1
Execution Copy
EXHIBIT 2.4
PLAN AND AGREEMENT OF MERGER
AMONG
STRIKER ACQUISITION ▇▇. ▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇
▇▇▇
▇▇▇▇▇▇ HOLDING, INC.
DATED AS OF NOVEMBER 29, 1996
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TABLE OF CONTENTS
ARTICLE 1
THE MERGER
1.1. Preliminary Transactions ............................................. 2
1.1.1. Exchange of Acquisition No. 1 Shares .......................... 2
1.1.2. Striker Merger ................................................ 2
1.1.3. Financing ..................................................... 3
1.1.4. Public Offering ............................................... 3
1.2. Merger ............................................................... 3
1.2.1. Surviving Corporation ......................................... 3
1.2.2. Stockholder Approval .......................................... 3
1.2.3. Effective Date ................................................ 3
1.2.4. Name and Continued Corporate Existence of Surviving
Corporation ................................................... 4
1.2.5. Governing Law and Articles of Incorporation of Surviving
Corporation ................................................... 4
1.2.6. Bylaws of Surviving Corporation ............................... 4
1.2.7. Directors of Surviving Corporation ............................ 4
1.2.8. Officers of Surviving Corporation ............................. 4
1.2.9. Vacancies ..................................................... 5
1.2.10. Capital Stock of Surviving Corporation ....................... 5
1.2.11. Conversion of Securities Upon Merger ......................... 5
1.2.11.1. General ............................................ 5
1.2.11.2. Conversion of Acquisition No. 3's Stock ............ 5
1.2.11.3. Conversion of Newgen's Stock ....................... 6
1.2.11.4. Exchange of Acquisition No. 3's Stock Certificate .. 6
1.2.11.5. Exchange of Newgen's Certificates .................. 6
1.2.12. Unclaimed Funds; No Escheat .................................. 7
1.2.13. Acquisition No. 3's Transfer Books Closed .................... 7
1.2.14. Assets and Liabilities of Merging Corporations Become
Those of Surviving Corporation ............................... 7
1.2.15. Conveyances to Surviving Corporation ......................... 7
1.2.16. Accounting Treatment ........................................ 8
1.2.17. Dissenting Stockholders of Newgen ............................ 8
1.2.18. Dissenting Stockholders of Acquisition No. 3 ................. 8
1.2.19. Stockholders Meetings ........................................ 8
1.2.19.1. Calling of Meetings ................................. 8
1.2.19.2. Grant of Proxy ...................................... 8
1.2.19.3. Expiration of Proxies ............................... 10
1.2.19.4. Revocation of Prior Proxies ......................... 10
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TABLE OF CONTENTS
(CONTINUED)
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF NEWGEN AND THE INSIDERS
2.1. Representations and Warranties of Newgen and the Insiders .................... 10
2.1.1. Organization and Standing ............................................ 10
2.1.2. Agreement Authorized and its Effect on Other Obligations ............. 11
2.1.3. Capitalization ....................................................... 10
2.1.4. Subsidiaries ......................................................... 11
2.1.5. Financial Statements ................................................. 11
2.1.5.1. Newgen Financial Statements ................................. 11
2.1.5.2. Projections ................................................. 12
2.1.6. Liabilities .......................................................... 12
2.1.7. Additional Newgen Information ........................................ 12
2.1.7.1. Real Estate ................................................ 12
2.1.7.2. Machinery and Equipment .................................... 12
2.1.7.3. Inventory .................................................. 13
2.1.7.4. Receivables ................................................ 13
2.1.7.5. Payables ................................................... 13
2.1.7.6. Insurance .................................................. 14
2.1.7.7. Material Contracts ......................................... 14
2.1.7.8. Employee Compensation Plans ................................ 14
2.1.7.9. Certain Salaries ........................................... 14
2.1.7.10. Bank Accounts .............................................. 14
2.1.7.11. Employee Agreements ........................................ 14
2.1.7.12. Patents .................................................... 14
2.1.7.13. Trade Names ................................................ 14
2.1.7.14. Promissory Notes ........................................... 14
2.1.7.15. Guaranties ................................................. 14
2.1.7.16. Financial Statements ....................................... 14
2.1.7.17. Reserves and Accruals ...................................... 14
2.1.7.18. Material Leases ............................................ 14
2.1.7.19. Environment ................................................ 14
2.1.8. No Undisclosed Defaults .............................................. 15
2.1.9. Absence of Certain Changes and Events ................................ 15
2.1.9.1. Financial Change ........................................... 15
2.1.9.2. Property Damage ............................................ 15
2.1.9.3. Dividends .................................................. 15
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2.1.9.4. Capitalization Change ................................. 15
2.1.9.5. Labor Disputes ........................................ 15
2.1.9.6. Other Material Changes ................................ 15
2.1.10. Taxes .......................................................... 16
2.1.11. Intellectual Property .......................................... 16
2.1.12. Title to Properties ............................................ 16
2.1.13. Litigation ..................................................... 17
2.1.14. Environmental Compliance ....................................... 17
2.1.14.1. Environmental Conditions ............................. 17
2.1.14.2. Permits, etc ......................................... 17
2.1.14.3. Compliance ........................................... 17
2.1.14.4. Past Compliance ...................................... 18
2.1.14.5. Environmental Claims ................................. 18
2.1.14.6. Renewals ............................................. 18
2.1.14.7. Asbestos and PCBs .................................... 18
2.1.15. Compliance with Other Laws ..................................... 18
2.1.16. Finder's Fee ................................................... 19
2.1.17. Compliance with ERISA .......................................... 19
2.1.17.1. Prohibited Transactions .............................. 19
2.1.17.2. Plan Termination; Material Liabilities................ 19
2.1.17.3. Accumulated Funding Deficiency ....................... 19
2.1.17.4. Relationship of Benefits to Pension Plan Assets ...... 20
2.1.17.5. Execution of Agreements .............................. 20
2.1.17.6. Fiduciary Liability .................................. 20
2.1.17.7. Pending Claims ....................................... 20
2.1.17.8. Multiemployer Plans .................................. 20
2.1.17.9. No Reportable Event .................................. 20
2.1.18. Investigations; Litigation ..................................... 21
2.1.19. Product Warranty ............................................... 21
2.1.20. Information for Striker Proxy Statement ........................ 21
2.1.21. FIRPTA ......................................................... 21
2.1.22. Effect of Disclosure ........................................... 21
2.2. Representations and Warranties of the Stockholders ..................... 21
2.2.1. Ownership of Shares ............................................. 21
2.2.2. Organization; Power, Binding Agreement .......................... 22
2.2.3. No Conflicts .................................................... 22
2.2.4. No Encumbrances ................................................. 22
2.2.5. Finder's Fee .................................................... 23
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(Continued)
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF
Acquisition No. 1 AND Acquisition No. 3
3.1. Representations and Warranties of Acquisition No. 1 ..................... 23
3.1.1. Organization and Standing ....................................... 23
3.1.2. Agreement Authorized and its Effect on Other Obligations ........ 23
3.1.3. Capitalization .................................................. 23
3.1.4. Compliance with Other Laws ...................................... 24
3.1.5. Investigations; Litigation ...................................... 24
3.1.6. Finder's Fee .................................................... 24
3.2. Representations and Warranties of Acquisition No. 3 ..................... 24
3.2.1. Organization and Standing ....................................... 24
3.2.2. Capitalization .................................................. 25
3.2.3. Agreement Authorized ............................................ 25
3.2.4. Investigations, Litigation ...................................... 25
3.2.5. Finder's Fee .................................................... 25
3.2.6. Solvency ........................................................ 25
ARTICLE 4
OBLIGATIONS PENDING EFFECTIVE DATE
4.1. Agreements of Newgen .................................................... 25
4.1.1. Maintenance of Present Business ................................. 26
4.1.2. Maintenance of Properties ....................................... 26
4.1.3. Maintenance of Books and Records ................................ 26
4.1.4. Compliance with Law ............................................. 26
4.1.5. Inspection of Each Merging Corporation .......................... 26
4.1.6. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ ............................................... 26
4.1.7. Notice of Material Developments ................................. 26
4.1.8. Prohibition of Certain Employment Contracts ..................... 27
4.1.9. Prohibition of Certain Loans .................................... 27
4.1.10. Prohibition of Certain Commitments .............................. 27
4.1.11. Disposal of Assets .............................................. 27
4.1.12. Maintenance of Insurance ........................................ 28
4.1.13. No Amendment to Articles of Incorporation, etc .................. 28
4.1.14. No Issuance, Sale, or Purchase of Securities .................... 28
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4.1.15. Prohibition on Dividends ....................................... 28
4.1.16. Supplemental Financial Statements .............................. 28
4.2. Additional Agreements of Newgen, the Insiders and the Stockholders ...... 28
4.2.1. Acquisition Proposals .......................................... 28
4.2.1.1. No Solicitation ....................................... 29
4.2.2. Expenses of Stockholders ................................ 29
4.2.3. Noncompetition .......................................... 29
ARTICLE 5
CONDITIONS PRECEDENT TO OBLIGATIONS
5.1. Conditions Precedent to Obligations of Newgen ........................... 31
5.1.1. Representations and Warranties True at Effective Date ............ 31
5.1.2. No Material Litigation ........................................... 31
5.1.3. Opinion of Acquisition No. 1 and Acquisition No. 3 Counsel ....... 31
5.1.4. Stockholder Approval ............................................. 32
5.1.5. Consent of Certain Parties in Privity With Striker ............... 32
5.1.6. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ ................................................ 32
5.1.7. Preliminary Transactions ......................................... 32
5.2. Conditions Precedent to Obligations of Acquisition No. 1
and Acquisition No. 3 ................................................... 33
5.2.1. Representations and Warranties of Newgen and Insiders True at
Effective Date .................................................. 33
5.2.2. Representations and Warranties of Stockholders True at Effective
Date ............................................................ 33
5.2.3. No Material Litigation .......................................... 33
5.2.4. Opinion of Newgen's Counsel ..................................... 33
5.2.5. Stockholder Approval ............................................ 34
5.2.6. Consent of Certain Parties in Privity with Newgen ............... 34
5.2.7. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ ............................................... 34
5.2.8. Preliminary Transactions ........................................ 35
5.2.9. Insider Employment Agreements ................................... 35
5.2.10. Completion of Due Diligence ..................................... 35
5.2.11. Granule Plant Project (the "Granule Plant") ..................... 35
5.2.12. Wilmington Labor Dispute ........................................ 35
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(Continued)
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ARTICLE 6
TERMINATION AND ABANDONMENT
6.1. Termination ............................................................. 35
6.1.1. By Mutual Consent ................................................ 36
6.1.2. By Acquisition No. 3 Because of Dissenting Stockholders .......... 36
6.1.3. By Acquisition No. 3 Because of Conditions Precedent ............. 36
6.1.4. By Acquisition No. 3 Because of Solicitation of Acquisition
Proposals ....................................................... 36
6.1.5. By Acquisition No. 3 Because of Material Adverse Change .......... 36
6.1.6. By Newgen Because of Conditions Precedent ........................ 36
6.1.7. By Acquisition No. 3 or Newgen Because of Legal Proceedings ...... 36
6.1.8. By Acquisition No. 3 or Newgen if Merger not Effective by April
21, 1997 ........................................................ 36
6.2. Termination by Board of Directors ....................................... 36
6.3. Effect of Termination; Expenses ......................................... 36
6.4. Waiver of Conditions .................................................... 37
ARTICLE 7
ADDITIONAL AGREEMENTS
7.1. Registration Statement; Proxy Statement/Prospectus ...................... 37
7.1.1. Filing With the Commission ....................................... 37
7.1.2. Cooperation of Newgen ............................................ 37
7.1.3. Best Efforts for Commission Clearance ............................ 38
7.1.4. Expenses ......................................................... 38
7.2. Indemnification by Newgen as to Proxy Statement/Prospectus .............. 38
7.3. Indemnification by Striker and Acquisition No. 1 as to Proxy
Statement/Prospectus .................................................... 38
7.4. Waivers ................................................................. 39
ARTICLE 8
MISCELLANEOUS
8.1. Entirety ................................................................ 40
8.2. Counterparts ............................................................ 40
8.3. Notices and Waivers ..................................................... 40
8.4. Termination of Representations, Warranties, etc ......................... 41
8.5. Table of Contents and Captions .......................................... 41
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(Continued)
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8.6. Successors and Assigns ............................................... 41
8.7. Severability ......................................................... 41
8.8. Applicable Law ....................................................... 41
8.9. Effective Date ....................................................... 41
8.10. Public Announcements ................................................. 42
EXHIBITS AND APPENDICES
Exhibit A...................................... Newgen Common Stock Owned by the Stockholders
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PLAN AND AGREEMENT OF MERGER
PLAN AND AGREEMENT OF MERGER (this "Agreement"), dated as of November
29, 1996, among Striker Industries, Inc., a Delaware corporation ("Striker"),
GSR Industries, Inc., a Delaware corporation formerly known as Striker
Acquisition ▇▇. ▇ ("▇▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇"), ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ No. 3, Inc., a
Texas corporation and a wholly-owned subsidiary of Acquisition ▇▇. ▇
("▇▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc., a Texas corporation ("Newgen" or
the "Surviving Corporation"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇▇▇▇▇"), Maredon-1, Ltd., a Texas limited partnership (the "▇▇▇▇▇
Partnership"), and EPDSJ, Ltd., a Texas limited partnership (the "Nesselroade
Partnership"). ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇ are referred to collectively herein as the
"Insiders." The ▇▇▇▇▇ Partnership and the Nesselroade Partnership are referred
to collectively herein as the "Stockholders." Acquisition No. 3 and Newgen are
sometimes hereinafter collectively referred to as the "Merging Corporations."
