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AGREEMENT AND PLAN OF MERGER
Between
CONCORD MERGER CORP.
and
CONCORD FABRICS INC.
Dated as of July 29, 1999
as amended
August 4, 1999
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AMENDED AGREEMENT AND PLAN OF MERGER, dated as of August 4, 1999
(this "Agreement") between Concord Merger Corp., a Delaware corporation
("Purchaser"), and Concord Fabrics Inc., a Delaware corporation (the "Company").
WHEREAS, prior to organizing Purchaser, the shareholders of
Purchaser (the "Continuing Shareholders") owned, in the aggregate, 1,168,699
shares of Class A Common Stock, par value $.50 per share (the "Class A Stock"),
and 1,112,799 shares of Class B Common Stock, par value $.50 per share (the
"Class B Stock," and together with the Class A Stock, the "Common Stock"), of
the Company, representing approximately 63% of the shares of Common Stock
("Shares") outstanding; and
WHEREAS, the Continuing Shareholders have transferred all of their
Shares to the Purchaser in exchange for all the issued and outstanding shares of
capital stock of the Purchaser; and
WHEREAS, it is proposed that the Continuing Shareholders, through
their ownership of Purchaser, acquire the remaining issued and outstanding
Shares; and
WHEREAS, it is proposed that Purchaser shall make a tender offer to
acquire all outstanding Shares not held by it for a cash amount of $7.875 per
Share (such amount, or any greater amount per Share paid pursuant to the tender
offer, being hereinafter referred to as the "Per Share Amount") net to the
seller in cash, upon the terms and subject to the conditions of this Agreement
(the "Offer"); and
WHEREAS, Xxxxx X. Xxxxxxx Company ("Solomon") has delivered to the
Special Committee of independent directors (the "Special Committee") of the
Board of Directors of the Company (the "Board"), for the Special Committee's
consideration, its written opinion that, subject to the various assumption and
limitations set forth thereon as of the date of such opinion, the cash
consideration to be received in the Offer and the Merger by the stockholders of
the Company other than Purchaser or it affiliates is fair to such stockholders
from a financial point of view; and
WHEREAS, the Special Committee, at a meeting duly called and held on
July 29, 1999, has (A) unanimously determined that $7.875 is a fair price, (B)
determined that this Agreement and the transactions contemplated by this
Agreement (the "Transactions") are fair to the stockholders of the Company
(other than Purchaser and its affiliates), and (C) on the basis of the foregoing
and the opinion of Solomon, unanimously recommended that the Board approve and
authorize the Offer, the Merger (as defined below) and this Agreement; and
WHEREAS, the Board, at a meeting duly called and held on July 29,
1999 has (A) approved and adopted this Agreement and the Transactions, including
the Offer and the merger between Purchaser and the Company contemplated by
Section 2.01 hereof (the "Merger") in accordance with the Delaware General
Corporations Law ("Delaware Law") and upon the terms and subject to the
conditions set forth in this Agreement, and (B) resolved to recommend
that the stockholders of the Company accept the Offer, tender their Shares
thereunder to Purchaser and, if required by applicable law, approve and adopt
this Agreement and the Merger; and
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Purchaser and the Company hereby agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01. The Offer. (a) Provided that this Agreement shall not
have been terminated in accordance with Section 7.01 and none of the events set
forth in Annex A hereto shall have occurred or be existing, Purchaser shall
commence the Offer as promptly as reasonably practicable after the date hereof,
but in no event later than five business days after the initial public
announcement of Purchaser's intention to commence the Offer. The obligation of
Purchaser to accept for payment and pay for Shares tendered pursuant to the
Offer shall be subject to the condition (the "Minimum Condition") that at least
a majority of those then outstanding Shares of each class not owned beneficially
and of record by Purchaser (including, without limitation, all Shares issuable
upon the conversion of any convertible securities or upon the exercise of any
options, warrants or rights) shall have been validly tendered and not withdrawn
prior to the expiration of the Offer and also shall be subject to the
satisfaction of the other conditions set forth in Annex A hereto. Purchaser
expressly reserves the right to waive any such condition, to increase the price
per Share payable in the Offer, and to make any other changes in the terms and
conditions of the Offer; provided, however, that the Minimum Condition may not
be waived without the prior approval of the Company and that no change may be
made which (v) changes the form of consideration payable in the Offer, (w) which
decreases the price per Share payable in the Offer, (x) which reduces the
maximum number of Shares to be purchased in the Offer, (y) which imposes
conditions to the Offer in addition to those set forth in Annex A hereto or (z)
which is otherwise adverse to the Company or its stockholders (other than
Purchaser and its affiliates). Notwithstanding the foregoing, Purchaser may,
without the consent of the Company, (i) extend the Offer beyond the scheduled
expiration date (the initial scheduled expiration date being 20 business days
following the commencement of the Offer) if, at the scheduled expiration date of
the Offer, any of the conditions to Purchaser's obligation to accept for
payment, and to pay for, the Shares, shall not be satisfied or waived, (ii)
extend the Offer for any period required by any rule, regulation or
interpretation of the Securities and Exchange Commission (the "SEC") or the
staff thereof applicable to the Offer, or (iii) extend the Offer for an
aggregate period of not more than 20 business days beyond the latest applicable
date that would otherwise be permitted under clause (i) or (ii) of this
sentence, if as of such date, all of the conditions to Purchaser's obligations
to accept for payment, and to pay for, the Shares are satisfied or waived, but
the number of Shares validly tendered and not withdrawn pursuant to the Offer is
less than 90 percent of each class of the outstanding Shares on a fully diluted
basis; provided, however, that if any condition remains unsatisfied on the
initial scheduled expiration date of the Offer, at the request of the Company,
the Purchaser shall extend the Offer from time
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to time until five business days after such condition is satisfied (provided
that Purchaser shall not be required to extend the Offer beyond 35 calendar days
after such initial scheduled expiration date). The Per Share Amount shall,
subject to applicable withholding of taxes, be net to the seller in cash, upon
the terms and subject to the conditions of the Offer. Subject to the terms and
conditions of the Offer, Purchaser shall pay, as promptly as practicable after
expiration of the Offer, for all Shares validly tendered and not withdrawn.
