EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
DATED AS OF SEPTEMBER 18, 1996
by and between
TWCC ACQUISITION CORP.
and
THE ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ COMPANY
TABLE OF CONTENTS
Page
ARTICLE 1
THE MERGER.....................................................................1
1.01. The Merger......................................................1
1.02. Effective Time of the Merger....................................1
1.03. Effect of Merger................................................1
1.04. Supplementary Action............................................1
ARTICLE 2
THE SURVIVING CORPORATION......................................................2
2.01. Name............................................................2
2.02. Articles of Organization........................................2
2.03. Bylaws..........................................................2
2.04. Directors.......................................................2
2.05. Officers........................................................2
2.06. Purpose.........................................................2
2.07. Authorized Capitalization.......................................3
ARTICLE 3
CONVERSION OF SHARES...........................................................3
3.01. Conversion of Shares............................................3
3.02. No Further Transfers............................................4
3.03. Adjustment of Merger Consideration..............................4
ARTICLE 4
PAYMENT........................................................................5
4.01. Exchange Procedure..............................................5
4.02. Lost Certificates...............................................6
ARTICLE 5
CLOSING........................................................................6
5.01. Time and Place..................................................6
5.02. Actions at Closing..............................................6
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................................7
6.01. Capitalization..................................................7
6.02. Subsidiaries....................................................8
6.03. Organization....................................................8
6.04. Annual and Quarterly Reports....................................8
6.05. Absence of Certain Changes or Events............................9
6.06. Title to Assets.................................................9
i
TABLE OF CONTENTS (cont'd)
6.07. Intellectual Property..........................................10
6.08. Commitments....................................................11
6.09. Litigation.....................................................12
6.10. Compliance With Laws...........................................12
6.11. Environmental Matters..........................................12
6.12. Corporate Power and Authority; No Violations...................13
6.13. Employee Benefit Plans.........................................14
6.14. Consents.......................................................15
6.15. Taxes..........................................................15
6.16. Disclaimer.....................................................16
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF PURCHASER...................................16
7.01. Organization; Capitalization...................................16
7.02. Corporate Power and Authority; Effect of Agreement.............17
7.03. Consents.......................................................17
7.04. Litigation.....................................................17
7.05. Purchase for Investment........................................17
7.06. Adequate Funds.................................................17
ARTICLE 8
COVENANTS OF THE PARTIES......................................................18
8.01. Efforts........................................................18
8.02. Conduct of Business............................................18
8.03. Access.........................................................20
8.04. No Solicitation................................................20
8.05. Books and Records; Personnel..................................20
8.06. Liabilities and Indemnification................................21
8.07. Insurance......................................................21
8.08. Subsequent Disclosures by Company..............................21
8.09. Environmental Matters..........................................22
8.10. Indebtedness...................................................22
ARTICLE 9
CONDITIONS TO PURCHASER'S OBLIGATIONS.........................................22
9.01. Representations, Warranties and Covenants of the Company.......22
9.02. No Prohibition.................................................23
9.03. Third Party Consents...........................................23
9.04. Governmental Consents..........................................23
9.05. Company Counsel Opinion........................................23
9.06. Title Insurance................................................23
ii
TABLE OF CONTENTS (cont'd)
9.07. Surveys........................................................24
9.08. Shareholder Approval...........................................24
9.09. Release of Liens...............................................24
ARTICLE 10
CONDITIONS TO THE COMPANY'S OBLIGATIONS.......................................24
10.01. Representations, Warranties and Covenants of Purchaser.........24
10.02. No Prohibition.................................................25
10.03. Governmental Consents..........................................25
10.04. Repayment of Indebdtedness.....................................25
10.05. Purchaser Counsel Opinion......................................25
ARTICLE 11
TERMINATION PRIOR TO CLOSING..................................................25
11.01. Termination....................................................25
11.02. Effect of Termination..........................................26
ARTICLE 12
MISCELLANEOUS.................................................................26
12.01. Non-Survival of Representations and Warranties.................26
12.02. Interpretive Provisions; Certain Definitions...................27
12.03. Entire Agreement...............................................27
12.04. Successors and Assigns.........................................27
12.05. Headings.......................................................28
12.06. Modification and Waiver........................................28
12.07. Expenses.......................................................28
12.08. Notices........................................................28
12.09. Governing Law..................................................29
12.10. Public Announcements...........................................29
12.11. Counterparts...................................................29
EXHIBITS
Exhibit 1.02 Articles of Merger
Exhibit 3.01 Distribution of Merger Consideration
iii
LIST OF DEFINED TERMS
TERM PLACE OF DEFINITION
---- -------------------
"Affiliate" Section 6.15(a)
"Affiliates" Section 6.15(a)
"Agreement" Preamble
"Allocated Merger Consideration" Section 3.01(a)
"Articles of Merger" Section 1.02
"Balance Sheet" Section 6.04
"Benefit Plan" Section 6.13(a)
"Certificates" Section 3.01
"Class A Common" Section 6.01
"Class B Common" Section 6.01
"Class C Common" Section 6.01
"Closing Date" Section 5.01
"Closing" Section 5.01
"Commitments" Section 6.08(a)
"Company Capital Stock" Section 3.01(a)
"Company" Preamble
"Company Related Parties" Section 6.16
"Company's Certificate" Section 9.01(c)
"Confidentiality Agreement" Section 8.03
"Constituent Corporations" Preamble
"Corporation Law" Preamble
"Credit Agreement" Section 12.02(b)
"Debt" Section 3.03(a)
"Defaulting Party" Section 11.02
"Disclosure Schedule" Article 6
"Domestic Listed Intellectual Property" Section 6.07
"ERISA" Section 6.13(a)
"Effective Time" Section 1.02
"Encumbrances" Section 6.02
"Environmental Laws" Section 6.11(b)
"Environmental Lien" Section 6.11(c)
"Exchange Agent" Section 4.01(a)
"Exchange Fund" Section 4.01(a)
"Financial Statements" Section 6.04
"Government Entity" Section 6.09
"HSR Act" Section 6.14
"Indebtedness" Section 12.02(b)
"Indemnified Party" Section 8.06(b)
"Initial Merger Consideration" Section 3.01(a)
"Insurance Policies" Section 6.08(c)
"Intellectual Property" Section 6.07
iv
"Leased Property" Section 6.06(b)
"Liabilities" Section 8.06(a)
"Listed Intellectual Property" Section 6.07
"Litigation" Section 6.09
"Losses" Section 8.06(a)
"Management Payment" Section 8.02(c)
"Material Adverse Effect" Section 6.03
"MBL Subordinated Note" Section 12.02(b)
"MEP" Section 4.01(a)
"MEP Payment" Section 4.01(a)
"Merger" Preamble
"Merger Consideration" Section 3.01(a)
"Owned Property" Section 6.06(b)
"Permitted Encumbrances" Section 6.06(a)
"Permits" Section 6.10
"Person" Section 12.02(b)
"Property Leases" Section 6.06(b)
"Purchaser" Preamble
"Purchaser's Certificate" Section 10.01(c)
"Purchaser Common Stock" Section 3.01(c)
"Purchaser Merger Conditions" Section 3.03(b)
"Real Property" Section 6.06(b)
"Required Consents" Section 9.03
"Required Government Consents" Section 9.04
"Returns" Section 6.15(a)
"Revolving Credit Facility" Section 3.03(a)
"Section 8.08 Notice" Section 8.08
"Senior Subordinated Notes" Section 12.02(b)
"Series A Preferred" Section 6.01
"Stockholder" Section 3.01
"Subsidiaries" Section 6.02
"Subsidiary" Section 6.02
"Surviving Corporation" Preamble
"Taxes" Section 6.15(f)
"Title Documents" Section 6.06(b)
"to the Company's knowledge" or Section 12.02(a)
"to the knowledge of the Company"
"to Purchaser's knowledge" or Section 12.02(a)
"to the knowledge of Purchaser"
v
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER ("Agreement"), dated as of September
18, 1996, is made by and between The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Company, a Massachusetts
corporation (the "Company") and TWCC Acquisition Corp., a Massachusetts
corporation ("Purchaser").
The Boards of Directors and stockholders of the Company and Purchaser
deem it advisable and in the best interests of each such corporation and its
respective stockholders to cause the merger of Purchaser with and into the
Company (the "Merger") upon the terms and conditions set forth herein and in
accordance with the General Laws of the Commonwealth of Massachusetts (the
"Corporation Law"). (Purchaser and the Company being hereinafter sometimes
referred to as the "Constituent Corporations" and the Company, following the
effectiveness of the Merger, as the "Surviving Corporation".)
THEREFORE, in consideration of the mutual representations, warranties,
covenants and conditions contained herein, and in order to set forth the terms
and conditions of the Merger and the mode of carrying the same into effect, the
parties hereby agree as follows:
ARTICLE 1
THE MERGER
1.01. THE MERGER. Upon the terms and subject to the conditions
hereof as promptly as practicable following the satisfaction or waiver of the
conditions set forth in Articles 9 and 10 hereof, Purchaser shall be merged with
and into the Company and the separate existence of Purchaser shall thereupon
cease, and the Company, as the Surviving Corporation, shall continue to exist
under and be governed by the Corporation Law.
1.02. EFFECTIVE TIME OF THE MERGER. The Merger shall become
effective when properly executed Articles of Merger in substantially the form
of Exhibit 1.02 attached hereto (the "Articles of Merger") are filed with the
Secretary of the Commonwealth of Massachusetts as provided in the Corporation
Law. When used in this Agreement, the term "Effective Time" shall mean the date
and time at which the Articles of Merger are so filed.
1.03. EFFECT OF MERGER. The Merger shall have the effects set
forth in the Corporation Law.
1.04. SUPPLEMENTARY ACTION. If, at any time after the Effective
Time, the Surviving Corporation shall consider or be advised that any further
assignments or assurances are necessary or desirable to vest or to perfect or
confirm of record in the Surviving Corporation the title to any property or
rights of either of the Constituent Corporations, or otherwise to carry out the
provisions of this Agreement, the officers and directors of the Surviving
Corporation are hereby authorized and empowered on behalf of the respective
Constituent Corporations, in the name of and on behalf of
the appropriate Constituent Corporation, to execute and deliver any and all
things necessary or proper to vest or to perfect or confirm title to such
property or rights in the Surviving Corporation, and otherwise to carry out the
purposes and provisions of this Agreement.
