
Section 3.1 is to be made to a holder other than the
registered owner of a surrendered certificate, it shall be a
condition of such payment that the Certificate so
surrendered shall be properly endorsed or otherwise in
proper form for transfer and that the person requesting such
exchange shall pay to the Paying Agent any transfer or other
taxes required by reason of the payment of such cash to a
person other than the registered holder of the Certificate
surrendered, or that such person shall establish to the
satisfaction of the Paying Agent that such tax has been paid
or is not applicable.
1. Promptly following the date which is one year after the
Effective Time, the Paying Agent shall return to the
Surviving Corporation all cash, certificates and other
instruments in its possession that constitute any portion of
the Payment Fund (including, without limitation, all
interest and other income received by the Paying Agent in
respect of all funds made available to it), and the Paying
Agent's duties shall terminate. Thereafter, each holder of
a Certificate shall be entitled to look to the Surviving
Corporation (subject to applicable abandoned property,
escheat and similar laws) only as a general creditor thereof
with respect to any Merger Consideration, without interest,
that may be payable upon due surrender of the Certificate or
Certificates held by them. Notwithstanding the foregoing,
neither the Paying Agent nor any party hereto shall be
liable to a holder of certificates that prior to the
Effective Time evidenced shares of Company Common Stock for
any Merger Consideration delivered pursuant hereto to a
public official pursuant to applicable abandoned property,
escheat or other similar laws.
1. At the Effective Time, the Company Common Stock
transfer books shall be closed and no transfer of shares of
Company Common Stock shall thereafter be made. If, after
the Effective Time, Certificates are presented to the
Surviving Corporation or the Paying Agent, they shall be
canceled and exchanged for the Merger Consideration as
provided in Section 2.7(b), subject to applicable law in the
case of Dissenting Shares (as defined below).
1. In the event any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that
fact in form and substance reasonably satisfactory to the
Surviving Corporation by the person claiming such
Certificate to be lost, stolen or destroyed and, if required
by Parent or the Surviving Corporation in their sole
discretion, upon the posting by such person of a bond in
such amount as Parent or the Surviving Corporation may
reasonably direct as indemnity against any claim that may be
made against it with respect to such Certificate, the Paying
Agent will issue in exchange for such lost, stolen or
destroyed Certificate, the cash representing the Merger
Consideration deliverable in respect thereof pursuant to
this Agreement.
A. Dissenting Shares.
1. Any shares of Company Common Stock outstanding
immediately prior to the Effective Time as to which the
holder thereof shall have not voted in favor of the Merger
or consented thereto in writing and as to which the holder
thereof shall have validly exercised such holder's appraisal
rights, if any, under Section 262 of the Corporation Law
("Dissenting Shares") shall not, after the Effective Time,
be entitled to vote for any purpose or be entitled to the
payment of dividends or other distributions (except
dividends or other distributions payable to stockholders of
record prior to the Effective Time), nor shall such
Dissenting Shares be converted into the right to receive the
Merger Consideration hereunder. Such holders of Dissenting
Shares duly making demand for appraisal (hereinafter
referred to as "Dissenting Stockholders") shall be entitled
to receive payment of the appraised value of such Dissenting
Shares in accordance with the provisions of such Section 262
of the Corporation Law, except that all shares of Company
Common Stock held by stockholders who shall fail to perfect,
or shall have effectively withdrawn or lost, such
stockholders' right to appraisal of such shares of Company
Common Stock under Section 262 of the Corporation Law shall
thereupon be deemed to have been converted into and to have
become exchangeable for, as of the Effective Time, the right
to receive the Merger Consideration, without any interest
thereon. The Company shall give Parent (i) prompt notice of
any demands for appraisal received by the Company,
withdrawals of such demands and any other instrument served
pursuant to Section 262 of the Corporation Law and received
by the Company, and (ii) the opportunity to direct all
negotiations and proceedings with respect to demands for
appraisal under the Corporation Law. The Company shall not,
except with the written consent of Parent, make any payment
with respect to any demands for appraisal, or settle or
offer to settle or negotiate, any such demands.
1. Each Dissenting Stockholder who becomes entitled under
the Corporation Law to payment for the Dissenting Shares
shall receive payment therefor after the Effective Time from
the Surviving Corporation (but only after the amount thereof
shall have been agreed upon or finally determined pursuant
to the Corporation Law) and such shares of Company Common
Stock shall be canceled.
I. REPRESENTATIONS AND WARRANTIES OF PARENT AND
ACQUISITION SUB
Parent and Acquisition Sub jointly and severally hereby
represent and warrant to the Company as follows:
A. Organization and Qualification. Parent is a limited
liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware.
Acquisition Sub is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware. Each of Parent and Acquisition Sub has the
requisite power and authority to carry on its business as it
is now being conducted. Each of Parent and Acquisition Sub
is duly qualified to do business and is in good standing in
each jurisdiction in which the character of its properties,
owned or leased, or the nature of its activities make such
qualification necessary, except where the failure to be so
qualified or in good standing would not have a material
adverse effect on the business, assets, results of
operations, condition (financial or otherwise) or prospects
(a "Material Adverse Effect") of Parent and its subsidiaries
taken as a whole. Neither Parent nor Acquisition Sub has
conducted any business prior to the date hereof other than
in furtherance of the transactions contemplated hereby and
has any assets and liabilities other than those incident to
its formation and to the consummation of the transactions
contemplated hereby. Copies of the Certificate of Formation
of Parent and the Certificate of Incorporation and By-laws
of Acquisition Sub heretofore delivered to the Company are
true, complete and correct as of the date hereof.
A. Authority Relative to this Agreement. Each of Parent
and Acquisition Sub has the requisite power and authority to
enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby
have been duly authorized by the Manager or Managers (as the
case may be) and, if necessary, the member or members of
Parent and by the Board of Directors and the sole
stockholder of Acquisition Sub, and no other corporate
proceedings on the part of Parent or Acquisition Sub are
necessary to authorize this Agreement and the transactions
contemplated hereby (other than, with respect to the Merger,
the filing and recordation of the appropriate merger
documents as required by the Corporation Law). This
Agreement has been duly and validly executed and delivered
by each of Parent and Acquisition Sub and, assuming this
Agreement constitutes a valid and binding obligation of the
Company, constitutes the legal, valid and binding obligation
of each of Parent and Acquisition Sub enforceable against
each of Parent and Acquisition Sub in accordance with its
terms.
A. No Violations.
1. Neither the execution and delivery of this Agreement by
Parent or Acquisition Sub nor the consummation of the
transactions contemplated hereby nor compliance by Parent or
Acquisition Sub with any of the provisions hereof will: (i)
violate, conflict with, or result in a breach of any
provision of, require any consent, approval or notice under,
or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) or result
in a right of termination or acceleration under, or result
in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of Parent
or any of its subsidiaries under any of the terms,
conditions or provisions of (x) their respective
Certificates of Incorporation, as amended, or By-laws or (y)
any note, bond, mortgage, indenture, deed of trust, lease,
agreement, lien, contract or other instrument or obligation
to which Parent or any of its subsidiaries is a party or to
which any of them, or any of their respective properties or
assets, may be subject or by which Parent or any of its
subsidiaries is bound; or (ii) subject to compliance with
the statutes and regulations referred to in Section 4.3(b),
violate any judgment, ruling, order, writ, injunction,
determination, award, decree, statute, ordinance, rule or
regulation applicable to Parent or any of its subsidiaries
or any of their respective properties or assets (except, in
the case of each of clauses (i) and (ii) above, for such
violations, conflicts, breaches, defaults, terminations,
accelerations or creations of liens, security interests,
charges or encumbrances which, or any consents, approvals or
notices which if not given or received, would not,
individually or in the aggregate, have a Material Adverse
Effect on Parent and its subsidiaries taken as a whole or on
the ability of Parent or Acquisition Sub to consummate the
transactions contemplated hereby or which are cured, waived
or terminated prior to the Effective Time and, except in the
case of (i) above, for those liens, security interests,
charges and encumbrances as may be imposed or otherwise
created in connection with financing the Merger and the
other transactions contemplated hereby); or (iii) cause the
suspension or revocation of any authorization, consent,
approval or license currently in effect, which suspension or
revocation would have a Material Adverse Effect on Parent
and its subsidiaries taken as a whole.
1. There is no legal impediment to Parent's or Acquisition
Sub's consummation of the transactions contemplated by this
Agreement. No filing or registration with, or
authorization, consent or approval of, any domestic public
body or authority is necessary for the consummation by
Parent or Acquisition Sub of the transactions contemplated
by this Agreement, except (i) for applicable requirements of
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder (the
"Xxxx-Xxxxx-Xxxxxx Act"), the Securities Exchange Act of
1934, as amended (the "Exchange Act"), state securities laws
and regulations ("Blue Sky Laws") and the filing and
recordation of the Certificate of Merger, as required by the
Corporation Law, and (ii) for such filings or registrations
which, if not made, or for such authorizations, consents or
approvals, which, if not received, would not, individually
or in the aggregate, have a Material Adverse Effect on
Parent and its subsidiaries taken as a whole or on the
ability of Parent and Acquisition Sub to consummate the
transactions contemplated hereby.
A. Brokerage Fees. Neither Parent nor Acquisition Sub has
retained any financial adviser, broker, agent or finder or
paid or agreed to pay any financial adviser, broker, agent
or finder on account of this Agreement or any transaction
contemplated hereby, except that Proteus International Group
Incorporated has been retained as Xxxxxxxxx X. Xxxxxx'x
financial adviser, each in connection with the transactions
contemplated hereby. Other than the foregoing arrangements
and the Company's arrangements with Hill Xxxxxxxx Capital
Markets, Inc., neither Parent nor Acquisition Sub is aware
of any claim for payment of any finder's fee, brokerage or
agent's commissions or other like payments in connection
with the negotiations leading to the Merger, this Agreement
or the consummation of the transactions contemplated hereby.
A. Financing. Parent has delivered to the Company true
and correct copies of signed letters received by Parent with
respect to the financing (the "Financing Letters") required
for the consummation of the transactions contemplated
hereby. Assuming satisfaction or waiver of all applicable
conditions set forth in the Financing Letters, such
financing (the "Financing") will, together with equity
investments in the aggregate of $9,000,000 being made in
connection with the transactions contemplated hereby,
provide sufficient funds to (i) pay, with respect to all
shares of Company Common Stock in the Merger, the Merger
Consideration pursuant to Section 2.7(b); and (ii) prepay,
redeem, refinance or renegotiate the Company's existing
indebtedness, if required to consummate the Merger, and pay
any and all fees, expenses, costs and penalties in
connection with any such prepayment, redemption, refinancing
or renegotiation. Parent shall not amend the Financing
Letters (excluding amendments that solely constitute
extensions thereof provided that this provision shall not
impair the rights of, or impose additional obligations upon,
either party under Section 9.1(b) hereof) without the prior
written consent of the Company, which consent shall not be
unreasonably withheld.
A. Arrangements. Neither Parent nor Acquisition Sub has
entered into any employment agreements with any current
officer of the Company, provided, however, that discussions
respecting continuation of current compensation and benefit
arrangements for a two year period have taken place which
discussions may, prior to the Effective Time, result in an
employment agreement or arrangement with such officer
respecting employment by the Surviving Corporation and/or
any of its subsidiaries after the Effective Time. Parent
and Acquisition Sub represent and warrant that no
agreements, arrangements or understandings exist between any
current officer of the Company and Parent, Acquisition Sub
or any entity that controls, is controlled by or is under
common control with Parent or Acquisition Sub that could
result in any payment (cash or otherwise) as a result of the
negotiation and execution of this Agreement and/or the
consummation of the transactions contemplated hereby
including the Merger except as specifically provided in this
Agreement.
I. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each of
Parent and Acquisition Sub as follows:
A. Organization and Qualification. Each of the Company
and its subsidiaries is a corporation duly incorporated,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the corporate
power and corporate authority to carry on its business as it
is now being conducted. Each of the Company and its
subsidiaries is duly qualified to do business and is in good
standing in each jurisdiction in which the character of its
properties, owned or leased, or the nature of its activities
make such qualification necessary, except as set forth on
Schedule 5.1 hereto or where the failure to be so qualified
or in good standing would not individually or in the
aggregate have a Material Adverse Effect on the Company and
its subsidiaries taken as a whole. Copies of the respective
Certificates of Incorporation, as amended, and By-laws of
the Company and each of its subsidiaries heretofore
delivered to Parent are true, complete and correct as of the
date hereof and no amendments thereto have been effected
since such copies were delivered, or are pending or
contemplated. Neither the Company nor any of its
subsidiaries is in violation of any term of its respective
Certificate of Incorporation or By-laws.
A. Authority Relative to this Agreement.
1. Each of the Company and its subsidiaries has the
requisite power and authority to enter into this Agreement
and to carry out its obligations hereunder. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized
by the Board. Except for the approval by the Company's
stockholders which is referred to in Section 7.2 below, no
other corporate proceedings on the part of the Company or
any of its subsidiaries are necessary to authorize this
Agreement and the transactions contemplated hereby (other
than, with respect to the Merger, the filing and recordation
of the appropriate merger documents as required by the
Corporation Law). This Agreement has been duly and validly
executed and delivered by the Company and, assuming this
Agreement constitutes a valid and binding obligation of
Parent and Acquisition Sub, constitutes the legal, valid and
binding obligation of the Company enforceable against the
Company and each of its subsidiaries in accordance with its
terms.