W I T N E S S E T H:
WHEREAS, Striker is a corporation duly organized and validly existing
under the laws of the State of Delaware, with its principal executive offices
at ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇; and
WHEREAS, Newgen is a corporation duly organized and validly existing
under the laws of the State of Texas, with its principal executive offices at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇; and
WHEREAS, the respective boards of directors of Striker and Newgen deem
it desirable and in the best interests of their respective corporations and
their respective stockholders to enter into a series of transactions pursuant
to which, among other things, (i) Striker will become a wholly-owned subsidiary
of Acquisition No. 1 and (ii) Acquisition No. 1 may acquire a portion of the
outstanding capital stock of Newgen through an exchange of stock with certain
Newgen stockholders electing to participate therein and will acquire the
balance of the outstanding capital stock of Newgen through a merger pursuant to
the provisions of Article 5.01 of the Texas Business Corporation Act (the
"Texas Act") of Acquisition No. 3 into Newgen in exchange for the Merger
Consideration set forth in Section 1.2.11.3 hereof, and have proposed, declared
advisable, and approved such merger (the "Merger) pursuant to this Plan and
Agreement of Merger (this "Agreement"), which Agreement has been duly approved
by resolutions of the respective boards of directors of Acquisition ▇▇. ▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇ and Newgen.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, and to prescribe the terms and
conditions of the Merger contemplated hereby, the mode of carrying the same
into effect, the manner and basis of converting (i) the presently outstanding
shares of common stock, par value $1.00 per share, of Acquisition ▇▇. ▇
("▇▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇ ▇▇▇▇▇▇ ▇▇▇▇▇") into shares of Class A common stock, par
value $0.01 per share, of Newgen ("Newgen Common Stock") and (ii) the presently
outstanding shares of Newgen Common Stock
10
(excluding those shares, if any, of Newgen Common Stock held by Acquisition No.
1 pursuant to the Stock Exchange Agreement described in Section 1.1.1 hereof,
and those shares of Newgen Common Stock held as treasury shares by Newgen, all
of which shall cease to exist) into the right to receive the Merger
Consideration described in Section 1.2.11.3 hereof, and such other details and
provisions as are deemed necessary or proper, the parties hereto hereby agree
as follows:
ARTICLE 1
THE MERGER
1.1. Preliminary Transactions.
1.1.1. Exchange of Acquisition No. 1 Shares. On or before the
Effective Date (as defined in Section 8.9 hereof), all of the
stockholders of Newgen, (the "Exchanging Stockholders") will have
entered into an agreement (the "Stock Exchange Agreement") with
Acquisition No. 1 pursuant to which the Exchanging Stockholders shall
agree to, on and as of the Effective Date, transfer to Acquisition No.
1 in a transaction intended to qualify for nonrecognition treatment
under Section 351 of the Internal Revenue Code of 1986, as amended (the
"Code"), the number of shares of Newgen Common Stock set forth opposite
their names on Exhibit A to the Stock Exchange Agreement in exchange
for such number of shares of the common stock, par value $.20 share, of
Acquisition No. 1 ("Acquisition No. 1 Common Stock") as is necessary to
vest in the Exchanging Stockholders an interest in Acquisition No. 1
Common Stock equal to 100% of all the issued and outstanding
Acquisition No. 1 Common Stock minus (a) the shares of Acquisition No.
1 Common Stock to be issued in connection with the Striker Merger
described in Section 1.1.2 hereof, (b) the shares of Acquisition No. 1
Common Stock to be purchased by the Equity Investors described in
Section 1.1.3 hereof, and (c) the shares of Acquisition No. 1 Common
Stock to be purchased by the public in an initial public offering
described in Section 1.1.4 hereof
1.1.2. Striker Merger. On or before the Effective Date, Striker
and Acquisition No. 2, Inc., a Delaware corporation and a wholly-owned
subsidiary of Acquisition No. 1 ("Acquisition No. 2") shall have
entered into an agreement by which, pursuant to the provisions of
Section 251(a) of the Delaware General Corporation Law (the "DGCL"),
Acquisition No. 2 will be, on and as of the Effective Date, merged with
and into Striker, with Striker as the surviving corporation (the
"Striker Merger"), and as a result of the Striker Merger (a) Striker
shall become a wholly-owned subsidiary of Acquisition No. 1, and (b)
the Striker stockholders (not properly perfecting their dissenters'
rights) will have, as of the Effective Date, an interest in Acquisition
No. 1 Common Stock equal to 100% of all issued and outstanding
Acquisition No. 1 Common Stock minus (i) the shares of Acquisition No.
1 Common Stock issued to the Exchanging Stockholders as described in
Section 1.1.1 hereof, (ii) the shares of Acquisition No. 1 Common
Stock to be purchased by the Equity Investors
2
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described in Section 1.1.3 hereof and (iii) the shares of Acquisition
No. 1 Common Stock to be purchased by the public in an initial public
offering described in Section 1.1.4 hereof
1.1.3. Financing. On and as of the Effective Date, Acquisition
No. 1 shall (a) issue to one or more equity investors (the "Equity
Investors") such number of shares of Acquisition No. 1 Common Stock as
is necessary to vest in the Equity Investors an interest in the
Acquisition No. 1 Common Stock equal to 100% of all issued and
outstanding Acquisition No. 1 Common Stock minus (i) the shares of
Acquisition No. 1 Common Stock issued to the Exchanging Stockholders as
described in Section 1.1.1 hereof and (ii) the shares of Acquisition
No. 1 Common Stock issued in the Striker Merger as described in Section
1.1.2 hereof, and (b) enter into a series of loan transactions with
certain lenders, with the net proceeds of such loan transactions, when
added to the net proceeds from the sale of Acquisition No. 1 Common
Stock to the Equity Investors described above, to be sufficient
Acquisition No. 1 to pay the Merger Consideration (as defined in
Section 1.2.11.3 hereof) and to pay the other costs and expenses of
Acquisition No. 1 and its affiliates in connection with the
transactions contemplated by this Agreement (the transactions described
in this Section 1.1.3 hereof, being referred to herein collectively as
the "Financing").
1.1.4. Public Offering. On and as of the Effective Date, a
registration statement on Form S-1 (the "Registration Statement") will
have been declared effective by the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the offer and sale of shares of
Acquisition No. 1 capital stock, plus such additional shares as are
necessary to cover any over-allotments (the "Over-Allotment"), for
offer and sale to the public pursuant to an underwriting agreement
between the Company and BlueStone Capital Partners, L.P., as
representative (the "Representative") of the several underwriters;
1.2. Merger
1.2.1. Surviving Corporation. Subject to the approval and
adoption of this Agreement by the requisite vote of the stockholders
and approval of the boards of directors of each of the Merging
Corporations, and to the other conditions hereinafter set forth, Newgen
and Acquisition No. 3 shall be, upon the Effective Date, merged into a
single surviving corporation, which shall be Newgen, which shall
continue its corporate existence and remain a Texas corporation
governed by and subject to the laws of that State.
1.2.2. Stockholder Approval. This Agreement shall be submitted
for adoption and approval by the respective stockholders of each of the
Merging Corporations in accordance with the applicable laws of the
State of Texas at separate meetings called and held for such purpose.
1.2.3. Effective Date. The Merger shall become effective on the
Effective Date (as defined in Section 8.9 hereof).
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1.2.4. Name and Continued Corporate Existence of Surviving
Corporation. On the Effective Date, the identity, existence, purposes,
powers, objects, franchises, rights, and immunities of Newgen, the
surviving corporation of the Merger, shall continue unaffected and
unimpaired by the Merger, and the corporate identity, existence,
purposes, powers, objects, franchises, rights, and immunities of
Acquisition No. 3 shall be wholly merged into Newgen, the surviving
corporation, and Newgen shall be fully vested therewith. Accordingly,
on the Effective Date, the separate existence of Acquisition No. 3,
except insofar as continued by statute, shall cease.
1.2.5. Governing Law and Articles of Incorporation of Surviving
Corporation. The laws of Texas shall continue to govern the Surviving
Corporation. On and after the Effective Date, the Articles of
Incorporation of Newgen shall be the articles of incorporation of the
Surviving Corporation until further amended in the manner provided by
law.
1.2.6. Bylaws of Surviving Corporation. On the Effective Date,
the Bylaws of Newgen shall be the Bylaws of the Surviving Corporation
until altered, amended, or repealed, or until new bylaws shall be
adopted in accordance with the provisions of law, the Articles of
Incorporation of Newgen, and the Bylaws of Newgen.
1.2.7. Directors of Surviving Corporation. The names of the
persons who, upon the Effective Date, shall constitute the board of
directors of the Surviving Corporation, and who shall hold office until
the first annual meeting of stockholders of the Surviving Corporation
next following the Effective Date, are as follows:
Name
----
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
1.2.8. Officers of Surviving Corporation. The names of the
persons who, upon the Effective Date, shall constitute the officers of
the Surviving Corporation, and who shall hold office, subject to the
Bylaws of the Surviving Corporation, until the first meeting of
directors following the next annual meeting of stockholders thereof,
are as follows:
Name Office
---- ------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Chairman of the Board, President
and Chief Operation Officer
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Chief Executive Officer
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Name Office
---- ------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Chief Financial Officer, Senior
Vice President, Secretary and
Treasurer
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ Senior Vice President Operations
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Vice President and Chief
Administrative Officer
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Vice President - Human Resources
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Vice President - Eastern Sales
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Vice President - Western Sales
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Vice President - Commercial Services
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇ Vice President - Corporate
Development and Technology
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Vice President and General Counsel
1.2.9. Vacancies. If on or after the Effective Date, a vacancy
shall for any reason exist in the board of directors or in any of the
offices of the Surviving Corporation, such vacancy shall be filled in
the manner provided in the Articles of Incorporation and Bylaws of the
Surviving Corporation.
1.2.10. Capital Stock of Surviving Corporation. The authorized
number of shares of capital stock of the Surviving Corporation, and the
par value, designations, preferences, rights, and limitations thereof,
and the express terms thereof, shall be as set forth in the Articles of
Incorporation of the Surviving Corporation.
1.2.11. Conversion of Securities Upon Merger.
1.2.11.1. General. The manner and basis of converting
the issued and outstanding shares of the capital stock of
Acquisition No. 3 into shares of the capital stock of Newgen,
and the manner and basis of converting the issued and
outstanding shares of the capital stock of Newgen into the
Merger Consideration herein provided for shall be as hereinafter
set forth in this Section 1.2.11.
1.2.11.2. Conversion of Acquisition No. 3's Stock. On the
Effective Date, each share of Acquisition No. 3 Common Stock
then issued and outstanding, without
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any action on the part of Acquisition No. 1, the holder
thereof, shall automatically become and be converted into one
fully paid and nonassessable share of the issued and
outstanding Newgen Common Stock.
1.2.11.3. Conversion of Newgen's Stock. On the Effective
Date, each share of Newgen Common Stock then issued and
outstanding (excluding any shares held by Acquisition No. 1, all
of which shares shall cease to exist), without any action on the
part of the holders thereof, shall automatically become and be
converted into the right to receive $135.47 in cash (the "Merger
Consideration") from Acquisition No. 1 upon surrender, in
accordance with Section 1.2.11.5 hereof, of certificates
theretofore evidencing shares of Newgen Common Stock, and all
shares of capital stock of Newgen then held in the treasury of
Newgen shall be canceled and shall cease to exist.
1.2.11.4. Exchange of Acquisition No. 3's Stock
Certificate. On the Effective Date, Acquisition No. 1 shall
surrender the outstanding certificate theretofore representing
shares of Acquisition No. 3 Common Stock to Newgen and shall
receive in exchange therefor a certificate or certificates
representing the number of whole shares of Newgen Common Stock
into which the shares of Acquisition No. 3 Common Stock
theretofore represented by the certificate so surrendered shall
have been converted as aforesaid.
1.2.11.5. Exchange of Newgen's Certificates. Commencing
on the Effective Date, each holder having certificates
registered in his name theretofore representing shares of Newgen
Common Stock (other than certificates representing Newgen Common
Stock held by Acquisition No. 1 or held in Newgen's treasury)
may surrender all such certificates to Newgen, and such holder
shall be entitled upon such surrender to receive in exchange
therefor a certified or bank cashier's check in the amount of
$135.47 for each share of Newgen Common Stock so surrendered.
From and after the Effective Date and to the date of such
surrender, each outstanding certificate theretofore
representing shares of Newgen Common Stock registered in the
name of a holder (other than certificates representing Newgen
Common Stock held by Acquisition No. 1 or held in Newgen's
treasury) shall represent the right, and only the right, to
receive payment in cash of the Merger Consideration into which
such shares of Newgen Common Stock have been so automatically
converted; no interest shall accrue or be payable with respect
to such amounts pending the surrender of Newgen certificates in
exchange therefor.
1.2.11.6. Cancellation of Newgen Options. On the
Effective Date, each outstanding employee stock option referred
to in Section 2.1.3 hereof shall be automatically canceled and
shall cease to exist and shall be settled thereafter by the
Surviving Corporation by payment to the holder thereof of cash
or cash equivalents in an amount equal to the Merger
Consideration multiplied by the number shares of
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Newgen Common Stock into which such options are exercisable
held by such holder less the aggregate exercise price of such
options held by such holder.
1.2.12. Unclaimed Funds; No Escheat. Subject to any contrary
stipulation of governing law, all funds or other consideration held by
Newgen or Acquisition No. 1 for the payment of the Merger Consideration
into which the aforesaid outstanding shares of Newgen Common Stock
shall have been converted in the Merger, and remaining unclaimed for
one year after the Effective Date, shall continue to be held by Newgen
or Acquisition No. 1; and the holder of any unexchanged certificate or
certificates which before the Effective Date represented shares of
Newgen Common Stock entitled to payment of the Merger Consideration
shall thereafter look only to Newgen or Acquisition No. 1 for exchange
or payment thereof upon surrender of such certificate or certificates
to Newgen or Acquisition No. 1.
1.2.13. Acquisition No. 3's Transfer Books Closed. Upon the
Effective Date, the stock transfer books of Acquisition No. 3 shall be
deemed closed, and no transfer of any shares of Acquisition No. 3 shall
thereafter be made or consummated.
1.2.14. Assets and Liabilities of Merging Corporations Become
Those of Surviving Corporation. On the Effective Date, all rights,
privileges, powers, and franchises of each of the Merging Corporations,
and all property, real, personal, and mixed, and all debts due on
whatever account, as well as stock subscriptions and all other things in
action of or belonging to any of the Merging Corporations, shall be
taken by and deemed to be transferred to and shall be vested in the
Surviving Corporation without further act or deed, and all such rights,
privileges, powers, and franchises, property, debts, or things in
action, and all and every other interest of each of the Merging
Corporations shall be thereafter as effectually the property of the
Surviving Corporation as they were of the respective Merging
Corporations, and the title to any real property, whether vested by
deed or otherwise, in either of the Merging Corporations, shall not
revert or be in any way impaired by reason of the Merger; provided
however, that all rights of creditors and all liens upon any properties
of each of the Merging Corporations shall be preserved unimpaired, and
all debts, liabilities and duties of the Merging Corporations shall
thenceforth attach to the Surviving Corporation and may be enforced
against and by it to the same extent as if such debts, liabilities and
duties had been incurred or contracted by it. Any action or proceeding
pending by or against either of the Merging Corporations may be
prosecuted to judgment as if the Merger had not taken place, or the
Surviving Corporation may be substituted in place of either of the
Merging Corporations.