(b) As soon as reasonably practicable on the date of commencement of
the Offer, Purchaser shall file with the SEC (i) a Tender Offer Statement on
Schedule 14D-1 (together with all amendments and supplements thereto, the
"Schedule 14D-1") with respect to the Offer and (ii) a Rule 13e-3 Transaction
Statement on Schedule 13E-3 (together with all amendments and supplements
thereto, the "Schedule 13E-3") with respect to the Offer and the other
Transaction. The Schedule 14D-1 and the Schedule 13E-3 shall contain or shall
incorporate by reference an offer to purchase (the "Offer to Purchase") and
forms of the related letter of transmittal and any related summary advertisement
(the Schedule 14D-1, the Schedule 13E-3, the Offer to Purchase and such other
documents, together with all supplements and amendments thereto, being referred
to herein collectively as the "Offer Documents"). Purchaser shall provide the
Company and its counsel a reasonable opportunity to review and comment on the
Offer Documents prior to the filing and/or dissemination thereof. Purchaser and
the Company agree to correct promptly any information provided by any of them
for use in the Offer Documents which shall have become false or misleading, and
Purchaser and the Company further agree to take all steps necessary to cause the
Schedule 14D-1 and the Schedule 13E-3 as so corrected to be filed with the SEC
and the other Offer Documents as so corrected to be disseminated to holders of
Shares, in each case as and to the extent required by applicable federal
securities laws.
SECTION 1.02. Company Action. (a) The Company hereby approves of and
consents to the Offer and represents that (i) the Board, acting upon the
unanimous recommendation of the Special Committee, at meetings duly called and
held on July 29, 1999 and August 4, 1999, has (A) determined that this
Agreement, as amended, and the Transactions, including each of the Offer and the
Merger, are advisable and fair to and in the best interests of the holders of
Shares (other than Purchaser and its Affiliates), (B) approved and adopted this
Agreement and the Transactions, including each of the Merger and the Offer, (C)
resolved to recommend that the stockholders of the Company accept the Offer,
tender their Shares thereunder to Purchaser and, if required by applicable law,
approve and adopt this Agreement and the Merger, and (ii) Solomon has delivered
to the Board a written opinion that the consideration to be received by the
holders of Shares pursuant to each of the Offer and the Merger is fair to the
holders of Shares from a financial point of view. The Company hereby consents to
the inclusion in the Offer Documents and the Proxy Statement (as hereinafter
defined) of the recommendation of the Board described in the immediately
preceding sentence. The Company has been advised by each of its directors and
executive officers that they intend to vote such Shares in favor of the approval
and adoption by the stockholders of the Company of this Agreement and the
Transactions.
(b) As soon as practicable on the date of commencement of the Offer,
the
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Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with any amendments or supplements thereto the
"Schedule 14D-9") and shall mail the Schedule 14D-9 to the stockholders of the
Company promptly after the commencement of the Offer. The Schedule 14D-9 shall,
except to the extent inconsistent with the fiduciary duties of the Board under
applicable law (as determined in good faith after consultation with independent
counsel), at all times contain the determinations, approvals and recommendations
described in Section 1.2(a). Purchaser and the Company each agrees promptly to
correct any information provided by it for use in the Schedule 14D-9 if and to
the extent that any such information shall have become false or misleading in
any material respect and the Company further agrees to take all steps necessary
to cause the Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to holders of Shares, in each case as and to the extent required by
applicable federal securities laws. Purchaser and its counsel shall be given a
reasonable opportunity to review and comment on the Schedule 14D-9 prior to its
filing with the SEC and shall be provided with any written or verbal comments
the Company and its counsel may receive from the SEC or its staff with respect
to the Schedule 14D-9 promptly after receipt of such comments.
(c) In connection with the Offer, the Company will, or will cause
its transfer agent to, promptly furnish Purchaser with mailing labels, security
position listings and any available listing or computer file containing the
names and addresses of the record holders and non-objecting beneficial owners of
the Shares and of Company Stock Options (as defined in Section 2.07) as of a
recent date and shall furnish Purchaser with such additional information and
assistance (including, without limitation, updated lists of stockholders,
mailing labels and lists of securities positions) as Purchaser or its agents may
reasonably request in communicating the Offer to the record and beneficial
holders of Shares. Subject to the requirements of applicable law, and except for
such steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Merger, Purchaser and its affiliates and
associates shall hold in confidence the information contained in any such
labels, listings and files, will use such information only in connection with
the Offer and the Merger, and, if this Agreement shall be terminated, will
deliver to the Company all copies of such information received from the Company
pursuant to this Agreement.
ARTICLE II
THE MERGER
SECTION 2.01. The Merger. Upon the terms and subject to the
conditions set forth in Article VI, and in accordance with Delaware Law, at the
Effective Time (as hereinafter defined) Purchaser shall be merged with and into
the Company. As a result of the Merger, the separate corporate existence of
Purchaser shall cease and the Company shall continue as the surviving
corporation of the Merger (the "Surviving Corporation"). Notwithstanding
anything to the contrary contained in this Section 2.01, Purchaser may elect
instead, at any time prior to the fifth business day immediately preceding the
date on which the Proxy Statement (as hereinafter defined) is mailed initially
to the Company's stockholders, to merge the Company into Purchaser or another
corporation controlled by, controlling or under common control with Purchaser.
In such event, the parties agree to execute an appropriate amendment to this
Agreement in order to
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reflect the foregoing and to provide, as the case may be, that Purchaser or such
other corporation controlled by Purchaser shall be the Surviving Corporation.
SECTION 2.02. Effective Time; Closing. As promptly as practicable
after the satisfaction or, if permissible, waiver of the conditions set forth in
Article VI, the parties hereto shall cause the Merger to be consummated by
filing this Agreement or a certificate of merger or certificate of ownership and
merger (in either case, the "Certificate of Merger") with the Secretary of State
of the State of Delaware, in such form as is required by, and executed in
accordance with the relevant provisions of, Delaware Law (the date and time of
such filing being the "Effective Time"). Prior to such filing, a closing shall
be held at the offices of Xxxxx Xxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
00000, or 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 Article VI.
SECTION 2.03. Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided in the applicable provisions of
Delaware 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 Purchaser shall vest in the Surviving Corporation,
and all debts, liabilities, obligations, restrictions, disabilities and duties
of the Company and Purchaser shall become the debts, liabilities, obligations,
restrictions, disabilities and duties of the Surviving Corporation.
