SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
September 10, 1995
(Date of earliest event reported)
WITCO CORPORATION
---------------------------------------------------------
(Exact name or registrant as specified in its charter)
Delaware 1-4654 13-1870000
- --------------- ------------ ------------------
(State or other (Commission (I.R.S. Employer
jurisdiction or File Identification
organization) Number) Number)
One American Way
Greenwich, Connecticut 06831
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(203) 552-2000
----------------------------------------------------
(Registrant's telephone number, including area code)
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Item 5. OTHER EVENTS
On September 11, 1995, Witco Corporation (the
"Company") announced that it has entered into an agreement
and plan of merger dated as of September 10, 1995 with OSi
Specialties Holding Company ("OSi"), pursuant to which OSi
will become a wholly owned subsidiary of the Company and
Witco will pay an aggregate of $486 million in cash for 100%
of the outstanding shares of OSi in connection with the
merger. Witco will finance the acquisition with cash-on- hand
and available bank facilities.
The merger, which has been approved by the
shareholders of OSi, is subject to other customary
conditions, including certain domestic and foreign regulatory
approvals. The Company and OSi currently anticipate that the
transaction will close during the fourth quarter of 1995.
Item 7. FINANCIAL STATEMENT, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS
c. Exhibits
2 (a) Agreement and Plan of Merger dated as of
September 10, 1995.
2 (b) Stockholders Agreement dated as of
September 10, 1995.
2O Press Release dated September 11, 1995.
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SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned
hereunto duly authorized.
WITCO CORPORATION,
by /s/ Dustan E. McCoy
-------------------------
Name: Dustan E. McCoy
Title: Vice President, General
Counsel and Secretary
Date: September 25, 1995
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EXHIBIT INDEX
Exhibit Sequentially
Number Exhibit Numbered Page
- ------- ------- -------------
2 (a) Agreement and Plan of Merger
dated as of September 10, 1995 5
2 (b) Stockholders Agreement
dated as of September 10, 1995 58
20 Press Release dated September 11,
1995 70
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EXHIBIT 2(a)
============================================================
AGREEMENT AND PLAN OF MERGER
among
WITCO CORPORATION,
WITSIL CORPORATION
and
OSI SPECIALTIES HOLDING COMPANY
Dated as of September 10, 1995
============================================================
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TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER
SECTION 1.1. The Merger............................. 2
SECTION 1.2. Closing................................ 2
SECTION 1.3. Effective Time......................... 2
SECTION 1.4. Effects of the Merger.................. 2
SECTION 1.5. Certificate of Incorporation;
By-laws.............................. 3
SECTION 1.6. Directors.............................. 3
SECTION 1.7. Officers............................... 3
ARTICLE II
EFFECT OF THE MERGER ON THE SECURITIES
OF THE CONSTITUENT CORPORATIONS
SECTION 2.1. Effect on Capital Stock................ 3
SECTION 2.2. Stock Options.......................... 5
SECTION 2.3. Warrants............................... 6
SECTION 2.4. Funds Provided by Parent............... 6
SECTION 2.5. Exchange Procedures.................... 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the
Company.............................. 10
SECTION 3.2. Representations and Warranties of
Parent and Sub....................... 30
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
PRIOR TO MERGER
SECTION 4.1. Conduct of Business of the Company..... 32
SECTION 4.2. Other Actions.......................... 35
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ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1. Access to Information;
Confidentiality...................... 36
SECTION 5.2. Commercially Reasonable Best
Efforts.............................. 37
SECTION 5.3. Indemnification and Insurance.......... 37
SECTION 5.4. Public Announcements................... 38
SECTION 5.5. Acquisition Proposals.................. 38
SECTION 5.6. Consents, Approvals and Filings........ 39
SECTION 5.7. Special Severance Arrangements......... 39
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1. Conditions to Each Party's Obligation
to Effect the Merger................. 40
SECTION 6.2. Conditions to Obligations of Parent
and Sub.............................. 41
SECTION 6.3. Conditions to Obligations of the
Company.............................. 42
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1. Termination............................ 43
SECTION 7.2. Effect of Termination.................. 43
SECTION 7.3. Amendment.............................. 43
SECTION 7.4. Extension; Waiver...................... 44
SECTION 7.5. Procedure for Termination, Amendment,
Extension or Waiver.................. 44
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.1. Nonsurvival of Representations and
Warranties........................... 44
SECTION 8.2. Fees and Expenses...................... 44
SECTION 8.3. Definitions............................ 45
SECTION 8.4. Notices................................ 45
SECTION 8.5. Interpretation......................... 47
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SECTION 8.6. Counterparts........................... 47
SECTION 8.7. Entire Agreement; Third-Party
Beneficiaries........................ 47
SECTION 8.8. Governing Law.......................... 47
SECTION 8.9. Assignment............................. 47
SECTION 8.10. Enforcement ........................... 48
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of
September 10, 1995 (this "Agreement"), among WITCO
CORPORATION, a Delaware corporation ("Parent"), WITSIL
CORPORATION, a Delaware corporation and a wholly owned
subsidiary of Parent ("Sub"), and OSI SPECIALTIES HOLDING
COMPANY, a Delaware corporation (the "Company").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Board of Directors of each of Parent,
Sub and the Company has approved the merger of Sub with and
into the Company (the "Merger"), upon the terms and subject
to the conditions set forth in this Agreement, whereby each
issued and outstanding share of Company Common Stock (as
defined in Section 2.1) (excluding shares owned, directly or
indirectly, by the Company or any Subsidiary (as defined in
Section 8.3) of the Company or by Parent, Sub or any other
Subsidiary of Parent and Dissenting Common Shares (as
defined in Section 2.1(d)) will be converted into the right
to receive the Merger Consideration (as defined in Section
2.1(c));
WHEREAS, concurrently with the execution of this
Agreement and as an inducement to Parent to enter into this
Agreement, certain stockholders of the Company are entering
into a stockholders agreement (the "Stockholders Agreement")
with Parent and the Company, pursuant to which such
stockholders have, among other things, agreed to vote their
shares of Company Common Stock in favor of the Merger and
the other transactions contemplated by this Agreement and
against any other business combination transaction involving
the Company; and
WHEREAS, Parent, Sub and the Company 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
representations, warranties, covenants and agreements
contained in this Agreement, the parties agree as follows:
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ARTICLE I
THE MERGER
SECTION 1.1. The Merger. Upon the terms and
subject to the conditions set forth in this Agreement, and
in accordance with the Delaware General Corporation Law (the
"DGCL"), Sub shall be merged with and into the Company at
the Effective Time (as defined in Section 1.3). Upon the
Effective Time, the separate existence of Sub shall cease,
and the Company shall continue as the surviving corporation
and a wholly owned subsidiary of Parent (the "Surviving
Corporation").
