EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
by and among
▇▇▇▇▇▇ CHEMICAL GROUP, INC.,
IMC GLOBAL INC.
and
IMC MERGER SUB INC.
Dated as of December 11, 1997
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS
1.1 Definitions 1
ARTICLE 2
FORMATION OF NEWCO AND THE MERGER
2.1 Reserved 4
2.2
The Merger
4
2.3
Closing 5
2.4 Effective Time 5
2.5 Effects of the Merger 5
2.6 Termination 5
2.7 Effect of Termination 6
ARTICLE 3
EFFECT OF THE MERGER ON THE CAPITAL
STOCK OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES
3.1 Effect on Capital Stock 6
3.2 Treatment of Options 8
3.3 Exchange of Certificates 8
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY
4.1 Organization of the Company and the
Subsidiaries;
Authority. 11
4.2 Capitalization of the Company;
Ownership. 11
4.3 Subsidiaries of the Company. 11
4.4 Ability to Carry Out the Agreement.
12
4.5 Consents and Approvals. 12
4.6 Financial Statements. 12
4.7 Title to Properties; Absence
of Liens. 13
4.8 Litigation. 14
4.9 Compliance with Law. 14
4.10 Contracts. 14
4.11 Brokers and Intermediaries.
15
4.12 Tax Matters. 15
4.13 Employee Benefits. 16
4.14 Intellectual
Property. 17
4.15 Environmental
Matters. 18
4.16 Absence of Certain Changes. 18
4.17 Employees, Labor Matters, etc. 20
4.18 Affiliate Transactions. 21
4.19 Availability of Assets and
Legality of Use. 21
4.20 Insurance. 21
4.21 HCNA SEC Documents. 21
4.22 Disclaimer of Other
Representations and
Warranties; Knowledge; Disclosure.
22
4.23 Consent of Stockholders. 23
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
OF THE BUYER
5.1 Organization and Authority of
the Buyer. 23
5.2 Ability to Carry Out the
Agreement. 23
5.3 Consents and Approvals. 24
5.4 Financial Ability to Perform. 24
5.5 Brokers and
Intermediaries. 24
ARTICLE
6
CERTAIN COVENANTS
AND AGREEMENTS OF
THE COMPANY AND
THE BUYER
6.1 Access and Information. 24
6.2 Regulatory Filings. 24
6.3 Conduct of Business. 25
6.4 Dividends; Changes in Stock. 25
6.5 Satisfaction of Conditions to
the Merger. 25
6.6 Employee Matters. 26
6.7 Tax Matters. 27
6.8 Announcement.
27
6.9 Notice to
Stockholders. 28
6.10 No
Solicitation. 28
6.11 Certain Litigation. 28
6.12 Subsequent Financial
Statements. 28
6.13 Name of Surviving
Corporation. 28
6.14 Insurance. 29
ARTICLE 7
CONDITIONS PRECEDENT OF
THE COMPANY
7.1 Representations and
Warranties. 29
7.2 Agreements. 29
7.3 Buyer Certificate. 29
7.4 No Injunction. 29
7.5 Consents. 29
7.6 Miscellaneous Closing
Deliveries. 30
7.7 Penrice Condition. 30
ARTICLE 8
CONDITIONS PRECEDENT
OF THE BUYER
8.1 Representations and
Warranties. 30
8.2 Agreements. 30
8.3 The Company's Certificate.
31
8.4 No Injunction. 31
8.5 Consents. 31
8.6 No Material Adverse Change.
31
8.7 Miscellaneous Closing
Deliveries. 31
8.8 Penrice Condition. 31
ARTICLE 9
NONSURVIVAL OF REPRESENTATIONS
AND WARRANTIES; CERTAIN
ACKNOWLEDGMENTS
9.1 Nonsurvival of Representations and
Warranties. 31
9.2 Information. 32
ARTICLE 10
INDEMNIFICATION
10.1 Indemnification. 32
ARTICLE 11
MISCELLANEOUS
11.1 Expenses. 34
11.2 Applicable Law. 34
11.3 Notices. 34
11.4 Entire Agreement. 36
11.5 Amendments. 36
11.6 Headings; References. 36
11.7 Counterparts. 36
11.8 Parties in Interest; Assignment. 36
11.9 Severability; Enforcement. 36
11.10 Waiver. 36
11.11 Relationship Between the Parties. 37
11.12 WAIVER OF CONSEQUENTIAL DAMAGES AND
JURY TRIAL. 37
11.13 Approval of Company Stockholders. 37
11.14 Liquidated Damages. 37
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of
December 11, 1997 (herein, together with the
Schedules and Exhibits attached hereto, referred to
as the "Agreement") by and among ▇▇▇▇▇▇ Chemical
Group, Inc., a Delaware corporation (the "Company"),
IMC Global Inc., a Delaware corporation ("Buyer") and
IMC Merger Sub Inc., a Delaware corporation
("Newco").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of
the Buyer, Newco and the Company have approved the
business combination transaction provided for herein
in which Newco will merge with and into the Company
with the Company continuing as the surviving
corporation (the "Merger").
WHEREAS, the Buyer and the Company desire to
make certain representations, warranties and
agreements in connection with the Merger and also to
prescribe various conditions to the Merger;
NOW, THEREFORE, in consideration of the premises
and the representations, warranties and agreements
herein contained, the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. For purposes of this Agreement,
the
following terms shall have the meanings set forth
below:
"Accounting Principles" means the accounting
principles, policies and procedures of the Company
and its Subsidiaries, as employed by each such
company, which are in conformity with GAAP.
"Active Employees" shall have the meaning set forth
in
Section 6.6(a).
"Affiliate" means, with respect to any Person,
any other Person directly or indirectly Controlling,
Controlled by, or under common Control with, such
other Person.
"Agreement" shall have the meaning set forth in
the forepart of this Agreement.
"Affiliate Transactions" shall have the meaning
set forth in Section 4.18.
"Applicable Interest Rate" shall have the
meaning ascribed thereto in Section 3.1(b).
"Certificate of Merger" shall have the meaning
set forth in Section 2.4.
"Claims" shall have the meaning set forth in Section
10.1(a).
"Closing" shall have the meaning set forth in
Section 2.3.
"Closing Date" shall have the meaning set forth
in Section 2.3.
"Code" means the Internal Revenue Code of 1986,
as amended or, if appropriate, any predecessor
statute.
"Company Benefit Plans" shall have the meaning
set forth in Section 4.13.
"Company Common Stock" means, collectively, the
Class A common stock of the Company, par value $.01
per share, the Class B common stock of the Company,
par value $.01 per share, the Class C common stock of
the Company, par value $.01 per share, and the Class
D common stock of the Company, par value $.01 per
share.
"Company Convertible Preferred Stock" means the
Convertible Preferred Stock of the Company, par value
$.01 per share.
"Company Group" means any "affiliated group" (as
defined in Section 1504(a) of the Code without regard
to the limitations contained in Section 1504(b) of
the Code) that, at any time on or before the
Effective Time, includes or has included the Company
or any predecessor of or successor to the Company (or
another such predecessor or successor), or any other
group of corporations which, at any time on or before
the Effective Time, files or has filed Returns on a
combined, consolidated or unitary basis with the
Company or any predecessor of or successor to the
Company (or another such predecessor or successor).
"Company Non-Convertible Preferred Stock" means
the NonConvertible Preferred Stock of the Company,
par value $.01 per
share.
"Company Stock" means, collectively, Company
Common Stock, Company Convertible Preferred Stock,
and Company Non-Convertible Preferred Stock.
"Company Stock Option" shall have the meaning
set forth in Section 3.2.
"Confidentiality Agreement" shall have the
meaning set forth in Section 6.1.
"Control" (including, with correlative meanings,
the terms "controlled by" and "under common control
with"), as used with respect to any Person, means the
possession, directly or indirectly, of the power to
direct or cause the direction of the management and
policies of such Person, whether through ownership of
voting securities, by contract or otherwise.
"DGCL" shall mean the Delaware General Corporation
Law.
"Dissenting Shares" shall have the meaning set forth
in
Section 3.1(d).
"DOJ" shall mean the Department of Justice.
"Effective Time" shall have the meaning set
forth in Section 2.4.
"Encumbrances" shall have the meaning set forth
in Section 4.7.
"Environmental Law" means any federal, state,
local or foreign statute, law or regulation, in
effect on the date hereof relating to pollution or
protection of the environment, health or safety.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
"Exchange Agent" shall have the meaning set
forth in Section 3.3(a).
"Exchange Fund" shall have the meaning set forth
in Section 3.3(a).
"Final Termination Date" shall have the meaning
set forth in Section 2.6(b).
"FTC" shall mean the Federal Trade Commission.
"GAAP" shall mean U.S. generally accepted accounting
principles.
"Governmental Entity" shall mean any federal,
state, local or foreign government or any court,
administrative agency or commissions or other
governmental authority or agency, domestic or
foreign.
"Hazardous Materials" means any hazardous
materials, hazardous wastes, hazardous constituents,
hazardous or toxic substances, petroleum products
(including crude oil or any fraction thereof),
defined or regulated as such in or under any
Environmental Law.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements
Act of 1976, as amended.
"Information Memorandum" shall have the meaning
set forth in Section 4.22.
"Intellectual Property" shall have the meaning
set forth in Section 4.14(a).
"Losses" shall have the meaning set forth in
Section 10.1.
"Material Adverse Effect" means a material
adverse effect (either individually or in the
aggregate) on the financial condition or operations
of any of (i) the Company and the Subsidiaries, taken
as a whole or (ii) any Significant Business, taken as
a whole.
"Merger Consideration" shall mean the cash
payable upon the Merger as provided in Section 3.1(b)
after giving effect to any adjustment provided for in
Section 11.1(a) hereof.
"Penrice Agreement" shall mean the agreement
referred to in Section 7.7 and Section 8.8 hereof.
"Person" means an individual, corporation,
partnership, trust or unincorporated organization or
a government or any agency or political subdivision
thereof.
"Property" and "Properties" shall have the
meaning set forth in Section 4.15.
"Reference Balance Sheet Date" shall have the meaning
set
forth in Section 4.6.
"Reference Statement of Operations" shall have
the meaning ascribed thereto in Section 4.6.
"Reference Balance Sheet" shall have the meaning
set forth in Section 4.6.
"Retirement Plan" shall have the meaning set forth in
Section 4.13(b)(i).
"Returns" means all returns, reports, estimates,
information returns and statements of any nature with
respect to Taxes.
"Significant Business" means (i) the businesses
of North American Salt Company, Salt Union Limited
and GSL Corporation, taken as a whole or (ii) the
businesses of North American Chemical Company,
▇▇▇▇▇▇▇ & ▇▇▇▇▇ GmbH, Societa Chimica Larderello
S.p.A. and Penrice Soda Products Pty Ltd, taken as a
whole.
"Stock Plan" shall have the meaning set forth in
Section
3.2.
"Stockholders" means the holders of shares of
Company Stock set forth on Schedule 4.2.
"Stockholders Agreement" means the Stockholders
Agreement dated as of October 18, 1993, as amended
among the Company and the persons listed as
stockholders on the Schedule of Stockholders attached
to the Stockholders Agreement.
"Subsidiary" (including "Subsidiaries") means
any corporation, joint venture, partnership, limited
liability company or other entity of which the
Company, directly or
indirectly, owns or controls capital stock (or other
equity interests) representing more than fifty
percent (50%) of the general voting power under
ordinary circumstances of such entity.
"Surviving Corporation" shall have the meaning
set forth in Section 2.2.
"Tax" or "Taxes" means any federal, state, local
or foreign income, gross receipts, profits,
franchise, transfer, sales, use, payroll, occupation,
property (real or personal), excise and similar taxes
(including interest, penalties or additions to such
taxes).
"WARN" shall have the meaning set forth in
Section 6.6. ARTICLE 2
FORMATION OF NEWCO AND THE MERGER
2.1 Reserved.
2.2 The Merger. Upon the terms and subject to
the conditions set forth in this Agreement, and in
accordance with the DGCL, Newco shall be merged with
and into the Company at the Effective Time. At the
Effective Time the separate existence of Newco shall
cease, and the Company shall continue as the
surviving corporation under the laws of the State of
Delaware and shall continue under the name "IMC
Inorganic Chemicals Inc." as a wholly owned
subsidiary of Buyer (the Company as a surviving
corporation in the Merger is sometimes referred to
herein as the "Surviving Corporation").
