Exhibit 2.1
Agreement and Plan of Merger dated September 30, 1996
among the Company, PAC and Sub
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
LAMCOR, INCORPORATED,
LI ACQUISITION CORPORATION
AND
PACKAGING ACQUISITION CORPORATION
DATED AS OF SEPTEMBER 30, 1996
TABLE OF CONTENTS
Page
ARTICLE 1 TRANSACTIONS AND TERMS OF MERGER........................5
1.1 Merger..................................................5
1.2 Time and Place of Closing...............................5
1.3 Effective Time..........................................5
ARTICLE 2 TERMS OF MERGER.........................................6
2.1 Charter.................................................6
2.2 Bylaws..................................................6
2.3 Directors and Officers..................................6
2.4 Effect of Merger........................................6
ARTICLE 3 MANNER OF CONVERTING SHARES.............................6
3.1 Conversion of Shares....................................6
3.2 Anti-Dilution Provisions................................7
3.3 Shares Held by Lamcor or Buyer..........................7
3.4 Dissenting Shareholders.................................7
3.5 Conversion of Options and Convertible Securities........8
ARTICLE 4 EXCHANGE OF SHARES......................................8
4.1 Exchange Procedures.....................................8
4.2 Rights of Former Lamcor Shareholders....................9
4.3 Withholding Rights......................................9
4.4 Lost Certificates......................................10
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF LAMCOR...............10
5.1 Organization, Standing and Power.......................10
5.2 Authority; No Breach By Agreement......................10
5.3 Capital Stock..........................................11
5.4 Lamcor Subsidiaries....................................12
5.5 SEC Filings; Financial Statements......................12
5.6 Absence of Undisclosed Liabilities.....................12
5.7 Absence of Certain Changes or Events...................13
5.8 Tax Matters............................................13
5.9 Assets.................................................14
5.10 Intellectual Property..................................15
5.11 Environmental Matters and Permits......................15
5.12 Labor Relations........................................16
5.13 Employee Benefit Plans.................................17
5.14 Material Contracts.....................................18
5.15 Legal Proceedings......................................19
5.16 Reports................................................19
5.17 Statements True and Correct............................19
5.18 Regulatory Matters.....................................20
5.19 State Takeover Laws....................................20
5.20 Charter Provisions.....................................20
5.21 Shareholder Voting Agreement...........................20
5.22 Noncompetition Agreement...............................20
5.23 Knowledge Inquiry......................................20
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYER................21
6.1 Organization, Standing, and Power......................21
6.2 Authority; No Breach By Agreement......................21
6.3 Compliance with Laws...................................22
6.4 Legal Proceedings......................................22
6.5 Statements True and Correct............................23
6.6 Authority of Sub.......................................23
6.7 Regulatory Matters.....................................23
6.8 Arrangements With Lamcor Personnel.....................24
6.9 Financing..............................................24
ARTICLE 7 CONDUCT OF BUSINESS PENDING CONSUMMATION...............24
7.1 Affirmative Covenants of Lamcor........................24
7.2 Negative Covenants of Lamcor...........................24
7.3 Covenants of Buyer.....................................26
7.4 Adverse Changes in Condition...........................27
7.5 Reports................................................27
ARTICLE 8 ADDITIONAL AGREEMENTS..................................27
8.1 Proxy Statement; Shareholder Approval..................27
8.2 Applications; Antitrust Notification...................28
8.3 Filings with State Offices.............................28
8.4 Agreement as to Efforts to Consummate..................28
8.5 Investigation and Confidentiality......................28
8.6 Press Releases.........................................29
8.7 Certain Actions........................................29
8.8 State Takeover Laws....................................30
8.9 Charter Provisions.....................................30
8.10 Employees..............................................30
8.11 Indemnification........................................30
8.12 Certain Policies of Lamcor.............................32
ARTICLE 9 CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE......32
9.1 Conditions to Obligations of Each Party................32
9.2 Conditions to Obligations of Buyer.....................33
9.3 Conditions to Obligations of Lamcor....................34
ARTICLE 10 TERMINATION............................................35
10.1 Termination............................................35
10.2 Effect of Termination..................................36
10.3 Guaranty by PFC........................................37
ARTICLE 11 MISCELLANEOUS..........................................37
11.1 Definitions............................................37
11.2 Expenses and Fee.......................................44
11.3 Brokers and Finders....................................45
11.4 Entire Agreement.......................................46
11.5 Amendments.............................................46
11.6 Waivers................................................46
11.7 Assignment.............................................47
11.8 Notices................................................47
11.9 Governing Law..........................................47
11.10 Counterparts...........................................48
11.11 Captions; Articles and Sections........................48
11.12 Interpretations........................................48
11.13 Enforcement of Agreement...............................48
11.14 Severability...........................................48
11.15 Escrow.................................................48
11.16 Shareholders' Representative...........................49
11.17 Survival...............................................50
11.18 Arbitration............................................51
LIST OF EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
1. FORM OF SHAREHOLDER VOTING AGREEMENT. (ss. 5.21).
2. MATTERS AS TO WHICH ▇▇▇▇, PLANT, ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇,
P.A. WILL OPINE. (ss. 9.2(D)).
3. FORM OF CLAIMS LETTER (ss. 9.2(E)).
4. MATTERS AS TO WHICH ▇▇▇▇▇▇ & BIRD WILL OPINE (ss. 9.3(D)).
5. FORM OF ESCROW AGREEMENT. (ss. 9.1(E)).
6. FORM OF EMPLOYMENT AGREEMENT (▇▇▇▇▇▇). (ss. 9.2(F))
7 FORM OF NONCOMPETITION AGREEMENT (▇▇▇▇) (ss. 5.22)
8. FORM OF OPTION CANCELLATION AGREEMENT. (ss. 9.2(I))
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of September 30, 1996, by and among LAMCOR, INCORPORATED
("Lamcor"), a Minnesota corporation having its principal office located in Le
Sueur, Minnesota; LI ACQUISITION CORPORATION ("Sub"), a Georgia corporation
having its principal office located in Atlanta, Georgia; and PACKAGING
ACQUISITION CORPORATION ("Buyer"), a Georgia corporation having its principal
office located in Atlanta, Georgia.
PREAMBLE
The Boards of Directors of Lamcor, Sub and Buyer are of the opinion
that the transactions described herein are in the best interests of the parties
to this Agreement and their respective shareholders. This Agreement provides for
the acquisition of Lamcor by Buyer pursuant to the merger of Sub with and into
Lamcor. At the effective time of such merger, the outstanding shares of the
capital stock of Lamcor shall be convened into the right to receive a cash
payment from Buyer (except as provided herein). As a result, Lamcor shall
continue to conduct its business and operations as a wholly-owned subsidiary of
Buyer. The transactions described in this Agreement are subject to the approval
of the shareholders of Lamcor and the satisfaction of certain other conditions
described in this Agreement.
Certain terms used in this Agreement are defined in Section 11.1 of
this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
parties agree as follows;
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 MERGER. Subject to the terms and conditions of this Agreement, at
the Effective Time, Sub shall be merged with and into Lamcor in accordance with
the provisions of Section 302A.65 1 of the MBCA with the effect provided in
Section 302A.641 of the MBCA and Section 14-2-1107 of the GBCC with the effect
provided in Section 14-2-1106 of the GBCC (the "Merger"). Lamcor shall be the
Surviving Corporation resulting from the Merger and shall become a wholly-owned
Subsidiary of Buyer and shall continue to be governed by the Laws of the State
of Minnesota. The Merger shall be consummated pursuant to the terms of this
Agreement, which has been approved and adopted by the respective Boards of
Directors of Lamcor, Sub and Buyer, and by Buyer, as the sole shareholder of
Sub.
1.2 TIME AND PLACE OF CLOSING. The closing of the transactions
contemplated hereby (the "Closing") will take place at 9:00 A.M. on the date
that the Effective Time occurs (or the immediately preceding day if the
Effective Time is earlier than 9:00 A.M.), or at such other time as the Parties,
acting through their authorized officers, may mutually agree. The Closing shall
be held at such location as may be mutually agreed upon by the Parties.
1.3 EFFECTIVE TIME. The Merger and other transactions contemplated by
this Agreement shall become effective on the date and at the time the Articles
of Merger reflecting the Merger shall become effective with the Secretary of
State of the State of Minnesota and the Certificate of Merger reflecting the
Merger becomes effective with the Secretary of State of the State of Georgia
(the "Effective Time"). Subject to the terms and conditions hereof, unless
otherwise mutually agreed upon in writing by the authorized officers of each
Party, the Parties shall use their reasonable efforts to cause the Effective
Time to occur on the first business day following or, if practicable, the same
business day as the last to occur of (i) the effective date (including
expiration of any applicable waiting period) of the last required Consent of any
Regulatory Authority having authority over and approving or exempting the
Merger, and (ii) the date on which the shareholders of Lamcor approve this
Agreement to the extent such approval is required by applicable Law.
ARTICLE 2
TERMS OF MERGER
2.1 CHARTER. The Articles of Incorporation of Lamcor in effect
immediately prior to the Effective Time shall be the Articles of Incorporation
of the Surviving Corporation until otherwise amended or repealed.
2.2 BYLAWS. The Bylaws of Lamcor in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation until otherwise
amended or repealed.
2.3 DIRECTORS AND OFFICERS. The directors of Sub in office immediately
prior to the Effective Time, together with such additional persons as may
thereafter be elected, shall serve as the directors of the Surviving Corporation
from and after the Effective Time in accordance with the Bylaws of the Surviving
Corporation. The officers of Lamcor in office immediately prior to the Effective
Time, together with such additional persons as may thereafter be elected, shall
serve as the officers of the Surviving Corporation from and after the Effective
Time in accordance with the Bylaws of the Surviving Corporation.
2.4 EFFECT OF MERGER. At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of the MBCA and the GBCC.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and franchises of
Lamcor and Sub shall vest in the Surviving Corporation, and all debts,
liabilities, obligations, restrictions, disabilities and duties of each of
Lamcor and Sub shall become the debts, liabilities, obligations, restrictions,
disabilities and duties of the Surviving Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 CONVERSION OF SHARES. Subject to the provisions of this Article 3,
at the Effective Time, by virtue of the Merger and without any action on the
part of Buyer, Lamcor, Sub or the shareholders of any of the foregoing, the
shares of the constituent corporations shall be converted as follows:
(a) Each share of Buyer Capital Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.
(b) Each share of Sub Common Stock issued and outstanding
immediately prior to the Effective Time shall cease to be outstanding
and shall be converted into one share of Lamcor Common Stock.
(c) Each share of Lamcor Common Stock (excluding shares held
by Lamcor or any Buyer Company, in each case other than as a result of
debts previously contracted, and excluding shares held by shareholders
who perfect their statutory dissenters' rights as provided in Section
3.4) issued and outstanding immediately prior to the Effective Time
shall cease to be outstanding and shall be convened into and exchanged
for the right to receive from Buyer a cash payment in an amount equal
to $4.12 (the "Merger Consideration") less (i) $0.12 representing the
pro rata portion of the Escrowed Funds described in Section 11.15 and
allocable to each such share of Lamcor Common Stock, and (ii) any Taxes
required to be withheld pursuant to Section 4.3 (the "Cash Payment").
3.2 ANTI-DILUTION PROVISIONS. In the event Lamcor changes the number of
shares of Lamcor Common Stock issued and outstanding prior to the Effective Time
as a result of a stock split, stock dividend, or similar recapitalization with
respect to such stock and the record date therefor (in the case of a stock
dividend) or the effective date thereof (in the case of a stock split or similar
recapitalization for which a record date is not established) shall be prior to
the Effective Time, the amount of the Cash Payment shall be proportionately
adjusted.
3.3 SHARES HELD BY LAMCOR OR BUYER. Each of the shares of Lamcor Common
Stock held by Lamcor or by any Buyer Company shall be canceled and retired at
the Effective Time and no consideration shall be issued in exchange therefor.
3.4 DISSENTING SHAREHOLDERS.
(a) Notwithstanding any provision of this Agreement to the contrary,
shares of Lamcor Common Stock ("Shares") that are outstanding immediately prior
to the Effective Time and which are held by Shareholders who shall have not
voted in favor of the Merger or consented thereto in writing and who shall have
demanded properly in writing the fair value for such Shares in accordance with
Section 302A.473 of the MBCA (collectively, the "Dissenting Shares") shall not
be converted into or represent the right to receive the Merger Consideration.
Such Shareholders shall be entitled to receive payment of the fair value of such
Dissenting Shares held by such Shareholders (with interest if required by the
MBCA) in accordance with the provisions of such Section 302A.473, except that
each Dissenting Share held by Shareholders who shall have failed to perfect or
who effectively shall have withdrawn or lost their rights to appraisal of such
Dissenting Shares under such Section 302A.473 shall thereupon be deemed to have
been converted into and to have become exchangeable for, as of the Effective
Time the right to receive the Cash Payment, without any interest thereon, upon
surrender, in the manner provided in Section 4.1, of the certificate or
certificates that formerly evidenced such Dissenting Shares.
(b) Lamcor shall give Buyer (i) prompt notice of any demands for fair
value of Dissenting Shares received by Lamcor and withdrawals of any such
demands and (ii) the opportunity to participate in all negotiations and
proceedings with respect to each such demand. Lamcor shall not, except with the
prior written consent of Buyer, make any payment (except to the extent that any
such payment is made pursuant to a final, non-appealable court order) with
respect to any demands for the fair value of Dissenting Shares or offer to
settle or settle any such demands.
(c) Payments to the holders of Dissenting Shares pursuant to Section
302A.473, and any costs or expenses in connection therewith, which exceed the
amount of the Merger Consideration payable with respect to such Shares, shall
not be paid out of the Escrowed Funds.
