EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
Dated as of August 16, 2002
Among
BERKSHIRE HATHAWAY INC.
C ACQUISITION CORP.
and
CTB INTERNATIONAL CORP.
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Interpretation
SECTION 1.01. Certain Defined Terms....................................... 2
SECTION 1.02. Other Defined Terms......................................... 5
SECTION 1.03. Interpretation.............................................. 6
ARTICLE II
The Merger
SECTION 2.01. The Merger.................................................. 6
SECTION 2.02. Closing..................................................... 7
SECTION 2.03. Effective Time.............................................. 7
SECTION 2.04. Effects of the Merger....................................... 7
SECTION 2.05. Articles of Incorporation and By-laws....................... 7
SECTION 2.06. Directors................................................... 8
SECTION 2.07. Officers.................................................... 8
ARTICLE III
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 3.01. Effect on Capital Stock..................................... 8
SECTION 3.02. Exchange of Certificates.................................... 9
ARTICLE IV
Representations and Warranties
SECTION 4.01. Representations and Warranties of the Company............... 12
SECTION 4.02. Representations and Warranties of Parent and Acquisition
Sub....................................................... 23
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ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01. Covenants of the Company.................................... 26
SECTION 5.02. Covenants of Parent and Acquisition Sub..................... 29
SECTION 5.03. No Solicitation............................................. 29
ARTICLE VI
Additional Agreements
SECTION 6.01. Preparation of the Proxy Statement.......................... 30
SECTION 6.02. Access to Information....................................... 31
SECTION 6.03. Company Shareholders Meeting................................ 32
SECTION 6.04. Reasonable Best Efforts..................................... 32
SECTION 6.05. Benefits Matters............................................ 32
SECTION 6.06. Stock-Based Compensation.................................... 34
SECTION 6.07. Fees and Expenses........................................... 35
SECTION 6.08. Indemnification and Exculpation............................. 35
SECTION 6.09. Transfer Taxes.............................................. 37
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to Each Party's Obligation to Effect the
Merger.................................................... 38
SECTION 7.02. Conditions to Obligations of Parent and Acquisition Sub to
Effect the Merger......................................... 38
SECTION 7.03. Conditions to Obligation of the Company to Effect the
Merger.................................................... 40
SECTION 7.04. Frustration of Closing Conditions........................... 40
ARTICLE VIII
Termination and Amendment
SECTION 8.01. Termination................................................. 41
SECTION 8.02. Effect of Termination....................................... 42
SECTION 8.03. Amendment................................................... 42
SECTION 8.04. Extension; Waiver........................................... 42
SECTION 8.05. Procedure for Termination, Amendment, Extension or Waiver... 43
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ARTICLE IX
General Provisions
SECTION 9.01. Nonsurvival of Representations and Warranties............... 43
SECTION 9.02. Notices..................................................... 43
SECTION 9.03. Counterparts................................................ 44
SECTION 9.04. Entire Agreement; No Third-Party Beneficiaries; Rights of
Ownership................................................. 44
SECTION 9.05. Governing Law............................................... 44
SECTION 9.06. Publicity................................................... 45
SECTION 9.07. Assignment.................................................. 45
SECTION 9.08. Enforcement................................................. 45
SECTION 9.09. Severability................................................ 46
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AGREEMENT AND PLAN OF MERGER (this "Agreement") dated
as of August 16, 2002, among BERKSHIRE HATHAWAY INC., a
Delaware corporation ("Parent"), C ACQUISITION CORP., an
Indiana corporation and a wholly owned subsidiary of
Parent ("Acquisition Sub"), and CTB INTERNATIONAL CORP.,
an Indiana corporation (the "Company").
WHEREAS Parent and the respective Boards of Directors of Acquisition
Sub and the Company have approved the merger of Acquisition Sub with and into
the Company (the "Merger"), upon the terms and subject to the conditions set
forth in this Agreement, whereby each issued and outstanding share of common
stock, par value $0.01 per share, of the Company ("Company Common Stock"),
other than the shares of Company Common Stock owned, directly or indirectly,
by Parent or the Company immediately prior to the Effective Time, will be
converted into the right to receive the Merger Consideration (as defined in
Section 3.01(c));
WHEREAS each issued and outstanding share of Company Common Stock
owned, directly or indirectly, by Parent or the Company immediately prior to
the Effective Time, will be canceled and retired;
WHEREAS concurrently with the execution and delivery hereof,
American Securities Partners, L.P., ASP/CTB L.P., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, J.
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the other individuals party thereto (collectively, the
"Sellers"), Parent and Acquisition Sub, will enter into a shareholder
agreement and proxy (the "Shareholders Agreement") pursuant to which the
Sellers will agree, among other things, to take specified actions in
furtherance of the Merger;
WHEREAS the Board of Directors of the Company (i) has determined
that this Agreement, the Merger and the other transactions contemplated hereby
are fair to and in the best interests of the Company and its shareholders,
(ii) has adopted this Agreement and has approved the Merger, the other
transactions contemplated hereby and the
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transactions contemplated by the Shareholders Agreement and (iii) has
recommended that the shareholders of the Company approve this Agreement, the
Merger and the other transactions contemplated hereby; and
WHEREAS Parent, Acquisition Sub and the Company desire to make
certain representations, warranties, covenants and agreements in connection
with the Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties agree as follows:
ARTICLE I
Definitions and Interpretation
SECTION 1.01. Certain Defined Terms.
For purposes of this Agreement, the following terms shall have the
following meanings:
"affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person.
"business day" means any day on which banks are not required or
authorized to close in the City of New York.
"control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management policies of a person,
whether through the ownership of voting securities, by contract or otherwise.
"Environmental Claim" means any written notice, claim, demand,
action, suit, complaint or proceeding by any person alleging liability arising
out of or relating to (A) the presence or Release of any Hazardous Materials
or (B) any violation of an Environmental Law or an Environmental Permit.
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"Environmental Laws" means all applicable federal, state and local
statutes, rules, regulations, ordinances, orders, judgments and decrees
relating to contamination, pollution or the protection of the environment.
"Environmental Permits" means all Company Permits required under
Environmental Laws necessary for the Company and its subsidiaries to conduct
their operations and businesses on the date of this Agreement.
"Hazardous Materials" means (A) any petroleum or petroleum products,
radioactive materials or wastes, asbestos in any form, urea formaldehyde foam
insulation and polychlorinated biphenyls and (B) any other chemical, material,
substance or waste that in relevant form or concentration is prohibited,
limited or regulated under any Environmental Law.
"material adverse effect" means, when used in connection with the
Company, any state of facts, change, effect, event, occurrence or development
that is, or is reasonably likely to be, materially adverse to the business,
results of operations or financial condition of the Company and its
subsidiaries, taken as a whole, other than any change, effect, event or
occurrence relating to or arising out of (A) the economy or securities markets
in general, (B) this Agreement or the transactions contemplated hereby or the
announcement thereof or (C) any industry currently engaged in by the Company,
in general, and not specifically relating to the Company or its subsidiaries;
"material adverse effect" means, when used in connection with Parent, any
state of facts, change, effect, event, occurrence or development that would,
or is reasonably likely to, prevent or materially impede or delay the
consummation of the Merger or the other transactions contemplated by this
Agreement.
"person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity.
"Release" means any release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal,
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discharge, dispersal, leaching or migration into or through the environment.
"subsidiary" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are not such voting interests, more than
50% of the equity interests of which) is owned directly or indirectly by such
first person.
"Takeover Proposal" means any proposal or offer from any person
(other than Parent or the Acquisition Sub) relating to any direct or indirect
acquisition, in one transaction or a series of transactions, including any
merger, tender offer, exchange offer, stock acquisition, asset acquisition,
statutory share exchange, business combination, recapitalization, liquidation,
dissolution, joint venture or similar transaction, of (A) assets or businesses
that constitute or represent 20% or more of the assets of the Company and its
subsidiaries, taken as a whole, or (B) 20% or more of the outstanding shares
of Company Common Stock or capital stock of, or other equity or voting
interests in, any of the Company's subsidiaries directly or indirectly
holding, individually or taken together, the assets or businesses referred to
in clause (A) above.
"tax" (including, with correlative meaning, "taxes" and "taxable")
includes all forms of taxation, whenever created or imposed, and whether
domestic or foreign, and whether imposed by a national, federal, state,
provincial, local or other Governmental Entity, including all interest,
penalties and additions imposed with respect to such amounts.
"tax returns" means all domestic or foreign (whether national,
federal, state, provincial, local or otherwise) returns, declarations,
statements, reports, schedules, forms and information returns relating to
taxes and any amended tax return.