1. The Board has, by resolutions duly adopted by unanimous
vote, approved the Merger, this Agreement and the
transactions contemplated hereby and has agreed to recommend
that the stockholders of the Company approve and adopt this
Agreement and the Merger. In connection with the foregoing,
the Board has taken such actions and votes as are necessary
on its part to render the provisions of Section 203 of the
Corporation Law and all other applicable takeover statutes
of the Corporation Law and any other applicable takeover
statutes of any other state, and any "fair price," takeover
or similar provisions of the Company's Certificate,
inapplicable to this Agreement, the Merger and the
transactions contemplated by this Agreement. As of the date
hereof, except as set forth on Schedule 5.2(b) hereto, all
of the directors and executive officers of the Company have
indicated that they presently intend to vote their shares of
Company Common Stock to approve and adopt the Merger
Agreement and the transactions contemplated thereby,
including the Merger.
A. No Violations; Consents and Approvals.
1. Except as set forth in Schedule 5.3 to this Agreement,
neither the execution and delivery of this Agreement by the
Company nor the consummation of the transactions
contemplated hereby nor compliance by the Company or any of
its subsidiaries with any of the provisions hereof will:
(i) violate, conflict with, or result in breach of any
provision of, require any consent, approval or notice under,
or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) or result
in a right of termination or acceleration under, or result
in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of the
Company or any of its subsidiaries under any of the terms,
conditions or provisions of (x) their respective
Certificates of Incorporation, as amended, or By-laws or (y)
any note, bond, mortgage, indenture, deed of trust, lease,
agreement, lien, contract, or other instrument or obligation
to which the Company or any of its subsidiaries is a party
or to which any of them, or any of their respective
properties or assets, may be subject or by which the Company
or any of its subsidiaries is bound; or (ii) subject to
compliance with the statutes and regulations referred to in
Section 5.3(b), violate any judgment, ruling, order, writ,
injunction, determination, award, decree, statute,
ordinance, rule or regulation applicable to the Company or
any of its subsidiaries or any of their respective
properties or assets (except, in the case of each of clauses
(i) and (ii) above, for such violations, conflicts,
breaches, defaults, terminations, accelerations or creations
of liens, security interests, charges or encumbrances which,
or any consents, approvals or notices which if not given or
received, would not, individually or in the aggregate, have
a Material Adverse Effect on the Company and its
subsidiaries taken as a whole or on the ability of the
Company to consummate the transactions contemplated hereby
or which are cured, waived or terminated prior to the
Effective Time and, except in the case of (i) above, for
those liens, security interests, charges and encumbrances as
may be imposed or otherwise created in connection with the
financing of the Merger and the other transactions
contemplated hereby); or (iii) cause the suspension or
revocation of any authorization, consent, approval or
license currently in effect, which suspension or revocation
would have a Material Adverse Effect on the Company and its
subsidiaries taken as a whole.
1. Except as set forth in Schedule 5.3(b), there is no
legal impediment to the Company's consummation of the
transactions contemplated by this Agreement. No filing or
registration with, or authorization, consent or approval of,
any domestic public body or authority is necessary for the
execution, delivery or consummation by the Company of the
transactions contemplated by this Agreement, except (i) for
applicable requirements of the Xxxx-Xxxxx-Xxxxxx Act, the
Exchange Act, Blue Sky Laws, the NASDAQ Listing Agreement,
and the filing and recordation of the Certificate of Merger,
as required by the Corporation Law, and (ii) for such
filings or registrations which, if not made, or for such
authorizations, consents or approvals, which, if not
received, would not, individually or in the aggregate, have
a Material Adverse Effect on the Company and its
subsidiaries taken as a whole or on the ability of the
Company to consummate the transactions contemplated hereby.
A. Capitalization. As of the date hereof, the authorized
capital stock of the Company consists of 20,000,000 shares
of Company Common Stock and 1,000,000 shares of Preferred
Stock, par value $.01 per share (the "Preferred Stock"). As
of the date hereof, 5,027,447 shares of Company Common Stock
were issued and outstanding, 190,601 shares of Company
Common Stock were held by the Company as treasury shares and
no shares of Preferred Stock were issued and outstanding.
As of the date hereof, 842,438 shares of Company Common
Stock were reserved for issuance upon exercise of Options
granted pursuant to the Stock Option Plans and Options to
purchase 842,438 shares of Common Stock are outstanding as
of the date hereof. Except for the matters set forth on
Schedule 5.4 hereto, which terminate upon or prior to the
consummation of the Merger and will be of no further force
and effect after the Effective Time, and for the Options,
there are no options, warrants or other rights, agreements
or commitments of any character whatsoever requiring the
issuance, sale or transfer by the Company of any shares of
capital stock of the Company or any securities convertible
into or exchangeable or exercisable for, or otherwise
evidencing the right to acquire, any shares of capital stock
of the Company. All of the outstanding shares of Company
Common Stock have been duly authorized and validly issued,
are fully paid and non-assessable and are not subject to,
nor were they issued in violation of, any preemptive rights.
A. Commission Filings.
1. The Company has heretofore delivered to Parent true and
complete copies of its (i) Annual Report on Form 10-K for
the fiscal year ended December 31, 1995, (ii) Quarterly
Report on Form 10-Q for each of the fiscal quarters ended
March 31, June 30 and September 30, 1995, and March 31 and
June 30, 1996, (iii) Proxy Statement for the annual meeting
of stockholders held on July 11, 1996, and (iv) all other
reports or registration statements filed by the Company with
the Securities and Exchange Commission (the "Commission")
since January 1, 1996, in each case as filed with the
Commission.
1. Except as set forth in Schedule 5.5 hereto, the Company
has filed all required forms, reports and documents with the
Commission since December 31, 1992 (collectively, the
"Commission Reports"), all of which were prepared in
accordance with the applicable requirements of the
Securities Act of 1933, as amended, and the Exchange Act in
all material respects. Except to the extent, if any, as may
have been appropriately disclosed in a Commission Report
filed subsequent thereto and prior to the date hereof as of
their respective dates, the Commission Reports did not
contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading,
and complied as to form and substance in all material
respects with all applicable requirements of law.
1. The Company will deliver to Parent as soon as they
become available true and complete copies of any report or
statement mailed by it to its stockholders generally or
filed by it with the Commission subsequent to the date
hereof and prior to the Effective Time. As of their
respective dates, such reports and statements (excluding any
information therein provided by Parent or Acquisition Sub,
as to which the Company makes no representation) will not
contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading, and
will comply in all material respects with all applicable
requirements of law.
1. Each of the consolidated financial statements
(including, in each case, any related notes thereto)
contained in the Commission Reports has been prepared in
accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto or
in Schedule 5.5), and each fairly presents in accordance
with generally accepted accounting principles the
consolidated financial position of the Company and its
subsidiaries as at the respective dates thereof and the
consolidated results of their operations and changes in cash
flow for the periods indicated, except as may be indicated
in the notes thereto and/or in the consolidated financial
statements contained in a Commission Report filed subsequent
thereto and prior to the date hereof, and except that the
unaudited interim financial statements were or are subject
to normal and recurring year-end adjustments which were not
or are not expected to be material in amount.
1. Except as set forth in Schedule 5.5 hereto and except
as and to the extent set forth on the consolidated balance
sheet of the Company and its subsidiaries as at December 31,
1995, including the notes thereto (the "1995 Balance
Sheet"), neither the Company nor any of its subsidiaries has
any liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) which would be
required to be reflected on a consolidated balance sheet of
the Company and its subsidiaries, or in the notes thereto,
prepared in accordance with generally accepted accounting
principles, except for liabilities or obligations (a)
incurred in the ordinary course of business since December
31, 1995, or (b) any liability or obligation existing at
December 31, 1995 which, individually or in the aggregate,
is not material to the Company and its subsidiaries taken as
a whole as of such date.
A. Absence of Certain Changes or Events. Since December
31, 1995, except as set forth in Schedule 5.6 or as and to
the extent disclosed in any Commission Report filed after
December 31, 1995:
(a) the Company and its subsidiaries have
conducted their businesses only in the ordinary course
and in a manner reasonably consistent with past
practice, and
(b) since December 31, 1995, there has not been
(i) any change in, or event affecting, the Company or
any of its subsidiaries having a Material Adverse
Effect on the Company and its subsidiaries taken as a
whole, (ii) any change by the Company in its accounting
methods, principles or practices, (iii) any entry by
the Company or any of its subsidiaries into a material
contract outside the ordinary course of business taken
as a whole, (iv) any declaration, setting aside or
payment of any dividends or distributions in respect
of, or any redemption, purchase or other acquisition
of, any of its securities or (v) any increase in the
benefits under or the establishment of any bonus,
insurance, severance, deferred compensation, pension,
retirement, profit sharing, stock option (including,
without limitation, the granting of stock options,
stock appreciation rights, performance awards, or
restricted stock awards), stock purchase or other
employee benefit plan, program, or arrangement for the
benefit of any director, officer or employee of the
Company or any of its subsidiaries pursuant to which
employees are contractually entitled to benefit that
would be materially above those mandated by applicable
law, except in the ordinary course of business
reasonably consistent with past practice. No officer,
director, or other employee other than those disclosed
in Schedule 5.6 hereto are parties to any severance pay
agreements or change in control agreements.
A. Absence of Litigation. Except as disclosed in the
Commission Reports filed after December 31, 1995 or in
Schedule 5.7 hereto, there are no claims, actions,
proceedings or investigations pending or, to the best
knowledge of the Company, threatened against the Company or
any of its subsidiaries, or, to the best knowledge of the
Company, pending or threatened against any of its directors,
officers, employees or agents, by any claimant or involving
any properties or rights of the Company or any of its
subsidiaries, at law or in equity, before any court,
arbitrator or administrative governmental regulatory
authority or body that (i) individually or in the aggregate
would have or are reasonably likely to have a Material
Adverse Effect on the Company and its subsidiaries taken as
a whole or (ii) seek to delay or prevent the consummation of
the transactions contemplated hereby. Except as set forth
on Schedule 5.7 hereto, to the best knowledge of the
Company, there are no ongoing or threatened claims, actions,
proceedings or investigations instituted by or on behalf of
the Department of Justice or any similar foreign, federal,
state, county or local government agency against the
Company, any of its subsidiaries or any of their respective
directors, officers, employees or agents involving the
business, properties, rights and/or activities of the
Company and/or any of its subsidiaries. As of the date
hereof, neither the Company nor any of its subsidiaries nor
any of their respective properties are subject to any order,
writ, judgment, injunction, decree, determination or award
of any court, arbitrator or governmental authority that,
individually or in the aggregate, have or are reasonably
likely to have a Material Adverse Effect on the Company and
its subsidiaries taken as a whole.
A. Employee Benefit Plans.
1. Schedule 5.8 hereto includes a list of each stock
option, stock purchase, insurance, bonus, incentive
compensation, severance, profit sharing, retirement, or
other material employee benefit plan, policy or arrangement,
including any employee benefit plan within the meaning of
Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA") which the Company maintains,
to which the Company or any one of its subsidiaries
contributes, or under which any of the employees or former
employees of the Company or any one of its subsidiaries are
covered (collectively, the "Plans"). Prior to the date of
this Agreement, the Company has provided or made available
to Parent a true and complete copy of each Plan as in effect
on the date hereof. Other than as specifically disclosed in
Schedule 5.8 hereto, (i) none of the Plans is a
multiemployer plan within the meaning of ERISA; (ii) none of
the Plans provides for or promises retiree medical benefits
or life insurance to any current or former employee, officer
or director of the Company or its subsidiaries; (iii) each
Plan which is intended to be qualified under Section 401(a)
of the Internal Revenue Code of 1986, as amended (the
"Code"), is so qualified; (iv) each Plan is now and has been
operated in all material respects in accordance with the
requirements of applicable law; and (v) with respect to
Plans subject to Title IV of ERISA, the aggregate projected
benefit obligations of such Plans (determined for each such
Plan as of the date of the most recent actuarial valuation
prepared for such Plan) does not exceed the fair market
value of the assets of such Plans (determined as of the date
of such valuation).
1. Except as disclosed in Schedule 5.8 hereto, the
execution of, and performance of the transactions
contemplated by, this Agreement will not (either alone or
upon the occurrence of any additional subsequent events
directly related to the transactions contemplated hereby)
(i) constitute an event under any Plan that will or may
result in any payment (whether of severance pay or
otherwise), acceleration, forgiveness of indebtedness,
vesting, distribution, increase in benefits or obligations
to fund benefits with respect to any employee, director or
consultant of the Company or any of its subsidiaries
pursuant to any Plan or (ii) result in the triggering or
imposition of any restrictions or limitations on the right
of the Company or Parent to amend or terminate any Plan. No
payment or benefit which will be required to be made
pursuant to the terms of any agreement, commitment or Plan,
as a result of the transactions contemplated by this
Agreement, to any officer, director or employee of the
Company or any of its subsidiaries, could be characterized
as an "excess parachute payment" within the meaning of
Section 280G of the Code or could be non-deductible by
reason of Section 162(m) of the Code.