SECTION 2.04. Certificate of Incorporation; By-laws. (a) Unless
otherwise determined prior to the Effective Time, at the Effective Time the
Certificate of Incorporation of the Company shall be amended and restated as set
forth in Exhibit 2.04 hereto and such Certificate of Incorporation, as amended
and restated, shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter amended as provided by law and such Certificate of
Incorporation.
(b) Unless otherwise determined by Purchaser prior to the Effective
Time, the By-laws of the Company, as in effect immediately prior to the
Effective Time, shall be the By-laws of the Surviving Corporation until
thereafter amended as provided by law, the Certificate of Incorporation of the
Surviving Corporation and such By-laws.
SECTION 2.05. Directors and Officers. The directors of Purchaser
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-laws of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be the initial officers of
the Surviving Corporation, in each case until their respective successors are
duly elected or appointed and qualified.
SECTION 2.06. Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of Purchaser, the
Company or the holders of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the
Effective
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Time (other than any Shares to be canceled pursuant to Section 2.06(b) and
any Dissenting Shares (as hereinafter defined)) shall be canceled and
shall be converted automatically into the right to receive an amount equal
to the Per Share Amount in cash (the "Merger Consideration") payable,
without interest, to the holder of such Share, upon surrender, in the
manner provided in Section 2.08, of the certificate that formerly
evidenced such Share;
(b) Each Share held in the treasury of the Company and each Share
owned by Purchaser, any Affiliate of Purchaser or any direct or indirect
subsidiary of the Company, immediately prior to the Effective Time shall
be canceled without any conversion thereof and no payment or distribution
shall be made with respect thereto; and
(c) Each share of Class A Common Stock, par value $.01 per share, of
Purchaser issued and outstanding immediately prior to the Effective Time
shall be converted into and exchanged for one validly issued, fully paid
and nonassessable share of Class A Common Stock, par value $.50 per share,
of the Surviving Corporation, and each share of Class B Common Stock, par
value $.01 per share, of Purchaser issued and outstanding immediately
prior to the Effective Time shall be converted into and exchanged for one
validly issued, fully paid and nonassessable share of Class B Common
Stock, par value $.50 per share, of the Surviving Corporation.
SECTION 2.07. Stock Options. Each stock option (a "Company Stock
Option") outstanding, whether or not exercisable and whether or not vested, at
the Effective Time under the Concord Fabrics Inc. Incentive Plan, as amended
December 4, 1996 (the "Company Stock Option Plan"), shall be canceled by the
Company immediately prior to the Effective Time, and each holder of a canceled
Company Stock Option shall be entitled to receive at the Effective Time or as
soon as practicable thereafter from the Company in consideration for the
cancellation of such Company Stock Option an amount (the "Option Spread") equal
to the product of (i) the number of Shares previously subject to such Company
Stock Option and (ii) the excess, if any, of the Per Share Amount over the
exercise price per share of Company Common Stock previously subject to such
Company Stock Option. The Option Spread, after reduction for applicable tax
withholding, if any, shall be paid in cash.
SECTION 2.08. Dissenting Shares. (a) Notwithstanding any provision
of this Agreement to the contrary, Shares that are outstanding immediately prior
to the Effective Time and which are held by stockholders who shall have not
voted in favor of the Merger or consented thereto in writing and who shall have
demanded properly in writing appraisal for such Shares in accordance with
Section 262 of Delaware Law (collectively, the "Dissenting Shares") shall not be
converted into or represent the right to receive the Merger Consideration. Such
stockholders shall be entitled to receive payment of the appraised value of such
Shares held by them in accordance with the provisions of such Section 262,
except that all Dissenting Shares held by stockholders who shall have failed to
perfect or who effectively shall have withdrawn or lost their rights to
appraisal of such Shares under such Section 262 shall thereupon be deemed to
have been converted into and to have become exchangeable for, as of the
Effective Time, the right to receive the Merger Consideration, without any
interest thereon, upon surrender, in the manner
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provided in Section 2.09, of the certificate or certificates that formerly
evidenced such Shares.
SECTION 2.09. Surrender of Shares; Stock Transfer Books. (a) Prior
to the Effective Time, Purchaser shall designate a bank or trust company to act
as agent (the "Paying Agent") for the holders of Shares in connection with the
Merger to receive the funds to which holders of Shares shall become entitled
pursuant to Section 2.06(a). Such funds shall be invested by the Paying Agent as
directed by the Surviving Corporation, provided that such investments shall be
in obligations of or guaranteed by the United States of America or of any agency
thereof and backed by the full faith and credit of the United States of America,
in commercial paper obligations rated A-1 or P-1 or better by Xxxxx'x Investors
Services, Inc. or Standard & Poor's Corporation, respectively, or in deposit
accounts, certificates of deposit or banker's acceptances of, repurchase or
reverse repurchase agreements with, or Eurodollar time deposits purchased from,
commercial banks with capital surplus and undivided profits aggregating in
excess of $50 million (based on the most recent financial statements of such
bank which are then publicly available at the SEC or otherwise).
(b) Promptly after the Effective Time, the Surviving Corporation
shall cause to be mailed to each person who was, at the Effective Time, a holder
of record of Shares entitled to receive the Merger Consideration pursuant to
Section 2.06(a) a form of letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the certificates
evidencing such Shares (the "Certificates") shall pass, only upon proper
delivery of the Certificates to the Paying Agent) and instructions for use in
effecting the surrender of the Certificates pursuant to such letter of
transmittal. Upon surrender to the Paying Agent of a Certificate, together with
such letter of transmittal, duly completed and validly executed in accordance
with the instructions thereto, and such other documents as may be required
pursuant to such instructions, the holder of such Certificate shall be entitled
to receive in exchange therefor the Merger Consideration for each Share formerly
evidenced by such Certificate, and such Certificate shall then be canceled. No
interest shall accrue or be paid on the Merger Consideration payable upon the
surrender of any Certificate for the benefit of the holder of such Certificate.
If payment of the Merger Consideration is to be made to a person other than the
person in whose name the surrendered Certificate is registered on the stock
transfer books of the Company, it shall be a condition of payment that the
Certificate so surrendered shall be endorsed properly or otherwise be in proper
form for transfer and that the person requesting such payment shall have paid
all transfer and other taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of the Certificate
surrendered or shall have established to the satisfaction of the Surviving
Corporation that such taxes either have been paid or are not applicable.