2.3 Closing. The closing of the merger
provided for herein (the "Closing") will take place
at the offices of Winthrop, Stimson, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at
10:00 a.m. (local time) on the date which is two (2)
business days following the satisfaction of the
conditions provided in Sections 7.5 and 8.5, or at
such other time and place as the Company and the
Buyer shall agree (the date of the Closing being the
"Closing Date").
2.4 Effective Time. As soon as practicable
following the satisfaction or waiver of the
conditions set forth in Articles 7 and 8, the parties
shall file with the Secretary of State of the State
of Delaware a certificate of merger (the "Certificate
of Merger") executed in accordance with the relevant
provisions of the DGCL and shall make all other
filings or recordings required under the DGCL. The
Merger shall become effective at such time as the
Certificate of Merger is duly filed with the
Secretary of State of the State of Delaware, or at
such other time as is permissible in accordance with
the DGCL and as the Buyer and the Company shall agree
and as specified in the Certificate of Merger (the
time the Merger becomes effective being the
"Effective Time").
2.5 Effects of the Merger. At the Effective Time:
(a) The separate existence of Newco
shall cease
and Newco shall be merged with and
into the Company with the Company
continuing as the surviving
corporation. At the Effective Time,
and without any further action on the
part of Newco or the Company, the
Certificate of Incorporation and By-
laws of Newco as in effect at the
Effective Time shall be the
Certificate of Incorporation and By-
laws of the Surviving Corporation
following the
Merger until thereafter changed or
amended as provided therein or by
applicable law. The directors of
Newco at the Effective Time shall be
the directors of the Surviving
Corporation following the Merger and
until the earlier of their resignation
or removal or until their respective
successors are duly elected and
qualified, as may be the case. The
officers of the Company immediately
prior to the Effective Time shall be
the officers of the Surviving
Corporation until their respective
successors are duly elected and
qualified.
(b) The Merger shall have all the
effects set forth in the appropriate
provisions of the DGCL and as set
forth in this Agreement.
2.6 Termination. This Agreement may be terminated
and
abandoned at any time prior to the Effective Time:
(a) by the mutual written consent of the
Buyer and the Company;
(b) by either the Buyer or the Company, if
the transactions contemplated hereby
are not consummated on or before June
30, 1998 (or such later date as may be
agreed upon in writing by the parties
hereto) (the "Final Termination
Date");
(c) by the Buyer, if the Company shall
have breached any of its
representations, warranties or
obligations hereunder, but only if
such breach is continuing on the Final
Termination Date and only if such
breach shall have a Material Adverse
Effect; or
(d) by the Company, if the Buyer shall
have breached in any material respect
any of its representations or
warranties or obligations hereunder,
but only if such breach is continuing
on the Final Termination Date and only
if such breach shall have a material
adverse effect on Buyer's ability to
perform its obligations under the
Agreement.
2.7 Effect of Termination. In the event of
termination of
this Agreement by either the Company or the Buyer as
provided in Section 2.6, this Agreement shall
forthwith become void and there shall be no liability
or obligation on the part of the Company or the Buyer
or their respective officers or directors, except
with respect to Sections 4.11, 5.5, 10.1 and 11.1.
Notwithstanding the immediately preceding sentence,
no termination of this Agreement under paragraphs (c)
and (d) of Section 2.6 shall constitute a waiver of
any rights of the party exercising such right of
termination.
ARTICLE 3
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
THE CONSTITUENT CORPORATIONS; EXCHANGE OF
CERTIFICATES
3.1 Effect on Capital Stock. As of the
Effective Time, by virtue of the Merger and without
any action on the part of the Company, the Buyer, or
Newco:
(a) Capital Stock of Newco. The
shares of common stock of Newco, par
value $.01 per share
("Newco Common Stock"), which are issued and
outstanding immediately prior to the Effective
Time, shall be converted into and become shares of
Company Common Stock at a rate of one (1) share of
Company Common Stock for each share of Newco
Common
Stock.
(b) Capital Stock of Company.
(i) Subject to Section 3.1(c), (d) and
(e), each share of Company Common Stock shall
be converted into and become a right to
receive $246.90 in cash plus, if the
Effective
Time shall not have occurred on or before
April 1, 1998, an amount, measured on a month
by month basis, equal to the result of the
following formula: X((P/365)Y), where X is
the number of days after March 31, 1998 that
the Closing shall occur, P is the Applicable
Interest Rate and Y is $246.90.
As used herein, the term "Applicable Interest
Rate" shall mean, for the period from
April 1, 1998 through April 30, 1998, 15%,
for
the period from May 1, 1998 through May 31,
1998, 17% and for the period commencing June
1, 1998, 19%;
(ii) Each share of Company Convertible
Preferred Stock shall be converted into the
right to receive (A) an amount in cash equal
to accrued and unpaid dividends in respect
thereof as of the Closing Date, and (B) the
right to receive, for each share of Company
Common Stock into which such share of Company
Convertible Preferred Stock is convertible,
$246.90 in cash plus, if the Effective Time
shall not have occurred on or before April 1,
1998, an amount, measured on a month by month
basis, equal to the result of the following
formula: X((P/365)Y), where X is the number
of days after March 31, 1998 that the Closing
shall occur, P is the Applicable Interest
Rate
and Y is $246.90; and
(iii) Each share of Company
Nonconvertible Preferred Stock shall be
converted into the right to receive in cash
the liquidation value thereof plus any
accrued
and unpaid dividends in respect thereof as of
the Closing Date.
(c) Cancellation of Treasury Stock and Certain Company
Stock.
Any shares of Company Stock that are owned immediately
prior to the Effective Time by any of the parties hereto or
by any other wholly owned subsidiary of the Company,
including any such common stock which constitutes treasury
stock in the hands of the holder thereof, shall be canceled
and retired and shall cease to exist, and no consideration
shall be delivered in exchange therefor, and each holder of
a
certificate representing any such shares shall cease to have
any rights with respect thereto.
(d) Dissenting Shares. Notwithstanding anything
in this Agreement to the contrary, shares of
Company Stock issued and outstanding immediately
prior to the Effective Time held by a holder (if
any) who has the right to demand payment for and
an
appraisal of such shares in accordance with
Section
262 of the DGCL (or any successor provision)
("Dissenting Shares") shall not be converted into
a
right to receive Merger Consideration (but shall
have the rights set forth in Section 262 of the
DGCL (or any successor provision)) unless such
holder fails to perfect or otherwise loses such
holder's right to such payment or appraisal, if
any. If, after the Effective Time, such holder
fails to perfect or loses any such right to
appraisal, each such share of such holder shall be
treated as a share that had been converted as of
the Effective Time into the right to receive
Merger
Consideration, without interest, in accordance
with
this Section 3.1.
The Company shall give Buyer (i) prompt notice of
any demands for appraisal of Company Stock
received
by the Company and (ii) the opportunity to
participate in and direct all negotiations and
proceedings with respect to any such demands. The
Company shall not, without the prior written
consent of Buyer, make any payment with respect
to,
or settle, offer to settle or otherwise negotiate,
any such demands.
(e) Cancellation and Retirement of Company Stock.
As of the
Effective Time, all shares of Company Stock (other
than shares
referred to in Section 3.1(d)) issued and
outstanding immediately
prior to the Effective Time, shall no longer be
outstanding and shall
automatically be canceled and retired and shall
cease to exist, and
each holder of a certificate representing any such
shares of Company
Stock shall, to the extent such certificate
represents such shares,
cease to have any rights with respect thereto,
except the right to
receive the Merger Consideration allocable to the
shares represented
by such certificate set forth above, to be paid in
consideration
therefor, without interest, upon surrender of such
certificate in
accordance with Section 3.3.
3.2 Treatment of Options
(a) Immediately prior to the Effective Time, each
outstanding stock option to purchase shares of
Company Stock (a "Company Stock Option") granted
under the ▇▇▇▇▇▇ Chemical Group, Inc. 1995 Stock
Option Plan (the "Stock Plan"), whether or not
then
exercisable, shall be canceled by the Company, and
at the Effective Time, the holder thereof shall be
entitled to receive from the Company in
consideration for such cancellation a cash value
equal to (A) the product of (x) the number of
shares of Company Stock previously subject to such
Company Stock Option and (y) the excess, if any,
of
the cash value of the Merger Consideration
allocable to each such share over the exercise
price per share, previously specified in such
Company Stock Option, reduced by (B) the amount of
withholding or other taxes required by law to be
withheld. Prior to the Effective Time, the
Company
shall use its best efforts to obtain all necessary
consents or releases from holders of Company Stock
Options and to take all such other lawful action
as
may be necessary to give effect to the
transactions
contemplated by this Section
3.2(a).
(b) Except as provided herein or as otherwise
agreed by Buyer and the Company, the Stock Plan
and
any other plan, program or arrangement providing
for the issuance or grant of any other interest in
respect of the capital stock of Company shall
terminate as of the Effective Time.
(c) Prior to the Effective Time, the Board of
Directors
(or, if appropriate, any committee administering the Stock
Plan) shall adopt such resolutions or take such actions as
are necessary to carry out the terms of this Section 3.2.
3.3 Exchange of Certificates.
(a) Exchange Agent. Prior to the Effective Time,
Company shall appoint Chase Manhattan Bank to act as
exchange
agent (the "Exchange Agent") for the payment of the Merger
Consideration. As of the Effective Time, Buyer shall have
deposited with the Exchange Agent, for the benefit of the
holders of shares of Company Stock, for exchange in
accordance with this Article 3, the aggregate amount of cash
payable, pursuant to Section 3.1 hereof in exchange for
outstanding shares of Company Stock (the "Exchange Fund").
(b) Exchange Procedures.
(i) At the Effective Time or as soon as
reasonably
practicable thereafter, the Exchange Agent shall mail
(or at the request of a holder of Company Stock, hand
deliver) to each holder of record of a certificate or
certificates which immediately prior to the Effective
Time represented outstanding shares of Company Stock
whose shares were converted into the right to receive
cash pursuant to Section 3.1:
(A) a letter of transmittal (which
shall specify that delivery shall be
effected, and risk of loss and title to
the certificates representing such
shares
of Company Stock shall pass, only upon
delivery of the certificates
representing
such shares of Company Stock, to the
Exchange Agent and shall be in such form
and have such other provisions as the
Exchange Agent may reasonably specify),
and
(B) instructions for use in effecting
the surrender of the certificates
representing such shares of Company
Stock, in exchange for cash.
(ii) Upon surrender to the Exchange Agent of a
certificate or certificates representing shares of
Company Stock and acceptance thereof by the Exchange
Agent, the holder thereof shall be entitled to the
amount of cash into which the number of shares of
Company Stock previously represented by such
certificate
or certificates surrendered shall have been converted
pursuant to this Agreement. The Exchange Agent shall
accept such certificates upon compliance with such
reasonable terms and conditions as the Exchange Agent
may impose to effect an orderly exchange
thereof in accordance with normal exchange practices. After
the Effective
Time, there shall be no further transfer on the records of
the Company or
its transfer agent of certificates representing shares of
Company Stock and
if such certificates are presented to the Company for
transfer, they shall
be canceled against delivery of the Merger Consideration
allocable to the
Shares represented by such certificate or certificates. If
any Merger
Consideration is to be remitted to a name other than that in
which the
certificate for the Company Stock surrendered for exchange
is registered,
it shall be a condition of such exchange that the
certificate so
surrendered shall be properly endorsed, with signature
guaranteed, or
otherwise in proper form for transfer and that the Person
requesting such
exchange shall pay to the Company, or its transfer agent,
any transfer or
other taxes required by reason of the payment of Merger
Consideration to a
name other than that of the registered holder of the
certificate
surrendered, or establish to the satisfaction of the Company
or its
transfer agent that such tax has been paid or is not
applicable. Until
surrendered as contemplated by this Section 3.3(b), each
certificate for
shares of Company Stock shall be deemed at any time after
the Effective
Time to represent only the right to receive upon such
surrender the Merger
Consideration allocable to the shares represented by such
certificate as
contemplated by Section 3.1. No interest wil be paid or
will accrue on any
amount payable as Merger Consideration. Subject to
completion of the
documentation referred to above, the Merger Consideration
shall be paid at
the Effective Time to holders of Company Stock
(c) No Further Ownership Rights in Company Stock.