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SECTION 1.02. Other Defined Terms. For purposes of this Agreement,
each of the following terms is defined in the Section set forth opposite such
term:
Term Section
"Acquisition Agreement" 5.03(b)
"Acquisition Sub" Preamble
"Agreement" Preamble
"Articles of Merger" 2.03
"Broker Agreements" 4.01(p)
"Certificate" 3.01(c)
"Closing" 2.02
"Closing Date" 2.02
"Code" 3.02(f)
"Company" Preamble
"Company Benefit Agreements" 4.01(l)
"Company Benefit Plans" 4.01(l)
"Company Common Stock" Recitals
"Company Disclosure Schedule" 4.01
"Company Filed SEC Documents" 4.01
"Company Option Agreements" 4.01(b)
"Company Permits" 4.01(g)
"Company Preferred Stock" 4.01(b)
"Company SEC Documents" 4.01(d)
"Company Shareholder Approval" 4.01(n)
"Company Shareholders Meeting" 4.01(c)(ii)
"Company Stock Incentive Plan" 4.01(b)
"Company Stock Options" 4.01(b)
"Confidentiality Agreement" 6.02
"Continuation Period" 6.05(a)
"Continued Employee" 6.05(a)
"Effective Time" 2.03
"ERISA" 4.01(l)
"Exchange Act" 4.01(c)(ii)
"GAAP" 4.01(d)
"Governmental Entity" 4.01(c)(ii)
"HSR Act" 4.01(c)(ii)
"IBCL" 2.01
"Indemnified Liabilities" 6.08(a)
"Indemnified Persons" 6.08(a)
"Lien" 4.01(c)(ii)
"Merger" Recitals
"Merger Consideration" 3.01(c)
"Outside Date" 8.01(b)(i)
"Parent" Preamble
"Paying Agent" 3.02
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"Proxy Statement" 4.01(c)(ii)
"Securities Act" 4.01(d)
"Shareholders Agreement" Recitals
"SEC" 4.01(c)(ii)
"Sellers" Recitals
"Surviving Corporation" 2.01
SECTION 1.03. Interpretation. When a reference is made in this
Agreement to a party or to an Article, Section, Exhibit or Schedule, such
reference shall be to a party to, an Article or Section of, or an Exhibit or
Schedule to, this Agreement unless otherwise indicated. The table of contents
and headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
Whenever the words "include", "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation". The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement. The term "or" when used
in this Agreement is not exclusive. All terms defined in this Agreement shall
have the defined meanings when used in any certificate or other document made
or delivered pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the
plural forms of such terms. Any agreement, instrument or statute defined or
referred to herein or in any agreement or instrument that is referred to
herein means such agreement, instrument or statute as from time to time
amended, modified or supplemented, including (x) (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession
of comparable successor statutes and (y) all attachments thereto and
instruments incorporated therein. References to a person are also to its
permitted successors and assigns.
ARTICLE II
The Merger
SECTION 2.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the Indiana
Business Corporation Law
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(the "IBCL"), Acquisition Sub shall be merged with and into the Company at the
Effective Time (as defined in Section 2.03). Following the Merger, the
separate corporate existence of Acquisition Sub shall cease and the Company
shall be the surviving corporation (the "Surviving Corporation"). The
Surviving Corporation shall continue its existence under the laws of the State
of Indiana under the name "CTB International Corp.", and the Surviving
Corporation shall succeed to all the rights and obligations of the Company and
Acquisition Sub in accordance with the IBCL.
SECTION 2.02. Closing. The closing of the Merger (the "Closing")
will take place at 10:00 a.m. on a date to be specified by the parties (the
"Closing Date"), which shall be no later than the second business day
following the satisfaction or waiver of the conditions set forth in Article
VII (other than those conditions that by their terms are to be satisfied at
the Closing, but subject to the satisfaction or waiver of those conditions),
at the offices of Cravath, Swaine & ▇▇▇▇▇, Worldwide Plaza, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, unless another time, date or place is agreed to in
writing by the parties.
SECTION 2.03. Effective Time. Prior to the Closing, the Company
shall prepare articles of merger incorporating the plan of merger in
accordance with Section 23-1-40-5 of the IBCL (the "Articles of Merger"), and
as soon as practicable on the Closing Date, the Company shall file the
Articles of Merger in accordance with the relevant provisions of the IBCL with
the Secretary of State of the State of Indiana. The Merger shall become
effective upon the filing of the Articles of Merger with the Secretary of
State of the State of Indiana in accordance with Section 23-1-40-5 of the IBCL
or at such later time as is agreed to by the parties and set forth in the
Articles of Merger (the time the Merger becomes effective being hereinafter
referred to as the "Effective Time").
SECTION 2.04. Effects of the Merger. The Merger shall have the
effects set forth in Section 23-1-40-6 of the IBCL.
SECTION 2.05. Articles of Incorporation and By-laws.
(a) The articles of incorporation of the Acquisition Sub as in
effect immediately prior to the
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Effective Time shall be the articles of incorporation of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.
(b) The by-laws of the Acquisition Sub as in effect immediately
prior to the Effective Time shall be the by-laws of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.
SECTION 2.06. Directors. The directors of Acquisition Sub
immediately prior to the Effective Time shall be the directors of the
Surviving Corporation to hold office until the earlier of their resignation or
removal or until their respective successors are duly elected and qualified,
as the case may be.
SECTION 2.07. Officers. The officers of the Company immediately
prior to the Effective Time shall be the officers of the Surviving Corporation
to hold office until the earlier of their resignation or removal or until
their respective successors are duly elected and qualified, as the case may
be.
ARTICLE III
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 3.01. Effect on Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
shares of capital stock of the Company, Parent or Acquisition Sub:
(a) Capital Stock of Acquisition Sub. Each issued and outstanding
share of common stock of Acquisition Sub shall be converted into and become
one fully paid and nonassessable share of common stock, par value $0.01 per
share, of the Surviving Corporation.
(b) Cancelation of Treasury Stock, Parent-Owned Stock and Certain
Other Stock. Each share of Company Common Stock that is owned by the Company,
any wholly owned subsidiary of the Company, Parent, Acquisition Sub or any
other wholly owned subsidiary of Parent, immediately prior to the Effective
Time shall automatically be canceled and
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retired and shall cease to exist and no consideration shall be delivered or
deliverable in exchange therefor.
(c) Conversion of Company Common Stock. Each share of Company Common
Stock issued and outstanding immediately prior to the Effective Time (other
than shares to be canceled in accordance with Section 3.01(b)) shall be
converted into the right to receive $12.75 in cash, without interest (the
"Merger Consideration"). At the Effective Time, all such shares shall no
longer be outstanding and shall automatically be canceled and retired and
shall cease to exist, and each holder of a certificate that immediately prior
to the Effective Time represented any such shares (a "Certificate") shall
cease to have any rights with respect thereto, except the right to receive the
Merger Consideration and any dividends to which such holder is entitled
pursuant to the proviso to the first sentence of Section 3.02(c).
SECTION 3.02. Exchange of Certificates.
(a) Paying Agent. When and as needed, Acquisition Sub shall deposit
or cause to be deposited (and Parent shall provide all necessary funds
and otherwise cause Acquisition Sub to deposit), with a bank or trust
company designated by Parent or Acquisition Sub (and reasonably
acceptable to the Company) to act as agent (the "Paying Agent") for the
holders of Company Common Stock, the funds to pay the Merger
Consideration to the holders of Company Common Stock who shall become
entitled thereto. Any interest or other income produced by the investment
of the Merger Consideration by the Paying Agent will be payable to the
Acquisition Sub or Parent, as Parent directs.
(b) Exchange Procedures. As soon as practicable after the Effective
Time, Parent shall cause the Paying Agent to mail to each holder of
record of a Certificate (i) a form of letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to
the Certificates shall pass, only upon proper delivery of the
Certificates to the Paying Agent and which shall be in customary form and
contain customary provisions)
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and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration. Each holder of
record of a Certificate shall, upon surrender to the Paying Agent of such
Certificate, be entitled to receive in exchange therefor an amount of
cash equal to the product of the Merger Consideration and the number of
shares of Company Common Stock previously represented by such
Certificate, and the Certificate so surrendered shall forthwith be
canceled. In the event of a transfer of ownership of Company Common Stock
which is not registered in the transfer records of the Company, payment
of the Merger Consideration may be made to a person other than the person
in whose name the Certificate so surrendered is registered if such
Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay any transfer or
other taxes required by reason of the payment of the Merger Consideration
to a person other than the registered holder of such Certificate or
establish to the satisfaction of Parent that such tax has been paid or is
not applicable. Subject to the proviso to the first sentence of Section
3.02(c), until surrendered as contemplated by this Section 3.02(b), each
Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the Merger
Consideration which the holder thereof has the right to receive in
respect of such Certificate pursuant to this Article III. No interest
shall be paid or will accrue on any cash payable to holders of
Certificates pursuant to the provisions of this Article III.
(c) No Further Ownership Rights in Company Common Stock. All cash
paid upon the surrender of Certificates in accordance with the terms of
this Article III shall be deemed to have been paid in full satisfaction
of all rights pertaining to the shares of Company Common Stock formerly
represented by such Certificates, provided, however, to the Surviving
Corporation's obligation to pay any dividends or make any other
distributions with a record date prior to the Effective Time which may
have been declared or made by the Company in accordance with the terms of
this Agreement on or prior to the date of this Agreement in respect of
such
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shares of Company Common Stock that remain unpaid at the Effective Time.
At the close of business on the day on which the Effective Time occurs,
the stock transfer books of the Company shall be closed, and there shall
be no further registration of transfers on the stock transfer books of
the Surviving Corporation of the shares of Company Common Stock that were
outstanding immediately prior to the Effective Time. If, after the
Effective Time, any Certificate is presented to the Surviving Corporation
or the Paying Agent for any reason, it shall be canceled against delivery
of cash to the holder thereof as provided in this Article III.
(d) Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by Parent, the posting by such person of a bond in such
reasonable and customary amount as Parent may direct as indemnity against
any claim that may be made against it with respect to such Certificate,
the Paying Agent shall deliver in exchange for such lost, stolen or
destroyed Certificate the applicable Merger Consideration with respect
thereto.