1.2.15. Conveyances to Surviving Corporation. The Merging
Corporations hereby agree, respectively, that from time to time, as and
when requested by the Surviving Corporation, or by its successors and
assigns, they will execute and deliver or cause to be executed and
delivered, all such deeds, conveyances, assignments, and other
instruments, and will take or cause to be taken such further or other
action as the Surviving Corporation, its successors or assigns, may
deem necessary or desirable to vest or perfect in or confirm to the
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Surviving Corporation, its successors and assigns, title to and
possession of all the property, rights, privileges, powers, immunities,
franchises, and interests referred to in this Section 1.2.15 and
otherwise carry out the intent and purposes of this Agreement.
1.2.16. Accounting Treatment. The assets and liabilities of the
Merging Corporations shall be taken up on the books of the Surviving
Corporation in accordance with generally accepted accounting
principles, and the capital surplus and retained earnings accounts of
the Surviving Corporation shall be determined, in accordance with
generally accepted accounting principles, by the board of directors of
the Surviving Corporation. Nothing herein shall prevent the board of
directors of the Surviving Corporation from making any future changes
in its accounts in accordance with law.
1.2.17. Dissenting Stockholders of Newgen. Acquisition No. I
agrees that, if the Merger becomes effective, it promptly will pay to
dissenting stockholders of Newgen the amounts, if any, to which they
are entitled under the provisions of Sections 5.11 through 5.13 of the
Texas Act, provided such dissenters act in strict compliance with such
provisions.
1.2.18. Dissenting Stockholders of Acquisition No. 3. Newgen
agrees that, if the merger of Acquisition No. 3 into Newgen becomes
effective, it promptly will pay to dissenting stockholders of
Acquisition No. 3 the amounts, if any, to which they are entitled under
Sections 5. 11 through 5.13 of the Texas Act, provided such dissenters
act in strict compliance with such provisions.
1.2.19. Stockholders Meetings.
1.2.19.1. Calling of Meetings. Subject to and in
accordance with applicable law, each of Newgen and Acquisition
No. 3, acting through their respective boards of directors,
shall duly call, give notice of, convene and hold a meeting, or
obtain a unanimous consent in lieu thereof as provided by the
Texas Act (each a "Stockholders Meeting") of its respective
stockholders for the purpose of taking all necessary corporate
action to approve and ratify the transactions contemplated by
this Agreement to which they are a party, including the Merger;
and shall include in the notice of the Stockholders Meeting so
given, as applicable, the recommendations of their respective
boards of directors that their respective stockholders vote in
favor of the transactions contemplated by this Agreement,
including the Merger. The Stockholders Meetings required to be
called and held pursuant to this Section 1.2.19.1 shall be
called and held as promptly as practicable after the date
hereof, and in no event later than December 30, 1996.
1.2.19.2. Grant of Proxy. Each Stockholder hereby
severally agrees that at the Stockholders Meeting of Newgen, any
adjournment thereof or any other meeting of the holders of
Newgen Common Stock, however called, or in connection with any
written consent of the holders of voting capital stock of
Newgen, such Stockholder
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shall vote, or cause to be voted, all the shares of Newgen
Common Stock set forth opposite such Stockholder's name on
Exhibit A hereto (the "Existing Shares," and together with any
shares of Newgen Common Stock that become Beneficially Owned or
controlled by such Stockholder after the date hereof and before
the termination of this Agreement, whether upon the exercise of
options, warrants or rights, the conversion or exchange of
convertible or exchangeable securities, or by means of purchase,
dividend, distribution or otherwise (hereinafter collectively
the "Shares"), provided however, that in the event of a stock
dividend or distribution, or any change in the outstanding
capital stock of Newgen by reason of any stock dividend,
split-up, recapitalization, combination, exchange of shares or
the like, the term "Shares" shall be deemed to refer to and
include the Shares as well as all such stock dividends and
distributions and any shares into which or for which any or all
of the Shares may be changed or exchanged), Beneficially Owned
or controlled by such Stockholder (i) in favor of the Merger,
the execution and delivery by Newgen of this Agreement and the
approval of the terms of each of the other actions contemplated
by this Agreement and any actions required in furtherance
thereof and hereof, (ii) against any change in a majority of the
persons who constitute the board of directors of Newgen and
(iii) against any action in furtherance of a Transaction
Proposal (as defined in Section 4.2.1.1 hereof) other than as
contemplated by this Agreement, and any other action that is
intended, or could reasonably be expected, to impede, interfere
with, delay, postpone, or materially adversely affect the Merger
and the transactions contemplated by this Agreement. In
furtherance thereof, each Stockholder hereby irrevocably
appoints Striker and its officers, agents and nominees, with
full power of substitution, as proxy, being an appointment
coupled with an interest, to vote the Shares for and in the
name, place and stead of such Stockholder at the Stockholders
Meeting of Newgen or at any adjournment thereof or any other
meeting of the holders of Newgen Common Stock, however called,
or pursuant to any consent in lieu of a meeting, or otherwise,
to approve this Agreement and the Merger, and the other
agreements and transactions contemplated hereby (the "Proxies").
The Proxies shall be irrevocable, each being coupled with an
interest sufficient in law to support an irrevocable proxy.
Except as otherwise provided in this Agreement, the Shares may
be voted by and in the manner determined by such Stockholder in
its sole discretion. Such Stockholder shall not enter into any
agreement or understanding with any person the effect of which
would be inconsistent or violative of the provisions and
agreements contained in this Section 1.2.19.2. For purposes of
this Agreement, "Beneficially Owned" or "Beneficial Ownership"
with respect to any securities shall mean "beneficial ownership"
of such securities as determined pursuant to Rule 13d-3 under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), including pursuant to any agreement, arrangement or
understanding whether or not in writing.
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1.2.19.3. Expiration of Proxies. The Proxies granted
pursuant to Section 1.2.19.2 above shall expire upon the
earliest to occur of (i) the Effective Date and (ii) the
termination of this Agreement.
1.2.19.4. Revocation of Prior Proxies, Each Stockholder
hereby revokes any and all previous proxies with respect to the
Shares.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF NEWGEN AND THE INSIDERS
2.1. Representations and Warranties of Newgen and the Insiders. Each of
Newgen and the Insiders represents and warrants as follows:
2.1.1. Organization and Standing. Newgen is a corporation duly
organized, validly existing and in good standing under the laws of the
state of Texas, has full requisite corporate power and authority to
carry on its business as it is currently conducted, and to own and
operate the properties currently owned and operated by it, and is duly
qualified or licensed to do business and is in good standing as a
foreign corporation authorized to do business in all jurisdictions in
which the character of the properties owned or the nature of the
business conducted by it would make such qualification or licensing
necessary, except where the failure to be so qualified or licensed
would not have a material adverse effect on its financial condition,
properties or business.
2.1.2. Agreement Authorized and its Effect on Other Obligations.
The execution and delivery of this Agreement has been authorized by the
board of directors of Newgen and subject to the approval of this
Agreement by the requisite vote of the stockholders of Newgen under the
laws of its state of incorporation, the consummation of the
transactions contemplated hereby have been duly and validly authorized
by all necessary corporate action on the part of Newgen, and this
Agreement is a valid and binding obligation of Newgen enforceable
against Newgen (subject to normal equitable principles) in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, debtor relief or similar laws affecting the
rights of creditors generally. At the Effective Date, the consummation
of the Merger contemplated by this Agreement will not conflict with or
result in a violation or breach of any term or provision of, nor
constitute a default under (I) the Articles of Incorporation or Bylaws
of Newgen or (ii) any obligation, indenture, mortgage, deed of trust,
lease, contract or other agreement to which Newgen or any of its
subsidiaries is a party or by which any of them or their properties are
bound, except as disclosed on Schedule 2.1.2 hereto.
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2.1.3. Capitalization. The authorized capitalization of Newgen
consists of 10,000,000 shares of Newgen Common Stock and Class B common
stock, par value $.01 per share ("Class B Common StocK"), and 377,650
shares of preferred stock, par value $1.06 per share ("Preferred
Stock"), of which at September 30, 1996, 535,272 shares of Newgen
Common Stock were issued and outstanding and no shares of either Class
B Common Stock or of Preferred Stock were issued and outstanding; at
the same date, Newgen did not have any outstanding options, warrants,
calls or commitments of any character relating to any of its authorized
but unissued shares of capital stock other than employee stock options
covering an aggregate of 3,150 shares of Newgen Common Stock. At
September 30, 1996, 77,841 shares of Newgen Common Stock were in
Newgen's treasury. All issued and outstanding shares of Newgen Common
Stock are validly issued, fully paid and non-assessable and are not
subject to preemptive rights. Other than as set forth in Schedule 2.1.3
hereto or as otherwise contemplated by this Agreement, none of the
outstanding shares of Newgen Common Stock is subject to any voting
trusts, voting agreement or other agreement or understanding with
respect to the voting thereof, nor is any proxy in existence with
respect thereto.
2.1.4. Subsidiaries. Schedule 2.1.4 hereto lists the subsidiary
corporations of Newgen existing at the date hereof, and shows as to
each of such subsidiary corporations the percentage of the total
outstanding stock thereof which is owned by Newgen. All outstanding
shares of stock of the subsidiary corporations owned by Newgen are
validly issued, fully paid, and nonassessable, and Newgen has good and
marketable title thereto free and clear of any mortgage, pledge, lien,
charge, security interest, option, right of first refusal, preferential
purchase right, defect, encumbrance or other right or interest of any
other person (each, an "Encumbrance"). Each such subsidiary is a
corporation duly organized, validly existing, and in good standing
under the laws of the jurisdiction under which it is incorporated and
has full requisite corporate power and authority to own its property
and carry on its business as presently conducted by it and is, or on
the Effective Date will be, duly qualified or licensed to do business
and is, or on the Effective Date will be, in good standing as a foreign
corporation authorized to do business in all jurisdictions in which the
character of the properties owned or the nature of the business
conducted makes such qualification or licensing necessary, except where
the failure to be so qualified or licensed would not have a material
adverse effect on the financial condition, properties or business of
such subsidiary. As hereinafter used in this Article 2, the term
"Newgen" also includes any and all of its directly and indirectly held
subsidiaries.
2.1.5. Financial Statements.
2.1.5. 1. Newgen Financial Statements. Newgen has
delivered to Striker copies of Newgen's audited consolidated
balance sheet and related statements of income, stockholders'
equity, and cash flows, with appended notes as at and for
Newgen's fiscal years ended December 31, 1991, 1992, 1993, 1994
and 1995 and also has delivered to Striker copies of Newgen's
unaudited consolidated balance
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sheets and related statements of income as at and for the three
months ended March 31, 1996 and as of and for the nine months
ended September 30, 1996. Such financial statements are complete
in all material respects, present fairly the financial condition
of Newgen as at the dates and for the periods indicated, and
have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis, except as
noted therein and except for the absence of notes for the March
31, 1996 and September 30, 1996 unaudited consolidated financial
statements as well as statements of stockholder's equity and
cashflows. The accounts receivable reflected in the September
30, 1996 unaudited consolidated balance sheet, or which have
been thereafter acquired by Newgen, have been collected or are
collectible at the aggregate recorded amounts thereof less
applicable reserves and accrued volume rebates, which reserves
and accruals are adequate. The inventories of Newgen reflected
in the September 30, 1996 unaudited consolidated balance sheet,
or which have thereafter been acquired by it, consist of items
of a quality usable and salable in the normal course of Newgen's
business, and the values at which inventories are carried are at
the lower of cost or market.
2.1.5.2. Projections. Newgen has provided Striker with
the projections set forth on Schedule 2.1.5.2 hereto. Such
projections were prepared in good faith and are based upon
assumptions that are reasonable in light of all of the
information in possession of management of Newgen.
2.1.6. Liabilities. Newgen does not have any liabilities or
obligations, either accrued, absolute or contingent nor does Newgen or
either of the Insiders have any knowledge of any potential liabilities
or obligations, which would materially adversely affect the value and
conduct of the business of Newgen, other than those (i) reflected or
reserved against in the September 30, 1996 unaudited consolidated
balance sheet of Newgen, (ii) incurred in the ordinary course of
business since September 30, 1996 or (iii) set forth on Schedule 2.1.6
hereto.