(c) At any time following the sixth month after the Effective Time,
the Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any funds which had been made available to the Paying Agent and
not disbursed to holders of Shares (including, without limitation, all interest
and other income received by the Paying Agent in respect of all funds made
available to it), and thereafter such holders shall be entitled to look to the
Surviving Corporation (subject to abandoned property, escheat and other similar
laws) only as general creditors thereof with respect to any Merger Consideration
that may be payable upon
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due surrender of the Certificates held by them. Notwithstanding the foregoing,
neither the Surviving Corporation nor the Paying Agent shall be liable to any
holder of a Share for any Merger Consideration delivered in respect of such
Share to a public official pursuant to any abandoned property, escheat or other
similar law.
(d) At the close of business on the day of the Effective Time, the
stock transfer books of the Company shall be closed and thereafter there shall
be no further registration of transfers of Shares on the records of the Company.
From and after the Effective Time, the holders of Shares outstanding immediately
prior to the Effective Time shall cease to have any rights with respect to such
Shares except as otherwise provided herein or by applicable law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Purchaser that:
SECTION 3.01. Organization and Qualification; Subsidiaries. (a) The
Company is a corporation duly organized, validly existing and in good standing
under the laws of Delaware and has the requisite power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted, except where the failure to
be so organized, existing or in good standing or to have such power, authority
and governmental approvals would not, individually or in the aggregate, have a
Material Adverse Effect (as defined below). The Company is duly qualified or
licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of the properties owned, leased or
operated by it or the nature of its business makes such qualification or
licensing necessary, except for such failures to be so qualified or licensed and
in good standing that would not, individually or in the aggregate, have a
Material Adverse Effect. When used in connection with the Company, the term
"Material Adverse Effect" means any change or effect that, when taken together
with all other adverse changes and effects that are within the scope of the
representations and warranties made by the Company in this Agreement and which
are not individually or in the aggregate deemed to have a Material Adverse
Effect, is or is reasonably likely to be materially adverse to the business,
operations, properties, condition (financial or otherwise), assets or
liabilities (including, without limitation, contingent liabilities) or prospects
of the Company. Except as set forth on Schedule 3.01, the Company does not
directly or indirectly own any equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for, any equity or similar
interest in, any corporation, partnership, joint venture or other business
association or entity.
SECTION 3.02. Authority Relative to this Agreement. The Company has
all necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the Transactions. The
execution and delivery of this Agreement by the Company and the consummation by
the Company of the Transactions have been duly and validly authorized by all
necessary corporate action and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
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Transactions (other than, with respect to the Merger, the approval and adoption
of this Agreement by the holders of a majority of the then outstanding Shares if
and to the extent required by applicable law, and the filing and recordation of
appropriate merger documents as required by Delaware Law). This Agreement has
been duly and validly executed and delivered by the Company and, assuming the
due authorization, execution and delivery by Purchaser, constitutes a legal,
valid and binding obligation of the Company. The Board of Directors has approved
the Offer, the Merger and the Transactions in accordance with the provisions of
Section 203 of the Delaware Law.
SECTION 3.03. Capitalization. The authorized capital stock of the
Company consists of 4,000,000 shares of Class A Common Stock, par value $.50 per
share ("Class A Common Stock"), and 4,000,000 shares of Class B Common Stock,
par value $.50 per share ("Class B. Common Stock"). As of the date hereof, (i)
2,169,814 shares of Class A Common Stock and 1,444,401 shares of Class B Common
Stock are issued and outstanding, all of which are validly issued, fully paid
and nonassessable, (ii) 120,892 shares of Class A Common Stock are held in the
treasury of the Company, and (iii) 325,000 shares of Class A Common Stock are
reserved for future issuance pursuant to employee stock options or stock
incentive rights granted pursuant to the Company's Stock Option Plan. Except as
set forth in this Section 3.03, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character relating to the issued
or unissued capital stock of the Company or obligating the Company to issue or
sell any shares of capital stock of, or other equity interests in, the Company.
All Shares subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, validly issued, fully paid and nonassessable.
SECTION 3.04. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by the Company does not, and the
performance of this Agreement by the Company will not, (i) conflict with or
violate the Certificate of Incorporation or By-laws or equivalent organizational
documents of the Company, (ii) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to the Company by which any
property or asset of the Company is bound or affected, or (iii) result in any
breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of the Company
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation.
(b) The execution and delivery of this Agreement by the Company does
not, and the performance of this Agreement by the Company will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, domestic or foreign, except for
applicable requirements, if any, of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), state securities or "blue sky" laws ("Blue Sky
Laws") and state takeover laws, the pre-merger notification requirements of the
HSR Act, and filing and recordation of appropriate merger documents as required
by Delaware Law and (ii) where failure to obtain such consents, approvals,
authorizations or permits, or to make
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such filings or notifications, would not prevent or delay consummation of the
Offer or the Merger, or otherwise prevent the Company from performing its
obligation under this Agreement, and would not, individually or in the
aggregate, have a Material Adverse Effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Company that:
SECTION 4.01. Corporate Organization. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the requisite power and authority and all necessary
governmental approvals to own, lease and operate its properties and to carry on
its business as it is now being conducted, except where the failure to be so
organized, existing or in good standing or to have such power, authority and
governmental approvals would not, individually or in the aggregate, have a
material adverse effect on the business or operations of Purchaser.
SECTION 4.02. Capitalization. As of the date hereof, 2,281,498
shares of Purchaser's Common Stock, par value $.01 per share, are issued and
outstanding, all of which have been issued to the Continuing Shareholders in
consideration of the respective transfer to Purchaser by each such Continuing
Shareholder of all of his or her Shares.
SECTION 4.03. Authority Relative to this Agreement. Purchaser has
all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
Transactions. The execution and delivery of this Agreement by Purchaser and the
consummation by Purchaser of the Transactions have been duly and validly
authorized by all necessary corporate action and no other corporate proceedings
on the part of Purchaser are necessary to authorize this Agreement or to
consummate the Transactions (other than, with respect to the Merger, the filing
and recordation of appropriate merger documents as required by Delaware Law).