(e) No Liability. None of Parent, Acquisition Sub, the Company, the
Surviving Corporation or the Paying Agent shall be liable to any person
in respect of any cash delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. If any Certificate
shall not have been surrendered prior to the date on which any Merger
Consideration would otherwise escheat to or become the property of any
Governmental Entity, any such Merger Consideration shall, to the extent
permitted by applicable law, become the property of Parent, free and
clear of all claims or interest of any person previously entitled
thereto.
(f) Withholding Rights. Parent, the Surviving Corporation and the
Paying Agent shall be entitled to deduct and withhold from the
consideration otherwise payable to any holder of Company Common Stock
pursuant to this Agreement such amounts as may be required to be deducted
and withheld with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended (the "Code"), or under any
provision of state, local or
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foreign tax law. To the extent amounts are so withheld by Parent, the
Surviving Corporation or the Paying Agent, the withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the
holder of Company Common Stock in respect of which the deduction and
withholding was made.
ARTICLE IV
Representations and Warranties
SECTION 4.01. Representations and Warranties of the Company. Except
as set forth in the Company SEC Documents (as defined in Section 4.01(d))
filed and publicly available after December 31, 2001 and prior to the date of
this Agreement (the "Company Filed SEC Documents") or on the disclosure
schedule delivered by the Company to Parent prior to the execution of this
Agreement (the "Company Disclosure Schedule"), the Company represents and
warrants to Parent and Acquisition Sub as follows:
(a) Organization and Power. The Company and each of its subsidiaries
is duly organized and validly existing under the laws of its jurisdiction of
incorporation or organization, has all requisite corporate power and authority
to conduct its business as presently conducted and is duly qualified and in
good standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification necessary,
except where failures thereof, individually or in the aggregate, would not
have a material adverse effect on the Company. The Company has made available
to Parent true and complete copies of its articles of incorporation and
by-laws, in each case as amended through the date of this Agreement.
(b) Capital Structure. The authorized capital stock of the Company
consists of 40,000,000 shares of Company Common Stock and 4,000,000 shares of
preferred stock, par value $0.01 per share, of the Company ("Company Preferred
Stock"). At the close of business on August 13, 2002, (A) 10,885,939 shares of
Company Common Stock were issued and outstanding, (B) no shares of Company
Preferred Stock were issued and outstanding, (C) 1,000,000 shares of Company
Common Stock were reserved
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for issuance pursuant to the 1999 CTB International Corp. Stock Incentive Plan
(the "Company Stock Incentive Plan"), of which 372,000 shares were subject to
outstanding Company Stock Options (as defined below) and (D) 587,938 shares
were subject to other option agreements (the "Company Option Agreements").
Other than as set forth above, at the close of business on August 13, 2002,
there were no shares of capital stock or other voting securities of the
Company issued, reserved for issuance or outstanding, and there were no
options, warrants or other rights to acquire from the Company any such stock
or securities. Since August 13, 2002, (x) there have been no issuances by the
Company of shares of capital stock or other voting securities of the Company
other than issuances of shares of Company Common Stock pursuant to the
exercise of options granted pursuant to the Company Stock Incentive Plan or
the Company Option Agreements to purchase Company Common Stock (collectively,
the "Company Stock Options") outstanding at such date and (y) there have been
no issuances by the Company of options, warrants or other rights to acquire
shares of capital stock or other voting securities from the Company. All
outstanding shares of Company Common Stock are, and any shares of Company
Common Stock which may be issued upon the exercise of Company Stock Options
when issued will be, validly issued, fully paid and nonassessable, and not
subject to preemptive rights. Other than as set forth above, there are no
outstanding securities, options, warrants, calls, rights, commitments,
agreements, derivative contracts or undertakings of any kind to which the
Company or any subsidiary of the Company is a party, or by which the Company
or any subsidiary of the Company is bound, obligating the Company or any
subsidiary of the Company to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting
securities of the Company or of any subsidiary of the Company or obligating
the Company or any subsidiary of the Company to issue, grant, extend or enter
into any such security, option, warrant, call, right, commitment, agreement or
undertaking, or obligating the Company to make any payment based on or
resulting from the value or price or change in value or price of any such
security, option, warrant, call, right, commitment, agreement or undertaking.
There are no outstanding contractual obligations of the Company or any of its
subsidiaries to repurchase, redeem or otherwise acquire any
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shares of capital stock of the Company or any of its subsidiaries.
(c) Authorization; Non-contravention. (i) The Company has all
requisite corporate power and authority to execute and deliver this Agreement
and, subject to obtaining the Company Shareholder Approval (as defined in
Section 4.01(n)), to consummate the transactions contemplated hereby. The
execution and delivery by the Company of this Agreement and the consummation
by the Company of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Company,
subject to obtaining the Company Shareholder Approval with respect to the
Merger. This Agreement has been duly executed and delivered by the Company
and, assuming this Agreement constitutes a 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, this Agreement constitutes a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms (except insofar as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally, or by principles governing
the availability of equitable remedies). The Board of Directors of the
Company, at a meeting duly called and held, duly unanimously adopted
resolutions (A) determining that the terms of the Merger and the other
transactions contemplated hereby are fair to and in the best interests of the
Company and its shareholders, (B) adopting this Agreement, (C) approving the
terms of the Shareholders Agreement and (D) recommending that the Company's
shareholders approve this Agreement, which resolutions have not been modified,
supplemented or rescinded and remain in full force and effect as of the date
of this Agreement.
(ii) The execution and delivery by the Company of this Agreement do not,
and the consummation by the Company of the transactions contemplated hereby
will not, conflict with, or result in any breach or violation of, or default
(with or without notice or lapse of time or both) under, or result in the
termination of, or accelerate the performance required by, or give rise to a
right of termination, cancelation or acceleration of any obligation under, or
the creation of a claim, lien, encumbrance, pledge or security
15
interest (a "Lien") pursuant to, (A) the articles of incorporation or by-laws
of the Company or comparable organizational documents of any subsidiary of the
Company or (B) subject to obtaining or making the consents, approvals, orders,
authorizations, registrations, declarations and filings referred to in the
following sentence, any loan or credit agreement, note, mortgage, indenture,
lease or other agreement, obligation, instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Company or any subsidiary of the Company or their
respective properties or assets, in any case under this clause (B) which,
individually or in the aggregate, would have a material adverse effect on the
Company. No consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other governmental authority or instrumentality (a "Governmental Entity") is
required by or with respect to the Company or any subsidiary of the Company in
connection with the execution and delivery of this Agreement by the Company or
the consummation by the Company of the transactions contemplated hereby,
except for (A) the filing with the Securities and Exchange Commission (the
"SEC") of (1) a proxy statement relating to the meeting (the "Company
Shareholders Meeting") of the shareholders of the Company duly called and
convened to consider the approval of this Agreement (such proxy statement as
amended or supplemented from time to time, the "Proxy Statement"), and (2)
such reports under the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder (the "Exchange Act"), as may be
required in connection with this Agreement and the other transactions
contemplated hereby, (B) the filing of the Articles of Merger with the
Secretary of State of the State of Indiana in accordance with Section
23-1-40-5 of the IBCL and the filing of appropriate documents with the
relevant authorities of other states in which the Company is qualified to do
business, (C) filings required pursuant to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder (the "HSR Act") and any other applicable filings and
approvals under similar foreign antitrust laws and regulations, (D) those
required under the rules and regulations of the Nasdaq National Market, (E)
filings necessary to satisfy the applicable requirements of state
16
securities or "blue sky" laws, and (F) such other consents, approvals, orders,
authorizations, registrations, declarations and filings, the failure of which
to be obtained or made, individually or in the aggregate, would not have a
material adverse effect on the Company and would not prevent or materially
impede or delay the consummation of the transactions contemplated hereby.
(d) SEC Documents; Financial Statements; Undisclosed Liabilities.
The Company has filed all reports, schedules, forms, statements and other
documents required to be filed by the Company with the SEC since January 1,
2001 (the "Company SEC Documents"). As of their respective dates, the Company
SEC Documents complied in all material respects with the requirements of the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the "Securities Act"), or the Exchange Act, as the case may be,
applicable to such Company SEC Documents. None of the Company SEC Documents
when filed contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading. The financial statements of the Company included in
the Company SEC Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto in effect at the time of filing, have been
prepared in accordance with generally accepted accounting principles ("GAAP")
(except, in the case of unaudited statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved (except as may
be indicated in the notes thereto) and fairly present in all material respects
the consolidated financial position of the Company and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). Except as set
forth in the Company Filed SEC Documents or for liabilities incurred in
connection with this Agreement or in the ordinary course of business after the
date of this Agreement, neither the Company nor any of its subsidiaries has
any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) which,
17
individually or in the aggregate, would have a material adverse effect on the
Company.
(e) Information Supplied. None of the information supplied or to be
supplied by the Company for inclusion or incorporation by reference in the
Proxy Statement will, at the date the Proxy Statement is first mailed to the
shareholders of the Company or at the time of the Company Shareholders
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Proxy Statement will comply as to form in all material
respects with the requirements of the Exchange Act, except that no
representation or warranty is made by the Company with respect to statements
made or incorporated by reference therein based on information supplied by or
on behalf of Parent or Acquisition Sub specifically for inclusion or
incorporation by reference therein.