2.1.7. Additional Newgen Information. Attached as Schedule 2.1.7
hereto are true, complete and correct lists of the following items
(which will be periodically updated by Newgen and delivered to Striker
through the Effective Date), and Newgen agrees that upon the request of
Striker, and in any event no more than once every 30 day period
following the date hereof, it will furnish to Striker true, complete
and correct copies of any documents referred to in such lists:
2.1.7. 1. Real Estate. All real property and structures
thereon owned, leased or subject to a contract of purchase and
sale, or lease commitment, by Newgen, with a description of the
nature and amount of any Encumbrances thereon;
2.1.7.2. Machinery and Equipment. All machinery,
transportation equipment, tools, equipment, furnishings, and
fixtures (excluding such items as did not have a
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cost basis of $50,000 or more at their respective dates of
acquisition by Newgen) owned, leased or subject to a contract of
purchase and sale, or lease commitment, by Newgen with a
description of the nature and amount of any Encumbrances
thereon;
2.1.7.3. Inventory. All inventory items or groups of
inventory items owned by Newgen, excluding raw materials and
work in process, which raw materials and work in process are
valued on the September 30, 1996 unaudited consolidated
financial statements, together with the amount of any
Encumbrances thereon;
2.1.7.4. Receivables. All accounts and notes receivable
of Newgen, together with (i) aging schedules by invoice date and
due date, (ii) the amounts provided for as an allowance for bad
debts, (iii) the identity and location of any asset in which
Newgen holds a security interest to secure payment of the
underlying indebtedness, and (iv) a description of the nature
and amount of any Encumbrances on such accounts and notes
receivable;
2.1.7.5. Payables. All accounts and notes payable of
Newgen, together with an appropriate aging schedule;
2.1.7.6. Insurance. All insurance policies or bonds
currently maintained by Newgen, including title insurance
policies, with respect to Newgen, including those covering
Newgen's properties, buildings, machinery, equipment, fixtures,
employees and operations, as well as a listing of any premiums,
audit adjustments or retroactive adjustments due or pending on
such policies or any predecessor policies;
2.1.7.7. Material Contracts. All contracts (including
purchase and sale contracts and representative contracts) not
made in the ordinary course of business, including leases under
which Newgen is lessor or lessee, which are to be performed in
whole or in part after the Effective Date, and which involve or
may involve aggregate payments by or to Newgen of $10,000 or
more after such date;
2.1.7.8. Employee Compensation Plans. All bonus,
incentive compensation, deferred compensation, profit-sharing,
retirement, pension, welfare, group insurance, death benefit, or
other fringe benefit plans, arrangements or trust agreements of
Newgen, together with copies of the most recent reports with
respect to such plans, arrangements, or trust agreements filed
with any governmental agency and all Internal Revenue Service
determination letters that have been received with respect to
such plans (collectively, "Employee Plans");
2.1.7.9. Certain Salaries. The names and salary rates of
all present officers and employees of Newgen whose current
regular annual salary rate, together with any bonuses paid or
payable to such persons for the fiscal year ended December 31,
1995, or since that date, is $50,000 or more, and, to the extent
existing on the date of this
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Agreement all arrangements with respect to any bonuses to be
paid to them from and after the date of this Agreement;
2.1.7.10. Bank Accounts. The name of each bank in which
Newgen has an account and the names of all persons authorized to
draw thereon;
2.1.7.11. Employee Agreements. Any collective
bargaining agreements of Newgen with any labor union or other
representative of employees, including amendments, supplements,
and written or oral understandings, and all employment and
consulting and severance agreements of Newgen;
2.1.7.12. Patents. All patents, trademarks, copyrights
and other intellectual property rights owned, licensed, or used
by Newgen;
2.1.7.13. Trade Names. All trade names and fictitious
names used or held by Newgen, whether and where such names are
registered and where used;
2.1.7.14. Promissory Notes. All long-term and short-term
promissory notes, installment contracts, loan agreements, credit
agreements, and any other agreements of Newgen relating thereto
or with respect to collateral securing the same;
2.1.7.15. Guaranties. All indebtedness, liabilities and
commitments of others and as to which Newgen is a guarantor,
endorser, co-maker, surety, or accommodation maker, or is
contingently liable therefor and all letters of credit, whether
stand-by or documentary, issued by any third party;
2.1.7.16. Financial Statements. Financial statements
(which may be in summary form) containing the information
described in Section 2.1.5 hereof and Section 4.1.16 hereof,
prepared in the manner described in such Sections;
2.1.7.17. Reserves and Accruals. All accounting reserves
and accruals maintained in the Newgen unaudited financial
statements as of September 30, 1996, including a report on the
status of all unresolved warranty claims in existence on such
date;
2.1.7.18. Material Leases. All leases to which Newgen is
a party and which involve or may involve aggregate payments by
Newgen of $10,000 or more per month after the Effective Date;
and
2.1.7.19. Environment. All environmental permits,
approvals, certifications, licenses, registrations, orders and
decrees applicable to current operations conducted by Newgen and
all environmental audits, assessments, investigations and
reviews
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conducted by Newgen within the last five years on any property
owned or used by Newgen copies of which shall be provided by
supplement to Schedule 2.1.4.
Schedule 2.1.7 hereto shall be true, complete and correct as of
the Effective Date, except for items contained in Sections 2.1.7.1,
2.1.7.16 and the detail of unresolved warranty claims provided under
Section 2.1.7.17, which are true, complete and correct as of March 31,
1996 and except for items contained in Sections 2.1.7.2, 2.1.7.3,
2.1.7.4, 2.1.7.5 and the balance of the detail for reserves and
accruals provided under Section 2.1.7.17, which are true, complete and
correct as of February 29, 1996.
2.1.8. No Undisclosed Defaults. Except as may be specified in
Schedule 2.1.7 and Schedule 2.1.8, Newgen is not a party to, or bound
by, any material contract or material arrangement of any kind to be
performed after the Effective Date, nor is Newgen in default in any
material obligation or covenant on their part to be performed under any
material obligation, lease, contract, order, plan or other arrangement
except as identified in Schedule 2.1.7 and Schedule 2.1.8.
2.1.9. Absence of Certain Changes and Events. Except as set
forth in Schedule 2.1.9 hereto, other than as a result of the
transactions contemplated by this Agreement, since September 30, 1996,
there has not been:
2.1.9.1. Financial Change. Any material adverse change
in the financial condition, backlog, operations, assets,
liabilities or business of Newgen;
2.1.9.2. Property Damage. Any material damage,
destruction, or loss to the business or properties of Newgen
(whether or not covered by insurance);
2.1.9.3. Dividends. Any declaration, setting aside, or
payment of any dividend or other distribution in respect of the
Newgen Common Stock, or any direct or indirect redemption,
purchase or any other acquisition by Newgen of any such stock;
2.1.9.4. Capitalization Change. Any change in the
capital stock or in the number of shares or classes of Newgen's
authorized or outstanding capital stock as described in Section
2.1.3 hereof,
2.1.9.5. Labor Disputes. Any labor dispute (other than
routine grievances);
or
2.1.9.6. Other Material Changes. Any other event or
condition known to Newgen or either of the Insiders particularly
pertaining to and adversely affecting the operations, assets or
business of Newgen (other than events or conditions which are
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of a general or industry-wide nature and of general public
knowledge) which would constitute a material adverse change.
2.1.10. Taxes. Except as set forth in Schedule 2.1.10 hereto,
all federal, state and local income, value added, sales, use,
franchise, gross revenue, turnover, excise, payroll, property,
employment, customs duties and any and all other tax returns, reports,
and estimates have been filed with appropriate governmental agencies,
domestic and foreign, by Newgen for each period for which any returns,
reports, or estimates were due (taking into account any extensions of
time to file before the date hereof); all taxes shown by such returns
to be payable and any other taxes due and payable have been paid other
than those being contested in good faith by Newgen; and the tax
provision reflected in Newgen's unaudited financial statements as of
September 30, 1996 is adequate, in accordance with generally accepted
accounting principles, to cover liabilities of Newgen at the date
thereof for all taxes, including any assessed interest, assessed
penalties and additions to taxes of any character whatsoever applicable
to Newgen or its assets or business. Except as set forth on Schedule
2.1.10 hereto, no waiver of any statute of limitations executed by
Newgen with respect to any income or other tax is in effect for any
period. Except as set forth on Schedule 2.1.10 hereto, the income tax
returns of Newgen have never been examined by the Internal Revenue
Service or the taxing authorities of any other jurisdiction. There are
no tax liens on any assets of Newgen except for taxes not yet currently
due and those which could not reasonably be expected to result in a
material adverse change to Newgen.
2.1.11 Intellectual Property. Except as set forth in Schedule
2.1.11 hereto, Newgen owns or possesses licenses to use all patents,
patent applications, trademarks and service marks (including
registrations and applications therefor), trade names, copyrights and
written know-how, trade secrets and all other similar proprietary data
and the goodwill associated therewith (collectively, the "Intellectual
Property") that are either material to the business of Newgen or that
are necessary for the manufacture, use or sale of any products
manufactured, used or sold by Newgen, including all such Intellectual
Property listed in Schedule 2.1.7 hereto. The Intellectual Property is
owned or licensed by Newgen free and clear of any Encumbrance other
than such Encumbrances as are listed in Schedule 2.1.11 hereto. Except
as otherwise indicated in such Schedule, Newgen has not granted to any
other person any license to use any Intellectual Property. Newgen has
not received any notice of infringement, misappropriation, or conflict
with, the intellectual property rights of others in connection with the
use by Newgen of the Intellectual Property.
2.1.12. Title to Properties. Newgen has good and indefeasible
title to all its properties, interests in properties and assets, real
and personal, reflected in the September 30, 1996 unaudited financial
statements referred to in Section 2.1.5 hereof or in Schedule 2.1.7
hereto, free and clear of any Encumbrance of any nature whatsoever,
except (i) liens and Encumbrances reflected in the unaudited balance
sheet of Newgen dated September 30, 1996 referred to in Section 2.1.5
hereof or in Schedule 2.1.7 hereto, (ii) liens for current taxes not yet
due and payable, and (iii) such imperfections of title, easements and
Encumbrances, if any,
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as are not substantial in character, amount or extent and do not and
will not materially detract from the value, or interfere with the
present use, of the property subject thereto or affected thereby, or
otherwise materially impair business operations. All leases pursuant to
which Newgen leases (whether as lessee or lessor) any substantial
amount of real or personal property are in good standing, valid, and
effective; and there is not, under any such leases, any existing
default or event of default or event which with notice or lapse of
time, or both, would constitute a default by Newgen and in respect to
which Newgen has not taken adequate steps to prevent a default from
occurring. The buildings and premises of Newgen that are used in its
business are in good operating condition and repair, subject only to
ordinary wear and tear. All major items of equipment of Newgen are in
good operating condition and in a state of reasonable maintenance and
repair, ordinary wear and tear excepted, and are free from any known
defects except as may be repaired by routine maintenance and such minor
defects as to not substantially interfere with the continued use
thereof in the conduct of normal operations.
2.1.13. Litigation. Except as set forth in Schedule 2.1.13
hereto, there is no suit, action, or legal, administrative,
arbitration, or other proceeding or governmental investigation pending
to which Newgen is a party or, to the knowledge of Newgen or either of
the Insiders might become a party or which particularly affects Newgen,
nor is any change in the zoning or building ordinances directly
affecting the real property or leasehold interests of Newgen, pending
or, to the knowledge of Newgen or either of the Insiders, threatened.
2.1.14. Environmental Compliance. Except as set forth in
Schedule 2.1.14 hereto, which Schedule may be supplemented prior to the
Effective Date in the event the closing contemplated by the Master
Agreement Re Rock Quarry occurs on or before the Effective Date, with
information concerning the property acquired in such closing:
2.1.14.1. Environmental Conditions. There are no
environmental conditions or circumstances, including, without
limitation, the presence or release of any hazardous substance,
on any property presently or previously owned by Newgen, or on
any property to which hazardous substances or waste generated by
Newgen's operations or use of its assets were disposed of, which
would result in a material adverse change in the business or
business prospects of Newgen;
2.1.14.2. Permits, etc. Newgen has in full force and
effect all environmental permits, licenses, approvals and other
authorizations required to conduct its operations, other than
those that are not material to the business or operations of
Newgen, and is operating in compliance thereunder;
2.1.14.3. Compliance. Newgen's operations and use of its
assets do not violate in any material respect any applicable
federal, state or local law, statute, ordinance, rule,
regulation, order or notice requirement pertaining to (a) the
condition or protection of air, groundwater, surface water,
soil, or other environmental media,
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(b) the environment, including natural resources or any activity
which affects the environment or (c) the regulation of any
pollutants, contaminants, waste, substances (whether or not
hazardous or toxic), including, without limitation, the
Comprehensive Environmental Response Compensation and Liability
Act (42 U.S.C. Section 9601 el seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 el seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 1609
et seq.), the Clean Water Act (33 U.S.C. 1251 et seq.), the
Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic
Substances Control Act (I 7 U. S.C. Section 2601 et seq.), the
Federal Insecticide Fungicide and Rodenticide Act (7 U.S.C.
Section 136 et seq.), the Safe Drinking Water Act (42 U. S. C.
Section 201 and Section 300f et seq.), the Rivers and Harbors Act
(33 U. S. C. Section 401 et seq.), the Oil Pollution Act (33
U.S.C. Section 2701 et seq.) and analogous federal, interstate,
state and local requirements, as any of the foregoing may have
been amended or supplemented from time to time (collectively the
"Applicable Environmental Laws");
2.1.14.4. Past Compliance. None of the operations or
assets of Newgen has ever been conducted or used in such a
manner as to constitute violation of any of the Applicable
Environmental Laws, other than violations that in the aggregate
are not material to the business or operations of Newgen;
2.1.14.5. Environmental Claims. No notice has been
served on Newgen from any entity, governmental agency or
individual regarding any existing, pending or threatened
investigation, inquiry, enforcement action or litigation related
to alleged violations under any Applicable Environmental Laws,
or regarding any claims for remedial obligations, response costs
or contribution under any Applicable Environmental Laws;
2.1.14.6. Renewals. Neither Newgen nor either of the
Insiders know of any reason Acquisition No. I would not be able
to renew any of the permits, licenses, or other authorizations
required pursuant to any Applicable Environmental Laws to
operate and use any of Newgen's assets for their current
purposes and uses; and
2.1.14.7. Asbestos and PCBs. No material amounts of
friable asbestos currently exist on any property owned or
operated by Newgen, nor do polychlorinated biphenyls exist in
concentrations of 50 parts per million or more in electrical
equipment owned or being used by Newgen in its operations or on
its properties.
2.1.15. Compliance with other laws. Except as set forth in
schedule 2.1.15 hereto, Newgen is not in violation of or in default
with respect to, or in alleged violation of or alleged default with
respect to, the Occupational Safety and Health Act (29 U.S. C. Sections
65 1 ET SEQ.) as amended, or any other applicable law or any applicable
rule, regulation, or any writ or decree of any court or any
governmental commission, board, bureau, agency, or instrumentality, or
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delinquent with respect to any report required to be filed with any
governmental commission, board, bureau, agency or instrumentality.
2.1.16. Finder's Fee. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried on
by Newgen and its counsel directly with Striker and Acquisition No. 1
and their counsel, without the intervention of any other person in such
manner as to give rise to any valid claim against any of the parties
hereto for a brokerage commission, finder's fee or any similar
payments, other than fees payable by Striker to KPMG Baymark Capital
LLP pursuant to the engagement letter between Striker and KPMG Baymark
Capital LLP dated February 26, 1996 (the "Engagement Letter).