This Agreement has been duly and validly executed and delivered by Purchaser
and, assuming the due authorization, execution and delivery by the Company,
constitutes a legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms.
SECTION 4.04. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by Purchaser do not, and the
performance of this Agreement by Purchaser will not, (i) conflict with or
violate the Certificate of Incorporation or By-laws of Purchaser, (ii) conflict
with or violate any law, rule, regulation, order, judgment or decree applicable
to Purchaser or by which any of its property or assets is bound or affected, or
(iii) result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, or result
in the creation of a lien or other encumbrance on any property or asset of
Purchaser pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to which
Purchaser is a party or by which Purchaser or any property or asset of Purchaser
is bound or affected,
11
except for any such conflicts, violations, breaches, defaults or other
occurrences which would not, individually or in the aggregate, have a material
adverse effect on the business or operations of Purchaser.
(b) The execution and delivery of this Agreement by Purchaser do
not, and the performance of this Agreement by Purchaser will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, domestic or foreign, except (i)
for applicable requirements, if any, of the Exchange Act, Blue Sky Laws and
state takeover laws, the HSR Act, and filing and recordation of appropriate
merger documents as required by Delaware Law and (ii) where failure to obtain
such consents, approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or delay consummation of the Offer or the
Merger, or otherwise prevent Purchaser from performing its obligations under
this Agreement.
SECTION 4.05. No Current Intent to Sell Business. Purchaser has no
current intention to sell, transfer or otherwise dispose of the business of the
Company or any material part thereof following the consummation of the Merger,
but there can be no assurance that the Surviving Corporation will not determine
to cause such a transfer in the future.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Stockholders' Meeting. (a) If required by applicable
law in order to consummate the Merger, the Company, acting through the Board,
shall, in accordance with applicable law and the Company's Certificate of
Incorporation and By-laws, duly call, give notice of, convene and hold an annual
or special meeting of its stockholders as soon as practicable following
consummation of the Offer for the purpose of considering and taking action on
this Agreement and the Transactions (the "Stockholders' Meeting"). Subject to
its fiduciary duties under applicable law as advised by independent counsel, if
the Minimum Condition shall not have been satisfied and such condition shall
have been waived by Purchaser, at the Stockholders' Meeting Purchaser shall
cause all Shares then owned by it and the Shares under its control to be voted
in favor of the Merger.
(b) Notwithstanding the foregoing in the event that Purchaser shall,
following consummation of the Offer, hold beneficially and of record at least 90
percent of each class of the then outstanding Shares, the parties hereto agree,
subject to Article VI, to take all necessary and appropriate action to cause the
Merger to become effective, in accordance with Section 253 of Delaware Law, as
soon as reasonably practicable after such acquisition, without a meeting of the
stockholders of the Company.
SECTION 5.02. Proxy Statement. If required by applicable law, as
soon as practicable following consummation of the Offer, the Company shall file
the Proxy Statement with the SEC under the Exchange Act, and shall use its best
efforts to have the Proxy Statement cleared by the SEC. Purchaser and the
Company shall cooperate with each other in the preparation of the Proxy
Statement.
12
SECTION 5.03. Directors' and Officers' Indemnification and
Insurance. (a) The Certificate of Incorporation of the Surviving Corporation
shall contain provisions no less favorable with respect to indemnification than
are set forth in Article Eighth of the Certificate of Incorporation of the
Company, which provisions shall not be amended, repealed or otherwise modified
for a period of ten years from the Effective Time in any manner that would
affect adversely the rights thereunder of individuals who at the Effective Time
were directors, officers, employees, fiduciaries or agents of the Company,
unless such modification shall be required by law.
(b) The Company shall, to the fullest extent permitted under
applicable law and regardless of whether the Merger becomes effective, indemnify
and hold harmless, and, after the Effective Time, the Surviving Corporation
shall, to the fullest extent permitted under applicable law, indemnify and hold
harmless, each present and former director, officer, employee, fiduciary and
agent of the Company (collectively, the "Indemnified Parties") against all costs
and expenses (including attorneys' fees), judgments, fines, losses, claims,
damages, liabilities and amounts paid in settlement in connection with any
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), whether civil, criminal, administrative or
investigative, arising out of or pertaining to any action or omission in their
capacity as an officer, director, employee, fiduciary or agent, whether
occurring before or after the Effective Time, for a period of ten years after
the date hereof. In the event of any such claim, action, suit, proceeding or
investigation, (i) the Company or the Surviving Corporation, as the case may be,
shall pay the reasonable fees and expenses of counsel selected by the
Indemnified Parties, which counsel shall be reasonably satisfactory to the
Company or the Surviving Corporation, promptly after statements therefor are
received and (ii) the Company and the Surviving Corporation shall cooperate in
the defense of any such matter; provided, however, that neither the Company nor
the Surviving Corporation shall be liable for any settlement effected without
its written consent (which consent shall not be unreasonably withheld); and
provided, further, that neither the Company nor the surviving Corporation shall
be obligated pursuant to this Section 5.03(b) to pay the fees and expenses of
more than one counsel for all Indemnified Parties in any single action except to
the extent that two or more of such Indemnified Parties shall have conflicting
interests in the outcome of such action; and provided, further, that, in the
event that any claim for indemnification is asserted or made within such
ten-year period, all rights to indemnification in respect of such claim shall
continue until the disposition of such claim.
(c) The Surviving Corporation shall use its best efforts to maintain
in effect for six years from the Effective Time, if available, the current
directors' and officers' liability insurance policies maintained by the Company
(provided that the Surviving Corporation may substitute therefor policies of at
least the same coverage containing terms and conditions which are not materially
less favorable) with respect to matters occurring prior to the Effective Time;
provided, however, that in no event shall the Surviving Corporation be required
to expend pursuant to this Section 5.03(c): (i) for period beginning at
Effective Time and ending three years thereafter, more than an amount per year
equal to 300% of current annual premiums (the "Current Annual Premiums") paid by
the Company for such insurance (which premiums the Company represents and
warrants to be approximately $63,000 in the aggregate), and (ii) for the
13
period beginning on the third anniversary of the Effective Time and ending three
years thereafter, more than an amount per year equal to 200% of the Current
Annual Premiums.