(f) Absence of Certain Changes or Events. Since June 30, 2002, the
Company has conducted its business only in the ordinary course, and during
such period there has not been:
(i) any state of facts, change, effect, event, occurrence or
development which, individually or in the aggregate, would have a
material adverse effect on the Company;
(ii) any declaration, setting aside or payment of any dividend or
other distribution (whether in cash, stock or property) with respect to
any shares of capital stock of the Company or any repurchase for value by
the Company of any shares of capital stock of the Company, other than (A)
in connection with the exercise of any Company Stock Option where the
exercise price thereof is paid in whole or in part in the form of shares
of Company Common Stock or (B) in connection with the exercise of any
Company Stock Option for purposes of satisfying tax withholding
obligations;
(iii) any split, combination or reclassification of any shares of
capital stock of the Company or any
18
issuance or the authorization of any issuance of any other securities in
respect of, in lieu of or in substitution for shares of capital stock of
the Company;
(iv) (A) any granting by the Company or any subsidiary of the
Company to any director or executive officer of the Company or any
subsidiary of the Company of any increase in compensation, except in the
ordinary course of business consistent with past practice or as required
to satisfy contractual obligations that are existing as of the date of
this Agreement, (B) any granting by the Company or any subsidiary of the
Company to any such director or executive officer of any increase in
severance or termination pay, except as required to satisfy contractual
obligations that are existing as of the date of this Agreement, (C) any
entry by the Company or any subsidiary of the Company into any
employment, severance or termination agreement with any such director or
executive officer, (D) other than as required by law, any entry into or
amendment in any material respect of, (1) any collective bargaining
agreement, except in connection with renegotiations of any expired or
expiring collective bargaining agreement in the ordinary course of
business, or (2) any Company Benefit Plan, except in the ordinary course
of business consistent with past practice, or (E) any taking of any
action to accelerate any rights or benefits, or making of any material
determinations not in the ordinary course of business consistent with
past practice, under any collective bargaining agreement or Company
Benefit Plan;
(v) any change in accounting methods, principles or practices by the
Company or any subsidiary of the Company materially affecting the
reported consolidated assets, liabilities or results of operations of the
Company, except insofar as may have been required by a change in GAAP; or
(vi) any material election with respect to taxes by the Company or
any subsidiary of the Company or settlement or compromise by the Company
or any subsidiary of the Company of any material tax liability or refund.
19
(g) Compliance with Laws; Litigation. The Company and its
subsidiaries hold all permits, licenses, registrations, variances,
exemptions, authorizations, orders and approvals of all Governmental
Entities (the "Company Permits") that are required for them to own, lease
or operate their properties and assets and to carry on their businesses
as presently conducted, and there has occurred no default under any such
Company Permit, except for failures to hold Company Permits or defaults
under Company Permits which, individually or in the aggregate, would not
have a material adverse effect on the Company. The Company and its
subsidiaries are in compliance with all applicable statutes, laws,
ordinances, rules, orders and regulations of any Governmental Entity,
except for instances of noncompliance which, individually or in the
aggregate, would not have a material adverse effect on the Company. There
are no suits, actions or proceedings pending or threatened, against the
Company or any subsidiary of the Company which, individually or in the
aggregate, would have a material adverse effect on the Company, nor are
there any judgments, decrees, injunctions, rules or orders of any
Governmental Entity or arbitrator outstanding against the Company or any
subsidiary of the Company which, individually or in the aggregate, are
having a material adverse effect on the Company. This Section 4.01(g)
does not apply to environmental matters, tax matters and labor and
benefit matters, which are exclusively the subject of Section 4.01(j),
Section 4.01(h) and Sections 4.01(k) and (l), respectively.
(h) Taxes. The Company has timely filed all material tax returns
required to be filed by it, has timely paid (or caused to be timely paid)
all material taxes shown as due and payable on all such tax returns, and
has paid (or caused to be paid) all other material taxes as are due. No
tax return of the Company is under audit or examination by any taxing
authority, and no written notice of such an audit or examination has been
received by the Company, except for such audits or examinations which,
individually or in the aggregate, would not have a material adverse
effect on the Company.
(i) Certain Agreements. Neither the Company nor any of its
subsidiaries is in breach of or default under any material agreement,
commitment, lease or other instrument to which it or any of its
properties is subject
20
and there has not occurred any event that, with the giving of notice or
the lapse of time or both, would constitute such a breach or default by
the Company or any of its subsidiaries or a breach thereof or default
thereunder by any other party thereto, except in all cases where such
defaults or breaches, individually or in the aggregate, would not have a
material adverse effect on the Company.
(j) Environmental Matters. Except for items referred to below which,
individually or in the aggregate, would not have a material adverse
effect on the Company:
(i) the Company and its subsidiaries are in compliance with all
Environmental Laws;
(ii) the Company and its subsidiaries have obtained and are in
compliance with all Environmental Permits;
(iii) there are no Environmental Claims pending or threatened
against the Company or any of its subsidiaries; and
(iv) none of the Company or any of its subsidiaries has entered
into or received any decree or order under, or is subject to any
judgment, decree or order pursuant to, any Environmental Law.
(k) Labor Matters. (i) There are no representation or certification
proceedings, or petitions seeking a representation proceeding, pending or
threatened to be brought or filed with the National Labor Relations Board
or any other labor relations tribunal or authority and (ii) there are no
organizing activities involving the Company or any of its subsidiaries
with respect to any group of employees of the Company or its
subsidiaries, in the case of each of clause (i) and (ii) which,
individually or in the aggregate, would have a material adverse effect on
the Company.
(l) Benefit Plans; Benefit Agreements. (i) Section 4.01(l) of the
Company Disclosure Schedule sets forth a true and complete list of each
material "employee benefit plan" (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
and each other material compensation, bonus, pension, profit sharing,
deferred compensation, stock
21
ownership, stock purchase, stock option, phantom stock, retirement,
welfare, collective bargaining, severance, disability, death benefit,
hospitalization and medical plan, program, policy or arrangement
maintained or contributed to (or required to be contributed to) for the
benefit of any current or former director, officer or employee of the
Company or any of its subsidiaries and with respect to which the Company
or any of its subsidiaries would reasonably be expected to have direct or
contingent liability, other than statutorily mandated benefit programs
(the "Company Benefit Plans"). There exist no employment, retention,
deferred compensation, severance, termination or indemnification
agreements or arrangements between the Company or any of its
subsidiaries, on the one hand, and any current or former director,
officer or employee of the Company or any of its subsidiaries, on the
other hand ("Company Benefit Agreements").
(ii) (A) None of the Company Benefit Plans is a "multiemployer plan"
within the meaning of Section 3(37) of ERISA or is otherwise subject
to Title IV of ERISA, (B) none of the Company Benefit Plans (other
than coverage mandated under applicable law) provides retiree
medical or life insurance benefits to any person, (C) each Company
Benefit Plan has been administered in compliance with its terms and
the applicable provisions of ERISA, the Code and all other
applicable laws, rules and regulations except for any failures to so
administer, individually or in the aggregate, as would not have a
material adverse effect on the Company, (D) neither the Company nor
any entity required to be treated as a single employer with the
Company under Section 414 of the Code has any unsatisfied
liabilities under Title IV of ERISA which, individually or in the
aggregate, would have a material adverse effect on the Company, (E)
there are no pending or threatened investigations, claims or
lawsuits in respect of any Company Benefit Plan which, individually
or in the aggregate, would have a material adverse effect on the
Company, and (F) except as provided in Section 6.06, no current or
former director, officer or employee of the Company or any of its
subsidiaries will become entitled to any material
payment, benefit or right, or any materially increased and/or
accelerated payment, benefit or right, as a result of the execution
of this Agreement or the consummation of the transactions
contemplated hereby.
(m) Subsidiaries. The Company has previously made available to
Parent a list of all the subsidiaries of the Company as of the date of
this Agreement and their respective jurisdictions of organization. All
the shares of capital stock of each of the subsidiaries of the Company
are validly issued, fully paid and nonassessable (in each jurisdiction
that recognizes such legal concept) and (except for directors' qualifying
shares, if any) are owned by the Company, another subsidiary of the
Company or the Company and another subsidiary of the Company, free and
clear of all Liens. Except for the capital stock of its subsidiaries, the
Company does not own, directly or indirectly, any capital stock or other
ownership interest in any person.
(n) Vote Required. Under the IBCL and the Company's articles of
incorporation, this Agreement must be approved by the affirmative vote of
the holders of a majority of the outstanding shares of Company Common
Stock (the "Company Shareholder Approval"). The Company Shareholder
Approval is the only vote of the holders of any class or series of
capital stock of the Company necessary to approve this Agreement and the
transactions contemplated hereby.
(o) State Business Combination Statutes. Sections 23-1-43-1 through
23-1-43-24 of the IBCL are not applicable to this Agreement, the Merger
and the other transactions contemplated hereby pursuant to Article IX,
Section 9.4 of the articles of incorporation of the Company as in effect
on the date of this Agreement.