2.1.17. Compliance with ERISA. Each benefit plan set forth on
Schedule 2.1.17 hereto (the "Benefit Plans"), which are all of the
employer benefit plans of Newgen complies currently, and has complied
in the past, in form and operation, with the applicable provisions of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), the Code and other applicable laws. All contributions
required to be made to each Benefit Plan under the terms of such
Benefit Plan, ERISA or other applicable laws have been timely made.
2.1.17.1. Prohibited Transactions. Newgen has not
engaged in any transaction in connection with which it could be
subject (either directly or indirectly) to a material liability
for either a civil penalty assessed pursuant to Section 502(I)
of ERISA or a tax imposed by Section 4975 of the Code.
2.1.17.2. Plan Termination; Material Liabilities. There
has been no termination of an "employee pension benefit plan" as
defined in ERISA which is subject to Title IV of ERISA (a
"Statutory Plan") or trust created under any Statutory Plan that
would give rise to a material liability to the Pension Benefit
Guaranty Corporation ("PBGC") on the part of Newgen. All
Statutory Plans intended to be tax-qualified under Section
401(a) or 403(a) of the Code have received favorable
determination letters from the Internal Revenue Service,
including amendments required by the Tax Reform Act of 1986. All
Plans have been amended to reflect the Unemployment Compensation
Amendments Act of 1982 and Revenue Reconciliation Act of 1993.
Each of such Plans is in qualified status. No material liability
to the PBGC has been or is expected to be incurred with respect
to any Statutory Plan. The PBGC has not instituted proceedings
to terminate any Statutory Plan. There exists no condition or
set of circumstances which presents a material risk of
termination or partial termination of any Statutory Plan by the
PBGC.
2.1.17.3. Accumulated Funding Deficiency. Full payment
has been made of all amounts which are required under the terms
of each Statutory Plan, ERISA or other applicable laws, domestic
and foreign, to have been paid as contributions to such
Statutory Plan as of December 31, 1994, and no accumulated
funding deficiency (as defined in Section 302 of ERISA and
Section 412 of the Code), whether or not
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waived, exists with respect to any Statutory Plan or, other than
as set forth on Schedule 2.1.17.3 hereto, with respect to any
foreign employee pension benefit plan maintained by Newgen or
any of its subsidiaries.
2.1.17.4. Relationship of Benefits to Pension Plan
Assets. The current value of all accrued benefits, both vested
and unvested, under all Statutory Plans does not exceed the
current value of the assets of such Statutory Plans allocable to
such accrued benefits, except as disclosed in the financial
statements described in Section 2.1.5 hereof For purposes of the
representation in this Section 2.1.17.4, the term "current
value" has the meaning specified in Section 4062(b)(1.A) of
ERISA, the term "accrued benefit" has the meaning specified in
Section 3 of ERISA and "current value" is based upon the same
actuarial assumptions used by Newgen for funding.
2.1.17.5. Execution of Agreements. The execution and
delivery of this Agreement and the consummation of the
transactions contemplated hereby will not involve any
transaction which is subject to the prohibitions of Section 406
of ERISA or in connection with which a tax could be imposed
pursuant to Section 4975 of the Code.
2.1.17.6. Fiduciary Liability. There have been no acts,
failures to act, omissions or transactions involving a Statutory
Plan or the assets thereof which could result in imposition on
Newgen (whether direct or indirect) of damages or liability in
actions brought under Section 502 or Sections 404 through 409 of
ERISA.
2.1.17.7. Pending Claims. There are no claims, pending
or, to Newgen's or either of the Insiders' knowledge,
threatened, involving any of the Benefit Plans by any current or
former employee (or beneficiary thereof) of Newgen which allege
any violation of ERISA or the terms of the Benefit Plans, nor is
there any reasonable basis to anticipate any claims involving
such Benefit Plans which would likely be successfully
maintained against Newgen.
2.1.17.8. Multiemployer Plans. Except AS set forth in
Schedule 2.1.17.8 hereto, neither Newgen nor any trade or
business (whether or not incorporated) which together with
Newgen would be deemed to be a "single employer" within the
meaning of Section 4001(b) of ERISA or Subsections 414(b), (c),
(m) or (o) of the Code sponsors, maintains, or contributes to,
or has at any time in the six-year period preceding the date of
this Agreement sponsored, maintained or contributed to, any plan
(not exempt from the provisions of ERISA), including, but not
limited to, any plan which is A "multiemployer plan" as such
term is defined in Section 3(37) or 4001(a)(3) of ERISA.
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29
2.1.17.9. No Reportable Event. There has been no
"reportable event" (within the meaning of Section 4043(b) of
ERISA with respect to a Statutory Plan) or any "prohibited
transaction" (as such term is defined in Section 406 of ERISA
and Section 4975(c) of the Code) with respect to any of the
Employee Plans. All reporting and disclosure requirements under
Title I of ERISA have been met.
2.1.18. Investigations; Litigation. Except as required pursuant
to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, and the
rules and regulations promulgated thereunder, (collectively, "HSR"),
and except as set forth on Schedule 2.1.18 hereto, (i) no investigation
or review by any governmental entity with respect to Newgen or any of
the transactions contemplated by this Agreement is pending or, to the
best of Newgen's and each of the Insider's knowledge, threatened, nor
has any governmental entity indicated to Newgen an intention to conduct
the same, and (ii) there is no action, suit or proceeding pending or, to
the best of Newgen's and each of the Insider's knowledge, threatened
against or affecting Newgen at law or in equity, or before any federal,
state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, that either individually or in the
aggregate, does or is likely to result in any material adverse change
in the financial condition, properties or business of Newgen.
2.1.19. Product Warranty. Except as set forth on Schedule 2.1.19
hereto, the reserve for warranty claims provided in the unaudited
consolidated financial statements of Newgen as of and for the nine
months ended September 30, 1996 is (and the reserve for warranty claims
provided in all other unaudited financial statements of Newgen
delivered to Striker after the date hereof will be) adequate to provide
for all warranty claims regarding the products sold by Newgen in the
past up to September 30, 1996 (and up to such other date of any
unaudited financial statements delivered by Newgen to Striker after the
date hereof) and there are no existing liabilities of Newgen for any
such claims in excess of the amount of such reserve that, in the
aggregate, would constitute a material adverse change in the financial
condition, properties or business of Newgen.
2.1.20. Information for Striker Proxy Statement. All information
and data (including financial statements) concerning Newgen that is or
will be included in the Proxy Statement/Prospectus described in Section
7.1 hereof to be used by Striker in connection with the transactions
contemplated by this Agreement will be furnished by Newgen for
inclusion therein and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements contained therein not misleading.
2.1.21. FIRPTA. Newgen does not have any stockholders who are
not United States citizens.
2.1.22. Effect of Disclosure. Any information required to be set
forth on any Schedule to this Agreement shall be deemed to be included
in such Schedule if such information is contained on any other
Schedule.
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2.2. Representations and Warranties of the Stockholders. Each
Stockholder hereby severally represents and warrants as follows:
2.2.1. Ownership of Shares. Such Stockholder is the record and
beneficial owner of the number of Existing Shares set forth opposite
its name on Exhibit A hereto. On the date hereof the Existing Shares
set forth opposite such Stockholder's name on Exhibit A hereto
constitute all of the shares of Newgen Common Stock owned of record or
Beneficially Owned by such Stockholder or any affiliate thereof Such
Stockholder has (a) sole voting power and sole power to issue
instructions with respect to the matters set forth in Sections 1.2.19
hereof, and (b) sole power of disposition, conversion, the right to
demand appraisal rights and to agree to all of the matters set forth in
this Agreement, in each case with respect to all of the Existing
Shares, with no limitations, qualifications or restrictions on such
rights, subject to any approval required under HSR, applicable
securities laws and the terms of this Agreement.
2.2.2. Organization; Power; Binding Agreement. Such Stockholder
has been duly formed and is validly existing as a limited partnership
in good standing under the laws of the State of Texas. Such Stockholder
has the legal capacity, power and authority to enter into and perform
all of such Stockholder's obligations under this Agreement. All
proceedings required to be taken by or on the part of such Stockholder
to authorize the execution of this Agreement and the implementation of
the Merger contemplated hereby have been taken. The execution, delivery
and performance of this Agreement by such Stockholder will not violate
any other agreement to which such Stockholder is a party including,
without limitation, any voting agreement stockholders agreement or
voting trust. This Agreement has been duly and validly executed and
delivered by such Stockholder and constitutes a valid and binding
agreement of such Stockholder, enforceable against such Stockholder in
accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general principles of equity
(whether considered in a proceeding in equity or at law). There is no
beneficiary or holder of a voting trust certificate or other interest
of any trust of which such Stockholder is trustee whose consent is
required for the execution and delivery of this Agreement or the
consummation by such Stockholder of the transactions contemplated
hereby except as have been obtained.
2.2.3. No Conflicts. No filing with, and no permit,
authorization, consent or approval of, any state or federal public body
or authority is necessary for the execution of this Agreement by such
Stockholder and the consummation by such Stockholder of the
transactions contemplated hereby except as required by applicable
securities laws and HSR. Neither the execution and delivery of this
Agreement by such Stockholder nor the consummation of the transactions
contemplated hereby will result in a default (or give rise to any right
of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any note, license, agreement or other
instrument or obligation to which such Stockholder is a party or by
which such Stockholder or any of its assets may be bound, or
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violate any order, writ, injunction, decree, statute, rule or
regulation applicable to such Stockholder or any of such Stockholder's
properties or assets.
2.2.4. No Encumbrances. Such Stockholder's Existing Shares and
the certificates representing such Existing Shares are now held by such
Stockholder, or by a nominee or custodian for the benefit of such
Stockholder, free and clear of all liens, claims, security interests,
proxies, voting trusts or agreements, understandings or arrangements or
any other encumbrances whatsoever, except for any such Encumbrances or
Proxies arising hereunder.
2.2.5. Finder's Fee. All negotiations relative to this Agreement
and the transactions contemplated hereby have been carried upon by such
Stockholder and his respective counsel, directly with Striker and
Acquisition No. 1 and their counsel, without intervention of any other
person as the result of any act of such Stockholder and so far as is
known by such Stockholder, without intervention of any other person in
such a manner as to give rise to any valid claim against any of the
parties hereto for a brokerage commission, finder's fee or any similar
payments, except for fees payable by Striker under the Engagement
Letter.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF
ACQUISITION No. 1 AND ACQUISITION No. 3
3.1. Representations and Warranties of Acquisition No. 1. Acquisition
No. 1 represents and warrants as follows:
3.1.1. Organization and Standing. Acquisition No. 1 is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware, has full requisite corporate power
and authority to carry on its business as it is currently conducted,
and to own and operate the properties currently owned and operated by
it, and is duly qualified or licensed to do business and is in good
standing as a foreign corporation authorized to do business in all
jurisdictions in which the character of the properties owned or the
nature of the business conducted by it would make such qualification or
licensing necessary.
3.1.2. Agreement Authorized and its Effect on Other Obligations.
The consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action on the part of
Acquisition No. 1, and this Agreement is a valid and binding obligation
of Acquisition No. 1 enforceable (subject to normal equitable
principles) in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, debtor relief or
similar laws affecting the rights of creditors generally. At the
Effective Date, the consummation of the Merger contemplated by this
Agreement will not result in the breach of any term or provision of or
constitute a default
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under any obligation, indenture, mortgage, deed of trust, lease,
contract or other agreement to which Acquisition No. 1 or any of its
subsidiaries, is a party.
3.1.3. Capitalization. The capitalization of Acquisition No. I
consists of 10,000,000 shares of preferred stock, par value $.20 per
share, of which at the date hereof, no shares were issued or
outstanding; and 50,000,000 shares of Acquisition No. 1 Common Stock,
of which at the date hereof, no shares were issued and outstanding and
no shares were reserved for issuance.
3.1.4. Compliance with Other Laws. Acquisition No. 1 is not in
violation of or in default with respect to, or in alleged violation of
or alleged default with respect to, any applicable law or any
applicable rule, regulation, or any writ or decree of any court or any
governmental commission, board, bureau, agency, or instrumentality, or
delinquent with respect to any report required to be filed with any
governmental commission, board, bureau, agency or instrumentality which
would have a material adverse affect upon its financial condition,
properties or business.
3.1.5. Investigations, Litigation. Except as required pursuant
to HSR, (i) no investigation or review by any governmental entity with
respect to Acquisition No. 1 in connection with any of the transactions
contemplated by this Agreement is pending or, to the best of
Acquisition No. 1's knowledge, threatened, nor has any governmental
entity indicated to Acquisition No. 1 an intention to conduct the same,
and (ii) there is no action, suit or proceeding pending or, to the best
of Acquisition No. 1's knowledge, threatened against or affecting
Acquisition No. 1 by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, which either individually or in the aggregate, does or
is likely to result in any material adverse change in the financial
condition, properties or businesses of Acquisition No. 1.
3.1.6. Finder's Fee. All negotiations relative to this Agreement
and the transactions contemplated hereby have been carried on by
Acquisition No. 1 and its counsel directly with Newgen and its counsel,
without the intervention by any other person as the result of any act
of Acquisition No. 1 in such a manner as to give rise to any valid
claim against any of the parties hereto for any brokerage commission,
finder's fee or any similar payments, except for payments by Striker
under the Engagement Letter.
3.1.7. Solvency. As determined on the Effective Date,
Acquisition No. 1 shall be Solvent (defined below), both immediately
prior to and after giving effect to the transactions contemplated by or
referred to in this Agreement, including the payment of all legal,
accounting and other fees related to the foregoing. The term "Solvent,"
when used with respect to a party to this Agreement, means that the
present fair saleable value of such party's assets on a going concern
basis is in excess of the total amount of its liabilities (including
contingent liabilities) and such party is able to pay its debts as they
become due.
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3.2. Representations and Warranties of Acquisition No. 3. Acquisition
No. 3 represents and warrants as follows:
3.2.1. Organization and Standing. Acquisition No. 3 is a
corporation duly organized, validly existing, and in good standing
under the laws of Texas.
3.2.2. Capitalization. The authorized capital stock of
Acquisition No. 3 consists of 1,000 shares of common stock par value
$1.00 per share, of which at the date hereof, 1,000 shares were issued,
outstanding, and held beneficially by Acquisition No. 1.