Merger
Consideration paid upon the surrender for exchange of
certificates
representing shares of Company Stock in accordance with
the terms of
this Article 3 shall be deemed to have been paid in
full satisfaction
of all rights pertaining to the shares of Company Stock
represented by
such certificates.
(d) Termination of Exchange Fund. Any portion of the
Exchange Fund (including any interest and other
income received by the Exchange Agent in respect of
all such funds) which remains undistributed to the
holders of the certificates representing shares of
Company Stock for six months after the Effective
Time shall be delivered to the Company, upon
demand, and any holders of shares of Company Stock
prior to the Merger who have not theretofore
complied with this Article 3 shall thereafter look
only to the Company and only as general creditors
thereof for payment of their claim for Merger
Consideration to which such holders may be
entitled.
(e) No Liability. No party to this Agreement shall be
liable to any Person in respect of any amount from
the Exchange Fund delivered to a public official
pursuant to any applicable abandoned property,
escheat or similar law. If any certificates
representing shares of Company Stock shall not have
been surrendered in exchange for Merger
Consideration prior to five years after the
Effective Time (or immediately prior to such
earlier date on which any Merger Consideration
would otherwise escheat to or become the property
of any Governmental Entity), any such amount shall,
to the extent permitted by applicable law, become
the property of the Company, free and clear of all
claims or interest of any Person previously
entitled thereto.
(f) Investment of Exchange Fund. The Exchange Agent
shall invest the cash included in the Exchange Fund
as directed by the Buyer, provided that such
investment shall be (i) securities issued or
directly and fully guaranteed or insured by the
United States government or any agency or
instrumentality thereof having maturities of not
more than six months from the Effective Time, (ii)
certificates of deposit, eurodollar time deposits
and bankers' acceptances with maturities not
exceeding six months and overnight bank deposits
with any commercial bank, depository institution or
trust company incorporated or doing business under
the laws of the United States of America, any state
thereof or the District of Columbia, provided that
such commercial bank, depository institution or
trust company has, at the time of investment, (A)
capital and surplus exceeding $250 million and (B)
outstanding short-term debt securities which are
rated at least A-1 by Standard & Poor's Rating
Group Division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
or at least P-1 by ▇▇▇▇▇'▇ Investors Services, Inc.
or carry an equivalent rating by a nationally
recognized rating agency if both of the two named
rating agencies cease to publish ratings of
investment, (iii) repurchase obligations with a
term of not more than 30 days for underlying
securities of the types described in clauses (i)
and (ii) above entered into with any financial
institution meeting the qualifications specified in
clause (ii) above, (iv) commercial paper having a
rating in the highest rating categories from
Standard & Poor's Rating Group Division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or ▇▇▇▇▇'▇ Investors
Services, Inc. or carrying an equivalent rating by
a nationally recognized rating agency if both of
the two named rating agencies cease to publish
ratings of investments and in each case maturing
within six months of the Effective Time and (v)
money market mutual or similar funds having assets
in excess of $1 billion. Any interest and other
income resulting from such investments shall be
paid to the Surviving Corporation.
(g) Lost Certificates. In the event any certificate or
certificates representing shares of Company Stock
shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the Person
claiming such certificate or certificates to be
lost, stolen or destroyed, the Exchange Agent will
issue in exchange for such lost, stolen or
destroyed certificate the Merger Consideration
deliverable in respect thereof as determined in
accordance with this Article 3, provided that the
Person to whom the Merger Consideration is paid
shall, as a condition precedent to the payment
thereof, indemnify Buyer in an agreement reasonably
satisfactory to it
against any claim that may be made against
Buyer or the
Company with respect to the certificate
claimed to have
been lost, stolen or destroyed.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as otherwise set forth in any Schedule attached
hereto, the
Company represents and warrants to the Buyer with respect to
itself and
its Subsidiaries:
4.1 Organization of the Company and the Subsidiaries;
Authority.
The Company and each Subsidiary is a corporation duly
organized,
validly existing and in good standing under the laws of its
jurisdiction of organization and has all the requisite
corporate power
and authority to carry on its business as now being
conducted and to
own and use the properties owned and used by it. Except as
disclosed
on Schedule 4.1, the Company and each of its Subsidiaries is
qualified
to do business in each jurisdiction in which the nature of
its business
requires it to be so qualified, except to the extent the
failure to so
qualify has not had, and would not reasonably be expected to
have, a
Material Adverse Effect. The execution and delivery of this
Agreement
and the consummation of the transactions contemplated hereby
have been
duly authorized by all requisite corporate action on the
part of the
Company. The Board of Directors of the Company has
unanimously adopted
resolutions approving this Agreement and the Merger,
determined that
the terms of the Merger are fair to, and in the best
interests of, the
Company's stockholders and recommended that the Company's
stockholders
approve and adopt this Agreement. Assuming the due
authorization,
execution and delivery hereof by the Buyer, this Agreement
has been
duly executed and delivered by the Company and constitutes
the valid,
binding and enforceable obligation of the Company, except as
such
enforceability may be limited by bankruptcy, insolvency,
reorganization
or similar laws affecting creditors' rights generally or by
general
equitable principles.
4.2 Capitalization of the Company; Ownership. The
authorized,
issued and outstanding capital stock of the Company is set
forth on
Schedule 4.2. All of the issued and outstanding shares of
capital
stock of the Company are duly authorized, validly issued,
fully paid
and non-assessable. Except as disclosed on Schedule 4.2,
there are no
outstanding options, warrants or other rights of any kind to
acquire
any additional shares of capital stock of the Company or
securities
convertible into or exchangeable for, or which otherwise
confer on the
holder thereof any right to acquire, any such additional
shares, nor is
the Company committed to issue any such option, warrant,
right or
security. As of December 31, 1997, the aggregate of (i) the
liquidation value of the Company Non-Convertible Preferred
Stock plus
(ii) the accrued and unpaid dividends in respect of the
Company Non-
Convertible Preferred Stock plus (iii) the accrued and
unpaid dividends
in respect of the Company Convertible Preferred Stock is
equal to
$6,687,710.
4.3 Subsidiaries of the Company. Schedule 4.3 sets
forth the
Subsidiaries of the Company and the Company's equity
interest in each
such Subsidiary. Except as set forth on Schedule 4.3, all
outstanding
capital stock or other equity interests of each Subsidiary
owned by the
Company is owned free and clear of any and all liens,
claims, security
interests or options, except for restrictions on transfer
under federal
and state securities laws. All shares of capital stock of
each
Subsidiary which is a corporation have been validly issued
and are
fully paid and
nonassessable. There are no outstanding options, warrants
or other
rights of any kind to acquire any additional shares of
capital stock of
any Subsidiary or securities convertible into or
exchangeable for any
additional shares of capital stock of any Subsidiary, nor is
any
Subsidiary committed to issue any such option, warrant,
right or
security. There are no outstanding options, warrants or
other rights
of any kind to acquire any additional equity interests of
any
Subsidiary, nor is any Subsidiary committed to issue any
such option,
warrant or right. Except as set forth on Schedule 4.3, the
Company does
not have, directly or indirectly, any equity interest in any
other
corporation, joint venture, partnership, limited liability
company or
other entity.
4.4 Ability to Carry Out the Agreement. Except as
disclosed on
Schedule 4.4, neither the Company nor any Subsidiary is
subject to or
bound by any provision of:
(i) any law, statute, rule, regulation, or
judicial or
administrative decision,
(ii) any articles or certificate of
incorporation
or by-laws,
(iii) any mortgage, deed of trust, lease,
note,
stockholders' agreement, partnership agreement,
bond,
indenture, license, permit, trust, or other
material
instrument or agreement, or
(iv) any judgment, order, writ, injunction,
or decree of
any court, governmental body, administrative
agency or
arbitrator,
that would prevent or be violated by or under which there
would be a
conflict, breach or default as a result of, nor is there
required any
consent of any Person under any contract or agreement
required to be
disclosed on and actually disclosed on Schedule 4.10 which
has not
been obtained for the execution,
delivery and performance by the Company of this Agreement
and the
transactions contemplated hereby, other than any violations,
defaults
or failures to obtain consents which have not had and are
not
reasonably likely to have a Material Adverse Effect or a
material
adverse effect on the ability of the Company to perform its
obligations
under this Agreement.
4.5 Consents and Approvals. Except as disclosed on
Schedule
4.5, no consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental
Entity, is
required by or with respect to the Company or any of its
Subsidiaries
in connection with the execution and delivery of this
Agreement by the
Company or the consummation by the Company of the
transactions
contemplated hereby, the failure of which to obtain would
have a
Material Adverse Effect.
No state anti-takeover statutes are applicable to the
Merger, this
Agreement or the transactions contemplated hereby. The
Company has not
adopted or executed, and is not a party or subject to, any
"Shareholder
Rights Plan" or similar instrument, plan or agreement.
4.6 Financial Statements. (a) Attached hereto as Schedule
4.6
are copies of (i) the audited balance sheet for the Company
on a
consolidated basis with the Subsidiaries as of ▇▇▇▇▇ ▇▇,
▇▇▇▇, (▇▇) the
interim balance sheet for the Company on a consolidated
basis with the
Subsidiaries (the "Reference Balance Sheet") as of in the
case of the
U.S. operations, September 27, 1997 and, in
the case of the European operations, September 30, 1997
(the
"Reference Balance Sheet Date"), (iii) the audited
statements of
operations (including the profit and loss and income
statements)
for the Company on a consolidated basis with the
Subsidiaries for
the fiscal year ended March 29, 1997, and (iv) interim
Statements
of Operations for the Company on a consolidated basis
with the
Subsidiaries ("Reference Statement of Operations").
Each of the
Reference Balance Sheet and the Reference Statement of
Operations
is attached hereto as part of Schedule 4.6 and has been
prepared
in conformity with the Accounting Principles and fairly
present
(subject, in the case of the unaudited statements, to
normal audit
adjustments, none of which were or are expected,
individually or
in the aggregate, to be material in amount) the
consolidated
financial position of the Company and its Subsidiaries
as at the
dates thereof and the consolidated results of their
operations for
the periods then ended.
(b) Except for liabilities or obligations
reflected or
reserved against in the Reference Balance Sheet or
reflected
in the Schedules hereto, to the knowledge of the
Company,
neither the Company nor any of the Subsidiaries has any
material liabilities, whether absolute, accrued,
contingent
or otherwise, that would be required by the Accounting
Principles to be reflected on the balance sheets of the
Company and the Subsidiaries, that is not reflected or
reserved against in the Reference Balance Sheet or the
Schedules hereto, except for liabilities or obligations
incurred in the ordinary course of business consistent
with
past practice since the Reference Balance Sheet Date.
4.7 Title to Properties; Absence of Liens. Except as
disclosed on Schedule 4.7(a), the Company and each
Subsidiary: (i)
has good and marketable title to all of its owned real
properties;
(ii) possesses a valid leasehold interest in its leased real
properties; and (iii) has title to, or subsisting leasehold
interests in, all of its personal properties and assets used
solely in the business of the Company or such Subsidiary or
reflected on the Reference Balance Sheet (except for
property and
assets disposed of since the Reference Balance Sheet Date or
acquired since the Reference Balance Sheet Date and required
by
the Accounting Principles to be recorded on the balance
sheets of
the Company or the Subsidiaries), free and clear of any
liens,
security interests and other encumbrances ("Encumbrances"),
except
for (a) Encumbrances set forth on Schedule 4.7(b), (b)
Encumbrances reflected in the Reference Balance Sheet or
created
in the ordinary course of business subsequent to the
Reference
Balance Sheet Date and which are not material, (c)
Encumbrances
securing indebtedness of less than $1,000,000 of record or
otherwise that do not and will not materially interfere with
the
present use by the Company or the Subsidiaries of the
property
subject thereto or affected thereby or which otherwise have
not
had a Material Adverse Effect, (d) Encumbrances for taxes,
assessments or governmental charges, or landlords',
mechanics',
workmen's, materialmen's or similar liens, in each case that
are
not delinquent or which are being contested in good faith,
(e)
Encumbrances that are reflected in the title reports or
surveys,
if any, delivered or otherwise made available to the Buyer
in
connection with the transactions contemplated hereby and (f)
Encumbrances incurred in the ordinary course of business
(such
Encumbrances listed in clauses (a) - (f) above being
referred to
herein as "Permitted Encumbrances"). Neither the whole nor
any
part of the owned real properties or any real property
leased,
used or occupied by the Company is subject to any pending
suit for
condemnation or other taking by any public authority or
other
Person, and, to the knowledge of the Company, no such
condemnation
or other taking is threatened or contemplated.