(p) Brokers. No broker, investment banker, financial advisor or
other person, other than Bear, ▇▇▇▇▇▇▇ & Co. Inc., Credit Suisse First
Boston Corporation and ▇▇▇▇▇▇ ▇. ▇▇▇▇ & Company, the fees and expenses of
which will be paid by the Company, is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with
the transactions contemplated by this Agreement based upon arrangements
made by or on
23
behalf of the Company. True and correct copies of the Company's
arrangements with Bear, ▇▇▇▇▇▇▇ & Co. Inc., Credit Suisse First Boston
Corporation and ▇▇▇▇▇▇ ▇. ▇▇▇▇ & Company (the "Broker Agreements") have
been delivered to Parent prior to the date of this Agreement.
(q) Opinion of Financial Advisor. The Company has received the
opinion of each of Bear, ▇▇▇▇▇▇▇ & Co. Inc., Credit Suisse First Boston
Corporation and ▇▇▇▇▇▇ ▇. ▇▇▇▇ & Company, dated as of the date of this
Agreement, to the effect that, as of the date of such opinion and based
upon and subject to the matters stated therein, the consideration to be
received by holders of Company Common Stock in the Merger is fair to such
holders from a financial point of view.
SECTION 4.02. Representations and Warranties of Parent and
Acquisition Sub. Parent and Acquisition Sub represent and warrant to the
Company as follows:
(a) Organization and Power. Each of Parent and Acquisition Sub is a
corporation duly organized, validly existing and, only in the case of Parent
is a corporation in good standing, under the laws of its jurisdiction of
incorporation. Each of Parent and Acquisition Sub has all requisite corporate
power and authority to conduct its business as presently conducted and is duly
qualified and in good standing in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such
qualification necessary, except where failures thereof, individually or in the
aggregate, would not have a material adverse effect on Parent.
(b) Authorization; Non-contravention. Each of Parent and Acquisition
Sub has all requisite corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery by Parent and Acquisition Sub of this Agreement and the
consummation by Parent and Acquisition Sub of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of Parent and Acquisition Sub. This Agreement has been duly executed and
delivered by each of Parent and Acquisition Sub and, assuming this Agreement
constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its
24
terms, this Agreement constitutes a 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 (except, in each case, insofar as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors' rights
generally, or by principles governing the availability of equitable remedies).
The execution and delivery by Parent and Acquisition Sub of this Agreement
does not, and the consummation by Parent and Acquisition Sub of the
transactions contemplated hereby will not, conflict with, or result in any
breach or violation of, or default (with or without notice or lapse of time or
both) under, or result in the termination of, or accelerate the performance
required by, or give rise to a right of termination, cancelation or
acceleration of any obligation under, or the creation of a Lien pursuant to,
(i) the certificate of incorporation or by-laws (or other comparable
organizational documents) of Parent or Acquisition Sub or (ii) subject to
obtaining or making the consents, approvals, orders, authorizations,
registrations, declarations and filings referred to in the following sentence,
any loan or credit agreement, note, mortgage, indenture, lease or other
agreement, obligation, instrument, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Parent or Acquisition Sub or their respective properties or
assets, in any case under this clause (ii) which, individually or in the
aggregate, would have a material adverse effect on Parent. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Entity is required by or with respect to Parent or
Acquisition Sub in connection with the execution and delivery of this
Agreement by Parent and Acquisition Sub or the consummation by Parent and
Acquisition Sub of the transactions contemplated hereby, except for (A) the
filing with the SEC of such reports under the Exchange Act as may be required
in connection with this Agreement and the other transactions contemplated
hereby, (B) the filing of the Articles of Merger with the Secretary of State
of the State of Indiana in accordance with Section 23-1-40-5 of the IBCL and
the filing of appropriate documents with the relevant authorities of other
states in which the Company is qualified to do business, (C) filings required
pursuant to the HSR Act and any other applicable filings and approvals
25
under similar foreign antitrust laws and regulations and (D) such other
consents, approvals, orders, authorizations, registrations, declarations and
filings the failure of which to be obtained or made, individually or in the
aggregate, would not have a material adverse effect on Parent.
(c) Information Supplied. None of the information supplied or to be
supplied by or on behalf of Parent or Acquisition Sub for inclusion or
incorporation by reference in the Proxy Statement will, at the date the Proxy
Statement is first mailed to shareholders of the Company or at the time of the
Company Shareholders Meeting, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(d) No Business Activities; No Ownership Interests. Since the date
of its incorporation, Acquisition Sub has not carried on any business or
conducted any operations other than the execution of this Agreement and the
performance of its obligations hereunder. Acquisition Sub does not have any
assets or liabilities nor does it own, directly or indirectly, any capital
stock or other ownership interest in any person.
(e) Brokers. No broker, investment banker, financial advisor or
other person is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Parent.
(f) Financing. Parent has or will have available, prior to the
Effective Time, sufficient cash in immediately available funds to pay the
aggregate Merger Consideration pursuant to Article III and to consummate, on
the terms contemplated hereby, the Merger and the other transactions
contemplated hereby.
ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01. Covenants of the Company. During the period from the
date of this Agreement until the Effective Time, the Company agrees as to
itself and its subsidiaries that (except as consented to in writing by Parent
(not to be unreasonably withheld), as expressly contemplated, required or
permitted by this Agreement or as set forth in the Company Disclosure
Schedule):
(a) Ordinary Course; Capital Expenditures. The Company shall, and
shall cause each of its subsidiaries to, carry on their respective businesses
in the usual, regular and ordinary course substantially consistent with past
practice in all material respects and use all reasonable efforts to preserve
intact their present business organizations, maintain their rights and
franchises, keep available the services of their current officers and
employees and preserve their relationships with customers, suppliers and
others having business dealings with them to the end that their goodwill and
ongoing businesses shall be unimpaired at the Effective Time. The Company
shall not, nor shall it permit any of its subsidiaries to, enter into any
material new line of business, or incur or commit to any capital expenditures,
or any obligations or liabilities in connection with any capital expenditures,
other than capital expenditures and obligations or liabilities incurred or
committed to that are not in excess of $6,100,000, in the aggregate.
(b) Dividends; Changes in Stock. The Company shall not, nor shall it
permit any of its subsidiaries to (i) declare, set aside or pay any dividends
on, or make other distributions in respect of, any of its capital stock, other
than dividends and distributions by a direct or indirect wholly owned
subsidiary of the Company to its parent, (ii) split, combine or reclassify any
of its capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock or (iii) purchase, redeem or otherwise acquire any shares of its
capital stock, other than (A) in connection with the exercise of any Company
Stock Option where the exercise price thereof is paid in whole or in part in
the form of
27
shares of Company Common Stock and (B) in connection with the exercise of any
Company Stock Option for purposes of satisfying tax withholding obligations.
(c) Issuance of Securities. The Company shall not, nor shall it
permit any of its subsidiaries to, issue, deliver or sell, or authorize the
issuance, delivery or sale of, any shares of its capital stock of any class or
any securities convertible into or exchangeable for, or any rights, warrants
or options to acquire, any of the foregoing, or enter into any agreement with
respect to any of the foregoing, other than the issuance of Company Common
Stock upon the exercise of Company Stock Options that are outstanding on the
date of this Agreement.
(d) Governing Documents. The Company shall not amend or propose to
amend, nor shall it permit any of its subsidiaries to amend, its articles of
incorporation or by-laws or other comparable organizational documents, except,
in the case of any subsidiary of the Company, for such amendments to its
articles of incorporation or by-laws or other comparable organizational
documents that do not have an adverse effect on the Merger or the other
transactions contemplated by this Agreement.
(e) No Acquisitions. The Company shall not, nor shall it permit any
of its subsidiaries to, acquire or agree to acquire (i) by merging or
consolidating with, or by purchasing a substantial equity interest in or a
substantial portion of the assets of, any corporation, partnership,
association or other business organization or any division or business thereof
(provided that any wholly owned subsidiary of the Company may merge into or
consolidate with any other wholly owned subsidiary of the Company) or (ii) any
assets, except in the case of clause (ii) above, purchases of inventory,
supplies and raw materials in the ordinary course of business consistent with
past practice.
(f) No Dispositions. The Company shall not, nor shall it permit any
of its subsidiaries to, sell, lease or otherwise dispose of, or subject to any
Lien, any properties or assets (including capital stock of subsidiaries) which
are material to the Company and its subsidiaries taken as a whole, except
sales of inventory
28
and excess or obsolete assets in the ordinary course of business consistent
with past practice.
(g) Indebtedness. The Company shall not, nor shall it permit any of
its subsidiaries to, (A) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person, issue or sell any debt
securities or warrants or rights to acquire any debt securities of the Company
or any of its subsidiaries, except for (i) short-term borrowings incurred in
the ordinary course of business, (ii) revolving credit borrowings under the
Company's existing credit and accounts receivable facilities, (iii)
indebtedness incurred in connection with the issuance of letters of credit for
the account of the Company in the ordinary course of business and drawings
thereunder, (iv) the guarantee by the Company or any of its wholly-owned
subsidiaries of any obligations of any wholly-owned subsidiary of the Company
and (v) any indebtedness or guarantees which are, individually or in the
aggregate, not material to the Company and its subsidiaries taken as a whole
or (B) make loans, advances or capital contributions to, or investments in,
any person other than the Company or any direct or indirect wholly owned
subsidiary of the Company.