SECTION 1.2. Closing. Unless this Agreement shall
have been terminated and the transactions herein
contemplated shall have been abandoned pursuant to Section
7.1 and subject to the satisfaction or waiver of the
conditions set forth in Article VI, the closing of the
Merger (the "Closing") shall take place at 10:00 a.m. on the
second business day following the date on which the last of
the conditions to be fulfilled or waived set forth in
Article VI shall be fulfilled or waived in accordance with
this Agreement (the "Closing Date"), at the offices of Weil,
Gotshal & Manges, 767 Fifth Avenue, New York, New York,
unless another date, time or place is agreed to in writing
by the parties hereto.
SECTION 1.3. Effective Time. The parties hereto
shall file with the Secretary of State of the State of
Delaware (the "Delaware Secretary of State") on the Closing
Date (or on such other date as Parent and the Company may
agree) a certificate of merger (the "Certificate of Merger")
or other appropriate documents, executed in accordance with
the relevant provisions of the DGCL, and make all other
filings or recordings required under the DGCL in connection
with the Merger. The Merger shall become effective upon the
filing of the Certificate of Merger with the Delaware
Secretary of State, or at such later time as is specified in
the Certificate of Merger (the "Effective Time").
SECTION 1.4. Effects of the Merger. The Merger
shall have the effects set forth in Section 259 of the DGCL.
Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all the properties,
rights, privileges, powers and franchises of the Company and
Sub shall vest in the Surviving Corporation, and all debts,
liabilities and duties of the Company and Sub shall be and
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become the debts, liabilities and duties of the Surviving
Corporation.
SECTION 1.5. Certificate of Incorporation; By-
laws. (a) At the Effective Time, the Certificate of
Incorporation of Sub shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
(b) The By-Laws of Sub as in effect at the
Effective Time shall, from and after the Effective Time, be
the By-Laws of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
SECTION 1.6. Directors. The directors of Sub at
the Effective Time shall, from and after the Effective Time,
become the directors of the Surviving Corporation, until the
earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the
case may be.
SECTION 1.7. Officers. The officers of Sub at the
Effective Time shall, from and after the Effective Time,
become the officers of the Surviving Corporation until the
earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the
case may be.
ARTICLE II
EFFECT OF THE MERGER ON THE SECURITIES
OF THE CONSTITUENT CORPORATIONS
SECTION 2.1. Effect on Capital Stock. As of the
Effective Time, by virtue of the Merger and without any
action on the part of the holder of (i) any shares of common
stock, par value $.01 per share, of the Company (the "Common
Stock"), (ii) any shares of Class A Common Stock, par value
$.01 per share, of the Company (the "Class A Common Stock"),
(iii) any shares of Class B Common Stock, par value $.01 per
share, of the Company (the "Class B Common Stock" and
collectively with the Common Stock and the Class A Common
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Stock, the "Company Common Stock") or (iv) any shares of
capital stock of Sub:
(a) Common Stock of Sub. Each share of common
stock of Sub issued and outstanding immediately prior to the
Effective Time shall, by virtue of the Merger and without
any action on the part of the holder thereof, be converted
into one share of common stock of the Surviving Corporation.
(b) Cancellation of Treasury Stock and
Parent-Owned Common Stock. Each share of any class of
Company Common Stock issued and outstanding immediately
prior to the Effective Time that is owned by the Company or
by any Subsidiary of the Company or by Parent, Sub or any
other Subsidiary of Parent (other than shares in trust
accounts, managed accounts, custodial accounts and the like
that are beneficially owned by third parties), shall
automatically be cancelled and retired and shall cease to
exist, and no cash or other consideration shall be delivered
or deliverable in exchange therefor.
(c) Conversion of Common Stock. Each share of any
class of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than shares
to be cancelled in accordance with Section 2.1(b) and other
than Dissenting Common Shares) shall be converted into the
right to receive $42.50 per share net to the holder in cash,
without interest, minus the Per Share Transaction Fees (as
defined in Section 2.4(b)) (the "Merger Consideration").
(d) Dissenting Shares. Notwithstanding anything in
this Agreement to the contrary, shares of any class of
Company Common Stock issued and outstanding immediately
prior to the Effective Time held by a holder (if any) who
has the right to demand, and who properly demands, an
appraisal of such shares in accordance with Section 262 of
the DGCL (or any successor provision) ("Dissenting Common
Shares") shall not be converted into or represent the right
to receive the Merger Consideration unless such holder fails
to perfect, withdraws or otherwise loses such holder's right
to such appraisal, if any. If, after the Effective Time,
such holder fails to perfect, withdraws or loses any such
right to appraisal pursuant to the DGCL, each such share of
such holder shall be treated as a share that had been
converted as of the Effective Time into the right to receive
the Merger Consideration in accordance with this Section
2.1. The Company shall give prompt notice to Parent of any
demands received by the Company for appraisal of
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shares of any class of Company Common Stock, and Parent
shall have the right to participate in and direct all
negotiations and proceedings with respect to such demands.
The Company shall not, except with the prior written consent
of Parent, make any payment with respect to, or settle or
offer to settle, any such demands.
(e) Cancellation and Retirement of Company Common
Stock. As of the Effective Time, all certificates
representing shares of any class of Company Common Stock,
other than certificates representing shares to be cancelled
in accordance with Section 2.1(b) or Dissenting Common
Shares, issued and outstanding immediately prior to the
Effective Time, shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to
exist, and each holder of a certificate representing any
such shares of Company Common Stock shall cease to have any
rights with respect thereto, except the right to receive the
Merger Consideration upon surrender of such certificate in
accordance with Section 2.5.
SECTION 2.2. Stock Options. The Company shall take
such action in order that, at the Effective Time, the
options granted under the Company's Employee Stock Option
Plan or any other stock option plan, agreement or
arrangement (collectively, as such plans, agreements or
arrangements may have been amended, supplemented or modified
from time to time, the "Stock Option Plans") that are
unexercised, whether or not then exercisable (the
"Options"), shall be extinguished by virtue of the Merger
and converted into the right to receive, for each share of
Company Common Stock subject to such Option, an amount in
cash equal to the excess, if any, of the Merger
Consideration for such share over the per share exercise
price of such Option (such excess being referred to as the
"Option Consideration"), and such amount less the amount of
any required withholding taxes shall be paid to the holder
of such Option. The surrender of an Option in exchange for
the Option Consideration shall constitute a release of any
and all rights the holder had or may have had in the Option.