1. All contributions have been made in all material
respects as required by the terms of each of the Plans
listed in Schedule 5.8 and the terms of any related
collective bargaining agreements, and, except as set forth
in Schedule 5.8 hereto, neither the Company nor any of its
subsidiaries has any knowledge or has received any notice
that any such plan is in reorganization, that increased
contributions are required to avoid a reduction in plan
benefits or the imposition of any excise tax, that any such
plan is or has been (except as used in accordance with the
terms of such Plan and in accordance with applicable law)
funded at a rate less than required under Section 412 of the
Code, or that any such plan is insolvent.
A. Labor Matters. Except as set forth in Schedule 5.9
hereto, neither the Company nor any of its subsidiaries is a
party to, or bound by, any collective bargaining agreement
or contract or other agreement or understanding with a labor
union or labor union organization. There is no unfair labor
practice or labor arbitration proceeding pending or, to the
knowledge of the Company, threatened against the Company or
any of its subsidiaries relating to their business, except
for any such proceeding which would not have a Material
Adverse Effect on the Company and its subsidiaries taken as
a whole. There is not currently pending or, to the best
knowledge of the Company, threatened any labor dispute or
labor stoppage regarding any of the Company's, or any of its
subsidiaries', current employees or any of the labor
relations or collective bargaining contracts listed on
Schedule 5.9 hereto, except for that labor relations
contract listed on Schedule 5.9 hereto that expires on
December 31, 1996, the negotiation of a new contract of
which is expressly provided for in Section 6.1 hereof.
Except as set forth in Schedule 5.9 hereto, to the knowledge
of the Company, there are no organizational efforts with
respect to the formation of a collective bargaining unit
presently being made or threatened involving employees of
the Company or any of its subsidiaries.
A. Taxes.
1. Except as set forth in Schedule 5.10 hereto, the
Company and each of its subsidiaries has paid or caused to
be paid all material Taxes (as defined below), owed by it
through the date hereof except such as are reserved for in
the Company's balance sheet contained in the most recently
filed Commission Report and are being contested in good
faith by appropriate proceedings. Except as set forth in
Schedule 5.10 hereto, the Company and its subsidiaries have
timely filed and properly prepared all foreign, federal,
state and local tax returns and reports required to be filed
by any of them through the date hereof, and all such returns
and reports completely and accurately in all material
respects set forth the amount of any Taxes relating to the
applicable period.
1. Except as set forth in Schedule 5.10 hereto, neither
the Internal Revenue Service (the "IRS") nor any other
governmental or taxing authority or agency is now asserting
or, to the best of the Company's knowledge, threatening to
assert, against the Company or any of its subsidiaries or
any partnership, joint venture or limited liability company
in which the Company or any of its subsidiaries is a
partner, joint venturer or member, as the case may be, any
deficiency or claim for any additional material Tax or
Taxes. Except as set forth in Schedule 5.10 hereto, there
is no dispute or claim concerning any Tax liability of the
Company or any subsidiary, either claimed or raised by any
governmental or taxing authority, or as to which any
director or officer of the Company or any of its
subsidiaries has reason to believe may be claimed or raised
by any governmental or taxing authority that is material,
either individually or in the aggregate, to the Company and
its subsidiaries taken as a whole. Except as set forth in
Schedule 5.10, no claim has ever been made by a taxing
authority in a jurisdiction where the Company does not file
reports and returns that the Company is or may be subject to
taxation by that jurisdiction. There are no security
interests on any of the assets of the Company or any of its
subsidiaries that arose in connection with any failure (or
alleged failure) to pay any Taxes. The Company has never
entered into a closing agreement pursuant to Section 7121 of
the Code.
1. Except as set forth in Schedule 5.10 hereto, neither
the Company nor any of its subsidiaries has received written
notice of any audit of any tax return filed by the Company
or its subsidiaries, and neither the Company nor any of its
subsidiaries has been notified by any governmental or taxing
authority that any such audit is contemplated or pending.
Except as set forth in Schedule 5.10 hereto, neither the
Company nor any of its subsidiaries has executed or filed
with the IRS or any other governmental or taxing authority
any agreement now in effect extending the period for
assessment or collection of any Taxes, and no extension of
time with respect to any date on which a tax return was or
is to be filed by the Company is in force. True, correct
and complete copies of all foreign, federal, state and local
income or franchise tax returns filed by the Company and
each of its subsidiaries for those tax years or periods for
which the applicable statute of limitations, or an extension
or waiver thereof, has not lapsed, expired, or otherwise
terminated, and all communications relating thereto have
been delivered to the Parent or made available to
representatives of the Parent. Except as set forth in
Schedule 5.10, neither the Company nor any of its
subsidiaries has granted any waiver of any statute of
limitations with respect to, or any extension of a period
for the assessment of, any foreign, federal, state or local
income tax.
1. The accruals and reserves for taxes reflected in the
1995 Balance Sheet are adequate to cover all Taxes accruable
through such date (including interest and penalties, if any,
thereon) in accordance with generally accepted accounting
principles.
1. None of the Company and its subsidiaries has filed a
consent under Section 341(f) of the Code concerning
collapsible corporations. None of the Company and its
subsidiaries has made any payments, is obligated to make any
payments, or is a party to any agreement that under certain
circumstances could obligate it to make any payments that
will not be deductible under Section 280G of the Code. None
of the Company and its subsidiaries has been a United States
real property holding corporation within the meaning of
Section 897(c)(2) of the Code during the applicable period
specified in Section 897(c)(1)(A)(ii) of the Code. Each of
the Company and its subsidiaries has disclosed on its
federal income tax returns all positions taken therein that
could give rise to a substantial understatement of federal
income tax within the meaning of Section 6662 of the Code.
None of the Company and its subsidiaries is a party to any
tax allocation or sharing agreement. Except as set forth in
Schedule 5.10, none of the Company and its subsidiaries (A)
has, except as set forth in Schedule 5.10 hereto, been a
member of an affiliated group filing a consolidated federal
income tax return (other than a group the common parent of
which was the Company) or (B) has any liability for the
Taxes of any person (other than any of the Company and its
subsidiaries) under Reg. Section 1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee
or successor, by contract, or otherwise.
(f) The term "Taxes" shall mean, for purposes of
this Agreement, all foreign, federal, state, local, and
other taxes, including without limitation income taxes,
estimated taxes, alternative minimum taxes, excise taxes,
sales taxes, use taxes, value-added taxes, gross receipts
taxes, franchise taxes, capital stock taxes, employment and
payroll-related taxes, withholding taxes, stamp taxes,
transfer taxes, windfall profit taxes, environmental taxes
and property taxes, whether or not measured in whole or in
part by net income, and all deficiencies or other additions
to tax, interest, fines and penalties relating to any such
taxes.
A. Environmental Matters.
1. Except as disclosed in Schedule 5.11 hereto and for the
matters specifically identified in environmental reports
received by Parent or Acquisition Sub, and except for any
other matters which, either individually or in the
aggregate, would not have a Material Adverse Effect on the
Company and its subsidiaries taken as a whole, to the
Company's knowledge, the Company and its subsidiaries are in
compliance with all applicable federal, state and local
statutes, laws, codes, regulations, ordinances, rules,
judgements, judicial decisions, decrees, injunctions,
permits, and orders relating to (i) emissions, discharges or
releases to the environment of Hazardous Substances (as
hereinafter defined), (ii) the use, storage, handling,
transport or disposal of Hazardous Substances, or (iii) any
matters of environmental regulation or control or similar
protection of human health and safety (collectively,
"Environmental Laws"). Except as disclosed in Schedule 5.11
hereto, the Company has not received any written notice of
any pending civil or criminal litigation, violation or
formal administrative proceeding relating to the
Environmental Laws involving the Company or any of its
subsidiaries. Except as disclosed in Schedule 5.11 hereto
and for the matters specifically identified in environmental
reports received by Parent or Acquisition Sub, and except
for any other matters which, either individually or in the
aggregate, would not have a Material Adverse Effect on the
Company and its subsidiaries taken as a whole, to the
Company's knowledge, no conditions exist which could
reasonably be expected to result in any litigation, notice
or administrative proceeding described in the preceding
sentence. Except as disclosed in Schedule 5.11, and for the
matters specifically identified in environmental reports
received by Parent or Acquisition Sub and except for any
other matters which, either individually or in the
aggregate, would not have a Material Adverse Effect on the
Company and its subsidiaries taken as a whole, to the
Company's knowledge, the Company and each of its
subsidiaries have all permits, licenses, consents and
approvals required by Environmental Laws ("Environmental
Permits") for the conduct and operation of their respective
businesses, all such Environmental Permits are in good
standing and the Company and each of its subsidiaries are in
compliance with all material terms and conditions of such
Environmental Permits.
1. Except as disclosed in Schedule 5.11 hereto and for the
matters specifically identified in the environmental reports
received by Parent and Sub, neither the Company nor any of
its subsidiaries has received any written notice (A) of any
actual or alleged violation of Environmental Laws by the
Company or any of its subsidiaries, (B) of the institution
or pendency of any action, claim, proceeding or
investigation of the Company or any of its subsidiaries by
any third party or governmental entity pursuant to
Environmental Laws, (C) requiring the investigation,
remediation or removal of Hazardous Substances from any of
the Company's or any of its subsidiaries' properties or any
part thereof, or (D) alleging that the Company or any of its
subsidiaries are potentially responsible parties with
respect to the release or threat of release of Hazardous
Substances to the environment at any location. Except as
disclosed in Schedule 5.11 hereto, and for the matters
specifically identified in environmental reports received by
Parent or Acquisition Sub, and except for any other matters
which, either individually or in the aggregate, would not
have a Material Adverse Effect on the Company or its
subsidiaries, to the Company's knowledge neither the Company
nor any of its subsidiaries (i) has held, stored, released,
transported or disposed of any Hazardous Substances on,
under or at any of the Company's or any of its subsidiaries'
properties or any part thereof, whether currently or
formerly leased, owned or used for any purpose; (ii) has
arranged for the disposal of Hazardous Substances at any
location owned, leased or operated by any third party; or
(iii) owns or operates real or personal property that has
been the subject of any lien imposed by a governmental
entity or a deed notice or restriction, which lien, notice
or restriction relates to Hazardous Substances or the
violation of any Environmental Laws. For purposes of this
Agreement, the term "Hazardous Substances" shall mean any
toxic or hazardous materials or substances or hazardous
wastes, including but not limited to oil and petroleum
products, defined as, or included in the definition of,
"hazardous substances," "hazardous waste," "hazardous
materials" or "toxic substances" under any Environmental Law
and any substance with respect to which a federal, state or
local agency requires environmental investigation,
monitoring, reporting or remediation.
1. No filing, approval or other action required under the
New Jersey Industrial Site Remediation Act, commonly known
as ISRA or any similar federal or State Environmental Law is
required to consummate the transactions contemplated hereby.
1. Notwithstanding anything to the contrary in this
Agreement, (i) the representations and warranties made in
Sections 5.11(a) and 5.11(b) hereof which are qualified as
to the knowledge of the Company speak as of the date of this
Agreement, (ii) to the extent any of the representations and
warranties in Sections 5.5, 5.6, 5.7, 5.11 and 5.13 would
otherwise be deemed incorrect by reason of the existence of
any environmental matters or conditions existing as of the
date hereof as to which the Company does not have knowledge
as of the date hereof, such representations and warranties
shall not be deemed to be incorrect; and (iii) any inability
to bring down the representations and warranties set forth
in Sections 5.5, 5.6, 5.7, 5.11 and 5.13, because of the
existing unknown environmental matters or conditions
referred to in clause (ii), as may be required by Section
8.3(a) or 8.3(b) hereof shall not constitute a condition to
Parent's and Acquisition Sub's obligations to consummate the
transactions contemplated under this Agreement and such
existing environmental matters or conditions shall not cause
a failure to satisfy Section 8.3(e). Notwithstanding the
foregoing, the foregoing shall not apply to environmental
matters or conditions (a) of which the Company has knowledge
as of the date hereof, or (b) which occur after the date
hereof which do not relate to such existing environmental
matters or conditions.
A. Books and Records.
1. The books of account and other financial records of the
Company and each of its subsidiaries are true, complete and
correct in all material respects and have been maintained in
accordance with good business practices.
1. Except as set forth in Schedule 5.12 the minute books
and other corporate records of the Company and each of its
subsidiaries have been made available to Parent or its
representatives, contain in all material respects accurate
records of all meetings, and accurately reflect in all
material respects all other corporate actions, of the
stockholders and directors and any committees of the board
of directors of the Company and each of its subsidiaries.
A. Real and Personal Property.
1. Owned Real Property. All of the real property which is
now owned and, to the best knowledge of the Company, has
ever been owned by the Company and each of its subsidiaries
(collectively referred to herein as the "Owned Real
Property") is identified on Schedule 5.13(a) hereto.