ARTICLE 2
THE SURVIVING CORPORATION
2.01. NAME. The name of the Surviving Corporation will be The
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Company.
2.02. ARTICLES OF ORGANIZATION. The Articles of Organization of
Purchaser as amended by the Articles of Merger shall be the articles of
organization of the Surviving Corporation. The Articles of Organization of the
Surviving Corporation thereafter may be amended in accordance with its terms and
as provided by law.
2.03. BYLAWS. The Bylaws of Purchaser immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation.
2.04. DIRECTORS. The directors of Purchaser immediately prior to
the Effective Time shall be the directors of the Surviving Corporation until
their respective successors are duly elected and qualified in the manner
provided in the Articles of Organization and Bylaws of the Surviving
Corporation, or until their earlier resignation or removal, or as otherwise
provided by law.
2.05. OFFICERS. The officers of the Company immediately prior to
the Effective Time shall be the officers of the Surviving Corporation until
their successors are duly elected and qualified in the manner provided in the
Articles of Organization and Bylaws of the Surviving Corporation, or until their
earlier resignation or removal, or as otherwise provided by law.
2.06. PURPOSE. The purposes of the Surviving Corporation shall be
as follows:
(a) To manufacture, produce, buy, sell, export, import, and otherwise
deal in any and all kinds of merchandise, yarns, threads, textile fabrics,
clothing, underclothing, wearing apparel of every kind, all articles,
materials and supplies used or capable of being used in such manufacture or
dealing, the products and by-products of the same, and all equipment and
materials necessary or useful in manufacturing or marketing merchandise.
(b) To carry on any manufacturing, mercantile, selling, management,
service or other business, operation or activity which may be lawfully
carried on by a corporation organized under the Corporation Law, whether or
not related to those referred to in the foregoing paragraph.
(c) To carry on any business, operation or activity through a wholly
or partly owned subsidiary.
2
(d) To carry on any business, operation or activity referred to in
the foregoing paragraphs to the same extent as might an individual, whether
as principal, agent, contractor or otherwise, and either alone or in
conjunction or a joint venture or other arrangement with any corporation,
association, trust, firm or individual.
(e) To have as additional purposes all powers granted to corporations
by the laws of The Commonwealth of Massachusetts, provided that no such
purpose shall include any activity inconsistent with the Business
Corporation Law or the general laws of said Commonwealth.
2.07. AUTHORIZED CAPITALIZATION. The authorized capitalization of
the Surviving Corporation shall be 1,000 shares of Common Stock, par value $.01
per share. After the Effective Time, the authorized capitalization of the
Surviving Corporation may be changed as provided by the Articles of Organization
and by law.
ARTICLE 3
CONVERSION OF SHARES
3.01. CONVERSION OF SHARES. As of the Effective Time, by virtue
of the Merger and without any action on the part of any record holder
("Stockholder") of certificates representing shares of the Company's capital
stock ("Certificates"):
(a) The issued and outstanding shares of the Company's Series A
Preferred Stock, Class A Common Stock, Class B Common Stock and Class C Common
Stock (collectively, the "Company Capital Stock"), excluding any such shares
held in the Company's treasury, shall be automatically converted into and shall
represent only the right to receive, in the aggregate, $202,500,000.00 (Two
Hundred Two Million Five Hundred Thousand Dollars) (the "Initial Merger
Consideration") subject to adjustment as provided in Section 3.03 hereof (the
"Merger Consideration"). Each share of Company Capital Stock shall be
automatically converted into and shall represent only the right to receive the
portion of the Merger Consideration (as defined below) as set forth on Exhibit
3.01 hereto (the "Allocated Merger Consideration").
(b) Each share of the Company Capital Stock held in the treasury
of the Company shall be canceled and retired and all rights in respect thereof
shall cease to exist and no payment shall be made in respect thereof; PROVIDED,
HOWEVER, that shares of the Company's Class C Common Stock authorized for sale
pursuant to the Company's Master Executive Stock Purchase Plan but not allocated
to any individual for purchase shall receive payment from the Merger
Consideration in accordance with such plan.
(c) Each issued and outstanding share of Purchaser's Common
Stock, par value $.01 per share ("Purchaser Common Stock"), shall be converted
into one share of the Surviving Corporation's Common Stock, par value $.01 per
share.
3
3.02. NO FURTHER TRANSFERS. At the Effective Time, the stock
transfer books of the Company shall be closed and no transfer of Company Capital
Stock shall thereafter be made.
3.03. ADJUSTMENT OF MERGER CONSIDERATION.
(a) The Initial Merger Consideration shall be reduced by the
following amounts:
(i) the amount of all Debt (as defined below)
outstanding on the Closing Date (as defined below), plus all principal
payments on such Debt made since June 29, 1996;
(ii) all costs, fees and expenses paid or payable by the
Company in connection with the process relating to the proposed sale
of the Company, including, without limitation, the costs, fees and
expenses paid or payable to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and all costs, fees
and expenses incurred in connection with the preparation for,
negotiation of and closing of the Merger;
(iii) all costs, fees and expenses associated with the
prepayment or other early termination of any Debt;
(iv) 68.42% of the first $9,600,000.00 and 100% of any
amount in excess of such amount of payments due under the MEP (as
defined below) and The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Company Long Term Incentive Plan
as a consequence of the Merger;
(v) 60% of any Management Payment (as defined in Section
8.02(c)) in excess of $790,000 or such lesser amount as shall be
determined pursuant to the last sentence of Section 8.02(c); and
(vi) the amount of any payments made by the Company prior
to the Closing Date in respect of deferred or accrued and unpaid
dividends on the Company Capital Stock.
For purposes of this Section 3.03(a), "Debt" means any liability (including
without limitation accrued but unpaid interest) in respect of (A) borrowed money
(other than borrowings under the Revolving Credit Facility (as defined below)),
(B) capitalized lease obligations, (C) the deferred purchase price of property
or services (other than trade payables in the ordinary course of business and
consistent with past practice), (D) obligations under interest rate agreements
and currency agreements and (E) guarantees of any of the foregoing. "Revolving
Credit Facility" means those certain revolving credit loans outstanding under
the terms of the Credit Agreement.
(b) In the event the Merger does not occur on or before
September 30, 1996, the Merger Consideration shall be increased as follows:
4
(i) for each day in the month of October 1996, including
October 1, 1996, on which the Merger does not occur, the Initial
Merger Consideration shall be increased by $50,000; and
(ii) for each day in the month of November 1996, on which
the Merger does not occur, the Initial Merger Consideration shall be
increased by $66,666.67.
PROVIDED, HOWEVER, that in the event the Purchaser has fulfilled, or has
indicated it is ready to fulfill, all of the conditions required to be fulfilled
by it ("Purchaser Merger Conditions"), and the failure of the Merger to occur is
directly related to the failure of the Company to comply with any condition to
the Merger required by it (other than a failure not within the control of the
Company), for purposes of clauses (i) and (ii) of this Section 3.03(b) the
Merger shall be deemed to have occurred on the date the Purchaser has either
fulfilled, or indicated its readiness to fulfill, such Purchaser Merger
Conditions.
ARTICLE 4
PAYMENT
4.01. EXCHANGE PROCEDURE.
(a) At the Closing, Purchaser shall deposit in trust with an
exchange agent selected by the Company (the "Exchange Agent") funds sufficient
to pay in full the Merger Consideration and all amounts due pursuant to the
terms of the Company's Management Equity Participation Plan (the "MEP") (such
amounts, the "MEP Payment"; the MEP Payment and the Merger Consideration,
together, the "Exchange Fund"). Prior to the Closing, the Exchange Agent shall
deliver to each Stockholder a form of letter of transmittal for return to the
Exchange Agent (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass only upon proper delivery of the
Certificates to the Exchange Agent and shall include an agreement by each
Stockholder that such Stockholder's respective allocation of the Merger
Consideration represents all such Stockholder is owed by the Company pursuant to
this Agreement, and that such Stockholder has waived and released the Company
from any claims by such Stockholder to receive any additional amounts in excess
of that provided for herein) and instructions for use in effecting the surrender
of the Certificates and payment of the Allocated Merger Consideration due in
respect thereof. Upon surrender to the Exchange Agent of a Certificate,
together with such letter of transmittal duly executed, the Stockholder holding
such Certificate shall be paid in exchange therefor the Allocated Merger
Consideration payable in respect of such shares, and the Certificate so
surrendered shall forthwith be canceled. The payments by the Exchange Agent of
Allocated Merger Consideration shall include payments to persons who surrender
Certificates representing shares of Series A Preferred Stock of all deferred or
accrued and unpaid dividends in respect of such shares, and payments of
Liquidating Dividends payable pursuant to Article VI, Part B, Section 1A of the
Articles of Organization of the Company as if the consummation of the Merger
were a Liquidation Event (as such term is defined in such Articles of
Organization).
5
(b) Until surrendered as contemplated by Section 4.01, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender the Allocated Merger
Consideration. No interest shall be paid or will accrue on the amount payable
at the Effective Time upon surrender of a Certificate. If payment is to be made
to a Stockholder other than the person in whose name the Certificate surrendered
is registered, it shall be a condition of payment that the Certificate so
surrendered shall be properly endorsed or otherwise in proper form for transfer
and that the Stockholder requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of the Certificate surrendered or establish that such tax has been paid
or is not applicable.
(c) At the Closing, the Exchange Agent shall pay the MEP Payment
to the beneficiaries under the MEP in accordance with the terms and provisions
thereof.
4.02. LOST CERTIFICATES. In the event any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact by
the registered holder of such lost, stolen or destroyed Certificate in form and
substance acceptable to the Exchange Agent and Purchaser and accompanied by a
bond in an amount satisfactory to the Exchange Agent and Purchaser, the Exchange
Agent will issue in exchange for such lost, stolen or destroyed Certificate the
Allocated Merger Consideration in respect thereof in the manner set forth in
Section 4.01.