Except as set forth in Section 2.2 of the Disclosure
Schedule, all Stock Option Plans shall terminate as of the
Effective Time and the provisions in any other plan, program
or arrangement providing for the issuance or grant of any
other interest in respect of the capital stock of the
Company or any Subsidiary shall be deleted as of the
Effective Time, and the Company shall take all action
necessary to ensure that, following the Effective Time, no
participant in any Stock Option Plan shall have any right
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thereunder to acquire equity securities of the Company, the
Surviving Corporation or any Subsidiary thereof and to
terminate all such plans.
SECTION 2.3. Warrants. The Company shall take such
action in order that, at the Effective Time, the Company's
warrants to purchase Common Stock issued pursuant to that
certain Warrant Agreement, dated as of April 19, 1994,
between the Company and Shawmut Bank Connecticut, National
Association (the "Warrant Agreement") that are unexercised
(the "Warrants"), shall become exercisable, upon surrender
of such Warrant, for the Merger Consideration (the Merger
Consideration, less the per share exercise price of such
Warrant, being referred to as the "Warrant Consideration").
The surrender of a Warrant in exchange for the Warrant
Consideration shall constitute a release of any and all
rights the holder had or may have had in the Warrant.
SECTION 2.4. Funds Provided by Parent. (a) Paying
Agent. As of the Effective Time and after taking into
account any amounts paid by the Company pursuant to Section
2.4(b), (i) Parent shall deposit, or shall cause to be
deposited, with or for the account of a bank or trust
company designated by Parent, which shall be reasonably
satisfactory to the Company (the "Paying Agent"), for the
benefit of the holders of shares of each class of Company
Common Stock and the holders of the Warrants, cash in an
amount sufficient to pay the aggregate Merger Consideration
and the aggregate Warrant Consideration (such amount being
hereinafter referred to as the "Payment Fund"), (ii) Parent
shall pay, or shall cause to be paid, to the Company an
amount equal to the aggregate Option Consideration and (iii)
the Company shall pay to each holder of Options the amount
required to be paid to such holder in respect of such
Options as provided in Section 2.2.
(b) Aggregate Payment. The aggregate amount of
funds to be provided by Parent to pay the Merger
Consideration, the Option Consideration and the Warrant
Consideration (collectively, the "Consideration") pursuant
to Section 2.4(a) is $486,000,000, less the Transaction Fees
(as defined in Section 3.1(l)). In addition, the Company
shall pay to the Paying Agent for deposit into the Payment
Fund or to holders of Options, as the case may be, as of the
Effective Time an amount equal to the aggregate amount
received by the Company pursuant to the exercise of Warrants
or Options during the period from the date hereof to but not
including the Effective Time. For purposes of this
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Agreement, "Per Share Transaction Fees" means an amount
equal to (i) the amount of Transaction Fees divided by
(ii) the aggregate number of shares of each class of Company
Common Stock with respect to which any Consideration is to
be paid pursuant to this Article II (whether held directly
or subject to an Option or Warrant).
SECTION 2.5. Exchange Procedures. (a) (i) Subject
to subparagraph (ii) below, as soon as practicable after the
Effective Time, each holder of an outstanding certificate or
certificates which prior thereto represented shares of any
class of Company Common Stock shall, upon surrender to the
Paying Agent of such certificate or certificates and
acceptance thereof by the Paying Agent, be entitled to the
amount of cash which the aggregate number of shares of such
class of Company Common Stock previously represented by such
certificate or certificates surrendered shall have been
converted into the right to receive pursuant to Section
2.1(c). As soon as practicable after the Effective Time,
each holder of an outstanding Warrant shall, upon surrender
to the Paying Agent of such Warrant and acceptance thereof
by the Paying Agent, be entitled to the amount of cash which
such holder shall have the right to receive pursuant to
Section 2.3. The Paying Agent shall accept such certificates
or Warrants, as the case may be, upon compliance with such
reasonable terms and conditions as the Paying Agent may
impose to effect an orderly exchange thereof in accordance
with normal exchange practices. If the consideration to be
paid in the Merger (or any portion thereof) is to be
delivered to any person (as defined in Section 8.3) other
than the person in whose name the certificate representing
shares of such class of Company Common Stock or Warrant, as
the case may be, surrendered in exchange therefor is
registered, it shall be a condition to such exchange that
the certificate or Warrant so surrendered shall be properly
endorsed or otherwise be in proper form for transfer and
that the person requesting such exchange shall pay to the
Paying Agent any transfer or other taxes required by reason
of the payment of such consideration to a person other than
the registered holder of the certificate or Warrant, as the
case may be, surrendered, or shall establish to the
satisfaction of the Paying Agent that such tax has been paid
or is not applicable. After the Effective Time, there shall
be no further transfer on the records of the Company or its
transfer agent of certificates representing shares of any
class of Company Common Stock and if such certificates are
presented to the Company for transfer, they shall be
cancelled against delivery of the Merger Consideration as
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hereinabove provided. Until surrendered as contemplated by
this Section 2.5(a)(i), each certificate representing shares
of any class of Company Common Stock (other than
certificates representing shares to be cancelled in
accordance with Section 2.1(b) or Dissenting Common Shares)
shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the
Merger Consideration, without any interest thereon, as
contemplated by Section 2.1. No interest will be paid or
will accrue on any cash payable as Merger Consideration or
Warrant Consideration.
(ii) Notwithstanding Section 2.5(a)(i) above and
Section 2.5(b) below, commencing at any time after the
selection of the Paying Agent in accordance with Section
2.4(a) and any time thereafter prior to payment by the
Paying Agent in accordance with the terms of this Agreement,
each holder of an outstanding certificate or certificates
which, if presented prior to the Effective Time, represents
shares of any class of Company Common Stock or, if presented
after the Effective Time, represented shares of any class of
Company Common Stock, may surrender to the Paying Agent (at
its designated office) such certificate or certificates,
which certificates, if presented prior to the Effective
Time, shall be held in escrow for such stockholders until
the Effective Time by the Paying Agent. Upon such surrender
and acceptance thereof by the Paying Agent in accordance
with the terms set forth in this Agreement, the Paying Agent
shall make payment, on or prior to the next business day
(which in no event shall be prior to the Effective Time),
via wire transfer in immediately available funds to the
account designated in writing by such stockholder, of an
amount equal to the product of (x) the aggregate number of
shares of such class of Company Common Stock previously
represented by such certificate or certificates so
surrendered and (y) the Merger Consideration.