SECTION 5.04. Financing. Purchaser shall use its reasonable best
efforts to obtain the financing required to satisfy the Financing Condition as
defined in Annex A hereto on terms and conditions no less favorable to Purchaser
than [those described on Annex B hereto]. The Company shall cooperate with, and
use its reasonable best efforts to assist, Purchaser in obtaining such
financing.
SECTION 5.05. Further Action; Reasonable Best Efforts. Upon the
terms and subject to the conditions hereof, each of the parties hereto shall use
its reasonable best efforts to take, or cause to be taken, all appropriate
action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the Transactions, including, without limitation, using its reasonable best
efforts to obtain all licenses, permits (including, without limitation,
Environmental Permits), consents, approvals, authorizations, qualifications and
orders of governmental authorities and parties to contracts with the Company as
are necessary for the consummation of the Transactions and to fulfill the
conditions to the Offer and the Merger. In case at any time after the Effective
Time any further action is necessary or desirable to carry out the purposes of
this Agreement, the proper officers and directors of each party to this
Agreement shall use their reasonable best efforts to take all such action.
SECTION 5.06. New York Real Estate Gains Tax. Either Purchaser or
the Surviving Corporation shall pay the New York State Tax on Gain Derived from
Certain Real Property Transfers and the New York City Real Property Transfer Tax
and any similar tax in any other jurisdiction, if any (and any penalties or
interest with respect to such taxes), payable in connection with the Merger or
the acquisition of a controlling interest in the Company by Purchaser, and shall
indemnify and hold harmless the stockholders of the Company from and against any
liability with respect to such taxes (including any penalties, interest and
professional fees). The Company and Purchaser shall cooperate in the preparation
and filing of any required returns with respect to such taxes (including returns
on behalf of the stockholders of the Company).
SECTION 5.07. American Stock Exchange Listing. Until the Effective
Time the Company shall use all commercially reasonable efforts to maintain the
listing of the Class A Stock and the Class B Stock on the American Stock
Exchange; maintain the registration of such securities under the Securities
Exchange Act of 1934, as amended; and comply with the rules and regulations of
the SEC.
ARTICLE VI
CONDITIONS TO THE MERGER
SECTION 6.01. Conditions to the Merger. The respective obligations
of each party to effect the Merger shall be subject to the satisfaction at or
prior to the Effective Time of the following conditions:
14
(a) Stockholder Approval. This Agreement and the Transactions shall
have been approved and adopted by the affirmative vote of the stockholders
of the Company to the extent required by Delaware Law and the Certificate
of Incorporation of the Company;
(b) No Order. No United States or state governmental authority or
other agency or commission or United States or state court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered
any law, rule, regulation, executive order, decree, injunction or other
order (whether temporary, preliminary or permanent) which is then in
effect and has the effect of making the consummation of the Merger
unlawful or preventing or prohibiting consummation of the Transactions;
and
(c) Offer. Purchaser or its permitted assignee shall have purchased
all Shares validly tendered and not withdrawn pursuant to the Offer;
provided, however, that this condition may be waived by Purchaser;
provided, further, that this condition may not be relied upon by Purchaser
if Purchaser's breach of this Agreement was the cause of, or resulted in,
the failure of Purchaser to purchase Shares pursuant to the Offer.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.01. Termination. This Agreement may be terminated and the
Merger and the other Transactions may be abandoned at any time prior to the
Effective Time, notwithstanding any requisite approval and adoption of this
Agreement and the Transactions by the stockholders of the Company:
(a) By mutual written consent duly authorized by the Board of
Directors of Purchaser and the Board of Directors of the Company; or
(b) If any court of competent jurisdiction in the United States or
other United States governmental authority shall have issued an order,
decree, ruling or taken any other action restraining, enjoining or
otherwise prohibiting the Merger and such order, decree, ruling or other
action shall have become final and nonappealable; provided, however that
each of the parties shall have used reasonable best efforts to prevent the
entry of any such injunction or other order and to appeal as promptly as
possible any injunction or other order that may be entered; or
(c) By Purchaser if (i) due to an occurrence or circumstance that
would result in a failure to satisfy any condition set forth in Annex A
hereto, Purchaser shall have (A) failed to commence the Offer within 5
business days following the date of this Agreement, (B) terminated the
Offer without having accepted any Shares for payment thereunder or (C)
failed to pay for Shares pursuant to the Offer within 90 days following
the commencement of the Offer, unless such failure to pay for Shares shall
have been caused by or resulted from the failure of Purchaser to perform
in any material respect any material covenant or agreement of it contained
in this Agreement or the material breach
15
by Purchaser of any material representation or warranty of it contained in
this Agreement; or (ii) prior to the purchase of Shares pursuant to the
Offer, the Board or any committee thereof shall have withdrawn or modified
in a manner adverse to Purchaser its approval or recommendation of the
Offer, this Agreement, the Merger or any other Transaction or shall have
recommended another merger, consolidation, business combination with, or
acquisition of, the Company or its assets or another tender offer for
Shares, or shall have resolved to do any of the foregoing; or
(d) By the Company, upon approval of the Board, if (i) Purchaser
shall have (A) prior to the date by which it is required to commence the
Offer, failed to furnish the Company with an executed commitment letter of
a financial institution evidencing its commitment, subject to customary
conditions, to provide the financing referred to in clause (ii) of the
first paragraph of Annex A hereto, (B) failed to commence the Offer within
5 business days following the date of this Agreement, (C) terminated the
Offer without having accepted any Shares for payment thereunder or (D)
failed to pay for Shares pursuant to the Offer within 90 days following
the commencement of the Offer, unless such failure to pay for Shares shall
have been caused by or resulted from the failure of the Company to perform
in any material respect any material covenant or agreement of it contained
in this Agreement or the material breach by the Company of any material
representation or warranty of it contained in this Agreement; or (ii)
prior to the purchase of Shares pursuant to the Offer, the Board shall
have withdrawn or modified in a manner adverse to Purchaser its approval
or recommendation of the Offer, this Agreement, the Merger or any other
Transaction or shall have recommended another merger, consolidation,
business combination with, or acquisition of, the Company or its assets or
another tender offer for Shares, or shall have resolved to do any of the
foregoing.