(h) Other Actions. The Company shall not, nor shall it permit any of
its subsidiaries to, take any action that would result in (i) any of the
representations and warranties of the Company set forth in this Agreement that
are qualified as to materiality or material adverse effect becoming untrue,
(ii) any of such representations and warranties that are not so qualified
becoming untrue in any material respect or (iii) any of the conditions to the
Merger set forth in Article VII not being satisfied. The Company shall not,
nor shall it permit any of its subsidiaries to, amend or modify any of the
Broker Agreements or enter into any similar arrangements.
(i) Advice of Changes. The Company shall advise Parent of any change
or event which would cause or constitute a material breach of any of its
representations and warranties contained in this Agreement.
(j) No General Authorization, Etc. The Company shall not, nor shall
it permit any of its subsidiaries to,
29
authorize any of, or commit or agree to take any of, the actions that are
prohibited by the foregoing covenants.
SECTION 5.02. Covenants of Parent and Acquisition Sub. During the
period from the date of this Agreement until the Effective Time, each of
Parent and Acquisition Sub agrees that:
(a) Other Actions. It shall not take any action that would result in
(i) any of its representations and warranties set forth in this Agreement that
are qualified as to materiality or material adverse effect becoming untrue,
(ii) any of such representations and warranties that are not so qualified
becoming untrue in any material respect or (iii) any of the conditions to the
Merger set forth in Article VII not being satisfied.
(b) Advice of Changes. It shall advise the Company of any change or
event which would cause or constitute a material breach of any of its
representations or warranties contained in this Agreement.
SECTION 5.03. No Solicitation. (a) The Company shall not, nor shall
it permit any of its subsidiaries to, nor shall it authorize any director,
officer or employee of the Company or any of its subsidiaries or any
investment banker, attorney or other advisor or representative of the Company
or any of its subsidiaries to, directly or indirectly, (and it shall
affirmatively direct each of the foregoing not to) (i) solicit, initiate or
encourage the submission of any Takeover Proposal or (ii) enter into, continue
or otherwise participate in any discussions or negotiations regarding, or
furnish to any person any information with respect to, or otherwise cooperate
in any way with, any Takeover Proposal.
(b) The Board of Directors of the Company shall not (i) withdraw (or
modify in a manner adverse to Parent) or propose publicly to withdraw (or
modify in a manner adverse to Parent) the recommendation by such Board of
Directors of this Agreement or the Merger to the shareholders of the Company,
or resolve or agree to take any such action, (ii) adopt or approve, or propose
publicly to adopt or approve, any Takeover Proposal, or resolve or agree to
take any such action or (iii) cause or permit the Company to enter into any
letter of intent, memorandum of
30
understanding, agreement in principle, acquisition agreement, merger
agreement, option agreement, joint venture agreement, partnership agreement or
other agreement (an "Acquisition Agreement") constituting or related to, or
which is intended to or would reasonably lead to, any Takeover Proposal or
resolve or agree to take any such action.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 5.03, the Company shall promptly advise
Parent orally and in writing of any Takeover Proposal or any inquiry, known to
the Board of Directors or the officers of the Company, that the Company
reasonably believes would lead to a Takeover Proposal, the material terms and
conditions of such Takeover Proposal or inquiry and the identity of the person
making any such Takeover Proposal or inquiry. The Company shall keep Parent
informed in all material respects as to the status and details (including
material amendments or proposed amendments) of any such Takeover Proposal or
inquiry.
(d) Nothing contained in this Section 5.03 shall prohibit the
Company from making any disclosure to the Company's shareholders if, in the
good faith judgment of the Board of Directors of the Company, after
consultation with counsel, failure to do so would create a risk of liability
for breach of the obligations of the Board of Directors of the Company under
applicable law; provided, however, that in no event shall the Company or its
Board of Directors or any committee thereof take, agree or resolve to take,
any action prohibited by Section 5.03(b).
ARTICLE VI
Additional Agreements
SECTION 6.01. Preparation of the Proxy Statement. (a) As soon as
practicable following the date of this Agreement, the Company shall prepare
and file with the SEC the Proxy Statement. Each of the parties shall furnish
all information concerning itself and its affiliates that is required to be
included in the Proxy Statement or that is customarily included in proxy
statements prepared in connection with transactions of the
31
type contemplated by this Agreement. The Company shall use its reasonable
efforts to cause the Proxy Statement to be mailed to the Company's
shareholders as promptly as practicable after filing with the SEC. No filing
of, or amendment or supplement to, the Proxy Statement will be made by the
Company without providing Parent the opportunity to review and comment
thereon. The Company shall advise Parent, promptly after it receives notice
thereof, of any request by the SEC for any amendment to the Proxy Statement or
comments thereon and responses thereto or requests by the SEC for additional
information. If at any time prior to the Effective Time any information
relating to the Company or Parent, or any of their respective directors,
officers or affiliates, should be discovered by the Company or Parent which
should be set forth in an amendment or supplement to the Proxy Statement, so
that the Proxy Statement would not include any misstatement of a material fact
or omit to state any material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, the
party which discovers such information shall promptly notify the other parties
and an appropriate amendment or supplement describing such information shall
be promptly filed with the SEC and, to the extent required by law,
disseminated to the shareholders of the Company.
SECTION 6.02. Access to Information. The Company shall, and shall
cause each of its subsidiaries to, afford to Parent and to its officers,
employees, accountants, counsel and other representatives, reasonable access,
during normal business hours during the period prior to the Effective Time, to
their respective properties, books, records and personnel and, during such
period, the Company shall, and shall cause each of its subsidiaries to,
furnish promptly to Parent (a) a copy of each report, schedule, registration
statement and other document filed or received by it during such period
pursuant to the requirements of federal or state securities laws and (b) such
other information concerning its business, properties and personnel as Parent
may reasonably request. All such information shall constitute Evaluation
Material (as such term is defined in the Confidentiality Agreement dated as of
August 14, 2002, between the Company and Parent (the "Confidentiality
Agreement")) and shall be subject thereto as provided therein, and Parent
shall, and shall cause its advisors and representatives who receive
32
Evaluation Material to agree to, hold all such Evaluation Material in
confidence to the extent required by, and in accordance with, the terms of the
Confidentiality Agreement.
SECTION 6.03. Company Shareholders Meeting. The Company shall, as
promptly as practicable after the date of this Agreement, (a) duly call, give
notice of, convene and hold the Company Shareholders Meeting for the purpose
of obtaining the Company Shareholder Approval and (b) through its Board of
Directors, recommend to its shareholders that they grant the Company
Shareholder Approval.
SECTION 6.04. Reasonable Best Efforts. Subject to the terms and
conditions of this Agreement, each of the Company and Parent shall, and shall
cause its subsidiaries to, use its reasonable best efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective the Merger and the other
transactions contemplated by this Agreement, including (i) the obtaining of
any necessary consent, authorization, order or approval of, or any exemption
by, any Governmental Entity and/or any other public or private third party
which is required to be obtained by such party or any of its affiliates in
connection with the Merger and the other transactions contemplated by this
Agreement, and the making or obtaining of all necessary filings and
registrations with respect thereto, including filings required under the HSR
Act, (ii) the defending of any lawsuits or other legal proceedings challenging
this Agreement and (iii) the execution and delivery of any additional
instruments necessary to consummate the transactions contemplated by, and to
fully carry out the purposes of, this Agreement.
SECTION 6.05. Benefits Matters. (a) For a period of one year after
the Effective Time (the "Continuation Period"), the Surviving Corporation
shall, provide benefits to each employee of the Company or its subsidiaries
who is or becomes an employee of the Surviving Corporation or its subsidiaries
on and after the Effective Time so long as he or she remains an employee
during such period (each, a "Continued Employee") that are no less favorable
in the aggregate to such Continued Employee than those in effect immediately
prior to the Effective Time for
33
such Continued Employee. During the Continuation Period, the Surviving
Corporation shall provide base salaries, annual commission and bonus
opportunities, and long-term incentive compensation opportunities to each
Continued Employee which are no less favorable in the aggregate to such
Continued Employee than those in effect immediately prior to the Effective
Time for such Continued Employee. The parties acknowledge and understand that
the Surviving Corporation and Parent do not intend to provide equity incentive
compensation opportunities and that the foregoing obligations do not require
the provision of any such opportunities. With respect to any unused vacation
or other time off to which any Continued Employee is entitled as of the
Effective Time, pursuant to the terms of the vacation and other time off
plans, programs, policies and arrangements of the Company and its subsidiaries
(as in effect immediately prior to the Effective Time), the Surviving
Corporation shall, following the Effective Time, allow such Continued Employee
to utilize such vacation or other time off in accordance with such terms,
without adverse amendment or modification. During the Continuation Period, the
Surviving Corporation shall honor and continue the Company's severance and
termination plans, programs and policies as in effect immediately prior to the
Effective Time, without adverse amendment or modification. From and after the
Effective Time, the Surviving Corporation shall honor and maintain all
provisions in the Company Benefit Plans in accordance with their respective
terms (as in effect at the Effective Time), for vested benefits and other
vested or guaranteed amounts earned or accrued through the Effective Time.
(b) From and after the Effective Time, the Surviving Corporation
shall honor in accordance with their respective terms (as in effect at the
Effective Time), all Company Benefit Agreements. Parent acknowledges and
agrees that the transactions contemplated by this Agreement when effected
shall constitute a "change in control" for purposes of all Company Benefit
Plans and Company Benefit Agreements.