(b) Letter of Transmittal. Promptly after the
Effective Time (but in no event more than five days
thereafter), the Surviving Corporation shall require the
Paying Agent to mail to each record holder of Warrants and
certificates, other than a holder of certificates that
previously surrendered such certificates in accordance with
Section 2.5(a)(ii), that immediately prior to the Effective
Time represented shares of any class of Company Common Stock
which shall have been converted pursuant to Section 2.1, a
form of letter of transmittal and instructions for use in
surrendering such Warrant or certificates, as the case may
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be, and receiving the consideration to which such holder
shall be entitled therefor pursuant to Section 2.3 or 2.1,
as the case, may be.
(c) No Further Ownership Rights in Company Common
Stock. The Consideration paid upon the surrender for
exchange of certificates representing shares of any class of
Company Common Stock, Options and Warrants thereon, as the
case may be, in accordance with the terms of this Article II
shall be deemed to have been issued and paid in full
satisfaction of all rights pertaining to the shares of such
class of Company Common Stock theretofore represented by
such certificates, or such Options or Warrants, as the case
may be.
(d) Termination of Payment Fund. Any portion of
the Payment Fund which remains undistributed to the holders
of the certificates representing shares of any class of
Company Common Stock or the Warrants for 120 days after the
Effective Time shall be delivered to the Surviving
Corporation, upon demand, and any holders of shares of any
class of Company Common Stock who theretofore have not
complied with this Article II or holders of Warrants that
have not exercised their rights set forth in Section 2.3
thereafter shall look only to the Surviving Corporation and
only as general creditors thereof for payment of their claim
for any Merger Consideration or Warrant Consideration, as
the case may be.
(e) No Liability. None of Parent, Sub, the
Surviving Corporation or the Paying Agent shall be liable to
any person in respect of any distributions payable from the
Payment Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. If
any certificates representing shares of any class of Company
Common Stock shall not have been surrendered prior to five
years after the Effective Time (or immediately prior to such
earlier date on which any Merger Consideration in respect of
such certificate would otherwise escheat to or become the
property of any Governmental Entity (as defined in Section
3.1(c))), any such distributions 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.
(f) Investment of Payment Fund. The Paying Agent
shall invest the Payment Fund, as directed by Parent, in (i)
direct obligations of the United States of America
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and (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, and any net earnings with
respect thereto shall be paid to Parent as and when
requested by Parent; provided, however, that any such
investment or any such payment of earnings shall not delay
the receipt of the Merger Consideration by holders of shares
of any class of Company Common Stock or the Warrant
Consideration by holders of the Warrants, as the case may
be, or otherwise impair such holders' respective rights
hereunder. In the event the Payment Fund shall realize a
loss on any such investment, Parent shall promptly
thereafter deposit in such Payment Fund on behalf of the
Surviving Corporation cash in an amount sufficient to enable
such Payment Fund to satisfy all remaining obligations
originally contemplated to be paid out of such Payment Fund.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the
Company. The Company represents and warrants to Parent and
Sub as follows:
(a) Organization, Standing and Corporate
Power. Each of the Company and each Subsidiary of the
Company (as hereinafter defined) is a corporation duly
organized, validly existing and in good standing under the
laws of the jurisdiction in which it is incorporated and has
the requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as
now being conducted. Each of the Company and each Subsidiary
of the Company is duly qualified or licensed to do business
and is in good standing in each jurisdiction in which the
nature of its business or the ownership or leasing of its
properties makes such qualification or licensing necessary,
other than in such jurisdictions where the failure to be so
qualified or licensed (individually or in the aggregate)
would not have a Material Adverse Effect (as defined in
Section 8.3) with respect to the Company. The Company and
each Subsidiary of the Company has delivered or made
available on or prior to August 22, 1995 to Parent complete
and correct copies of its Charter and By-laws, as amended to
the date of this Agreement.
(b) Capital Structure. The authorized capital
stock of the Company consists of 13,300,000 shares
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of Common Stock, 750,000 shares of Class A Common Stock and
750,000 shares of Class B Common Stock. As of the date
hereof: (i) 9,347,350 shares of Common Stock were issued
and outstanding, 1,245,375 shares of Common Stock were
reserved for issuance upon exercise of outstanding Options
(in each case at an exercise price of $4.00 per share),
257,493 shares of Common Stock were reserved for issuance
upon exercise of the Warrants (in each case at an exercise
price of $8.00 per share) and 17,500 shares of Common Stock
were held by the Company in its treasury;
(ii) 750,000 shares of Class A Common Stock were issued and
outstanding; and (iii) all shares of Class B Common Stock
were reserved for issuance upon conversion of the Class A
Common Stock. Except as set forth above, as of the date
hereof, no shares of capital stock or other equity
securities of the Company were issued, reserved for issuance
or outstanding. Except as set forth in Section 3.1(b)(1) of
the Disclosure Schedule, all outstanding shares of capital
stock of the Company are, and all shares which may be issued
pursuant to the Stock Option Plans or the Warrants will be,
when issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights. No
bonds, debentures, notes or other indebtedness of the
Company or any Subsidiary of the Company having the right to
vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which the
stockholders of the Company or any Subsidiary of the Company
may vote are issued or outstanding. All of the outstanding
shares of capital stock or quotas, as the case may be, of
each Material Subsidiary (as defined in Section 8.3) are
owned, directly or indirectly, by the Company, except with
respect to certain shares issued as directors' qualifying
shares. All the outstanding shares of capital stock or
quotas, as the case may be, of each Material Subsidiary have
been validly issued, are fully paid and nonassessable and
are free and clear of all pledges, claims, liens, charges,
restrictions, encumbrances and security interests of any
kind or nature whatsoever (collectively, "Liens"), except
with respect to certain shares pledged as collateral
pursuant to (A) that certain Pledge Agreement, dated as of
April 19, 1994, between the Company and Shawmut Bank
Connecticut, National Association, entered into in
connection with the Company's issuance of its 11-1/2%
Series B Senior Secured Discount Debentures due 2004 (the
"Debentures") and (B) that certain Pledge Agreement, dated
as of July 9, 1993, entered into by OSi Specialties, Inc.