3.2.3. Agreement Authorized. The consummation of the
transactions contemplated hereby have been duly and validly authorized
by all necessary corporate action on the part of Acquisition No. 3, and
this Agreement is a valid and binding obligation of Acquisition No. 3
enforceable (subject to normal equitable principles) in accordance with
its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, debtor relief, or similar laws affecting
the rights of creditors generally.
3.2.4. Investigations; Litigation. Except as required pursuant
to HSR, (i) no investigation or review by any governmental entity with
respect to Acquisition No. 3 in connection with any of the transactions
contemplated by this Agreement is pending or, to the best of
Acquisition No. 3's knowledge, threatened, nor has any governmental
entity indicated to Acquisition No. 3 an intention to conduct the same
and (ii) there is no action, suit or proceeding pending or, to the best
of Acquisition No. 3's knowledge, threatened against or affecting
Acquisition No. 3 at law or in equity, or before any federal, state,
municipal or other governmental department, commission, board, bureau,
agency or instrumentality, which either individually or in the
aggregate, does or is likely to have a material adverse affect in its
financial condition, properties or business taken as a whole.
3.2.5. Finder's Fee. All negotiations relative to this Agreement
and the transactions contemplated hereby have been carried on by
Acquisition No. 3 and its counsel and Newgen and its counsel, without
the intervention of any other person as the result of any act of
Acquisition No. 3 in such a manner as to give rise to any valid claim
against any of the parties hereto for any brokerage commission,
finder's fee or any similar payments except for payments by Striker
under the Engagement Letter.
3.2.6. Solvency. As determined on the Effective Date,
Acquisition No. 3 shall be Solvent both immediately prior to and after
giving effect to the transactions contemplated by or referred to in
this Agreement, including the payment of all legal, accounting and
other fees related to the foregoing.
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ARTICLE 4
OBLIGATIONS PENDING EFFECTIVE DATE
4.1. Agreements of Newgen. As used in this Article 4, the term "Newgen"
also includes each of its directly and indirectly held subsidiaries. Newgen
agrees that since September 30, 1996, it has, and from the date hereof to the
Effective Date, it will:
4.1. 1. Maintenance of Present Business. Other than as
contemplated by this Agreement or in the Schedules to this Agreement
(i) operate its business only in the usual, regular, and ordinary
manner so as to maintain the goodwill it now enjoys and, (ii) to the
extent consistent with such operation, use all reasonable efforts to
(a) preserve intact its present business organization, (b) keep
available the services of its present officers and employees, and (c)
preserve its relationships with customers, suppliers, jobbers,
distributors, and others having business dealings with it;
4.1.2. Maintenance of Properties. At its expense, maintain all
of its property and assets in customary repair, order, and condition,
reasonable wear and use and damage by fire or casualty excepted;
4.1.3. Maintenance of Books and Records. Maintain its books of
account and records in the usual, regular, and ordinary manner, in
accordance with generally accepted accounting principles applied on a
consistent basis;
4.1.4. Compliance with Law. Duly comply in all material respects
with all laws applicable to it and to the conduct of its business;
4.1.5. Inspection of Each Merging Corporation. Permit
Acquisition No. 1, Acquisition No. 3 and Striker and their respective
officers and authorized representatives, during normal business hours,
to inspect Newgen's records and to consult with its officers,
employees, attorneys, and agents for the purpose of determining the
accuracy of the representations and warranties hereinabove made and the
compliance with covenants contained in this Agreement. Each of
Acquisition No. 3 and Striker agrees that it and its officers and
representatives shall hold all data and information obtained with
respect to Newgen in confidence and each further agrees that it will
not use such data or information or disclose the same to others, except
(i) to the extent such data or information either are, or become,
published or a matter of public knowledge, other than by breach of this
Section 4.1.5, or (ii) for any purpose contemplated by, or in a dispute
under, this Agreement;
4.1.6. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. File such materials as are required
under HSR with respect to the transactions contemplated hereby and
shall cooperate with Striker and Acquisition No. 3 to the extent
necessary to assist Striker, Acquisition No. 1 and Acquisition No. 3 in
the preparation of such filings;
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4.1.7. Notice of Material Developments. Promptly notify
Acquisition ▇▇. ▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇ and Striker in writing of any
"material adverse change" in, or any changes which, in the aggregate,
could result in a "material adverse change" in, the consolidated
financial condition, business or affairs of Newgen, whether or not
occurring in the ordinary course of business. As used in this
Agreement, the term "material adverse change' means any change, event,
circumstance or condition (collectively, a "Change") which when
considered with all other Changes would reasonably be expected to
result in a "loss" having the effect of so fundamentally adversely
affecting the business or financial prospects of Newgen, that the
benefits reasonably expected to be obtained by Striker and Acquisition
No. 1 as a result of the transactions contemplated by this Agreement
would be jeopardized with relative certainty. The term "loss" shall
mean any and all direct or indirect payments, obligations, assessments,
losses, loss of income, liabilities, fines, penalties, costs and
expenses paid or incurred or more likely than not to be paid or
incurred, or diminutions in value of any kind or character (whether or
not known or unknown, conditional or unconditional, ▇▇▇▇▇▇ or inchoate,
liquidated or unliquidated, secured or unsecured, accrued, absolute,
contingent or otherwise) that are more likely than not to occur,
including without limitation penalties, interest on any amount payable
to a third party as a result of the foregoing and any legal or other
expenses reasonably incurred or more likely than not to be incurred in
connection with investigating or defending any demands, claims, actions
or causes of action that, if adversely determined, would likely result
in losses, and all amounts paid in settlement of claims or actions;
provided, however, that losses shall be net of any insurance proceeds
entitled to be received from a nonaffiliated insurance company on
account of such losses (after taking into account any costs incurred in
obtaining such proceeds and any increase in insurance premiums as a
result of a claim with respect to such proceeds);
4.1.8. Prohibition of Certain Employment Contracts. Except as
contemplated by Section 5.2.9, 5.2.9 hereof, not enter into any
contracts of employment that (i) cannot be terminated on notice of 14
days or less or (ii) provide for any severance payments or benefits
covering a period beyond the termination date (other than those which
Striker or Acquisition No. 3 has previously approved) except as may be
required by law;
4.1.9. Prohibition of Certain Loans. Not incur any borrowings
except (i) additional borrowings under its existing revolving credit
facilities, (ii) the prepayment by customers of amounts due or to
become due for goods sold or services rendered or to be rendered in the
future, (iii) trade payables incurred in the ordinary course of
business, (iv) other borrowings incurred in the ordinary course of
business to finance normal operations, but in no event to exceed
$50,000 in aggregate principal amount or (v) as is otherwise agreed to
in writing by Striker or Acquisition No. 3;
4.1.1O. Prohibition of Certain Commitments. Not enter into
commitments of a capital expenditure nature which would exceed
$10,000,000, in the aggregate, except (i) in connection with the Granule
Plant Project as described in Section 5.2.11 hereof, (ii) as may be
necessary for the maintenance of existing facilities, machinery and
equipment in good
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operating condition and repair in the ordinary course of business,
(iii) as may be required by law or (iv) as is otherwise agreed to in
writing by Striker or Acquisition No. 3;
4.1.11. Disposal of Assets. Not sell dispose of or encumber, any
property or assets, except (i) in the ordinary course of business, (ii)
in an amount not in excess of $50,000 in aggregate depreciated cost
basis, (iii) as is otherwise agreed to in writing by Striker or
Acquisition No. 3 or (iv) for the sale of the glass mat line and
related real and personal property to ▇▇▇▇▇▇▇ International, Inc.
("▇▇▇▇▇▇▇") that is currently leased by ▇▇▇▇▇▇▇.
4.1.12. Maintenance of Insurance. Maintain insurance upon all
its properties and with respect to the conduct of its business of such
kinds and in such amounts as is customary in the type of business in
which it is engaged, but not less than that presently carried by it,
which insurance may be added to from time to time in its discretion;
4.1.13. No Amendment to Articles of Incorporation, etc. Not
amend its certificate or articles of incorporation or bylaws or other
organizational documents or merge or consolidate with or into any other
corporation or change in any manner the rights of its capital stock or
the character of its business;
4.1.14. No Issuance, Sale, or Purchase of Securities. Not issue
or sell, or issue options or rights to subscribe to, or enter into any
contract or commitment to issue or sell (upon conversion or otherwise),
any shares of its capital stock or subdivide or in any way reclassify
any shares of its capital stock, or acquire, or agree to acquire, any
shares of its capital stock; provided, however, that the issuance of
Newgen Common Stock upon the exercise of options issued before the date
hereof shall be permitted.
4.1.15. Prohibition on Dividends. Not declare or pay any
dividend on shares of its capital stock or make any other distribution
of assets to the holders thereof, and
4.1.16. Supplemental Financial Statements. Deliver to Striker
within 30 days after the end of each fiscal quarter of Newgen beginning
on the date hereof and through the Effective Date, unaudited
consolidated and consolidating balance sheets and related unaudited
statements of income as of the end of each fiscal quarter of Newgen,
and as of the corresponding fiscal quarter of the previous fiscal year.
Newgen hereby represents and warrants that such unaudited consolidated
and consolidating financial statements shall (i) be complete in all
material respects except for the omission of notes, statements of
stockholders' equity and cash flows, and schedules contained in audited
financial statements, (ii) present fairly the financial condition of
Newgen as at the dates indicated and the results of operations for the
respective periods indicated and (iii) shall have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis, except as noted therein and except for the absence of
notes as well as statements of stockholders' equity and cash flows.
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4.2. Additional Agreements of Newgen, the Insiders and the
Stockholders. From the date hereof until the Effective Date:
4.2. 1. Acquisition Proposals. Neither Newgen, the Insiders nor
either of the Stockholders shall directly or indirectly:
4.2.1. 1. No Solicitation. Authorize or permit any of
its or his respective agents to: (i) solicit, initiate,
encourage (including by way of furnishing information) or take
any other action to facilitate, any inquiry or the making of any
proposal which constitutes, or may reasonably be expected to
lead to, any acquisition or purchase of a substantial amount of
assets of, or any equity interest in, Newgen or any of its
subsidiaries or any merger, consolidation, business combination,
sale of substantially all assets, sale of securities,
recapitalization, liquidation, dissolution or similar
transaction involving Newgen or any of its subsidiaries (other
than the transactions contemplated by this Agreement) or any
other material corporate transaction the consummation of which
would or could reasonably be expected to impede, interfere with,
prevent or materially delay the transactions contemplated by
this Agreement (collectively, "Transaction Proposals") or agree
to or endorse any Transaction Proposal or (ii) propose, enter
into or participate in any discussions or negotiations regarding
any of the foregoing, or furnish to another person any
information with respect to its business, properties or assets
or any of the foregoing, or otherwise cooperate in any way with,
or assist or participate in, facilitate or encourage, an effort
or attempt by any other person to do or seek any of the
foregoing. If the board of directors of Newgen, either of the
Insiders or either of the Stockholders receives a Transaction
Proposal, then Newgen or such Stockholder, as the case may be,
shall immediately inform Striker and Acquisition No. 3 of the
terms and conditions of such proposal and the identity of the
person making it and shall keep Striker and Acquisition No. 3
fully informed of the status and details of any such Transaction
Proposal and of all steps it is taking in response to such
Transaction Proposal.
4.2.2. Expenses of Stockholders. Newgen will not incur, or if
incurred will not pay, more than $250,000 of the professional fees and
expenses of the Insiders or the Stockholders in connection with the
negotiation of this Agreement and the closing of the transactions
contemplated hereby.
4.2.3. Noncompetition. Except as otherwise consented to or
approved in writing by Striker, each of ▇▇▇▇▇ and the ▇▇▇▇▇ Partnership
agrees that for a period of 60 months from the date of termination of
▇▇▇▇▇'▇ employment under the ▇▇▇▇▇ Employment Agreement (defined in
Section 5.2.9 hereof), and each of Nesselroade and the Nesselroade
Partnership agree that for a period of 60 months from the date of
termination of Nesselroade's services under the Nesselroade Consulting
Agreement (defined in Section 5.2.9 hereof), they will not, directly or
indirectly, acting alone or as a member of a partnership or as an
officer, director, employee, consultant representative, holder of, or
investor in as much as 5% of any security
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of any class of any corporation or other business entity (i) engage in
any business in competition with the business or businesses conducted
by Newgen or Striker at the date of cessation (the "Cessation Date") of
▇▇▇▇▇'▇ or ▇▇▇▇▇▇▇▇▇▇▇'▇ respective employment or services under the
▇▇▇▇▇ Employment Agreement or the Nesselroade Consulting Agreement, as
the case may be, or in any manufacturing business the products of which
at the Cessation Date are sold to and marketed by Newgen or Striker in
any state of the United States, any province of Canada, or any foreign
country in which Newgen or Striker transacts business on Cessation
Date; (ii) request any present or future customers or suppliers of
Newgen or Striker to curtail or cancel their business with Newgen or
Striker; (iii) disclose to any person, firm or corporation any trade,
technical or technological secrets of Newgen or Striker or any details
of their organization or business affairs or (iv) induce or actively
attempt to influence any employee of Newgen or Striker to terminate his
employment. Each of the Insiders and the Stockholders agrees that if
either the length of time or geographical area set forth in this
Section is deemed too restrictive in any court proceeding, the court
may reduce such restrictions to those which it deems reasonable under
the circumstances. The obligations expressed in this Section 4.2.1.3
are in addition to any other obligations that either of the Insiders or
Stockholders may have under the laws of the State of Texas requiring an
employee of a business or a stockholder who sells his stock in a
corporation (including a disposition in a merger) to limit his
activities so that the goodwill and business relations of his employer
and of the corporation whose stock he has sold (and any successor
corporation) will not be materially impaired. Each Insider and
Stockholder further agrees and acknowledges that Newgen and Striker do
not have any adequate remedy at law for the breach or threatened breach
by either of the Insiders or Stockholders of this covenant, and agree
that Newgen or Striker may, in addition to the other remedies which may
be available to it hereunder, file a suit in equity to enjoin such
Insider or Stockholder from such breach or threatened breach. If any
provisions of this Section 4.2.1.3 are held to be invalid or against
public policy, the remaining provisions shall not be affected thereby.