4.8 Litigation. Except as disclosed on Schedule
4.8,
there is no action, suit or proceeding pending or, to the
knowledge of the Company, threatened against the Company or
any
Subsidiary at law, in equity or otherwise, in, before, or by
any
court or governmental agency or authority which is
reasonably
likely to have a Material Adverse Effect.
4.9 Compliance with Law. Except as disclosed on
Schedule
4.9, to the knowledge of the Company, the business of the
Company
and the Subsidiaries is being conducted in all material
respects
in compliance with all laws, ordinances and regulations and
other
requirements of any governmental entity applicable to the
Company
and the Subsidiaries. All governmental approvals, permits
and
licenses required by the Company and each Subsidiary in
connection
with the conduct of their respective businesses have been
obtained
and are in full force and effect and are being complied with
in
all material respects.
4.10 Contracts. (a) Schedule 4.10 sets forth
each
written contract or agreement outstanding as of
the date
hereof to which the Company or any Subsidiary is a
party
and which
(i) involves future payment or receipt of in
excess of $1,000,000 or future performance or
receipt of
services or delivery or receipt of goods and
materials,
in each case with an aggregate value in excess of
$1,000,000, including but not limited to sale and
purchase agreements, distributorship agreements
and loan
agreements, notes and other financing documents
but
excluding rock salt sales agreements which have a
term
of less than twelve (12) months;
(ii) is a guarantee in respect of
indebtedness of
any Person (other than the Company or its
Subsidiaries)
which may involve future payment in excess of
$1,000,000
or is a mortgage, security agreement or other
collateral
arrangement securing indebtedness of any Person
(other
than the Company or its Subsidiaries) in excess of
$1,000,000 and creating Encumbrances on properties
and
assets of the Company or its Subsidiaries with an
aggregate value in excess of $1,000,000;
(iii) is a lease providing for monthly
rental
payments in excess of $25,000 (exclusive of
charges for
taxes, insurance, utilities, maintenance and
repair);
(iv) is an employment or consulting contract
pursuant to which the Company or its Subsidiaries
may
reasonably be expected to make payment in excess
of
$250,000 in 1997 or thereafter;
(v) is a technology license agreement
material to
the business of the Company and its Subsidiaries,
taken
as a whole or any Significant Business;
(vi) (A) limits the Company's or any
Subsidiary's
freedom to compete in any line of business or in
any
geographical area or with any person or entity, or
(B) prohibits the Company or any of its
Subsidiaries
from disclosing any confidential information where
such
prohibition on disclosure is likely to have a
Material
Adverse Effect;
(vii) is a contract or commitment to
sell,
lease or otherwise dispose of any material asset
other
than in the ordinary course of business consistent
with
past practice;
(viii) is any other material agreement,
contract, commitment or series of related
agreements,
contracts or commitments which, in any case, is
subject
to change of control provisions or involves
payments or
receipts of more than $1,000,000 over the life of
such
agreements, contracts or commitments; or
(ix) any contract or agreement (or other
obligation) of any third party pursuant to which
the
third party has agreed to assume, retain or
otherwise
indemnify the Company against any liability.
(b) Except as set forth in Schedule 4.10, each of
the
leases, contracts and other agreements listed in
Schedules
4.7, 4.10, 4.13, 4.17 and 4.18 constitutes a valid and
binding obligation of the parties thereto and is in
full
force and effect other than as to certain provisions
thereof,
the aggregate effect of which would not deprive any
party
thereto of the practical realization of the benefits
thereof
and except as limited by (A) applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance and
other
laws affecting creditors' rights generally, (B) general
equitable principles, (C) requirements of
reasonableness,
good faith and fair dealing, and (D) additionally, in
the
case of indemnities and exculpatory provisions
(including
certain waivers), public policy, and (except for those
leases, contracts and other agreements which by their
terms
will expire prior to the Effective Time) will, subject
to the
qualification referred to above, continue in full force
and
effect after the Effective Time, in each case without
breaching the terms thereof or resulting in the
forfeiture or
impairment of any rights thereunder and without the
consent,
approval or act of, or the making of any filing with,
any
other party. There is no default by the Company or any
of
the Subsidiaries or, to the knowledge of the Company,
by any
third party, under any contract or agreement required
to be
described in and actually described on Schedule 4.10.
4.11 Brokers and Intermediaries. Other than Chase
Securities Inc., neither the Company nor any Subsidiary has
employed any broker, finder, advisor or intermediary in
connection
with the transactions contemplated by this Agreement which
would
be entitled to a broker's, finder's or similar fee or
commission
in connection therewith or upon the consummation thereof.
Any
such fees due to Chase Securities Inc. shall be paid by the
Company. If the Company receives an opinion from Chase
Securities
Inc. as to the fairness, from a financial point of view, of
the
consideration to be received by the Company's stockholders
in the
Merger, a copy of such opinion shall be delivered to Buyer
after
the Effective Time.
4.12 Tax Matters. Except as disclosed on Schedule
4.12, (a)
all Returns required to be filed in respect of the business
of the
Company and its Subsidiaries on or prior to the Closing Date
have
been or will be filed when due in timely fashion and were or
will
be correct and complete in all material respects; (b) all
Taxes
shown on such Returns that are due on or prior to the
Closing Date
have been or will be paid when due in timely
fashion or adequate accruals have been or will be
established for
the payment of such Taxes; (c) to the knowledge of the
Company,
there is no action, suit, proceeding, investigation, audit
or
claim now pending regarding any Taxes relating to the
income,
properties or operations of the businesses of the Company
and its
Subsidiaries; (d) there are no agreements for the extension
of
the time for assessment of any Taxes relating to the income,
properties or operations of the businesses of the Company
and its
Subsidiaries; (e) all Taxes relating to the income,
properties or
operations of the business of the Company and its
Subsidiaries,
which Taxes the Company or any Subsidiary is required by law
to
withhold or collect have been duly withheld or collected,
and have
been timely paid over to the proper authorities to the
extent due
and payable; and (f) there are no Tax sharing or allocation
agreements involving the Company or any Subsidiary and any
other
entity other than the tax sharing agreement among the
Company and
certain of its subsidiaries dated September 24, 1993. Except
as
disclosed on Schedule 4.12, neither the Company nor any
Subsidiary
has been a member of any Company Group other than the
Company
Group of which the Company is now a member (other than
Company
Groups of which it may have been a member prior to it
becoming a
member of a Company Group which includes the Company). As a
result
of the transactions contemplated by this Agreement, none of
the
Company nor any Subsidiary will be obligated to make a
payment to
an individual that would be a "parachute payment" to a
"disqualified individual" as those terms are defined in
Section
280G of the Code, without regard to whether such payment is
reasonable compensation for personal services performed or
to be
performed in the future. Neither the Company nor any
Subsidiary
has filed a consent under Section 341(f) of the Code,
concerning
collapsible corporations.
4.13 Employee Benefits.
(a) Schedule 4.13 sets forth all employee benefit
plans
(as defined in Section 3(3) of ERISA) and all bonus,
deferred
compensation, incentive compensation, severance or
termination pay, change in control compensation and
death
benefit plans, agreements or arrangements, maintained
or
contributed to by, and applicable to, employees of the
Company or any Subsidiary (the "Company Benefit Plans")
and
all material fringe benefit plans or programs
maintained by
the Company or any Subsidiary and applicable to
employees of
any Company or any Subsidiary. Except as provided in
Schedule 4.13, true copies of each Company Benefit Plan
have
been delivered to Buyer.
(b) All Company Benefit Plans have been
administered in
substantial compliance with their terms and with the
requirements of all applicable laws, including for U.S.
plans, but not limited to, ERISA and the Code. Without
limiting the generality of the foregoing:
(i) with respect to any Company Benefit Plan
that
is an "employee pension benefit plan" as such term
is
defined in Section 3(2) of ERISA (each a
"Retirement
Plan"), neither the Company nor any Subsidiary
nor, to
the knowledge of the Company, any trustee or
administrator of such Retirement Plan, has engaged
in a
"prohibited transaction," as defined in Section
4975 of
the Code, or a transaction prohibited by Section
406 of
ERISA, that could give rise to any material tax or
penalty under such Section 4975;
(ii) except as disclosed on Schedule 4.13, no
Retirement Plan is subject to Title IV of ERISA or
to
the minimum funding requirements of Section 412 of the
Code or Part 3 of Title I of ERISA; and
(iii) each Retirement Plan intended to be
qualified under Section 401(a) of the Code has received
a favorable determination letter from the Internal
Revenue Service, and to the Company's knowledge nothing
has occurred and no condition exists that could
reasonably be expected to cause the loss of such
qualification.
(c) Neither the Company nor the Subsidiaries nor any
other current or former member of the same controlled group
of organizations as the Company and the Subsidiaries (within
the meaning of Section 414(b), (c), (m) or (o) of the Code)
has taken any action, nor has any event occurred, which has
resulted or will likely result in any liability under Title
IV of ERISA, including any withdrawal liability with respect
to any "multiemployer plan" as defined in Section 4001(a) of
ERISA, which liability will become a liability of the Buyer
or any Affiliate of the Buyer (including but not limited to
the Companies and their Subsidiaries) following the Closing.
(d) Except as disclosed in Schedule 4.13, neither the
Company nor any Subsidiary has any current or projected
liability in respect of post-employment or post-retirement
health, medical, or life insurance benefits for retired,
former, or current employees, except as required to avoid
excise tax under Section 4980B of the Code.
4.14 Intellectual Property.
(a) Set forth on Schedule 4.14 hereto is a list of all
material patents, trademarks, trade names, service marks and
copyrights that are owned or licensed by the Company or any
of the Subsidiaries and, except as set forth on Schedule
4.14, are necessary for the operation of the Company's
businesses as presently conducted (the "Intellectual
Property"). Except as disclosed on Schedule 4.14, (i) to
the
knowledge of the Company, the Company or its respective
Subsidiaries owns or possesses, or owns or possesses
licenses
or other valid rights to use, all Intellectual Property used
by it and set forth on Schedule 4.14; and (ii) to the
knowledge of the Company, the conduct of the business of the
Company and each Subsidiary as now being conducted does not
infringe or conflict with, nor has it been alleged to
infringe or conflict with, any patents, trademarks, trade
names or copyrights or other intellectual property rights of
others.
(b) To the knowledge of the Company, there is no claim
or liability for trademark, trade name, patent or copyright
infringement as to any products manufactured or sold in the
businesses of the Company and the Subsidiaries.
(c) To the knowledge of the Company, except as set
forth on Schedule 4.14, on the date hereof (i) there are no
pending re-examination, opposition, interference,
cancellation or other administrative proceedings with
respect
to any of the Intellectual Property, and (ii) no order,
holding, decision or judgment has been rendered by any court
of law or authority, and no agreement, consent or pending
litigation in a court of law exists to which the Company or
any Subsidiary is a party, which would prevent the Company,
any Subsidiary or the Buyer from using any of the
Intellectual Property.
4.15 Environmental Matters. Except as set forth
on
Schedule 4.15, to the knowledge of the Company, each of the
representations and warranties set forth in subsections (a)
through (e) of this Section 4.15 is true and correct with
respect
to each parcel of real property owned or leased by the
Company or
any of the Subsidiaries (individually, a "Property" and
collectively, the "Properties"):
(a) The Properties do not contain, by activities
or
operations of the Company or any Subsidiary, in, on, or
under, including, without limitation, the soil and
groundwater thereunder, any Hazardous Materials, except
in
compliance in all material respects with all applicable
Environmental Laws;
(b) The Properties and all operations and
facilities at
the Properties are in compliance in all material
respects
with all applicable Environmental Laws and all
governmental
approvals, permits and licenses required for the
Properties,
and all operations and facilities of the Company or the
Subsidiaries under applicable Environmental Laws have
been
obtained and are in full force and effect and are being
complied with in all material respects;
(c) Neither the Company nor any Subsidiary, nor
any of
their respective Affiliates has received any written
governmental complaint, notice of violation, alleged
violation, or investigation or notice of potential
liability
or of potential responsibility regarding environmental
protection or any health or safety matters or permit
compliance with regard to the Properties;
(d) Hazardous Materials have not been generated,
stored,
transported, treated or disposed of on the
Properties or transferred from the Properties to any
other
location except in compliance in all material respects
with
all applicable Environmental Laws in effect at the time
of
such activities;
(e) There are no governmental, administrative
actions
or judicial proceedings pending or threatened under any
applicable Environmental Laws to which the Company or
any
Subsidiary is named as a party with respect to the
Properties
or any Hazardous Materials transferred from the
Properties,
nor are there any consent decrees or other decrees,
consent
orders, administrative orders or other orders, under
any
applicable Environmental Law with respect to any of the
Properties; and
(f) The water use rights of the Company and its
Subsidiaries are sufficient to conduct their respective
businesses as currently conducted in all material
respects.