("OSi Inc.") in connection with that certain Amended and
Restated Credit Agreement dated as of July 8, 1993 and
amended and restated as of September 2, 1994 (the "Credit
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Agreement"), between OSi Inc., the financial institutions
party thereto and Chase Manhattan Bank (National
Association), as administrative agent for such financial
institutions. Except as set forth in Section 3.1(b)(2) of
the Disclosure Schedule and other than with respect to
directors' qualifying shares, neither the Company nor any
Subsidiary of the Company is a party to or is bound by
(x) any outstanding or authorized option, warrant, call,
subscription or other right, agreement or commitment which
obligates the Company or any Subsidiary of the Company to
issue, deliver, sell or transfer, purchase, redeem or
otherwise acquire, or cause to be issued, delivered, sold or
transferred, purchased, redeemed or otherwise acquired, any
shares of the capital stock or other voting securities
(including voting debt securities) of the Company or any
Subsidiary of the Company, or which obligates the Company or
any Subsidiary of the Company to grant, extend or enter into
any such option, warrant, call, subscription, right,
commitment or agreement, or (y) any shareholder agreements,
voting trusts or other agreements or understandings relating
to the voting of any shares of capital stock or other voting
securities (including voting debt securities) of the Company
or any Subsidiary of the Company. Section 3.1(b)(2) of the
Disclosure Schedule sets forth a true and complete list of
the Subsidiaries of the Company. Except for the capital
stock of its Subsidiaries or as otherwise set forth on
Section 3.1(b)(2) of the Disclosure Schedule, the Company
does not own, directly or indirectly, any capital stock or
other ownership interest in any corporation, partnership,
joint venture or other entity.
(c) Authority; Noncontravention. The Company
has the requisite corporate power and authority to enter
into this Agreement and to consummate the transactions
contemplated by this Agreement. The execution and delivery
of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the
part of the Company. This Agreement has been duly executed
and delivered by the Company and, assuming this Agreement
constitutes the valid and binding agreement of Parent and
Sub, constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with
its terms. To the Company's knowledge, no state takeover
statute or similar statute or regulation applies or purports
to apply to this Agreement, the Stockholders Agreement or
any of the transactions contemplated hereby or thereby. The
execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated by this
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Agreement and compliance with the provisions hereof will
not, (i) conflict with any of the provisions of the Charter
or By-laws of the Company or the comparable documents of any
Subsidiary of the Company, (ii) except as set forth in
Section 3.1(c) of the Disclosure Schedule, subject to the
governmental filings and other matters referred to in the
following sentence, conflict with, result in a breach of or
default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation
or acceleration of any obligation or loss of a material
benefit under, or require the consent of any person under,
(x) any indenture or other agreement, permit, concession,
franchise, license, mortgage, lease, Benefit Plan (as
defined in Section 3.1(h)) or similar obligation, instrument
or undertaking to which the Company or any of its
Subsidiaries is a party or by which the Company or any of
its Subsidiaries or any of their assets is bound or affected
or (y) any credit agreement or similar obligation,
instrument or undertaking to which the Company or any
Material Subsidiary is a party or by which the Company or
any Material Subsidiary or any of their assets is bound or
affected, or (iii) subject to the governmental filings and
other matters referred to in the following sentence,
contravene any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award, domestic or
foreign, applicable to the Company or any of its
Subsidiaries or their respective properties or assets,
which, in the case of clauses (ii) and (iii) above, would
have a Material Adverse Effect with respect to the Company.
No consent, approval, order or authorization of, or
registration, declaration or filing with, or notice to, any
court, governmental agency or regulatory authority, domestic
or foreign (a "Governmental Entity"), which has not been
received or made, is required by or with respect to the
Company or any Material Subsidiary in connection with the
execution and delivery of this Agreement by the Company or
the consummation by the Company of the transactions
contemplated hereby, except for (A) the filing of premerger
notification and report forms under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR
Act") with respect to the Merger, (B) the filing with the
SEC of such reports under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as may be required in
connection with this Agreement and the transactions
contemplated by this Agreement, (C) the filing of the
Certificate of Merger with the Delaware Secretary of State
and appropriate documents with the relevant authorities of
other states in which the Company is qualified to do
business, (D) such filings as may be required in connection
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with any state, local or foreign tax which is attributable
to beneficial ownership of real property, if any, by the
Company or any of its Subsidiaries, (E) such other consents,
approvals, authorizations, filings or notices as are set
forth in Section 3.1(c)(E) of the Disclosure Schedule and
(F) any applicable filings under state anti-takeover laws,
or filings, authorizations, consents or approvals the
failure to make or obtain which would not have a Material
Adverse Effect with respect to the Company.
(d) SEC Documents. (i) Each of the Company
and OSi Inc. has filed with the SEC all reports, schedules,
forms, statements and other documents required to be filed
by the Company or OSi Inc., as the case may be (such
reports, schedules, forms, statements and other documents
are hereinafter referred to as the "SEC Documents"); and
(ii) as of their respective dates, the SEC Documents
complied in all material respects with the requirements of
the Securities Act of 1933, as amended (the "Securities
Act"), or the Exchange Act, as the case may be, and the
rules and regulations of the SEC promulgated thereunder
applicable to such SEC Documents, and none of the SEC
Documents when filed contained any untrue statement of a
material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under
which they were made, not misleading. Except to the extent
that information contained in any SEC Document has been
revised or superseded by a Filed SEC Document (as defined in
Section 3.1(f)), none of the SEC Documents contains any
untrue statement of a material fact or omits 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 were made, not misleading.
(e) Financial Statements. (i) The audited
consolidated balance sheets of the Company and its
consolidated Subsidiaries as of December 31, 1994 and those
of OSi Inc. and its consolidated Subsidiaries as of December
31, 1993 and the audited statements of income, stockholders'
equity and cash flows of the Company and its consolidated
Subsidiaries for the year ended December 31, 1994 and those
of OSi Inc. and its consolidated Subsidiaries for the six
months ended December 31, 1993, in each case together with
the notes related thereto, included in the SEC Documents
comply as to form in all material respects with applicable
accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting
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principles applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto)
and fairly present the consolidated financial position of
the Company and its consolidated Subsidiaries as of the
dates thereof and the consolidated results of their
operations and cash flows for the periods then ended.
(ii) The unaudited condensed consolidated balance
sheets of the Company and its consolidated Subsidiaries and
the related unaudited condensed consolidated statements of
income and cash flows of the Company and its consolidated
Subsidiaries, in either case together with the notes related
thereto, that are included in the SEC Documents that have
been filed since December 31, 1994, comply as to form in all
material respects with applicable accounting requirements
and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with
generally accepted accounting principles for interim
financial information applied on a consistent basis during
such periods (except as may be indicated in the notes
thereto) and, subject to normal year end audit adjustments,
fairly present the consolidated financial position of the
Company and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and
cash flows for the periods then ended, and any adjustments
that are included therein are of a normal and recurring
nature.