(c) Subject to compliance with this Section 6.05, nothing herein
shall limit or prevent the Surviving Corporation from amending, modifying or
terminating any Company Benefit Plans or Company Benefit Agreements in
34
accordance with the terms of such Company Benefit Plans and Company Benefit
Agreements and applicable law.
(d) To the extent applicable, with respect to any employee benefit
plan maintained by the Surviving Corporation, for all purposes, including
determining eligibility to participate, level of benefits, benefit accrual and
vesting, service by Continued Employees with the Company or any of its
subsidiaries (or any predecessor employer of an employee of the Company or any
of its subsidiaries, to the extent service with such predecessor employer is
recognized by the Company or any of its subsidiaries) shall be treated as
service with the Surviving Corporation or any of its subsidiaries; provided,
however, that such service need not be recognized to the extent that such
recognition would result in any duplication of benefits.
(e) To the extent applicable, the Surviving Corporation shall waive,
or cause to be waived, any pre-existing condition limitation or
actively-at-work requirement under any welfare benefit plan maintained by the
Surviving Corporation in which Continued Employees (and their eligible
dependents) will be eligible to participate from and after the Effective Time,
except to the extent that such pre-existing condition limitation or
actively-at-work requirement would have been applicable under the comparable
welfare benefit plan of the Company or its subsidiaries immediately prior to
the Effective Time. To the extent applicable, the Surviving Corporation shall
credit, or cause to be credited, the dollar amount of all expenses incurred by
each Continued Employee (and his or her eligible dependents) during the plan
year in which the Effective Time occurs for purposes of satisfying such year's
deductible and co-payment limitations under the relevant welfare benefit plans
in which they participate from and after the Effective Time.
(f) Parent shall take all necessary shareholder action to permit
each of the obligations of the Surviving Corporation in this Section 6.05 to
be performed.
SECTION 6.06. Stock-Based Compensation. (a) As soon as reasonably
practicable following the date of this Agreement, the Board of Directors of
the Company (or, if appropriate, any committee administering the Company Stock
35
Incentive Plan) shall adopt resolutions or take such other actions as may be
required to adjust the terms of all outstanding Company Stock Options, whether
vested or unvested, as necessary to provide that each Company Stock Option
outstanding immediately prior to the Effective Time shall be canceled
effective immediately prior to the Effective Time, with the holder thereof
becoming entitled to receive an amount in cash equal to (i) the excess, if
any, of (1) the Merger Consideration over (2) the exercise price per share of
Company Common Stock subject to such Company Stock Option, multiplied by (ii)
the number of shares of Company Common Stock for which such Company Stock
Option shall not theretofore have been exercised. As of the Effective Time,
the Company Stock Incentive Plan shall terminate and all rights under any
provision of any other plan, program or arrangement providing for the issuance
or grant of any other interest in respect of the capital stock of the Company
or any subsidiary of the Company shall be canceled. The Company shall take all
actions necessary to ensure that, after the Effective Time, no person shall
have any right under the Company Stock Incentive Plan or any other plan,
program or arrangement with respect to equity securities of the Company, or
any subsidiary of the Company.
(b) All amounts payable pursuant to Section 6.06(a) shall be subject
to any required withholding of taxes or proof of eligibility of exemption
therefrom and shall be paid without interest by the close of business on the
day on which the Effective Time occurs.
SECTION 6.07. Fees and Expenses. Whether or not the Merger is
consummated, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such costs or expenses, except that filing fees and expenses incurred in
connection with the preparation, printing, filing and mailing of the Proxy
Statement shall be shared equally by Parent and the Company.
SECTION 6.08. Indemnification and Exculpation. (a) From and after
the Effective Time, Parent shall, and shall cause the Surviving Corporation
to, indemnify, defend and hold harmless each person who is now, or has been at
any time prior to the date of this Agreement or who becomes such prior to the
Effective Time, an officer, director,
36
agent, fiduciary or employee of the Company or any of its subsidiaries (the
"Indemnified Persons") against (i) any and all losses, claims, damages, costs,
expenses, fines, liabilities or judgments or amounts that are paid in
settlement with the approval of the indemnifying party (which approval shall
not be unreasonably withheld) of or in connection with any claim, action,
suit, proceeding or investigation based in whole or in part on or arising in
whole or in part out of the fact that such person is or was a director,
officer, agent, fiduciary or employee of the Company or any of its
subsidiaries whether pertaining to any action or omission existing or
occurring at or prior to the Effective Time and whether asserted or claimed
prior to, or at or after, the Effective Time ("Indemnified Liabilities"), and
(ii) all Indemnified Liabilities based in whole or in part on, or arising in
whole or in part out of, or pertaining to this Agreement or the transactions
contemplated hereby; provided, however, that in the case of the Surviving
Corporation such indemnification shall only be to the fullest extent a
corporation is permitted under the IBCL to indemnify its own directors,
officers, agents, fiduciaries and employees, and in the case of Parent, such
indemnification shall not be limited by the IBCL but such indemnification
shall not be applicable to any claims made against the Indemnified Persons (A)
if a judgment or other final adjudication established that their acts or
omissions were committed in bad faith or were the result of active and
deliberate dishonesty and were material to the cause of action so deliberated
or (B) arising out of, based upon or attributable to the gaining in fact of
any financial profit or other advantage to which they were not legally
entitled. Parent and the Surviving Corporation, as the case may be, will pay
all expenses of each Indemnified Person in advance of the final disposition of
any such action or proceeding, in the case of the Surviving Corporation only
to the fullest extent permitted by law upon receipt of any undertaking
contemplated by Section 23-1-37-10 of the IBCL. Without limiting the
foregoing, in the event any such claim, action, suit, proceeding or
investigation is brought against any Indemnified Person (whether arising
before or after the Effective Time), (i) the Indemnified Persons may retain
counsel satisfactory to them and Parent and the Surviving Corporation, (ii)
Parent shall, and shall cause the Surviving Corporation to, pay all reasonable
fees and expenses of such counsel for the Indemnified Persons promptly as
statements therefor are received and
37
(iii) Parent shall, and shall cause the Surviving Corporation to, use all
reasonable efforts to assist in the vigorous defense of any such matter,
provided that neither Parent nor the Surviving Corporation shall be liable for
any settlement of any claim effected without its written consent, which
consent, however, shall not be unreasonably withheld. Any Indemnified Person
wishing to claim indemnification under this Section 6.08(a), upon learning of
any such claim, action, suit, proceeding or investigation, shall notify Parent
and the Surviving Corporation (but the failure so to notify an indemnifying
party shall not relieve it from any liability which it may have under this
Section 6.08(a) except to the extent such failure materially prejudices such
party), and shall deliver to Parent and the Surviving Corporation the
undertaking contemplated by Section 23-1-37-10 of the IBCL. The Indemnified
Persons as a group may retain only one law firm to represent them with respect
to each such matter unless there is, under applicable standards of
professional conduct, a conflict on any significant issue between the
positions of any two or more Indemnified Persons.
(b) The parties agree that the provisions of this Section 6.08 are
(i) intended to be for the benefit of, and shall be enforceable by, each
Indemnified Person and each Indemnified Person's heirs and representatives and
(ii) in addition to, and not in substitution for, any other rights to
indemnification or contribution that any such person may have by contract or
otherwise.
SECTION 6.09. Transfer Taxes. Parent shall pay any state, local,
foreign or provincial tax (including penalties and interest imposed in
connection therewith) which is attributable to the transfer of the beneficial
ownership of the Company's or the Company's subsidiaries' real property, if
any, payable in connection with the consummation of the Merger, and any state,
local, foreign or provincial tax (including penalties and interest imposed in
connection therewith) which is attributable to the transfer of Company Common
Stock pursuant to this Agreement.
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the satisfaction or waiver at or prior to the Effective Time of the
following conditions:
(a) Company Shareholder Approval. The Company Shareholder Approval
shall have been obtained.
(b) Antitrust. The waiting period applicable to the Merger under the
HSR Act shall have expired or been terminated. Any other consents or approvals
required to consummate the Merger (i) under any antitrust law of the European
Union or any member nation of the European Union or (ii) under any other
foreign antitrust law shall have been obtained, except in the case of clause
(ii) for those the failure of which to be obtained would not have a material
adverse effect on the Company.
(c) No Injunctions or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction or other order or
decree issued by any Governmental Entity of competent jurisdiction enjoining
or otherwise preventing the consummation of the Merger shall be in effect.
SECTION 7.02. Conditions to Obligations of Parent and Acquisition
Sub to Effect the Merger. The obligations of Parent and Acquisition Sub to
effect the Merger is subject to the satisfaction of the following conditions
unless waived by Parent and Acquisition Sub:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement (i) to the extent
qualified by material adverse effect, shall be true and correct and (ii)
to the extent not qualified by material adverse effect, shall be true and
correct, except that this clause (ii) shall be deemed satisfied so long
as any failures of such representations and warranties to be true and
correct would not, individually or in the aggregate, have a material
adverse effect on the Company, in each of cases (i) and (ii), as of the
Closing Date as though made on and as of the Closing Date (except to the
extent any such representations and warranties expressly relate to an
earlier date, in which case as of such earlier date), and Parent shall
have received a certificate to such effect signed on behalf of the
Company by its chief executive officer or its chief financial officer.
Notwithstanding anything to the contrary, the condition specified in this
Section 7.02(a) shall not apply to the representation and warranty made
in Section 4.01(f)(i) on or after September 19, 2001.