Schedule 5.13(a) hereto also sets forth by address (i) all
real property under contract to be acquired by the Company
or any of its subsidiaries (the "Acquisition Property"),
(ii) to the knowledge of the Company, the owner and usage of
the Owned Real Property and the Acquisition Property and
(iii) whether the Owned Real Property is currently owned by
the Company or any of its subsidiaries. The Company hereby
makes the following representations and warranties with
respect to the Owned Real Property which is currently owned
by the Company:
a) Title and Description. Each of the Company and
its subsidiaries, as the case may be, has good, clear,
record and marketable fee simple title to the Owned
Real Property, free and clear of all (A) mortgages,
deeds of trust, ground leases, assessments, leases and
tenancies, claims, covenants, conditions, restrictions,
easements, judgments or other encumbrances and free of
encroachments onto or off of the Owned Real Property,
except for (w) easements, claims, conditions,
covenants, restrictions and similar encumbrances that
do not interfere with the use of the Owned Real
Property as currently used and improved, (x)
encroachments that do not adversely affect the value or
use of the Owned Real Property as currently used and
improved, (y) any of same which are disclosed in any
title report or title search received by, or made
available by the Company to, Parent and Acquisition Sub
or (z) matters set forth on Schedule 5.13(a) ((w), (x),
(y) and (z) are collectively referred to as "Permitted
Encumbrances").
a) Security Interests. All of the mortgages, deeds
of trust, ground leases, security interests or similar
material encumbrances on the Owned Real Property are
set forth on Schedule 5.13(a) (collectively, the
"Mortgages"). Except as set forth on Schedule 5.13(a),
the Company and each of its applicable subsidiaries has
obtained the consent of the holder of any Mortgage if
the transactions contemplated hereby would otherwise
cause a default under the Mortgage, and such
transactions will not give the holder of any Mortgage
any remedy, or the right to charge any premium or
penalty. Schedule 5.13(a) also indicates all Mortgages
which are, by their terms, by means of a separate
guaranty or otherwise, recourse, in whole or in part,
to the Company or any of its subsidiaries.
a) Condition. Except as set forth on Schedule
5.13(a), to the Company's knowledge, (A) there are no
material defects in the physical condition of any
improvements constituting a part of the Owned Real
Property, including, without limitation, structural
elements, mechanical systems, roofs or parking and
loading areas, and (B) all of such improvements are in
good operating condition and repair, have been well
maintained and are free from infestation by rodents or
insects except for those exceptions which individually
or in the aggregate do not have a Material Adverse
Effect on the Company or its subsidiaries taken as a
whole. Except as set forth on Schedule 5.13(a), none
of the Owned Real Property is subject to special flood
or mudslide hazards or within the 100 year flood plain.
All water, sewer, gas, electric, telephone, drainage
and other utilities required by law or necessary for
the current or planned operation of the Owned Real
Property have been connected pursuant to valid permits
and are sufficient to service the Owned Real Property.
a) Compliance with Law; Government Approvals.
Neither the Company nor any of its subsidiaries has
received any notice from any governmental authority of
any violation of any law, ordinance, regulation,
license, permit or authorization issued with respect to
any of the Owned Real Property that has not been
corrected heretofore, and to the Company's knowledge no
such violation exists which could have a material
adverse effect on the operation or value of any of the
Owned Real Property. Except for those matters which do
not individually or in the aggregate have a Material
Adverse Effect on the Company and its subsidiaries
taken as a whole, to the Company's knowledge (i) all
improvements constituting part of the Owned Real
Property have been completed and are now in compliance
in all respects with all applicable laws, ordinances,
regulations, licenses, permits and authorizations, and
there are presently in effect all licenses, permits and
authorizations required by law, ordinance, or
regulation and (ii) the transactions contemplated
hereby will not affect the rights of the Company or any
of its subsidiaries to the use of any off-site
facilities necessary to ensure compliance with all such
laws, ordinances, codes and regulations. There is at
least the minimum access required by applicable
subdivision or similar law to the Owned Real Property.
Neither the Company nor any of its subsidiaries has
received any notice of any pending or threatened real
estate tax deficiency or reassessment or condemnation
of all or any portion of any of the Owned Real
Property.
2. Leased Real Property. Schedule 5.13(b) hereto sets
forth, by address, owner, tenant, and usage, all of the real
property which is now leased or operated and, to the best
knowledge of the Company, has ever been leased or operated
by the Company or any of its subsidiaries (collectively, the
"Leased Real Property"). The Company hereby makes the
following representations and warranties with respect to the
Leased Real Property which is now leased or operated by the
Company and its subsidiaries:
a) Leases. The copies of the leases of the Leased
Real Property (collectively, the "Leases") delivered by
the Company to Parent are complete, accurate, true and
correct, and the information with respect to each of
the Leases set forth in Schedule 5.13(b) is complete,
accurate, true and correct in all material respects as
of the date hereof. With respect to each of the
Leases, except as set forth on Schedule 5.13(b):
(1) each of the Leases is in full force and
effect and has not been modified, amended, or
altered, in writing or otherwise;
(1) to the Company's knowledge, (I) all
obligations of the landlord or lessor under the
Leases which have accrued have been performed in
all material respects, and (II) no landlord or
lessor is in default under any Lease in any
material respect;
(C) to the Company's knowledge, (I) all
obligations of the tenant or lessee under the
Leases which have accrued have been performed in
all material respects, and neither the Company nor
any of its subsidiaries is in default under any
Lease in any material respect provided that the
Company's timely payment of its rental obligations
under the Leases is not qualified by the Company's
knowledge, and (II) no circumstance presently
exists which, with notice or the passage of time,
or both, would give rise to a material default by
the Company or any of its subsidiaries; and
(D) the Company and each of its
subsidiaries, as the case may be, has obtained or
will obtain prior to the Closing the consent of
each landlord or lessor under any Leases whose
consent is required to the transactions
contemplated hereby and any necessary landlord
waiver or subordinations in the form heretofore
presented to the Company by Parent required by the
entities providing Parent and Acquisition Sub with
the financing to consummate the Merger and the
other transactions contemplated hereby, and,
subject to obtaining the foregoing consents, the
Merger and the other transactions contemplated
hereby (other than the Financing) will not give
any landlord or lessor under any Lease any remedy,
including, without limitation, any right to
declare a default under any Lease; provided,
however that with respect to those Leases marked
as such on Schedule 5.13(b), the Company shall be
required only to exercise its best efforts to
obtain such consent or landlord waiver.
a) Title and Description. The Company and each of
its subsidiaries, as the case may be, holds a good,
clear, marketable, valid and enforceable leasehold
interest in the Leased Real Property pursuant to the
Leases, subject only to the right of reversion of the
landlord or lessor under the Leases and any mortgagee
thereof, free and clear, to the Company's knowledge, of
all other prior or subordinate interests, including,
without limitation, mortgages, deeds of trust, ground
leases, leases, subleases, assessments, tenancies,
claims, covenants, conditions, restrictions, easements,
judgments or other encumbrances or matters affecting
title, and free of encroachments onto or off of the
Leased Real Property, except for (v) any of the same
which are disclosed in any title report or title search
received by Parent or Acquisition Sub or made available
by the Company to Parent or Acquisition Sub, (w) any
rights of any person which has been granted rights by
any owner of any such property, (x) easements, claims,
conditions, covenants, restrictions and similar
encumbrances that do not materially interfere with the
use of the Leased Real Property as currently used and
improved, (y) encroachments that do not materially
adversely affect the value or use of the Leased Real
Property as currently used and improved and (z) matters
set forth on Schedule 5.13(b).
a) Condition. Except as set forth on Schedule
5.13(b) and except for those matters which do not
individually or in the aggregate have a Material
Adverse Effect on the Company and its subsidiaries
taken as a whole, to the Company's knowledge, (A) there
are no material defects in the physical condition of
any improvements constituting a part of the Leased Real
Property, including, without limitation, structural
elements, mechanical systems, roofs or parking and
loading areas, and, (B) all of such improvements are in
good operating condition and repair, have been well
maintained and are free from infestation by rodents or
insects. Except as set forth on Schedule 5.13(b), none
of the Leased Real Property is subject to special flood
or mudslide hazards or within the 100 year flood plain.
Except for any which does not individually or in the
aggregate have a Material Adverse Effect on the Company
or its subsidiaries taken as a whole, all water, sewer,
gas, electric, telephone, drainage and other utilities
required by law or necessary for the current or planned
operation of the Leased Real Property have been
installed and connected pursuant to valid permits, and
are sufficient to service the Leased Real Property.
a) Compliance with Law; Government Approvals.
Neither the Company nor any of its subsidiaries has
received any written notice from any governmental
authority of any violation of any law, ordinance,
regulation, license, permit or authorization issued
with respect to any of the Leased Real Property that
has not been corrected heretofore. To the Company's
knowledge, except as described on Schedule 5.13(b) and
except for violations that would not have a Material
Adverse Effect on the Company and its subsidiaries
taken as a whole, (A) no such violation now exists
which could have an adverse effect on the operation or
value of any of the Leased Real Property, and (B) all
improvements constituting a part of the Leased Real
Property are in compliance in all respects with all
applicable laws, ordinances, regulations, licenses,
permits and authorizations, and there are presently in
effect all licenses, permits and authorizations
required by law, ordinance, or regulation. The
transactions contemplated hereby will not affect the
rights of the Company or any of its subsidiaries to use
any off-site facilities necessary to ensure compliance
with all such laws, ordinances, codes and regulations.
There is at least the minimum access required by
applicable subdivision or similar law to the Leased
Real Property. Neither the Company nor any of its
subsidiaries has received any notice of any pending or
threatened real estate tax deficiency or reassessment
or condemnation of all or any portion of any of the
Leased Real Property.
1. Violations/Condemnation. Except as set forth in
Schedule 5.13(c) hereto, neither the Company nor any of its
subsidiaries has received, with respect to any Owned Real
Property currently owned, leased or operated by the Company
or Leased Real Property currently owned, leased or operated
by the Company, any written notice of default or termination
or any written notice of noncompliance with respect to
applicable federal, state or local laws and regulations
relating to zoning, building, fire, use restriction or
safety or health codes which have not been remedied in all
respects which, either individually or in the aggregate,
could reasonably be expected to have a Material Adverse
Effect on the Company and its subsidiaries taken as a whole.
There is no pending or, to the knowledge of the Company or
any of its subsidiaries, threatened condemnation or other
governmental taking of any of the Owned Real Property or
Leased Real Property.
1. Notwithstanding anything to the contrary contained in
this Agreement, those representations and warranties
contained in this Agreement with respect to Owned Real
Property which is not currently either leased, operated or
owned by either the Company or any of its subsidiaries, and
Leased Real Property which is not currently either leased,
owned or operated by either the Company or any of its
subsidiaries, is subject to the knowledge of the Company.
A. Contracts. Except as set forth on Schedule 5.14
hereto, neither the Company nor any of its subsidiaries is
in default, or has received any notice that it is in
default, in any respect under any contract, agreement,
commitment, arrangement, lease, policy or other instrument
to which the Company or any of its subsidiaries is a party
or by which the Company or any such subsidiary is bound
(excluding contracts, agreements, commitments, arrangements,
leases, policies or other instruments involving total
payments not in excess of $100,000 and which may be
terminated within 90 days by the Company or any of its
subsidiaries) ("Material Contracts"), except for those
defaults which could not reasonably be expected, either
individually or in the aggregate, to have a Material Adverse
Effect on the Company and its subsidiaries taken as a whole,
and there has not occurred any event that, with the lapse of
time or the giving of notice or both, would constitute such
a material default. To the Company's knowledge, no other
party to any such Material Contact is in material breach or
default of the terms thereunder or has refused or otherwise
failed to materially perform under the terms thereof.
A. Trade Names.
1. Except as set forth on Schedule 5.15, the Company and
each of its applicable subsidiaries, as the case may be,
owns all rights to, or possesses a valid, subsisting and
enforceable exclusive license to use (in each case, free and
clear of any liens), all trade names used by the Company or
any of its subsidiaries in the jurisdictions in which such
names are used. To the best knowledge of the Company,
except as disclosed in Schedule 5.15 hereto, (i) the use of
trade names by the Company and its subsidiaries does not
infringe on the rights of any person, (ii) no person is
infringing on any right of the Company or any of its
subsidiaries with respect to any of the Company's or such
subsidiaries' trade names, (iii) there is no decree,
undertaking or agreement limiting the scope of the Company's
or any of its subsidiaries' right to use any of its trade
names and (iv) neither the Company nor any of its
subsidiaries has granted any license to any person for the
use of the Company's or any of its subsidiaries' trade
names.
1. Except in each case as disclosed in the Company's
Commission Reports or as set forth in Schedule 5.15 hereto:
a) to the best knowledge of the Company, the Company
owns, has the right to use, sell, license and dispose
of, and has the right to bring actions for the
infringement of, and, where necessary, has made timely
and proper application for all Intellectual Property
Rights (as defined below) necessary or required for the
conduct of its business as currently conducted (such
Intellectual Property Rights, collectively, the
"Requisite Rights") and has such rights to use, sell,
license, dispose of and bring such actions as are
sufficient for such conduct of its business;
a) to the best knowledge of the Company, there are no
royalties, honoraria, fees or other payments payable by
the Company to any person by reason of the ownership,
use, license, sale or disposition of Requisite Rights;
and
a) to the best knowledge of the Company, neither the
marketing, license, sale nor use of any product
currently or proposed to be licensed or sold by the
Company materially violates or will materially violate
any license or agreement with any third party to which
the Company is a party or materially infringe any
Intellectual Property Right of any other party.