(f) Absence of Certain Changes or Events; No
Undisclosed Material Liabilities. Except as disclosed in the
SEC Documents filed and publicly available prior to the date
of this Agreement (the "Filed SEC Documents") or in Section
3.1(f) of the Disclosure Schedule, since December 31, 1994,
the Company and its Subsidiaries have conducted their
business only in the ordinary course (other than with
respect to the process established by the Company for
entertaining offers to acquire the Company), and there has
not been (i) any change which would have a Material Adverse
Effect with respect to the Company, (ii) any declaration,
setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with
respect to any of the Company's outstanding capital stock,
(iii) any split, combination or reclassification of any of
the Company's outstanding capital stock or any issuance or
the authorization of any issuance of any other securities in
respect of, in lieu of or in substitution for shares of the
Company's outstanding capital stock, (iv) (A) any granting
by the Company or any of its Subsidiaries to any executive
officer or other employee of the Company or any of its
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Subsidiaries of any increase in compensation (including
bonuses), except in the ordinary course of business
consistent with prior practice or as was required under
employment agreements in effect as of December 31, 1994,
(B) any granting by the Company or any of its Subsidiaries
to any such executive officer of any increase in severance
or termination pay, except as was required under any
employment, severance or termination agreements in effect as
of December 31, 1994 or (C) any entry by the Company or any
of its Subsidiaries into any employment, severance or
termination agreement with any such executive officer,
(v) any change in accounting methods, principles or
practices by the Company or any of its Subsidiaries
materially affecting its assets or liabilities, except
insofar as may have been required by a change in generally
accepted accounting principles, (vi) any write-off or write-
down of, or any determination to write off or write down,
any asset of the Company or any of its Subsidiaries or any
portion thereof, the result of which individually or in the
aggregate would have a Material Adverse Effect with respect
to the Company, (vii) any amendment, termination, waiver,
disposal, or lapse of, or other failure to preserve, any
license, permit, or other form of authorization of the
Company or any of its Subsidiaries, the result of which
individually or in the aggregate would have a Material
Adverse Effect with respect to the Company, or (viii) any
agreements by the Company to do any of the things described
in the preceding clauses (i) through (vii) other than as
expressly contemplated or provided for herein. Except as
set forth in the most recent Filed SEC Document, as of the
date of this Agreement there are no material liabilities or
obligations of the Company or any of its Subsidiaries of any
kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, that would otherwise
have been required by applicable law or by generally
accepted accounting principles to be disclosed in such Filed
SEC Document had it arisen prior to the date of such Filed
SEC Document.
(g) Absence of Changes in Benefit Plans.
Except as disclosed in the Filed SEC Documents or in Section
3.1(g) of the Disclosure Schedule, since July 1, 1995,
neither the Company nor any of its Subsidiaries has adopted
or amended in any material respect or agreed to adopt or
amend in any material respect any collective bargaining
agreement or any Benefit Plan, except as required by
applicable law.
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<PAGE>
(h) Employee Benefit Plans. Section 3.1(h) of
the Disclosure Schedule identifies each employee benefit
plan (as that phrase is defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA")) and any other benefit or compensation plan,
program or arrangement maintained, administered or
contributed to by the Company or any ERISA Affiliate (as
defined in Section 8.3) for the benefit of any current or
former employee, officer or director of the Company or any
of its Subsidiaries (the "Benefit Plans"). The Company has
delivered or made available to Parent on or prior to August
22, 1995 true, complete, correct and current copies of (w)
each Benefit Plan (or, in the case of any unwritten Benefit
Plans, true, complete, correct and current descriptions
thereof), (x) the most recent annual report on Form 5500
filed with the Internal Revenue Service with respect to each
Benefit Plan (if any such report was required), (y) the most
recent summary plan description for each Benefit Plan of the
Company or any Material Subsidiary for which such summary
plan description is required and (z) each currently
effective trust agreement and insurance or group annuity
contract, including related actuarial report, relating to
any Benefit Plan of the Company or any Material Subsidiary.
The information furnished by the Company to the actuary in
connection with the preparation of each actuarial report in
clause (z) above was complete and accurate in all material
respects, and the Company has no reason to believe that any
conclusion in any such actuarial report is inaccurate.
Except as set forth in Section 3.1(h) of the
Disclosure Schedule, with respect to the Benefit Plans of
the Company and the Material Subsidiaries:
(i) none of such Benefit Plans is a
"multiemployer plan" within the meaning of Section 3(37) of
ERISA;
(ii) none of such Benefit Plans is subject to
Title IV of ERISA ("Pension Plans");
(iii) none of such Benefit Plans promises or
provides retiree medical or life insurance benefits to any
person, including through any organization described in
Section 501(c)(9) of the Code;
(iv) no employee of the Company or any
Material Subsidiary will be entitled to additional benefits,
increase of a benefit amount, the payment of a contingent
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<PAGE>
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;
(v) each such Benefit 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 Benefit Plan;
(vi) each such Benefit Plan has been
administered in all material respects in accordance with its
terms and the Company, each Material Subsidiary (with
respect to their respective duties and obligations under
each of such Benefit Plans) and such Benefit Plans are in
compliance in all material respects with applicable
provisions of ERISA, the Code and any other applicable law,
and there are no investigations by any Governmental Entity,
termination proceedings or other claims (except claims for
benefits payable in the normal operation of such Benefit
Plans), suits or proceedings against or involving any such
Benefit Plan or asserting any rights or claims to benefits
under any such Benefit Plan that could give rise to any
material liability, and there are not any facts that could
give rise to any material liability in the event of any such
investigation, claim, suit or proceeding;
(vii) neither the Company nor any ERISA
Affiliate has incurred any direct or indirect liability
under, arising out of or by operations of Title IV of ERISA
in connection with the termination of, or withdrawal from,
any such Benefit 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) (1) as of December 31, 1993, there was
no "accumulated funding deficiency" (as defined in Section
412 of the Code) with respect to any pension plan of the
Company or any ERISA Affiliate, whether or not waived, and
since that date there has been no material increase in
benefits under any such plan, and (2) all contributions
required to be made to any Benefit Plan have been timely
made and all such contributions for any period ending on or
before the Effective Time that are not yet, but will be,
required to be made, will be properly accrued and provided
for;
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(ix) nothing done or omitted to be done and
no transaction or holding of any asset under or in
connection with any such Benefit Plan has made or will make
the Company or any Material Subsidiary, any of their
employees, or, to the knowledge of the Company, a trustee,
administrator or other fiduciary of any trust created under
any such Benefit Plan to the tax or sanctions imposed by
Section 4975 of the Code or Title I of ERISA; no pension
plan of the Company or any ERISA Affiliate has been
terminated or has been the subject of a reportable event,
within the meaning of Section 4043 of ERISA, and no event
described in Section 4041, 4042, 4062 or 4063 of ERISA has
occurred in connection with any such Benefit Plan; and none
of the Company, any Material Subsidiary, and to the
knowledge of the Company, any trustee, administrator or
other fiduciary of any such Benefit Plan or any agent of any
of the foregoing has engaged in any transaction or acted in
a manner that could, or has failed to act so as to, subject
the Company, any such Material Subsidiary or any trustee,
administrator or other fiduciary to any liability for breach
of fiduciary duty under ERISA or any other applicable law;
(x) the information concerning the funded
status of any pension plan of the Company and any Subsidiary
of the Company described in the Company's Form 10-K for the
year ended December 31, 1994 is accurate in all material
respects;
(xi) neither the Company nor any ERISA
Affiliate has (a) engaged in a transaction described in
Section 4069 of ERISA that could subject the Company or any
Subsidiary of the Company to liability at any time after the
date hereof or (b) acted in a manner that could, or failed
to act so as to, result in fines, penalties, taxes or
related charges under (x) Section 502(c), (i) or (l) of
ERISA, (y) Section 4071 of ERISA or (z) Chapter 43 of the
Code; and
(xii) each Benefit Plan that is a "welfare
plan" (as defined in Section 3(1) of ERISA) may be amended
or terminated without material liability to the Company or
any of its Subsidiaries at any time after the Effective
Time; and the Company and its Subsidiaries comply with the
applicable requirements of Section 4980B(f) of the Code with
respect to each Benefit Plan that is a group health plan, as
such term is defined in Section 5000(b)(1) of the Code.