ARTICLE 5
CLOSING
5.01. TIME AND PLACE. The closing of the transactions
contemplated hereby (the "Closing") shall take place on October 31, 1996 (the
"Closing Date"), or such date prior to or after October 31, 1996 as shall be
specified in a notice from Purchaser to the Company delivered at least two days
prior to the Closing Date specified therein, upon satisfaction or waiver of the
conditions set forth in Articles 9 and 10 hereof (other than those conditions
which by their terms are intended to be satisfied on the Closing Date), which
time also shall be the Effective Time; PROVIDED, HOWEVER that in the event of a
Closing later than October 31, 1996, the Closing Date shall not be later than
the third business day following the satisfaction or waiver of the conditions
set forth in Articles 9 and 10 hereof (other than those conditions which by
their terms are intended to be satisfied on the Closing Date). The Closing
shall take place at the offices of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇.
5.02. ACTIONS AT CLOSING. At the Closing:
(a) There shall be delivered to Purchaser, the Company and the
Stockholders the certificates, opinions and other documents and instruments
provided to be delivered under Articles 9 and 10 hereof.
6
(b) The Company shall cause the Articles of Merger to be filed
in accordance with the Corporation Law, and shall take any and all other lawful
actions, and do any other lawful things necessary to effect the Merger and to
enable the Merger to become effective.
(c) Purchaser shall deposit the Exchange Fund with the Exchange
Agent as described in Section 4.01 hereof.
(d) The Exchange Agent shall make the payments described in
Section 4.01 hereof.
(e) The Company shall pay all amounts payable to employees under
The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Company Long Term Incentive Plan.
(f) The Company shall pay all costs, fees and expenses in
connection with the process relating to the proposed sale of the Company,
including, without limitation, the costs, fees and expenses paid or payable to
▇▇▇▇▇▇▇, Sachs & Co. and all costs, fees and expenses incurred in connection
with the preparation for, negotiation of and closing of the Merger.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as otherwise set forth in the disclosure schedule delivered by
the Company to the Purchaser in connection herewith (the "Disclosure Schedule"),
the Company represents and warrants to the Purchaser as follows:
6.01. CAPITALIZATION. The authorized capital stock of the Company
consists of (a) 50,000 shares of Series A Preferred Stock, par value $.01 per
share ("Series A Preferred"), of which 50,000 shares are issued and
outstanding; (b) 100,000 shares of Class A Common Stock, par value $.01 per
share ("Class A Common"), of which 10,000 shares are issued and outstanding;
(c) 100,000 shares of Class B Common Stock, par value $.01 per share ("Class B
Common"), of which 10,000 shares are issued and outstanding; and (d) 100,000
shares of Class C Common Stock, par value $.01 per share ("Class C Common"), of
which 2,769 shares are issued and outstanding ( and of which 431 shares remain
available for allocation and issuance pursuant to the Master Executive Stock
Plan, dated as of January 1, 1995, as amended); all of such 72,769 of Company
Capital Stock are owned of record by the Stockholders as set forth in
Section 6.01 of the Disclosure Schedule. All of such shares are validly issued,
fully paid and non-assessable. There are no securities presently outstanding,
and at the Effective Time there will not be any outstanding securities which
are, convertible into, exchangeable for, or carrying the right to acquire,
equity securities of the Company, or subscriptions, warrants, options, calls,
convertible securities, registration or other rights or other arrangements or
commitments obligating the Company to issue, transfer or dispose of any of its
equity securities or any ownership interest therein.
7
6.02. SUBSIDIARIES. Except as set forth in Section 6.02 of the
Disclosure Schedule, the Company does not own, directly or indirectly, any
capital stock or any other equity interest in any person. The entities so set
forth in Section 6.02 of the Disclosure Schedule are referred to herein
individually as a "Subsidiary" and collectively as the "Subsidiaries." The
name, jurisdiction of incorporation, capitalization and ownership of each
Subsidiary is set forth in Section 6.02 of the Disclosure Schedule. Except for
director's qualifying shares, the Company owns all of the issued and outstanding
shares of capital stock of the Subsidiaries which they purport to own, free and
clear of any imperfections to title, liens, claims, security interests, pledges,
charges or other encumbrances ("Encumbrances"), and all of such shares are
(except to the extent such concepts do not apply to the foreign subsidiaries, in
which case no representation is made) validly issued, fully paid and
non-assessable. Except as set forth on Section 6.02 of the Disclosure Schedule,
there are not now, and at the Effective Time there will be no, outstanding
securities convertible into, exchangeable for, or carrying the right to acquire,
equity securities of any of the Subsidiaries, or subscriptions, warrants,
options, calls, convertible securities, registration or other rights or other
arrangements or commitments obligating any Subsidiary to issue, transfer or
dispose of any of its equity securities or any ownership interest therein or
voting trusts or other agreements or understandings to which the Company or any
of the Subsidiaries is bound with respect to the voting of the capital stock of
any of the Subsidiaries.
6.03. ORGANIZATION. The Company and each of the Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation (except for any of the Subsidiaries
organized under the laws of a jurisdiction in which the concept of good standing
is inapplicable, as to which no representation or warranty regarding good
standing is made) with all requisite corporate power and authority to own, lease
and operate its properties and assets and to carry on its business as it is now
being conducted. The Company and each of the Subsidiaries is duly qualified to
do business and in good standing as a foreign corporation in the jurisdictions
set forth in Section 6.03 of the Disclosure Schedule which are all of the
jurisdictions where the nature of the property owned or leased by it, or the
nature of the business conducted by it, makes such qualification necessary and
the absence of such qualification would have a material adverse effect on the
assets, business, operations or financial condition of the Company and the
Subsidiaries taken as a whole other than such effects attributable to general
economic conditions or to other change generally affecting companies in the same
business as the Company (a "Material Adverse Effect"). True and complete copies
of the certificate of incorporation and by-laws (or substantially equivalent
documents) of the Company and each of the Subsidiaries have been delivered or
made available to Purchaser.
6.04. ANNUAL AND QUARTERLY REPORTS. The Company has previously
furnished to Purchaser true and complete copies of its audited consolidated
balance sheet, consolidated statement of income and consolidated statement of
cash flows and consolidated statement of changes in stockholders' equity,
together with notes thereto, for the fiscal year ended December 30, 1995 and the
unaudited consolidated balance sheet, consolidated statement of income and
consolidated statement of cash flows for the period ended June 29, 1996
(collectively, the "Financial Statements"). The Financial Statements fairly
present the consolidated financial position, the consolidated results of
operations, stockholders' equity or deficiency, cash flows and the other
information included therein of the Company and the Subsidiaries for the periods
or as of the dates therein set forth,
8
in each case in accordance with generally accepted accounting principles
consistently applied during the periods involved, except that the unaudited
Financial Statements are subject to normal year end adjustments and lack
footnotes required for full disclosure under generally accepted accounting
principles. The unaudited consolidated balance sheet at June 29, 1996 is
sometimes referred to herein as the "Balance Sheet."
6.05. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the
Balance Sheet, neither the Company nor any of the Subsidiaries has (a) suffered
any damage, destruction or casualty loss to any of its assets which,
individually or in the aggregate, has a Material Adverse Effect, (b) incurred or
discharged any material obligation or liability, or entered into any other
material transaction, except in the ordinary course of business, (c) suffered
any Material Adverse Effect (excluding normal shifts in working capital
occurring in the ordinary course of business) or (d) failed to operate its
business only in the ordinary course consistent with past practice or, except
for proposed amendments to the Company's Articles of Organization contemplated
in connection with the Merger, taken any of the actions prohibited under Section
8.02(b).
6.06. TITLE TO ASSETS.
(a) Each of the Company and the Subsidiaries has good (and, in
the case of real property, marketable) title (or leasehold interest with respect
to capital leases) to all of the assets and properties which are material to the
conduct of the business of the Company (including those reflected on the Balance
Sheet), except for assets and properties sold, consumed or otherwise disposed of
in the ordinary course of business since the date of the Balance Sheet, free and
clear of all Encumbrances, except (i) lack of title and other Encumbrances as
set forth in Section 6.06(a) of the Disclosure Schedule, (ii) liens for taxes
not yet due and payable or being contested in good faith by appropriate
proceedings, (iii) liens of carriers, warehousemen, mechanics, materialmen and
other similar liens incurred in the ordinary course of business that
individually or in the aggregate do not have a Material Adverse Effect and
(iv) lack of title and other Encumbrances which individually or in the aggregate
do not have a Material Adverse Effect (the matters set forth in the foregoing
clauses (i), (ii), (iii) and (iv) being referred to herein as the "Permitted
Encumbrances").
(b) Section 6.06(b) of the Disclosure Schedule sets forth (i) an
accurate and complete list of all real property that the Company or any of the
Subsidiaries owns, or in which the Company or any of the Subsidiaries has legal,
beneficial or equitable title (the "Owned Property"); (ii) an accurate and
complete list of all real property with respect to which the Company or any of
the Subsidiaries in a lessee, sublessee, licensee or other occupant or user (the
"Leased Property"); and (iii) an accurate and complete list of each lease,
sublease, license or other agreement or understanding, oral or written, pursuant
to which any party other than the Company or a Subsidiary occupies or uses all
or any part of the Owned Property or Leased Property. The Owned Property and
the Leased Property are sometimes collectively referred to herein as the "Real
Property." True and complete copies of (A) all leases, subleases, licenses or
other documents, instruments, agreements or understandings to which the Company
or any Subsidiary is a party, whether as lessee, lessor, sublessee, sublessor,
licensee or licensor, pertaining to the current or future use or occupancy of
any Real Property or any current or future right to use or occupy any Real
Property, together with all amendments, modifications, and supplements thereto
(collectively, the
9
"Property Leases"), and (B) all deeds, title insurance policies, surveys,
mortgages, agreements and other documents, instruments, agreements or
understandings granting to the Company or any of the Subsidiaries title to or an
interest in or otherwise affecting or evidencing the state of title to any Real
Property, together with all amendments, modifications and supplements thereto
(collectively, the "Title Documents"), have been delivered to the Purchaser.