As used herein, the term "Intellectual Property Rights"
shall mean all industrial and intellectual property rights,
including, without limitation, patents, patent applications,
patent rights, trademarks, trademark applications, trade
names, service marks, service xxxx applications, copyrights,
copyright applications, know-how, trade secrets, proprietary
processes and formulae, franchises, licenses, inventions,
marketing materials, trade dress, logos and designs and all
documentation and media constituting, describing or relating
to the foregoing, including, without limitation, manuals,
memoranda and records.
A. Affiliate Transactions. Except as set forth on
Schedule 5.16 hereto, (i) the Company has not engaged in any
transaction involving any lease or other transaction or the
transfer of any cash, property or rights to or from the
Company or any of its subsidiaries from, to or for the
benefit of any affiliate or former affiliate of the Company
or any of its subsidiaries ("Affiliate Transactions") during
the period commencing January 1, 1994 through the date
hereof, (ii) neither the Company nor any of its subsidiaries
has any existing commitments to engage in the future in any
material Affiliate Transactions and (iii) to the best
knowledge of the Company, no affiliate of the Company or any
of its subsidiaries is party to any contract with a third
party pursuant to which (x) as a result of a claimed breach
a claim against the Company or any such subsidiary may arise
or (y) a liability (whether absolute, contingent or
otherwise) might accrue against the Company or any such
subsidiary.
A. Brokerage Fees. The Company has not retained any
financial adviser, broker, agent or finder or paid or agreed
to pay any financial adviser, broker, agent or finder on
account of this Agreement or any transaction contemplated
hereby, except that Hill Xxxxxxxx Capital Markets, Inc. has
been retained as the Company's financial advisor in
connection with certain matters including the transactions
contemplated hereby. The Company has heretofore furnished
to Parent a complete and correct copy of all agreements
between the Company and Hill Xxxxxxxx Capital Markets, Inc.
pursuant to which such firm would be entitled to any payment
relating to the transactions contemplated hereby. Other
than the foregoing arrangements and Xxxxxxxxx Xxxxxx'x
arrangements with Proteus International Group Incorporated,
the Company is not aware of any claim for payment of any
finder's fee, brokerage or agent's commissions or other like
payments in connection with the negotiations leading to the
Merger, this Agreement or the consummation of the
transactions contemplated hereby.
A. Subsidiaries. The Company's subsidiaries and
investments in any other corporation, partnership, joint
venture or other business organization are listed in
Schedule 5.18 hereto. The Company owns beneficially and of
record all of the outstanding shares of capital stock or
other equity interest of each of its subsidiaries, and such
shares or other equity interest are duly authorized, validly
issued, fully paid and non-assessable, and are free and
clear of all preemptive rights and, except as set forth on
Schedule 5.18 hereto, all liens, charges, encumbrances,
equities, claims and options whatsoever. There are not any
outstanding subscriptions, options, warrants or other
rights, agreements or commitments to purchase any additional
shares of such subsidiary's capital stock or any other
securities convertible into or evidencing the right to
subscribe for any capital stock of such subsidiary. Except
as disclosed in Schedule 5.18, all of the outstanding shares
of capital stock or other equity interest of each of the
Company's subsidiaries are owned beneficially and of record
by the Company free of any lien, restriction or encumbrance
and said shares have been duly authorized and validly issued
and are outstanding, fully paid and non-assessable.
A. Disclosure. The representations, warranties and
statements made by the Company in this Agreement and in the
schedules and exhibits attached hereto and in the
certificates and other documents delivered pursuant to
Section 8.3(a) and 8.3(b) hereof do not contain any untrue
statement of a material fact, and, when taken together, do
not omit to state any material fact necessary to make such
representations, warranties and statements, in light of the
circumstances under which they are made, not misleading and
may be relied upon regardless of any investigation by or
independent inquiry or knowledge of Parent, Acquisition Sub
or any of their respective employees, consultants, advisers
or affiliates. Parent and Acquisition Sub acknowledge that
they are not relying on any representations and warranties
other than the representations and warranties contained in
this Agreement and the schedules and exhibits attached
hereto.
I. CONDUCT OF BUSINESS PENDING THE MERGER
A. Conduct of Business by the Company. During the period
from the date of this Agreement to the Effective Time,
except as otherwise contemplated by this Agreement or as set
forth in Schedule 6.1 hereto, the Company shall, and shall
cause each of its subsidiaries to, carry on their respective
businesses in the usual, regular and ordinary course,
reasonably consistent with past practice in all material
respects, and use their best efforts to preserve intact
their present business organizations, keep available the
services of their present advisors, managers, officers and
employees and preserve their relationships in all material
respects with customers, suppliers, licensors and others
having business dealings with them and continue existing
contracts (for the term provided in such contracts),
provided that the Company shall not be required to make any
payments (cash or otherwise) outside the ordinary course or
enter into or amend any contractual arrangements or
understandings to satisfy the foregoing obligations;
provided, however, that the covenant contained in this
sentence shall not be deemed to be breached in any material
respect unless any actions or failures to act when taken
together constituted unreasonable business judgements
determined on the basis of the Company's compliances, or
non-compliances, taken on the whole with this sentence; and
the Company shall have the right within ten (10) days after
receipt of the written notice from Parent to cure any such
claimed breach as is reasonably susceptible of cure.
Notwithstanding the foregoing and without limiting the
generality of the foregoing, neither the Company nor any of
its subsidiaries will (except as expressly permitted by this
Agreement or to the extent that Parent shall otherwise
consent in writing):
1. (i) declare, set aside or pay any dividend or other
distribution (whether in cash, stock, or property or any
combination thereof) in respect of any of its capital stock,
(ii) split, combine or reclassify any of its capital stock
or (iii) repurchase, redeem or otherwise acquire any of its
securities, except, in the case of clause (iii), for the
acquisition of shares of Company Common Stock from holders
of the Options in full or partial payment of the exercise
price payable by such holders upon exercise of the Options
outstanding on the date of this Agreement;
1. authorize for issuance, issue, sell, deliver or agree
or commit to issue, sell or deliver (whether through the
issuance or granting of options, warrants, commitments,
subscriptions, rights to purchase or otherwise) any stock of
any class or any other securities (including indebtedness
having the right to vote) or equity equivalents (including,
without limitation, stock appreciation rights) (other than
the issuance of Company Common Stock upon the exercise of
the Options outstanding on the date of this Agreement in
accordance with their present terms);
1. acquire, sell, lease, encumber, transfer or dispose of
any assets outside the ordinary course of business which are
material to the Company and its subsidiaries taken as a
whole (whether by asset acquisition, stock acquisition or
otherwise), except pursuant to obligations in effect on the
date hereof which have been disclosed in writing to Parent
and Acquisition Sub prior to the date hereof;
1. (i) incur any indebtedness for borrowed money,
guarantee any indebtedness, issue or sell debt securities or
warrants or rights to acquire any debt securities, guarantee
(or become liable for) any debt of others, make any loans,
advances or capital contributions, mortgage, pledge or
otherwise encumber any material assets, or create or suffer
any material lien thereupon, other than, as to each of the
foregoing, in the ordinary course of business reasonably
consistent with prior practice or (ii) incur any short-term
indebtedness for borrowed money, except, in each such case,
pursuant to credit facilities in existence on the date
hereof under the terms thereof on the date hereof, which
credit facilities have been disclosed in writing to Parent
and Acquisition Sub prior to the date hereof;
1. pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than any payment, discharge
or satisfaction (i) in the ordinary course of business
reasonably consistent with past practice, or (ii) in
connection with the transactions contemplated by this
Agreement;
1. change any of the accounting principles or practices
used by it (except as required by generally accepted
accounting principles, in which case written notice shall be
provided to Parent and Acquisition Sub prior to any such
change);
1. except as required by law, (i) enter into, adopt, amend
or terminate any employee benefit plan, (ii) enter into,
adopt, amend or terminate any agreement, arrangement, plan
or policy between the Company or any of its subsidiaries and
one or more of their directors or officers, or (iii) except
for normal increases in the ordinary course of business
reasonably consistent with past practice, increase in any
manner the compensation or fringe benefits of any director,
officer or employee or pay any benefit not required by any
plan or arrangement as in effect as of the date hereof;
1. adopt any amendments to the Company's Certificate or
the Company's By-laws, except as expressly provided by the
terms of this Agreement;
1. enter into a new agreement or amend any existing
agreement which could reasonably be expected to have a
Material Adverse Effect on the Company and its subsidiaries
taken as a whole;
1. adopt a plan of complete or partial liquidation or
resolutions providing for or authorizing such a liquidation
or a dissolution, merger, consolidation, restructuring,
recapitalization or reorganization;
1. enter into or amend, extend or otherwise alter any
collective bargaining agreement;
1. settle or compromise any litigation (whether or not
commenced prior to the date of this Agreement) other than
settlements or compromises or litigation where the amount
paid (after giving effect to insurance proceeds actually
received) in settlement or compromise does not exceed
$50,000;
1. grant any new or modified severance or termination
arrangement or increase or accelerate any benefits payable
under its severance or termination pay policies in effect on
the date hereof, except with respect to the Options and
except to the extent provided by the terms of any such
arrangements or policies in effect on the date hereof which
arrangements or policies have been disclosed in Schedule 5.8
hereto;
1. except as set forth on Schedule 6.1 hereto, enter into
any transaction, contract or arrangement with any affiliate;
1. except as set forth on Schedule 6.1 hereto, enter into
any other material agreement, arrangement or understanding,
whether oral or written, outside the ordinary course of
business;
1. enter into an agreement to take any of the foregoing
actions or enter into an agreement that would foreseeably
result in the failure of any of the conditions to the Merger
set forth in Section 8 hereof to occur or be satisfied; or
1. authorize any of, or commit or agree to take any of, or
take any corporate action in furtherance of, any of the
foregoing actions.
Notwithstanding the foregoing, the Company may
negotiate and enter into a collective bargaining agreement
with Local 282, the existing contract of which expires
December 31, 1996, on terms acceptable to the Company,
without the consent of Parent or Acquisition Sub and the
absence of an agreement with Local 282 after December 31,
1996 or a resulting strike by Local 282 shall not be deemed
to have a Material Adverse Effect on the Company or
constitute the failure of any obligations under this
Agreement.
I. ADDITIONAL AGREEMENTS
A. Proxy Statement; Other Filings. As promptly as
practicable, the Company shall prepare, shall file with the
Commission under the Exchange Act, shall use its best
efforts to have cleared by the Commission and promptly
thereafter shall mail to its stockholders, a Proxy Statement
with respect to the meeting of the Company's stockholders
referred to in Section 7.2. The term "Proxy Statement"
shall mean such proxy statement, as the case may be, and all
related proxy materials at the time such documents initially
are mailed to the Company's stockholders, and all amendments
or supplements thereto, if any, similarly filed and mailed.
The Company shall give Parent and its counsel a reasonable
opportunity to review and comment upon the Proxy Statement
prior to its being filed with the Commission and shall give
Parent and its counsel a reasonable opportunity to review
all amendments and supplements to the Proxy Statement and
all responses to requests for additional information and
replies to comments prior to their being filed with, or sent
to, the Commission and, in the case of the Proxy Statement
and any amendments or supplements thereto, prior to its
being disseminated to holders of shares of Company Common
Stock. As promptly as practicable, the Company, Parent and
Acquisition Sub each shall properly prepare and file any
other filings required under the Exchange Act or any other
federal or state law relating to the Merger and the
transactions contemplated herein (including filings, if any,
required under the Xxxx-Xxxxx-Xxxxxx Act) (collectively,
"Other Filings"). Each of Parent and the Company shall
promptly notify the other of the receipt of any comments on,
or any request for amendments or supplements to, the Proxy
Statement or any Other Filings by the Commission or any
other governmental entity or official, and each of the
Company and Parent shall supply the other with copies of all
correspondence between it and each of its subsidiaries and
representatives, on the one hand, and the Commission or the
members of its staff or any other appropriate governmental
official, on the other hand, with respect to the Proxy
Statement and any of the Other Filings. The Company, Parent
and Acquisition Sub each shall use its respective best
efforts to obtain and furnish the information required to be
included in the Proxy Statement and any Other Filings, and
the Company, after consultation with Parent, shall use its
best efforts to respond promptly to any comments made by the
Commission with respect to the Proxy Statement and any
preliminary version thereof. The information provided and
to be provided by Parent, Acquisition Sub and the Company,
respectively, for use in the Proxy Statement shall, on both
the date the Proxy Statement is first mailed to the
Company's stockholders as referred to in Section 7.2 hereof
and the date such stockholders meeting is held, not contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they are made, not misleading, or necessary to
correct any statement in any earlier communication with
respect to the solicitation of proxies for the stockholders'
meeting which shall have become false or misleading, and
shall comply in all material respects as to form and
substance with all applicable requirements of law. Parent,
the Company and Acquisition Sub each agree to correct
promptly any such information provided by it for use in the
Proxy Statement which shall have become false or misleading.