Anything in this Agreement to the contrary notwithstanding,
this
Section 4.15 shall be the exclusive representation and
warranty
relating to environmental matters.
4.16 Absence of Certain Changes. (a) Except
as
set forth in Schedule 4.16(a), since the
Reference
Balance Sheet Date, there has been:
(i) no material adverse change in the
assets,
business, financial condition or operations of the
Company and its Subsidiaries taken as a whole or
any
Significant Business and no fact or condition
exists or
to the Company's knowledge is threatened which might
reasonably be expected to cause such a material adverse
change in the future; and
(ii) no damage, destruction, loss or claim,
whether
or not covered by insurance, or condemnation or other
taking which has a Material Adverse Effect.
(b) Except as set forth in Schedule 4.16(b) or as
expressly permitted by this Agreement, between the Reference
Balance Sheet Date and the date hereof, neither the Company
nor any Subsidiary has:
(i) purchased, sold, leased, transferred or
assigned or agreed to purchase, sell, lease, transfer
or
assign, any of its assets, tangible or intangible
involving more than $1,000,000 except in the ordinary
course of business consistent with past practice;
(ii) entered into any contract, lease, sublease,
license or sublicense (or series of related contracts,
leases, subleases, licenses and sublicenses) involving
more than $1,000,000 except in the ordinary course of
business consistent with past practices;
(iii) accelerated, terminated, modified, or
canceled any contract, lease, sublease, license or
sublicense (or series of related contracts, leases,
subleases, licenses and sublicenses) involving more
than
$1,000,000 to which the Company or any Subsidiary is a
party or by which such company is bound, except in the
ordinary course of business consistent with past
practices;
(iv) imposed any Encumbrances (except for
Permitted
Encumbrances) upon any of its real property;
(v) made any capital expenditure (or series of
related capital expenditures) involving more than
$1,000,000, except in the ordinary course of business
consistent with past practice;
(vi) made any capital investment in, any loan to,
or any acquisition of the securities or assets of any
other person (or series of related capital investments,
loans, and acquisitions) involving more than
$1,000,000,
except in the ordinary course of business consistent
with past practice;
(vii) created, incurred, assumed, or
guaranteed
any indebtedness for borrowed money (including
capitalized lease obligations) involving more than
$250,000 singly or $1,000,000 in the aggregate, except
in the ordinary course of business consistent with past
practice;
(viii) granted any license or sublicense of any
rights under or with respect to any material
Intellectual Property;
(ix) issued, sold, or otherwise disposed of any of
its capital stock or any capital stock of any
subsidiary, or granted any options, warrants, or other
rights to purchase or obtain (including upon conversion
or exercise) any of its capital stock or any capital
stock of any Subsidiary;
(x) declared, set aside, or paid any
dividend or
distribution with respect to its capital stock or
redeemed, purchased, or otherwise acquired any of
its
capital stock (other than dividends on the Company
Convertible Preferred Stock and Company Non-
Convertible
Preferred Stock);
(xi) made any loan to, or entered into any
other
transaction with, any of its directors, officers,
or
employees outside the ordinary course of business
giving
rise to any claim or right on its part against the
person or on the part of the person against such
Company;
(xii) entered into any employment
contract or
collective bargaining agreement, written or oral,
or
modified the terms of any existing such contract
or
agreement outside the ordinary course of business
consistent with past practice;
(xiii) granted any increase in the base
compensation of any of its directors, officers,
and key
employees;
(xiv) adopted any (A) bonus, (B)
profitsharing,
(C) incentive compensation, (D) pension, (E)
retirement,
(F) medical, hospitalization, life, or other
insurance
or (G) severance plan;
(xv) made any other material change in
employment
terms for any of its directors, officers, and
employees
outside the ordinary course of business consistent
with
past practice;
(xvi) made or pledged to make any capital
contribution (other than to a wholly owned
subsidiary)
or made or pledged to make any charitable
contribution
or contributions in excess of $10,000,
individually, or
$100,000 in the aggregate; or
(xvii) contractually committed to do any
of the
foregoing.
4.17 Employees, Labor Matters, etc. Except as set
forth on
Schedule 4.17, neither the Company nor any Subsidiary is a
party
to or bound by any collective bargaining or other labor
agreement,
and there are no labor unions or other organizations
representing
or, to the knowledge of the Company, purporting to represent
or
attempting to represent any employees employed by the
Company or
any Subsidiary. Except as set forth on Schedule 4.17, since
the
Reference Balance Sheet Date, there has not occurred or, to
the
knowledge of the Company, been threatened any material
strike,
slowdown, picketing, work stoppage, concerted refusal to
work
overtime or other similar labor activity with respect to any
employees of the Company or any Subsidiary.
Except as set forth on Schedule 4.17, there are no material
labor
disputes currently subject to any grievance procedure,
arbitration
or litigation and there is no representation petition
pending or,
to the knowledge of the Company, threatened with respect to
any
employee of the Company or any Subsidiary. To the knowledge
of
the Company, the Company and all its Subsidiaries have
complied in
all material respects with all applicable laws pertaining to
the
employment or termination of employment of its employees,
including, without limitation, all such applicable laws
relating
to labor relations, equal employment opportunities,
fair employment practices, prohibited discrimination or
distinction and other similar employment activities.
4.18 Affiliate Transactions. Schedule 4.18 contains a
list
of all contracts, agreements, transactions or commitments
between
any officer, employee or director of the Company or any
Subsidiary, any family member of any of the foregoing or any
other
Affiliate of any of the foregoing (other than the Company or
a
Subsidiary), on the one hand, and the Company or any
Subsidiary,
on the other hand, other than (i) compensation paid as part
of the
employment relationship for services rendered (including
directors' fees), (ii) contributions by the Company or any
Subsidiary or payments of benefits under any defined benefit
programs of the Company or any Subsidiary (collectively, the
"Affiliate Transactions"), that are currently in effect or
that
will bind the Company or any Subsidiary after the Closing,
(iii)
the Stockholders Agreement or (iv) any stock option grant
pursuant
to the Stock Plan. Except as set forth in Schedule 4.18, no
severance, "change-in control", termination or other similar
payment will be or become due at the Effective Time.
4.19 Availability of Assets and Legality of Use.
Except as
set forth in Schedule 4.19, the assets owned or leased by
the
Company constitute all the assets used in its business and
in all
material respects are in sufficient condition to operate the
businesses consistent with past practices.
4.20 Insurance. Schedule 4.20 sets forth a list and
brief
description (including nature of coverage, limits,
deductibles,
premiums and the loss experience for the most recent three
years
with respect to each type of coverage) of all policies of
insurance maintained, owned or held by the Company during
the
period from April 1, 1995 (current insurance in the case of
property and casualty insurance) up to and including the
date
hereof. The Company has complied with each of such
insurance
policies in all material respects and has not failed to give
any
notice or present any claim, with respect to claims in
excess of
$1,000,000 thereunder in a due and timely manner.
4.21 HCNA SEC Documents. (a) The Company has
furnished or made available, (or, in the case
of
future filings will furnish) to Buyer a true
and
complete copy of each report, schedule,
registration statement and definitive proxy
statement
filed by ▇▇▇▇▇▇ Chemical North America, Inc., a
wholly owned Subsidiary ("HCNA"), with the SEC
since
January 1, 1996 (as such documents have since
the
time of this Agreement been amended, the "HCNA
SEC
Documents") which are all the documents (other
than
preliminary material) that HCNA was required to
file
with the SEC since such date.
(b) As of their respective dates, the
HCNA SEC
Documents complied in all material respects
with the
requirements of the Securities Act or the
Exchange
Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder
applicable to such HCNA SEC Documents, and none
of
the HCNA SEC Documents contained any untrue
statement
of a material fact or omitted to state a
material
fact required to be stated therein or necessary
to
make the statements therein, in the light of
the
circumstances under which they were made, not
misleading. Except as set forth in Schedule
4.21,
there are no material changes to any of the
statements contained in the HCNA SEC
Documents.
(c) The financial statements of HCNA
included
in the HCNA SEC Documents comply as to form in
all
material respects with applicable accounting
requirements and with the published rules and
regulations of the SEC with respect thereto,
have
been prepared in accordance with GAAP applied
on a
consistent basis during the periods involved
(except
as may be indicated in the notes thereto or, in
the
case of the unaudited statements, as permitted
by
Form 10-Q of the SEC) and fairly present
(subject, in
the case of the unaudited statements, to
normal,
recurring adjustments) the consolidated
financial
position of HCNA and its consolidated
subsidiaries as
at the dates thereof and the consolidated
results of
their operations and cash flows for the periods
then
ended.
4.22 Disclaimer of Other Representations and
Warranties;
Knowledge; Disclosure.
(a) Neither the Company nor any Subsidiary makes,
or
has made, any representations or warranties relating to the
Company, any Subsidiary, or the business of the Company or
any
Subsidiary or otherwise in connection with the transactions
contemplated hereby other than those expressly set forth
herein
which are made by the Company. Without limiting the
generality of
the foregoing, neither the Company nor any Subsidiary has
made,
nor shall be deemed to have made, any representations or
warranties in the Information Memorandum relating to the
businesses of the Companies and their Subsidiaries prepared
by
Chase Securities Inc. on behalf of the Company and supplied
to
the Buyer prior to the date hereof (the "Information
Memorandum")
or in any presentation of the businesses of the Company and
the
Subsidiaries in connection with the transactions
contemplated
hereby, and no statement contained in the Information
Memorandum
or made in any such presentation shall be deemed a
representation
or warranty hereunder or otherwise. It is understood that
any
cost estimates, projections or other predictions, any data,
any
financial information or any memoranda or offering materials
or
presentations, including but not limited to the Information
Memorandum, are not and shall not be deemed to be or to
include
representations or warranties of the Company or any
Subsidiary. No
Person has been authorized by the Company or any Subsidiary
to
make any representation or warranty relating to the Company
or any
Subsidiary, the business of any Company or any Subsidiary or
otherwise in connection with the transactions contemplated
hereby
and, if made, such representation or warranty must not be
relied
upon as having been authorized by the Company or any
Subsidiary.
(b) Whenever a representation or warranty made by
the
Company herein refers to the knowledge of the Company, such
knowledge shall be deemed to consist only of the actual
knowledge
on the date hereof and on the Closing Date, as applicable,
of
those persons listed on Schedule 4.22.
(c) Notwithstanding anything to the contrary
contained
in this Agreement or in any of the Schedules, any
information
disclosed in one Schedule shall be deemed to be disclosed in
all
Schedules. Certain information set forth in the Schedules
is
included solely for informational purposes and may not be
required
to be disclosed pursuant to this Agreement. The disclosure
of any
information shall not be deemed to constitute an
acknowledgment
that such information is required to be
disclosed in connection with the representations and
warranties
made by the Company in this Agreement or that it is
material, nor
shall such information be deemed to establish a standard of
materiality.
4.23 Consent of Stockholders. As of the date hereof,
the
Company has obtained the written consent of its stockholders
(as
described in Section 11.13) approving this Agreement and the
transactions contemplated hereby pursuant to Section 228 of
the
DGCL.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Company that:
5.1 Organization and Authority of the Buyer. The
Buyer is
a corporation duly incorporated, validly existing and in
good
standing under the laws of the State of Delaware, with the
corporate power and authority to enter into this Agreement
and to
perform its obligations hereunder. The execution and
delivery of
this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all
requisite
corporate action on the part of the Buyer. This Agreement
has
been duly executed and delivered by the Buyer and
constitutes the
valid, binding and enforceable obligation of the Buyer,
subject to
applicable bankruptcy, reorganization, insolvency,
moratorium and
other laws affecting creditors' rights generally from time
to time
in effect and to general equitable principles.