(i) Taxes. (i) Since July 9, 1993, each of
the Company, the Material Subsidiaries and the Company Group
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<PAGE>
(as defined below) has timely filed all Tax returns and
reports required to be filed by it (collectively, "Company
Returns") or requests for extensions to file Company Returns
have been timely filed, granted and have not expired. As of
the date of this Agreement, the Company has no reason to
believe that the Company Returns did not, as of the
respective times of filing, correctly reflect the facts
regarding income, business assets, operations, activities,
status and the Tax liability of the Company, the Material
Subsidiaries and the Company Group, except for any such
inaccuracies that would not have a Material Adverse Effect
with respect to the Company, the applicable Material
Subsidiary or the Company Group, as the case may be. For
purposes of this paragraph, Company Returns shall be deemed
to include any Tax return for the 1994 taxable year, which
shall be deemed to be filed on the date hereof even if filed
after the date hereof. The Company, each Material
Subsidiary and the Company Group have timely paid (or the
Company has timely paid on such Material Subsidiary's and
Group's behalf) all Taxes shown as due on Company Returns,
and has made or will make provision for Taxes payable for
any taxable period, or portions thereof, that begins before
the Effective Time and for which no Company Returns have
been filed.
(ii) No material deficiencies for any Taxes
have been proposed, asserted or assessed against the
Company, any Material Subsidiary or the Company Group that
are not adequately reserved for, as determined in accordance
with generally accepted accounting principles, in the most
recent financial statements contained in the Filed SEC
Documents, and, except as set forth in Section 3.1(i) of the
Disclosure Schedule, no requests for waivers of the time to
assess any such Taxes have been granted or are pending.
Except as set forth in Section 3.1(i) of the Disclosure
Schedule, at the date hereof, none of the Company Returns
have been examined by the United States Internal Revenue
Service or any other appropriate taxing authority.
(iii) Except as set forth in Section 3.1(i)
of the Disclosure Schedule, no federal, state or local
income or franchise tax audits or other administrative
proceedings or court proceedings are pending at the date
hereof with regard to any federal, state or local income or
franchise Taxes for which the Company, any Material
Subsidiary or the Company Group would be liable.
(iv) None of the Company, any of its
Subsidiaries or the Company Group has any contractual
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obligations under any Tax sharing agreement with any
corporation that, as of the Effective Time, is not a member
of the Company Group.
(v) As used in this Agreement, "Taxes" shall
include all Federal, state, local and foreign income,
property, sales, excise, employment, payroll, withholding
and other taxes, tariffs or governmental charges of any
nature whatsoever together with any interest and any
penalties or additions to tax imposed by any taxing
authority. As used in this Agreement, "Company Group" shall
mean with respect to Federal income Taxes, the Affiliated
group of corporations (as defined in Section 1504(a) of the
Code) of which the Company is a member and, with respect to
state or local income or franchise Taxes or foreign Taxes,
the consolidated, combined or unitary group of which the
Company or any of its Affiliates is a member.
(j) Voting Requirements. The affirmative vote
of a majority of the votes cast by the holders of the shares
of all classes of Company Common Stock entitled to vote
thereon, voting together as a single class, with respect to
the approval of the Merger is the only vote of the holders
of any class or series of the Company's capital stock
necessary to approve this Agreement and the transactions
contemplated by this Agreement. The Company (i) has obtained
such approval pursuant to the written consent of the holders
of a majority of the outstanding Company Common Stock
entitled to vote thereon and (ii) will send written notice
of such approval to the extent necessary to each holder of
shares of Company Common Stock who did not so consent, in
each case in accordance with Section 228 of the DGCL.
(k) Compliance with Applicable Laws. Each of
the Company and each Material Subsidiary has in effect all
Federal, state, local and foreign governmental approvals,
authorizations, certificates, filings, franchises, licenses,
notices, permits and rights necessary for it to own, lease
or operate its properties and assets and to carry on its
business as now conducted ("Permits", including Permits
required under Environmental Law). Since July 9, 1993, there
has occurred no default under any such Permit held by the
Company or any Material Subsidiary, except for the lack of
Permits and for defaults under Permits which lack or
defaults is not reasonably likely to have a Material Adverse
Effect with respect to the Company or such Material
Subsidiary, as the case may be (and further qualified, in
the case of OSi Specialties do Brazil Ltda.,
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to the knowledge of the Company). Except as disclosed in
the Filed SEC Documents or as set forth in Section 3.1(k) of
the Disclosure Schedule, each of the Company and each
Material Subsidiary is in compliance with the terms of the
Permits and with all applicable statutes, laws, ordinances,
rules, orders and regulations of any Governmental Entity,
except for possible noncompliance which is not reasonably
likely to have a Material Adverse Effect with respect to the
Company or such Material Subsidiary, as the case may be (and
further qualified, in the case of OSi Specialties do Brazil
Ltda., to the knowledge of the Company).