A. Meeting of the Company's Stockholders. In order to
consummate the Merger, the Company, acting through the
Board, shall take all action necessary in accordance with
applicable laws, the Company's Certificate and By-laws to
duly call, give notice of, convene and hold an annual or
special meeting of its stockholders as promptly as
practicable to consider and vote upon the approval and
adoption of this Agreement and the approval of the Merger
and to take such other action as is necessary or desirable
to consummate the transactions contemplated hereby (the
"Stockholders' Meeting"). Except to the extent required by
law or the Company's By-Laws (a) the Company shall not
convene any meeting of its Stockholders prior to the
Stockholders' Meeting, and (b) the company shall not present
any other matter at the Stockholders' Meeting except for the
matters contemplated by this Agreement. At the
Stockholders' Meeting, all the shares of Company Common
Stock owned by Parent, Acquisition Sub or any other
subsidiary or affiliate of Parent shall be voted in favor of
the Merger. The stockholder vote required for the adoption
of this Agreement and the Merger shall be the vote required
by the Corporation Law. The Proxy Statement shall, except
to the extent legally required under the Corporation Law for
the discharge of the fiduciary duties of the Board as
advised by its counsel, contain the determination and the
recommendation of the Board that the stockholders of the
Company approve and adopt this Agreement and the
transactions contemplated hereby including the Merger and
the Company, acting through the Board, shall use its best
efforts to obtain such approval and adoption. Parent and
the Company shall coordinate and cooperate with respect to
the foregoing matters.
A. Additional Agreements. Subject to the terms and
conditions herein provided, each of the parties hereto
agrees to use its best efforts (i) to take, or cause to be
taken, all actions and (ii) to do, or cause to be done, all
things necessary, proper or advisable to consummate and make
effective as promptly as practicable the transactions
contemplated by this Agreement and to cooperate with each
other in connection with the foregoing, including the taking
of such actions as are necessary to obtain any necessary
consents, approvals, orders, exemptions and authorizations
by or from any public or private third party, including
without limitation any that are required to be obtained
under any federal, state or local law or regulation or any
contract, agreement or instrument to which the Company or
any subsidiary is a party or by which any of their
respective properties or assets are bound, (iii) to defend
all lawsuits or other legal proceedings challenging this
Agreement or the consummation of the transactions
contemplated hereby, (iv) to cause to be lifted or rescinded
any injunction or restraining order or other order adversely
affecting the ability of the parties to consummate the
transactions contemplated hereby, and (v) to effect all
necessary registrations and Other Filings, including, but
not limited to, filings under the Xxxx-Xxxxx-Xxxxxx Act, if
any, and submissions of information requested by
governmental authorities. Without limiting the generality
of the foregoing, Parent and Acquisition Sub will use their
best efforts to obtain appropriate financing to consummate
the Merger. For purposes of the foregoing sentence and as
to the Company's obligations under Section 5.13(b)(i)(D)
hereof, the obligation of the Company, Parent and
Acquisition Sub to use their "best efforts" to obtain
waivers, consents and approvals to loan agreements, leases
and other contracts shall not include any obligation to
agree to an adverse modification of the terms of such
documents or to prepay or incur additional obligations
(payment or otherwise) to such other parties.
B. Fees and Expenses. Except as set forth in Section 9.2
below, whether or not the Merger is consummated, all fees,
costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be
paid by the party incurring such cost or expense.
Notwithstanding the foregoing, upon consummation of the
Merger, Parent may be reimbursed by the Company for all
costs and expenses incurred by Parent and Acquisition Sub in
connection with this Agreement and the transactions
contemplated hereby.
A. No Solicitations.
(a) Unless and until this Agreement shall have been
terminated in accordance with its terms, the Company agrees
and covenants that (i) neither it nor any of its
subsidiaries shall, and each of them shall direct and use
its best efforts to cause its respective officers,
directors, employees, agents and representatives (including,
without limitation, any investment banker, attorney or
accountant retained by it or any of its subsidiaries) not
to, directly or indirectly, initiate, solicit or encourage
any inquiries or the making or implementation of any
proposal or offer (including, without limitation, any
proposal or offer to its stockholders) with respect to a
merger, acquisition, tender offer, exchange offer,
consolidation or similar transaction involving any purchase
of 10% or more of the assets or securities of the Company or
any of its subsidiaries, other than the transactions
contemplated by this Agreement (any such proposal or offer
being hereinafter referred to as an "Acquisition Proposal")
or engage in any negotiations with, or provide any
confidential information or data to, or have any discussions
with, any person relating to, an Acquisition Proposal, or
otherwise facilitate any effort or attempt to make or
implement an Acquisition Proposal; (ii) the Company will
immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any persons
conducted heretofore with respect to any of the foregoing
and will take the necessary steps to inform the individuals
or entities referred to above of the obligations undertaken
in this Section; and (iii) the Company will notify the
Parent immediately if any such inquiries or proposals are
received by, any such information is requested from, or any
such negotiations or discussions are sought to be initiated
or continued with, the Company, which notification shall
include the terms of any such inquiries or proposals.
(b) Notwithstanding anything set forth in this
Agreement to the contrary, the Board may furnish or cause to
be furnished by any committee thereof, any executive officer
of the Company, the Company's counsel or the Company's
investment advisor information or data to or enter into
discussions or negotiations with any person that on an
unsolicited basis, makes a bona fide Acquisition Proposal,
if, and only to the extent that, the Board (x) determines in
good faith, after consideration of written advice of its
financial advisors, that the Acquisition Proposal, if
consummated as proposed, may result in a transaction more
favorable to the Company's stockholders from a financial
point of view than the transactions contemplated by this
Agreement (any such Acquisition Proposal being referred to
herein as a "Superior Proposal") and (y) determines in good
faith, after consultation with its outside counsel, that the
failure to take such action may be a breach of the
directors' fiduciary duties under applicable law, provided
that prior to furnishing such information to, or entering
into discussions or negotiations with, such person, the
Company provides written notice to Parent to the effect that
it is furnishing information to, or entering into
discussions or negotiations with, such person and the
Company keeps Parent informed of the status of any such
discussions or negotiations and the principal terms of any
such Acquisition Proposal. Notwithstanding the foregoing
(a) the Company and its representatives (as set forth above)
may advise any person expressing an interest in the Company
and/or making an Acquisition Proposal that such person must
review and comply with, and the Company must comply with,
the provisions of Section 7.5 hereof (as contained in this
Agreement as filed with the Commission) prior to the Company
entering into any discussion or negotiations with such
person or providing any information or data to such person,
and any such statement to such effect (when initially made
to such person) shall not constitute a breach of this
Agreement, and (b) nothing contained herein shall preclude
the Company from entering into a definitive agreement with
any person providing a bona fide Acquisition Proposal that
the Company is entitled to negotiate pursuant to the terms
of this Section 7.5 provided that the Company and its
representatives comply with the obligations contained in
this Section 7.5 and in Sections 9.1(f) and 9.2 hereof. As
used in this Agreement, the word "person" means an
individual, a corporation, a partnership, an association, a
joint-stock company, a trust, a limited liability company,
an unincorporated organization or any other entity.
A. Officers' and Directors' Insurance; Indemnification.
Parent agrees that all rights to indemnification existing in
favor of, and all limitations on the personal liability of,
the directors and officers of the Company provided for in
the Company's Certificate and in each subsidiaries'
certificate of incorporation (or similar organizational
document) or their respective By-laws as in effect as of the
date hereof with respect to matters occurring prior to the
Effective Time shall continue without amendment in full
force and effect for a period of not less then six (6) years
from the Closing; provided, however, that all rights to
indemnification in respect of any claims (a "Claim")
asserted or made within such period shall continue until the
disposition of such Claim. At or prior to the Effective
Time, Parent also shall continue the Company's existing
directors' and officers' liability insurance coverage for
the Company's directors in a form reasonably acceptable to
the Company which shall provide such directors with coverage
for six years following the Effective Time; provided,
however, that the cost of such policy shall not exceed
$200,000 in the aggregate. Notwithstanding anything to the
contrary in this Section 7.6, nothing contained in this
Section 7.6 shall at any time be construed to limit or
otherwise impair or shall at any time limit or otherwise
impair the rights of any officer or director to
indemnification for acts occurring prior to the Effective
Date by the Company, any subsidiary or the Surviving
Corporation under the Corporation Law, it being understood
that the provisions of this Section 7.6 constitute a
contractual obligation.
A. Access to Information; Confidentiality. From the date
hereof until the Effective
Time, the Company shall, and shall cause its subsidiaries,
officers, employees and agents to, afford to Parent and to
the officers, employees and agents of Parent complete access
at all reasonable times to their officers, employees,
agents, properties, books, records and contracts, and shall
furnish Parent such financial, operating and other data and
information as Parent may reasonably request provided,
however, that the Company shall not be required to disclose
or permit access to certain information regarding the
deliberations of the Company's Board of Directors or
committees thereof to the extent same relates solely to an
Acquisition Proposal or this Agreement. Prior to the
Effective Time, Parent and Acquisition Sub shall hold in
confidence all such information on the terms and subject to
the conditions contained in that certain confidentiality
agreement between Fidelity Ventures Limited and the Company
(the "Confidentiality Agreement") the provisions of which
shall survive the termination of this Agreement. The
parties hereto on behalf of the signatories to the
Confidentiality Agreement hereby waive the provisions of the
Confidentiality Agreement as and to the extent necessary to
permit the making and consummation of the transactions
contemplated hereby. Upon the consummation of the Merger,
such Confidentiality Agreement shall terminate.
A. Financial and Other Statements. Notwithstanding
anything contained in Section 7.7, during the term of this
Agreement, the Company shall also provide to Parent the
following documents and information:
1. As soon as reasonably available, but in no event
more than 45 days after the end of each fiscal quarter
ending after the date of this Agreement, the Company
will deliver to Parent its Quarterly Report on Form
10-Q as filed under the Exchange Act. The Company will
also deliver to Parent, contemporaneously with its
being filed with the SEC, a copy of all Current Reports
on Form 8-K.
1. Promptly upon receipt thereof, the Company will
furnish to Parent copies of all internal control
reports submitted to the Company or any subsidiary by
independent accountants in connection with each annual,
interim or special audit of the books of the Company or
any such subsidiary made by such accountants.
1. As soon as practicable, the Company will furnish
to Parent copies of all such financial statements and
reports as it or any subsidiary shall send to its
stockholders, the Commission or any other regulatory
authority, to the extent any such reports furnished to
any such regulatory authority are not confidential and
except as legally prohibited thereby.
1. With reasonable promptness, the Company will
furnish to Parent (i) monthly profit and loss
statements, (ii) a listing of accounts receivable,
including aging, as of the end of each month, (iii)
inventory analysis as of the end of each month, (iv) a
listing of accounts payable, including aging, as of the
end of each month, and (v) such additional financial
data as Parent may reasonably request.
A. Observer Rights. From the date hereof until the
earlier to occur of the Effective Time or the termination of
this Agreement in accordance with its terms, the Company
shall afford a representative designated by Parent
observation rights for all meetings (whether in person,
telephonic or otherwise) of the Company's Board of Directors
and shall provide Parent and Acquisition Sub copies of all
notices, minutes, consents and other materials that it
provides to its directors in the same manner and at the same
time as it provides such materials to its directors
(including those related to the committees thereof), except
to the extent the same relates solely to an Acquisition
Proposal or this Agreement; provided, however, that such
representative shall agree to hold in confidence all
information so provided.
A. Advice of Change; Schedule Update. Each party will
promptly advise the other of (i) any change or the
occurrence or non-occurrence of any event having a Material
Adverse Effect or which would be reasonably likely to cause
any representation or warranty contained in this Agreement
to be untrue or inaccurate in any material respect and (ii)
any material failure of such party to comply with or satisfy
any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement.
X. Xxxxxx Building Transaction. The Company shall involve
Parent and its advisors in its continued investigations of
and discussions with Xxxxxx Building Products Corp. ("Xxxxxx
Building Products"), shall consult with Parent regarding any
proposed transaction involving Xxxxxx Building Products
including the structure of the transaction, the form and
substance of the documents to be executed in connection with
such transaction and the specific nature of any post-closing
obligations (payment, indemnification or otherwise) and
agrees to not consummate any such transaction without the
prior written consent of Parent.
A. Certain Litigation. Notwithstanding anything to the
contrary contained in this Agreement, the outcome of the
currently pending litigation commenced against the Post
Authority of New York and New Jersey (the "Port Authority")
and the Company and/or one or more of its subsidiaries in
the United States District Court for the Eastern District of
New York (styled as Case No.: CV96-3793), and any related
legal proceeding in state or federal court including without
limitation any reasonably related legal proceedings
instituted by individual members of the coalition which is
the plaintiff in the aforementioned proceeding involving the
lease dated March 29, 1996 between the Company and the Port
Authority (the "Port Authority Lease"), shall not constitute
an event which gives rise to a failure of a condition to
Parent's and Acquisition Sub's respective obligations under
this Agreement (including without limitation, if the Port
Authority Lease is deemed unenforceable and the Company has
not secured or occupied another location prior to the
expiration of the Company's lease at 000 Xxxxxxxx Xxxxxx,
Xxxxxxxx, Xxx Xxxx), or which otherwise provides Parent or
Acquisition Sub with the right to decline to consummate the
Merger as a result of a failure of a closing condition. The
Company has, prior to the date hereof, delivered a true and
correct copy of the Indemnification Agreement, dated October
8, 1996, by and between the Port Authority and the Company
and/or one or more of its subsidiaries (the "Indemnification
Agreement"). The Company (a) shall keep Parent and its
counsel advised in writing of the status of, and material
developments in, the pending legal proceeding referred to
above, (b) shall notify Parent and its counsel in writing of
the commencement of any related legal proceeding, (c) shall
preserve its rights under the Indemnification Agreement, and
(d) shall not settle or compromise the pending legal
proceeding or any such related legal proceeding without the
prior written consent of Parent and Acquisition Sub, which
consent shall not be unreasonably withheld.