5.2 Ability to Carry Out the Agreement. The Buyer is
not
subject to or bound by any provision of:
(i) any law, statute, rule, regulation or
judicial
or administrative decision,
(ii) any articles or certificate of
incorporation
or by-laws,
(iii) any mortgage, deed of trust, lease,
note,
stockholders' agreement, partnership agreement,
bond,
indenture, license, permit, trust, or other
material
instrument or agreement, or
(iv) any judgment, order, writ, injunction or
decree of any court, governmental body,
administrative
agency or arbitrator,
that would prevent or be violated by or under which there
would be
a conflict, breach or default as a result of, nor is the
consent
required of any Person under any material agreement which
has not
been obtained for the execution, delivery and performance by
the
Buyer of this Agreement and the transactions contemplated
hereby
other than any violations, defaults or failures to obtain
consents
which have not had a material adverse effect on the ability
of the
Buyer to perform its obligations under this Agreement.
5.3 Consents and Approvals. Except as disclosed on
Schedule 5.3, no consent, approval, order or authorization
of, or
registration, declaration or filing with, any Governmental
Entity,
is required by or with respect to the Buyer or any of its
Subsidiaries in connection with the execution and delivery
of this
Agreement by the Buyer or the consummation by the Buyer of
the
transactions contemplated hereby, the failure of which to
obtain would have a material adverse effect on the ability
of the
Buyer to enter into this Agreement and to consummate the
transactions contemplated hereby.
5.4 Financial Ability to Perform. The Buyer has, or
has
access to, sufficient funds to pay the aggregate Merger
Consideration on the terms and conditions contemplated by
this
Agreement. The Buyer acknowledges and agrees that the
Buyer's
performance of its obligations under this Agreement is not
in any
way contingent upon the availability of financing to the
Buyer.
5.5 Brokers and Intermediaries. The Buyer has not
employed
any broker, finder, advisor or intermediary other than
▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ in connection with the transactions
contemplated by
this Agreement which would be entitled to a broker's,
finder's, or
similar fee or commission in connection therewith or upon
the
consummation thereof. Any such fees due ▇▇▇▇▇▇▇ ▇▇▇▇▇
Barney
shall be paid by Buyer.
ARTICLE 6
CERTAIN COVENANTS AND AGREEMENTS
OF THE COMPANY AND THE BUYER
6.1 Access and Information. The Company and its
Subsidiaries shall permit the Buyer and its representatives
after
the date of this Agreement to have reasonable access during
normal
business hours, upon reasonable advance notice, to the
properties,
contracts, books and records of the Company and its
Subsidiaries
for the purpose of verifying the representations and
warranties of
the Company hereunder, provided that such access shall be
conducted by the Buyer and its representatives in such a
manner as
not to interfere unreasonably with the businesses or
operations of
the Company or any Subsidiary. All information provided to
the
Buyer pursuant hereto shall be subject to that certain
confidentiality agreement dated March 21, 1997 executed by
the
Buyer (the "Confidentiality Agreement"). The Buyer shall
notify
the Company promptly upon its discovery of any information
which
constitutes or would indicate a material breach by the
Company of
any representation, warranty or agreement of the Company
hereunder.
6.2 Regulatory Filings. Each of the parties hereto
will
furnish to the other party hereto such necessary information
and
reasonable assistance as such other party may reasonably
request
in connection with its preparation of necessary filings or
submissions to any Governmental Entity. The Buyer and the
Company
agree to file any information required by the HSR Act, the
Canadian Competition Act, the Investment Canada Act, the
requirements of the German Federal Cartel Office, the
Italian
Merger Control Regulation and each other governmental entity
having jurisdiction over the transaction and each party
agrees
promptly to supplement such information and promptly use
reasonable best efforts to effect compliance with the
conditions
specified in Sections 7.5 and 8.5 hereof prior to the Final
Termination Time.
6.3 Conduct of Business. Prior to the Closing, and
except
as otherwise expressly contemplated by this Agreement, the
Company
shall operate the businesses conducted by it in all material
respects in the ordinary and usual course and cause the
business
operated by its Subsidiaries to be operated in all material
respects in the ordinary and usual course. Without limiting
the
generality of the foregoing, and except as expressly
contemplated
by this Agreement, the Company shall not, and shall not
permit any
Subsidiary to, without the prior written consent
of the Buyer, engage in any act or transaction referred to
in
clauses (i) through (xvii) of Section 4.16, except that for
purposes of this Section 6.3 all references in Section 4.16
to
$1,000,000 shall be deemed to be $500,000.
6.4 Dividends; Changes in Stock. The Company shall
not,
nor shall it permit any of its Subsidiaries to (other than
in the
case of wholly owned Subsidiaries):
(a) declare or pay any dividends on or make other
distributions in respect of any of its capital stock
(other
than dividends on the Company's Non-Convertible
Preferred
Stock and Convertible Preferred Stock payable in shares
of
the Company's Non-Convertible Preferred Stock as
provided in
Article Third, Section 1(a) of the Certificate of
Designation
for such Convertible Preferred Stock and Article Third,
Section 1(a) of the Certificate of Designation for such
Non-
Convertible Preferred Stock);
(b) split, combine or reclassify any of
its
capital stock or issue or authorize or
propose the
issuance of any other securities in respect
of, in
lieu of or in substitution for shares of its
capital stock,
(c) repurchase, redeem or otherwise
acquire
(other than as required pursuant to the
Stockholders Agreement), or permit any
subsidiary
to purchase or otherwise acquire, any share
of its
capital stock, or issue, deliver or sell, or
authorize or propose the issuance, delivery
or sale
of, any share of its capital stock of any
class or
any securities convertible into, or any
rights,
warrants or options to acquire, any such
shares or
convertible securities, or
(d) enter into any transaction with any
person listed on Schedule 4.22 which results
in an
increase in amounts otherwise currently being
paid
by the Company or any Subsidiary to or for
the
benefit of any such person, in each case
except as
otherwise provided for or permitted by this
Agreement.
6.5 Satisfaction of Conditions to the Merger.
(a) Each of the Buyer and the Company will
take
all reasonable actions necessary to comply
promptly
with all legal requirements which may be
imposed on
itself with respect to the Agreement.
(b) Subject to the terms and conditions
of
this Agreement, each of the parties hereto
agrees
to use its reasonable best efforts to take, or
cause to be taken, all action and to do, or
cause
to be done, all things necessary, proper or
advisable under applicable laws and regulations
to
consummate and make effective the transactions
contemplated by this Agreement, including full
cooperation with the other party and including
the
provision of information and making of all
necessary filings in connection with, among
other
things, the approvals under the HSR Act.
(c) Each of the Buyer and the Company
will,
and will cause its Subsidiaries to, take all
reasonable actions necessary to obtain (and will
cooperate with each other in obtaining) any consent,
authorization, order or approval of, or any
exemption
by, any Governmental Entity required to be obtained
by the Buyer and the Company or any of their
Subsidiaries in connection with the Merger or the
taking of any action contemplated thereby or by this
Agreement.
6.6 Employee Matters.
(a) The Buyer shall ensure that all persons who were
employed by the Company or any Subsidiary immediately
preceding the Closing, including those on vacation, leave of
absence or disability, will be employed by the Buyer or an
Affiliate of the Buyer (including but not limited to the
Surviving Corporation or any Subsidiary) at the same base
rate of pay and in a comparable position on and after the
Closing Date, except as otherwise provided in this Section
6.6. Except as expressly provided in this Agreement the
foregoing shall not constitute any commitment, contract,
understanding or guarantee (express or implied) on the part
of the Buyer of a post-Effective Time employment
relationship. Employment of any of the employees by the
Buyer will be "at will" except as otherwise disclosed in
this
Agreement and may be terminated by the Buyer at any time for
any reason (subject to any legally binding agreement other
than this Agreement, or any applicable laws or collective
bargaining agreement, or any other arrangement or
commitment). The Buyer shall not, at any time prior to 180
days after the Closing Date, effectuate a "plant closing" or
"mass layoff" as those terms are defined in the Worker
Adjustment and Retraining Notification Act of 1988 ("WARN")
affecting in whole or in part any facility, site of
employment, operating unit or employee of the Company or any
Subsidiary without complying fully with the requirements of
WARN.
For purposes of this Section 6.6, the term "Active
Employees" shall mean any employees who are actively
employed
by the Company or any Subsidiary as of the Closing Date,
including those on vacation and leave of absence (including
maternity leave).
(b) During the period from the Closing Date through
the second anniversary of the Closing Date and subject to
subparagraph (c) below, the Buyer shall maintain, or cause
to
be maintained the employee benefit plans, policies and
arrangements described on Schedule 4.13, or take such other
actions described therein so as to provide benefits to the
Active Employees which are in the aggregate substantially
equivalent to, and provided pursuant to substantially
equivalent terms and conditions as, the Company Benefit
Plans
as in effect immediately prior to the Closing Date,
provided,
however, that, subject to the Buyer's obligation to provide
benefits to the Active Employees which are in the aggregate
substantially equivalent to, and provided pursuant to
substantially equivalent terms and conditions as, the
Company
Benefit Plans as in effect immediately prior to the Closing
Date, the Buyer shall not be obligated to maintain any
specific employee benefit plan, policy or arrangement. The
Buyer shall cause each of its employee benefit plans,
policies and arrangements covering the Active Employees on
or
after the Closing Date (each a "Buyer Benefit Plan"), to
recognize for eligibility and vesting purposes all service
of
the Active Employees counted for such purposes under the
corresponding Company Benefit Plan. In addition, if
such
Buyer Benefit Plan is a "group health plan" within the
meaning of Section 5000(b)(1) of the Code, the Buyer
shall
cause such plan to give credit to the Active Employees
for
amounts paid under the corresponding Company Benefit
Plan
toward any applicable deductibles, co-payments and out-
of
pocket limits as though such amounts had been paid in
accordance with the terms and conditions of such Buyer
Benefit Plan.
(c) Buyer shall be responsible for and assume and
honor
the obligations referred to in Schedule 6.6.
6.7 Tax Matters.
(a) The Buyer shall be liable for, and shall
pay
when due, any transfer, gains, documentary,
sales,
use, registration, stamp, value added or other
similar Taxes payable by reason of the
transactions
specified by this Agreement or attributable to
the
sale, transfer or delivery of the Shares
hereunder
(other than any capital gains or other income
tax
payable by any stockholder of the Company), and
the
Buyer shall, at its own expense, file all
necessary
Tax returns and other documentation with
respect to
all such Taxes.
(b) After the Closing Date, Buyer shall, and
shall
cause the Company to, provide each party hereto
and
each stockholder thereof with such cooperation
and
information relating to the Company and each
Subsidiary as such party reasonably may request
in
filing any Return, amended Return or claim for
refund, determining any Tax liability or a
right to
refund of Taxes, or conducting or defending any
audit
or other proceeding in respect of Taxes. Buyer
shall
cause the Company and each Subsidiary to retain
all
Returns, schedules and work papers, and all
material
records and other documents relating thereto,
until
the expiration of the statute of limitations
(and, to
the extent notified by any party, any
extensions
thereof) of the taxable years to which such
Returns
and other documents relate and until the final
determination of any Tax in respect of such
years.
Any information obtained under this Section
6.7(b)
shall be kept confidential, except as may be
otherwise necessary in connection with filing
any
Return, amended Return, or claim for refund,
determining any Tax liability or right to
refund of
Taxes, or in conducting or defending any audit
or
other proceeding in respect of Taxes.
Notwithstanding
the foregoing, neither Buyer, nor any of its
affiliates, shall be required unreasonably to
prepare
any document, or determine any information not
then
in its possession, in response to a request
under
this Section 6.7(b).
6.8 Announcement. Neither the Company nor the Buyer
will
issue any press release or otherwise make any public
statement
with respect to this Agreement and the transactions
contemplated
hereby without the prior consent of the other (which consent
shall not be unreasonably withheld), except as may be
required by
applicable law or stock exchange regulation.
Notwithstanding
anything in this Section 6.8 to the contrary, the Buyer and
the
Company will, to the extent practicable, consult with each
other
before issuing, and provide each other the opportunity to
review
and comment upon, any such press release or other public
statements with respect to this Agreement and the
transactions
contemplated hereby whether or not required by law.
6.9 Notice to Stockholders. The Company will, as
promptly
as practicable following the date of this Agreement, give
notice
to any holders of Company Stock who have not heretofore
consented
in writing to the Merger.