3.5 CONVERSION OF OPTIONS AND CONVERTIBLE SECURITIES. At the Effective
Time, each option or warrant to purchase shares of Lamcor capital stock
outstanding at the Effective Time, whether or not exercisable ("Lamcor Options")
, and all other securities convertible into or exchangeable for shares of Lamcor
capital stock, whether or not convertible or exchangeable ("Lamcor Convertible
Securities"), shall be canceled. At the Closing, Buyer shall cause Lamcor to
make a cash payment for each Lamcor Option or Lamcor Convertible Security
("Option Settlement Payment") equal to the product of (a) the difference (if
positive) between the Merger Consideration and the price at which the holder of
such Lamcor Option or Lamcor Convertible Security could purchase each share of
Lamcor Common Stock to which such Lamcor Option or Lamcor Convertible Security
relates, multiplied by (b) the number of shares of Lamcor Common Stock subject
to such Lamcor Option or Lamcor Convertible Security as if such Lamcor Option
was then fully exercisable or such Lamcor Convertible Security was then fully
convertible or exchangeable, less (y) the product of $0.12, representing the pro
rata portion of the Escrowed Funds described in Section 11.15 allocable to each
such share of Lamcor Common Stock, multiplied by the number of shares referenced
in clause (b) above, and further less (z) any Taxes required to be withheld
pursuant to Section 4.3. At the Effective Time, each such Lamcor Option and each
such Lamcor Convertible Security shall no longer represent the right to purchase
shares of Lamcor Common Stock, but in lieu thereof shall represent only the
nontransferable right to receive the Option Settlement Payment referred to
above. The parties hereto agree that the Rights offered pursuant to the Rights
offering were terminated and cancelled effective upon the termination of the
Rights offering by the Company, are no longer outstanding and are therefore not
included in the respective definitions of "Lamcor Options" and "Lamcor
Convertible Securities" set forth above.
ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES
(a) At the Effective Time, Buyer shall deposit in trust with a bank or
trust company (the "Exchange Agent") selected by mutual agreement of Lamcor and
Buyer before the Closing Date cash in an aggregate amount equal to the product
of (i) the number of Shares issued and outstanding at the Effective Time (other
than Shares owned beneficially or of record by Sub or Buyer and other than the
Dissenting Shares) and (ii) the Merger Consideration (such amount is referred to
as the "Exchange Fund"). The Exchange Agent shall, pursuant to irrevocable
instructions, make payments provided for in Sections 4.1(b) and 11.15 out of the
Exchange Fund The Exchange Fund shall not be used for any other purpose, except
as provided in this Agreement or the Escrow Agreement.
(b) Promptly after the Effective Time, Buyer and Lamcor shall cause the
Exchange Agent to mail to the former Shareholders of Lamcor appropriate
transmittal materials which shall specify that delivery shall be effected, and
risk of loss and title to the certificates theretofore representing Shares of
Lamcor Common Stock (the "Certificates") shall pass, only upon proper delivery
of such Certificates to the Exchange Agent. The Exchange Agent may establish
reasonable and customary rules and procedures in connection with its duties.
After the Effective Time, each holder of Shares of Lamcor Common Stock (other
than shares to be canceled pursuant to Section 3.3 or as to which statutory
dissenters' rights have been perfected as provided in Section 3.4) issued and
outstanding at the Effective Time shall surrender the Certificate or
Certificates representing such shares to the Exchange Agent and shall promptly
upon surrender thereof receive in exchange therefor the Cash Payment, together
with all undelivered dividends or distributions in respect of such shares
(without interest thereon) pursuant to Section 4.2. Buyer shall not be obligated
to deliver the consideration to which any former holder of Lamcor Common Stock
is entitled as a result of the Merger until such holder surrenders such holder's
Certificate or Certificates for exchange as provided in this Section 4.1. The
Certificate or Certificates so surrendered shall be duly endorsed as the
Exchange Agent may require. Any other provision of this Agreement
notwithstanding, neither Buyer, the Surviving Corporation nor the Exchange Agent
shall be liable to a holder of Lamcor Common Stock for any amounts paid or
property delivered in good faith to a public official pursuant to any applicable
abandoned property Law. Adoption of this Agreement by the Shareholders of Lamcor
shall constitute ratification of the appointment of the Exchange Agent.
4.2 RIGHTS OF FORMER LAMCOR SHAREHOLDERS. At the Effective Time, the
stock transfer books of Lamcor shall be closed as to holders of Lamcor Common
Stock immediately prior to the Effective Time, and no transfer of Lamcor Common
Stock by any such holder shall thereafter be made or recognized. Until
surrendered for exchange in accordance with the provisions of Section 4.1, each
Certificate (other than Certificates representing shares to be canceled pursuant
to Section 3.3 or as to which statutory dissenters' rights have been perfected
as provided in Section 3.4) shall from and after the Effective Time represent
for all purposes only the right to receive the consideration provided in Section
3.1 in exchange therefor. However, upon surrender of such Certificate, any
undelivered cash payments payable hereunder (without interest) shall be
delivered and paid with respect to each share represented by such Certificate.
4.3 WITHHOLDING RIGHTS. Each of Surviving Corporation and Buyer shall
be entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of Lamcor Common Stock, Lamcor Options,
or Lamcor Convertible Securities such Taxes as it is required to deduct and
withhold with respect to the making of such payment under the Code, or any
provision of state, local or foreign tax law. To the extent that amounts are so
withheld by Surviving Corporation or Buyer, as the case may be, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the Lamcor Common Stock in respect of which such deduction and
withholding was made by Surviving Corporation or Buyer, as the case may be.
4.4 LOST CERTIFICATES. If any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such person of a bond in such
reasonable amount as the Surviving Corporation may direct as indemnity against
any claim that may be made against it with respect to such Certificate, the
Exchange Agent will make payment pursuant to this Article 4 with respect to such
Certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF LAMCOR
Lamcor hereby represents and warrants to Buyer as follows:
5.1 ORGANIZATION, STANDING AND POWER. Lamcor is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Minnesota, and has the corporate power and authority to carry on its business as
now conducted and to own, lease and operate its Assets. Lamcor is duly qualified
or licensed to transact business as a foreign corporation in good standing in
the States of the United States where the character of its Assets or the nature
or conduct of its business requires it to be so qualified or licensed, except
for such jurisdictions in which the failure to be so qualified or licensed is
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Lamcor.
5.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Lamcor has the corporate power and authority necessary to execute,
deliver, and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery, and performance of
this Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of Lamcor, subject to the
adoption of this Agreement by the holders of a majority of the outstanding
shares of Lamcor Common Stock (excluding all Shares beneficially owned or owned
of record by Buyer or Buyer's Affiliates), which is the only shareholder vote
required for approval of this Agreement and consummation of the Merger by
Lamcor. Subject to such requisite Shareholder approval, and assuming the due
authorization execution and delivery of this Agreement by Buyer and Sub, this
Agreement represents a legal, valid, and binding obligation of Lamcor,
enforceable against Lamcor in accordance with its terms (except in all cases as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium, or similar Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding may
be brought).
(b) Neither the execution and delivery of this Agreement by Lamcor, nor
the consummation by Lamcor of the transactions contemplated hereby, nor
compliance by Lamcor with any of the provisions hereof, will (i) conflict with
or result in a breach of any provision of Lamcor's Articles of Incorporation or
Bylaws, or (ii) except as disclosed in Section 5.2 of the Lamcor Disclosure
Memorandum, constitute or result in a Default under, or require any Consent
pursuant to, or result in the creation of any Lien on any Asset of Lamcor under,
any Contract or Permit of Lamcor or (iii) subject to receipt of the requisite
Consents referred to in Section 9.1(b), violate any Law or Order applicable to
Lamcor or any of its Material Assets; except with respect to subparagraphs (ii)
and (iii) above where any such breaches, defaults, violations or other
occurrences would not, individually or in the aggregate, have a Material Adverse
Effect on Lamcor's business or Assets.
(c) No notice to, filing with, or Consent of, any public body or
authority is necessary for the consummation by Lamcor of the Merger and the
other transactions contemplated in this Agreement, except (i) in connection or
compliance with the provisions of the Securities Laws, applicable state
corporate and securities Laws, and rules of the NASD, (ii) for Consents required
from Regulatory Authorities and other than notices to or filings with the
Internal Revenue Service or the Pension Benefit Guaranty Corporation with
respect to any employee benefit plans, or under the HSR Act, and (iii) where
failure to obtain such Consents, approvals, authorizations or permits, or to
make such filings or notifications, would not prevent or delay consummation of
the Merger, or otherwise prevent Lamcor from performing its obligations under
this Agreement, and would not, individually or in the aggregate, have a Material
Adverse Effect on Lamcor's business or Assets.
5.3 CAPITAL STOCK
(a) The authorized capital stock of Lamcor consists of 10,000,000
Shares of Lamcor Common Stock, of which 1,382,317 shares are issued and
outstanding as of the date of this Agreement and up to 550,000 shares are
reserved for issuance and issuable upon exercise of the Lamcor Options or upon
the conversion or exchange of Lamcor Convertible Securities. All of the issued
and outstanding Shares of Lamcor Common Stock are duly authorized, validly
issued and outstanding and are fully paid and nonassessable. No dividends have
been made or declared by Lamcor in respect of any shares of Lamcor Common Stock
which remain unpaid at the date hereof. No present or former Shareholder of
Lamcor has any preemptive rights with respect to shares of Lamcor Common Stock
under the MBCA or under the Articles of Incorporation of Lamcor as in effect on
the date of this Agreement and none of the outstanding shares of capital stock
of Lamcor has been issued in violation of any preemptive rights under the MBCA.
(b) Except as set forth in Section 5.3(a), or as disclosed in Section
5.3 of the Lamcor Disclosure Memorandum, no Rights or options exercisable for
and no debt or equity securities convertible into or exchangeable for shares of
capital stock or other equity securities of Lamcor are outstanding, and Lamcor
is under no obligation to issue any shares of its capital stock or other debt or
equity securities or any Rights, options or other debt or equity securities
exercisable for or convertible or exchangeable for shares of the capital stock
of Lamcor.
5.4 LAMCOR SUBSIDIARIES. Lamcor has no, and has never had any,
subsidiaries.
5.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Lamcor has timely filed all SEC Documents required to be filed by
Lamcor since December 31, 1992. Section 5.5 of the Lamcor Disclosure Memorandum
lists SEC Documents filed by Lamcor since such date (the "Lamcor SEC Reports").
The Lamcor SEC Reports (i) at the time filed, complied in all Material respects
with the applicable requirements of the Securities Laws and (ii) did not, at the
time they were filed (or, if amended or superseded by a filing prior to the date
of this Agreement, then on the date of such subsequent filing) contain any
untrue statement of a Material fact or omit to state a Material fact required to
be stated therein or necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading.
(b) Each of the Lamcor Financial Statements (including, in each case,
any related notes) contained in the Lamcor SEC Reports, including any Lamcor SEC
Reports filed after the date of this Agreement until the Effective Time,
complied as to form in all Material respects with the applicable published rules
and regulations of the SEC with respect thereto, was prepared in accordance with
GAAP applied on a consistent basis throughout the periods involved (except as
may be indicated in the notes to such financial statements or, in the case of
unaudited interim statements, as permitted by Form 10-Q or 10-QSB of the SEC),
and fairly presented in all Material respects the financial position of Lamcor
as at the respective dates and the consolidated results of operations and cash
flows for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be Material in amount or effect.
5.6 ABSENCE OF UNDISCLOSED LIABILITIES. Lamcor has no Knowledge of
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Lamcor, except Liabilities which are
accrued or reserved against in the balance sheets of Lamcor as of September 30,
1995 and June 30, 1996, included in the Lamcor Financial Statements delivered
prior to the date of this Agreement or reflected in the notes thereto or the
Lamcor Disclosure Memorandum. Lamcor has not incurred or paid any Liability
since June 30, 1996, except for such Liabilities incurred or paid (i) in the
ordinary course of business consistent with past business practice and as to
incurred liabilities, are not, individually or in the aggregate, Material, (ii)
in connection with the transactions contemplated by this Agreement or (iii) as
shown in the Lamcor Disclosure Memorandum. Except as disclosed in Section 5.6 of
the Lamcor Disclosure Memorandum, Lamcor is not directly or indirectly liable,
by guarantee, indemnity, or otherwise, upon or with respect to, or obligated, by
discount or repurchase agreement or in any other way, to provide funds in
respect to or obligated to guarantee or assume any Liability of any Person for
any amount. Lamcor has terminated the offering of Rights to subscribe for up to
350,000 shares of Lamcor Common Stock initiated by Lamcor on March 1, 1996 (the
"Rights offering"), and returned any and all funds tendered pursuant to such
Rights offering. Section 5.6 of the Lamcor Disclosure Memorandum lists all
Lamcor Shareholders of record who tendered funds pursuant to such Rights
offering and had such tendered funds returned by Lamcor.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since September 30, 1995,
except as disclosed in the Lamcor Financial Statements delivered prior to the
date of this Agreement or as disclosed in the Lamcor Disclosure Memorandum and
except for such changes as are the result of general economic conditions or
general conditions in the industry in which Lamcor operates, (i) there have been
no events, changes, or occurrences which have had, or are reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Lamcor, and
(ii) Lamcor has not taken any action, or failed to take any action, prior to the
date of this Agreement, which action or failure, if taken after the date of this
Agreement, would represent or result in a Material breach or violation of any of
the covenants and agreements of Lamcor provided in Article 7.
5.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf of Lamcor have
been timely filed or requests for extensions have been timely filed, granted,
and have not expired for periods ended on or before September 30, 1995, and on
or before the date of the most recent fiscal year end immediately preceding the
Effective Time, and all Tax Returns filed are complete and accurate. All Taxes
shown on filed Tax Returns have been paid. There is no audit examination,
deficiency, or refund Litigation with respect to any Taxes, except as reserved
against in the Lamcor Financial Statements delivered prior to the date of this
Agreement or as disclosed in Section 5.8 of the Lamcor Disclosure Memorandum.
Lamcor's federal income Tax Returns have not been audited by the IRS. All Taxes
and other Liabilities due with respect to completed and settled examinations or
concluded Litigation have been paid. There are no Liens with respect to Taxes
upon any of the Assets of Lamcor.
(b) Lamcor has not executed an extension or waiver of any statute of
limitations on the assessment or collection of any Tax due (excluding such
statutes that relate to years currently under examination by the Internal
Revenue Service or other applicable taxing authorities) that is currently in
effect.
(c) The provision for any Taxes due or to become due for Lamcor for the
period or periods through and including the date of the respective Lamcor
Financial Statements that has been made and is reflected on such Lamcor
Financial Statements is sufficient to cover all such Taxes.
(d) Deferred Taxes of Lamcor have been provided for in accordance with
GAAP.
(e) Lamcor (i) is not a party to any Tax allocation or sharing
agreement, (ii) has not been a member of an affiliated group filing a
consolidated federal income Tax Return and (iii) has no Liability for Taxes of
any Person under Treasury Regulation Section 1.502-6 (or any similar provision
of state, local or foreign Law) as a transferee or successor or by Contract or
otherwise.
(f) Lamcor is in compliance with, and its records contain all
information and documents (including properly completed IRS Forms W-9) necessary
to comply with, all applicable information reporting and Tax withholding
requirements under federal, state, and local Tax Laws, and such records identify
with specificity all accounts subject to backup withholding under Section 3406
of the Internal Revenue Code.
(g) Except as disclosed in Section 5.8 of the Lamcor Disclosure
Memorandum, Lamcor has not made any payments, is not obligated to make any
payments, or is not a party to any Contract that could obligate it to make any
payments that would be disallowed as a deduction under Section 280G or 162(m) of
the Internal Revenue Code.
(h) Through the Effective Time, there has not been nor shall there be
an ownership change, as defined in Internal Revenue Code Section 382(g), of
Lamcor that occurred during or after any Taxable Period in which Lamcor incurred
a net operating loss that carries over to any Taxable Period ending after
September 30, 1995, excluding the ownership change contemplated by the Merger.
5.9 ASSETS. Except as disclosed in Section 5.9 of the Lamcor Disclosure
Memorandum or as disclosed or reserved against in the Lamcor Financial
Statements delivered prior to the date of this Agreement, Lamcor has good and
marketable title, free and clear of all Liens, to all of its Assets. To the
Knowledge of Lamcor, (i) the machinery and equipment used in Lamcor's business
are in good working order and are usable in a manner consistent with past use,
reasonable wear and tear excepted, (ii) have been regularly and properly
maintained in accordance with reasonable and customary industry standards and
applicable regulations, and (iii) there are no defects or malfunctions in such
machinery and equipment, which alone or in the aggregate, are reasonably likely
to result in any disruption or interruption in Lamcor's business which would
have a Material Adverse Effect on Lamcor. All items of inventory of Lamcor
reflected on the most recent balance sheet included in the Lamcor Financial
Statements delivered prior to the date of this Agreement and prior to the
Effective Time consisted and will consist, as applicable, of items of a quality
and quantity usable and saleable in the ordinary course of business, are valued
at the lower of cost or net realizable market value and conform to generally
accepted standards in the industry in which Lamcor is a part. All Assets which
are Material to Lamcor's business held under leases or subleases by Lamcor, are
held under valid Contracts enforceable in accordance with their respective terms
(except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceedings may be brought), and neither Lamcor
nor to Lamcor's Knowledge any other party thereto is in Default in any Material
respect under any such Contract. Lamcor has not received notice from any
insurance carrier that (i) any policy of insurance will be canceled or that
coverage thereunder will be reduced or eliminated, or (ii) premium costs with
respect to such policies of insurance will be substantially increased. There are
presently no claims pending under such policies of insurance and Lamcor has no
Knowledge of any event that would cause Lamcor to be required to give notice
thereof in order to assert a claim under such policies. There are no assets used
in connection with the business of Lamcor other than (i) the Assets reflected on
the Lamcor Financial Statements, (ii) Assets owned by Lamcor but not required by
GAAP to be reflected on the Lamcor Financial Statements, and (iii) Assets
acquired by Lamcor since the date of the latest Lamcor Financial Statements,
less any Assets sold by Lamcor in the ordinary course of business since the
latest Lamcor Financial Statements.
5.10 INTELLECTUAL PROPERTY. Lamcor owns or has a license to use (or
will by the Effective Time own or have a license to use) all of the Intellectual
Property which is Material to and used in the course of its business. Lamcor is
the owner of or has a license to any Intellectual Property sold or licensed to a
third party in connection with its business operations, and has the right to
convey by sale or license any Intellectual Property so conveyed. Lamcor is not
in Default under any of its Intellectual Property licenses. No proceedings have
been instituted or are pending, or to the Knowledge of Lamcor threatened, which
challenge the rights of Lamcor with respect to Intellectual Property used, sold
or licensed by Lamcor in the course of its business, nor to the Knowledge of
Lamcor has any person claimed or alleged any rights to such Intellectual
Property. Lamcor is not obligated to pay any recurring royalties to any Person
with respect to any such Intellectual Property. No officer, director, or
employee of Lamcor is a party to a Contract which requires such officer,
director or employee to assign any interest in any Intellectual Property to
Lamcor and to keep confidential any trade secrets, proprietary data, customer
information, or other business information of Lamcor, and to the Knowledge of
Lamcor no such officer, director or employee is party to any Contract with any
Person other than Lamcor which requires such officer, director or employee to
assign any interest in any Intellectual Property to any Person other than Lamcor
or to keep confidential any trade secrets, proprietary data, customer
information, or other business information of any Person other than Lamcor.
Except as disclosed in Section 5.10 of the Lamcor Disclosure Memorandum, no
officer or director or, to the Knowledge of Lamcor, other employee of Lamcor is
party to any Contract which restricts or prohibits such officer, director or
employee from engaging in activities competitive with any Person, including
Lamcor.
5.11 ENVIRONMENTAL MATTERS AND PERMITS. Except as disclosed in Section
5.11 of the Lamcor Disclosure Memorandum:
(a) Lamcor is, and has been, in Material compliance with all
Environmental Laws.
(b) There is no Litigation pending or, to the Knowledge of Lamcor,
threatened before any court, governmental agency, or authority or other forum in
which Lamcor has been or, with respect to threatened Litigation, may be named as
a defendant (i) for alleged noncompliance (including by any predecessor) with
any Environmental Law or (ii) relating to the release, discharge, spillage, or
disposal into the environment of any Hazardous Material, whether or not
occurring at, on, under, adjacent to, or affecting (or potentially affecting) a
site owned, leased, or operated by Lamcor.
(c) To the Knowledge of Lamcor, during the period Lamcor's ownership or
operation of any of its current properties, there have been no releases,
discharges, spillages, or disposals of Hazardous Material in, on, under,
adjacent to, or affecting (or potentially affecting) such properties. Prior to
the period of Lamcor's ownership or operation of any of its respective current
properties, to the Knowledge of Lamcor, there were no releases, discharges,
spillages, or disposals of Hazardous Material in, on, under, or affecting any
such property.
Lamcor has in effect all Permits necessary for it to own, lease, or operate its
Material Assets and to carry on its business as now conducted, except for those
Permits the absence of which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Lamcor, and there has occurred no
Default under any such Permit. Except as disclosed in Section 5.11 of the Lamcor
Disclosure Memorandum, Lamcor:
(i) is not in Default under any of the provisions of its
Articles of Incorporation or Bylaws (or other governing instruments);
(ii) is not in Material Default under any Laws, Orders, or
Permits applicable to its business or employees conducting its
business; or
(iii) since January 1, 1993, has not received any notification
or communication from any agency or department of federal, state, or
local government or any Regulatory Authority or the staff thereof (1)
asserting that Lamcor is not in Material compliance with any of the
Laws or Orders which such governmental authority or Regulatory
Authority enforces, (2) threatening to revoke any Permits, or (3)
requiring Lamcor to enter into or consent to the issuance of a cease
and desist order, formal agreement, directive, commitment, or
memorandum of understanding, or to adopt any Board resolution or
similar undertaking.
Copies of all Material reports, correspondence, notices and other documents
relating to any inspection, audit, monitoring or other form of review or
enforcement action by a Regulatory Authority have been made available to Buyer.
5.12 LABOR RELATIONS. Lamcor is not now and has not been in the
preceding five (5) years the subject of any Litigation asserting that it has
committed an unfair labor practice (within the meaning of the National Labor
Relations Act or comparable state law) or seeking to compel it to bargain with
any labor organization as to wages or conditions of employment, nor is it party
to any collective bargaining agreement, nor is there any strike or other labor
dispute, pending or to the Knowledge of Lamcor threatened, or to the Knowledge
of Lamcor, is there any current activity involving any of its employees seeking
to certify a collective bargaining unit or engaging in any other organization
activity.
5.13 EMPLOYEE BENEFIT PLANS.
(a) Lamcor has disclosed in Section 5.13 of the Lamcor Disclosure
Memorandum, and has delivered or made available to Buyer prior to the execution
of this Agreement copies in each case of, all pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock ownership,
severance pay, vacation, bonus, or other incentive plan, all other written or
unwritten employee programs, arrangements, or agreements, all medical, vision,
dental, or other health plans, all life insurance plans, and all other employee
benefit plans or fringe benefit plans, including "employee benefit plans" as
that term is defined in Section 3(3) of ERISA, which grant benefits to any
Person in excess of $500.00 on an annualized basis, currently adopted,
maintained by, sponsored in whole or in part by, or contributed to by Lamcor or
any ERISA Affiliate thereof for the benefit of employees, retirees, dependents,
spouses, directors, independent contractors, or other beneficiaries and under
which employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries are eligible to participate (collectively,
the "Lamcor Benefit Plans").
(b) Except for the Lamcor 401(k) Profit Sharing Plan and Trust dated
effective October 1, 1993, Lamcor does not have and has never maintained an
"employee pension benefit plan," as that term is defined in Section 3(2) of
ERISA. Lamcor does not have and has never contributed to a multiemployer plan
within the meaning of Section 3(37) of ERISA.
(c) All Lamcor Benefit Plans are in compliance with the applicable
terms of ERISA, the Internal Revenue Code, and any other applicable Laws the
breach or violation of which are reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Lamcor. Each Lamcor ERISA Plan which
is intended to be qualified under Section 401(a) of the Internal Revenue Code
has received a favorable determination letter from the Internal Revenue Service,
and Lamcor is not aware of any circumstances likely to result in revocation of
any such favorable determination letter. Lamcor has not engaged in a transaction
with respect to any Lamcor Benefit Plan that, assuming the taxable period of
such transaction expired as of the date hereof, would subject Lamcor to a Tax
imposed by either Section 4975 of the Internal Revenue Code or Section 502(i) of
ERISA.
(d) Within the six-year period preceding the Effective Time, no
Liability under Subtitle C or D of Title IV of ERISA has been or is expected to
be incurred by Lamcor with respect to any ongoing, frozen, or terminated
single-employer plan or the single-employer plan of any ERISA Affiliate. Lamcor
has not incurred any withdrawal Liability with respect to a multiemployer plan
under Subtitle B of Title IV of ERISA (regardless of whether based on
contributions of an ERISA Affiliate).
(e) Except as disclosed in Section 5.13 of the Lamcor Disclosure
Memorandum, Lamcor does not have any Liability for retiree health and life
benefits under any of the Lamcor Benefit Plans and there are no restrictions on
the rights of Lamcor to amend or terminate any such retiree health or benefit
Plan without incurring any Liability thereunder.
(f) Except as disclosed in Section 5.13 of the Lamcor Disclosure
Memorandum, neither the execution and delivery' of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute, or
otherwise) becoming due to any director or any employee of Lamcor from Lamcor
under any Lamcor Benefit Plan or otherwise, (ii) increase any benefits otherwise
payable under any Lamcor Benefit Plan, or (iii) result in any acceleration of
the time of payment or vesting of any such benefit.
(g) The actuarial present values of all accrued deferred compensation
entitlements (including entitlements under any executive compensation,
supplemental retirement, or employment agreement) of employees and former
employees of Lamcor and its beneficiaries, other than entitlements accrued
pursuant to funded retirement plans subject to the provisions of Section 412 of
the Internal Revenue Code or Section 302 of ERISA, have been fully reflected on
the Lamcor Financial Statements to the extent required by and in accordance with
GAAP.
(h) Each Lamcor Benefit Plan designed to satisfy the requirements of
Section 125, Section 401, Section 401(k), Section 409, Section 501(c)(9),
Section 4975(e)(7), and/or Section 4980B of the Code, satisfies such section.
(i) All amounts required to be paid by Lamcor with respect to each
Lamcor Benefit Plan on or before the Effective Time have been paid.
(j) Neither the execution and delivery of this Agreement nor the
consummation of any of the transactions contemplated hereby will result in a
Material increase in the premium costs of any Lamcor Benefit Plan for which
benefits are insured or a Material increase in benefit costs of any Lamcor
Benefit Plan which provides self-insured benefits.
(k) No "leased employee," as that term is defined in Section 414(n) of
the Code, performs services for a Company.
(l) Lamcor has furnished to Buyer correct and complete copies of all
plan documents, trust agreements, summary plan descriptions, employee
informational materials, IRS Forms 5500 and participant listings for each Lamcor
Benefit Plan.
5.14 MATERIAL CONTRACTS. Except as disclosed in Section 5.14 of the
Lamcor Disclosure Memorandum or otherwise reflected in the Lamcor Financial
Statements delivered prior to the date of this Agreement, neither Lamcor nor any
of its assets, businesses, or operations is a party to, or is bound or affected
by, or receives benefits under, (i) any employment, severance, termination,
consulting, or retirement Contract providing for aggregate payments to any
Person in any calendar year in excess of $50,000, (ii) any Contract relating to
the borrowing of money by Lamcor or the guarantee by Lamcor of any such
obligation (other than Contracts evidencing trade payables and Contracts
relating to borrowings or guarantees made in the ordinary course of business),
(iii) any Contract which prohibits or restricts Lamcor from engaging in any
business activities in any geographic area, line of business or otherwise in
competition with any other Person, (iv) any Contract involving Intellectual
Property (other than Contracts entered into in the ordinary course with
customers and "shrink-wrap" software licenses), (v) any Contract relating to the
provision of data processing, network communication, or other technical services
to or by Lamcor, (vi) any Contract relating to the purchase or sale of any goods
or services (other than Contracts entered into in the ordinary course of
business and involving payments under any individual Contract not in excess of
$100,000), and (vii) any other Contract or amendment thereto that would be
required to be filed as an exhibit to a Form 10-K filed by Lamcor with the SEC
as of the date of this Agreement (together with all Contracts referred to in
Sections 5.9 and 5.14(a), the "Lamcor Contracts"). With respect to each Lamcor
Contract: (i) the Contract is in frill force and effect; (ii) Lamcor is not in
Default thereunder; (iii) Lamcor has not repudiated or waived any Material
provision of any such Contract; and (iv) no other party to any such Contract is,
to the Knowledge of Lamcor, in Default in any respect or has repudiated or
waived any Material provision thereunder. All of the indebtedness of Lamcor for
money borrowed is prepayable at any time by Lamcor without penalty or premium.
5.15 LEGAL PROCEEDINGS. Except as described in Section 5.15 of the
Lamcor Disclosure Memorandum, there is no Litigation instituted or pending, or
to the Knowledge of Lamcor threatened (or unasserted but considered probable of
assertion and which if assessed would have at least a reasonable probability of
an unfavorable outcome), against Lamcor, or against any officer or director, or
employee benefit plan of Lamcor, or against any Asset, interest, or right of any
of them, nor are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators outstanding against Lamcor. Section
5.15 of the Lamcor Disclosure Memorandum contains a summary of all pending
Litigation as of the date of this Agreement to which Lamcor is a party and which
names Lamcor as a defendant or cross-defendant.
5.16 REPORTS. Since January 1, 1993 Lamcor has timely filed all
Material reports and statements, together with any amendments required to be
made with respect thereto, that it was required to file with Regulatory
Authorities (except as described in Section 5.16 of the Lamcor Disclosure
Memorandum or for failures to file or properly file which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Lamcor). As of their respective dates, each of such reports and documents,
including the financial statements, exhibits and schedules thereto, complied in
all Material respects with all applicable Laws, and did not contain any untrue
statement of a Material fact or omit to state a Material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
5.17 STATEMENTS TRUE AND CORRECT. No statement, certificate,
instrument, or other writing furnished or to be furnished by Lamcor to Buyer
pursuant to this Agreement or any other document, agreement, or instrument
referred to herein contains or will contain any untrue statement of Material
fact or will omit to state a Material fact necessary to make the statements
therein, in light of the circumstances under which they were made) not
misleading. None of the information supplied or to be supplied by Lamcor for
inclusion in the Proxy Statement to be mailed to Lamcor's shareholders in
connection with the Shareholders' Meeting, and any other documents to be filed
by Lamcor with the SEC or any other Regulatory Authority in connection with the
transactions contemplated hereby, will, at the respective time such documents
are filed, and with respect to the Proxy Statement, when first mailed to the
shareholders of Lamcor, be false or misleading with respect to any Material
fact, or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or, in the case of the Proxy Statement or any amendment thereof or
supplement thereto, at the time of the Shareholders' Meeting, be false or
misleading with respect to any Material fact, or omit to state any Material fact
necessary to correct any statement in any earlier communication with respect to
the solicitation of any proxy for the Shareholders' Meeting. All documents that
Lamcor is responsible for filing with any Regulatory Authority in connection
with the transactions contemplated hereby will comply as to form in all Material
respects with the provisions of applicable Law.
5.18 REGULATORY MATTERS. Lamcor has not taken or agreed to take any
action or has -any Knowledge of any fact or circumstance that is reasonably
likely to materially impede or delay receipt of any Consents of Regulatory
Authorities referred to in Section 9.1(b) or result in the imposition of a
condition or restriction of the type referred to in the last sentence of such
Section.
5.19 STATE TAKEOVER LAWS. As of the Effective Time, Lamcor will have
taken, or cause to be taken, all necessary action required under Minnesota law
so that the provisions of the MBCA do not prevent the consummation of the Merger
or have a Material Adverse Effect on Sub or Buyer.
5.20 CHARTER PROVISIONS. Lamcor has not taken any action so that the
entering into of this Agreement and the consummation of the Merger and the other
transactions contemplated by this Agreement do and will result in the grant of
any rights to any Person under the Articles of Incorporation, Bylaws or other
governing instruments of Lamcor or restrict or impair the ability of Buyer or
any of its Subsidiaries to vote, or otherwise to exercise the rights of a
shareholder with respect to, Shares of Lamcor that may be directly or indirectly
acquired or controlled by them.
5.21 SHAREHOLDER VOTING AGREEMENT. Each of the officers and directors
of Lamcor and Affiliates of such officers and directors who are Shareholders,
and each of the holders of 5% or more of the outstanding shares of Lamcor Common
Stock has executed and delivered to Buyer an agreement in substantially the form
of Exhibit 1.
5.22 NONCOMPETITION AGREEMENT. ▇▇▇ ▇▇▇▇ has executed and delivered the
Noncompetition Agreement attached as Exhibit 7.
5.23 KNOWLEDGE INQUIRY. As to any representation and warranty contained
in this Article 5 that is qualified as being to the "Knowledge" of Lamcor or
words of similar import, one or more of the persons named in the definition of
"Knowledge" in Section 11.1 as having actual knowledge on behalf of Lamcor of
the facts to which such representation and warranty relates either (a) has such
actual knowledge of the accuracy of such representation and warranty or (b) has
reviewed the text of such representation and warranty and all Schedules to this
Agreement relating thereto with the senior most management employee or employees
of Lamcor having management or supervisory responsibility for the operations and
affairs of Lamcor to which such representation and Warranty relates and has
inquired of such employee or employees as to the accuracy of such representation
and warranty and has not received any response to such review and inquiry which
would indicate that there are facts and circumstances not heretofore disclosed
to Buyer that would cause such representation and warranty to be inaccurate in
any Material respect.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Lamcor as follows:
6.1 ORGANIZATION, STANDING, AND POWER. Buyer is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Georgia, and has the corporate power and authority to carry on its business as
now conducted and to own, lease and operate its Material Assets. Buyer is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the foreign jurisdictions where the character of its Assets or the
nature or conduct of its business requires it to be so qualified or licensed,
except for such jurisdictions in which the failure to be so qualified or
licensed is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Buyer.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Buyer has the corporate power and authority necessary to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of Buyer. This Agreement
represents a legal, valid, and binding obligation of Buyer, enforceable against
Buyer in accordance with its terms (except in all cases as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
receivership, conservatorship, moratorium, or similar Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by Buyer, nor
the consummation by Buyer of the transactions contemplated hereby, nor
compliance by Buyer with any of the provisions hereof, will (i) conflict with or
result in a breach of any provision of Buyer's Articles of Incorporation or
Bylaws, or (ii) constitute or result in a Default under, or require any Consent
pursuant to, or result in the creation of any Lien on any Asset of any Buyer
Company under, any Contract or Permit of any Buyer Company or, (iii) subject to
receipt of the requisite Consents referred to in Section 9.1(b), violate any Law
or Order applicable to any Buyer Company or any of their respective Material
Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and rules of
the NASD, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
or under the HSR Act, and other than Consents, filings, or notifications which,
if not obtained or made, are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Buyer, no notice to filing with, or
Consent of, any public body or authority is necessary for the consummation by
Buyer of the Merger and the other transactions contemplated in this Agreement.
6.3 COMPLIANCE WITH LAWS. Each Buyer Company has in effect all Permits
necessary for it to own, lease or operate its Material Assets and to carry on
its business as now conducted, and there has occurred no Default under any such
Permit. None of the Buyer Companies:
(a) is in Default under its Articles of Incorporation or
Bylaws (or other governing instruments); or
(b) is in Default under any Laws, Orders or Permits applicable
to its business or employees conducting its business; or
(c) since January 1, 1993, has received any notification or
communication from any agency or department of federal, state, or local
government or any Regulatory Authority or the staff thereof (i)
asserting that any Buyer Company is not in compliance with any of the
Laws or Orders which such governmental authority or Regulatory
Authority enforces, (ii) threatening to revoke any Permits, or (iii)
requiring any Buyer Company to enter into or consent to the issuance of
a cease and desist order, formal agreement, directive, commitment or
memorandum of understanding, or to adopt any Board resolution or
similar undertaking, which restricts materially the conduct of its
business.
6.4 LEGAL PROCEEDINGS. There is no Litigation instituted or pending,
or, to the Knowledge of Buyer, threatened (or unasserted but considered probable
of assertion and which if asserted would have at least a reasonable probability
of an unfavorable outcome) against any Buyer Company, or against any officer or
director, or employee benefit plan of any Buyer Company, or against an)' Asset,
interest, or right of any of them, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
any Buyer Company.
6.5 STATEMENTS TRUE AND CORRECT. No statement, certificate, instrument
or other writing furnished or to be furnished by any Buyer Company or any
Affiliate thereof to Lamcor pursuant to this Agreement or any other document,
agreement or instrument referred to herein contains or will contain any untrue
statement of Material fact or will omit to state a Material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. None of the information supplied or to be supplied by any
Buyer Company or any Affiliate thereof for inclusion in the Proxy Statement to
be mailed to Lamcor's shareholders in connection with the Shareholders' Meeting,
and any other documents to be filed by any Buyer Company or any Affiliate
thereof with the SEC or any other Regulatory Authority in connection with the
transactions contemplated hereby, will, at the respective time such documents
are filed, and with respect to the Proxy Statement, when first mailed to the
shareholders of Lamcor, be false or misleading with respect to any Material
fact, or omit to state any Material fact necessary' to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or, in the case of the Proxy' Statement or any amendment thereof or
supplement thereto, at the time of the Shareholders' Meeting, be false or
misleading with respect to any Material fact, or omit to state any Material fact
necessary to correct any statement in any earlier communication with respect to
the solicitation of any proxy for the Shareholders' Meeting. All documents that
any Buyer Company or any Affiliate thereof is responsible for filing with any
Regulatory Authority in connection with the transactions contemplated hereby
will comply as to form in all Material respects with the provisions of
applicable Law.
6.6 AUTHORITY OF SUB. Sub is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Georgia as a wholly
owned Subsidiary of Buyer. The authorized capital stock of Sub shall consist of
1,000 shares of Sub Common Stock, all of which is validly issued and
outstanding, fully paid and nonassessable and is owned by Buyer free and clear
of any Lien. Sub has the corporate power and authority necessary to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of Sub. This Agreement
represents a legal, valid, and binding obligation of Sub, enforceable against
Sub in accordance with its terms (except in all cases as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar Laws affecting the enforcement of creditors' rights generally and except
that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding may be brought). Buyer, as the sole shareholder of Sub, has voted
prior to the Effective Time the shares of Sub Common Stock in favor of approval
of this Agreement, as and to the extent required by applicable Law.
6.7 REGULATORY MATTERS. No Buyer Company or any Affiliate thereof has
taken or agreed to take any action or has any Knowledge of any fact or
circumstance that is reasonably likely to Materially impede or delay receipt of
any Consents of Regulatory Authorities referred to in Section 9.1(b) or result
in the imposition of a condition or restriction of the type referred to in the
last sentence of such Section.
6.8 ARRANGEMENTS WITH LAMCOR PERSONNEL. Prior to the date of this
Agreement, Buyer has disclosed to the Special Committee of the Board of
Directors of Lamcor all Material arrangements or agreements proposed by any
Buyer Companies or any Affiliate thereof to any officer, director or employee of
Lamcor and pertaining to (i) the services or compensation of such Person alter
the Effective Time or (ii) participation by any such officer, director or
employee of Lamcor in the equity ownership of any Buyer Company or any Affiliate
thereof at the Effective Time.
6.9 FINANCING. Prior to the date of this Agreement, Buyer has delivered
to Lamcor a letter from CGW Southeast Partners III, L.P. ("CGW") addressed to
Buyer to the effect that as of the date of this Agreement, CGW is highly
confident that Buyer will have sufficient assets and financing to fund the
Merger Consideration payable under this Agreement. On or before the last to
occur of twenty one (21) days after the date of this Agreement or the mailing of
the Proxy Statement to the Shareholders of Lamcor, Buyer will deliver to Lamcor
evidence that Buyer has entered into (a) a written agreement with CGW providing
for the investment by CGW in the equity securities of Buyer in the amount of not
less than Eight Million Dollars ($8,000,000) on the terms and subject to the
conditions set forth in that agreement and (b) an agreement and plan of merger
with Polyflex Film and Converting, Inc., a Georgia corporation ("PFC") pursuant
to which PFC shall, contemporaneously with the consummation of the Merger, merge
with and into a wholly owned subsidiary of Buyer on the terms and subject to the
conditions set forth in that agreement and plan of merger. Buyer agrees to use
commercially reasonable best efforts to cause the transactions to be provided
for in such agreement with CGW and such agreement and plan of merger with PFC to
be consummated.
ARTICLE 7 CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 AFFIRMATIVE COVENANTS OF LAMCOR. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
unless the prior written consent of Buyer shall have been obtained, and except
as otherwise expressly contemplated herein, Lamcor shall (a) operate its
business only in the usual, regular, and ordinary course, (b) preserve intact
its business organization and Assets and maintain its rights and franchises, and
(c) take no action which would (i) adversely affect the ability of any Party to
obtain any Consents required for the transactions contemplated hereby without
imposition of a condition or restriction of the type referred to in the last
sentences of Section 9.1(b) or 9.1(c), or (ii) adversely affect the ability of
any Party to perform its covenants and agreements under this Agreement.
7.2 NEGATIVE COVENANTS OF LAMCOR. From the date of this Agreement until
the earlier of the Effective Time or the termination of this Agreement, Lamcor
covenants and agrees that it will not do or agree or commit to do, any of the
following without the prior written consent of the President or Treasurer of
Buyer, which consent shall not be unreasonably withheld:
(a) amend the Articles of Incorporation, Bylaws or other
governing instruments of Lamcor; or
(b) except for that certain construction loan and related
security interests (the "Construction Loan") in a principal amount not
to exceed $480,000.00, which Construction Loan bears interest at a rate
not to exceed the highest rate currently charged to Lamcor by Valley
National Bank of Le Sueur for Lamcor's other outstanding indebtedness
and contains no prepayment penalty or premium, incur any additional
debt obligation or other obligation for borrowed money except in the
ordinary course of the business, consistent with past practices, or
impose, or suffer the imposition, on any Asset of any Lien or permit
any such Lien to exist (other than in connection with Liens in effect
as of the date hereof that are disclosed in the Lamcor Disclosure
Memorandum), or
(c) repurchase, redeem, or otherwise acquire or exchange
(other than exchanges in the ordinary course under employee benefit
plans), directly or indirectly, any shares, or any securities
convertible into any shares, of the capital stock of Lamcor, or declare
or pay any dividend or make any other distribution in respect of
Lamcor's capital stock; or
(d) except for this Agreement, or pursuant to the exercise of
stock options outstanding as of the date hereof and pursuant to the
terms thereof in existence on the date hereof, issue, sell, pledge,
encumber, authorize the issuance of, enter into any Contract to issue,
sell, pledge, encumber, or authorize the issuance of, or otherwise
permit to become outstanding, any additional shares of Lamcor Common
Stock or any other capital stock of Lamcor, or any stock appreciation
rights, or any option, warrant, or other Right; or
(e) adjust, split, combine or reclassify any capital stock of
Lamcor or issue or authorize the issuance of any other securities in
respect of or in substitution for shares of Lamcor Common Stock, or
sell, lease, mortgage or otherwise dispose of or otherwise encumber (x)
any shares of capital stock of any Lamcor Subsidiary (unless any such
shares of stock are sold or otherwise transferred to another Lamcor
Company) or (y) any Material Asset other than in the ordinary course of
business for reasonable and adequate consideration and other than in
connection with the Construction Loan; or
(f) except for purchases of U.S. Treasury securities or U.S.
Government agency securities, which in either case have maturities of
three years or less, purchase any securities or make any Material
investment, either by purchase of stock of securities, contributions to
capital, Asset transfers, or purchase of any Assets, in any Person, or
otherwise acquire direct or indirect control over any Person, other
than in connection with (i) foreclosures in the ordinary course of
business, or (iii) the creation of new wholly owned Subsidiaries
organized to conduct or continue activities otherwise permitted by this
Agreement; or
(g) grant any increase in compensation or benefits to the
employees or officers of Lamcor, except in accordance with past
practice disclosed in Section 7.2(g) of the Lamcor Disclosure
Memorandum or as required by Law, pay any severance or termination pay
or any bonus other than pursuant to written policies or written
Contracts in effect on the date of this Agreement and disclosed in
Section 7 2(g) of the Lamcor Disclosure Memorandum; and enter into or
amend any severance agreements with officers of Lamcor; grant any
Material increase in fees or other increases in compensation or other
benefits to directors of Lamcor except in accordance with past practice
disclosed in Section 7.2(g) of the Lamcor Disclosure Memorandum; or
(h) enter into or amend any employment Contract between Lamcor
and any Person; or
(i) adopt any new employee benefit plan of Lamcor or terminate
or withdraw from, or make any Material change in or to, any existing
employee benefit plans of Lamcor other than any such change that is
required by Law or that, in the opinion of counsel, is necessary or
advisable to maintain the tax qualified status of any such plan, or
make any distributions from such employee benefit plans, except as
required by Law, the terms of such plans or consistent with past
practice; or
(j) make any significant change in any Tax or accounting
methods or Systems of internal accounting controls, except as may be
appropriate to conform to changes in Tax Laws or regulatory accounting
requirements or GAAP; or
(k) commence any Litigation other than in accordance with past
practice, settle any Litigation involving any Liability of Lamcor for
Material money damages or restrictions upon the operations of Lamcor;
or
(l) enter into, modify, amend or terminate any Material
Contract or waive, release, compromise or assign any Material rights or
claims; or
(m) incur fees and expenses in connection with the negotiation
and preparation of this Agreement, in settlement of claims relating to,
based upon or arising out of the Rights offering or in consideration
for the Releases or in attorneys fees and expenses and other costs in
obtaining such settlement or Releases, and in connection with the
consummation of the transactions provided for herein in excess of
$275,000
7.3 COVENANTS OF BUYER. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, Buyer
covenants and agrees that it shall take no action which would (i) materially
adversely affect the ability of any Party to obtain any Consents required for
the transactions contemplated hereby without imposition of a condition or
restriction of the type referred to in the last sentences of Section 9 1(b) or 9
1(c), or (ii) materially adversely affect the ability of any Party to perform
its covenants and agreements under this Agreement; provided, that the foregoing
shall not prevent any Buyer Company from acquiring any Assets or other
businesses or from discontinuing or disposing of any of its Assets or business
if such action (i) is, in the judgment of Buyer, desirable in the conduct of the
business of Buyer and its Subsidiaries; and (ii) does not adversely affect the
Buyer's ability to fund the Merger Consideration and the Option Settlement
Payment pursuant to Sections 3 1(c), 3 5 and 9 1(e)
7.4 ADVERSE CHANGES IN CONDITION. Each Party agrees to give written
notice promptly to the other Party upon becoming aware of the occurrence or
impending occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (ii) would cause or constitute a
Material breach of any of its representations, warranties, or covenants
contained herein, and to use its reasonable efforts to prevent or promptly to
remedy the same.
7.5 REPORTS. Each Party and its Subsidiaries shall file all reports
required to be filed by it with Regulatory Authorities between the date of this
Agreement and the Effective Time and shall deliver to the other Party copies of
all such reports promptly after the same are filed. If financial statements are
contained in any such reports filed with the SEC, such financial statements will
fairly present the consolidated financial position of the entity filing such
statements as of the dates indicated and the consolidated results of operations,
changes in shareholders' equity, and cash flows for the periods then ended in
accordance with GAAP (subject in the case of interim financial statements to
normal recurring year-end adjustments that are not Material). As of their
respective dates, such reports fled with the SEC will comply in all Material
respects with the Securities Laws and will not contain any untrue statement of a
Material fact or omit to state a Material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Any financial statements contained
in any other reports to another Regulatory Authority shall be prepared in
accordance with Laws applicable to such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 PROXY STATEMENT; SHAREHOLDER APPROVAL. Lamcor shall call a
Shareholders' Meeting, to be held as soon as reasonably practicable after
execution of this Agreement, for the purpose of voting upon adoption of this
Agreement and such other related matters as it deems appropriate. In connection
with the Shareholders' Meeting, (i) Lamcor shall prepare and file with the SEC a
Proxy Statement and mail such Proxy Statement to its shareholders, (ii) the
Parties shall furnish to each other all information concerning them (including
information described in Section 6.8) that they may reasonably request in
connection with such Proxy Statement, and (iii) the Board of Directors of Lamcor
shall recommend to its shareholders the approval of the matters submitted for
approval. Buyer and Lamcor shall make all necessary filings with respect to the
Merger under the Securities Laws.
8.2 APPLICATIONS; ANTITRUST NOTIFICATION. Buyer shall prepare and file,
and Lamcor shall cooperate in the preparation and, where appropriate, filing of,
applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement. To the
extent required by the HSR Act, each of the Parties will file with the United
States Federal Trade Commission and the United States Department of Justice the
notification and report form required for the transactions contemplated hereby
and any supplemental or additional information which may reasonably be requested
in connection therewith pursuant to the HSR Act and will comply in all Material
respects with the requirements of the HSR Act. The Parties shall deliver to each
other copies of all filings, correspondence and orders to and from all
Regulatory Authorities in connection with the transactions contemplated hereby.
8.3 FILINGS WITH STATE OFFICES. Upon the terms and subject to the
conditions of this Agreement, Lamcor shall execute and file the Articles of
Merger with the Secretary of State of the State of Minnesota and Sub shall
execute and file the Certificate of Merger with the Secretary of State of the
State of Georgia in connection with the Closing.
8.4 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
reasonably practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including using its reasonable efforts to lift
or rescind any Order adversely affecting its ability to consummate the
transactions contemplated herein and to cause to be satisfied the conditions
referred to in Article 9; provided, that nothing herein shall preclude either
Party from exercising its rights under this Agreement. Each Party shall use, and
shall cause each of its Subsidiaries to use, its reasonable efforts to obtain
all Consents necessary or desirable for the consummation of the transactions
contemplated by this Agreement.
8.5 INVESTIGATION AND CONFIDENTIALITY.
(a) Prior to the Effective Time, each Party shall keep the other Party
advised of all Material developments relevant to its business and to
consummation of the Merger and shall permit the other Party to make or cause to
be made such investigation of the business and properties of it and its
Subsidiaries and of their respective financial and legal conditions as the other
Party reasonably requests, provided that such investigation shall be reasonably
related to the transactions contemplated hereby and shall not interfere
unnecessarily with normal operations. No investigation by a Party shall affect
the representations and warranties of the other Party.
(b) In addition to the Parties' respective obligations under the
Confidentiality Agreement, which is hereby reaffirmed and adopted and
incorporated by reference herein, each Party shall, and shall cause its advisers
and agents to, maintain the confidentiality of all confidential information
furnished to it by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions and shall not use such
information for any purpose except in furtherance of the transactions
contemplated by this Agreement. If this Agreement is terminated prior to the
Effective Time, each Party shall promptly return or certify the destruction of
all documents and copies thereof, and all work papers containing confidential
information received from the other Party.
(c) Each Party agrees to give the other Party notice as soon as
practicable after any determination by it of any fact or occurrence relating to
the other Party which it has discovered through the course of its investigation
and which represents, or is reasonably likely to represent, either a Material
breach of any representation, warranty, covenant or agreement of the other Party
or which has had or is reasonably likely to have a Material Adverse Effect on
the other Party.
8.6 PRESS RELEASES. Prior to the Effective Time, Lamcor and Buyer shall
consult with each other as to the form and substance of any press release or
other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, that nothing in this Section 8.6
shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law.
8.7 CERTAIN ACTIONS. Lamcor shall deal exclusively with Buyer with
respect to the sale of the Lamcor Common Stock or any assets or properties of
Lamcor (not made in the ordinary course of business), and Lamcor shall not (and
shall direct the officers, directors, financial advisors, accountants and
counsel of Lamcor not to); (i) solicit the submission of any Acquisition
Proposal; (ii) participate in any discussions or negotiations regarding, or
furnish any information to any person or entity other than the Buyer, or
otherwise cooperate in any way or assist, facilitate or encourage, any
Acquisition Proposal by any person or entity other than the Buyer; or (iii)
enter into any agreement or understanding, whether oral or written, that would
prevent the consummation of the transaction proposed herein; provided, however,
that the foregoing restrictions shall not apply to any Acquisition Proposal that
is received by Lamcor or its Representatives from a third party which the Board
of Directors of Lamcor determines is required in the exercise of its fiduciary
duties to consider, provided that Lamcor shall promptly notify Buyer thereof If
and only if Lamcor shall accept and close within one year after the date of this
Agreement any such other Acquisition Proposal first received before the
termination of this Agreement, Lamcor shall pay to Buyer, in reimbursement of
the expenses incurred by the Buyer in connection with the transaction proposed
herein and as liquidated damages to compensate the Buyer for the loss of the
benefit to be derived by the Buyer from the acquisition of the Lamcor Common
Stock and the consummation of the Merger and the transactions contemplated by
this Agreement, the lesser of (i) actual documented out-of-pocket expenses of
the Buyer incurred after June 14, 1996 in connection with the transaction
proposed herein or (ii) $250,000 (the "Expenses"); provided, however, that no
amount shall be paid pursuant to this Section 8 7 if the Agreement was
terminated by Lamcor pursuant to Sections 10.1(b), 10.1(c) or 10.1(f) (but only
on the basis of the failure of Buyer to satisfy the conditions set forth in
Sections 9.3(a), 9.3(b) or 9 3(c)) Upon payment of the Expenses and the Fee to
the extent required under Section 11.2, this Agreement shall terminate with no
further liability of Lamcor or at law or equity resulting therefrom.
8.8 STATE TAKEOVER LAWS. Before the Effective Time, Lamcor shall take
all necessary action so that the provisions of the MBCA do not prevent the
consummation of the Merger or have a Material Adverse Effect on Sub or Buyer.
8.9 CHARTER PROVISIONS. Lamcor shall take all necessary action to
ensure that the entering into of this Agreement and the consummation of the
Merger and the other transactions contemplated hereby do not and will not result
in the grant of any rights to any Person under the Articles of Incorporation,
Bylaws or other governing instruments of Lamcor or restrict or impair the
ability of Buyer or any of its Subsidiaries to vote, or otherwise to exercise
the rights of a shareholder with respect to, shares of Lamcor that may be
directly or indirectly acquired or controlled by them.
8.10 EMPLOYEES. Following the Effective Time, Buyer intends to cause
Lamcor to retain substantially all of its current employees and shall provide
generally to officers and employees of Lamcor employee benefits under employee
benefit and welfare plans (other than stock option or other plans involving the
potential issuance of Buyer Common Stock), on terms and conditions which when
taken as a whole are substantially similar to those currently provided by Buyer
to its similarly situated officers and employees. For purposes of participation,
vesting and (except in the case of Buyer retirement plans) benefit accrual under
Buyer's employee benefit plans, the service of the employees of Lamcor prior to
the Effective Time shall be treated as service with a Buyer Company
participating in such employee benefit plans. Except as otherwise contemplated
herein, Buyer also shall cause the Surviving Corporation and its Subsidiaries to
honor in accordance with their terms all employment, severance, consulting and
other compensation Contracts disclosed in Section 8.10 of the Lamcor Disclosure
Memorandum to Buyer between Lamcor and any current or former director, officer,
or employee thereof, and all provisions for vested benefits or other vested
amounts earned or accrued through the Effective Time under the Lamcor Benefit
Plans.
8.11 INDEMNIFICATION.
(a) For a period of six years after the Effective Time, Buyer shall,
and shall cause the Surviving Corporation to, indemnify', defend and hold
harmless the present and former directors and officers of Lamcor (each, an
"Indemnified Party") against all Liabilities arising out of actions or omissions
arising out of the Indemnified Party's service or services as directors or
officers of Lamcor or, at Lamcor's request, of another corporation, partnership,
joint venture, trust or other enterprise occurring at or prior to the Effective
Time if (i) such Indemnified Party is determined to have met the relevant
standard of care and criteria set forth in subdivision 2 of Section 302A 521 of
the MBCA (or any successor statutory provisions) and otherwise to the extent and
as provided under Section 302A.521 of the MBCA (or any successor statutory
provisions) and (ii) such Indemnified Party notifies Buyer of each claim for
indemnification in accordance with Section 8.11(b) within the six-year period
following the Effective Time. Without limiting the foregoing, in any case in
which any determination of eligibility for such indemnification or for the
payment or reimbursement of expenses under such Section is required to be made
by the Surviving Corporation, the Surviving Corporation shall direct, at the
election of the Indemnified Party, that any such determination of eligibility
shall be made by independent counsel mutually agreed upon between Buyer and the
Indemnified Party. For a period of six (6) years after the Effective Time, Buyer
and the Surviving Corporation will not take any action, or permit any action to
be taken, which would change or amend the provisions of the Articles of
Incorporation or Bylaws of the Surviving Corporation in effect at the Effective
Time relating to indemnification provided under Section 302A.521 of the MBCA (or
any successor statutory' provisions) or limitation of liability, in any manner
that would adversely affect the rights of any Indemnified Party under Section
8.11. In the event the Surviving Corporation or any of its successors or assigns
(i) reorganizes or consolidates with or merges into or enters into another
business combination with any other Person and is not the resulting, continuing
or surviving corporation or entity of such consolidation, merger or transaction
or (ii) liquidates, dissolves or transfers all or substantially all of its
properties and assets to any Person, then, and in each such case, proper
provision will be made so that the successor and assigns of the Surviving
Corporation assume the obligations set forth in Section 8.11. Each Indemnified
Party shall be a third party beneficiary of Section 8.11 and shall be entitled
to enforce the provisions of Section 8.1.1.
(b) Any Indemnified Party wishing to claim indemnification under
paragraph (a) of this Section 8.11, upon learning of any such Liability or
Litigation, shall promptly notify Buyer thereof In the event of any such
Litigation (whether arising before or after the Effective Time), (i) Buyer or
the Surviving Corporation shall have the obligation and right to assume the
defense thereof and neither Buyer nor the Surviving Corporation shall be liable
to such Indemnified Parties for any legal expenses of other counsel or any other
expenses subsequently incurred by such Indemnified Parties in connection with
the defense thereof, except that if counsel for the Indemnified Parties advises
that there are substantive issues which raise conflicts of interest between
Buyer or the Surviving Corporation and the Indemnified Parties, the Indemnified
Parties may retain counsel satisfactory to them, and Buyer or the Surviving
Corporation shall pay all reasonable fees and expenses of such counsel for the
Indemnified Parties promptly as statements therefor are received; provided, that
Buyer and the Surviving Corporation shall be obligated pursuant to this
paragraph (b) to pay for only one firm of counsel for all Indemnified Parties in
any jurisdiction, (ii) the Indemnified Parties will cooperate in the defense of
any such Litigation, and (iii) neither Buyer nor the Surviving Corporation shall
be liable for any settlement effected without its prior written consent; and
provided further that neither Buyer nor the Surviving Corporation shall have any
obligation hereunder to any Indemnified Party when and if a court of competent
jurisdiction shall determine, and such determination shall have become final,
that the indemnification of such Indemnified Party in the manner contemplated
hereby is prohibited by applicable Law. The provisions of this Section 8.11 do
not and shall not modify the indemnification obligations of Lamcor provided
under Section 302A. 521 of the MBCA (or any successor statutory provisions).
8.12 CERTAIN POLICIES OF LAMCOR. Buyer and Lamcor also shall consult
with respect to the character, amount and timing of restructuring and
Merger-related expense charges to be taken by each of the Parties in connection
with the transactions contemplated by this Agreement and shall take such charges
in accordance with GAAP), prior to the Effective Time, as may be mutually agreed
upon by the Parties. Neither Party's representations, warranties, covenants or
agreements contained in this Agreement shall be deemed to be inaccurate or
breached in any respect as a consequence of any modifications or charges
undertaken solely on account of this Section 8.12.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective obligations
of each Party to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by both Parties pursuant to Section 11.6:
(a) SHAREHOLDER APPROVAL. The shareholders of Lamcor, by the
requisite approval required by Law and Lamcor's governing corporate
documents, shall have adopted this Agreement, and the consummation of
the transactions contemplated hereby, including the Merger, as and to
the extent required by Law, by the provisions of any governing
instruments, or by the rules of the NASD.
(b) REGULATORY APPROVALS. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities
required for consummation of the Merger shall have been obtained or
made and shall be in frill force and effect and all waiting periods
required by Law shall have expired. No Consent obtained from any
Regulatory Authority which is necessary to consummate the transactions
contemplated hereby shall be conditioned or restricted in a manner
(including requirements relating to the raising of additional capital
or the disposition of Assets) which in the reasonable judgment of the
Board of Directors of Buyer would so materially adversely impact the
economic or business assumptions of the transactions contemplated by
this Agreement that, had such condition or requirement been known, such
Party would not, in its reasonable judgment, have entered into this
Agreement.
(c) CONSENTS AND APPROVALS. Each Party shall have obtained any
and all Consents required for consummation of the Merger (other than
those referred to in Section 9.1(b)) or for the preventing of any
Default under any Contract or Permit of such Party which, if not
obtained or made, is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on such Party. No Consent so
obtained which is necessary to consummate the transactions contemplated
hereby shall be conditioned or restricted in a manner which in the
reasonable judgment of the Board of Directors of Buyer would so
materially adversely impact the economic or business assumptions of the
transactions contemplated by this Agreement that, had such condition or
requirement been known, such Party would not, in its reasonable
judgment, have entered into this Agreement.
(d) LEGAL PROCEEDINGS. No court or governmental or regulatory
authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any Law or Order (whether temporary,
preliminary or permanent) or taken any other action which prohibits,
restricts or makes illegal consummation of the transactions
contemplated by this Agreement.
(e) ESCROW AGREEMENT. Lamcor, Buyer, the Shareholders'
Representative and the Escrow Agent shall have entered into an Escrow
Agreement in substantially the form of Exhibit 5.
9.2 CONDITIONS TO OBLIGATIONS OF BUYER. The obligations of Buyer to
perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by Buyer pursuant to Section 11.6(a):
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Lamcor set forth in this Agreement shall be true and
correct on the date of this Agreement and as of the Effective Time with
the same effect as though all such representations and warranties had
been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date
shall speak only as of such date).
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of
the Material agreements and covenants of Lamcor to be performed and
complied with pursuant to this Agreement prior to the Effective Time
shall have been duly performed and complied with.
(c) CERTIFICATES. Lamcor shall have delivered to Buyer (i) a
certificate, dated as of the Effective Time and signed on its behalf by
its chief executive officer and its chief financial officer, to the
effect that the conditions set forth in Section 9.1 as relates to
Lamcor and in Section 9.2(a) and 9.2(b) have been satisfied, and (ii)
certified copies of resolutions duly adopted by Lamcor's Board of
Directors and shareholders evidencing the taking of all corporate
action necessary to authorize the execution, delivery and performance
of this Agreement, and the consummation of the transactions
contemplated hereby.
(d) OPINION OF COUNSEL. Buyer shall have received an opinion
of ▇▇▇▇, Plant, ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A., counsel to Lamcor, dated
as of the Closing, substantially in the form set forth in Exhibit 2.
(e) CLAIMS LETTERS. Each of the directors and officers of
Lamcor shall have executed and delivered to Buyer letters in
substantially the form of Exhibit 3, and all indebtedness of any such
director or officer outstanding as of the Effective Time shall have
been paid in full to Lamcor.
(f) EMPLOYMENT AGREEMENT. ▇▇▇▇ ▇▇▇▇▇▇ shall have executed,
subject to delivery to Buyer at the Closing, an Employment Agreement in
substantially the form of Exhibit 6 hereto.
(g) DISSENTING SHAREHOLDERS. Not more than five percent (5%)
of the Lamcor Common Stock issued and outstanding immediately prior to
the Effective Time shall constitute Dissenting Shares.
(h) SETTLEMENT OF CLAIMS, RELEASES. Lamcor shall have
delivered to Buyer written releases (a "Release") in form and content
acceptable to Buyer and its counsel from the shareholders of Lamcor
identified below pursuant to which each such shareholder executing any
such Release, for good and sufficient consideration (which, to the
extent such consideration is the payment of money, shall be paid by
Lamcor), agrees to release Lamcor and Buyer and Sub and all officers,
directors, agents, attorneys and employees of Lamcor and/or Buyer and
Sub of, from and in respect of all claims, demands, actions, causes of
action, damages or other liabilities (including both those known or
unknown, accrued or yet to accrue and/or those arising out of federal
or state statutory or Common law) in any way relating to, based upon or
arising out of the commencement, conduct or termination by Lamcor of
the Rights offering. A Release shall be obtained from (i) each
shareholder of Lamcor that has heretofore asserted against Lamcor,
either directly or through an attorney, any claim in any way relating
to, based upon or arising out of the commencement, conduct or
termination of the Rights offering, (ii) not less than ninety-five
percent (95%) of the shareholders of Lamcor who timely subscribed to
shares of Lamcor Common Stock in the Rights offering, other than those
of such shareholders who are included within clause (i) of this
sentence, and (iii) the holders of not less than 800,000 shares of the
Lamcor Common Stock issued and outstanding on the date hereof, other
than holders of Lamcor Common Stock who are included within clauses (i)
and (ii) of this sentence.
(i) OPTION CANCELLATION AGREEMENT. Each of the holders of
Lamcor Options shall have executed, subject to delivery to Buyer at the
Closing, an Option Cancellation Agreement in substantially the form of
Exhibit 8 hereto (collectively, the "Option Cancellation Agreements").
9.3 CONDITIONS TO OBLIGATIONS OF LAMCOR. The obligations of Lamcor to
perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by Lamcor pursuant to Section 11.6(b):
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer set forth in this Agreement shall be true and
correct on the date of this Agreement and as of the Effective Time with
the same effect as though all such representations and warranties had
been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date
shall speak only as of such date).
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of
the Material agreements and covenants of Buyer to be performed and
complied with pursuant to this Agreement prior to the Effective Time
shall have been duly performed and complied with.
(c) CERTIFICATES. Buyer shall have delivered to Lamcor (i) a
certificate, dated as of the Effective Time and signed on its behalf by
its chief executive officer and its chief financial officer, to the
effect that the conditions set forth in Section 9.1 as relates to Buyer
and in Section 9.3(a) and 9.3(b) have been satisfied, and (ii)
certified copies of resolutions duly adopted by Buyer's Board of
Directors and Sub's Board of Directors and sole shareholder evidencing
the taking of all corporate action necessary to authorize the
execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby.
(d) OPINION OF COUNSEL. Lamcor shall have received an opinion
of ▇▇▇▇▇▇ & Bird, counsel to Buyer, dated as of the Effective Time,
substantially in the form set forth in Exhibit 4.
(e) FAIRNESS OPINION. Lamcor shall have received from ▇.▇.
▇▇▇▇▇▇▇▇ & Co. Corp. a letter, dated not more than five business days
prior to the date of the Proxy Statement, to the effect that, in the
opinion of such firm, the consideration to be received by Lamcor
shareholders in connection with the Merger is fair, from a financial
point of view, to such Shareholders.
(f) EXCHANGE AGENT CERTIFICATION. The Exchange Agent shall
have delivered to Lamcor a certificate, dated as of the Effective Time,
to the effect that the Buyer has deposited with the Exchange Agent the
Exchange Fund required pursuant to Section 4.1.
ARTICLE 10
TERMINATION
10.1 TERMINATION. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement by the
shareholders of Lamcor, this Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time only as follows:
(a) By mutual written consent of the Board of Directors of
Buyer and the Board of Directors of Lamcor; or
(b) By the Board of Directors of either Party (provided that
the terminating Party is not then in Material breach of any
representation, warranty, covenant, or other agreement contained in
this Agreement) in the event of a Material breach by the other Party of
any representation, warranty, covenant or agreement (other than any
breach arising out of or based upon the failure of Buyer timely to
deliver to Lamcor the items described in the second sentence of Section
6.9 of this Agreement or the failure of Buyer to obtain the financing
at Closing sufficient to fund the Merger Consideration payable under
this Agreement) contained in this Agreement which cannot be or has not
been cured within 30 days after the giving of written notice to the
breaching Party of such breach; or
(c) By the Board of Directors of either Party (provided that
the terminating Party is not then in Material breach of any
representation, warranty, covenant, or other agreement contained in
this Agreement) in the event (i) any Consent of any Regulatory
Authority required for consummation of the Merger and the other
transactions contemplated hereby shall have been denied by final
nonappealable action of such authority or if any action taken by such
authority is not appealed within the time limit for appeal, or (ii) the
shareholders of Lamcor fail to vote their approval of the matters
relating to this Agreement and the transactions contemplated hereby at
the Shareholders' Meeting where such matters were presented to such
shareholders for approval and voted upon; or
(d) By the Board of Directors of either Party in the event
that the Merger shall not have been consummated by January 15, 1997, if
the failure to consummate the transactions contemplated hereby on or
before such date is not caused by any breach of this Agreement by the
Party electing to terminate pursuant to this Section 10.1(d); or
(e) By the Board of Directors of either Party (provided that
the terminating Party is not then in Material breach of any
representation, warranty, covenant, or other agreement contained in
this Agreement) in the event that any of the conditions precedent to
the obligations of such Party to consummate the Merger cannot be
satisfied or fulfilled by the date specified in Section 10.1(d); or
(f) By the Board of Directors of Lamcor if Buyer shall fail
timely to deliver to Lamcor the items described in the second sentence
of Section 6.9 of this Agreement or if Buyer shall fail to obtain the
financing at Closing sufficient to fund the Merger Consideration
payable under this Agreement.
10.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1, this Agreement shall
become void and have no effect, except that (i) the provisions of this Section
10.2 and Sections 11.2, 11.16, 11.18 and 8.5(b) shall survive any such
termination and abandonment, and (ii) a termination pursuant to Section 10.1(b)
shall not relieve the breaching Party from Liability for an uncured willful
breach of a representation, warranty, covenant, or agreement giving rise to such
termination. In the event this Agreement shall be terminated pursuant to Section
10.1(f), Buyer shall pay and reimburse Lamcor for amounts actually paid by
Lamcor to third parties for legal and accounting fees and related costs in
connection with the negotiation, preparation and execution of this Agreement and
the preparation for the consummation of the transactions contemplated hereby
provided, however, that the maximum aggregate liability of Buyer for such
payment and reimbursement shall be $100,000.
10.3 GUARANTY BY PFC. Contemporaneously with the execution and delivery
by Buyer and Sub of this Agreement, Buyer has delivered to Lamcor the written
agreement of PFC guaranteeing the obligations of Buyer under the last sentence
of Section 10.2 above.
ARTICLE 11
MISCELLANEOUS
11.1 DEFINITIONS.
(a) Except as otherwise provided herein, the capitalized terms set
forth below shall have the following meanings:
"ACQUISITION PROPOSAL" shall mean proposals or offers from any
Person or entity other than Buyer or any of Buyer's Affiliates relating
to (i) any acquisition, issuance or purchase (whether through a merger,
consolidation, share exchange, purchase of assets or similar
transaction, and whether effected in a single transaction or series of
related transactions) of an amount of the Lamcor capital stock which
results in a Change of Control, or (ii) the purchase of all or
substantially all of the assets and properties of Lamcor, or (iii) a
transaction of the type described in the preceding clauses (i) or (ii)
but relating to any corporation or other form of entity formed by
Lamcor or any Affiliate of Lamcor to which at least 51% of the
outstanding Lamcor Common Stock or substantially all of the assets or
properties of Lamcor may be contributed.
"AFFILIATE" of a Person shall means (i) any other Person
directly, or indirectly through one or more intermediaries,
controlling, controlled by or under common control such Person; (ii)
any officer, director, partner, employer, or direct or indirect
beneficial owner of any 10% or greater equity or voting interest of
such Person (on a fully diluted basis); or (iii) any other Person for
which a Person described in clause (ii) acts in any such capacity.
"AGREEMENT" shall mean this Agreement and Plan of Merger,
including the Exhibits hereto.
"ASSETS" of a Person shall mean all of the assets, properties,
businesses and rights of such Person of every kind, nature, character
and description, whether real, personal or mixed, tangible or
intangible, accrued or contingent, or otherwise relating to or utilized
in such Person's business, directly or indirectly, in whole or in part,
whether or not carried on the books and records of such Person, and
whether or not owned in the name of such Person or any Affiliate of
such Person and wherever located.
"ARTICLES OF MERGER" shall mean the Articles of Merger to be
executed by Lamcor and filed with the Secretary of State of the State
of Minnesota relating to the Merger as contemplated by Section 1.1.
"BUYER CAPITAL STOCK" shall mean the capital stock of Buyer.
"BUYER COMPANIES" shall mean, collectively, Buyer and all
Buyer Subsidiaries.
"BUYER SUBSIDIARIES" shall mean the Subsidiaries of Buyer,
which shall include any corporation or other organization acquired as a
Subsidiary of Buyer in the future and held as a Subsidiary by Buyer at
the Effective Time.
"CERTIFICATE OF MERGER" shall mean the Certificate of Merger
to be executed by Lamcor and filed with the Secretary of State of the
State of Georgia relating to the Merger as contemplated by Section 1.1.
"CHANGE OF CONTROL" shall have occurred if any "person" or
"group of persons" (as determined pursuant to Sections 13(d) and 14(d)
of the 1934 Act) (i) becomes the beneficial owner, directly or
indirectly, of voting securities of Lamcor, or securities convertible
into or exchangeable for such voting securities, representing more than
50% of the combined voting power of Lamcor's then outstanding
securities or (ii) acquires the right or power to nominate and/or
control, directly or indirectly, a majority of the members of Lamcor's
Board of Directors (or the Board of Directors of the resulting or
surviving entity with which Lamcor is merged or consolidated).
"CLOSING DATE" shall mean the date on which the Closing
occurs.
"CONFIDENTIALITY AGREEMENT" shall mean that certain
Nondisclosure, Nonsolicitation and Standstill Agreement, dated June 10,
1996, between Lamcor and Buyer "Consent" shall mean any consent,
approval, authorization, clearance, exemption, waiver, or similar
affirmation by any Person pursuant to any Contract, Law, Order, or
Permit.
"CONTRACT" shall mean any written or oral agreement,
arrangement, authorization, commitment, contract, indenture,
instrument, lease, obligation, plan, practice, restriction,
understanding, or undertaking of any kind or character, or other
document to which any Person is a party or that is binding on any
Person or its capital stock, Assets or business.
"DEFAULT" shall mean (i) any breach or violation of or default
under any Contract, Law, Order, or Permit, (ii) any occurrence of any
event that with the passage of time or the giving of notice or both
would constitute a breach or violation of or default under any
Contract, Law, Order, or Permit, or (iii) any occurrence of any event
that with or without the passage of time or the giving of notice would
give rise to a right to terminate or revoke, change the current terms
of, or renegotiate, or to accelerate, increase, or impose any Liability
under, any Contract, Law, Order, or Permit.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to pollution
or protection of human health or the environment (including ambient
air, surface water, ground water, land surface, or subsurface strata)
and which are administered, interpreted, or enforced by the United
States Environmental Protection Agency and state and local agencies
with jurisdiction over, and including common law in respect of,
pollution or protection of the environment, including the Comprehensive
Environmental Response Compensation and Liability Act, as amended, 42
U.S.C. 9601 ET SEQ. ("CERCLA"), the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. 6901 et seq. ("RCRA"), and other Laws
relating to emissions, discharges, releases, or threatened releases of
any Hazardous Material, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
or handling of any Hazardous Material.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"ESCROW AGREEMENT" shall mean the Escrow Agreement dated as of
the Closing Date by and among Buyer, Lamcor and the Shareholders'
Representative.
"EXHIBITS" 1 through 8, inclusive, shall mean the Exhibits so
marked, copies of which are attached to this Agreement. Such Exhibits
are hereby incorporated by reference herein and made a part hereof, and
may be referred to in this Agreement and any other related instrument
or document without being attached hereto.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"GBCC" shall mean the Georgia Business Corporation Code.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance, or toxic
substance (as those terms are defined by any applicable Environmental
Laws) and (ii) any chemicals, pollutants, contaminants, petroleum,
petroleum products, or oil (and specifically shall include asbestos
requiring abatement, removal, or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated
biphenyls).
"HSR ACT" shall mean Section 7A of the ▇▇▇▇▇▇▇ Act, as added
by Title II of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"INTELLECTUAL PROPERTY" shall mean copyrights, patents,
trademarks, service marks, service names, trade names, applications
therefor, technology rights and licenses, computer software (including
any source or object codes therefor or documentation relating thereto),
trade secrets, franchises, know-how, inventions, and other intellectual
property rights.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code
of 1986, as amended, and the rules and regulations promulgated
thereunder.
"KNOWLEDGE" as used with respect to (i) Buyer, shall mean the
actual knowledge of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and (ii)
with respect to Lamcor, shall mean the actual knowledge of ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, and ▇▇▇▇ ▇▇▇▇▇▇.
"LAMCOR COMMON STOCK" shall mean the no par value capital
stock of Lamcor.
"LAMCOR DISCLOSURE MEMORANDUM" shall mean the written
information entitled "Lamcor, Incorporated Disclosure Memorandum"
delivered prior to the date of this Agreement to Buyer describing in
reasonable detail the matters contained therein and, with respect to
each disclosure made therein, specifically referencing each Section of
this Agreement under which such disclosure is being made. Information
disclosed with respect to one Section shall be deemed to be disclosed
for purposes of any other Section not specifically referenced with
respect thereto.
"LAMCOR FINANCIAL STATEMENTS" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of
Lamcor as of June 30, 1996, and as of September 30, 1995 and 1994, and
the related statements of income, changes in shareholders' equity, and
cash flows (including related notes and schedules, if any) for the nine
months ended June 30, 1996, and for each of the three fiscal years
ended September 30, 1995, 1994 and 1993, as filed by Lamcor in SEC
Documents, and (ii) the consolidated balance sheets of Lamcor
(including related notes and schedules, if any) and related statements
of income, changes in shareholders' equity, and cash flows (including
related notes and schedules, if any) provided to Buyer or included in
SEC Documents filed with respect to periods ended subsequent to June
30, 1996.
"LAW" shall mean any code, law (including common law),
ordinance, regulation, reporting or licensing requirement, rule, or
statute applicable to a Person or its Assets, Liabilities, or business,
including those promulgated, interpreted or enforced by any Regulatory
Authority.
"LIABILITY" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost or
expense (including costs of investigation, collection and defense),
claim, deficiency, guaranty or endorsement of or by any Person (other
than endorsements of notes, bills, checks, and drafts presented for
collection or deposit in the ordinary course of business) of any type,
whether accrued, absolute or contingent, liquidated or unliquidated,
matured or unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation,
infringement, lien, mortgage, pledge, reservation, restriction,
security interest, title retention or other security arrangement, or
any adverse right or interest, charge, or claim of any nature
whatsoever of, on, or with respect to any property or property
interest, other than (i) Liens for current property Taxes not yet due
and payable, and (iii) Liens which do not materially impair the use of
or title to the Assets subject to such Lien.
"LITIGATION" shall mean any action, arbitration, cause of
action, claim, complaint, criminal prosecution, governmental or other
examination or investigation, hearing, administrative or other
proceeding relating to or affecting a Party, its business, its Assets
(including Contracts related to it), or the transactions contemplated
by this Agreement.
"LOSS" shall mean any and all direct or indirect demands,
claims, payments, obligations, recoveries, deficiencies, fines,
penalties, interest, assessments, actions, causes of action, suits,
losses, diminution in the value of Assets, punitive, exemplary or
consequential damages (including, but not limited to, lost income and
profits and interruptions of business), liabilities, costs, expenses,
and interest on any amount payable to a third party as a result of the
foregoing. This definition shall include all Losses, whether accrued,
absolute, contingent, known, unknown or otherwise.
"MATERIAL" for purposes of this Agreement shall be determined
in light of the facts and circumstances of the matter in question;
provided that any specific monetary amount stated in this Agreement
shall determine materiality in that instance.
"MATERIAL ADVERSE EFFECT" on a Party shall mean an event,
change or occurrence which, individually or together with any other
event, change or occurrence, has a Material adverse impact on (i) the
financial position, business, or results of operations of such Party
and its Subsidiaries, taken as a whole, or (ii) the ability of such
Party to perform its obligations under this Agreement or to consummate
the Merger or the other transactions contemplated by this Agreement.
"MBCA" shall mean the Minnesota Business Corporation Act.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"NASDAQ NATIONAL MARKET" shall mean the National Market System
of the National Association of Securities Dealers Automated Quotations
System.
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"ORDER" shall mean any administrative decision or award,
decree, injunction, judgment, order, quasi-judicial decision or award,
ruling, or writ of any federal, state, local or foreign or other court,
arbitrator, mediator, tribunal, administrative agency, or Regulatory
Authority.
"PARTY" shall mean either Lamcor, Sub or Buyer, and "Parties"
shall mean Lamcor, Sub and Buyer.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person or its securities, Assets, or business.
"PERSON" shall mean a natural person or any legal, commercial
or governmental entity, such as, but not limited to, a corporation,
general partnership, joint venture, limited partnership, limited
liability company, trust, business association, group acting in
concert, or any person acting in a representative capacity.
"PROXY STATEMENT" shall mean the proxy statement used by
Lamcor to solicit the approval of its shareholders of the transactions
contemplated by this Agreement.
"REGULATORY AUTHORITIES" shall mean, collectively, the SEC,
the NASD, the United States Department of Justice, and all other
federal, state, county, local or other governmental or regulatory
agencies, authorities (including self-regulatory authorities),
instrumentalities, commissions, boards or bodies having jurisdiction
over the Parties and their respective Subsidiaries.
"REPRESENTATIVE" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, or other representative of a
Person.
"RIGHTS" shall mean all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings,
warrants, or other binding obligations of any character whatsoever
relating to, or securities or rights convertible into or exchangeable
for, shares of the capital stock of a Person or by which a Person or
may be bound to issue additional shares of its capital stock or other
Rights.
"SEC DOCUMENTS" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents filed,
or required to be filed, by a Party or any of its Subsidiaries with any
Regulatory Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act
of 1940, as amended, the Trust Indenture Act of 1939, as amended,
applicable state securities Laws, and the rules and regulations of any
Regulatory Authority promulgated thereunder.
"SHAREHOLDER" and "SHAREHOLDERS" shall mean the holders of
Lamcor Common Stock.
"SHAREHOLDERS' MEETING" shall mean the meeting of the
shareholders of Lamcor to be held pursuant to Section 8.1, including
any adjournment or adjournments thereof.
"SHAREHOLDERS' REPRESENTATIVE" shall mean ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ in
his capacity as the Shareholders' Representative pursuant to Section
11.16 of this Agreement.
"SUB COMMON STOCK" means the no par value common stock of Sub.
"SUBSIDIARIES" shall mean all those corporations,
associations, or other business entities of which the entity in
question either (i) owns or controls 50% or more of the outstanding
equity securities either directly or through an unbroken chain of
entities as to each of which 50% or more of the outstanding equity
securities is owned directly or indirectly by its parent (provided,
there shall not be included any such entity the equity securities of
which are owned or controlled in a fiduciary capacity), or (ii) in the
case of partnerships, serves as a general partner.
"SURVIVING CORPORATION" shall mean Lamcor as the surviving
corporation resulting from the Merger
"TAX" or "TAXES" shall mean any federal, state, county, local,
or foreign taxes, charges, fees, levies, imposts, duties, or other
assessments, including income, gross receipts, excise, employment,
sales, use, transfer, license, payroll, franchise, severance, stamp,
occupation, windfall profits, environmental, federal highway use,
commercial rent, customs duties, capital stock, paid-up capital,
profits, withholding, Social Security, single business and
unemployment, disability, real property, personal property,
registration, ad valorem, value added, alternative or add-on minimum,
estimated, or other tax or governmental fee of any kind whatsoever,
imposes or required to be withheld by the United States or any state,
county, local or foreign government or subdivision or agency thereof,
including any interest, penalties, and additions imposed thereon or
with respect thereto.
"TAX RETURN" shall mean any report, return, information
return, or other information required to be supplied to a taxing
authority in Connection with Taxes, including any return of an
affiliated or combined or unitary group that includes a Party or its
Subsidiaries.
(b) The terms set forth below shall have the meanings ascribed thereto
in the referenced sections;
Business Combination Section 11.2(b)
Buyer Preamble
Cash Payment Section 3.1(c)
Certificates Section 4.1(b)
CGW Section 6.9
Closing Section 1.2
Construction Loan Section 7.2(b)
Dissenting Shares Section 3 4(a)
Effective Time Section 1.3
Escrow Claim Section 11.15
Escrowed Funds Section 11.15
Exchange Agent Section 4.1(a)
Exchange Fund Section 4.1(a)
Expenses Section 8.7
Fee Section 11.2(b)
Indemnified Party Section 8 11(a)
Lamcor Preamble
Lamcor Benefit Plans Section 5.13(a)
Lamcor Contracts Section 5.14
Lamcor Convertible Securities Section 3.5
Lamcor Options Section 3.5
Lamcor Expenses Section 11.15
Lamcor SEC Reports Section 5.5(a)
Merger Section 11
Merger Consideration Section 3 1(c)
Option Cancellation Agreements Section 9 2(i)
Option Settlement Payment Section 3 5
PFC Section 6 9
Release Section 9.2(h)
Representative's Expenses Section 11.16(e)
Rights offering Section 5.6
Shareholders' Representative Section 11.16(a)
Shares Section 3.4(a)
▇▇▇▇▇▇▇▇ Section 113
Sub Preamble
(c) Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
11.2 EXPENSES AND FEE.
(a) Except as otherwise provided in this Section 11.2 or in Section
8.7, each of the Parties shall bear and pay all direct costs and expenses
incurred by it or on its behalf in connection with the transactions contemplated
hereunder, including filing, registration and application fees, printing fees,
and fees and expenses of its own financial or other consultants, investment
bankers, accountants, and counsel.