Except as set forth in Section 6.06(b) of the Disclosure Schedule, to the
knowledge of the Company, neither the Company nor any of the Subsidiaries is in
breach or default under (and no event has occurred which with notice or the
passage of time or both would constitute a breach or default under) any of the
Property Leases or Title Documents nor, to the knowledge of the Company, is any
other party to any of the Property Leases or Title Documents in default
thereunder (and no event has occurred which with notice or the passage of time
or both would constitute a breach or default thereunder); excluding, however, in
each instance, breaches or defaults which, in the aggregate, are not reasonably
likely to have a Material Adverse Effect. The Company and the Subsidiaries have
good and marketable title in fee simple to the Owned Property, good and
marketable leasehold title to the Leased Property, and good and marketable title
to all plants, buildings, fixtures and improvements located on the Real
Property, in each case free and clear of all Encumbrances except Permitted
Encumbrances.
6.07. INTELLECTUAL PROPERTY. Section 6.07 of the Disclosure
Schedule sets forth an accurate and complete list of all active patents, pending
patent applications, trademarks, pending trademark applications and trade names
licensed to, applied for or registered in the name of, the Company or any
Subsidiary, or in which the Company or any Subsidiary has any rights, and all
active copyright registrations or pending applications for registration of the
Company or any Subsidiary, or in which the Company or any Subsidiary has any
rights, in each case which are material to the conduct of the business of the
Company, together with the application or registration number, the jurisdiction
and the record owner of such intellectual property (the "Listed Intellectual
Property"). Except as set forth in Section 6.07 of the Disclosure Schedule,
with respect to the Listed Intellectual Property insofar as it relates to rights
in the United States of America or any state or jurisdiction therein (the
"Domestic Listed Intellectual Property"), no registration relating thereto has
lapsed, expired or been abandoned or canceled or is the subject of cancellation
proceedings except for such lapses, expirations, abandonments, cancellations or
proceedings that individually or in the aggregate do not have a Material Adverse
Effect. The Company and the Subsidiaries own or possess adequate and
enforceable licenses (free of Encumbrances other than Permitted Encumbrances) to
use all Listed Intellectual Property and any other material intellectual
property rights (including, without limitation, drawings, trade secrets,
know-how and confidential information) necessary to permit the Company and the
Subsidiaries to conduct their businesses as now conducted (the Listed
Intellectual Property and the other material intellectual property rights
hereinafter collectively called the "Intellectual Property"). Section 6.07 of
the Disclosure Schedule sets forth all material licenses to which the Company or
any of the Subsidiaries is a party relating to the Intellectual Property.
Except as set forth on Section 6.07 of the Disclosure Schedule, no claim is
pending or, to the knowledge of the Company, threatened nor to the knowledge of
the Company is there any basis for any claim which would have a reasonable
likelihood of prevailing, to the effect that the present or past operations
within the last three years of the Company or any Subsidiary infringes upon or
conflicts with the rights of any other person in respect of any intellectual
property, and no claim is pending or, to the knowledge of the Company,
threatened nor to the knowledge of the Company is there any basis for any claim
which would have a reasonable likelihood of prevailing, to the effect that any
10
Intellectual Property is invalid or unenforceable; excluding, however, claims or
potential claims which, in the aggregate, are not reasonably likely to have a
Material Adverse Effect. To the Company's knowledge, except as set forth on
Section 6.07 of the Disclosure Schedule, no person is materially infringing upon
or violating any of the Intellectual Property; and no claim is pending or, to
the Company's knowledge, threatened to that effect. Except as set forth on
Section 6.07 of the Disclosure Schedule, no contract, agreement or understanding
between the Company or any of the Subsidiaries and any party exists and no
Encumbrances exist which in either case would impede or prevent the continued
use by the Company, the Subsidiaries or their successors of the entire right,
title and interest of the Company and the Subsidiaries in and to any of the
Intellectual Property; excluding, however, contracts, agreements, understandings
and Encumbrances which, in the aggregate, are not reasonably likely to have a
Material Adverse Effect.
6.08. COMMITMENTS.
(a) Section 6.08(a) of the Disclosure Schedule sets forth an
accurate and complete list of each material contract or material agreement,
whether written or oral (including any and all amendments thereto) to which the
Company or any of the Subsidiaries is a party or by which the Company or any of
the Subsidiaries is bound which (i) relates to the borrowing of money or the
guaranty of any obligation to borrow money; (ii) involves revenues or
expenditures in excess of $250,000 (excluding purchase and sale orders entered
into in the ordinary course consistent with past practice); (iii) is a
collective bargaining agreement; (iv) obligates the Company or any Subsidiary
not to compete with any business or which otherwise restrains or prevents the
Company or any of the Subsidiaries from carrying on any lawful business
(excluding customary restrictive covenants contained in agreements identified
pursuant to clause (i) above); (v) relates to employment, compensation,
severance, consulting or indemnification between the Company or any Subsidiary
and any of their respective officers, directors, employees or consultants who
are entitled to compensation thereunder in excess of $100,000 per annum; or (vi)
is material to the assets, business, operations or financial condition of the
Company and the Subsidiaries taken as a whole (collectively, the "Commitments").
The Company previously has furnished or made available to Purchaser true and
correct copies of all Commitments. To the Company's knowledge, all of the
Commitments are enforceable by the Company or the Subsidiary which is a party
thereto in accordance with their terms except to the extent that such
enforceability (a) may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights generally, and
(b) is subject to general principles of equity and public policy. Except as set
forth in Section 6.08(a) of the Disclosure Schedule, neither the Company nor any
of the Subsidiaries is in breach or default under (and no event has occurred
which with notice or the passage of time or both would constitute a breach or
default under) any agreements listed or required to be listed in Section 6.08(a)
of the Disclosure Schedule nor, to the knowledge of the Company, is any other
party to any of the agreements listed or required to be listed in Section
6.08(a) of the Disclosure Schedule in default thereunder (and no event has
occurred which with notice or the passage of time or both would constitute a
breach or default thereunder); excluding, however, in each instance, breaches or
defaults which, in the aggregate, are not reasonably likely to have a Material
Adverse Effect.
(b) Except as set forth in Section 6.08(b) of the Disclosure
Schedule, neither the Company nor any Subsidiary is a party to any material
contract, agreement or
11
understanding which contains a "change in control," "potential change in
control" or similar provision or which could result in a potential "parachute
payment" within the meaning of Section 280G of the Internal Revenue Code.
Except as set forth in Section 6.08(b) of the Disclosure Schedule, the
consummation of the transactions contemplated hereby will not (either alone or
upon the passage of time and/or occurrence of any additional acts or events)
result in any payment (severance pay or otherwise) becoming due from the Company
or any Subsidiary to any person or accelerate the time of payment or vesting, or
increase the amount of compensation due, any person; excluding, however, any
such payments, accelerations or increases which could have occurred upon the
passage of time and/or occurrence of any additional acts or events even if the
"change of control" or "potential change of control" occurring upon the
execution and delivery of this Agreement and the consummation of the
transactions contemplated herein did not occur.
(c) Section 6.08(c) of the Disclosure Schedule sets forth as
accurate and complete list of all insurance policies maintained by the Company
and its Subsidiaries (the "Insurance Policies"), and the Insurance Policies
provide substantially equivalent coverage to that which has been maintained by
the Company and the Subsidiaries since January 1, 1995.
6.09. LITIGATION. Except as set forth on Section 6.09 of the
Disclosure Schedule, there is no action, suit, investigation or proceeding
("Litigation") pending or, to the Company's knowledge, threatened, involving the
Company or any of the Subsidiaries before any court or before any public body or
authority, domestic or foreign (a "Government Entity") which individually or in
the aggregate is reasonably likely to have a Material Adverse Effect or which
would be reasonably likely to have a material adverse effect on the ability of
the Company to perform its obligations hereunder, or which seeks to enjoin or
obtain damages in respect of the consummation of the transactions contemplated
hereby. Neither the Company nor any of the Subsidiaries is subject to any
outstanding orders, rulings, judgments or decrees that would be reasonably
likely to have a Material Adverse Effect. Section 6.09 of the Disclosure
Schedule also sets forth a list of each outstanding order, ruling, judgment or
decree to which the Company or any Subsidiary or any of its or their assets is
bound or subject.
6.10. COMPLIANCE WITH LAWS. The Company and the Subsidiaries are
in compliance with all applicable laws, rules, regulations, ordinances, decrees
or orders of any Government Entity currently in effect, except where the failure
to comply therewith is not reasonably likely to have a Material Adverse Effect.
The Company and the Subsidiaries have all governmental permits, licenses and
authorizations necessary for the conduct of their businesses as presently
conducted ("Permits") and are in compliance with the terms of the Permits,
except for any non-compliance which is not reasonably likely to have a Material
Adverse Effect.
6.11. ENVIRONMENTAL MATTERS.
(a) Except as set forth on Section 6.11 of the Disclosure
Schedule, or except as would not, in the aggregate, be reasonably likely to
result in a fine, penalty or cost that would have a Material Adverse Effect:
12
(i) the Company and the Subsidiaries are in compliance
with Environmental Laws;
(ii) neither the Company nor any of the Subsidiaries has
received written notice from a Government Entity alleging that the
Company or any Subsidiary is not in compliance with Environmental
Laws; and
(iii) no Environmental Lien has attached to any property
that is currently owned or operated by the Company or any Subsidiary.
(b) "Environmental Laws" shall mean all statutes, regulations,
ordinances and similar provisions having the force and effect of law of any
Governmental Entity concerning the pollution or protection of the environment,
including without limitation the federal Clean Air Act, the Clean Water Act, the
Solid Waste Disposal Act, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, and the Emergency Planning and
Community Right-To-Know Act of 1986.
(c) "Environmental Lien" shall mean a lien, either recorded or
unrecorded, in favor of any Governmental Entity, arising under Environmental
Laws.