6.10 No Solicitation. The Company shall, and shall
direct
and use its best efforts to cause its officers, directors,
employees, representatives and agents to, immediately cease
any
discussions or negotiations with any parties that may be
ongoing
with respect to an Acquisition Proposal (as hereinafter
defined).
The Company shall not, nor shall it authorize or permit any
of its
Subsidiaries or any officer, director, employee, investment
banker, attorney or other adviser or representative of the
Company
or any of its Subsidiaries to, (i) solicit, initiate, or
encourage
the submission of, any Acquisition Proposal, (ii) enter into
any
agreement with respect to any Acquisition Proposal or (iii)
participate in any discussions or negotiations regarding, or
furnish to any person any information for the purpose of
facilitating the making of, or take any other action to
facilitate
any inquiries or the making of, any proposal that
constitutes, or
can reasonably be expected to lead to, any Acquisition
Proposal.
Without limiting the foregoing, it is understood that any
violation of which the Company or any of its Subsidiaries
had
knowledge at the time of such violation of the restrictions
set
forth in the immediately preceding sentence by any officer,
director, employee, investment banker, attorney, employee,
or
other adviser or representative of the Company or any of its
Subsidiaries, whether or not such Person is purporting to
act on
behalf of the Company or any of its Subsidiaries or
otherwise,
shall be deemed to be a breach of this Section 6.10 by the
Company
and its Subsidiaries. For purposes of this Agreement,
"Acquisition Proposal" means any proposal for a merger or
other
business combination involving the Company or any of its
Subsidiaries or any proposal or offer to acquire in any
manner,
directly or indirectly, an equity interest in the Company or
any
of its Subsidiaries, any voting securities of the Company or
any
of its Subsidiaries or a substantial portion of the assets
of the
Company. Anything contained herein to the contrary
notwithstanding, this Section 6.10 shall have no force and
effect
after April 30, 1998.
6.11 Certain Litigation. The Company agrees that it
shall
not settle any litigation commenced after the date hereof
against
the Company or any of its directors by any stockholder of
the
Company relating to the Merger or this Agreement without the
prior
written consent of Buyer, which consent shall not be
unreasonably
withheld.
6.12 Subsequent Financial Statements. Prior to the
Effective Time, the Company shall deliver to the Buyer, not
later
than 45 days after the end of each quarterly period and in
the
form customarily prepared by the Company, the unaudited
internal
financial statements of the Company, including an income
statement, for the monthly period then ended and for the
period
from the beginning of the current fiscal year to the end of
such
monthly period.
6.13 Name of Surviving Corporation. Buyer shall have
the
right to use the ▇▇▇▇▇▇ name on a non-exclusive royalty free
basis
in connection with the operation of the business of the
Subsidiaries of the Company for a period of one year from
the
Effective Time, whereupon such right to use such name shall
cease.
6.14 Insurance. The Company shall use commercially
reasonable efforts to keep or cause the insurance policies
set
forth on Schedule 4.20 (or insurance policies comparable
thereto),
to be kept in full force and effect through the Effective
Time.
ARTICLE 7
CONDITIONS PRECEDENT OF THE COMPANY
The obligation of the Company to consummate the
transactions
described in Article 2 hereof is subject to the fulfillment
of
each of the following conditions prior to or at the Closing:
7.1 Representations and Warranties. None of the
representations and warranties of the Buyer contained or
referred
to herein that is qualified as to materiality shall be
untrue or
incorrect in any respect and at the Effective Time such
representations and warranties shall be true and correct as
though
made at the Effective Time, except for changes specifically
permitted by this Agreement or resulting from any
transaction
expressly consented to in writing by the Company; none of
such
representations or warranties that are not so qualified
shall be
untrue or incorrect in any material respect and at the
Effective
Time such representations and warranties shall be true and
correct
in all material respects as though made at the Effective
Time,
except for changes specifically permitted by this Agreement
or
resulting from any transaction expressly consented to in
writing
by the Company.
7.2 Agreements. The Buyer shall have performed and
complied in all material respects with all its undertakings
and
agreements required by this Agreement to be performed or
complied
with by the Buyer prior to or at the Closing.
7.3 Buyer Certificate. The Company shall have been
furnished with a certificate of an authorized officer of the
Buyer, dated the Closing Date, certifying to the effect that
the
conditions contained in Sections 7.1 and 7.2 have been
fulfilled
and confirming the acknowledgement set forth in Section 9.2.
7.4 No Injunction. No injunction, restraining order
or
decree of any nature of any court or governmental or
regulatory
authority shall exist against the Buyer, the Company, any
Subsidiary or any of their respective Affiliates, or any of
the
principals, officers or directors of any of them, that
restrains,
prevents or materially changes the transactions contemplated
hereby.
7.5 Consents. All material consents, approvals and
authorizations of Governmental Entities, and all material
filings
with and notifications of Governmental Entities or other
entities
which regulate the businesses of the Company, the
Subsidiaries or
the Buyer, necessary on the part of the Company, any
Subsidiary or
the Buyer, or their respective Affiliates, to the execution
and
delivery of this Agreement and the consummation of the
transactions contemplated hereby are listed on Schedule 7.5,
and
shall have been obtained or effected (and all applicable
waiting
periods, if any, including any extensions thereof, under any
applicable law, statute, regulation or rule, including but
not
limited to the HSR Act, if applicable, shall have expired or
terminated, as applicable).
7.6 Miscellaneous Closing Deliveries. The Company
shall
have received each of the following:
(a)all documents, instruments and other closing
deliveries specified herein; and
(b)such evidence as the Company may reasonably
request
in order to establish (i) the corporate power
and
authority of the Buyer to consummate the
transactions
contemplated by this Agreement and (ii)
compliance
with the conditions of Closing set forth
herein.
7.7 Penrice Condition.
The transactions contemplated by the Sale and Purchase
Agreement-Penrice Group of Companies dated the date hereof
shall
have been consummated.
ARTICLE 8
CONDITIONS PRECEDENT OF THE BUYER
The obligation of the Buyer to consummate the
transactions
described in Article 2 hereof is subject to the fulfillment
of
each of the following conditions prior to or at the Closing:
8.1 Representations and Warranties. (x) None of the
representations and warranties of the Company contained or
referred to herein that are qualified as to Material Adverse
Effect shall be untrue or incorrect in any respect and at
the
Effective Time such representations and warranties shall be
true
and correct at the Effective Time as though made at the
Effective
Time, except for changes therein specifically permitted by
this
Agreement or resulting from any transaction expressly
consented to
in writing by the Buyer; (y) none of such representations or
warranties that is not so qualified shall be untrue or
incorrect
in such a manner as to cause a Material Adverse Effect and
at the
Effective Time such representations and warranties shall be
true
and correct as though made at the Effective Time except for
changes (i) specifically permitted by this Agreement or
(ii)resulting from any transaction expressly consented to in
writing by the Buyer or (iii)those that do not have a
Material
Adverse Effect (it being understood that for purposes of
this
clause (y) qualifications in the representations and
warranties as
to a materiality shall be disregarded).
8.2 Agreements. The Company shall have performed
and
complied in all respects with all of its undertakings and
agreements required by this Agreement to be performed or
complied
with by it prior to or at the Closing provided that the non
compliance of an undertaking or agreement, other than in the
case
of uncured or unremedied non-compliance with Section 6.3
(insofar
as it relates to Section 4.16(b)(ix), (b)(x) and (b)(xvi)),
Section 6.4 and Section 6.11 hereof, at any time shall not
constitute a failure of the condition contained in this
Section
8.2 if such non-compliance is not a material breach of such
undertaking or agreement or if such non-compliance, both
alone and
in conjunction with all other such non-compliances, has not
had a
Material Adverse Effect.
8.3 The Company's Certificate. The Buyer shall have
been
furnished with a certificate of an authorized officer of the
Company, dated the Closing Date, certifying to the effect
that
the conditions contained in Sections 8.1, 8.2 and 8.6 have
been
fulfilled.
8.4 No Injunction. No injunction, restraining order
or
decree of any court or governmental or regulatory authority
shall
exist against the Buyer, the Company, any Subsidiary or any
of
their respective Affiliates, or any of the principals,
officers or
directors of any of them, that restrains, prevents or
materially
changes the transactions contemplated hereby.
8.5 Consents. All material consents, approvals and
authorizations of Governmental Entities, and all material
filings
with and notifications of Governmental Entities or other
entities
which regulate the businesses of the Company, the
Subsidiaries or
the Buyer, necessary on the part of the Company, any
Subsidiary or
the Buyer, or their respective Affiliates, to the execution
and
delivery of this Agreement and the consummation of the
transactions contemplated hereby are listed on Schedule 7.5,
and
shall have been obtained or effected (and all applicable
waiting
periods, if any, including any extensions thereof, under any
applicable law, statute, regulation or rule, including but
not
limited to the HSR Act, if applicable, shall have expired or
terminated, as applicable).
8.6 No Material Adverse Change. Since the Reference
Balance Sheet Date, except as set forth on Schedule 8.6,
there
shall have been no material adverse change in the financial
condition or results of operations of either (i) the Company
and
its Subsidiaries, taken as a whole or (ii) any Significant
Business.
8.7 Miscellaneous Closing Deliveries. The Buyer
shall
have received each of the following:
(a) all documents, instruments and other closing
deliveries specified herein; and
(b) such evidence as the Buyer may reasonably
request
in order to establish (i) the corporate power and
authority
of the Company to consummate the transactions
contemplated by
this Agreement and (ii) compliance with the conditions
of
Closing set forth herein.
8.8 Penrice Condition.
The transactions contemplated by the Sale and Purchase
Agreements - Penrice Group of Companies dated the date
hereof
shall have been consummated.
ARTICLE 9
NONSURVIVAL OF REPRESENTATIONS AND
WARRANTIES; CERTAIN ACKNOWLEDGMENTS
9.1 Nonsurvival of Representations and Warranties.
None of
the representations and warranties in this Agreement or in
any
instrument delivered pursuant to this Agreement shall
survive the
Effective Time and all such representations and warranties
will be
extinguished on consummation of the Merger and neither
Company,
any Subsidiary nor any officer, director or employee or
stockholder shall be under any liability whatsoever with
respect
to any such representation or warranty after such time.
This
Section 9.1 shall not limit any covenant or agreement of the
parties which by its terms contemplates performance after
the
Effective Time.
9.2 Information. On or immediately prior to the
Closing
Date, the Buyer shall provide to the Company a certificate
pursuant to which the Buyer will acknowledge each of the
following:
(a) The Buyer has received all materials relating to
the
business of the Company and each Subsidiary which it has
requested
and has been afforded the opportunity to obtain any
additional
information necessary to verify the accuracy of any such
information or of any representation or warranty made by the
Company hereunder or to otherwise evaluate the merits of the
transactions contemplated hereby; and
(b) The Company and its representatives have answered
to
the Buyer's satisfaction all inquiries that the Buyer or its
representatives have made concerning the business of the
Company
and each Subsidiary or otherwise relating to the
transactions
contemplated hereby.
ARTICLE 10
INDEMNIFICATION
10.1 Indemnification.
(a) The Company will indemnify, defend and hold
harmless, and after the Effective Time, Buyer will
indemnify,
defend and hold harmless, the present and former
officers and
directors of the Company and its Affiliates and the
Stockholders (each an "Indemnified Party") against all
losses, claims, demands, actions, causes of action,
damages
or liabilities arising out of actions or omissions
occurring
at or prior to the Effective Time (individually, a
"Claim"
and collectively, "Claims") to the fullest extent
provided in
the charters and by-laws of the Company and its
Subsidiaries,
as the case may be, immediately prior to the Effective
Time.
Without limiting the foregoing, the Company, and after
the
Effective Time, Buyer, shall advance expenses incurred
with
respect to Claims, including attorney's fees, as they
are
incurred, to the fullest extent permitted under
applicable
law, provided that the person on whose behalf the
expenses
are advanced provides an undertaking (which need not be
secured) to repay such advances if it is ultimately
determined by a court of competent jurisdiction that
indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by applicable law.
(b) The certificate of incorporation and the by-
laws of
the Surviving Corporation (and its Subsidiaries
referred to
above) shall contain the provisions with respect to
indemnification and exculpation from liability set
forth in
the Company's and such Subsidiaries' certificates of
incorporation and by-laws on the date of this
Agreement,
which provisions shall not be amended, repealed or
otherwise
modified for a period of seven years from the Effective
Time
in any manner that would adversely affect the rights
thereunder of individuals who on or prior to the
Effective
Time were directors, officers, employees or agents of
Company, unless such modification is required by law.