SECTION 7.02. Effect of Termination. In the event of the termination
of this Agreement pursuant to Section 7.01, this Agreement shall forthwith
become void, and there shall be no liability on the part of any party hereto,
except (i) as set forth in Sections 7.03 and 8.01 and (ii) nothing herein shall
relieve any party from liability for any willful breach hereof.
SECTION 7.03. Fees and Expenses. (a) If this Agreement is terminated
pursuant to clause (ii) of Section 7.01(d) and Purchaser is not in material
breach of its material covenants and agreements contained in this Agreement or
its representations and warranties contained in this Agreement, the Company
shall reimburse Purchaser (and its stockholders and Affiliates) not later than
one business day after submission of statements therefor for all out-of-pocket
expenses and fees up to $1 million in the aggregate (including, without
limitation, fees and expenses payable to all banks, investment banking firms,
other financial institutions and other persons and their respective agents and
counsel, for arranging, committing to provide or providing any financing for the
Transactions or structuring the Transactions and all fees of counsel,
accountants, experts and consultants to Purchaser and its respective
stockholders and Affiliates, and all printing and advertising expenses) actually
incurred or accrued by it or on its behalf in connection with the Transactions,
including, without limitation, the financing thereof, and actually incurred or
accrued by banks, investment banking firms, other financial institutions and
16
other persons and assumed by Purchaser (or its stockholders or Affiliates) in
connection with the negotiation, preparation, execution and performance of this
Agreement, the structuring and financing of the Transactions and any financing
commitments or agreements relating thereto (all the foregoing being referred to
herein collectively as the "Expenses").
(b) Except as set forth in this Section 7.03, all costs and expenses
incurred in connection with this Agreement and the Transactions shall be paid by
the party incurring such expenses, whether or not any Transaction is
consummated.
(c) In the event that the Company shall fail to pay any Expenses
when due, the term "Expenses" shall be deemed to include the costs and expenses
actually incurred or accrued by Purchaser (and its stockholders and Affiliates)
(including, without limitation, fees and expenses of counsel) in connection with
the collection under and enforcement of this Section 7.03, together with
interest on such unpaid Expenses, commencing on the date that such Expenses
became due, at a rate equal to the rate of interest publicly announced by The
Chase Manhattan Bank, from time to time, in the City of New York, as such bank's
Base Rate plus 2%.
SECTION 7.04. Amendment. This Agreement may be amended by the
parties hereto by action taken by or on behalf of the Board of Directors of
Purchaser and the Board of Directors of the Company at any time prior to the
Effective Time; provided, however, that, after the approval and adoption of this
Agreement and the Transactions by the stockholders of the Company, no amendment
may be made which would reduce the amount or change the type of consideration
into which each Share shall be converted upon consummation of the Merger. This
Agreement may not be amended except by an instrument in writing signed by the
parties hereto.
SECTION 7.05. Waiver. At any time prior to the Effective Time, any
party hereto may (i) extend the time for the performance of any obligation or
other act of any other party hereto, (ii) waive any inaccuracy in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any agreement or condition
contained herein. Any such extension or waiver shall be valid if (a) it is the
result of action taken by or on behalf of the Board of Directors of Purchaser,
if Purchaser is the party granting the extension or waiver, or the Board of
Directors of the Company, if the Company if the party granting the extension or
waiver, and (b) it is set forth in an instrument in writing signed by the party
or parties to be bound thereby.
SECTION 7.06. Special Committee. Any action permitted or required to
be taken under this Agreement by the Board of Directors of the Company,
including without limitation any termination of this Agreement pursuant to
Section 7.01 hereof, any amendment of this Agreement pursuant to Section 7.04 or
any waiver pursuant to Section 7.05, and any consent, approval or determination
permitted or required to be made or given by the Company pursuant to this
Agreement, shall be made, taken or given, as the case may be, only with the
concurrence, or at the direction, of the Special Committee, as the Special
Committee may determine, from time to time, in its sole discretion.
ARTICLE VIII
17
GENERAL PROVISIONS
SECTION 8.01. Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 7.01, as the case may be, except that the agreements set
forth in Article II shall survive the Effective Time indefinitely and those set
forth in Section 7.03 shall survive termination indefinitely.
SECTION 8.02. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by cable,
telecopy, telegram or telex or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified in a notice given in
accordance with this Section 8.02):
if to Purchaser:
Concord Merger Corp.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx
with a copy to:
Xxxxxxxx Xxxxx Singer & Xxxxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Telecopier No.: (000) 000-0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
if to the Company:
Concord Fabrics Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx Xxxxxxx,
Senior Vice President -
Chief Financial Officer
with a copy to:
Xxxxx Xxxx LLP
000 Xxxx Xxxxxx
00
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx
SECTION 8.03. Certain Definitions. For purposes of this Agreement,
the term:
(a) "Affiliate" of a specified person means a person who directly or
indirectly through one or more intermediaries controls, is controlled by,
or is under common control with, such specified person;
(b) "beneficially own" or "beneficially hold" or any variation
thereon with respect to a person holding Shares means that such person
shall be deemed to be the beneficial owner of such Shares (i) which such
person or any of its Affiliates or associates (as such term is defined in
Rule 12b-2 promulgated under the Exchange Act) beneficially owns, directly
or indirectly, (ii) which such person or any of its Affiliates or
associates has, directly or indirectly, (A) the right to acquire (whether
such right is exercisable immediately or subject only to the passage of
time), pursuant to any agreement, arrangement or understanding or upon the
exercise of consideration rights, exchange rights, warrants or options, or
otherwise, or (B) the right to vote pursuant to any agreement, arrangement
or understanding or (iii) which are beneficially owned, directly or
indirectly, by any other persons with whom such person or any of its
Affiliates or associates or person with whom such person or any of its
Affiliates or associates has any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of any Shares;
(c) "business day" means any day on which the principal offices of
the SEC in Washington, D.C. are open to accept filings, or, in the case of
determining a date when any payment is due, any day on which banks are not
required or authorized to close in the City of New York;
(d) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting securities, as trustee or executor, by contract or credit
arrangement or otherwise;
(e) "person" means an individual, corporation, partnership, limited
partnership, syndicate, person (including, without limitation, a "person"
as defined in Section 13(d)(3) of the Exchange Act), trust, association or
entity or government, political subdivision, agency or instrumentality of
a government; and
(f) "subsidiary" or "subsidiaries" of the Company, the Surviving
Corporation, or any other person means an Affiliate controlled by such
person, directly or indirectly, through one or more intermediaries.