6.12. CORPORATE POWER AND AUTHORITY; NO VIOLATIONS. The Company
has full corporate power and authority to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby. The
execution, delivery and performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of the Company,
including due and valid authorization by the Board of Directors and the
Stockholders of the Company and no other corporate proceedings on the part of
the Company are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Company and constitutes the valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except to the extent that such enforceability (i) may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditors' rights generally, and (ii) is subject to general
principles of equity. Except as set forth in Section 6.12 of the Disclosure
Schedule, neither the execution, delivery and performance by the Company of this
Agreement nor the consummation by the Company of the transactions contemplated
hereby will, with or without the giving of notice or the passage of time, or
both, (x) violate any provision of law, rule, regulation, order, judgment, writ,
injunction or decree applicable to the Company or any of the Subsidiaries or any
of their properties or assets, (y) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any note, bond, mortgage, indenture, license, contract or agreement to
which the Company or any of the Subsidiaries is a party or by which the Company
or any of the Subsidiaries or any of their assets is bound or result in the
imposition of any Encumbrance (other than Permitted Encumbrances) upon any of
the assets of the Company or any of the Subsidiaries; or (z) conflict with or
violate any provision of the Articles of Organization or bylaws (or
substantially equivalent documents) of the Company or any of the Subsidiaries,
except, in the case of (x) or (y), for
13
violations, conflicts, breaches, defaults, accelerations, terminations,
modifications, cancellations or failures to give notice or Encumbrances which in
the aggregate would not be reasonably likely to have a Material Adverse Effect
and would not prevent or materially delay, hinder or impair the consummation of
the transactions contemplated hereby.
6.13. EMPLOYEE BENEFIT PLANS.
(a) Section 6.13 of the Disclosure Schedule sets forth an
accurate and complete list of each employee benefit plan (as such term is
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), and any other bonus, deferred compensation, incentive
compensation, stock, severance or other plan or arrangement, other than a
non-material fringe benefit plan (each of the foregoing, a "Benefit Plan"),
currently maintained, contributed to or required to be contributed to by the
Company or any Subsidiary or with respect to which the Company or any Subsidiary
has any material liability or obligation. With respect to each Benefit Plan,
the Company previously has furnished to Purchaser a true and correct copy of,
where applicable, (i) the most recent annual report (Form 5500) filed with the
IRS, (ii) the plan document, (iii) each trust agreement and group annuity
contract or other funding vehicle, if any, relating to such Benefit Plan,
(iv) the most recent actuarial report or valuation relating to such Benefit Plan
(in the event such Benefit Plan is subject to Title IV of ERISA), (v) the most
recent summary plan description and (vi) the most recent determination letter
issued by the IRS.
(b) Neither the Company nor any Subsidiary has, or during the
most recent six years has had, an obligation to contribute to any multiemployer
plan (as defined in Section 3(37) of ERISA) and, no Benefit Plan is or ever was
subject to Title IV of ERISA. Except as set forth in Section 6.13 of the
Disclosure Schedule with respect to the Benefit Plans or other benefit or
compensation arrangements, all required contributions and payments to date by
the Company have been timely made or, if not yet due and owing, properly
accrued.
(c) Each of the Benefit Plans has been administered in
accordance with its terms in all material respects and is in compliance in all
material respects with applicable laws and regulations.
(d) Except as set forth in Section 6.13 of the Disclosure
Schedule, each of the Benefit Plans which is intended to be a qualified plan
within the meaning of Section 401(a) of the Code is so qualified and has been
determined by the IRS to be so qualified from its inception to the present, and,
to the knowledge of the Company, nothing has occurred to cause the loss of such
qualified status.
(e) Except as set forth in Section 6.13 of the Disclosure
Schedule, no Benefit Plan provides health, medical or life insurance benefits
with respect to current or former employees of the Company or any Subsidiary
beyond their retirement or other termination of service other than (i) coverage
mandated by applicable law, or (ii) benefits the full cost of which are borne by
the current or former employee (or his or her beneficiary).
14
(f) Except for the pension benefit obligations to retired
executives set forth in Section 6.13 of the Disclosure Schedule, neither the
Company nor any Subsidiary maintains, participates in, contributes to, or has
any liability or obligation with respect to any defined benefit plan (as defined
in Section 3(35) of ERISA). Section 6.13 of the Disclosure Schedule lists all
frozen or terminated defined benefit plans, whether or not tax-qualified,
previously established or maintained by or on behalf of the Company or any
Subsidiary, or with respect to which the Company or any Subsidiary contributed
or had an obligation to contribute or otherwise had or has any liability or
obligation, and with respect thereto also lists any remaining or outstanding
obligations or liabilities.
(g) Neither the Company nor any Subsidiary has any liability
with respect to any "employee benefit plan" (as defined in Section 3(3) of
ERISA) solely by reason of being treated or having been treated as a single
employer under Section 414 of the Code with any trade, business or entity other
than the Company and the Subsidiaries.
(h) No audit or investigation by any governmental authority is
pending, or, to the knowledge of the Company, threatened, regarding any Benefit
Plan, and, neither the Company nor any Subsidiary nor, to the knowledge of the
Company, any other party dealing with any Benefit Plan has engaged in any
non-exempt prohibited transactions (within the meaning of Section 406 of ERISA
or Section 4975 of the Code).
6.14. CONSENTS. Except as set forth in Section 6.14 of the
Disclosure Schedule, no consent, approval or authorization of, or exemption by,
or filing with, any governmental authority (other than pursuant to the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act (the "HSR Act")) is required in
connection with the execution, delivery and performance by the Company of this
Agreement or the taking of any other action contemplated hereby, excluding,
however, consents, approvals, authorizations, exemptions and filings, if any,
which Purchaser is required to obtain or make and consents or authorizations
which, if not obtained, are not reasonable likely to have a Material Adverse
Effect.
6.15. TAXES. Except in each case as set forth in Section 6.15 of
the Disclosure Schedule:
(a) Each of the Company, the Subsidiaries, and any affiliated,
combined or unitary group of which any such corporation is a member
(individually, an "Affiliate" of the Company and, collectively, the Company's
"Affiliates") has: ((i)timely filed and in all material respects correctly
prepared all returns, declarations, reports, estimates, information returns and
statements ("Returns") required to be filed or sent by or with respect to them
in respect of any Taxes (as hereinafter defined); ((ii)properly paid all Taxes
that are shown due and payable on such Returns; ((iii)established on their
books and records and in the consolidated financial statements of the Company
and the Subsidiaries included in the Company Reports reserves in accordance with
generally accepted accounting principles for the payment of all accrued Taxes
not yet due and payable; and ((iv)complied in all material respects with all
applicable laws, rules and regulations relating to the payment and withholding
of Taxes from employees and other persons.
15
(b) There are no liens for Taxes upon the assets of the Company
or any of the Subsidiaries, except liens for Taxes not yet due and other
immaterial liens.
(c) No written claim or deficiency for any Taxes has been
asserted against the Company or any of the Subsidiaries which has not been
resolved and paid in full.
(d) There are no outstanding waivers or comparable consents
given by the Company or any of the Subsidiaries regarding the application of the
statute of limitations with respect to any Taxes or Returns.
(e) No proceedings before any Government Entity are presently
pending with regard to any Taxes or Returns and the Company and the Subsidiaries
have not received any written notices of any such audits or proceedings.
(f) For purposes of this Agreement, "Taxes" shall mean federal,
state, local or foreign income, gross receipts, windfall profits, severance,
property, production, sales, use, license, excise, franchise, employment,
withholding, alternative minimum or add-on minimum or similar taxes imposed on
the income, properties or operations of the Company or any of the Subsidiaries,
customs duties or levies of any kind, together with any interest, additions or
penalties with respect thereto and any interest in respect of such additions or
penalties.
6.16. DISCLAIMER. Except as set forth in this Agreement, neither
the Company, any Subsidiary nor any officer, director, employee, agent,
stockholder, or affiliate of the Company or any Subsidiary (such officers,
directors, employees, agents, stockholders (including the Stockholders) and
affiliates being collectively referred to herein as the "Company Related
Parties") makes any representation or warranty, express or implied (including
those referred to in section 2-312 of the N.Y.S. Uniform Commercial Code or in
any statute applicable to real property), about or concerning the assets,
liabilities and business of the Company and the Subsidiaries.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser hereby represents and warrants to the Company as
follows:
7.01. ORGANIZATION; CAPITALIZATION. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted, and to execute, deliver and perform this Agreement
and to consummate the transactions contemplated hereby. The authorized capital
stock of Purchaser consists solely of 1,000 shares of Common Stock, par value
$.01 per share, of which 1,000 are outstanding and owned of record and
beneficially by TWCC Holdings Company, Inc. a Massachusetts corporation .
There are outstanding no securities convertible into, exchangeable for, or
carrying the right to acquire, equity securities of Purchaser, or subscriptions,
warrants, options,
16
calls, convertible securities, registration or other rights or other
arrangements or commitments obligating Purchaser to issue, transfer or dispose
of any of its equity securities or any ownership interest therein.
7.02. CORPORATE POWER AND AUTHORITY; EFFECT OF AGREEMENT. The
execution, delivery and performance by Purchaser of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on their part, including due and valid
authorization by the Board of Directors of Purchaser and the stockholders of
Purchaser. This Agreement has been duly and validly executed and delivered by
Purchaser and constitutes the valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, except to the extent
that such enforceability (a) may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors' rights
generally, and (b) is subject to general principles of equity. The execution,
delivery and performance by Purchaser of this Agreement and the consummation by
it of the transactions contemplated hereby will not, with or without the giving
of notice or the lapse of time, or both, (x) violate any provision of law, rule,
regulation, any order, judgment, writ, injunction or decree applicable to it,
(y) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any material agreement to which
Purchaser is a party or by which Purchaser or Purchaser's assets are bound; or
(z) violate any provision of their respective Articles of Organization or
bylaws; except, in the case of (x) or (y), for violations, conflicts, breaches,
defaults, accelerations, terminations, modifications, cancellations, or failures
to give notice, which in the aggregate, would not materially delay, hinder or
impair the consummation of the transactions contemplated hereby.
7.03. CONSENTS. Except as set forth in Section 7.03 of the
Disclosure Schedule, no consent, approval or authorization of, or exemption by,
or filing with, any governmental authority (other than pursuant to the HSR Act)
is required in connection with the execution, delivery and performance by
Purchaser of this Agreement, or the taking of any other action contemplated
hereby excluding, however, consents, approvals, authorizations, exemptions and
filings, if any, which the Company is required to obtain or make.