B. Public Announcements. Parent and the Company shall
consult with each other before issuing any press release or
otherwise making any public statements or announcements with
respect to this Agreement or any transaction contemplated
herein and shall not issue any such press release or make
any such public statement without the prior written consent
of the other party, which consent shall not be unreasonably
withheld; provided, however, that a party may, without the
prior consent of the other party, issue such press release
or make such public statement or announcement as may be
required by law if it has used its reasonable best efforts
to consult with the other party and to obtain such party's
consent but has been unable to do so. Notwithstanding
anything to the contrary set forth in this Agreement, the
Company shall not, and shall use its best efforts to ensure
that its stockholders, directors, officers, employees,
agents, advisors or affiliates do not, disclose any
information concerning Parent or any of its affiliates
without the prior written consent of a majority of the
equity holders of Parent. Access to any information
concerning Parent and its affiliates shall be limited by the
Company only to those employees, advisors and
representatives who have a need to receive any such
information for the purpose of consummating the Merger and
the other transactions contemplated by this Agreement and
who are under an enforceable obligation to the Company to
hold such information in confidence under similar terms and
conditions as set forth in the Confidentiality Agreement.
A. Environmental Matters. The Company (a) shall promptly
prepare and file all such reports, notices, filings,
requests for consent or waiver, applications for permit or
license and such other documents (if any) as required by
applicable federal, state and local law with respect to
those environmental matters set forth in, or referred to in,
Schedule 5.11 hereto, and (b) shall promptly notify Parent
and its counsel in writing of any matter, issue, discovery,
notice or other event which occurs, or of which the Company
becomes aware, after the date hereof, and which would have
required disclosure on Schedule 5.11 hereto had it occurred
or had the Company become aware prior to the date hereof.
A. Stop Transfer; Reorganization Agreement. The Company
acknowledges and agrees to be bound by and comply with the
provisions of the Proxy Agreement as if a party thereto with
respect to transfers of record ownership of shares of the
Common Stock, and agrees to notify the transfer agent of the
provisions of the Proxy Agreement and to request that the
transfer agent place a stop transfer order on the shares
that are subject to the provisions of such agreement except
for the transfers permitted by Section 1(a) of the Proxy
Agreement. The Company hereby waives any and all rights
that it might have under the Agreement and Plan of
Reorganization dated October 1, 1986 by and among the
Company and the Stockholders (as defined therein), as
amended (the "Reorganization Agreement"), to the extent
necessary to consummate the transaction contemplated hereby
and in order for the Principal Stockholders to enter into
the Proxy Agreement. The Company further agrees not to take
any action under such Reorganization Agreement that would
affect the Proxy Agreement and the arrangements contained
therein. Furthermore, the Company agrees that, at the
Effective Time, the Reorganization Agreement shall terminate
as to the Company and the Company shall have no further
rights thereunder.
A. Transfer Taxes. Acquisition Sub and Parent agree that
either Acquisition Sub or the Company will pay the
applicable state and local transfer taxes arising as a
result of the consummation of the Merger (collectively, the
"Transfer Taxes") including but not limited to the New York
State Real Property Transfer Tax, the New York City Real
Property Transfer Tax and the Connecticut Real Estate
Conveyance Tax, if any, and any penalties or interest with
respect to the Transfer Taxes payable as a result of the
consummation of the Merger. The Company agrees to cooperate
with Acquisition Sub in the filing of any returns with
respect to the Transfer Taxes, including supplying in a
timely manner any information with respect to the Company's
real property interests that is reasonably necessary to
complete such returns.
I. CONDITIONS TO THE MERGER
A. Conditions to the Obligations of Each Party to Effect
the Merger. The respective obligations of each party to
effect the Merger shall be subject to the fulfillment or
waiver, where permissible, at or prior to the Effective
Time, of each of the following conditions:
1. Stockholder Approval. This Agreement and the
transactions contemplated hereby, including the Merger,
shall have been approved and adopted by the affirmative vote
of the stockholders of the Company to the extent required by
the Corporation Law and the Company's Certificate.
1. Xxxx-Xxxxx-Xxxxxx Act. Any waiting period (and any
extension thereof) applicable to the consummation of the
Merger under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or
been terminated.
1. Other Regulatory Approvals. All necessary approvals,
authorizations and consents of any governmental or
regulatory entity required to consummate the Merger shall
have been obtained and remain in full force and effect, and
all waiting periods relating to such approvals,
authorizations and consents shall have expired or been
terminated, except where the failure to so obtain will not,
either individually or in the aggregate, have a Material
Adverse Effect on the Company and its subsidiaries taken as
a whole .
1. No Injunctions, Orders or Restraints; Illegality. No
preliminary or permanent injunction or other order, decree
or ruling issued by a court of competent jurisdiction or by
a governmental, regulatory or administrative agency or
commission nor any statute, rule, regulation or executive
order promulgated or enacted by any governmental authority
shall be in effect which would (i) make the consummation of
the Merger illegal, or (ii) otherwise restrict, prevent or
prohibit the consummation of the transactions contemplated
by this Agreement, including the Merger.
A. Additional Conditions to the Obligations of the
Company. The obligation of the Company to effect the Merger
is also subject to the satisfaction, or waiver by the
Company, of the following conditions:
(a) Representations and Warranties. Each of the
representations and warranties of Parent and Acquisition Sub
in this Agreement which is qualified as to materiality shall
be true and correct and each such representation or warranty
that is not so qualified shall be true and correct in all
material respects, in each case as of the date of this
Agreement and (except to the extent such representations and
warranties speak as of an earlier date) as of the Effective
Date. Parent and Acquisition Sub shall each have delivered
to the Company a certificate of such party to such effect
signed by the Manager or Managers (as the case may be) of
Parent dated as of the Effective Date.
(b) Agreements and Covenants. Parent and Acquisition
Sub shall have performed in all material respects all
obligations and complied in all material respects with all
of the respective agreements or covenants to be performed or
complied with by such party under this Agreement and the
Company shall have received a certificate signed by the
Chief Executive or Chief Financial Officer of Parent to such
effect dated as of the Effective Date.
A. Additional Conditions to the Obligations of Parent and
Acquisition Sub. The obligations of Parent and Acquisition
Sub to effect the Merger are also subject to the
satisfaction, or waiver by Parent and Acquisition Sub, of
the following conditions:
1. Representations and Warranties. Each of the
representations and warranties of the Company in this
Agreement which is qualified as to materiality shall be true
and correct and each such representation or warranty that is
not so qualified shall be true and correct in all material
respects, in each case as of the date of this Agreement, as
applicable, and (except to the extent such representations
and warranties speak as of an earlier date) as of the
Effective Time. The Company shall have delivered to Parent
a certificate of the Company to such effect signed by the
Chief Executive Officer and the Chief Financial Officer of
the Company as of the Effective Date.
1. Agreements and Covenants. The Company shall have
performed in all material respects all obligations and
complied in all material respects with all agreements or
covenants of the Company to be performed or complied with by
it at or prior to the Effective Date under this Agreement
and Parent shall have received a certificate signed on
behalf of the Company by the Chief Executive Officer and
Chief Financial Officer of the Company to such effect dated
as of the Effective Date.
1. No Orders, Injunctions or Restraints on Operation of
Business; Illegality. No pending legal proceeding in (a
"Pending Litigation"), or preliminary or permanent
injunction or other order, decree or ruling issued by, a
court of competent jurisdiction or pending in (together with
a Pending Litigation a "Pending Legal Proceeding"), or
issued by, a governmental, regulatory or administrative
agency or commission nor any statute, rule, regulation or
executive order promulgated or enacted by any governmental
authority shall be in effect, which (i) restricts, prevents
or prohibits the ownership or operation by Parent (or any of
its subsidiaries) of any portion of its or the Surviving
Corporation's or its subsidiaries' business, properties or
assets which is material to such businesses as a whole, or
compels Parent (or any of its subsidiaries) to dispose of or
hold separate any portion of the Surviving Corporation's or
its subsidiaries' business, properties or assets which is
material to such businesses as a whole, (ii) imposes any
material limitation on the ability of Parent or Acquisition
Sub to effect the Merger or on the ability of Parent to hold
or to exercise full rights of ownership of the shares of
common stock of the Surviving Corporation, including,
without limitation, the right to vote the shares of common
stock of the Surviving Corporation on all matters presented
to the stockholders of the Surviving Corporation, (iii)
imposes any limitations on the ability of Parent or any of
its affiliates or subsidiaries to control in any material
respect the business, properties and operations of the
Company or the Surviving Corporation, or (iv) occurs after
the execution of this Agreement and is otherwise reasonably
likely to have a Materially Adverse Effect on the Surviving
Corporation and its subsidiaries taken as a whole.
1. Financial Markets. There shall not have occurred
(i) any general suspension of trading in, or limitation on
prices for, securities on the New York Stock Exchange, the
American Stock Exchange or The Nasdaq Stock Market, Inc.'s
National Market, (ii) the declaration of a banking
moratorium or any suspension of payments in respect of banks
in the United States (whether or not mandatory), (iii) the
commencement of a war, armed hostilities or other
international or national calamity directly or indirectly
involving the United States having a significant effect on
the functioning of financial markets in the United States,
or (iv) any limitation (whether or not mandatory) by any
United States governmental authority or agency on the
extension of credit by banks or other financial institutions
which would have a material adverse effect on Parent's
ability to borrow sufficient funds as contemplated by the
Financing Letters to pay the Merger Consideration.
1. No Material Adverse Effect. Since the date of the
Agreement, there shall not have occurred any change having a
Material Adverse Effect on the Company and its subsidiaries
taken as a whole provided, however, that the financial
results of the Company for the three months ended March 31,
1997, to the extent that they are reasonably consistent with
the financial results for the three months ended March 31,
1996, shall be excluded in determining any such change.
1. Third Party Consents. The Company shall have obtained
all consents of third parties to the consummation of the
Merger and the other transactions contemplated by this
Agreement (other than the Financing, except as specifically
contemplated in this Agreement) necessary under any
contract, agreement, arrangement or understanding listed on
Schedule 8.3(f) hereto and under any other contract,
agreement, arrangement or understanding the failure of which
to obtain would have a Material Adverse Effect on the
Company and its subsidiaries taken as a whole.
1. Waivers of Contractual Defaults, Accelerations, Etc.
The Company shall have obtained waivers (on terms
satisfactory to Parent and Acquisition Sub) with respect to
any default, termination, acceleration of payment or
performance or modification clause contained in any
contract, agreement, commitment, arrangement, lease, policy
or other instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of
its subsidiaries, or their respective properties or assets
is bound which is triggered or otherwise caused by reason of
the entering into this Agreement or the consummation of the
Merger and the other transactions contemplated by this
Agreement (other than the Financing, except as specifically
contemplated in this Agreement), except where the failure to
have so obtained would not have a Material Adverse Effect on
the Company and its subsidiaries taken as a whole, on the
Surviving Corporation and its subsidiaries taken as a whole,
on the Parent or on the ability to consummate the Merger.
1. Appraisal Rights. Holders of capital stock of the
Company shall not have demanded or perfected the right for
appraisal of shares of Company Stock representing more than
five percent (5%) of all issued and outstanding shares of
capital stock of the Company taken as a whole as of the
Effective Date in accordance with Section 262 of the
Corporation Law and the Company shall have delivered to
Parent a certificate dated as of the Effective Date
certifying to the foregoing effect.
1. Stock Option Plans. Parent shall have received
satisfactory evidence (x) that holders of all Options have
consented to the cancellation of such Options and (y) that
such Options and the Stock Option Plans will terminate at or
prior to the Effective Time.
A. Certain Payments. In the event Parent and Acquisition
Sub elect to not consummate the Merger and the other
transactions contemplated under this Agreement as a result
of a Pending Legal Proceeding, Parent shall reimburse the
Company for the Company Expenses (as defined in Section
9.2(d) hereof) which payment shall be payable to the Company
(by wire transfer of immediately available funds to an
account designated by the Company) within two (2) business
days after demand theretofore is made in writing by the
Company.