(b) Performance of Obligations of the Company. The Company shall
have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date, and
Parent shall have received a certificate to such effect signed on behalf
of the Company by its chief executive officer or its chief financial
officer.
(c) No Litigation. There shall not be pending any suit, action or
proceeding that has a substantial likelihood of success brought by any
Governmental Entity (i) challenging the acquisition by Parent or
Acquisition Sub of any shares of Company Common Stock, seeking to
restrain or prohibit the consummation of the Merger, or seeking to obtain
from the Company, Parent or any of their respective affiliates any
damages that are material in relation to the Company and its
subsidiaries, taken as a whole, (ii) seeking to prohibit or limit the
ownership or operation by the Company, Parent or any of their respective
affiliates engaged in a line of business currently engaged in by the
Company or its affiliates of any portion of the business or assets of the
Company, Parent or any such affiliate, or to require any such person to
divest or hold separate any portion of its business or assets, as a
result of the Merger or any of the other transactions contemplated by
this Agreement, (iii) seeking to impose limitations on the ability of
Parent to acquire or hold, or exercise full rights of ownership of, any
shares of Company Common Stock, including the right to vote the Company
Common Stock on all matters properly presented to the shareholders of the
Company or (iv) seeking to prohibit Parent from
40
effectively controlling the business or operations of the Company and its
subsidiaries.
SECTION 7.03. Conditions to Obligation of the Company to Effect the
Merger. The obligation of the Company to effect the Merger is subject to the
satisfaction of the following conditions unless waived by the Company:
(a) Representations and Warranties. The representations and
warranties of Parent and Acquisition Sub set forth in this Agreement (i)
to the extent qualified by material adverse effect, shall be true and
correct and (ii) to the extent not qualified by material adverse effect,
shall be true and correct, except that this clause (ii) shall be deemed
satisfied so long as any failures of such representations and warranties
to be true and correct do not, individually or in the aggregate, have a
material adverse effect on Parent, in each of cases (i) and (ii), as of
the Closing Date as though made on and as of the Closing Date (except to
the extent any such representations and warranties expressly relate to an
earlier date, in which case as of such earlier date), and the Company
shall have received a certificate to such effect signed on behalf of
Parent by an officer of Parent.
(b) Performance of Obligations of Parent and Acquisition Sub. Each
of Parent and Acquisition Sub shall have performed in all material
respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date, and the Company shall have
received a certificate to such effect signed on behalf of Parent by an
officer of Parent.
SECTION 7.04. Frustration of Closing Conditions. None of Parent,
Acquisition Sub or the Company may rely on the failure of any condition set
forth in Section 7.01, 7.02 or 7.03, as the case may be, to be satisfied if
such failure was caused by such party's failure to use its reasonable best
efforts to consummate the Merger and the other transactions contemplated by
this Agreement.
41
ARTICLE VIII
Termination and Amendment
SECTION 8.01. Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after the Company
Shareholder Approval is received:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company upon written notice to the other
party:
(i) if the Merger shall not have been consummated on or before
January 31, 2003 (the "Outside Date"), unless the failure to
consummate the Merger is the result of a material breach of this
Agreement by the party seeking to terminate this Agreement;
(ii) if any Governmental Entity of competent jurisdiction shall
have issued a permanent injunction or other order or decree
enjoining or otherwise preventing the consummation of the Merger and
such injunction or other order or decree shall have become final and
nonappealable; or
(iii) if, upon a vote at a duly held Company Shareholders
Meeting, the Company Shareholder Approval shall not have been
obtained;
(c) by Parent if the Company shall have breached any of its
representations, warranties or covenants contained in this Agreement,
which breach (i) would give rise to the failure of a condition set forth
in Section 7.02(a) or 7.02(b) and (ii) has not been or is incapable of
being cured by the Company within 30 business days after its receipt of
written notice thereof from Parent; or
42
(d) by the Company if Parent shall have breached any of its
representations, warranties or covenants contained in this Agreement,
which breach (i) would give rise to the failure of a condition set forth
in Section 7.03(a) or 7.03(b) and (ii) has not been or is incapable of
being cured by Parent within 30 business days after its receipt of
written notice thereof from the Company.
SECTION 8.02. Effect of Termination. In the event of termination of
this Agreement by either Parent or the Company as provided in Section 8.01,
this Agreement shall forthwith become void and have no effect, and, except to
the extent that such termination results from the intentional and material
breach by a party of any of its representations, warranties, covenants or
agreements set forth in this Agreement, there shall be no liability or
obligation on the part of Parent, Acquisition Sub or the Company, except with
respect to Section 4.01(p), Section 4.02(e), the second sentence of Section
6.02, Section 6.07, this Section 8.02 and Article IX (other than Section
9.06), which provisions shall survive such termination.
SECTION 8.03. Amendment. This Agreement may be amended by the
parties at any time before or after the Company Shareholder Approval is
received, provided that after receipt of the Company Shareholder Approval, no
amendment shall be made which by law requires further approval by the
shareholders of the Company without such further approval. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties.
SECTION 8.04. Extension; Waiver. At any time prior to the Effective
Time, the parties may, to the extent legally allowed, (a) extend the time for
the performance of any of the obligations or other acts of the other parties,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (c) subject to the
proviso to the first sentence of Section 8.03, waive compliance with any of
the agreements or conditions contained herein. Any agreement on the part of a
party to any such extension or waiver shall be valid only if set forth in a
written instrument signed on behalf of such party. The failure of any party
43
to assert any of its rights under this Agreement or otherwise shall not
constitute a waiver of those rights.
SECTION 8.05. Procedure for Termination, Amendment, Extension or
Waiver. A termination of this Agreement pursuant to Section 8.01, an amendment
of this Agreement pursuant to Section 8.03 or an extension or waiver pursuant
to Section 8.04 shall, in order to be effective, require, in the case of
Acquisition Sub or the Company, action by its Board of Directors or the duly
authorized designee of its Board of Directors to the extent permitted by law.
ARTICLE IX
General Provisions
SECTION 9.01. Nonsurvival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time. This
Section 9.01 shall not limit any covenant or agreement of the parties which by
its terms contemplates performance after the Effective Time.
SECTION 9.02. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, telecopied (with written confirmation) or sent by overnight or
same-day courier (providing proof of delivery) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to the Company, to:
CTB International Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
44
with a copy to:
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ Cami, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇.
(b) if to Parent or Acquisition Sub, to:
Berkshire Hathaway Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 9.03. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other party.
SECTION 9.04. Entire Agreement; No Third-Party Beneficiaries; Rights
of Ownership. This Agreement, together with the Confidentiality Agreement, (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, provided that the Confidentiality Agreement (other than
Sections 4 and 7 thereof, which shall be of no further force or effect) shall
survive the execution and delivery of this Agreement, and (b) other than
Sections 6.06 and 6.08 of this Agreement, is not intended to confer upon any
person other than the parties any rights or remedies hereunder.
SECTION 9.05. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the
45
laws of the State of Indiana, without regard to any principles of conflicts of
law of such State.
SECTION 9.06. Publicity. Except as otherwise permitted by this
Agreement or required by law or obligations pursuant to any listing agreement
with any national securities exchange or the National Association of
Securities Dealers, Inc., none of Parent, Acquisition Sub or the Company
shall, or shall permit any of their respective affiliates to, issue or cause
the publication of any press release or other public announcement or statement
with respect to this Agreement or the transactions contemplated hereby without
first giving an opportunity to review and comment upon such press release or
other public announcement or statement to the Company, in the case of Parent
or Acquisition Sub, or Parent, in the case of the Company. The parties agree
that the initial press release to be issued with respect to the transactions
contemplated by this Agreement shall be in the form heretofore agreed to by
the parties.
SECTION 9.07. Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by any of the parties (whether by operation of law or
otherwise) without the prior written consent of the other parties, and any
such purported assignment that is not so consented to shall be null and void.
Subject to the preceding sentence, this Agreement will be binding upon, inure
to the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
SECTION 9.08. Enforcement. The parties 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 shall be entitled to an injunction
or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any federal court
located in the State of Indiana or in any Indiana state court, this being in
addition to any other remedy to which they are entitled at law or in equity.
In addition, each of the parties (a) consents to submit itself to the personal
jurisdiction of any federal court located in the State of Indiana or any
Indiana state court in the event
46
any dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement, (b) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from
any such court, (c) agrees that it will not bring any action relating to this
Agreement or any transaction contemplated by this Agreement in any court other
than any federal court located in the State of Indiana or any Indiana state
court, unless it is unable to bring such action in an Indiana court as a
result of the denial of jurisdiction by such courts and (d) waives any right
to trial by jury with respect to any action related to or arising out of this
Agreement or any transaction contemplated by this Agreement.
SECTION 9.09. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or
law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.
IN WITNESS WHEREOF, each party has duly executed this Agreement, all
as of the date first above written.
BERKSHIRE HATHAWAY INC.,
by: /s/ ▇▇▇▇ ▇. Hamburg
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Name: ▇▇▇▇ ▇. Hamburg
Title: Vice President and
Chief Financial Officer
C ACQUISITION CORP.,
by: /s/ ▇▇▇▇ ▇. Hamburg
-------------------------------
Name: ▇▇▇▇ ▇. Hamburg
Title: President
CTB INTERNATIONAL CORP.,
by: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President and
Chief Executive Officer