7.04. LITIGATION. There is no Litigation pending or to
Purchaser's knowledge threatened, involving Purchaser or any of its affiliates
(a) which is reasonably likely to have a material adverse effect on the ability
of Purchaser to perform its respective obligations under this Agreement or
(b) which seeks to enjoin or obtain damages in respect of the consummation of
the transactions contemplated hereby. Neither Purchaser nor any of its
affiliates is subject to any outstanding orders, rulings, judgments or decrees
which would be reasonably likely to have a material adverse effect on the
ability of Purchaser to perform its obligations under this Agreement.
7.05. PURCHASE FOR INVESTMENT. Purchaser is acquiring the Company
for investment and not with a view to any public resale or other distribution
thereof in violation of the Securities Act or any applicable state securities
laws.
7.06. ADEQUATE FUNDS. Purchaser has, or has access to, adequate
funds to meet its obligations under this Agreement.
17
ARTICLE 8
COVENANTS OF THE PARTIES
8.01. EFFORTS. Subject to the terms and conditions herein
provided, each of the parties hereto and their respective affiliates agree to
use their commercially reasonable 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 or otherwise to consummate and
effect the transactions contemplated by this Agreement on or before October 31,
1996, including, without limitation, obtaining all required consents and
approvals, making all required filings and applications and complying with or
responding to any requests by governmental agencies.
8.02. CONDUCT OF BUSINESS.
(a) Except as may be otherwise contemplated by this Agreement or
Section 8.02 of the Disclosure Schedule or any agreements or arrangements
disclosed in the Disclosure Schedule or as Purchaser may otherwise consent to in
writing, from the date hereof and prior to the Effective Time, the Company will,
and will cause each of the Subsidiaries to operate its business only in the
ordinary course consistent with past practice.
(b) Without limiting the generality of the foregoing, except as
may be otherwise contemplated by this Agreement or Section 8.02 of the
Disclosure Schedule or any agreements or arrangements disclosed in the
Disclosure Schedule or as Purchaser may otherwise consent to in writing, from
the date hereof and prior to the Effective Time, neither the Company nor any of
the Subsidiaries will:
(i) (A) declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of any of its capital stock; (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 or (C) amend the terms
of, repurchase, redeem or otherwise acquire, or permit any Subsidiary
to repurchase, redeem or otherwise acquire, any of its securities or
any securities of the Subsidiaries, or propose to do any of the
foregoing;
(ii) authorize for issuance, issue, sell, deliver or
agree or commit to issue, sell or deliver (whether through the
issuance or granting of options, warrants, commitments, subscriptions,
rights to purchase or otherwise) any stock of any class or any other
securities (including indebtedness having the right to vote) or equity
equivalents (including, without limitation, stock appreciation
rights), or amend in any respect any of the terms of any such
securities or equity equivalents outstanding on the date hereof;
18
(iii) amend or propose to amend its Articles of
Organization or by-laws or equivalent documents;
(iv) acquire, sell, lease, encumber, transfer or dispose
of any assets (except that the Company and the Subsidiaries may sell
inventory in the ordinary course of business, consistent with past
practice) or make any capital expenditures aggregating over $100,000,
except in each case pursuant to Commitments in effect on the date
hereof or pursuant to the Company's capital expenditure budget; modify
or amend any Commitments (including any relating to Indebtedness)
outside of the ordinary course of business; enter into any material
contract, commitment or transaction outside the ordinary course of
business; reduce the coverage provided by the Insurance Policies;
(v) except for revolving credit loans under the
Revolving Credit Facility and letters of credit obtained in the
ordinary course of business or to make payments contemplated
hereunder, incur or assume any indebtedness for borrowed money or
guarantee any such indebtedness or issue or sell any debt securities
or warrants or rights to acquire any debt securities of the Company or
any of the Subsidiaries or guarantee (or become liable for) any debt
of others or mortgage, pledge or otherwise encumber any assets or
consensually create any Encumbrance thereupon other than Permitted
Encumbrances;
(vi) make any loans, advances or capital contributions
outside of the ordinary course of business, except to wholly-owned
Subsidiaries;
(vii) except as may otherwise be required by generally
accepted accounting principles or the Financial Accounting Standards
Board, (A) change any of the accounting principles or practices used
by it or (B) make any tax election except in the ordinary course of
business; or
(viii) (A) enter into, adopt, amend or terminate any
Benefit Plan or any agreement, arrangement, plan or policy between
itself and one or more of its directors or executive officers or
(B) increase in any manner the compensation or fringe benefits of any
director, officer or employee or pay any benefit not required by any
plan or arrangement as in effect as of the date hereof, except in the
case of officers and employees for normal increases in compensation
and normal year-end bonuses in the ordinary course of business and
consistent with past practice; or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing;
(ix) agree to take any of the foregoing actions.
(c) Notwithstanding anything else in this Section 8.02, the Company
may pay to certain executives on or before the Closing Date the sum of (i)
$790,000 (representing the aggregate "grossed up" tax benefit to the Company on
account of the allocation of Class C Common to such executives described on
Section 8.02 of the Disclosure Schedule) and (ii) an amount not to exceed
19
$1,500,000 (such sum, the "Management Payment"). The payment to executives of
the Management Payment shall be in addition to any salary or bonus such
executives are otherwise entitled to receive under current company practice or
existing agreements. The allocation of Class C Common described on Section 8.02
of the Disclosure Schedule and the Management Payment shall be made so as to
assure that the tax deductions will occur in the taxable year of the Company
ending on the Closing Date. Purchaser and the Company agree that the payment
under clause (i), above, shall be reduced to the extent that such payment
exceeds the tax benefits to be realized for taxable years of the Company ending
on or before the Closing Date from the allocation of Class C Stock described on
Section 8.02 of the Disclosure Schedule.
8.03. ACCESS. From the date hereof and prior to the Effective
Time, the Company shall provide Purchaser with such information as Purchaser may
from time to time reasonably request with respect to the Company and the
Subsidiaries and their assets and properties and the transactions contemplated
by this Agreement, and shall provide Purchaser and its representatives
reasonable access during regular business hours and upon reasonable notice to
the personnel, representatives, properties, books and records of the Company and
the Subsidiaries as Purchaser may from time to time reasonably request. Any
disclosure whatsoever during such investigation by Purchaser shall not
constitute any enlargement or additional representations or warranties of the
Company or any of its Affiliates beyond those specifically set forth in this
Agreement. All such information and access shall be subject to the terms and
conditions of the Confidentiality Agreement, dated June 4, 1996 executed by
Investcorp International, Inc., acting on behalf of Purchaser (the
"Confidentiality Agreement"), as though Purchaser was a party to such
Confidentiality Agreement.
8.04. NO SOLICITATION. Neither the Company nor any of the
Subsidiaries, Affiliates, officers, directors, employees, representatives or
agents, shall, directly or indirectly, encourage, solicit, participate in,
initiate or continue discussions or negotiations with, or provide any
information to, any person (other than Purchaser and its affiliates and
representatives) concerning any merger, sale of assets, sale of shares of
capital stock or similar transactions involving the Company or any Subsidiary or
division of the Company and any existing discussions or negotiations with third
persons relating thereto shall be terminated immediately; PROVIDED, HOWEVER that
the directors of the Company shall be permitted to provide information regarding
the transactions contemplated by this Agreement to Stockholders and to entities
regulating such Stockholders.
8.05. BOOKS AND RECORDS; PERSONNEL. For a period of seven (7)
years from the Closing Date, Purchaser shall, and shall cause the Company and
the Subsidiaries to, provide to any Stockholder for any purpose relating to such
Stockholder's ownership of any securities of the Company, access to the books
and records of the Company upon reasonable advance written notice during regular
business hours for the sole purpose of obtaining information for use as
aforesaid and will permit such Stockholder to make such extracts and copies
thereof as may be necessary. Such Stockholder shall reimburse the Company or
the Subsidiary for the reasonable out-of-pocket expenses incurred by any of them
in performing the covenants contained in this Section 8.05.
20
8.06. LIABILITIES AND INDEMNIFICATION.
(a) Purchaser understands and agrees that, from and after the
Closing, neither the Stockholders nor any of their affiliates shall have any
liability or responsibility for any liability or obligation of the Company or
any of the Subsidiaries (such liabilities and obligations, being collectively
referred to as the "Liabilities"). Accordingly, Purchaser agrees that,
effective upon the Closing, Purchaser shall be responsible for and indemnify the
Stockholders and their affiliates and hold each of them harmless against any
liability, loss, damage, claim, cost or expense (including, without limitation,
reasonable attorneys' fees and disbursements) (collectively, "Losses") incurred
or suffered by any of them arising out of any of the Liabilities which were
reflected in the Balance Sheet, disclosed in the Disclosure Schedule or incurred
in the ordinary course of business since June 29, 1996.
(b) After the Effective Time, Purchaser, the Surviving
Corporation and each Subsidiary shall exculpate (to the greatest extent
permitted by applicable law) and shall indemnify, defend and hold harmless, the
present and former officers and directors of the Company and the Subsidiaries
(each an "Indemnified Party") against all Losses, arising out of actions or
omissions in their capacities as such occurring at or prior to the Effective
Time to the fullest extent permitted under Massachusetts law or the Company's
Articles of Organization or Bylaws in effect at the date of this Agreement,
including, without limitation, provisions relating to advances of expenses
incurred in the defense of any action or suit, PROVIDED that the Surviving
Corporation shall pay for only one counsel for all Indemnified Parties unless
the use of one counsel for such Indemnified Parties would present such counsel
with a conflict of interest; subject to such Indemnified Party's agreement to
return any advanced funds if a court of competent jurisdiction, after all time
for appeals having been exhausted, shall have determined that such Indemnified
Party is not entitled to such amounts under Massachusetts law or the Company's
Articles of Organization or Bylaws.
8.07. INSURANCE. The Surviving Corporation shall maintain, and
Purchaser and its affiliates shall cause the Surviving Corporation to maintain,
the Company's existing officers' and directors' liability insurance, if
available, for a period of not less than seven years after the Effective Time;
PROVIDED, that the Surviving Corporation may substitute therefor policies of
insurers with at least equal rating with at least the same coverage containing
terms and conditions which are no less advantageous to the beneficiaries thereof
and, PROVIDED FURTHER, that the Surviving Corporation shall not be required to
expend annual premiums for such insurance in excess of 150% of the amount of
such annual premiums currently paid by the Company.