Each of the Insiders and Stockholders acknowledges that the covenants
set forth in this Section are being executed and delivered by such
Insider and Stockholder in consideration of the covenants of Newgen and
Striker contained in this Agreement, and for other good and valuable
consideration, receipt of which is hereby acknowledged.
4.3 Shareholders Agreement. Each of the Stockholders hereby agrees that
to the extent any of the agreements or other actions to be performed by such
Stockholder hereunder or by the Exchanging Shareholders under the Stock
Exchange Agreement would violate any provision of that certain Amended and
Restated Management Shareholders Agreement dated October 25, 1993 by and among
Newgen and its shareholders (the "Shareholders Agreement"), the Shareholders
Agreement shall be deemed to be amended hereby by written consent of each of
the Stockholders to allow such agreements or other actions. Additionally, each
of the Stockholders hereby consent to the termination of the Shareholders
Agreement, such consent to be effective as of the Effective Date and if the
Stock Exchange Agreement is consummated, immediately prior to the closing of
the Stock Exchange Agreement.
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ARTICLE 5
CONDITIONS PRECEDENT TO OBLIGATIONS
5.1. Conditions Precedent to Obligations of Newgen. As used in this
Article 5, the term "Newgen" also includes each of its directly and indirectly
held subsidiaries. The obligation of Newgen to consummate and effect the Merger
hereunder shall be subject to the satisfaction of the following conditions, or
to the waiver thereof by Newgen in the manner contemplated by Section 6.4
hereof, before the Effective Date:
5.1. 1. Representations mad Warranties True at Effective Date.
The representations and warranties of Acquisition No. 1 and Acquisition
No. 3 herein contained shall be, in all material respects, true as of
and at the Effective Date with the same effect as though made at such
date, except as affected by transactions permitted or contemplated by
this Agreement; Acquisition No. 1 and Acquisition No. 3 shall have
performed and complied, in all material respects, with all covenants
required by this Agreement to be performed or complied with by
Acquisition No. 1 and Acquisition No. 3 before the Effective Date; and
Acquisition No. 1 and Acquisition No. 3 shall have delivered to Newgen
a certificate, dated the Effective Date and signed by their respective
chairmen of the board or presidents, and by their respective chief
financial or accounting officers, to both such effects.
5.1.2. No Material Litigation. No suit, action, or other
proceeding shall be pending or threatened before any court or
governmental agency in which it will be, or it is, sought to restrain
or prohibit or to obtain damages or other relief in connection with
this Agreement or the consummation of the transactions contemplated
hereby.
5.1.3. Opinion of Acquisition No. 1 and Acquisition No. 3
Counsel. Newgen shall have received a favorable opinion, dated as of
the Effective Date, from ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., counsel for
Acquisition No. 1 and Acquisition No. 3, in form and substance
satisfactory to Newgen, to the effect that (i) Acquisition No. 1 and
Acquisition No. 3 have been duly incorporated and are validly existing
as corporations in good standing under the laws of their respective
states of corporation; (ii) all corporate proceedings required to be
taken by or on the part of Acquisition No. 1 and Acquisition No. 3 to
authorize the execution of this Agreement and the implementation of the
Merger contemplated hereby have been taken; (iii) this Agreement has
been duly executed and delivered by, and is the legal, valid and
binding obligation of, Acquisition No. 1 and Acquisition No. 3, and is
enforceable against Acquisition No. 1 and Acquisition No. 3 in
accordance with its terms, except as enforceability may be limited by
(a) equitable principles of general applicability or (b) bankruptcy,
insolvency, reorganization, fraudulent conveyance or similar laws
affecting the rights of creditors generally, and except that no opinion
need be expressed as to the enforceability of any indemnification
provisions of this Agreement; and (v) except as specified by such
counsel (such exceptions to be acceptable to Newgen) such counsel does
not know of any material litigation, proceedings, or governmental
investigation pending or threatened against or
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relating to Acquisition No. 1 or Acquisition No. 3, any of their
affiliates, or their respective properties or businesses in which it is
sought to restrain, prohibit or otherwise affect the consummation of
the transactions contemplated by this Agreement. Such opinion also
shall cover such other matters incident to the transactions herein
contemplated as Newgen and its counsel may reasonably request. In
rendering such opinion, such counsel may rely upon (i) certificates of
public officials and of officers of Acquisition No. 1 and Acquisition
No. 3 as to matters of fact and (ii) the opinion or opinions of other
counsel, which opinions shall be reasonably satisfactory to Newgen, as
to matters other than federal or Delaware corporate law.
5.1.4. Stockholder Approval. The approval required under the
laws of its state of incorporation of holders of outstanding capital
stock of Newgen entitled to vote thereon of the Merger contemplated by
this Agreement shall have occurred, and such approval shall not have
been amended, modified or rescinded on or before the Effective Date.
5.1.5. Consent of Certain Parties in Privity With Striker. The
holders of any material indebtedness of Striker or Acquisition No. 1,
the lessors of any material property leased by Striker or Acquisition
No. 1, and the other parties to any other material agreements to which
Striker or Acquisition No. 1 is a party shall, to the extent required,
have consented to the transactions contemplated hereby.
5.1.6. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. All waiting periods required by HSR
shall have expired with respect to the transactions contemplated by
this Agreement, or early termination with respect thereto shall have
been obtained without the imposition of any governmental request or
order requiring the sale or disposition or holding separate (through a
trust or otherwise) of particular assets or businesses of Striker, its
affiliates or any component of Newgen or other actions as a
pre-condition to the expiration of any waiting period or the receipt of
any necessary governmental approval or consent. In addition, any
approvals required under state laws comparable to HSR shall have been
obtained.
5.1.7. Preliminary Transactions. Each of the Preliminary
Transactions described in Section 1. I shall have been consummated on
and as of the Effective Date, except that if the Stock Exchange
Agreement is not entered into on or before the Effective Date, then
only the Striker Merger and the Financing shall have been consummated
on and as of the Effective Date.
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5.2. Conditions Precedent to Obligations of Acquisition No. 1 and
Acquisition No. 3. The obligations of Acquisition No. 1 and Acquisition No. 3
to consummate and effect the Merger hereunder shall be subject to the
satisfaction of the following conditions, or to the waiver thereof by
Acquisition No. 1 or Acquisition No. 3 in the manner contemplated by Section
6.4 hereof before the Effective Date.
5.2.1. Representations and Warranties of Newgen and Insiders
True at Effective Date. The representations and warranties of Newgen
and the Insiders herein contained shall be, in all material respects,
true as of and at the Effective Date with the same effect as though
made at such date, except as affected by transactions permitted or
contemplated by this Agreement. Each of Newgen and the Insiders shall
have performed and complied in all material respects with all covenants
required by this Agreement to be performed or complied with by them
before the Effective Date; and each of Newgen and the Insiders shall
have delivered to Acquisition No. 1 and Acquisition No. 3 a
certificate, dated the Effective Date and signed by Newgen or such
Insider (with such certificate of Newgen being signed by its chairman
of the board or its president, and by its chief financial or accounting
officer), to both such effects.
5.2.2. Representations and Warranties of Stockholders True at
Effective Date. The representations and warranties of the Stockholders
herein contained shall be in all material respects true as of and at
the Effective Date with the same effect as though made at such date,
except as effected by transactions permitted or contemplated by this
Agreement. Each of the Stockholders shall have performed and complied
in all material respects with all covenants required by this Agreement
to be performed or complied with by them before the Effective Date; and
each of the Stockholders shall have delivered to Acquisition No. 1 and
Acquisition No. 3 a certificate, dated the Effective Date and signed by
such Stockholder, to both such effects.
5.2.3. No Material Litigation. No suit, action, or other
proceeding shall be pending or threatened before any court or
governmental agency in which it will be, or it is, sought to
restrain or prohibit or to obtain damages or other relief in connection
with this Agreement or the consummation of the Merger contemplated
hereby or which might result in a material adverse change in the value
of the assets and business of Newgen.
5.2.4. Opinion of Newgen's Counsel. Acquisition No. 1 and
Acquisition No. 3 shall have received a favorable opinion, dated the
Effective Date, from Vial, Hamilton, ▇▇▇▇ & ▇▇▇▇, L.L.P., counsel to
Newgen, the Insiders and the Stockholders, in form and substance
satisfactory to Acquisition No. 1 and Acquisition No. 3, to the effect
that (i) Newgen and each of its subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of its state of incorporation; (ii) all outstanding shares of
Newgen Common Stock and the capital stock of each of its subsidiaries
have been validly issued and are fully paid and nonassessable and free
of preemptive rights; (iii) all corporate or other proceedings required
to be taken by or on the part of Newgen to authorize the
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execution of this Agreement and the implementation of the Merger
contemplated hereby have been taken; (iv) each of the Stockholders has
been duly formed and is validly existing as a limited partnership in
good standing under the laws of the State of Texas; (v) all proceedings
required to be taken by or on the part of each of the Stockholders to
authorize the execution of this Agreement and the implementation of the
Merger contemplated hereby have been taken, (vi) this Agreement has
been duly executed and delivered by, and is the legal, valid and
binding obligation of Newgen, each of the Insiders and each of the
Stockholders and is enforceable against Newgen, each of the Insiders
and each of the Stockholders in accordance with its terms, except as
the enforceability may be limited by (a) equitable principles of
general applicability or (b) bankruptcy, insolvency, reorganization,
fraudulent conveyance or similar laws affecting the rights of creditors
generally and except that no opinion need be expressed as to the
enforceability of any indemnification provisions of this Agreement; and
(vii) except as specified by such counsel (such exceptions to be
acceptable to Acquisition No. 1 and Acquisition No. 3) such counsel
does not know of any material litigation, proceedings or governmental
investigation, pending or threatened against or relating to Newgen or
any of its subsidiaries or their respective properties or businesses in
which it is sought to restrain, prohibit or otherwise affect
consummation of the transactions contemplated by this Agreement. Such
opinion shall also cover such other matters incident to the
transactions herein contemplated as Acquisition No. 1 and Acquisition
No. 3 and its counsel may reasonably request. In rendering such
opinion, such counsel may rely upon (i) certificates of public
officials, officers of Newgen, general partners of the Stockholders, or
the Insiders as to matters of fact and (ii) on the opinion or opinions
of other counsel, which opinions shall be reasonably satisfactory to
Acquisition No. 3, as to matters other than federal, Texas, Delaware
corporate law or New York corporate law.
5.2.5. Stockholder Approval. The holders of the requisite
majority of the outstanding shares of Acquisition No. 3 Common Stock
shall have approved the Merger contemplated by this Agreement, and such
approval shall not have been amended, modified or rescinded before the
Effective Date.
5.2.6. Consent of Certain Parties in Privity with Newgen. The
holders of any material indebtedness of Newgen, the lessors of any
material property leased by Newgen, and the other parties to any other
material agreements to which Newgen is a party shall, to the extent
required, have consented to the Merger contemplated hereby.
5.2.7. ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇. All waiting periods required by HSR
shall have expired with respect to the transactions contemplated by
this Agreement or early termination with respect thereto shall have
been obtained without the imposition of any governmental request or
order requiring the sale or disposition or holding separate (through a
trust or otherwise) of particular assets of Newgen, its affiliates or
any component of Striker or other actions as pre-condition to the
expiration of any waiting period or the receipt of any necessary
governmental approval or consent. In addition, any approvals required
under state laws comparable to HSR shall have been obtained.
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5.2.8.Preliminary Transactions. Each of the Preliminary
Transactions described in Section 1.1 shall have been consummated on
and as of the Effective Date, except that if the Stock Exchange
Agreement is not entered into on or before the Effective Date, then
only the Striker Merger and the Financing shall have been consummated
on and as of the Effective Date.
5.2.9. Insider Employment Agreements. ▇▇▇▇▇ shall have executed
an employment agreement (the "▇▇▇▇▇ Employment Agreement") with
Acquisition No. 1, or a designated affiliate of Acquisition No. 1, for
a term beginning on the Effective Date and expiring on December 31,
1998. Nesselroade shall have executed an employment/consulting
agreement (the "Nesselroade Consulting Agreement") with Acquisition No.
1, or a designated affiliate of Acquisition No. 1, for a term beginning
on the Effective Date and expiring on December 31, 1998. Compensation
under such agreements will be at least equal to the compensation
currently in effect for each such Insider, including each such
Insider's presently scheduled 1996 salary increases and "guaranteed
bonus" as set forth in Newgen's "annual bonus letter," and such
agreements shall otherwise be reasonably satisfactory to all parties
thereto.
5.2.10. Completion of Due Diligence. Acquisition No. 3 and
Striker shall have completed the due diligence examination contemplated
by Section 4.1.5 hereof and the information concerning Newgen received
pursuant to such investigation shall, to Acquisition No. 3's sole
satisfaction, be consistent with the representations and warranties of
Newgen, the Insiders and the Stockholders set forth herein in all
material respects.
5.2.11. Granule Plant Project (the "Granule Plant"). Newgen or
its affiliates will have consummated the transactions contemplated by
the Master Agreement Re Rock Quarry concerning a long term lease and a
supply agreement with respect to the operation of the quarry to be used
in connection with the operations of the proposed Granule Plant, and,
if required, the supplement to Schedule 2.1.14 hereto contemplated in
Section 2.1.14 shall have been delivered and the information contained
therein shall be acceptable to Acquisition No. 3.
5.2.12. Wilmington Labor Dispute. By December 31, 1996 the
Wilmington, California facility will be operating at or above the
conversion factors and total unit production level at which it was
operating before the beginning of the labor dispute pending before the
National Labor Relations Board's Region 21 concerning ILWU Local 26
against Newgen, and concerning Newgen against ILWU Local 26.
ARTICLE 6
TERMINATION AND ABANDONMENT
6.1. Termination. As used in this Article 6, the term "Newgen" also
includes each of its directly and indirectly held subsidiaries. Anything
contained in this Agreement to the contrary notwithstanding, this Agreement may
be terminated and the Merger contemplated hereby abandoned
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at any time (whether before or after the approval and adoption thereof by the
stockholders of Newgen or Acquisition No. 3) before the Effective Date:
6. 1. 1. By Mutual Consent. By mutual consent of Acquisition No.
3, Newgen and each of the Insiders and the Stockholders.
6.1.2. By Acquisition No. 3 Because of Dissenting Stockholders.
By Acquisition No. 3, if the holders of any shares of Newgen Common
Stock elect to exercise the right to dissent under applicable
provisions of Texas law in connection with the Merger contemplated by
this Agreement.