19
SECTION 8.04. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the Transactions is not affected in any manner materially adverse
to any party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the Transactions be consummated as originally contemplated to the
fullest extent possible.
SECTION 8.05. Entire Agreement; Assignment. This Agreement
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and undertakings, both written
and oral, among the parties, or any of them, with respect to the subject matter
hereof. This Agreement shall not be assigned by operation of law or otherwise,
except that Purchaser may assign all or any of its rights and obligations
hereunder to any Affiliate of Purchaser provided that no such assignment shall
relieve the assigning party of its obligations hereunder if such assignee does
not perform such obligations.
SECTION 8.06. Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.
SECTION 8.07. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
SECTION 8.08. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York applicable
to contracts executed in and to be performed in that State. All actions and
proceedings arising out of or relating to this Agreement shall be heard and
determined in any New York state or federal court sitting in the City of New
York.
SECTION 8.09. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 8.10. Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, Purchaser and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
20
CONCORD MERGER CORP.
Attest:
Xxxx Xxxxxxxxx By: /s/ Xxxx Xxxxxx
-------------- --------------------------
Title: President
CONCORD FABRICS INC.
Attest:
Xxxx Xxxxxxxxx By: /s/ Xxxxx Xxxxxxxxx
-------------- --------------------------
Title: Chairman
ANNEX A
Conditions to the Offer
Notwithstanding any other provision of the Offer, Purchaser shall
not be required to accept for payment or pay for any Shares tendered pursuant to
the Offer, and may terminate or amend the Offer and may postpone the acceptance
for payment of and payment for Shares tendered, if (i) the Minimum Condition
shall not have been satisfied, (ii) Purchaser shall not have obtained sufficient
financing to enable it to purchase the Shares to be purchased by it and to pay
fees and expenses of the Offer and the Merger, including, without limitation,
fees and expenses incurred or to be incurred in connection with the financing
(the "Financing Condition") or (iii) at any time on or after the date of this
Agreement, and prior to the acceptance for payment of Shares, any of the
following conditions shall exist:
(a) there shall have been instituted or be pending any action or
proceeding before any court or governmental, administrative or regulatory
authority or agency, domestic or foreign, (i) challenging or seeking to
make illegal, materially delay or otherwise directly or indirectly
restrain or prohibit or make materially more costly the making of the
Offer, the acceptance for payment of, or payment for, any Shares by
Purchaser or the consummation of any other Transaction, or seeking to
obtain material damages in connection with any Transaction; (ii) seeking
to prohibit or limit materially the ownership or operation by Purchaser of
all or any material portion of the business or assets of the Company, or
to compel Purchaser, to dispose of or hold separate all or any material
portion of the business or assets of Purchaser as a result of the
Transactions; (iii) seeking to impose or confirm limitations on the
ability of Purchaser or any of its Affiliates to exercise effectively full
rights of ownership of any Shares, including, without limitation, the
right to vote any Shares acquired by Purchaser pursuant to the Offer or
otherwise on all matters properly presented to the Company's stockholders,
including, without limitation, the approval and adoption of this Agreement
and the Transactions, (iv) seeking to require divestiture by Purchaser or
any of its Affiliates of any Shares; or (v) which is reasonably likely to
materially adversely affect the business, operations, properties,
condition (financial or otherwise), assets or liabilities (including,
without limitation, contingent liabilities) or prospects of Purchaser or
any of its Affiliates;
21
(b) there shall have been any action taken, or any statute, rule
regulation, legislation, interpretation, judgment, order or injunction
enacted, entered, enforced, promulgated, amended, issued or deemed
applicable to (i) Purchaser, the Company or any subsidiary or Affiliate of
Purchaser or the Company or (ii) any Transaction, by any legislative body,
court, government or governmental, administrative or regulatory authority
or agency, domestic or foreign, which is reasonably likely to result,
directly or indirectly, in any of the consequences referred to in clauses
(i) through (v) of paragraph (a) above;
(c) there shall have occurred any change, condition, event or
development that has a Material Adverse Effect;
(d) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on The American Stock
Exchange, (ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (iii) any limitation
(whether or not mandatory) by any government or governmental,
administrative or regulatory authority or agency, domestic or foreign, on,
or other event that, in the reasonable judgment of Purchaser, might
affect, the extension of credit by banks or other lending institutions,
(iv) a commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United States
or (v) in the case of any of the foregoing existing on the date hereof, a
material acceleration or worsening thereof which materially effects the
Company;
(e) (i) it shall have been publicly disclosed or Purchaser shall
have otherwise learned that beneficial ownership (determined for the
purposes of this paragraph as set forth in Rule 13d-3 promulgated under
the Exchange Act) of 20% or more of the then outstanding Shares has been
acquired by any person, other than Purchaser or any of its Affiliates or
(ii) (A) the Board or any committee thereof shall have withdrawn or
modified in a manner adverse to Purchaser the approval or recommendation
of the Offer, the Merger, the Merger Agreement, or approved or recommended
any takeover proposal or any other acquisition of Shares other than the
Offer, the Merger or the Merger Agreement or (B) the Board or any
committee thereof shall have resolved to do any of the foregoing;
(f) any representation or warranty of the Company in the Merger
Agreement which is qualified as to materiality shall not be true and
correct or any such representation or warranty that is not so qualified
shall not be true and correct in any material respect, in each case as if
such representation or warranty was made as of such time on or after the
date of this Agreement;
(g) the Company shall have failed to perform in any material respect
any obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under the
Merger Agreement;
(h) the Merger Agreement shall have been terminated in accordance
with its terms; or
22
(i) Purchaser and the Company shall have agreed that Purchaser shall
terminate the Offer or postpone the acceptance for payment of or payment
for Shares thereunder;
which, in the sole judgment of Purchaser in any such case, and regardless of the
circumstances giving rise to any such condition, makes it inadvisable to proceed
with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Purchaser and
may be asserted by Purchaser regardless of the circumstances giving rise to any
such condition or may be waived by Purchaser in whole or in part at any time and
from time to time in its sole discretion. The failure by Purchaser at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any such
right; the waiver of any such right with respect to particular facts and other
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances; and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
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