8.08. SUBSEQUENT DISCLOSURES BY COMPANY. If, at any time prior to
the Closing, the Company becomes aware of the failure of any of its
representations and warranties in this Agreement to be true and correct (whether
as a result of the discovery of facts or circumstances not known as of the date
of this Agreement, the occurrence of any developments after the date of this
Agreement, or any other reason), which the Company believes is reasonably likely
to have or constitute a Material Adverse Effect, the Company shall immediately
so notify Purchaser in writing (a "Section 8.08 Notice").
21
8.09. ENVIRONMENTAL MATTERS. Purchaser and the Company agree that
the only representations and warranties of the Company herein as to any
environmental matters are those contained in Section 6.11.
8.10. INDEBTEDNESS. At Closing, Purchaser shall cause the Company
to repay all Debt of the Company or Purchaser shall have negotiated the right to
keep all Indebtedness in place notwithstanding consummation of the Merger.
ARTICLE 9
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligations of Purchaser to consummate the Merger shall be subject
to the satisfaction (or waiver) on or prior to the Closing Date of all of the
following conditions:
9.01. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
(a) The Company shall have performed and complied in all
material respects with its agreements and covenants contained herein to be
performed on or prior to the Closing Date.
(b) Except as otherwise contemplated by this Agreement, the
representations and warranties of the Company contained herein shall be true and
correct at and as of the earlier to occur of (i) the Closing or (ii) October 31,
1996, ignoring for this purpose all qualifications as to Material Adverse Effect
or otherwise as to materiality in such representations and warranties. This
condition will be deemed to be satisfied unless the failures of such
representations and warranties (ignoring such qualifications) to be true and
correct at and as of the earlier of said dates (with all such failures
considered in the aggregate) would have or constitute a Material Adverse Effect.
If, in making a determination pursuant to this Section 9.01(b) as to whether all
representations and warranties of the Company set forth herein are true and
correct at and as of the Closing Date, (i) there are no failures of any such
representations or warranties other than the failure of a representation or
warranty disclosed in a Section 8.08 Notice, and (ii) Purchaser did not exercise
its right to terminate this Agreement pursuant to Section 11.01(c) hereof, then
this condition will be deemed to be satisfied notwithstanding such failure;
PROVIDED, HOWEVER, that if the Company delivers more than one Section 8.08
Notice, nothing herein shall preclude Purchaser from considering all Section
8.08 Notices in the aggregate in making a determination pursuant to this Section
9.01(b).
(c) Purchaser shall have received a certificate of the Company,
dated as of the Closing Date and signed by the Chief Executive Officer and the
Chief Financial Officer of the Company, certifying as to the fulfillment of the
conditions set forth in this Section 9.01 (the "Company's Certificate").
(d) Purchaser shall have received (i) evidence from the Company
of the waiver by the beneficiaries under the
22
MEP of any rights to receive aggregate payments under the MEP in excess of
$5,043,941 and (ii) evidence from the Company that each Stockholder has agreed
to his, her or its respective allocation of the Merger Consideration and has
waived and releases the Company from any claims by such Stockholder to receive
any additional amounts of Merger Consideration in excess of that provided for
herein or any dividends other than those payable from the Merger Consideration
as contemplated by Exhibit 3.01 hereto, or an opinion from counsel for the
Company, in form and substance reasonably acceptable to Purchaser and its
counsel, that no further payments of Merger Consideration are owed by the
Company to the Stockholders pursuant to this Agreement and that no such
additional dividends are payable.
9.02. NO PROHIBITION. No order, decree or injunction of any court
or government authority shall be in effect which prohibits the consummation of
the transactions contemplated hereby.
9.03. THIRD PARTY CONSENTS. The Company shall have received all
consents, authorizations and approvals from non-governmental third parties, in
form reasonably acceptable to Purchaser, which, based upon Purchaser's
representations to the Company regarding the net worth of the Surviving
Corporation, are necessary in order to enable (a) Purchaser to consummate the
transactions contemplated hereby and (b) the Company and the Subsidiaries to
conduct their businesses after the Effective Time on the same basis as conducted
prior to the date hereof (except with respect to clauses (a) and (b) for the
failure to obtain any consents, approvals, authorizations, exemptions and
waivers the failure of which to obtain would not, in the aggregate, reasonably
be expected to result in a Material Adverse Effect and consents necessary to
permit outstanding Indebtedness to remain outstanding after the Closing Date)
(the "Required Consents"). The Required Consents are listed on Section 9.03 of
the Disclosure Schedule.
9.04. GOVERNMENTAL CONSENTS. The applicable waiting period under
the HSR Act shall have expired or been terminated and all other consents,
approvals, authorizations, exemptions and waivers from Government Entities that
shall be required in order to (a) enable Purchaser to consummate the
transactions contemplated hereby (except for such consents, approvals,
authorizations, exemptions and waivers, the absence of which would not prohibit
consummation of such transactions or render such consummation illegal) and
(b) enable the Company and the Subsidiaries to conduct their businesses after
the Effective Time on the same basis as conducted prior to the date hereof shall
have been obtained (excluding, however, the failure to obtain new Certificates
or transfer of the existing Certificates and further excluding the failure to
obtain any consents, approvals, authorizations, exemptions and waivers the
failure of which to obtain would not reasonably be expected to result in a
Material Adverse Effect) (the "Required Government Consents"). The Required
Government Consents are listed on Section 9.04 of the Disclosure Schedule.
9.05. COMPANY COUNSEL OPINION. Purchaser shall have received an
opinion from ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ dated the Closing Date, substantially in form and
substance reasonably satisfactory to Purchaser.
9.06. TITLE INSURANCE. The Company shall have delivered, at
Purchaser's sole cost and expense, an ALTA Owner's Policy of Title Insurance
Form B-1970 for each parcel of Owned
23
Property issued by a title insurer reasonably satisfactory to Purchaser insuring
title to the Real Property in Purchaser subject only to the Permitted
Encumbrances.
9.07. SURVEYS. The Company shall have delivered, at Purchaser's
sole cost and expense, a current ALTA/ACSM survey of each parcel of Owned
Property made in accordance with the 1992 ALTA/ACSM standards including Table A
Items Nos. 1-4 and 6-13.
9.08. SHAREHOLDER APPROVAL. Appropriate shareholder approval, in
form and substance reasonably satisfactory to Purchaser and its counsel, shall
have been obtained by the Company and any relevant Subsidiary under Internal
Revenue Code Section 280G that will exempt the Company and any relevant
Subsidiary from any loss of deduction under Code Section 280G and exempt any
recipient from any excise tax under Code Section 4999 for any excess parachute
payments paid or payable to any employee as a result of the Merger.
9.09. RELEASE OF LIENS. Upon payment by the Company of the Debt
at Closing, the Company shall be immediately able to obtain the release of all
Encumbrances on all assets of the Company securing such Debt, and shall be able
to provide or arrange to be provided to Purchaser releases and other documents
in form and substance reasonably satisfactory to Purchaser to demonstrate such
release of Encumbrances and to promptly thereafter clear all public records of
any such Encumbrances.
ARTICLE 10
CONDITIONS TO THE COMPANY'S OBLIGATIONS
The obligations of the Company to consummate the Merger shall be subject to
the satisfaction (or waiver) on or prior to the Closing Date of all of the
following conditions:
10.01. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER.
(a) Purchaser each shall have performed and complied in all
material respects with their respective agreements and covenants contained
herein to be performed on or prior to the Closing Date.
(b) The representations and warranties of Purchaser contained
herein shall be true and correct in all respects at and as of the earlier of
October 31, 1996 and the Closing Date, ignoring for this purpose all
qualifications as to materiality in such representations and warranties, except
where any and all failures of such representations and warranties to be true and
correct in all respects at and as of the earlier of said dates (with all such
failures considered in the aggregate) would not have a Material Adverse Effect
on the ability of Purchaser to perform its obligations under this Agreement.
24
(c) The Company and its Stockholders shall have received
certificates of Purchaser, dated as of the Closing Date and signed by two
officers of Purchaser, certifying as to the fulfillment of the conditions set
forth in this Section 10.01 (the "Purchaser's Certificate").
10.02. NO PROHIBITION. No order, decree or injunction of any court
or government authority shall be in effect which prohibits the consummation of
the transactions contemplated hereby.
10.03. GOVERNMENTAL CONSENTS. The applicable waiting period under
the HSR Act shall have expired or been terminated and all other consents,
approvals, authorizations, exemptions and waivers from Government Entities that
shall be required in order to enable the Company to consummate the transactions
contemplated hereby shall have been obtained (except for such consents,
approvals, authorizations, exemptions and waivers, the absence of which would
not prohibit consummation of such transactions or render such consummation
illegal).
10.04. REPAYMENT OF INDEBDTEDNESS. At Closing, Purchaser shall
cause the Company to repay all Debt of the Company or Purchaser shall have
negotiated the right to keep all Indebtedness in place notwithstanding the
consummation of the Merger.
10.05. PURCHASER COUNSEL OPINION. The Company shall have received
an opinion from counsel to Purchaser reasonably acceptable to the Company, dated
the Closing Date, substantially in form and substance reasonably satisfactory to
the Company.