(b) In addition to the foregoing, if, after the date of this Agreement
and within twelve (12) months following:
(i) any termination of this Agreement by Buyer pursuant to
Sections 10.1(b) or 10.1(f) (but only on the basis of the failure of
Lamcor to satisfy any of the conditions enumerated in Section 9.2,
other than Section 9.2(d)); or
(ii) failure to consummate the Merger by reason of any failure
of Lamcor to satisfy the conditions enumerated in Section 9.2, other
than Section 9.2(d);
any third-party, in a single transaction or series of related transactions and
whether through a merger, consolidation, share exchange, purchase or similar
transaction, shall purchase all or substantially all of the Assets of Lamcor or
any corporation or business entity owned by Lamcor or its Affiliates and to
which such Assets are contributed or acquire or purchase an amount of the
capital stock of Lamcor or such other corporation or business entity that
results in a Change of Control (collectively, a "Business Combination"), then
Lamcor shall pay to Buyer upon consummation and closing of the Business
Combination an amount in cash equal to the sum of:
(x) the Expenses determined under Section 8.7 above (if not
previously paid by Lamcor), plus
(y) a fee ("Fee') equal to 2% of the aggregate fair market
value of the consideration received by the Shareholders of Lamcor in
such Business Combination;
which sum represents additional compensation for Buyer's loss as the result of
the transactions contemplated by this Agreement not being consummated; provided,
however, that no Expenses or Fee shall be paid to Buyer if the Agreement was
terminated by Lamcor pursuant to Sections 10.1(b) or 10.1(f) (but only on the
basis of the failure of Buyer to satisfy any of the conditions set forth in
Sections 9.3(a), 9.3(b) or 9.3(c)). Upon payment of the Expenses and the Fee,
this Agreement shall terminate with no further liability of Lamcor or such third
party at law or equity resulting therefrom In the event such third-party shall
refuse to pay such amounts within ten days of demand therefor by Buyer, the
amounts shall be an obligation of Lamcor and shall be paid by Lamcor promptly
upon notice to Lamcor by Buyer.
11.3 BROKERS AND FINDERS. Except for ▇.▇. ▇▇▇▇▇▇▇▇ & Co. Corp.
("▇▇▇▇▇▇▇▇") as to Lamcor, each of the Parties represents and warrants that
neither it nor any of its officers, directors, employees, or Affiliates has
employed any broker or finder or incurred any Liability for any financial
advisory fees, investment bankers' fees, brokerage fees, commissions, or
finders' fees in connection with this Agreement or the transactions contemplated
hereby. In the event of a claim by any broker or finder based upon his or its
representing or being retained by or allegedly representing or being retained by
Lamcor or Buyer, each of Lamcor and Buyer, as the case may be, agrees to
indemnify and hold the other harmless of and from any Liability in respect of
any such claim; provided, however, the Surviving Corporation will pay upon the
Effective Time the balance of any fees payable to ▇▇▇▇▇▇▇▇ so long as Lamcor has
not breached the covenant set forth in Section 7.2(m).
11.4 ENTIRE AGREEMENT. Except as otherwise expressly provided herein,
this Agreement (including the documents and instruments referred to herein)
constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral (except, as to Section
8.5(b), for the Confidentiality Agreement). Nothing in this Agreement expressed
or implied, is intended to confer upon any Person, other than the Parties or
their respective successors, any rights, remedies, obligations, or liabilities
under or by reason of this Agreement, other than as provided in Sections 8.11.
11.5 AMENDMENTS. To the extent permitted by Law, this Agreement may be
amended by a subsequent writing signed by each of the Parties upon the approval
of the Boards of Directors of each of the Parties, whether before or after
shareholder approval of this Agreement has been obtained; provided, that after
any such approval by the holders of Lamcor Common Stock, there shall be made no
amendment that pursuant to Section 302A.613 of the MBCA requires further
approval by such Shareholders without the further approval of such Shareholders.
11.6 WAIVERS.
(a) Prior to or at the Effective Time, Buyer, acting through its Board
of Directors, chief executive officer or other authorized officer, shall have
the right to waive any Default in the performance of any term of this Agreement
by Lamcor, to waive or extend the time for the compliance or fulfillment by
Lamcor of any and all of its obligations under this Agreement, and to waive any
or all of the conditions precedent to the obligations of Buyer under this
Agreement, except any condition which, if not satisfied, would result in the
violation of any Law. No such waiver shall be effective unless in writing signed
by a duly authorized officer of Buyer.
(b) Prior to or at the Effective Time, Lamcor, acting through its Board
of Directors, chief executive officer or other authorized officer, shall have
the right to waive any Default in the performance of any term of this Agreement
by Buyer, to waive or extend the time for the compliance or fulfillment by Buyer
of any and all of its obligations under this Agreement, and to waive any or all
of the conditions precedent to the obligations of Lamcor under this Agreement,
except any condition which, if not satisfied, would result in the violation of
any Law. No such waiver shall be effective unless in writing signed by a duly
authorized officer of Lamcor.
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
11.7 ASSIGNMENT. Except as expressly contemplated hereby, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any Party hereto (whether by operation of Law or otherwise) without
the prior written consent of the other Party. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the Parties and their respective successors and assigns.
11.8 NOTICES. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, by registered or certified mail, postage pre-paid, or by
courier or overnight carrier, to the persons at the addresses set forth below
(or at such other address as may be provided hereunder), and shall be deemed to
have been delivered as of the date so delivered:
Lamcor: Lamcor, Incorporated
▇.▇. ▇▇▇ ▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Special Committee of the Board of Directors
Copy to Counsel: ▇▇▇▇, Plant, ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A.
3400 City Center
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Buyer: Packaging Acquisition Corporation
▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Copy to Counsel: ▇▇▇▇▇▇ & Bird
One Atlantic Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
11.9 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the Laws of the State of Georgia and as to statutory
dissenters' rights, the MBCA, without regard to any applicable conflicts of
Laws.
11.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
11.11 CAPTIONS; ARTICLES AND SECTIONS. The captions contained in this
Agreement are for reference purposes only and are not part of this Agreement.
Unless otherwise indicated, all references to particular Articles or Sections
shall mean and refer to the referenced Articles and Sections of this Agreement.
11.12 INTERPRETATIONS. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against any party, whether under
any rule of construction or otherwise. No party to this Agreement shall be
considered the draftsman. The parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all parties and their attorneys
and shall be construed and interpreted according to the ordinary meaning of the
words used so as fairly to accomplish the purposes and intentions of all parties
hereto.
11.13 ENFORCEMENT OF AGREEMENT. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
11.14 SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
11.15 ESCROW. The Exchange Agent shall deliver to the Escrow Agent on
behalf of the Shareholders at the Effective Time an amount equal to Two Hundred
Thirty One Thousand Eight Hundred Seventy Eight Dollars and 04/100 ($23
1,878.04) (the "Escrowed Funds") representing the aggregate of (a) the amount
allocated to the Escrowed Fund with respect to each share of Lamcor Common Stock
issued and outstanding immediately prior to the Effective Time and (b) the
amount allocated to each share of Lamcor Common Stock that is subject to any
Lamcor Option or Lamcor Convertible Security purchased pursuant to Section 3.5.
The term "Escrow Claim" means any and all claims, individually or in the
aggregate, made by Buyer within one year after the Effective Time for the
purpose of compensating Buyer for Losses resulting from (x) the breach or
inaccuracy of any representation or warranty of Lamcor contained herein, (y) the
failure of Lamcor to perform any covenant or agreement of Lamcor under this
Agreement, and (z) all amounts in excess of $275,000 paid or incurred by Lamcor
in connection with the negotiation and preparation of this Agreement, in
settlement of claims relating to, based upon or arising out of the Rights
offering or in consideration for the Releases, or in attorneys fees and expenses
and other costs in obtaining such settlement or Releases, and in connection with
the consummation of the transactions provided for herein (collectively, the
"Lamcor Expenses"); provided, however, that Buyer shall not be entitled to
assert a claim against the Escrowed Funds for breaches of representations and
warranties pursuant to the preceding clause (x) if Buyer had actual knowledge of
the breach at the Effective Time; provided further, that Buyer shall not be
entitled to assert an Escrow Claim against the Escrowed Funds unless each such
Escrow Claim is in excess of $1,000.00. An Escrow Claim shall be satisfied or
liquidated only from the Escrowed Funds in accordance with the terms and
conditions of the Escrow Agreement; provided, however, that Buyer shall not be
entitled to receive any of the Escrowed Funds unless (i) the Surviving
Corporation is not in breach in any Material respect of any of its covenants or
agreements arising after the Effective Time and (ii) the aggregate amount of all
Escrow Claims arising out of clauses (x) and (y) of the preceding sentence
exceeds $50,000. Once such $50,000 threshold has been reached, Buyer shall be
entitled to hall payment for all Escrow Claims arising out of such clauses (x)
and (y) out of the Escrowed Funds as if no such limitation on payment had
existed, provided that the conditions of clause (i) of this sentence is
satisfied at the time of payment. Buyer shall pay all fees and expenses in
connection with the escrow and the Escrowed Funds, without reimbursement
therefor to Buyer from the Escrowed Funds. Notwithstanding the foregoing, any
amount of Lamcor Expenses in excess of $275,000 shall be paid to Buyer out of
the Escrowed Funds, to the extent thereof, without regard to such $50,000
threshold.
11.16 SHAREHOLDERS' REPRESENTATIVE.
(a) The Shareholders irrevocably make, constitute and appoint ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ as their agent (the "Shareholders' Representative") and authorize and
empower him to fulfill the role of Shareholders' Representative hereunder and
under the Escrow Agreement. In the event of the resignation of the Shareholders'
Representative, the resigning Shareholders' Representative shall appoint a
successor from among the Shareholders and who shall agree in writing to accept
such appointment. If the Shareholders' Representative should die or become
incapacitated, his successor shall be appointed within 15 days of his death or
incapacity by a majority of the Shareholders, and such successor shall be a
Shareholder. The choice of a successor Shareholders' Representative appointed in
any manner permitted above shall be final and binding upon all of the
Shareholders. The decisions and actions of any successor Shareholders'
Representative shall be, for all purposes, those of a Shareholders'
Representative as if originally named herein.
(b) Each Shareholder has made, constituted and appointed and by the
approval of this Agreement hereby irrevocably makes, constitutes and appoints
the Shareholders Representative as such person's true and lawful attorney in
fact and agent, for such person and in such person's name, place and stead for
all purposes necessary or desirable in order for the Shareholders'
Representative to take the actions contemplated by this Agreement and the Escrow
Agreement on behalf of the Shareholders, with the ability to execute and deliver
all instruments, certificates and other documents of every kind incident to the
foregoing to all intents and purposes and with the same effect as such
Shareholder could do personally, and each such Shareholder hereby ratifies and
confirms as his, her or its own act, all that the Shareholders' Representative
shall do or cause to be done pursuant to the provisions hereof.
(c) The death or incapacity of any Shareholder shall not terminate the
authority and agency of the Shareholders' Representative.
(d) Buyer shall be entitled to rely exclusively upon any communication
given or other action taken by the Shareholders' Representative pursuant hereto
and shall not be liable for any action taken or not taken in reliance upon the
Shareholders' Representative. Buyer shall not be obligated to inquire as to the
authority of the Shareholders' Representative to take any action that the
Shareholders' Representative takes or purports to take on behalf of the
Shareholders.
(e) The Shareholders agree to indemnify the Shareholders'
Representative and to hold him or her harmless against any and all loss,
liability or expense incurred without bad faith on the part of the Shareholders'
Representative and arising out of or in connection with his or her duties as
Shareholders' Representative, including the reasonable costs and expenses
incurred by the Shareholders' Representative in defending against any claim or
liability in connection herewith (the "Representative's Expenses"), and
authorize the Shareholder's Representative to receive following the first
anniversary of the Effective Date a portion of the amount by which the then
remaining balance of the Escrowed Funds exceeds the sum of the Tentatively
Impounded Funds (as defined in the Escrow Agreement) equal to the
Representative's Expenses in accordance with Section 6(f) of the Escrow
Agreement, subject to Section 11.16(f) below; provided, however, that Buyer
shall pay all reasonable Representative's Expenses incurred by the Shareholders
Representative and its counsel in defending against any Escrow Claim in the
event that the Shareholders' Representative prevails in such defense, and the
Shareholders and Buyer authorize a maximum amount equal to the lesser of (i)
Five Thousand Dollars ($5,000.00), or (ii) the actual amount of the reasonable
Representative's Expenses incurred by the Shareholders' Representative and its
counsel in carrying out the provisions of this Section 11.16 and Section 6 of
the Option Cancellation Agreements (as evidenced by a written notice from the
Shareholders' Representative to Buyer setting forth the actual amount and a
description of such Representative's Expenses), to be remitted prior to the
first anniversary of the Effective Date to the Shareholders' Representative out
of the Escrowed Funds upon the Escrow Agent's receipt of written notice from
Buyer stating the amount to be so remitted
(f) Each Shareholder shall have the right to receive upon written
request therefor an accounting of the Representative's Expenses for which the
Shareholder's Representative is reimbursed from the Escrowed Funds pursuant to
Section 11.16(e) hereof.
11.17 SURVIVAL. Article 4, Sections 8.10 and 8.11, and Article 11
(other than Section 11.2) shall survive the Effective Time pursuant to their
respective terms. The representations and warranties found in Articles 5 and 6
shall survive until termination of the Escrow Agreement.
11.18 ARBITRATION. Any dispute, controversy or claim arising out of or
relating to this Agreement, shall be settled by arbitration in accordance with
the then-prevailing Commercial Arbitration Rules of the American Arbitration
Association. Such arbitration shall be held in Minneapolis, Minnesota before a
panel of three arbitrators, one selected by Buyer and Sub, one selected by
Lamcor and the third selected by mutual agreement of the first two arbitrators.
Each arbitrator shall be independent and impartial. Judgment upon any award
rendered by the arbitrators may be entered into any court of competent
jurisdiction. The determinations of which Party (or combination of them) bears
the costs and expenses incurred in connection with any such arbitration
proceeding shall be made by the arbitrators.
(signatures appear on the following page)
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.
ATTEST: LAMCOR, INCORPORATED
By:
-------------------------------- -------------------------------------
Secretary President
[CORPORATE SEAL]
ATTEST: PACKAGING ACQUISITION CORPORATION
By:
-------------------------------- -------------------------------------
Secretary President
[CORPORATE SEAL]
LI ACQUISITION CORPORATION
By:
-------------------------------- -------------------------------------
Secretary President
[CORPORATE SEAL]
LIST OF EXHIBITS
TO
AGREEMENT AND PLAN OF MERGER
Exhibit 1 Form of Shareholder Voting Agreement
Exhibit 2 Matters as to which ▇▇▇▇, Plant, ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇,
P.A. will opine
Exhibit 3 Form of Claims Letter
Exhibit 4 Matters as to which ▇▇▇▇▇▇ & Bird will opine
Exhibit 5 Form of Escrow Agreement
Exhibit 6 Form of Employment Agreement (▇▇▇▇▇▇)
Exhibit 7 Form of Noncompetition Agreement (▇▇▇▇)
Exhibit 8 Form of Option Cancellation Agreement
The Company has omitted the above Exhibits to the Agreement and Plan of Merger
and hereby agrees to furnish supplementally a copy of any omitted Exhibit to the
Commission upon request.