(c) The Buyer or the Surviving Corporation shall
maintain in effect for six years from the Effective
Time
policies of directors' and officers' liability
insurance
containing terms and conditions which are not less
advantageous to the insured than any such policies of
the
Company or any such Subsidiary currently in effect on the
date of this Agreement (the "Company Insurance"), with
respect to matters occurring prior to the Effective Time, to
the extent available, and having the maximum available
coverage under any such Company Insurance policies; provided
that (i) the Surviving Corporation and such Subsidiaries
following the Merger shall not be required to spend in
excess
of 150% of the amount spent on current annual premiums for
the Company Insurance (the "Premium Limit") per year
therefor; provided further that if the Surviving Corporation
and such Subsidiaries following the Merger would be required
to spend in excess of the Premium Limit per year to obtain
insurance having the maximum available coverage under
Company
Insurance policies, the Surviving Corporation and such
Subsidiaries will be required to spend up to such amount to
maintain or procure insurance coverage pursuant hereto,
subject to availability of such (or similar) coverage and
(ii) such policies may in the sole discretion of the
Surviving Corporation be one or more "tail" policies for all
or any portion of the full six year period, provided that
such "tail" policies, contain terms and conditions and
provide coverage no less advantageous to the insiders than
the terms, conditions and coverage in the Company Insurance.
Buyer agrees that in the event that the Surviving
Corporation
and such Subsidiaries would be required to spend in excess
of
the Premium Limit per year to obtain insurance having the
maximum available coverage under Company Insurance policies,
the Surviving Corporation will notify the officers and
directors who are the beneficiaries thereof and permit such
officers and directors to pay any excess amount over the
Premium Limit which may be necessary to maintain such
policies. The annual premium for Company Insurance for
calendar year 1997 was not greater than $100,000.
(d) Any Indemnified Party wishing to claim
indemnification under this Section 10.1, upon learning of
any
claim, action, suit, proceeding or investigation which may
give rise to a right to indemnification under this Section
10.1, shall promptly notify Buyer thereof. In the event of
any such claim, action, suit, proceeding or investigation,
(i) Buyer or the Surviving Corporation shall have the right
to assume the defense thereof (with counsel engaged by Buyer
or the Surviving Corporation to be reasonably acceptable to
the Indemnified Party) and Buyer shall not be liable to such
Indemnified Party for any legal expenses of other counsel or
any other expenses subsequently incurred by such Indemnified
Party in connection with the defense thereof provided there
is no conflict of interests between the Indemnified Party
and
the Surviving Corporation or Buyer in the Indemnified
Party's
good faith judgment based upon advice of counsel, (ii) the
Indemnified Party will cooperate in the defense of any such
matter and (iii) Buyer shall not be liable for any
settlement
effected without its prior written consent.
(e) This Section 10.1 shall survive the closing of the
transactions contemplated hereby, is intended to benefit the
Company, the Surviving Corporation and each of the
Indemnified Parties (each of whom shall be entitled to
enforce this Section 10.1 against the Company or the
Surviving Corporation, as the case may be) and shall be
binding on all successors and assigns of the Surviving
Corporation.
(f) In the event the Surviving Corporation or any such
Subsidiary or the Buyer, as the case may be, or any of
their
respective successors or assigns (i) consolidates with
or
merges into any other person and shall not be the
continuing
or surviving corporation or entity of such
consolidation or
merger, or (ii) transfers all or substantially all of
its
properties and assets to any person, then, in each such
case,
the Buyer shall cause proper provision to be made so
that
such resulting or surviving corporation or entity or
such
transferee assumes the obligations set forth in this
Section
10.1.
(g) Buyer shall cause the Company to satisfy all
of the
Company's obligations under this Article 10.
ARTICLE 11
MISCELLANEOUS
11.1 Expenses.
(a) The Company shall pay the fees and
expenses of its counsel, accountants,
investment
banking firms, and other experts and
consultants
and shall pay all other expenses incurred by
it in
connection with the negotiation, preparation
and
execution of this Agreement and the
consummation of
the transactions contemplated hereby.
Schedule
11.1 which shall be delivered promptly after
the
date hereof will contain an estimate of the
fees
and expenses of the counsel, accountants,
investment banking firms, change of control
payments (other than severance payments) and
other
experts and consultants retained by the
Company in
connection with the Merger and the
transactions
contemplated by the Penrice Agreement. If
such
fees in the aggregate exceed $22.5 million
(exclusive of the closing related obligations
payable under the Management Services
Agreement
with ▇.▇. ▇▇▇▇▇▇ and ▇.▇. ▇▇▇▇▇▇▇▇▇▇ referred
to in
Schedule 6.6), then the aggregate Merger
Consideration shall be reduced pro-rata by
the
amount of such excess.
(b) The Buyer shall pay the fees and
expenses of its counsel, accountants,
investment
banking firms, and other experts and
consultants
and shall pay all other expenses incurred by
it in
connection with the negotiation, preparation
and
execution of this Agreement and the
consummation of
the transactions contemplated hereby.
11.2 Applicable Law. The rights and duties of the
Buyer and
the Company under this Agreement shall, pursuant to the New
York
General Obligations Law Section 5-1401, be governed by the
law of
the State of New York except to the extent the laws of the
State
of Delaware shall apply to the Merger.
11.3 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have
been
duly given or made as follows: (a) if sent by registered or
certified mail in the United States return receipt
requested, upon
receipt; (b) if sent by reputable overnight air courier
(such as
DHL or Federal Express), two business days after being so
sent;
(c) if sent by telecopy transmission, with a copy mailed on
the
same day in the manner provided in clauses (a) or (b) above,
when
transmitted and receipt is confirmed by telephone; or
(d) if otherwise actually personally delivered, when
delivered
and shall be sent or delivered as follows:
If to the Company, to:
▇▇▇▇▇▇ Chemical Group, Inc.
c/o D. ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Associates, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (212) 207-
6470
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
with a copy to:
Winthrop, Stimson, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
If to the Buyer or Newco, to:
IMC Global Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
with a copy to:
Sidley & Austin
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Such names and addresses may be changed by such notice.
11.4 Entire Agreement. This Agreement (including the
Schedules attached hereto, all of which are a part hereof)
and
the Confidentiality Agreement contains the entire
understanding
of the parties hereto with respect to the subject matter
contained herein, supersedes and cancels all prior
agreements,
negotiations, correspondence, undertakings and
communications of
the parties, oral or written, respecting such subject
matter,
including but not limited to the Confidential Memorandum.
There
are no restrictions, promises, representations, warranties,
agreements or undertakings of any party hereto with respect
to
the transactions under this Agreement other than those set
forth
herein or made hereunder.
11.5 Amendments. This Agreement may be amended only
by a
written instrument executed by the parties or their
respective
successors or assigns.
11.6 Headings; References. The article, section and
paragraph headings contained in this Agreement are for
reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. All references herein to
"Articles," "Sections," "Schedules" or "Exhibits" shall be
deemed
to be references to Articles or Sections hereof or Schedules
or
Exhibits hereto unless otherwise indicated.
11.7 Counterparts. This Agreement may be executed in
one or
more counterparts and each counterpart shall be deemed to be
an
original.
11.8 Parties in Interest; Assignment. This Agreement
shall
inure to the benefit of and be binding upon the Company and
Buyer
and their respective successors. Except as provided in or
contemplated by Section 6.6 and Article 10 (each of which
shall
confer upon the employees and other Persons referred to
therein
for whose benefit it is intended the right to enforce such
Section
or Article, as applicable notwithstanding any general
releases
that any such person may execute in connection with a
termination
of employment), nothing in this Agreement, express or
implied, is
intended to confer upon any Person not a party to this
Agreement
any rights or remedies under or by reason of this Agreement.
No
party to this Agreement may assign or delegate all or any
portion
of its rights, obligations or liabilities under this
Agreement
without the prior written consent of the other party to this
Agreement.
11.9 Severability; Enforcement. Any term or provision
of
this Agreement that is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective
to the
extent of such invalidity or unenforceability without
rendering
invalid or unenforceable the remaining terms and provisions
of
this Agreement or affecting the validity or unenforceability
of
any of the terms or provisions of this Agreement in any
other
jurisdiction. If any provision of this Agreement is so
broad as
to be unenforceable, the provisions shall be interpreted to
be
only so broad as is enforceable.
11.10 Waiver. Any of the conditions to Closing
set
forth in this Agreement may be waived in writing at any time
prior
to or at the Closing hereunder by the party entitled to the
benefit thereof. The failure of any party hereto to enforce
at
any time any of the provisions of this Agreement shall in no
way
be construed to be a waiver of any such provision, nor in
any way
to affect the validity of this Agreement or any part hereof
or the
right of such party thereafter to enforce each and every
such
provision. No waiver of any breach of or non-compliance
with this
Agreement shall be held to be a waiver of any other or
subsequent
breach or non-compliance.
11.11 Relationship Between the Parties. The
parties
agree that this is an arm's length transaction in which the
parties' rights, undertakings and obligations are limited to
those
which are set forth in this Agreement.
11.12 WAIVER OF CONSEQUENTIAL DAMAGES AND JURY
TRIAL.
THE PARTIES TO THIS AGREEMENT EXPRESSLY WAIVE AND FOREGO ANY
RIGHT
TO RECOVER CONSEQUENTIAL, EXEMPLARY, INDIRECT, INCIDENTAL,
PUNITIVE, OR SPECIAL DAMAGES IN ANY ARBITRATION, LAWSUIT,
LITIGATION OR PROCEEDING ARISING OUT OF OR RESULTING FROM
ANY
CONTROVERSY OR CLAIM ARISING OUT OR RELATING TO THIS
AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS
CONTEMPLATED HEREBY.
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF
THE
FOREGOING WAIVERS, (ii) IT UNDERSTANDS AND HAS CONSIDERED
THE
IMPLICATIONS OF SUCH WAIVERS, (iii) IT MAKES SUCH WAIVERS
VOLUNTARILY, AND (iv) IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 11.12.
11.13 Approval of Company Stockholders. Prior to
or
simultaneously with the execution of this Agreement, holders
of
90% or more of the Company Common Stock shall have entered
into an
amendment of the Stockholders Agreement to amend Section 1K
thereof in the manner attached hereto as Annex 11.13. Each
of the
stockholders listed on Schedule 11.13 is the beneficial
owner of
the number of shares of Company Common Stock set forth
opposite
such stockholder's name and such stockholder owns all such
shares
free and clear of all liens, charges, encumbrances,
restrictions
and commitments of any kind. Such stockholders have
executed a
written consent, which has been delivered to Buyer upon
execution
of this Agreement.
11.14 Liquidated Damages. The parties hereto
agree
that, if the Effective Date shall not have occurred under
the
circumstances described below, because it is impossible to
adequately measure actual damages, in lieu of actual
damages, the
Company shall be entitled to liquidated damages in the
amount of
$40 million (the "Liquidated Damages"), which amount the
parties
hereby agree to be a reasonable amount under the
circumstances of
the transaction contemplated hereby. The Company agrees and
acknowledges that, in the absence of the Buyer's fraud or
willful
misconduct, such Liquidated Damages are in full satisfaction
of,
and shall be in lieu of, any other claim, right, or other
cause of
action which the Company might have with respect to the
circumstances described below, and the Company agrees that,
in the
absence of the Buyer's fraud or willful misconduct, upon
payment
of such Liquidated Damages, the Company shall release Buyer
from
any and all such claims. The Liquidated Damages shall be
payable
to the Company by Buyer on the Final Termination Date if (x)
the
Effective Time shall not have occurred on or before the
Final
Termination Date, (y) the conditions set forth in Sections
8.1,
8.2, 8.4, 8.5 and 8.6 shall not have been breached in any
material
respect as of the Final Termination Date (other than, in the
case
of Sections 8.4 and 8.5, with respect to antitrust matters)
and
(z) the Penrice closing contemplated by Section 8.8 shall
not have
occurred under circumstances where liquidated damages are
not
payable under the Penrice Agreement.
IN WITNESS WHEREOF, the parties hereto have duly
executed
this Agreement as of the date first above written.
▇▇▇▇▇▇ CHEMICAL GROUP, INC.
By:
Name:
Title:
IMC GLOBAL INC.
By:
Name:
Title:
IMC MERGER SUB INC.
By:
Name:
Title: