1
Exhibit 2(b)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
By and Among
The ▇▇▇▇▇-▇▇▇▇▇▇▇ Stores Corp.,
The ▇▇▇▇▇-▇▇▇▇▇▇▇ Acquisition Corp.,
Stone & ▇▇▇▇▇▇
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. and G. ▇▇▇▇▇ ▇▇▇▇▇▇▇, as Representatives
---------------------
Dated: June 18, 1998
--------------------
-------------------------------------------------------------------------------
2
TABLE OF CONTENTS
Page
ARTICLE I. MERGER................................................................................................1
1.1 Merger..........................................................................................1
1.2 Closing.........................................................................................1
1.3 Certificate of Merger/Articles of Merger........................................................2
1.4 Effects of the Merger...........................................................................2
1.5 Articles of Incorporation.......................................................................2
1.6 Bylaws..........................................................................................2
1.7 Officers........................................................................................2
1.8 Directors.......................................................................................2
1.9 Effect on Capital Stock.........................................................................2
(a) Common Stock of Merger Sub.............................................................2
(b) Cancellation of Treasury Shares and Parent-Owned Shares................................3
(c) Conversion of S&T Common Shares........................................................3
(d) Redemption of S&T Preferred Shares.....................................................3
(e) Dissenting Shares......................................................................3
1.10 Exchange of Certificates........................................................................3
(a) Exchange Agent.........................................................................3
(b) Letters of Transmittal; Surrender of Certificates......................................4
(c) Cancellation and Retirement of Shares; No Further Rights...............................4
(d) Investment of Exchange Fund............................................................4
(e) Termination of Exchange Fund...........................................................5
(f) No Liability...........................................................................5
(g) Withholding Rights.....................................................................5
1.11 Escrow..........................................................................................5
1.12 Reservation of Right to Revise Transaction......................................................6
ARTICLE II. REPRESENTATIONS AND WARRANTIES.......................................................................7
2.1 Representations and Warranties of S&T...........................................................7
(a) Organization, Standing and Corporate Power.............................................7
(b) Authority..............................................................................7
(c) Conflicts; Defaults....................................................................7
(d) Consents and Approvals.................................................................8
(e) Capital Structure......................................................................8
(f) Title and Related Matters..............................................................8
(g) Real Property..........................................................................9
(h) Contracts..............................................................................9
(i) Financial Statements..................................................................10
(j) Liabilities...........................................................................11
(k) Trade Creditor Accounts...............................................................11
(l) Litigation............................................................................11
(m) Compliance with Laws..................................................................11
(n) Brokers, Finders and Agents...........................................................12
(o) Employees and Employee Plans..........................................................12
(p) Environmental and Safety Compliance...................................................13
3
(q) Changes in Circumstances..............................................................13
(r) Taxes.................................................................................14
(s) Insurance.............................................................................14
(t) Approvals.............................................................................15
(u) Copies of Documents...................................................................15
(v) Insider Interests.....................................................................15
(w) Disclosure............................................................................15
(x) Merger Approval.......................................................................15
2.2 Representations and Warranties of Parent.......................................................15
(a) Organization and Standing; Corporate Power and Authority..............................16
(b) Authority.............................................................................16
(c) Conflicts; Defaults...................................................................16
(d) Consents and Approvals................................................................16
(e) Disclosure............................................................................16
2.3 General........................................................................................16
ARTICLE III. CONDITIONS TO CLOSING..............................................................................17
3.1 Conditions to Parent's and Merger Sub's Obligations............................................17
(a) Representations and Warranties........................................................17
(b) Covenants.............................................................................17
(c) Material Adverse Change...............................................................17
(d) Consents..............................................................................17
(e) HSR Consent...........................................................................17
(f) No Proceeding or Litigation...........................................................17
(g) Certificate of S&T....................................................................17
(h) Investigations........................................................................17
(i) Certificate; Documents................................................................18
(j) Approval of S&T's Stockholders; Dissenters' Rights....................................18
(k) Delivery of Employee Plan Documents...................................................18
(l) Delivery of Real Property Instruments and Agreements..................................18
3.2 Conditions to S&T's Obligations................................................................18
(a) HSR Consent...........................................................................18
(b) Representations and Warranties........................................................18
(c) Covenants.............................................................................18
(d) No Proceeding or Litigation...........................................................18
(e) Certificates; Documents...............................................................18
(f) Approval of Merger Sub's Stockholder..................................................19
(g) Certificate of Parent.................................................................19
ARTICLE IV. CLOSING.............................................................................................19
4.1 Documents to be Delivered by S&T...............................................................19
4.2 Documents to be Delivered by Parent and Merger Sub.............................................20
4.3 Other Documents to be Delivered at Closing.....................................................21
ii
4
ARTICLE V. COVENANTS OF S&T.....................................................................................21
5.1 Conduct of Business............................................................................21
(a) Obligations for Borrowed Money........................................................21
(b) Employee Matters......................................................................21
(c) Sale of Assets........................................................................22
(d) Commitments...........................................................................22
(e) Leased Facilities.....................................................................22
(f) Encumbrances..........................................................................22
(g) Litigation............................................................................22
(h) Representations and Warranties........................................................22
(i) Amendments............................................................................22
(j) Capital Structure.....................................................................22
(k) Reorganization........................................................................22
(l) Accounting............................................................................23
(m) Commitments...........................................................................23
5.2 Supplemental Disclosure........................................................................23
5.3 Closing........................................................................................23
5.4 Maintenance of Insurance.......................................................................23
5.5 Inventories....................................................................................23
5.6 No Shopping....................................................................................23
5.7 Further Assurances.............................................................................24
ARTICLE VI. COVENANTS OF PARENT.................................................................................24
6.1 Maintenance of, and Access to, Records.........................................................24
6.2 Closing........................................................................................24
ARTICLE VII. CERTAIN ADDITIONAL COVENANTS.......................................................................24
7.1 Expenses; Transfer Taxes.......................................................................24
7.2 Press Releases and Disclosure..................................................................25
7.3 Regulatory Approvals...........................................................................25
7.4 Environmental Inspection and Assessment; Compliance Actions....................................25
(a) Inspection............................................................................25
(b) Environmental Report..................................................................26
(c) Merger Consideration Adjustment.......................................................27
7.5 Certain Information to be Provided.............................................................27
7.6 Stockholders Meeting/Unanimous Written Consent.................................................27
7.7 Access to Information; Confidentiality.........................................................28
ARTICLE VIII. TERMINATION, AMENDMENT AND WAIVER.................................................................28
8.1 Termination....................................................................................28
8.2 Effect of Termination..........................................................................29
8.3 Amendment......................................................................................29
8.4 Extension; Waiver..............................................................................30
8.5 Procedure for Termination, Amendment, Extension or Waiver......................................30
iii
5
ARTICLE IX. MISCELLANEOUS.......................................................................................30
9.1 Amendments.....................................................................................30
9.2 Entire Agreement...............................................................................30
9.3 Governing Law..................................................................................30
9.4 Notices........................................................................................30
9.5 Counterparts...................................................................................31
9.6 Assignment.....................................................................................32
9.7 Waivers........................................................................................32
9.8 Third Parties..................................................................................32
9.9 Schedules, Addenda and Exhibits................................................................32
9.10 Headings.......................................................................................32
9.11 Certain Definitions............................................................................32
9.12 Remedies Not Exclusive.........................................................................33
9.13 Gender and Number..............................................................................33
iv
6
List of Exhibits
Exhibit A Form of Escrow Agreement
v
7
List of Schedules
Schedule 2.1(a)(i) Subsidiaries
Schedule 2.1(a)(ii) Articles and Bylaws of S&T and Subsidiaries
Schedule 2.1(e) Warrants, Options
Schedule 2.1(f) Liens
Schedule 2.1(g) Real Estate and Leases
Schedule 2.1(h) Contracts
Schedule 2.1(i) Financial Statements
Schedule 2.1(j) Liabilities
Schedule 2.1(l) Litigation
Schedule 2.1(m) Compliance with Laws
Schedule 2.1(n) Brokers, Finders and Agents
Schedule 2.1(o) Employee Plans
Schedule 2.1(p) Environmental Matters
Schedule 2.1(q) Changes in Circumstances
Schedule 2.1(r)(i) Tax Liabilities
Schedule 2.1(r)(ii) Tax Returns
Schedule 2.1(s) Insurance
Schedule 2.1(t) Approvals
Schedule 2.1(v) Insider Interests
Schedule 3.1(c) Material Adverse Changes
Schedule 5.1(a) Obligations for Borrowed Money
Schedule 9.11(a) Directors, Officers, Merchandise Managers, Buyers
and Store Managers
vi
8
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of June 18, 1998
(the "Agreement"), is by and among Stone & ▇▇▇▇▇▇, a West Virginia corporation
("S&T"), The ▇▇▇▇▇-▇▇▇▇▇▇▇ Stores Corp., an Ohio corporation ("Parent"), The
▇▇▇▇▇-▇▇▇▇▇▇▇ Acquisition Corp., a West Virginia corporation and wholly-owned
subsidiary of Parent ("Merger Sub"), and G. ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇., as Representatives (as hereinafter defined).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, S&T presently conducts the business (the "Business")
of selling consumer and household goods at retail in 21 department stores
located in West Virginia, Virginia, Kentucky and Ohio; and
WHEREAS, the respective Boards of Directors of Parent, Merger
Sub and S&T have each determined that the merger of Merger Sub with and into S&T
(the "Merger") and the other transactions contemplated hereby are consistent
with, and in furtherance of, their respective business strategies and goals and
are in the best interests of their respective stockholders; and
WHEREAS, the respective Boards of Directors of Parent, Merger
Sub and S&T have each approved the Merger, upon the terms and subject to the
conditions set forth in this Agreement; and
WHEREAS, Parent and S&T desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Parent, Merger Sub and S&T, upon the terms and subject to the conditions
contained herein, hereby agree as follows:
ARTICLE I. MERGER
-----------------
1.1 MERGER. On the terms and subject to the conditions set
forth in this Agreement, and in accordance with the West Virginia Corporation
Act (the "WVCA"), the Merger shall be effected and Merger Sub shall be merged
with and into S&T at the Effective Time (as defined in Section 1.3 below). At
the Effective Time, the separate corporate existence of Merger Sub shall cease
and S&T shall be the surviving corporation (the "Surviving Corporation") and
shall succeed to and assume all the rights and obligations of Merger Sub in
accordance with the WVCA.
1.2 CLOSING. Unless this Agreement is terminated pursuant to
Article VIII, and subject to the satisfaction or waiver of all of the conditions
in Article III, the closing of the Merger (the "Closing") will take place at
10:00 a.m., Eastern time, on the second business day (the "Closing Date")
following satisfaction or waiver of the conditions set forth in Article III,
unless another time or date is agreed to by the parties hereto. The Closing will
be held at the offices of ▇▇▇▇▇, Day,
1
▇
▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Center, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ or
at such other location as may be designated by Parent.
1.3 CERTIFICATE OF MERGER/ARTICLES OF MERGER. On the Closing
Date, S&T and Merger Sub shall cause articles of merger meeting the requirements
of Section 31-1-34 of the WVCA (the "Articles of Merger") to be properly
executed and filed in accordance with the WVCA. The Merger shall be effective,
for corporate law purposes, at the time and on the date of the filing of the
Articles of Merger in accordance with the WVCA (the "Effective Time").
1.4 EFFECTS OF THE MERGER. The Merger shall have the effects
set forth in the applicable provisions of the WVCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all
property of S&T and Merger Sub shall vest in the Surviving Corporation, and all
liabilities of S&T and Merger Sub shall become the liabilities of the Surviving
Corporation.
1.5 ARTICLES OF INCORPORATION. The articles of incorporation
of S&T in effect immediately prior to the Effective Time shall be the articles
of incorporation of the Surviving Corporation (the "Articles") until thereafter
changed or amended in accordance with the provisions thereof and applicable law;
PROVIDED, HOWEVER, that Article First of the Articles of S&T shall be amended to
read as follows:
The name of the corporation is ▇▇▇▇▇-▇▇▇▇▇▇▇ West
Virginia, Inc.
1.6 BYLAWS. The bylaws of S&T in effect immediately prior to
the Effective Time shall be the bylaws of the Surviving Corporation (the
"Bylaws") until thereafter changed or amended in accordance with the provisions
thereof and of the Articles and applicable law.
1.7 OFFICERS. The officers of Merger Sub immediately prior to
the Effective Time shall be the officers of the Surviving Corporation and shall
hold office until their successors are duly elected or appointed and qualified
in the manner provided in the Articles or the Bylaws or as otherwise provided by
law, or until their earlier death, resignation or removal.
1.8 DIRECTORS. The directors of Merger Sub immediately prior
to the Effective Time shall be the directors of the Surviving Corporation and
shall serve until their successors are duly elected or appointed and qualified
in the manner provided in the Articles or the Bylaws or as otherwise provided by
law, or until their earlier death, resignation or removal.
1.9 EFFECT ON CAPITAL STOCK. The manner of converting the
shares of capital stock of S&T and Merger Sub upon the Merger shall, by virtue
of the Merger and without any action on part of the holder thereof, be as
follows:
(a) COMMON STOCK OF MERGER SUB. Each share of
common stock, without par value, of Merger Sub issued and outstanding
immediately prior to the Effective Time shall be converted into and become one
validly issued, fully paid and nonassessable share of common stock of the
Surviving Corporation.
2
10
(b) CANCELLATION OF TREASURY SHARES AND
PARENT-OWNED SHARES. Each share of common stock, without par value, of S&T ("S&T
Common Shares") and each share of preferred stock, par value $100 per share, of
S&T ("S&T Preferred Shares" and, together with the S&T Common Shares, the
"Shares") issued and outstanding immediately prior to the Effective Time that is
owned by S&T or any Subsidiary (as defined in Section 9.11) of S&T or by Parent,
Merger Sub or any other Subsidiary of Parent (other then shares in trust
accounts, managed accounts, custodial accounts and the like that are
beneficially owned by third parties) shall be canceled and retired automatically
and shall cease to exist, and no cash or other consideration shall be delivered
or deliverable in exchange therefor.
(c) CONVERSION OF S&T COMMON SHARES. Each S&T
Common Share issued and outstanding immediately prior to the Effective Time
(other than S&T Common Shares to be canceled and retired in accordance with
Section 1.9(b)) shall be converted (subject to the adjustments to the aggregate
Merger Consideration (as defined in this Section 1.9(c)) contained in Sections
1.9(d), 1.11, 2.1(n), 7.1 and 7.4 hereof) into the right to receive, on the
terms and subject to the conditions set forth in Section 1.10, the sum of (i)
$595.49, and (ii) (x) the aggregate amount of any funds disbursed upon the
termination of the Escrow Agreement (as defined in Section 1.11), subject in all
respects to the provisions of the Escrow Agreement (the "Merger Consideration"),
divided by (y) 30,227.25.
(d) REDEMPTION OF S&T PREFERRED SHARES. Each S&T
Preferred Share issued and outstanding immediately prior to the Effective Time
(other than S&T Preferred Shares to be canceled and retired in accordance with
Section 1.9(b)) shall be redeemed by S&T, effective immediately prior to the
Effective Time, for an amount (the "Redemption Amount") equal to such S&T
Preferred Share's par value (i.e, One Hundred Dollars ($100) per S&T Preferred
Share). The Merger Consideration shall be reduced by the Redemption Amount.
(e) DISSENTING SHARES. All of the Shares
outstanding immediately prior to the Effective Time that are held by
stockholders of S&T who shall have properly asserted dissenters' rights with
respect thereto under Section 31-1-123 of the WVCA (collectively, the
"Dissenting Shares") shall not be converted into the right to receive such
shares' pro rata portion of the Merger Consideration or the Redemption Amount,
as applicable, pursuant to the Merger, but shall be entitled to receive payment
of the fair value of such shares in accordance with the provisions of such
Section 31-1-123 of the WVCA; PROVIDED, HOWEVER, that any Dissenting Shares so
held by stockholders of S&T who shall thereafter withdraw their demand for
payment for such shares or lose their right to such payment as provided in such
Section 31-1-123 of the WVCA shall be deemed converted, as of the Effective
Time, into the right to receive such shares' pro rata portion of the Merger
Consideration or the Redemption Amount, as applicable, that such holder would
have been entitled to receive as a result of the Merger. If any holder of
Dissenting Shares shall become entitled to receive payment for such shares
pursuant to Section 31-1-123 of the WVCA, such payment shall be made by the
Surviving Corporation.
1.10 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. Prior to or concurrently
with the Effective Time, Parent shall enter into an agreement with such bank or
trust company as may be designated by Parent
3
11
(the "Exchange Agent"), which agreement shall provide that Parent deposit with
the Exchange Agent, as of the Effective Time and for the benefit of the holders
of Shares, for exchange in accordance with this Section 1.10, through the
Exchange Agent, the Merger Consideration (other than the Escrow Funds (as
defined in Section 1.11(a))) (sometimes hereinafter referred to as the "Exchange
Fund").
(b) LETTERS OF TRANSMITTAL; SURRENDER OF CERTIFICATES. As
soon as reasonably practicable after the Effective Time, Parent shall instruct
the Exchange Agent to mail to each holder of record (other than holders of
Shares to be canceled in accordance with Section 1.9(b)) of a certificate or
certificates that, immediately prior to the Effective Time, evidence outstanding
Shares (the "Certificates"): (i) a form of letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates to the
Exchange Agent, and shall be in such form and have such other provisions as
Parent may reasonably specify); and (ii) instructions for effecting the
surrender of the Certificates in exchange for the Merger Consideration. Upon
surrender of a Certificate for cancellation to the Exchange Agent together with
such letter of transmittal, duly executed, and such other customary documents as
may be required pursuant to such instructions, the holder of such Certificate
shall be entitled to receive in exchange therefor a pro rata share of the
Exchange Fund and any funds disbursed to S&T upon the termination of the Escrow
Agreement, subject in all respect to the provisions of the Escrow Agreement, and
the Certificate so surrendered shall forthwith be canceled. If payment is to be
made to a person other than the person in whose name the surrendered Certificate
is registered, it shall be a condition of payment that the Certificate so
surrendered shall be properly endorsed or otherwise in proper form for transfer
and that the person requesting such payment shall (i) pay any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of the surrendered Certificate or (ii) establish to the satisfaction of
Parent and the Surviving Corporation that such taxes have been paid or are not
applicable.
(c) CANCELLATION AND RETIREMENT OF SHARES; NO FURTHER RIGHTS.
As of the Effective Time, all Shares issued and outstanding immediately prior to
the Effective Time shall cease to be outstanding and shall automatically be
canceled and retired and shall cease to exist, and each holder of a Certificate
theretofore representing any such Shares shall cease to have any rights with
respect thereto (including without limitation the right to vote), other than the
right to receive (other than with respect to Shares canceled in accordance with
Section 1.9(b)) on the terms and subject to the conditions set forth in this
Section 1.10, its portion of the Merger Consideration following surrender of
such Certificate in accordance with Section 1.10(b), and until so surrendered,
each such Certificate shall represent for all purposes only such right. No
interest shall be paid or accrued on any cash payable upon the surrender of any
Certificate. The Merger Consideration paid following the surrender for exchange
of Certificates in accordance with the terms of this Section 1.10 shall be
deemed to have been paid in full satisfaction of all rights pertaining to the
Shares theretofore represented by such Certificates.
(d) INVESTMENT OF EXCHANGE FUND. The Exchange Agent shall
invest any cash included in the Exchange Fund, as directed by Parent, in (i)
direct obligations of the United States of America, (ii) obligations for which
the full faith and credit of the United States of America is pledged to provide
for the payment of principal and interest, (iii) commercial paper rated the
highest quality by either ▇▇▇▇▇'▇ Investors Services, Inc. or Standard & Poor's
Corporation or (iv) certificates of deposit, bank repurchase agreements or
bankers' acceptances of commercial banks
4
12
with capital exceeding $500 million. Any net earnings from the investment of the
Exchange Fund shall be the property of, and paid over to, pursuant to provisions
of Section 1.9(c) and the Escrow Agreement, the holders of Certificates in their
respective pro rata proportions.
(e) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange
Fund that remains undistributed to the holders of Certificates for 180 days
after the Effective Time shall be delivered to Parent, upon demand, and any
holders of Certificates that have not theretofore complied with this Section
1.10 shall thereafter look only to Parent, and only as general unsecured
creditors thereof, for payment of their claim for their pro rata share of the
Merger Consideration and any net earnings from the investment of the Exchange
Fund.
(f) NO LIABILITY. None of Parent, Merger Sub, the Surviving
Corporation or the Exchange Agent shall be liable to any person in respect of
any payments or distributions payable from the Exchange Fund delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law. If any Certificates shall not have been surrendered prior to five
years after the Effective Time (or immediately prior to such earlier date on
which any cash or property payable in respect of such Certificate under this
Section 1.10 would otherwise escheat to or become the property of any domestic
or foreign governmental agency or regulatory authority ("Governmental Entity")),
any cash or property payable in respect of such Certificate shall, to the extent
permitted by applicable law, become the property of the Surviving Corporation,
free and clear of all claims or interest of any person previously entitled
thereto.
(g) WITHHOLDING RIGHTS. Parent shall be entitled to deduct
and withhold, or cause to be deducted or withheld, from the consideration
otherwise payable pursuant to this Agreement to any holder of Shares or
Certificates such amounts as are required to be deducted and withheld with
respect to the making of such payment under the Internal Revenue Code of 1986,
as amended (the "Code"), or any provision of applicable state, local or foreign
tax law. To the extent that amounts are so deducted and withheld, such deducted
and withheld amounts shall be treated for all purposes of this Agreement as
having been paid to such holders in respect of which such deduction and
withholding was made.
1.11 ESCROW.
(a) Prior to or concurrently with the Effective Time: (i)
Parent and S&T shall enter into an escrow agreement, in the form attached hereto
as EXHIBIT A (the "Escrow Agreement"), with such escrow agent as may be
designated by Parent (the "Escrow Agent") and G. ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇., as representatives of the holders of Shares (the "Representatives");
and (ii) subject to Section 7.4(c)(iv), Parent shall deposit with the Escrow
Agent, pursuant to the Escrow Agreement, Three Million Dollars ($3,000,000) in
immediately available funds (the "Escrow Funds"). Upon being deposited with the
Escrow Agent pursuant to the Escrow Agreement, the Escrow Funds and any and all
earnings thereon and proceeds thereof held by the Escrow Agent (collectively,
the "Escrowed Property") shall be subject in all respects to the provisions of
the Escrow Agreement and shall be held and disbursed by the Escrow Agent in
accordance with the provisions of the Escrow Agreement. In accordance with the
provisions of the Escrow Agreement, the Escrowed Property shall be held in
escrow by the Escrow Agent for a period of eighteen (18) months after which time
any remaining Escrowed Property will be disbursed, on a pro
5
13
rata basis, to the Certificate holders; PROVIDED, HOWEVER, that such portion of
the Escrowed Property sufficient to completely discharge the amount of any claim
for indemnification made by written demand before the expiration of such
18-month period (as provided in Section 1.11(b) and the Escrow Agreement) shall
be held in escrow by the Escrow Agent beyond the 18-month period until such
claim has been fully resolved. On the Closing Date, to provide a fund to
reimburse all out-of-pocket expenses incurred by the Representatives in
connection with their service as Representatives, Parent shall pay to the
Representatives the sum of One Hundred Thousand Dollars ($100,000), which amount
shall be deducted from the aggregate Merger Consideration otherwise to be
deposited into the Exchange Fund and any unused portions of such amount shall by
distributed by the Representatives to the holders of Shares in proportion to
their Proportionate Share (as defined in the Escrow Agreement) at the
termination of the Escrow Agreement.
(b) Parent (on behalf of itself or any of its affiliates or
any of their respective directors, officers, representatives, employees or
agents) will be entitled to recover from time to time in accordance with the
provisions of the Escrow Agreement, from the Escrowed Property, such portions of
the Escrowed Property as may be necessary to fully indemnify the Parent and its
affiliates and their respective directors, officers, representatives, employees
and agents and hold each of them harmless from and against any and all claims,
actions, suits, demands, assessments, judgments, losses, liabilities, damages,
costs and expenses (including interest, penalties, reasonable attorneys' fees,
reasonable accounting fees and reasonable investigation costs) (collectively,
"Losses") resulting or arising from, relating to or incurred by Parent or any of
its affiliates or any of their respective directors, officers, representatives,
employees or agents in connection with the Merger, this Agreement or any
document related hereto (including without limitation, any breach of any
representation, warranty, covenant, obligation or agreement of S&T contained in
this Agreement or any document related hereto) and by whomever asserted
(including without limitation, S&T, the Representatives and any former, current
or future stockholder of S&T). In accordance with the provisions of the Escrow
Agreement, any dispute with respect to a claim for indemnification by the Parent
that is not resolved by Parent and S&T within the time periods prescribed in the
Escrow Agreement shall be submitted to arbitration for resolution.
(c) Subject to the additional limitations set forth in
Section 7.4, S&T shall not be required to indemnify the Parent under Section
1.11(b) and the provisions of the Escrow Agreement for any Losses unless and
until the amount of such Losses equals $25,000 in the aggregate (the "Threshold
Amount") in which event S&T shall be obligated to indemnify Parent, and Parent
may assert its right to indemnification to the full extent of all Losses,
including Losses that are less than the Threshold Amount.
1.12 RESERVATION OF RIGHT TO REVISE TRANSACTION. If each of
Parent, Merger Sub and S&T agree, the parties hereto, prior to the receipt of
the approval by Parent's and S&T's stockholders of the Merger, may change the
method of effecting the business combination between S&T and Parent, and each
party shall cooperate in such efforts; PROVIDED, HOWEVER, that no such change
shall (i) alter or change the amount or kind of consideration to be issued to
holders of the Shares as provided for in this Agreement or (ii) materially delay
the consummation of the transactions contemplated by this Agreement.
6
14
ARTICLE II. REPRESENTATIONS AND WARRANTIES
------------------------------------------
2.1 REPRESENTATIONS AND WARRANTIES OF S&T. S&T hereby
represents and warrants to Parent and Merger Sub that:
(a) ORGANIZATION, STANDING AND CORPORATE POWER.
S&T and each subsidiary of S&T is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction in which it is
incorporated and has full corporate power and authority to operate the Business,
to own or lease the assets, properties, rights and interests used in the
operation of the Business (the "Acquired Assets") and to carry on the Business
as now being conducted. Except as disclosed on Schedule 2.1(a)(i), entitled
"Subsidiaries," S&T owns no interest, direct or indirect, in any other business
enterprise, firm or corporation, and is the only business enterprise, firm or
corporation through which the Business (or any business competing with or
similar to the Business) is conducted, or which owns, leases or uses assets
related to the Business. S&T and each subsidiary of S&T is duly qualified or
licensed to do business as a foreign corporation and is in good standing in each
jurisdiction in which the ownership or leasing of its properties and assets or
the operation of the Business requires such qualification or licensing. The
copies of the articles of incorporation and bylaws or comparable governing
documents of S&T and each of S&T's Subsidiaries, included in Schedule
2.1(a)(ii), entitled "Articles and Bylaws of S&T and Subsidiaries," attached to
this Agreement are true, correct and complete.
(b) AUTHORITY. S&T has the requisite corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and all other agreements and instruments executed and delivered or to be
executed and delivered by S&T in connection herewith (the "Transaction
Documents") and the consummation by S&T of the transactions contemplated hereby
and thereby have been duly authorized by all necessary corporate action on the
part of S&T, subject, in the case of the Merger, to the adoption of this
Agreement by S&T's stockholders. This Agreement has been duly executed and
delivered by S&T and, assuming that this Agreement constitutes a valid and
binding obligation of Parent and Merger Sub, constitutes a valid and binding
obligation of S&T, enforceable against S&T in accordance with its terms, subject
to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally
and to general principles of equity.
(c) CONFLICTS; DEFAULTS.
(i) Subject to S&T obtaining the
Consents (as defined in Section 2.1(t)), neither the execution and delivery of
this Agreement and the Transaction Documents by S&T, nor the performance by S&T
of the transactions contemplated hereby or thereby, will violate, conflict with
or constitute a default under any of the terms of the articles of incorporation
or bylaws or comparable governing documents of S&T and S&T's Subsidiaries, or
any provisions of, or result in the acceleration of any obligation under, any
contract, sales commitment, license, purchase order, security agreement,
mortgage, note, deed, lien, lease, agreement or instrument, including, without
limitation, the Contracts (as defined in Section 2.1(h)), or any order, judgment
or decree, relating to the Business or the Acquired Assets, or by which S&T or a
Subsidiary of S&T or the Acquired Assets are bound.
7
15
(ii) Neither the execution and delivery of
this Agreement and the Transaction Documents by S&T nor the performance by S&T
of the transactions contemplated hereby or thereby will: (A) result in the
creation or imposition of any Liens or Claims (as hereinafter defined) in favor
of any third Person or entity upon any of the Acquired Assets; (B) violate any
law, statute, judgment, decree, order, rule or regulation of any Governmental
Authority; (C) constitute an event that, after notice or lapse or time or both,
would result in such violation, conflict, default, acceleration, or creation or
imposition of Liens or Claims; (D) constitute an event that, after notice of
lapse of time or otherwise would create, or cause to be exercisable or
enforceable, any option, agreement or right of any kind to purchase any of the
Acquired Assets. Neither S&T nor any of S&T's Subsidiaries is in violation of or
in default under its respective articles of incorporation, bylaws or comparable
charter documents, or any provision of any contract, sales commitment, license,
purchase order, security agreement, mortgage, note, deed, lien, lease, agreement
or instrument, including without limitation the Contracts, or any order,
judgment or decree, relating to the Business or the Acquired Assets, or by which
S&T, S&T's Subsidiaries or the Acquired Assets are bound, or in the payment of
any of S&T's or S&T's Subsidiaries' monetary obligations or debts relating to
the Business, and there exists no condition or event which, after notice or
lapse of time or both, would result in any such violation or default.
(d) CONSENTS AND APPROVALS. No consent,
approval or authorization of, or declaration or filing with, or notice to, any
Governmental Entity that has not been received or made is required by or with
respect to S&T or any of its Subsidiaries in connection with the execution and
delivery of this Agreement by S&T or the consummation by S&T of the transactions
contemplated hereby, except for: (i) the filing of premerger notification and
report forms under the ▇▇▇▇- ▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of ▇▇▇▇
(▇▇▇ "▇▇▇ ▇▇▇"); (ii) the filing of the Articles of Merger with the West
Virginia Secretary of State and appropriate documents with the relevant
authorities of other states in which S&T is qualified to do business; and (iii)
such other consents, approvals, authorizations, filings or notices as are
specified in Section 2.1(t), entitled "Approvals."
(e) CAPITAL STRUCTURE. The authorized capital
stock of S&T consists solely of (i) 50,000 S&T Common Shares, of which 42,317
are issued, of which 30,227.25 are outstanding as of the date hereof and
12,089.75 are owned by S&T as treasury stock, and (ii) 6,000 S&T Preferred
Shares, of which 530 are outstanding as of the date hereof. The Shares are the
only authorized classes of capital stock of S&T. Except as set forth in Schedule
2.1(e) entitled "Warrants, Options," S&T has no outstanding warrants, rights,
options, calls, commitments or other arrangements evidencing the right to
acquire any shares of capital stock or any other securities convertible into,
exchangeable for or evidencing the right to subscribe for any shares of capital
stock. All the Shares are validly issued, fully paid, nonassessable and not
subject to preemptive rights. All Shares are free of any Liens, including
without limitation any claims, charges, encumbrances or assessments of any
nature whatsoever.
(f) TITLE AND RELATED MATTERS. The Acquired
Assets constitute all of the assets, properties, rights and interests necessary
to conduct the Business in substantially the same manner as conducted by S&T
prior to the date of this Agreement. To the best of S&T's knowledge, all of the
Acquired Assets used in connection with the operation of the Business (including
without limitation the assets reflected on the Unaudited Balance Sheet (as
hereinafter defined)) are in good operating condition and repair, subject to
normal wear and tear consistent with the age of the
8
16
properties or assets, and are adequate and sufficient for the uses to which they
are put in the Business. None of the Acquired Assets have any material defects
or are in need of maintenance or repair, except for ordinary, routine
maintenance and repairs that are not material in nature or cost. S&T has good,
marketable and exclusive title to, and the valid and enforceable power and
unqualified right to use each of the Acquired Assets and the Acquired Assets are
free and clear of all Liens and Claims of any kind or nature whatsoever, except
for: (i) current real estate Taxes (as defined herein) or governmental charges
or levies that are a Lien but not yet due and payable; (ii) Liens disclosed as
securing specified liabilities on the Unaudited Balance Sheet and notes thereto
with respect to which no default exists; (iii) Liens disclosed on Schedule
2.1(f), entitled "Liens," attached hereto; and (iv) minor imperfections of
title, if any, none of which are substantial in amount, or materially detract
from the value or impair the use of the property subject thereto or the
operation of the Business and that have arisen only in the ordinary and normal
course of business consistent with past practice (the Liens described in clauses
(i), (ii), (iii) and (iv) being collectively referred to herein as "Permitted
Liens"). The consummation of the transactions contemplated by this Agreement
will not adversely affect such title or rights, or any terms of the applicable
agreements (whether written or oral) evidencing, creating or granting such title
or rights. Except as disclosed on Schedule 2.1(f), entitled "Liens," none of the
Acquired Assets are subject to, or held under, any lease, mortgage, security
agreement, conditional sales contract or other title retention agreement, or are
other than in the sole possession and under the sole control of S&T. S&T has the
right under valid and existing leases to occupy, use or control all properties
and assets leased by it and included in the Acquired Assets.
(g) REAL PROPERTY. Schedule 2.1(g), entitled
"Real Estate and Leases," attached hereto, contains a true, correct and complete
list of all instruments and agreements creating any interest or right in real
property relating to the Business, or owned, leased or occupied by S&T, and all
easements, buildings, structures, fixtures and improvements related thereto. All
and any property owned by S&T appearing on such Schedule is hereinafter referred
to as the "Fee Property," and all and any property leased by S&T appearing on
such Schedule is hereinafter referred to as the "Leased Property". True, correct
and complete copies of the instruments and agreements identified in such
Schedule have been delivered to Parent and Merger Sub. Each such instrument and
agreement is in full force and effect and is a legal, binding and enforceable
obligation of the parties thereto, and no event has occurred that constitutes
or, with the giving of notice or passage of time, or both, would constitute a
default or breach thereunder. Except as disclosed on Schedule 2.1(g), entitled
"Real Estate and Leases," all lease agreements with respect to Leased Property
to which S&T or any S&T Subsidiary is a party (the "Lease Agreements") have not
been modified, altered, terminated or revoked and are in full force and effect.
S&T, or a Subsidiary of S&T, as the present tenant under the Lease Agreements,
is not in default under, or in breach of, any of the terms of the Lease
Agreements, and there are no existing facts or conditions that could give rise
to any such breach or default, or any claim against S&T or any S&T Subsidiary,
under the Lease Agreements.
(h) CONTRACTS. Schedule 2.1(h), entitled
"Contracts," attached hereto, contains a complete list or description of: (i)
each license, contract, agreement, commitment and undertaking (whether written
or oral) relating to the Business or to which S&T or any Subsidiary of S&T is a
party (A) that involves the purchase of inventories or the sale of products, and
involves aggregate future payments in excess of $10,000, or that extends for a
period of more than three months and cannot be canceled by S&T without further
payment or penalty, or (B) that does not involve the purchase of inventories or
the sale of products, and involves aggregate future payments
9
17
in excess of $10,000 or extends for a period of more than three months and
cannot be canceled by S&T without further payment or penalty; (ii) each loan or
credit agreement, security agreement, guaranty, indenture, mortgage, pledge or
other agreement or instrument evidencing indebtedness of S&T or any Subsidiary
of S&T, to which S&T or any Subsidiary of S&T is a party; (iii) any conditional
sale or other title retention agreement, equipment obligation, or lease purchase
agreement involving (in the aggregate) amounts in excess of $10,000 relating to
S&T or any Subsidiary of S&T or the Business, or to which S&T or any Subsidiary
of S&T is a party; (iv) any power of attorney given by S&T or any Subsidiary of
S&T to any Person, firm or corporation or otherwise relating to the Business or
the Acquired Assets; (v) any non-competition, restrictive covenant or other
agreement that restricts S&T or any Subsidiary of S&T or any other entity from
conducting the Business anywhere in the world; (vi) each contract, agreement,
commitment or undertaking presently in effect, whether or not fully performed,
between S&T or any Subsidiary of S&T and any current or former officer,
director, consultant or other employee (or group thereof) retained or employed
in connection with the Business, or any current or former stockholder (or group
of stockholders) of S&T or any Subsidiary of S&T; and (vii) any other contract,
agreement, commitment or undertaking material to the condition (financial or
otherwise), results of operations, properties, assets, liabilities, business or
prospects of the Business (the items described in clauses (i) through (vii)
being herein collectively referred to as the "Contracts").
(i) FINANCIAL STATEMENTS. Schedule 2.1(i),
entitled "Financial Statements," attached hereto, contains the following
financial statements (collectively, together with the notes thereto and the
financial statements to be delivered pursuant to Section 5.2(b), the "Financial
Statements"): (i) the unaudited Consolidated Balance Sheet of S&T (the
"Unaudited Balance Sheet") as of May 30, 1998 (the "Balance Sheet Date"), the
unaudited consolidated Statement of Income for the four months ended May 30,
1998 and the unaudited Consolidated Statement of Cash Flows for the four months
ended May 30, 1998; (ii) unaudited Consolidated Balance Sheet of S&T for the
year ended January 31, 1998, the unaudited Consolidated Statement of Income for
the year ended January 31, 1998 and the unaudited Consolidated Statement of Cash
Flows for the year ended January 31, 1998; and (iii) unaudited Consolidated
Balance Sheet of S&T for the year ended February 1, 1997, the unaudited
Consolidated Statement of Income for the year ended February 1, 1997 and the
unaudited Consolidated Statement of Cash Flows for the year ended February 1,
1997 (collectively, the "Unaudited Financial Statements"). Each of the Financial
Statements is true, complete and correct in all material respects, was prepared
from the books and records kept by S&T for the Business and fairly presents the
financial position of S&T as of such dates and the results of S&T's operations
and S&T's cash flows for the periods then ended in accordance with Generally
Accepted Accounting Principles ("GAAP") consistently applied (except, in the
case of the Unaudited Financial Statements, for normally recurring year-end
adjustments, which adjustments will not be material, either individually or in
the aggregate). Except as set forth in the Schedules delivered pursuant to this
Agreement or the Financial Statements, since the Balance Sheet Date, there has
been no material adverse change in the condition (financial or otherwise),
results of operations, properties, assets, liabilities, business or prospects of
S&T, nor has there been any event or condition of any character that has
materially and adversely affected, or that is likely to materially and adversely
affect, the condition (financial or otherwise), results of operations,
properties, assets, liabilities, business or prospects of S&T or the Business.
The Unaudited Balance Sheet reflects all properties and assets, real, personal
or mixed, that are currently used in connection with the Business, except for:
(i) inventory purchased or sold consistent with past practice and in the
ordinary and normal course
10
18
of business since the Balance Sheet Date; (ii) other properties and assets
(other than capital assets) not in excess of $10,000 (in the aggregate)
purchased or sold since Balance Sheet Date consistent with past practice and in
the ordinary and normal course of business; (iii) capital assets purchased since
Balance Sheet Date in an amount not in excess of $25,000 (in the aggregate); and
(iv) purchase commitments disclosed on Schedule 2.1(j), entitled "Liabilities."
(j) LIABILITIES. S&T has no liabilities or
obligations of any nature whatsoever, whether absolute, accrued, contingent or
otherwise, related to or connected with the Business or the Acquired Assets, and
whether known or unknown, including without limitation liabilities for Taxes,
unusual forward or long-term commitments, or unrealized or anticipated losses
from any unfavorable conditions or occurrences, or from write-downs or
write-offs of assets (including all accounts receivable, unpaid interest accrued
on any such accounts receivable and any security or collateral related thereto
(collectively, the "Accounts Receivable") and inventories), except for those (i)
reflected or reserved on the Unaudited Balance Sheet and Notes thereto, (ii)
incurred or accrued since the Balance Sheet Date in the ordinary and normal
course of S&T's business in transactions involving the purchase or sale by S&T
of goods and services in amounts that do not exceed $50,000 in the aggregate and
which transactions are consistent with the representations, warranties,
covenants, obligations and agreements contained in this Agreement, or (iii) set
forth on Schedule 2.1(j), entitled "Liabilities," attached hereto, and there
exists no event or circumstance that, after notice or lapse of time or both,
might create any other obligations or liabilities of S&T.
(k) TRADE CREDITOR ACCOUNTS. To the best of
S&T's knowledge, the trade creditor debit balances reflected on the books and
records of S&T as of the Balance Sheet Date are true, correct and accurate as of
the date thereof (the "Trade Creditor Debts"), and the full amounts of such
Trade Creditor Debts may be used by the Surviving Corporation after the
Effective Date as payment for merchandise and inventory ordered from such trade
creditors.
(l) LITIGATION. Except as set forth on
Schedule 2.1(l), entitled "Litigation," attached hereto, S&T is not subject to
any order of, or written agreement or memorandum or understanding with, any
Governmental Authority, and there exists no litigation, action, suit, claim or
proceeding pending, or, to the best of S&T's knowledge, any litigation, action,
suit, investigation, claim or proceeding threatened against or affecting S&T,
the Business or the Acquired Assets, or any employee associated with the
Business or the Acquired Assets, or that would affect the transactions
contemplated by this Agreement, at law or in equity or before any Governmental
Authority, including without limitation claims for product warranty, product
liability, antitrust, unfair competition, price discrimination or other
liability or obligation related to products, whether supplied or sold by S&T,
any of its Subsidiaries or Affiliates or any of their respective
predecessors-in-interest in respect of the Business, or that would adversely
affect the transactions contemplated by this Agreement, and no one has grounds
to assert any such litigation, action, suit, claim or proceeding.
(m) COMPLIANCE WITH LAWS. Except as set forth
on Schedule 2.1(m), entitled "Compliance with Laws," attached hereto, to the
best of S&T's knowledge, the Business has been conducted, the Acquired Assets
have been maintained and S&T is currently in compliance with all applicable Laws
(including without limitation all laws relating to zoning, building codes, civil
rights, occupational health and safety, antitrust, consumer protection, currency
exchange, equal opportunity, pensions, securities and trading-with-the-enemy).
11
19
(n) BROKERS, FINDERS AND AGENTS. Except as set
forth on Schedule 2.1(n), entitled "Brokers, Finders and Agents," attached
hereto, S&T is not directly or indirectly obligated to anyone acting as a broker
or finder or in any other similar capacity in connection with this Agreement or
the transactions contemplated hereby. The Merger Consideration shall be reduced
by the amount of any obligations set forth on Schedule 2.1(n).
(o) EMPLOYEES AND EMPLOYEE PLANS. Schedule
2.1(o), entitled "Employee Plans," attached hereto, contains a true and complete
list of: (i) all employees of S&T, together with a description of their
respective job titles and responsibilities and annual compensation (including
salaries, bonuses, consulting or directors' fees and incentive or deferred
compensation); and (ii) all the employee benefit plans (as that phrase is
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) maintained or contributed to for the benefit of any
current or former employee, officer or director of S&T or any of its
Subsidiaries ("ERISA Plans") and any other benefit or compensation plan, program
or arrangement maintained or contributed to for the benefit of any current or
former employee, officer or director of S&T or any of its Subsidiaries (ERISA
Plans and such other plans being referred to as "Employee Plans"). S&T has
furnished or made available to Parent and its representatives a true, correct
and complete copy of every document pursuant to which each Employee Plan is
established or operated (including any summary plan descriptions), a written
description of any Employee Plan for which there is no such written document and
the three most recent annual reports, financial statements and actuarial
valuations with respect to each Employee Plan. Except as set forth on Schedule
2.1(o):
(i) none of the ERISA Plans is a
"multiemployer plan" within the meaning of ERISA;
(ii) none of the Employee Plans
promises or provides retiree health benefits or retiree life insurance benefits
to any person;
(iii) none of the Employee Plans provides
for payment of a benefit, the increase of a benefit amount, the payment of a
contingent benefit or the acceleration of the payment or vesting of a benefit by
reason of the execution of this Agreement or the consummation of the
transactions contemplated by this Agreement;
(iv) neither S&T nor any of its
Subsidiaries has an obligation to adopt, or is considering the adoption of, any
new Employee Plan or, except as required by law, the amendment of an existing
Employee Plan;
(v) each ERISA Plan intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter from the IRS that it is so qualified, and nothing has
occurred since the date of such letter that could reasonably be expected to
affect the qualified status of such ERISA Plan;
(vi) each Employee Plan has been
operated in accordance with its terms and the requirements of all
applicable law;
12
20
(vii) neither S&T nor any of its
Subsidiaries or members of their "controlled group" has incurred any direct or
indirect liability under, arising out of or by operation of Title IV of ERISA in
connection with the termination of, or withdrawal from, any ERISA Plan or other
retirement plan or arrangement, and no fact or event exists that could
reasonably be expected to give rise to any such liability;
(viii) the aggregate accumulated benefit
obligations of each ERISA Plan subject to Title IV of ERISA (as of the date of
the most recent annual actuarial valuation prepared for such ERISA Plan in
conjunction with such ERISA Plan's annual report and based on the discount rate
and other actuarial assumptions used in such valuation) do not exceed the fair
market value of the assets of such ERISA Plan (as of the date of such valuation)
and assuming such ERISA Plan remains in existence;
(ix) neither S&T nor any of its Subsidiaries
is aware of any claims relating to the Employee Plans, other than routine claims
for benefits; and
(x) none of the Employee Plans provide
for benefits or other participation therein, and S&T has received no claims or
demands for participation in or benefits under any Employee Plan, by any
individual classified or treated by S&T as an independent contractor.
(p) ENVIRONMENTAL AND SAFETY COMPLIANCE. Except
as disclosed on Schedule 2.1(p), entitled "Environmental Matters," attached
hereto, neither S&T, nor, to the best of S&T's knowledge, any other previous
owner, tenant, occupant or user of the real property, including Leased Property,
listed on Schedule 2.1(g), entitled "Real Estate and Leases" (hereinafter
collectively referred to as the "Property") nor any other Person, has engaged in
or permitted any operations or activities upon, or any use or occupancy of the
Property, or any portion thereof, resulting in the emission, release, discharge,
dumping or disposal of any Hazardous Materials (as hereinafter defined) on,
under, in or about the Property, nor have any Hazardous Materials migrated from
the Property to, upon, about or beneath other properties, nor have any Hazardous
Materials migrated or threatened to migrate from other properties to, upon,
about or beneath the Property. For purposes of this Section 2.1(p), the term
"Hazardous Material" means any substance: (i) the presence of which requires
investigation or remediation under any federal, state or local statute,
regulation, ordinance, order, action, policy or common law; (ii) that is or has
been identified as a potential "hazardous waste," "hazardous substance,"
pollutant or contaminant under any federal, applicable state or local statute,
regulation, rule or ordinance or amendments thereto including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C. ▇▇.▇▇. 9601 et seq.) and/or the Resource Conservation and
Recovery Act (42 U.S.C. ▇▇.▇▇. 6901 et seq.); or (iii) that is toxic, explosive,
corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic,
reactive, or otherwise hazardous and has been identified as regulated by any
Governmental Authority.
(q) CHANGES IN CIRCUMSTANCES. Except as
disclosed on Schedule 2.1(q), entitled "Changes in Circumstances," attached
hereto, since the Balance Sheet Date, there has been no material adverse change
in the condition (financial or otherwise), results of operations, properties,
assets, liabilities, business or prospects of S&T, nor has there been any event
or condition of any character that has materially and adversely affected, or
that is likely to materially and adversely affect,
13
21
the condition (financial or otherwise), results of operations, properties,
assets, liabilities, business or prospects of S&T or the Business. Since the
Balance Sheet Date, S&T has conducted the Business and maintained the Acquired
Assets in accordance with the provisions of Section 5.1.
(r) TAXES.
(i) Except as set forth on Schedule
2.1(r)(i), entitled "Tax Liabilities," (i) all federal, state, local, and
foreign Tax returns and reports (collectively, "Tax Returns") that are or were
required to be filed before the Closing by, or with respect to, S&T have been
timely filed or caused to be filed; (ii) all Taxes owed by S&T for the taxable
periods covered by such Tax Returns (whether or not shown to be due on such Tax
Returns) have been paid; (iii) the assets of S&T are not subject to any Liens,
whether or not perfected, for any Taxes or assessments or similar government
charges; (iv) all Tax Returns of S&T relating to taxable years that remain open
are true and correct; (v) as of the date hereof, there are no material pending
or threatened audits, claims, deficiencies or adjustments against S&T relating
to any liability for Taxes; (vi) S&T has not granted any extensions of the
statute of limitations for the assessment or collection of any Taxes which
remain in effect; (vii) no claim has ever been made by a taxing authority in a
jurisdiction where S&T does not file Tax Returns that S&T is or may be subject
to Tax in such jurisdiction; (viii) S&T has not been a United States real
property holding corporation within the meaning of Section 897(c)(2) of the Code
during the applicable period specified in Section 897(c)(1)(a)(ii) of the Code;
(ix) S&T has disclosed on its federal income Tax Returns all positions taken
therein that could give rise to a substantial understatement of federal income
Tax within the meaning of Section 6652 of the Code; (x) S&T has never been a
member of an affiliated group filing a consolidated federal income Tax Return or
has any liability for the Taxes of any other entity under Treas. Reg. ss.
1.1502-6 (or any similar provision of state, local or foreign law), as a
transferee or successor, by contract, or otherwise; and (xi) S&T has never
agreed to an adjustment under Section 481 of the Code with respect to a change
in method of accounting.
(ii) The amount of any damages for any
breach of the representations and warranties in this Section 2.1(r) shall be
satisfied by first offsetting such damages with those S&T net operating loss
carryovers ("NOLs"), to the extent such NOLs are available after application to
offset gains on dispositions of assets, and then by asserting claims against the
Escrowed Property in accordance with the Escrow Agreement. True and correct
copies of all Tax Returns for S&T in respect of all years not barred by the
statute of limitations have heretofore been delivered to Parent and Merger Sub
and all such Tax Returns are listed in Schedule 2.1(r)(ii), entitled "Tax
Returns," attached hereto. For the purposes of this Agreement, "Tax" or "Taxes"
means all net income, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property or windfall profits taxes,
customs duties or other taxes, fees, assessments or charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts imposed by any taxing authority (domestic or foreign).
(s) INSURANCE. Schedule 2.1(s), entitled
"Insurance," attached hereto, contains a list of all insurance policies
(specifying the location, insured, insurer, amount of coverage, type of
insurance and policy number) maintained by S&T. All such policies are in full
force and effect, all premiums with respect thereto covering all periods up to
and including the date of Closing
14
22
have been paid, and no notice of cancellation or termination has been received
with respect to any such policy.
(t) APPROVALS. Schedule 2.1(t), entitled
"Approvals," attached hereto, sets forth a list of all Consents that must be
obtained or satisfied by S&T for the consummation of the transactions
contemplated by this Agreement, including without limitation all Consents that
must be obtained pursuant to Section 2.1(d) (the "Consents"). All Consents
prescribed by any Law or any contract, agreement, commitment or undertaking and
that must be obtained or satisfied by S&T for the consummation of the
transactions contemplated by this Agreement, or for the continued performance by
it of their rights and obligations thereunder, have been, or shall by the
Closing have been, made, obtained and satisfied.
(u) COPIES OF DOCUMENTS. S&T has delivered to
Parent and Merger Sub true, correct and complete copies of all contracts,
agreements and other documents listed in the Schedules to, or referenced in,
this Agreement and all modifications and amendments thereto.
(v) INSIDER INTERESTS. Except as set forth in
Schedule 2.1(v), entitled "Insider Interests," attached hereto, no officer,
director or employee of S&T, or affiliate of any officer, director or employee
of S&T: (i) has any material interest in any property, real or personal,
tangible or intangible, including without limitation inventions, patents,
trademarks or trade names, used in the Business or pertaining to S&T; or (ii)
has entered into a material contract, arrangement or understanding, other than
with respect to compensation, with S&T.
(w) DISCLOSURE. None of the information
supplied or to be supplied by S&T specifically for inclusion or incorporation by
reference in, or that may be deemed to be incorporated by reference in the
registration statement on Form S-1 (the "Registration Statement") to be filed
with the Securities and Exchange Commission ("SEC") by Parent in connection with
its public offering will, at the time the Registration Statement is filed with
the SEC, at any time that it is amended or supplemented and at the time it
becomes effective under the Securities Exchange Act of 1933, as amended (the
"Securities Act"), contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. No representation or warranty made by S&T contained in
this Agreement or in any Transaction Document contains an untrue statement of a
material fact or omits to state a material fact necessary to make the statements
and facts contained herein or therein, in light of the circumstances in which
they were or are made, not false or misleading.
(x) MERGER APPROVAL. S&T has received unanimous
written consent or irrevocable proxies from the requisite number of holders of
Shares necessary to approve the Merger pursuant to the WVCA.
2.2 REPRESENTATIONS AND WARRANTIES OF PARENT. Parent
represents and warrants to S&T that:
15
23
(a) ORGANIZATION AND STANDING; CORPORATE POWER
AND AUTHORITY. Each of Parent and Merger Sub is a corporation duly organized,
validly existing and in good standing under the laws of the State of Ohio.
(b) AUTHORITY. Each of Parent and Merger Sub
has the requisite corporate power and authority to enter into this Agreement and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement and the Transaction Documents and the consummation by each of
Parent and Merger Sub of the transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate action on the part of each of
Parent and Merger Sub. This Agreement has been duly executed and delivered by
each of Parent and Merger Sub and, assuming that this Agreement constitutes a
valid and binding obligation of S&T, constitutes a valid and binding obligation
of each of Parent and Merger Sub, enforceable against each of Parent and Merger
Sub in accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and to general principles of equity.
(c) CONFLICTS; DEFAULTS. Neither the execution
and delivery of this Agreement or any Transaction Document by Parent or Merger
Sub, nor the performance of their respective obligations hereunder or
thereunder, will conflict with or constitute a default under any of the terms of
Parent's or Merger Sub's Articles of Incorporation, as amended, or Code of
Regulations.
(d) CONSENTS AND APPROVALS. No consent,
approval or authorization of, or declaration or filing with, or notice to, any
Governmental Entity that has not been received or made is required by or with
respect to Parent or Merger Sub in connection with the execution and delivery of
this Agreement by Parent and Merger Sub or the consummation by Parent and Merger
Sub of the transactions contemplated hereby, except for: (i) the filing of
premerger notification and report forms under the HSR Act; and (ii) the filing
of the certificate of merger with the Secretary of State of Ohio and appropriate
documents with the relevant authorities of other states in which Parent or
Merger Sub is qualified to do business.
(e) DISCLOSURE. No representation or warranty
made by Parent or Merger Sub contained in this Agreement or in any other writing
furnished pursuant hereto contains an untrue statement of a material fact or
omits to state a material fact necessary to make the statements and facts
contained herein or therein, in light of the circumstances in which they were or
are made, not false or misleading.
2.3 GENERAL. The representations and warranties of the parties
hereto made in this Agreement, subject to the exceptions thereto, shall not be
affected by any information furnished to, or any investigation conducted by, any
of them or their representatives in connection with the subject matter of this
Agreement. The representations and warranties made in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Closing.
16
24
ARTICLE III. CONDITIONS TO CLOSING
----------------------------------
3.1 CONDITIONS TO PARENT'S AND MERGER SUB'S OBLIGATIONS. The
obligations of Parent and Merger Sub to consummate the transactions provided for
by this Agreement are subject to the satisfaction, on or prior to the Closing
Date, of each of the following conditions, any of which may be waived by Parent
and Merger Sub except for the conditions set forth in subsection (e) of this
Section 3.1:
(a) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of S&T made in Section 2.1 of this Agreement
shall be true and correct in all material respects both on the date hereof and
as of the Closing Date as though made at such time.
(b) COVENANTS. S&T shall have performed and
complied with in all material respects all covenants, agreements and obligations
required to be performed or complied with by it at or prior to the Closing Date.
(c) MATERIAL ADVERSE CHANGE. Except as
disclosed on Schedule 3.1(c), entitled "Material Adverse Changes," since the
date hereof, there shall have occurred no material adverse change, or discovery
of a condition or occurrence of any event which might result in any such change,
in the condition (financial or otherwise), business, assets, properties,
operations or prospects of S&T or the Business.
(d) CONSENTS. (i) All Consents of Governmental
Authorities and third parties described in Sections 2.1(d) and 2.1(t) and
necessary to consummate the transactions contemplated hereunder shall have been
obtained and satisfied.
(ii) Parent shall have obtained the consent
of Citibank, N.A. to the consummation of the transactions contemplated by this
Agreement.
(e) HSR CONSENT. The waiting period under the
HSR Act shall have expired or early termination under the HSR Act shall have
been granted.
(f) NO PROCEEDING OR LITIGATION. No litigation,
action, suit, investigation, claim or proceeding challenging the legality of, or
seeking to restrain, prohibit or materially modify, the transactions provided
for in this Agreement shall have been instituted and not settled or otherwise
terminated.
(g) CERTIFICATE OF S&T. At the Closing, S&T
shall have delivered to Parent a Certificate signed by S&T's President, and
attested to by its Secretary or an Assistant Secretary, and dated the Closing
Date, to the effect that to the best of the knowledge and belief of such
officers the conditions specified in Sections 3.1(a), (b), (c), (d) and (e)
have been fulfilled.
(h) INVESTIGATIONS. Parent shall have commenced
the investigations described in Section 7.4 and the Environmental Consultant
shall not have, as of the Closing Date, discovered Non-Complying Conditions or
Practices (as defined in Section 7.4(b)) in excess of One Million Dollars
($1,000,000).
17
25
(i) CERTIFICATE; DOCUMENTS. S&T and the other
Persons shall have delivered the certificates, opinion of counsel and other
documents required by Sections 4.1 and 4.3.
(j) APPROVAL OF S&T'S STOCKHOLDERS; DISSENTERS'
RIGHTS. (i) To the extent required by applicable law, this Agreement, the Merger
and the transactions contemplated thereby shall have been approved by the
requisite vote of the stockholders of S&T.
(ii) Dissenters' rights under Section
31-1-123 of the WVCA shall not have been asserted by the holders of
more than 10% of the issued and outstanding Shares.
(k) DELIVERY OF EMPLOYEE PLAN DOCUMENTS. S&T
shall have furnished to Parent and its representatives a true, correct and
complete copy of every document pursuant to which each Employee Plan is
established or operated (including any summary plan descriptions), a written
description of any Employee Plan for which there is no such written document and
the three most recent annual reports, financial statements and actuarial
valuations with respect to each Employee Plan.
(l) DELIVERY OF REAL PROPERTY INSTRUMENTS AND
AGREEMENTS. S&T shall have furnished to Parent true, correct and complete copies
of all instruments and agreements creating any interest in Fee Property.
3.2 CONDITIONS TO S&T'S OBLIGATIONS. The obligations of S&T to
consummate the transactions provided for by this Agreement are subject to the
satisfaction, on or prior to the Closing Date, of each of the following
conditions, any of which may be waived by S&T except for the conditions set
forth in subsection (a) of this Section 3.2:
(a) HSR CONSENT. The waiting period under the
HSR Act shall have expired or early termination under the HSR Act shall have
been granted.
(b) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of Parent and Merger Sub made in Section 2.2 of
this Agreement shall be true and correct in all material respects both on the
date hereof and as of the Closing Date as though made at such time.
(c) COVENANTS. Each of Parent and Merger Sub
shall have performed and complied with all covenants and agreements required to
be performed or complied with by it at or prior to the Closing Date.
(d) NO PROCEEDING OR LITIGATION. No litigation,
action, suit, investigation, claim or proceeding challenging the legality of, or
seeking to restrain, prohibit or materially modify, the transactions provided
for in this Agreement shall have been instituted and not settled or otherwise
terminated.
(e) CERTIFICATES; DOCUMENTS. Parent and Merger
Sub and the other Persons shall have delivered the certificates, opinion of
counsel and other documents required by Section 4.2.
18
26
(f) APPROVAL OF MERGER SUB'S STOCKHOLDER. To the extent
required by applicable law, this Agreement, the Merger and the transactions
contemplated thereby shall have been approved by the requisite vote of the
stockholder of Merger Sub.
(g) CERTIFICATE OF PARENT. At the Closing, Parent shall have
delivered to S&T a Certificate signed by Parent's President, and attested to by
its Secretary or an Assistant Secretary, and dated the Closing Date, to the
effect that to the best knowledge and belief of such officers the conditions
specified in Section 3.2(a), (b) and (c) have been fulfilled.
ARTICLE IV. CLOSING
-------------------
4.1 DOCUMENTS TO BE DELIVERED BY S&T. At the Closing, S&T
shall deliver to Parent and Merger Sub:
(a) Copies of (i) the resolutions of the Boards of Directors
of S&T and the stockholders of S&T, authorizing and approving this Agreement and
all other transactions and agreements contemplated hereby, (ii) S&T's, and each
Subsidiary of S&T's, Articles of Incorporation, and (iii) S&T's, and each
Subsidiary of S&T's, Bylaws, all certified by the corporate Secretary or
Assistant Secretary of S&T to be true, correct, complete and in full force and
effect and unmodified as of the Closing Date;
(b) Copies of the Certificate of Merger and the Articles of
Merger, each executed by S&T in the form required by the OGCL and the WVCA,
respectively;
(c) An opinion, dated as of the Closing Date, of Steptoe &
▇▇▇▇▇▇▇, counsel to S&T, addressed to Parent and Merger Sub, in form and
substance reasonably satisfactory to Parent and Merger Sub;
(d) Copies of all Consents to the Merger of each (i) license,
permit, approval, variance, waiver or consent (collectively, the "Permits"),
(ii) Contract, and (iii) Lease Agreement, that requires such Consent pursuant to
Section 2.1(t);
(e) The Certificate required by Section 3.1(g);
(f) Long-form good standing and tax certificates for each of
S&T and its Subsidiaries from West Virginia and from the appropriate state and
tax authorities in each jurisdiction in which S&T is qualified to do business as
a foreign corporation, dated not more than ten days prior to the Closing;
(g) An incumbency certificate of the officers of S&T;
(h) At S&T's expense, good and valid title insurance policies
or, in final form, irrevocable title insurance commitments issuable by Chicago
Title Insurance Company (the "Title Insurance Policies"), dated as of the
Closing Date, issued in the name of the Surviving Corporation, insuring the
title as fee owner in each parcel of real property included in the Fee
19
27
Property, access rights to such property and specific survey facts, in a form
reasonably satisfactory to Parent; and
(i) Searches of the official UCC and real estate records of
the Secretary of State of West Virginia, Virginia, Kentucky and Ohio, the County
Recorders of ▇▇▇▇▇▇, Greenbrier, ▇▇▇▇▇▇▇▇, Kanawha, ▇▇▇▇▇▇, Monongalia,
▇▇▇▇▇▇▇▇, Ohio, Putnam, Raleigh, Randolph, Upshur, ▇▇▇▇▇▇ and ▇▇▇▇ Counties,
West Virginia, the County Recorders of Albemarle and Augusta Counties, Virginia,
the County Recorder of ▇▇▇▇ County, Kentucky and the County Recorder of Belmont
County, Ohio reflecting no mortgages, liens, pledges, charges, security
interests, leasehold interests, options to purchase, or other encumbrances of
any kind or character, except Permitted Liens and other than (i) those that
would not affect or limit either the value or use of the assets to which they
relate, including without limitation all liens, equities, claims, prior
assignments, mortgages, charges, security interests, pledges, conditional sales
contracts, collateral security arrangements and other title retention
arrangements, restrictions (including, in the case of real property, rights of
way, use restrictions, and other variances, reservations or limitations of any
nature) or encumbrances whatsoever, and (ii) liens for Taxes not yet due and
payable.
(j) The Escrow Agreement in substantially the form attached
hereto as EXHIBIT A, duly executed by S&T, the Escrow Agent and the
Representatives.
4.2 DOCUMENTS TO BE DELIVERED BY PARENT AND MERGER SUB. At the
Closing, Parent shall deliver to S&T:
(a) A copy of (i) the resolutions of the Board of Directors
of Parent and Merger Sub authorizing and approving this Agreement and all other
transactions and agreements contemplated hereby, (ii) Articles of Incorporation
of Parent and Merger Sub, and (iii) Code of Regulations of Parent and Merger
Sub, all certified by the Secretary or an Assistant Secretary of Parent or
Merger Sub, as appropriate, to be true, correct, complete and in full force and
effect and unmodified as of the Closing Date;
(b) Evidence of the payment of the Merger Consideration;
(c) An opinion, dated as of the Closing Date, of the General
Counsel of Parent, addressed to S&T, as to the due authorization and
enforceability of the Agreement and the Transaction Documents;
(d) Long-form good standing and tax certificates for Parent
and Merger Sub from the Secretary of State of Ohio, dated not more than ten days
prior to the Closing;
(e) An Incumbency Certificate of the officers of Parent and
Merger Sub;
(f) The Exchange Agreement, duly executed by Parent;
(g) The Escrow Agreement in substantially the form attached
hereto as EXHIBIT A, duly executed by Parent; and
20
28
(h) The Certificate required by Section 3.2(g).
4.3 OTHER DOCUMENTS TO BE DELIVERED AT CLOSING. At the
Closing, Parent, Merger Sub, S&T, and such other Persons, as appropriate, shall
execute and deliver:
(a) a Consulting Agreement between Surviving
Corporation and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., which agreement shall provide for the
consultant to provide services to the Surviving Corporation for a period of one
year after the Effective Time in exchange for fees in the aggregate amount of
$150,000.
(b) Written certification from the Environmental
Consultant, dated not more than ten calendar days prior to the Closing, to the
effect that all Non-Complying Conditions or Practices have been corrected or
remediated, or otherwise have been satisfactorily addressed, or shall be
completed promptly following the Closing as contemplated by Section 7.4.
ARTICLE V. COVENANTS OF S&T
---------------------------
5.1 CONDUCT OF BUSINESS. Subject to the disclosures on
Schedules 2.1(q) and 3.1(c), during the period from the date hereof through the
Closing Date, S&T shall conduct the Business and operate the Acquired Assets
diligently and in the ordinary and normal course and consistent with past
practice (including, without limitation, using its best efforts to preserve
beneficial relationships between S&T and its distributors, agents, lessors,
suppliers and customers) and continue normal maintenance, marketing,
advertising, distributional and promotional expenditures in connection with the
Business. S&T shall engage in no transactions, including transactions relating
to the purchase or sale of goods, inventories or other operating or production
items, intracorporate or otherwise, not in the ordinary and normal course of
business from the date hereof until the Closing other than transactions approved
by Parent in writing. Without limiting the generality of the foregoing and
except as otherwise expressly provided in this Agreement, during the period from
the date hereof through the Closing Date, S&T shall not:
(a) OBLIGATIONS FOR BORROWED MONEY. Except as
disclosed on Schedule 5.1(a), entitled "Obligations for Borrowed Money," in
connection with the Business or the Acquired Assets (i) create, incur or assume
any debt (including obligations in respect of capital leases) or any debt for
money borrowed (whether long- or short-term); (ii) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligation of any other Person; or (iii) make any loans,
advances or capital contributions to any other Person, other than such
liabilities and obligations of S&T that constitute trade payables due to
suppliers as payment for inventory included in the Acquired Assets and incurred
by S&T in the ordinary and normal course of business between the Balance Sheet
Date and the Closing Date (in transactions in the ordinary and normal course)
and consistent with past practice and the representations, warranties,
covenants, obligations and agreements set forth in this Agreement;
(b) EMPLOYEE MATTERS. (i) Increase in any
manner the rate of compensation of any of its officers or other employees or
make or agree to make any bonus to any of its officers or other employees, (ii)
make or agree to make any payment pursuant to any Employee Plan,
21
29
including, without limitation, any payment of any pension, retirement allowance,
severance or other employee benefit, except as required by any existing Employee
Plan disclosed on the Schedules to this Agreement, to any such officers or
employees, whether past or present; (iii) enter into or modify any collective
bargaining agreement, except as required by Law; or (iv) commit itself to any
additional Employee Plan, or employment or consulting agreement with a Person,
or to amend any of such Plans or agreements, except as required by Law;
(c) SALE OF ASSETS. Sell, transfer, license or otherwise
dispose of or agree to sell, transfer, license or otherwise dispose of any
Acquired Assets, except inventory in the ordinary and normal course of business
consistent with past practice;
(d) COMMITMENTS. Enter into any other agreements,
commitments, contracts or undertakings, except agreements, commitments,
contracts or undertakings made in the ordinary and normal course of business
consistent with past practice and the representations and warranties of S&T
contained in this Agreement;
(e) LEASED FACILITIES. Terminate, modify or amend the Lease
Agreements;
(f) ENCUMBRANCES. Except as required to obtain the financing
disclosed on Schedule 5.1(a), entitled "Obligations for Borrowed Money,"
encumber or grant or create a Lien on any of the Acquired Assets or S&T Common
Shares or S&T Preferred Shares;
(g) LITIGATION. Enter into any compromise or settlement of
any litigation, action, suit, claim, proceeding or investigation, except
settlements made in the ordinary and normal course of business or by insurers,
involving amounts not in excess of $5,000;
(h) REPRESENTATIONS AND WARRANTIES. Take any action the
taking of which, or omit to take any action the omission of which, would cause
any of the representations and warranties contained in Section 2.1 to fail to be
true and correct as of the Closing as though made at and as of the Closing;
(i) AMENDMENTS. Amend its certificate of incorporation,
bylaws or other comparable charter or organizational documents;
(j) CAPITAL STRUCTURE. (i) declare, set aside or pay any
dividends on, or make any other distributions (whether in cash, securities or
other property) in respect of, any of its outstanding capital stock, (ii) split,
combine or reclassify any of its outstanding capital stock or issue or authorize
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its outstanding capital stock, or (iii) purchase,
redeem or otherwise acquire any shares of outstanding capital stock or any
rights, warrants or options to acquire any such shares;
(k) REORGANIZATION. Adopt or enter into a plan of complete or
partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other material reorganization or any agreement relating to
an Acquisition Proposal (as herein defined); or
22
30
(l) ACCOUNTING. Make any changes in any method of accounting
or accounting practice or policy, except as required by any changes in generally
accepted accounting principles.
(m) COMMITMENTS. Agree or commit to do any of the foregoing;
5.2 SUPPLEMENTAL DISCLOSURE.
(a) From time to time prior to the Closing, S&T shall
promptly disclose to Parent any matter that may arise hereafter and which, if
existing or occurring at or prior to the date hereof, would have been required
to be set forth or described in the Schedules to this Agreement. No such
disclosure, unless expressly consented in writing by Parent, shall be deemed to
cure any breach of any representation or warranty made in this Agreement, or
modify, affect or diminish Parent's right to terminate this Agreement pursuant
to Section 8.1(a)(vi).
(b) During the period from the date hereof to the Closing,
S&T shall promptly (i) furnish or make available to Parent copies of all major
operating reports and monthly, quarterly and year-end financial statements as
soon as they become available, all certified by S&T's chief financial officer
that such financial statements fairly present the financial position and results
of operations of the S&T for the periods covered by such statements in
accordance with GAAP consistently applied (subject to normally recurring
year-end audit adjustments and without footnote disclosures), and (ii) notify
Parent of (A) any material change in the condition (financial or otherwise),
business, assets, properties, operations or prospects of S&T, and (B) the
institution or settlement of any litigation, action, suit, investigation, claim
or proceeding and of any developments therein.
5.3 CLOSING. S&T shall use its best efforts to cause the
conditions set forth in Section 3.1 to be satisfied by the Closing Date.
5.4 MAINTENANCE OF INSURANCE. S&T will (a) maintain all
policies of insurance in effect on the date hereof through and until the
Closing; and (b) after the Closing use its best efforts to maintain any policies
of insurance which cover liabilities associated with the operation of the
Business prior to the Closing; PROVIDED, HOWEVER, that after the Closing S&T
shall not be required to pay any additional premiums in respect of such policies
or maintain in effect any insurance coverage other than coverage disclosed on
the Schedules hereto.
5.5 INVENTORIES. Except to the extent compliance is prevented
by the circumstances set forth in Schedule 3.1(c) and the first sentence of
Schedule 2.1(q), prior to the Closing, S&T will maintain levels of all
inventories, including merchandise and supplies, at levels consistent with
current practice in the ordinary and normal course of business.
5.6 NO SHOPPING. From the date hereof through and until the
earlier of termination of this Agreement pursuant to Article VIII or Closing,
but in no event for any period exceeding 180 days, neither S&T, nor any of its
Subsidiaries, Affiliates, employees, officers, directors, agents,
representatives or advisors shall, directly or indirectly, (a) solicit, initiate
or encourage any inquiries, proposals or offers from any Person relating to any
acquisition (or sublease as the case may be) of the Acquired Assets or the
Business, or any securities of, or any merger,
23
31
consolidation or business combination with, S&T, or (b) with respect to any
effort or attempt by any other Person to do or seek any of the foregoing, (i)
participate in any discussions or negotiations, (ii) furnish to any other Person
any information with respect to, or afford access to the properties, books or
records of or relating to, S&T, the Acquired Assets or the Business, or (iii)
otherwise cooperate in any way with, or assist or participate in, or facilitate
or encourage any such effort. S&T shall promptly notify Parent if any such
proposal or offer or any inquiry or contact with any Person with respect thereto
is made.
5.7 FURTHER ASSURANCES. S&T shall use its best efforts to
implement the provisions of this Agreement, and for such purpose S&T, at the
request of Parent, at or after the Closing, shall, without further
consideration, promptly execute and deliver, or cause to be executed and
delivered, to Parent such deeds, assignments, bills of sale, Consents and other
instruments in addition to those required by this Agreement, in form and
substance satisfactory to Parent, and take all such other actions, as Parent may
reasonably deem necessary or desirable to implement any provision of this
Agreement or to more effectively transfer, convey and assign to Parent good and
marketable title to, and to put Parent in actual possession and operating
control of, all of the Acquired Assets, free and clear of all Liens.
ARTICLE VI. COVENANTS OF PARENT
-------------------------------
6.1 MAINTENANCE OF, AND ACCESS TO, RECORDS. From and after the
Closing, Parent shall, whenever reasonably requested by the Representatives,
permit the Representatives to have access to such business records turned over
to Parent pursuant to this Agreement and professionals previously retained by
S&T as may be required by the Representatives in connection with any audit or
investigation by any Governmental Authority, or any matter relating to insurance
coverage or third party claims, in each such case to the extent relating to the
operation of the Business by S&T prior to the Closing. Parent shall preserve and
maintain the records relating to the Business that are part of the Acquired
Assets for at least three years after the Closing Date.
6.2 CLOSING. Parent shall use its best efforts to cause the
conditions set forth in Section 3.2 to be satisfied by the Closing Date.
ARTICLE VII. CERTAIN ADDITIONAL COVENANTS
-----------------------------------------
7.1 EXPENSES; TRANSFER TAXES. Each party hereto will bear the
legal, accounting, financial advisory and related out-of-pocket expenses
incurred by such party in connection with the negotiation, preparation and
execution of this Agreement, the Transaction Documents, and the transactions
contemplated hereby. All sales, transfer, recordation and documentary Taxes and
fees that may be payable in connection with the transactions contemplated by
this Agreement shall be borne by the party responsible for such Taxes and fees
under applicable law and customary practice. The Merger Consideration shall be
reduced by the amount of all expenses, costs and fees incurred by S&T pursuant
to this Section 7.1; PROVIDED, HOWEVER, that, notwithstanding the foregoing, the
Merger Consideration shall not be reduced by any out-of-pocket accounting
expenses incurred by S&T in connection with the preparation of the Registration
Statement.
24
32
7.2 PRESS RELEASES AND DISCLOSURE. The parties agree that neither
S&T, Parent, Merger Sub nor their respective Subsidiaries or Affiliates shall
issue or cause publication of any press release or other announcement or public
communication with respect to this Agreement or the transactions contemplated
hereby or otherwise disclose this Agreement or the transactions contemplated
hereby to any third party (other than attorneys, advisors and accountants to S&T
or Parent) without the consent of the other party hereto, which consent shall
not be unreasonably withheld; PROVIDED, HOWEVER, that nothing herein shall
prohibit any party from issuing or causing publication of any press release,
announcement or public communication to the extent that such party deems such
action to be required by Law or stock exchange; PROVIDED FURTHER, HOWEVER, that
such party shall, whenever practicable consult with the other party concerning
the timing and content of such press release, announcement or communication
before the same is issued or published.
7.3 REGULATORY APPROVALS. S&T will, and will cause its appropriate
Affiliates to, and each of Parent and Merger Sub will use, in each case, its
best efforts to obtain any authorizations, consents, orders and approvals of any
Governmental Authority necessary for the performance of its respective
obligations pursuant to this Agreement and the Transaction Documents, and the
consummation of the transactions contemplated hereby and thereby, and will
cooperate fully with each other in all reasonable respects in promptly seeking
to obtain such authorizations, consents, orders and approvals. Neither S&T,
Parent, nor Merger Sub will take any action that will have the effect of
delaying, impairing or impeding the receipt of any required regulatory
approvals. Without limiting the generality of the foregoing, if applicable, S&T
and Parent will promptly file or cause to be filed with the Federal Trade
Commission ("FTC") and the Antitrust Division of the United States Department of
Justice ("DOJ"), Notification and Report Forms and documentary materials which
substantially comply with the provisions of the HSR Act and the rules
thereunder. S&T shall pay (or shall reimburse Parent for) all fees associated
with the filing of any such Notification and Report Forms or related materials
and information (other than the fees and expenses of Parent's legal, financial
or other professionals engaged to provide services in respect of such filing);
PROVIDED, HOWEVER, that Parent shall pay all fees associated with any
Notification, Report Forms and documentary materials necessary to substantially
comply with the provisions of the HSR Act and the rules thereunder. Parent and
S&T will promptly file any additional information requested as soon as
practicable after receipt of a request for additional information. Parent and
S&T will use reasonable efforts to obtain early termination of the applicable
waiting period under the HSR Act. The parties hereto will coordinate and
cooperate with one another in exchanging such information and providing such
reasonable assistance as may be requested in connection with such filing. S&T
will supply Parent with copies of all correspondence, filings or communications
(or memoranda setting forth the substance thereof) between S&T or its
representatives, on the one hand, and the FTC, the DOJ or any other Governmental
Authority or members of their respective staffs, on the other hand, with respect
to this Agreement or the transactions contemplated hereby.
7.4 ENVIRONMENTAL INSPECTION AND ASSESSMENT; COMPLIANCE ACTIONS.
(a) INSPECTION. No later than five calendar days
subsequent to the execution of this Agreement, Parent and S&T shall cause an
environmental consulting firm mutually acceptable to Parent and S&T (the
"Environmental Consultant") to commence an inspection and environmental
assessment of the Property and to render a written report setting forth its
findings in connection with such inspection and assessment. Parent shall pay the
costs of such inspection and assessment. The
25
33
scope of such inspection and assessment shall be satisfactory to Parent and
shall include, without limitation: (i) a so-called "Phase I" preliminary
environmental audit of the Property (including, without limitation, a
walk-through site inspection and review of S&T's records regarding previous
environmental violations, if any, and an inspection of environmental Permits and
verification of compliance with the same); (ii) additional procedures,
including, without limitation, taking of ground water samples, soil test
borings, effluent or other discharge analyses at all locations; and (iii) in the
event that any of the foregoing procedures reveal any actual or potential
environmental conditions existing on, in, under or about the Property or
otherwise associated with the operation of the Business or with the ownership,
possession or use of any of the Acquired Assets, such other testing as Parent
may determine to be appropriate. Parent will coordinate with S&T on the timing
of the physical inspection. The parties (or their representatives) will also
agree on the implementation of the sampling program, provided that the parties'
consent shall not be unreasonably withheld to the Environmental Consultant's
proposals for such implementation. Prior to commencement of any tests that
involve penetration of the surface, the Environmental Consultant shall arrange
for radar detector tests of any affected areas in order to avoid damage to
underground structures, facilities or equipment.
(b) ENVIRONMENTAL REPORT. After completing its
environmental survey of the properties and operations of S&T, the Environmental
Consultant will issue a written report to Parent, containing a list of all
Non-Complying Conditions or Practices (as hereinafter defined) that it believes
should be cured or corrected, along with suggested methods for so doing, and the
estimated costs therefor. The estimated costs shall be discounted at the then
market interest rate to give a present value, but only in instances where the
cure or correction will extend over a period of more than two years and only for
that portion of such costs which are expected to extend more than two years
after the date of the report. "Non-Complying Conditions or Practices" shall mean
all those environmental conditions or practices that are in violation of
Environmental Requirements, as well as (i) soil contamination to the extent that
it can reasonably be expected to cause ground water contamination; (ii) friable
asbestos on building components and process equipment or in exposed insulation;
or (iii) inadequate spill containment and monitoring facilities (including lack
of proper secondary containment (A) of above grade tankage; (B) of process
equipment; and (C) at points of transfer of Hazardous Material).
Parent will deliver a copy of the Environmental Consultant report
to S&T who will have five (5) business days thereafter to notify Parent, in
writing, of any objections to the findings of the Environmental Consultant, the
methods proposed for curing or correcting any conditions or practices, or the
estimated costs associated therewith. Failing such notification, S&T will be
deemed to be in agreement with the Environmental Consultant report. If S&T
objects to the Environmental Consultant report, Parent and S&T will, in the
following five (5) business days, seek to resolve the points to which S&T has
objected. If Parent and S&T cannot reach agreement in this period, the matters
in dispute will be submitted for resolution to a second environmental consulting
firm, to be chosen by mutual agreement to be retained jointly by and responsible
to Parent and S&T. The conclusions of the second environmental consulting firm
shall be final and binding on the parties. The costs of the second environmental
consulting firm will be paid by S&T.
26
34
(c) MERGER CONSIDERATION ADJUSTMENT.
(i) If the estimated costs to cure or correct any
Non-Complying Conditions or Practices, as finally agreed upon in accordance with
the procedures described in Section 7.4(b) (the "Final Environmental Report"),
are as to any Fee Property or Leased Property over $50,000, the Merger
Consideration shall be reduced (through reduction of the Escrowed Funds) by the
amount in excess of $50,000 contained in the Final Environmental Report.
(ii) If the estimated costs to cure or correct any conditions
and practices as contained in the Final Environmental Report are over, in the
aggregate, $1,000,000, either Parent or S&T may elect not to effect the Closing
and may terminate this Agreement; PROVIDED, HOWEVER, that such termination shall
not be effective until 10 days after Parent or S&T, as applicable, shall have
given written notice of such termination to the other parties to this Agreement,
during which 10 day period the parties shall attempt in good faith to resolve
any matters addressed by the Final Environmental Report. If, on the other hand,
Parent and S&T decide to effect the Closing, the Merger Consideration shall be
reduced (through reduction of the Escrowed Funds) by the amounts contained in
the Final Environmental Report.
(iii) To the extent the estimated costs to cure or correct
any Non-Complying Conditions or Practices as contained in the Final
Environmental Report are in the form of a range, the parties hereby agree that,
for the purposes of this Section 7.4, the mid-point in such range shall be
deemed to be the amount estimated for such costs.
(iv) Parent may only recover the reduction in the Merger
Consideration contemplated by (i) and (ii) above, by, at the option of the
Parent, (A) reducing the amount of the Escrowed Funds to be deposited with the
Escrow Agent in accordance with Section 1.11(a), but only if such reduction
occurs prior to the Closing, (B) asserting claims against the Escrowed Property
in accordance with the Escrow Agreement, or (C) a combination of both of the
foregoing.
7.5 CERTAIN INFORMATION TO BE PROVIDED. As soon as
practicable following the date hereof S&T shall use its best efforts to (i)
cooperate with Parent to prepare for inclusion in the Registration Statement
information relating to the Merger in accordance with the Securities Act (the
"Merger Information"), (ii) cause its officers, directors, management personnel,
independent public accounts, professionals and other advisers to cooperate with
Parent in preparing the Merger Information, and (iii) provide such access to its
books and records as may be necessary to prepare the Merger Information.
7.6 STOCKHOLDERS MEETING/UNANIMOUS WRITTEN CONSENT. S&T shall
take all action necessary, in accordance with the WVCA and other applicable law
and its articles of incorporation and bylaws, to convene and hold a special
meeting of the stockholders of S&T (the "Stockholders Meeting") as promptly as
practicable after the date hereof for the purpose of considering and voting upon
this Agreement or, in lieu of the Stockholders Meeting, adopt a unanimous
written consent of the stockholders of S&T approving the Merger and this
Agreement. The Board of Directors of S&T shall recommend that the holders of the
Shares vote in favor of the adoption of this Agreement. Parent and Merger Sub
shall vote any Shares beneficially owned by them (which may be voted by
27
35
them pursuant to applicable law) and S&T shall vote any shares for which it
holds irrevocable proxies in favor of the adoption of this Agreement.
7.7 ACCESS TO INFORMATION; CONFIDENTIALITY. Each of Parent and S&T
shall, and shall cause each of its Subsidiaries to, afford to the other and its
officers, employees, counsel, financial advisors and other representatives
access during the period prior to the Effective Time to all its properties,
books, contracts, commitments, returns, personnel and records and, during such
period, each of Parent and S&T shall, and shall cause each of its Subsidiaries
to, furnish as promptly as practicable to the other such information concerning
its business, properties, financial condition, operations and personnel as the
other may from time to time request. Any such investigation by Parent or S&T
shall not affect the representations or warranties contained in this Agreement.
Except as required by law, Parent and S&T will hold, and will cause its
directors, officers, employees, accountants, counsel, financial advisors and
other representatives and affiliates to hold, any non-public information
obtained from the other in confidence to the extent required by, and in
accordance with the provisions of, the Confidentiality Agreement, dated June 11,
1998, between Parent and S&T and the letter agreement, dated April 27, 1998,
between Deloitte & Touche LLP and Parent and the individual secrecy agreements
related thereto (collectively, the "Confidentiality Agreements").
ARTICLE VIII. TERMINATION, AMENDMENT AND WAIVER
-----------------------------------------------
8.1 TERMINATION.
(a) This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Effective Time, notwithstanding adoption thereof by the stockholders of S&T, in
any one of the following circumstances:
(i) By mutual written consent duly authorized
by the Boards of Directors of Parent and S&T.
(ii) By Parent or S&T, if the Effective Time shall
not have occurred on or before August 31, 1998, otherwise than as a result of
any material breach of any provision of this Agreement, by the party seeking to
effect such termination.
(iii) By Parent or S&T, if any federal or state
court of competent jurisdiction or other Governmental Entity shall have issued
an order, decree or ruling, or taken any other action permanently restraining,
enjoining or otherwise prohibiting the Merger and such order, decree, ruling or
other action shall have become final and non-appealable, provided that neither
party may terminate this Agreement pursuant to this Section 8.1(a)(iii) if it
has not complied with its obligations under Section 7.3.
(iv) By Parent or S&T, if the Stockholders Meeting
shall have been held and this Agreement shall not have been adopted by the
affirmative vote of the holders of the requisite number of shares of capital
stock of S&T, provided that S&T may not terminate this Agreement pursuant to
this Section 8.1(a)(iv) unless it shall have paid to Parent the Fee provided for
in
28
36
Section 8.1(b); or by Parent, if the Stockholders Meeting shall not have been
held by July 31, 1998 as a result of a breach by S&T of its obligations under
Section 7.6.
(v) By Parent, if the Board of Directors of
S&T or any committee thereof shall have (A) withdrawn or modified, in a manner
adverse to Parent or Merger Sub, its approval of this Agreement or the
transactions contemplated hereby or the recommendation referred to in the
penultimate sentence of Section 7.6, (B) approved, endorsed or recommended to
its stockholders an Acquisition Proposal, or (C) resolved to do any of the
foregoing. For purposes of this Agreement, "Acquisition Proposal" means an
inquiry, offer, proposal or other indication of interest regarding any of the
following (other than the transactions contemplated hereby with Parent or Merger
Sub) involving S&T: (i) any merger, consolidation, share exchange,
recapitalization, business combination or other similar transaction; (ii) any
sale, lease, exchange, mortgage, pledge, transfer or other disposition of all or
substantially all the assets of S&T and its Subsidiaries, taken as a whole, in a
single transaction or series of related transactions; or (iii) any public
announcement of a proposal, plan or intention to do any of the foregoing or any
agreement to engage in any of the foregoing.
(vi) By Parent or S&T, if (A) the other party
shall have failed to comply in any material respect with any of the material
covenants and agreements contained in this Agreement to be complied with or
performed by such party at or prior to such date of termination, and such
failure continues for 20 business days after the actual receipt by such party of
a written notice from the other party setting forth in detail the nature of such
failure, or (B) a representation or warranty of the other party contained in
this Agreement shall have been untrue in any respect on the date when made (or
in the case of any representations and warranties that are made as of a
different date, as of such different date) and the matters in respect of which
such representation or warranty shall have been untrue has had or could
reasonably be expected to have a Material Adverse Effect on such other party.
(b) If this Agreement is terminated pursuant to (i)
Section 8.1(a)(iv), or (ii) Section 8.1(a)(v), then, in either of such events,
S&T shall pay to Parent prior to such termination, in the case of termination by
S&T pursuant to Section 8.1(a)(iv), or promptly (and in any event within three
business days) after such termination, in the case of termination by Parent
pursuant to Section 8.1(a)(iv) or Section 8.1(a)(v), a fee in the amount of Four
Hundred Thousand Dollars ($400,000) (the "Fee"), which amount shall be payable
in immediately available funds.
8.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 8.1(a) hereof, this Agreement
(except for the provisions of paragraph (b) of Section 8.1 and this Section 8.2)
shall forthwith become void and cease to have any force or effect, without any
liability on the part of any party hereto or any of its affiliates; PROVIDED,
HOWEVER, that nothing in this Section 8.2 shall relieve any party to this
Agreement of liability for any willful or intentional breach of this Agreement.
8.3 AMENDMENT. Subject to any applicable provisions of the
OGCL and the WVCA, at any time prior to the Effective Time, the parties hereto
may modify or amend this Agreement by written agreement executed and delivered
by duly authorized officers of the respective parties; PROVIDED, HOWEVER, that
after adoption of this Agreement at the Stockholders Meeting, no
29
37
amendment shall be made that would reduce the amount or change the type of
consideration into which each Share shall be converted upon consummation of the
Merger. This Agreement may not be modified or amended except by written
agreement executed and delivered by duly authorized officers of each of the
respective parties.
8.4 EXTENSION; WAIVER. At any time prior to the Effective
Time, the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties of the other parties contained in this
Agreement or in any document delivered pursuant to this Agreement, or (c)
subject to Section 8.3, waive compliance with any of the agreements or
conditions (other than the condition contained in Section 3.2(a)) of the other
parties contained in this Agreement. Any agreement on the part of a party to any
such extension or waiver shall be valid only if set forth in a written
instrument executed and delivered by a duly authorized officer on behalf of such
party. The failure of any party to this Agreement to assert any of its rights
under this Agreement or otherwise shall not constitute a waiver of such rights.
8.5 PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR WAIVER.
A termination of this Agreement pursuant to Section 8.1, an amendment of this
Agreement pursuant to Section 8.3 or an extension or waiver pursuant to Section
8.4 shall, in order to be effective, require in the case of Parent, Merger Sub
or S&T, action by its Board of Directors or the duly authorized designee of its
Board of Directors.
ARTICLE IX. MISCELLANEOUS
-------------------------
9.1 AMENDMENTS. This Agreement may be amended only by a
writing executed by all of the parties hereto.
9.2 ENTIRE AGREEMENT. This Agreement, the Confidentiality
Agreements and the other agreements expressly provided for herein, set forth the
entire understanding of the parties hereto with respect to the subject matter
hereof, and supersede all prior contracts, agreements, arrangements,
communications, discussions, representations and warranties, whether oral or
written, between the parties.
9.3 GOVERNING LAW. This Agreement shall in all respects be
governed by and construed in accordance with the laws of the State of Ohio,
without regard to its conflicts of law doctrine. S&T hereby agrees to submit to
the personal jurisdiction of the state or federal courts located in the State of
Ohio. Notwithstanding the foregoing, any party may initiate and prosecute any
legal proceeding or seek enforcement of any judgment in any proper court having
jurisdiction in the United States or elsewhere.
9.4 NOTICES. Any notice, request or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given (a) when received if personally delivered, (b) within five days
after being sent by registered or certified mail, return receipt requested,
postage prepaid, (c) within 12 hours after being sent by telecopy, with
confirmed
30
38
answerback, or (d) within one business day of being sent by priority delivery by
established overnight courier, to the parties at their respective addresses set
forth below.
To S&T: Stone & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
With a copy to: Steptoe & ▇▇▇▇▇▇▇
Bank ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇., Esq.
To Parent: The ▇▇▇▇▇-▇▇▇▇▇▇▇ Stores Corp.
▇▇▇▇ ▇▇-▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
With a copy to: ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇
North Point
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
To Representatives G. ▇▇▇▇▇ ▇▇▇▇▇▇▇
after the Closing Date: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to: Steptoe & ▇▇▇▇▇▇▇
Bank ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇., Esq.
Any party by written notice to the others given in accordance with this Section
9.4 may change the address or the Persons to whom notices or copies thereof
shall be directed.
9.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together will constitute one and the same instrument.
31
39
9.6 ASSIGNMENT. This Agreement shall be binding upon and inure to
the benefit of the successors and permitted assigns of each party hereto. No
rights, obligations or liabilities hereunder shall be assignable by any party
without the prior written consent of the other parties.
9.7 WAIVERS. Except as otherwise provided herein, Parent, S&T and
Merger Sub (acting on behalf of itself and its appropriate Affiliates), may
waive in writing compliance by any of the other parties hereto (to the extent
such compliance is for the benefit of the party giving such waiver) with any of
the terms, covenants or conditions (other than the condition contained in
Section 3.2(a)) contained in this Agreement or in any of the other Transaction
Documents (except such as may be imposed by law). Any waiver by any party of any
violation of, breach of, or default under, any provision of this Agreement or
any of the other Transaction Documents, by any other party shall not be
construed as, or constitute, a continuing waiver of such provision, or waiver of
any other violation of, breach of or default under any other provision of this
Agreement or any of the other Transaction Documents.
9.8 THIRD PARTIES. Nothing expressed or implied in this Agreement
is intended, or shall be construed, to confer upon or give any Person or entity
other than Parent, S&T and Merger Sub any rights or remedies under or by reason
of this Agreement.
9.9 SCHEDULES, ADDENDA AND EXHIBITS. The Schedules and Exhibits
attached to this Agreement are incorporated herein and shall be part of this
Agreement for all purposes.
9.10 HEADINGS. The headings in this Agreement are solely for
convenience of reference and shall not be given any effect in the construction
or interpretation of this Agreement.
9.11 CERTAIN DEFINITIONS. For purposes of this Agreement and
of any other Transaction Document:
(a) the term "Affiliate" shall mean any Person that
directly, or indirectly through one or more Persons, controls, is controlled by,
or is under common control with, the Person specified or, directly or
indirectly, is related to or otherwise associated with any such Person or
entity;
(b) the term "claim" or "Claim" shall mean a right to
payment, whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured, or unsecured; or right to an equitable remedy for
breach of performance if such breach gives rise to a right to payment, whether
or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured, or unsecured;
(c) the term "Law" shall mean all federal, state,
municipal or local constitutional provisions, laws, ordinances, rules,
regulations, orders, actions, rules and regulations. and common laws.
(d) the term "Lien" shall mean a claim, encumbrance,
or charge on property, whether acquired by contract, operation of law or
otherwise, for payment of some debt, obligation or duty;
32
40
(e) the term "Person" shall mean an individual,
partnership, corporation, limited liability company, business trust, joint stock
company, trust, unincorporated association, joint venture, Governmental
Authority or other entity of whatever nature;
(f) the term "Related Party" shall mean any trust,
corporation or any entity in which S&T or any of their Affiliates has a material
interest;
(g) a "Subsidiary" of any person means any other
person of which (i) the first mentioned person or any Subsidiary thereof is a
general partner, (ii) voting power to elect a majority of the board of directors
or others performing similar functions with respect to such other person is held
by the first mentioned person and/or by any one or more of its Subsidiaries, or
(iii) at least 50% of the equity interests of such other person is, directly or
indirectly, owned or controlled by such first mentioned person and/or by any one
or more of its Subsidiaries;
(h) the phrase, "to the best of S&T's knowledge" or
"S&T's knowledge" shall be deemed to include, without limitation, all
information that is actually known or, in the exercise of reasonable diligence
in the normal course of their employment and/or assigned duties, should be
known, by each of the following individuals: (i) the officers and employees of
S&T listed on Schedule 9.11(h) and all other management or supervisory personnel
who are (or, at any time since June 1, 1997, were) employed or retained by S&T
or any of its Affiliates and whose principal place of performance of their
duties was at the Wheeling, West Virginia corporate offices of S&T, whether or
not such individuals were or are also officers, directors of employees of S&T or
any of its Affiliates, and (ii) all other individuals employed or retained by
S&T or any of its Affiliates who have (or should have) exercised by reason of
their position, responsibilities or duties, the principal supervisory,
monitoring or compliance function with respect to any of the particular subject
matters addressed by the representations and warranties set forth in Article III
of this Agreement.
9.12 REMEDIES NOT EXCLUSIVE. No remedy conferred by any of the
specific provisions of this Agreement is intended to be exclusive of any other
remedy and each remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or hereafter existing at law or in equity or by
statute or otherwise. No remedy shall be deemed to be a limitation on the amount
or measure of damages resulting from any breach of this Agreement. The election
of any one or more remedies shall not constitute a waiver of the right to pursue
other available remedies.
9.13 GENDER AND NUMBER. The masculine, feminine or neuter gender
and the singular or plural number shall each be deemed to include the others
whenever the context so indicates.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement as of the date first above written.
33
41
STONE & ▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: PRESIDENT
THE ▇▇▇▇▇-▇▇▇▇▇▇▇ STORES CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: PRESIDENT
THE ▇▇▇▇▇-▇▇▇▇▇▇▇ ACQUISITION CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: PRESIDENT
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., as
Representative
/s/G. ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
G. ▇▇▇▇▇ ▇▇▇▇▇▇▇, as
Representative
34