I. TERMINATION, AMENDMENT AND WAIVER
A. Termination. This Agreement may be terminated at any
time prior to the Closing:
1. by mutual written consent of Parent, Acquisition Sub
and the Company;
1. by either Parent and Acquisition Sub or the Company if
the Effective Time shall not have occurred on or before
February 28, 1997 or such later date as shall be mutually
agreed to in each party's sole discretion;
1. by either Parent and Acquisition Sub or the Company if
there shall have been a material breach of any of the
representations or warranties set forth in this Agreement on
the part of the other party, which breach by its nature
cannot be cured prior to the Effective Time or within thirty
(30) business days following receipt by the breaching party
of written notice of such breach from the other party
hereto;
1. by either Parent and Acquisition Sub or the Company if
any United States federal or state court of competent
jurisdiction shall have issued an injunction or taken any
other action (which the parties shall use their best efforts
to stay or reverse) permanently restraining, enjoining or
otherwise prohibiting the Merger, and such injunction or
other action shall have become final and non-appealable;
1. by the Company if either Parent or Acquisition Sub
shall have failed to perform or has breached in any material
respect any of its covenants, obligations or agreements
under or contained in this Agreement unless the failure to
so perform or the breach, as the case may be, has been
caused by or results from a breach of this Agreement by the
Company;
1. by the Company if the Company enters into a binding
definitive agreement to effect a Superior Proposal (which
entrance shall not require Parent's or Acquisition Sub's
consent); provided, however, that the Company shall notify
Parent in writing at least three business days prior to the
exercise of its termination rights under this Section
9.1(f), where such notice shall include the proposed terms
of such agreement into which the Company may enter;
1. by Parent and Acquisition Sub if the Board shall have
failed to recommend or shall have withdrawn its
recommendation or approval of the Merger, or if the Board
shall have recommended to stockholders of the Company any
Acquisition Proposal of any other person or shall have
resolved to do any of the foregoing, provided that any
notice sent to Parent and Acquisition Sub under Section
9.1(f) prior to the exercise of the termination rights under
such section shall not require the entrance into such
agreement or be deemed to constitute an act described in
this Section 9.1(g) but the entrance into a binding
definitive agreement to effect a Superior Proposal shall
constitute an act described in this Section 9.1(g);
1. by Parent and Acquisition Sub if the Company shall have
failed to perform in any material respect any of its
covenants, obligations or agreements under or contained in
this Agreement unless the failure to so perform or the
breach, as the case may be, has been caused by or results
from a breach of this Agreement by Parent or Acquisition
Sub; or
1. by Parent and Acquisition Sub if any United States
federal or state court of competent jurisdiction shall have
issued an injunction or taken any other action (which the
parties shall use their best efforts to stay or reverse)
permanently restraining, enjoining or otherwise prohibiting
the enforcement of any of the terms of the Proxy Agreement,
and such injunction or other action shall have become final
and non-appealable.
A. Effect of Termination.
1. In the event of the termination of this Agreement
pursuant to Section 9.1 hereof, this Agreement shall
forthwith become void and have no effect, without any
liability on the part of any party hereto or its affiliates,
trustees, directors, officers or stockholders and all rights
and obligations of any party hereto shall cease except for
the agreements contained in Sections 7.4, 7.7, 9 and 10;
provided, however, that nothing contained in this Section
9.2(a) shall relieve any party from liability under this
Section 9 for any breach of this Agreement.
1. If (x) Parent and Acquisition Sub terminate this
Agreement (A) pursuant to Section 9.1(g) or (B) pursuant to
Section 9.1(h) as a result of a willful breach by the
Company or (y) if the Company terminates this Agreement
pursuant to Section 9.1(f), then the Company shall pay to
Parent an amount in cash equal to the sum of (i) $1,000,000,
plus (ii) Parent's and Xxxxxxxxx Xxxxxx'x out-of-pocket
costs and expenses in connection with this Agreement and the
transactions contemplated hereby including, without
limitation, fees and disbursements of its outside counsel,
accountants and other consultants retained by or on behalf
of Parent together with the other out-of-pocket costs
incurred by it in connection with analyzing, structuring,
participating in the negotiations of the terms and
conditions, arranging financing, conducting due diligence
and other activities related to the Merger and the
transactions contemplated by this Agreement and the
negotiations and evaluations leading to the Merger,
including, without limitation, commitment fees and expense
reimbursements paid to potential lenders (collectively, the
"Parent Expenses"). Following the Company's reasonable
request, Parent and Xx. Xxxxxx shall provide such reasonable
documentation of such expenses to enable the Company to
appropriately account for such expenses in its financial
records and to report such expenses in its tax returns and
reports.
1. If Parent and Acquisition Sub terminate this Agreement
pursuant to Sections 9.1(h) (except for a termination
because of a willful breach by the Company, in which case
the provisions of Section 9.2(b) will apply), the Company
shall reimburse Parent and Xx. Xxxxxx for the Parent
Expenses.
1. If the Company terminates this Agreement pursuant to
Section 9.1(e) hereof as a result of a willful breach by
Parent and Acquisition Sub, the Parent and Acquisition Sub
shall pay to the Company an amount in cash equal to the sum
of (i) $1,000,000, plus (ii) the Company's out-of-pocket
costs and expenses in connection with this Agreement and the
transactions contemplated hereby including, without
limitation, fees and disbursements of its outside counsel,
accountants and other consultants retained by or on behalf
of the Company together with the other out-of-pocket costs
incurred by it in connection with participating in the
negotiations of the terms and conditions of this Agreement
and the other activities related to the Merger and the other
transactions contemplated by this Agreement and the
negotiations with Parent and its affiliates leading to the
Merger (collectively, the "Company Expenses"). Following
Parent's reasonable request, the Company shall provide such
reasonable documentation of such expenses to enable Parent
to appropriately account for such expenses in its financial
records and to report such expenses in its tax returns and
reports.
1. If the Company terminates this Agreement pursuant to
Section 9.1(e) (except for termination because of a willful
breach by Parent and Acquisition Sub, in which case the
provisions of Section 9.2(d) will apply), Parent shall
reimburse the Company for the Company Expenses.
1. Any payment required by this Section 9.2 shall be
payable (i) by the Company to Parent and Xx. Xxxxxx, or (ii)
by Parent to the Company, as the case may be, (by wire
transfer of immediately available funds to accounts
designated by the recipients thereof) within two business
days after demand therefore is made in writing by the person
entitled to make such demand. The parties acknowledge and
agree that the provisions of this Section 9.2 are included
herein in order to induce each of the parties hereto to
enter into this Agreement and to reimburse such parties for
incurring the costs and expenses related to entering into
this Agreement and consummating the transactions
contemplated by this Agreement.
1. Notwithstanding anything to the contrary in this
Agreement, the parties hereto acknowledge and agree that the
sole and exclusive remedies available to them with respect
to any proposed or actual termination of this Agreement or
any act or failure to act prior to the consummation of the
Merger and the other transactions contemplated by this
Agreement, including any misrepresentation or breach of any
representation, warranty, covenant, agreement or obligation
under this Agreement shall be the rights to payment under
this Section 9.2. The parties hereto expressly acknowledge
and agree that, in light of the difficulty of accurately
determining actual damages with respect to the foregoing,
the rights to payment under this Section 9.2: (i) constitute
a reasonable estimate of the damages that will be suffered
by reason of any such proposed or actual termination of this
Agreement or any such act or failure to act in accordance
with this Agreement, and (ii) shall be in full and complete
satisfaction of any and all damages arising as a result of
the foregoing. The parties agree that, except as set forth
in this Section 9.2(g), they shall not, in respect of any
proposed or actual termination of this Agreement or any act
or failure to act prior to the consummation of the Merger
and the other transactions contemplated by this Agreement,
exercise or attempt to exercise any other rights or
remedies, in contract, at law, in equity or otherwise
against any other party hereto.
A. Amendment. This Agreement may be amended by the
parties hereto by an instrument in writing signed on behalf
of each of the parties hereto at any time before or after
any approval hereof by the stockholders of the Company and
Acquisition Sub; provided, however, that after any such
approval of the Company's stockholders, no amendment shall
be made which reduces the amount or changes the form of the
Merger Consideration or in any way materially adversely
affects the rights of stockholders of the Company, without
the further approval of such stockholders.
A. Extension; Waiver. At any time prior to the Closing,
the parties hereto may, to the extent legally allowed,
(i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any of the
agreements or conditions contained herein. Any agreement on
the part of a party hereto to any such extension or waiver
shall be valid only if set forth in a written instrument
signed on behalf of such party.
I. GENERAL PROVISIONS
A. Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed
to have been duly given or made as of the date delivered if
delivered personally or as of the date sent if sent by
cable, telegram or telecopier, or, as of the next business
day if sent by prepaid overnight carrier to the parties at
the following addresses (or at such other addresses as shall
be specified by the parties by like notice):
(a) if to Parent or Acquisition Sub:
c/o Fidelity Capital
Associates, Inc.
00 Xxxxxxxxxx Xxxxxx, X00X
Xxxxxx, XX 00000-0000
Attn: Xx. Xxxx X. Xxxxxxx
with a copy to: c/o Fidelity Capital
Associates, Inc.
00 Xxxxxxxxxx Xxxxxx, X0XX
Xxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
and a copy to: Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
Xxxxxx, P.C.
Xxxxxx X. Xxxxxxx III,
Esq.
(b) if to the Company: 000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: President
with a copy to: Xxxxx Cummis Xxxxxxxxx
Xxxxx
Tischman Xxxxxxx & Xxxxx, P.A.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxx X. North, III,
Esq.
A. Interpretation. When a reference is made in this
Agreement to subsidiaries of Parent, Acquisition Sub or the
Company, the word "subsidiary" means any corporation more
than 50 percent of whose outstanding voting securities, or
any partnership, joint venture or other entity more than 50
percent of whose total equity interest, is directly or
indirectly owned by Parent, Acquisition Sub or the Company,
as the case may be. 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.
A. Non-Survival of Representations, Warranties, Covenant
and Agreements. Except for Section 7.6, and the obligations
contained in Section 3 hereof, none of the representations,
warranties, covenants and agreements contained in this
Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Effective Time, and thereafter
there shall be no liability on the part of either Parent,
Acquisition Sub or the Company or any of their respective
officers, directors or stockholders in respect thereof.
Except as expressly set forth in this Agreement, there are
no representations or warranties of any party hereto,
express or implied.
A. Miscellaneous. This Agreement (i) constitutes,
together with the Confidentiality Agreement, the entire
agreement and supersedes all of the prior agreements and
understandings, both written and oral, among the parties, or
any of them, with respect to the subject matter hereof, (ii)
shall be binding upon and inure to the benefits of the
parties hereto and their respective successors and permitted
assigns and is not intended to confer upon any other person
(except as set forth below) any rights or remedies hereunder
and (iii) may be executed in two or more counterparts (and
via facsimile) which together shall constitute a single
agreement. Section 7.6 is intended to be for the benefit of
those persons described therein and their respective
legatees, distributees, heirs, estates, executors and other
personal representatives, as fully in each case as if each
such person was a party hereto and the covenants contained
therein may be enforced by such persons. The parties hereto
agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed
in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties and
each of the persons referred to Section 7.6 and this Section
10.4 shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in the Chancery
Court of the State of Delaware, this being in addition to
any other remedy to which they are entitled at law or in
equity that is not limited by this Agreement.
A. Assignment. Except as expressly permitted by the terms
hereof, neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any
of the parties hereto without the prior written consent of
the other parties (and any assignment to a non-permitted
assignee shall be void and of no effect).
A. Knowledge; Best Efforts. Wherever the terms "the
Company's knowledge," "the Company's best knowledge," "the
receipt of notice," "the best knowledge of the Company," and
any similar term is used, in each case each such term shall
mean the knowledge or best knowledge or receipt (as the case
may be) of any of Xxxxxx Xxxxxx, Xxxxx Xxxxxxxxx, Xxxxxxx
Xxxxx, Xxxx Xxxxxxxx and Xxxxx Xxxxxxxxx and includes any
fact, matters or circumstances which any of such
individuals, as an ordinary and prudent business person
employed or retained in the same capacity in the same type
and size of business as the Company should have known.
A. Severability. If any provision of this Agreement, or
the application thereof to any person or circumstance is
held invalid or unenforceable, the remainder of this
Agreement, and the application of such provision to other
persons or circumstances, shall not be affected thereby, and
to such end, the provisions of this Agreement are agreed to
be severable.
A. Choice of Law/Consent to Jurisdiction. The validity,
interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of
Delaware. The parties hereby irrevocably and
unconditionally consent to the jurisdiction of the Chancery
Court of the State of Delaware for any action, suit or
proceeding arising out of or relating to this Agreement or
the transactions contemplated hereby, and the parties agree
not to commence any action, suit or proceeding related
thereto except in such court unless, as a result of
Surviving Corporation's merger with a non-Delaware entity or
other similar corporate event occurring after the Effective
Time, such court affirmatively refuses to resolve any such
action, suit or proceeding. The parties further irrevocably
and unconditionally waive any objection to the laying of
venue of any action, suit or proceeding arising out of or
relating to this Agreement in the Chancery Court of the
State of Delaware, and hereby further irrevocably and
unconditionally waive and agree not to plead or claim in
such court that any such action, suit or proceeding brought
in such court has been brought in an inconvenient forum.
Each party further agrees that service of any process,
summons, notice or document by U.S. registered mail to the
address of such party set forth in Section 10.1 above shall
be effective service of process for any action, suit or
proceeding brought against such party in such court.
A. Third-Party Beneficiary. With respect to those
provisions of Section 9.2 pursuant to which certain expenses
are to be reimbursed to Xxxxxxxxx X. Xxxxxx, Xx. Xxxxxx is a
direct and intended third-party beneficiary of such Section
9.2.
IN WITNESS WHEREOF, Parent, Acquisition Sub and the
Company have caused this Agreement to be executed as of the
date first written above by their respective officers
thereunto duly authorized.
XXXXXXXX ACQUISITION LLC
By:/s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Manager
XXXXXXXX NY ACQUISITION CORP.
By:/s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: President
THE STROBER ORGANIZATION, INC.
By:/s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: President and Chief Executive
Officer