ARTICLE 11
TERMINATION PRIOR TO CLOSING
11.01. TERMINATION. This Agreement may be terminated as follows:
(a) On or before September 24, 1996 by Purchaser in the event
the Company fails to deliver to Purchaser, on or before September 20, 1996, (i)
an agreement to vote in favor of the Merger, in form and substance satisfactory
to Purchaser and its counsel, from Stockholders holding shares of Company
Capital Stock sufficient to approve the Merger under the Corporation Law and
(ii) the signatures of the holder of the Class A Common and the holder of the
Class B Common and the Series A Preferred on that certain side letter concerning
the possible amendment of this Agreement to provide for a purchase of the Class
A Common, the Class B Common and the Series A Preferred followed by a merger of
Purchaser with and into the Company; or
(b) At any time prior to the Closing by the mutual written
consent of Purchaser and the Company; or
25
(c) At any time prior to the Closing by either the Company or
Purchaser in writing, without liability to the terminating party on account of
such termination (except as otherwise provided in Section 11.02), if the Closing
shall not have occurred on or before November 30, 1996; or
(d) At any time prior to the Closing by Purchaser in writing
within 14 days after receipt by Purchaser of a Section 8.08 Notice, provided
that Purchaser may not terminate this Agreement pursuant to this
Section 11.01(d) until the earlier of November 30, 1996, or the 30th day
following receipt of the Section 8.08 Notice if the Company states in such
Section 8.08 Notice that it is undertaking to cure the problem which provided
the basis for the Section 8.08 Notice and then such termination may occur only
if the Company fails to cure such problem prior to the earlier of said dates ;
or
(e) At any time prior to the Closing by either the Company or
Purchaser if (i) the conditions to such party's obligations shall have become
impossible to satisfy on or before November 30, 1996 (after giving effect to any
potential actions the non-terminating party or the Stockholders may propose to
take to cure such failure of condition after reasonable notice from the party
proposing to terminate this Agreement), PROVIDED that no party shall be entitled
to terminate this Agreement pursuant to this clause (e) if the reason for such
impossibility is due to a breach by the party proposing to terminate this
Agreement or (ii) any permanent injunction or other order of a Government Entity
preventing the consummation of the Merger shall have become final and
non-appealable.
11.02. EFFECT OF TERMINATION. Termination of this Agreement
pursuant to this Article 11 shall terminate all obligations of the parties
hereunder, except for the obligations under Sections 11.02, 12.07, 12.09, and
12.10, the Confidentiality Agreement and the Performance Guaranty Agreement,
PROVIDED, HOWEVER, that nothing in this Section 11.02 shall relieve or limit the
liability or obligations hereunder of any party (the "Defaulting Party") to the
other party or parties on account of a breach of a covenant or agreement
contained herein, or any fraudulent representation or warranty contained herein
by the Defaulting Party. In the case of such a willful and intentional breach
or fraud, in addition to any damages for which the Defaulting Party may be
liable, the Defaulting Party shall reimburse the other party or parties for any
expenses incurred by such party or parties in order to enforce its or their
rights under this Agreement (including reasonable attorney's fees and expenses).
Nothing in this Agreement shall constitute a waiver by any party hereto of its
rights to compel specific performance of the obligations of any other party
hereto.
ARTICLE 12
MISCELLANEOUS
12.01. NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties in this Agreement or any certificate delivered
pursuant to this Agreement shall survive the Effective Time.
26
12.02. INTERPRETIVE PROVISIONS; CERTAIN DEFINITIONS.
(a) Whenever used in this Agreement, "to the Company's
knowledge" or "to the knowledge of the Company" shall mean the actual knowledge
of those persons who are listed in Section 12.02(a)(i) of the Disclosure
Schedule and "to Purchaser's knowledge" or "to the knowledge of Purchaser" shall
mean the actual knowledge of the persons listed in Section 12.02(a)(ii) of the
Disclosure Statement. The inclusion of any information on the Disclosure
Schedule shall not be deemed to be an admission or acknowledgment by the
Company, in and of itself, that such information is required to be listed on the
Disclosure Schedules or is material to or outside the ordinary course of the
business of the Company and its Subsidiaries. The language used in this
Agreement will be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction will be applied
against any person.
(b) The term "Person" shall be construed broadly, and shall
include an individual, corporation, partnership, trust, proprietorship,
association, governmental body, agency or subdivision or other entity.
"Indebtedness" means the aggregate amount of all long term indebtedness of the
Company and the Subsidiaries, including current portions, including all interest
expense accrued but unpaid, and any prepayment premiums payable thereon and all
other amounts payable pursuant to the Credit Agreement, the Senior Subordinated
Notes and the MBL Subordinated Note; excluding, however, any amounts owing to
the Company or any Subsidiary from the Company or any Subsidiary. "Credit
Agreement" means the Second Amended and Restated Credit Agreement, dated as of
December 5, 1991, by and among ▇▇▇▇▇▇ Holdings Corp. (predecessor by merger to
the Company), the Company, The Bank of New York, The Bank of Nova Scotia,
Kleinwort ▇▇▇▇▇▇ Ltd., Kredietbank N.V., Grand Cayman Branch, The Daiwa Bank
Limited, Pitney ▇▇▇▇▇ Credit Corporation and The Bank of New York, as Agent and
Issuing Bank. "Senior Subordinated Notes" means the senior subordinated notes
of ▇▇▇▇▇▇ Holdings Corp. in the aggregate principal amount of $5 million issued
to the CHC Charitable Irrevocable Trust pursuant to that certain Purchase
Agreement, dated as of December 6, 1991, by and among ▇▇▇▇▇▇ Holdings Corp., the
Company and the CHC Charitable Irrevocable Trust. "MBL Subordinated Note" means
the subordinated note of ▇▇▇▇▇▇ Holdings Corp. in the aggregate principal amount
of $20 million issued to Mutual Benefit Life Insurance Company in Rehabilitation
pursuant to that certain Securities Exchange Agreement, dated as of December 6,
1991, by and among ▇▇▇▇▇▇ Holdings Corp., the Company and the Mutual Benefit
Life Insurance Company in Rehabilitation.
12.03. ENTIRE AGREEMENT. This Agreement (including the Disclosure
Schedule), the Confidentiality Agreement and the Performance Guaranty Agreement
constitute the sole understanding of the parties with respect to the subject
matter hereof. Matters disclosed in the Disclosure Schedule pursuant to any
Section of this Agreement shall be deemed to be disclosed with respect to all
Sections of this Agreement.
12.04. SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties hereto; PROVIDED, HOWEVER, that this
Agreement may not be assigned by any party without the prior written consent of
the other parties and any such attempted assignments shall be null and void,
except that the Purchaser may assign this Agreement to any of its affiliates,
but no such assignment
27
shall release Purchaser from any liability hereunder. From and after the
Closing, the Company Related Parties shall be third party beneficiaries of this
Agreement to the extent herein provided.
12.05. HEADINGS. The headings of the articles, sections and
paragraphs of this Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Agreement or to affect the construction
hereof.
12.06. MODIFICATION AND WAIVER. No amendment, modification or
alteration of the terms or provisions of this Agreement shall be binding unless
the same shall be in writing and duly executed by the parties hereto, except
that any of the terms or provisions of this Agreement may be waived in writing
at any time by the party which is entitled to the benefits of such waived terms
or provisions. No waiver of any of the provisions of this Agreement shall be
deemed to or shall constitute a waiver of any other provision hereof (whether or
not similar). No delay on the part of any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof.
12.07. EXPENSES. Except as otherwise provided herein, the Company
on the one hand and the Purchaser on the other hand shall each pay all costs and
expenses incurred by it or on its behalf in connection with this Agreement and
the transactions contemplated hereby including, without limiting the generality
of the foregoing, fees and expenses of its own financial consultants,
accountants and counsel.
12.08. NOTICES. Any notice, request, instruction or other document
to be given hereunder by any party hereto to any other party shall be in writing
and shall be given (and will be deemed to have been duly given upon receipt) by
delivery in person, by electronic facsimile transmission, by overnight courier
or by registered or certified mail, postage prepaid,
if to the Company to:
The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
28
if to Purchaser to:
TWCC Acquisition Corp.
c/o Investcorp International, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
12.09. GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York applicable to
agreements made and to be performed wholly within such jurisdiction. Each of
the parties hereto hereby irrevocably and unconditionally consents to submit to
the exclusive jurisdiction of the courts of the State of New York and of the
United States of America, in each ease located in County of New York, for any
litigation arising out of or relating to this Agreement and the transactions
contemplated hereby (and agrees not to commence any litigation relating thereto
except in such courts), and further agrees that: service of any process,
summons, notice or document by U.S. registered mail to its respective address
set forth in Section 12.10 shall be effective service of process for any
Litigation brought against it in any such court. Each of the parties hereto
hereby irrevocably and unconditionally waives any objection to the laying of
venue of any litigation arising out of this Agreement or the transactions
contemplated hereby in the courts of the State of New York or the United States
of America, in each case located in County of New York, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such litigation brought in any such court has been brought
in an inconvenient forum.
12.10. PUBLIC ANNOUNCEMENTS. None of the parties shall make any
public statements, including, without limitation, any press releases, with
respect to this Agreement and the transactions contemplated hereby without the
prior written consent of the other parties except as may be required by law or
pursuant to any Commitment. If a public statement is required to be made by law
or pursuant to any Commitment, the parties shall consult with each other in
advance as to the contents and timing thereof.
12.11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument.
* * *
29
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed under seal on its behalf as of the date first above
written.
THE ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ COMPANY
SEAL
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer and Treasurer
TWCC ACQUISITION CORP.
SEAL
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Clerk
EXHIBIT 1.02
TO THE AGREEMENT AND PLAN OF MERGER
ARTICLES OF MERGER
ATTACHED
EXHIBIT 3.01
TO THE AGREEMENT AND PLAN OF MERGER
DISTRIBUTION OF MERGER CONSIDERATION
capitalized terms used in this Exhibit and not defined in the Merger Agreement
shall have the meanings given such terms in the Articles of Incorporation of the
Company
The Merger Consideration shall be distributed as follows:
FIRST
to pay an amount equal to accrued and unpaid dividends on Series A
Preferred Stock to the holders thereof in accordance with Article IV, Part
B, Section 1A of the Articles of Incorporation of the Company;
SECOND
to pay an amount equal to the Liquidating Dividend due on Series A
Preferred Stock to the holders thereof calculated in accordance with
Article IV, Part B, Section 1A of the Articles of Incorporation of the
Company as if the Merger were a Liquidation Event;
THIRD
to pay an amount equal to the aggregate Liquidation Value of the Series A
Preferred Stock to the holders thereof as if the Merger were a Liquidation
Event;
FOURTH
to pay an amount equal to the aggregate Unpaid Yield on the Class A Common
Stock to the holders thereof;
FIFTH
to pay an amount equal to the lesser of (i) the remaining Merger
Consideration and (ii) the Unpaid Preference Amount to the holders of
Common Stock in accordance with Article IV, Part C, Section 3(ii) of such
Articles of Incorporation; and
SIXTH
any amount remaining thereafter shall be distributed pro rata to the
holders of Common Stock.