6.1.3. By Acquisition No. 3 Because of Conditions Precedent. By
Acquisition No. 3, if any condition set forth in Section 5.2 hereof has
not been met and has not been waived.
6.1.4. By Acquisition No. 3 Because of Solicitation of
Acquisition Proposals. By Acquisition No. 3 if Newgen or either of the
Insiders or either of the Stockholders has breached the provisions of
Section 4.2.1.1 hereof.
6.1.5. By Acquisition No. 3 Because of Material Adverse Change.
By Acquisition No. 3, if there has been a material adverse change in
the financial condition or business of Newgen since the date of the
most recent financial statements referred to in Section 2.1.5.
6.1.6. By Newgen Because of Conditions Precedent. By Newgen, if
any condition set forth in Section 5.1 hereof has not been met and has
not been waived.
6.1.7. By Acquisition No. 3 or Newgen Because of Legal
Proceedings. By either Acquisition No. 3 or Newgen if any suit, action,
or other proceeding shall be pending or threatened by the federal or a
state government before any court or governmental agency, in which it
is sought to restrain, prohibit, or otherwise affect the consummation
of the merger contemplated hereby.
6.1.8. By Acquisition No. 3 or Newgen if Merger not Effective by
April 21, 1997. By either Acquisition No. 3 or Newgen, if the Merger
shall not have become effective on or before April 21, 1997.
6.2. Termination by Board of Directors. An election of Acquisition No.
3 to terminate this Agreement and abandon the merger as provided in Section 6.1
shall be exercised on behalf of Acquisition No. 3 by its board of directors. An
election of Newgen to terminate this Agreement and abandon the Merger as
provided in Section 6.1 hereof shall be exercised on behalf of Newgen by its
board of directors.
6.3. Effect of Termination; Expenses. In the event of a termination and
abandonment of this Agreement pursuant to and in accordance with the provisions
of Section 6.1 hereof, then this
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Agreement shall become void and have no effect. In such event, notwithstanding
any other provisions of this Agreement to the contrary, all expenses relating
to the transactions contemplated by this Agreement will be paid by the party
incurring them.
6.4. Waiver of Conditions. Subject to the requirements of any
applicable law, any of the terms or conditions of this Agreement may be waived
at any time by the party which is entitled to the benefit thereof (which waiver
shall be, in the case of corporate parties, by action taken by the board of
directors, the executive committee of the board of directors, or the chief
executive officer of such corporate party).
ARTICLE 7
Additional Agreements
7.1. Registration Statement; Proxy Statement/Prospectus.
7. 1. 1. Filing With the Commission. For the purposes of (i)
holding a meeting of the stockholders of Striker to approve the Striker
Merger and (ii) registering with the Commission and with applicable
state securities authorities the issuance of Acquisition No. 1 Common
Stock to holders of Striker Common Stock in connection with the Striker
Merger, the parties hereto shall cooperate in the preparation of an
appropriate registration statement of Acquisition No. 1 on Form S-4 or
S-1 (such registration statement, together with all and any amendments
and supplements thereto, being herein referred to as the "Registration
Statement"), which shall include a proxy statement/prospectus of
Striker satisfying all applicable requirements of the DGCL, the
Securities Act of 1933, as amended (the "Securities Act"), the Exchange
Act, applicable state securities laws and the rules and regulations
thereunder (such proxy statement/prospectus, together with any and all
amendments or supplements thereto, being herein referred to as the
"Proxy Statement/Prospectus").
7.1.2. Cooperation of Newgen. As hereinafter used in this
Article 7, the term "Newgen" also includes each of its directly and
indirectly held subsidiaries. Newgen shall furnish Striker and
Acquisition No. 1 with such information concerning Newgen as is
necessary in order to cause the Registration Statement and the Proxy
Statement/Prospectus, insofar as they relate to Newgen, to be prepared
in accordance with Section 7.1.1. Newgen shall have the right to
review and approve the information concerning Newgen and its
subsidiaries included in the Registration Statement. Newgen agrees
promptly to advise Striker and Acquisition No. 1 if at any time before
the stockholders meeting of Striker or the effective date of the
Registration Statement any information provided by Newgen for use in
the Proxy Statement/Prospectus becomes incorrect or incomplete in any
material respect, and to provide Striker and Acquisition No. 1 with the
information needed to correct such inaccuracy or omission.
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7.1.3. Best Efforts for Commission Clearance. Striker and
Acquisition No. 1 will, as soon as practicable, file with the
Commission and applicable state securities agencies on a confidential
basis a form of preliminary proxy statement/prospectus that will in a
revised form ultimately comprise part of the Registration Statement and
shall use its best efforts to cause the Registration Statement to
become effective under the Securities Act and applicable state
securities laws at the earliest practicable date. Acquisition No. 1
shall advise Newgen promptly when the Registration Statement has become
effective and of any supplements or amendments thereto, and Acquisition
No. 1 shall furnish Newgen with copies of all such documents. Before
the Effective Date or the termination of this Agreement, each party
shall consult with the other with respect to any other material (other
than the Proxy Statement/Prospectus) that might constitute a
"prospectus" relating to the Striker Merger within the meaning of the
Securities Act.
7.1.4. Expenses. Acquisition No. 1 shall bear the costs of all
Commission filing fees with respect to the Registration Statement, the
costs of qualifying the shares of Acquisition No. 1 Common Stock
covered by the Registration Statement under applicable state securities
laws to the extent necessary and all printing and mailing costs in
connection with the preparation and mailing of the Proxy
Statement/Prospectus to the Striker stockholders. Striker, Acquisition
No. 1 and Newgen shall each bear their own legal and accounting
expenses in connection with the Registration Statement.
7.2. Indemnification by Newgen as to Proxy Statement Prospectus. Newgen
and each of the Insiders, severally (in proportion to their respective
ownership interests in Newgen), agrees to indemnify and hold harmless Striker,
Acquisition No. 1 and their respective officers and directors and each person
who controls Striker or Acquisition No. 1 within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act against any and all
losses, claims, damages, or liabilities, joint or several, to which any of them
may become subject under the Securities Act, the Exchange Act or any other
similar state statute or similar principal of common law, and to reimburse them
for any legal or other expenses incurred by them in connection with
investigating any claims and defending any actions, to the extent such losses,
claims, damages, liabilities, or actions arise out of or are based upon (i) any
false, misleading or untrue statement or alleged false, misleading or untrue
statement of a material fact, insofar as it relates to Newgen, contained in the
Proxy Statement/Prospectus in the form mailed to the stockholders of Striker,
or (ii) the omission or alleged omission to state in the Proxy
Statement/Prospectus a material fact required to be stated therein or necessary
to make the statements therein not misleading, and insofar as the same relates
to Newgen.
7.3. Indemnification by Striker and Acquisition No. 1 as to Proxy
Statement Prospectus. Striker and Acquisition No. 1, agree to indemnify and
hold harmless Newgen and its officers and directors and each person who
controls Newgen within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against any and all losses, claims, damages, or
liabilities, joint or several, to which any of them may become subject under
the Securities Act, the Exchange Act or any other similar state statute or
similar principal of common law, and to reimburse them for any legal or other
expenses incurred by them in connection with investigating any claims and
defending any
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actions, to the extent such losses, claims, damages, liabilities, or actions
arise out of or are based upon (i) any false, misleading or untrue statement or
alleged false, misleading or untrue statement of a material fact, insofar as it
relates to Striker or Acquisition No. 1 contained in the Proxy
Statement/Prospectus in the form mailed to the stockholders of Striker or (ii)
the omission or alleged omission to state in the Proxy Statement/Prospectus a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and insofar as the same relates to Striker or
Acquisition No. 1, as the case may be.
7.4. Waivers. Striker, Acquisition No. 1 and Acquisition No. 3 hereby
make the following waivers:
7.4. 1. Breaches of Representations and Warranties. The
representations and warranties of the Stockholders and the Insiders in
this Agreement (and in any certificates delivered by either of the
Stockholders or either of the Insiders, including those required under
Sections 5.2.1 and 5.2.2 hereof and those attached to the opinion
delivered pursuant to Section 5.2.4 hereof) shall terminate in
accordance with Section 8.4. If Striker or any of its affiliates before
the Effective Date discovers that any representations or warranties
made by the Insiders or the Stockholders herein was or is not true, and
as a result, a material adverse change is in existence, then, absent
fraud on the part of the Stockholder or the Insider whose
representation or warranty was not true, the only remedy available to
Striker, Acquisition No. 1 or Acquisition No. 3 or any of their
affiliates shall be to terminate this Agreement in accordance with
Article 6 hereof. If Striker, Acquisition No. 1 or Acquisition No. 3 or
any of their affiliates discovers after the Effective Date that any of
the representations or warranties made by the Insiders or the
Stockholders herein was not true when made or at the Effective Date,
then absent fraud, Striker, Acquisition No. 1 and Acquisition No. 3 and
their affiliates shall have no cause of action or remedy against the
Insider or the Stockholder who made such untrue representation or
warranty. Absent fraud, on the part of the Insider or the Stockholder
who made an untrue representation or warranty, no monetary damages
shall accrue against any such Insider or Stockholder for making a
representation or warranty that was not true, and Striker, Acquisition
No. 1 and Acquisition No. 3 and their affiliates hereby waive, release
and discharge any cause of action, in law or in equity, that any of
them otherwise would have had or could have had by virtue of such
untrue representation or warranty.
7.4.2 Environmental Matters. Striker, Acquisition No. 1 and
Acquisition No. 3 affirm that upon consummation of the Merger, the
Surviving Corporation will assume any liabilities arising out of the
matters set forth in Schedule 2.1.14 hereto and also will assume any
other liabilities arising out of violations of any environmental laws,
including but not limited to the Applicable Environmental Laws, made by
Newgen and any of its affiliates. Striker, Acquisition No. 1 and
Acquisition No. 3 and their affiliates hereby waive any rights they
might otherwise have against either of the Insiders or either of the
Stockholders for contribution, indemnification or subrogation with
respect to any damages, fines or other penalties arising out of the
violation by Newgen or any of its affiliates of any environmental
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laws, including but not limited to, the Applicable Environmental Laws,
provided however, that the Surviving Corporation shall not be liable
for any damages, fines or other penalties enforced against any Insider
for such Insider's personal violations of environmental laws, and the
Surviving Corporation shall not be required to indemnify, or otherwise
hold harmless any such Insider from such personal liabilities.
7.4.3 Further Assurances. On the written request of a majority
in interest of the Stockholders, the Surviving Corporation shall cause
any of its affiliates to make the affirmations and waivers to the
Stockholders contained in this Section 7.4.
7.4.4 Survival. THE provisions of this Section 7.4 shall survive
the closing of the Merger.
ARTICLE 8
MISCELLANEOUS
8.1. Entirety. This Agreement embodies the entire agreement between the
parties with respect to the subject matter hereof and all prior agreements
between the parties with respect thereto are hereby superseded in their
entirety.
8.2. Counterparts. Any number of counterparts of this Agreement may be
executed and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
instrument.
8.3. Notices and Waivers. Any notice or waiver to be given to any party
hereto shall be in writing and shall be delivered by courier, sent by facsimile
transmission or first class registered or certified mail, postage prepaid,
return receipt requested.
IF TO STRIKER
Addressed to:
Striker Industries, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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IF TO NEWGEN, AN INSIDER OR A STOCKHOLDER
Addressed to: With a copy to:
Newgen Holding, Inc. Vial, Hamilton, ▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any communication so addressed and mailed by first-class registered or
certified mail, postage prepaid, with return receipt requested, shall be deemed
to be received on the third business day after so mailed, and if delivered by
courier or facsimile to such address, upon delivery during normal business
hours on any business day.
8.4. Termination of Representations, Warranties, etc. The respective
representations and warranties contained in Articles 2 and 3 shall expire with,
and be terminated and extinguished by, the Merger pursuant to this Agreement at
the time of the consummation thereof on the Effective Date. This Paragraph 8.4
shall have no effect upon any other right or obligation of the parties in
connection with this Agreement or otherwise, whether to be exercised or
performed before or after the Effective Date.
8.5. Table of Contents and Captions. The table of contents and captions
contained in this Agreement are solely for convenient reference and shall not
be deemed to affect the meaning or interpretation of any article, section, or
paragraph hereof.
8.6. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of and be enforceable by the successors and assigns
of the parties hereto.
8.7. Severability. If any term, provision covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
void, or unenforceable, the remainder of the terms, provisions, covenants and
restrictions shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, void or unenforceable.
8.8. Applicable Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Texas.
8.9. Effective Date. The Merger shall become effective upon the filing
of Articles of Merger by each of the Merging Corporations with the Secretary of
State of the State of Texas. The
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date upon which the Merger shall become effective is referred to in this
Agreement as the "Effective Date."
8.10. Public Announcements. The parties agree that before the Effective
Date that they shall not, without the prior written consent of the other
parties hereto, make any public announcement regarding the existence of this
Agreement, the contents hereof or the transactions contemplated hereby, and to
obtain the prior approval of the other party as to the content of such
announcement, which approval shall not be unreasonably withheld. The parties
further agree that any such announcement will not disclose the identity of any
of the parties to this Agreement other than Striker, Acquisition No. 1 or
Acquisition No.3. However, the foregoing shall not apply to any announcement or
written statement which, upon the written advice of counsel, is required by law
to be made, except that the party required to make such announcement shall,
whenever practicable, consult with and solicit prior approval from such other
party concerning the timing and content of such legally required announcement
or statement before it is made.
IN WITNESS WHEREOF, the Insiders have executed this Agreement and the
other parties hereto have caused this Agreement to be signed in their
respective corporate or partnership names by their respective duly authorized
representatives, all as of the day and year first above written.
NEWGEN HOLDING, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
STRIKER INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
GSR INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
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STRIKER ACQUISITION NO. 3, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
INSIDERS
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Individually
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Individually
STOCKHOLDERS
MAREDON -I, LTD.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, General Partner
EPDSJ, LTD.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, General Partner
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EXHIBIT A
EXISTING SHARES
STOCKHOLDER SHARES OF NEWGEN COMMON STOCK OWNED
----------- -----------------------------------
Maredon -I, Ltd. 276,352
EPDSJ, Ltd. 153,072