(l) Brokers; Schedule of Fees and Expenses.
No broker, investment banker, financial advisor or other
person, other than Donaldson, Lufkin & Jenrette Securities
Corporation, the fees and expenses of which will be paid by
the Company and will be deducted from the amount of the
Consideration payable by Parent and Sub pursuant to Article
II, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based
upon arrangements made by or on behalf of the Company.
"Transaction Fees" means the aggregate amount of out-of-
pocket professional and financial advisory fees and expenses
incurred and to be incurred by the Company prior to the
Effective Time in connection with this Agreement and the
transactions contemplated by this Agreement (including the
fees of the Company's legal counsel), an estimate of which
is set forth in Section 3.1(l) of the Disclosure Schedule.
The Transaction Fees will be deducted from the amount of
Consideration payable by Parent and Sub pursuant to Article
II.
(m) Litigation, etc. As of the date hereof,
except as disclosed in Section 3.1(m) of the Disclosure
Schedule, there is no suit, claim, action or proceeding (at
law or in equity) pending or, to the knowledge of the
Company, threatened against or affecting the Company or any
Subsidiary of the Company before any Governmental Entity
which could reasonably be expected to have a Material
Adverse Effect with respect to the Company or such
Subsidiary, as the case may be (and further qualified, in
the case of any Subsidiary of the Company that is not a
Material Subsidiary, with respect to any such pending suit,
claim, action or proceeding, to the knowledge of the
Company). As of the date hereof, there are no such suits,
actions, claims, proceedings or investigations pending or,
to the knowledge of the Company, threatened, seeking to
prevent, hinder or materially delay the transactions
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contemplated by this Agreement. Neither the Company nor any
Subsidiary of the Company is subject to any outstanding
order, writ, injunction or decree that could reasonably be
expected to have a Material Adverse Effect with respect to
the Company or such Subsidiary, as the case may be (and
further qualified, in the case of any Subsidiary of the
Company that is not a Material Subsidiary, to the knowledge
of the Company).
(n) Intellectual Property. Section 3.1(n) of
the Disclosure Schedule sets forth a true and complete list
as of the date hereof (i) all United States and foreign
patents, trademark and service mark registrations, copyright
registrations and applications for the Company or any
Material Subsidiary owned by or licensed to the Company or
any Material Subsidiary (in each case, free and clear of any
Liens in respect of such owned or licensed interests, as the
case may be, other than Liens existing pursuant to the
Credit Agreement) which are material to the conduct of the
business of the Company and the Material Subsidiaries taken
as a whole; (ii) all licenses granted to or by the Company
or any Material Subsidiary pursuant to written agreement
pertaining to patents, patent applications, proprietary
technology, inventions, trademarks, service, marks, trade
names and copyrights (collectively "Intellectual Property")
which are material to the conduct of the business of the
Company and the Material Subsidiaries taken as a whole;
(iii) all written development and settlement agreements
pertaining to Intellectual Property which are material to
the conduct of the business of the Company or any Material
Subsidiary; and (iv) all suits, actions, proceedings
(including infringement, misappropriation, interference,
opposition, revocation, cancellation and conflict
proceedings) and written claims presently pending or, to the
knowledge of the Company, threatened, and all final orders,
injunctions, judgments, writs, edicts, awards and decrees
presently outstanding, pertaining to any Intellectual
Property that is either (a) described in this Section
3.1(n), or (b) owned by any third party and asserted (or, to
the knowledge of the Company, threatened in writing since
July 9, 1993 to be asserted) against the Company or any
Material Subsidiary.
(o) Environmental Laws. (i) The operations of
the Company and the Material Subsidiaries, since July 9,
1993, have been and are in compliance with all Environmental
Laws (as defined herein), other than for such noncompliance
that would not have, individually or in the aggregate, a
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Material Adverse Effect with respect to the Company or such
Material Subsidiary, as the case may be. The Company and
the Material Subsidiaries have obtained and are in
compliance with all Permits required under Environmental
Laws, other than such Permits the absence of which or the
noncompliance with which, individually or in the aggregate,
would not have a Material Adverse Effect with respect to the
Company or such Material Subsidiary, as the case may be, and
all such Permits are freely transferable or will remain in
full force and effect under the circumstances contemplated
by the Merger and the other transactions contemplated by
this Agreement.
(ii) The Company and the Material
Subsidiaries have no actual or contingent liabilities with
respect to any release, as such term is defined under any
Environmental Law, since July 9, 1993 of Hazardous Materials
(as defined herein) at any currently or previously owned or
operated property or in connection with the off-site
shipment of such Hazardous Materials which would have a
Material Adverse Effect with respect to the Company or such
Material Subsidiary, as the case may be, nor is the Company
aware of any circumstances, facts or conditions that could
reasonably be expected to give rise to such liabilities.
(iii) The Company and the Material
Subsidiaries have provided to Parent all environmentally
related audits, studies, reports, analyses and results of
investigations that have been performed by or on behalf of
the Company since July 9, 1993 with respect to currently or
previously owned, leased or operated properties.
(iv) Except as set forth in Section 3.1(o) of
the Disclosure Schedule or to the extent any such matter
would not result in a Material Adverse Effect with respect
to the Company or a Material Subsidiary, as the case may be,
(A) neither the Company nor such Material Subsidiary, and to
the knowledge of the Company, no other Person has, since
July 9, 1993, disposed of, released, as such term is defined
under any Environmental Law, or placed any Hazardous
Materials on, under or at any property owned, operated or
leased by the Company or such Material Subsidiary other than
in compliance with applicable Environmental Law; (B) there
are no polychlorinated biphenyls (PCBs), no friable
asbestos-containing materials, no underground storage tanks
used to store Hazardous Materials at any property owned,
operated, or leased by the Company or such Material
Subsidiary; and (C) there are no Liens arising under or
pursuant to any applicable
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Environmental Laws on property owned, operated by the
Company or such Material Subsidiary.
(v) For purposes of this Agreement,
"Hazardous Materials" means any substance, material or waste
which is regulated by any local, state or federal
governmental body in the jurisdiction in which the Company
or any Material Subsidiary conducts business, or the United
States, including any material or substance which is defined
as a "hazardous waste," "hazardous material," "hazardous
substance," "extremely hazardous waste" or "restricted
hazardous waste," "subject waste," "contaminant," "toxic
waste" or "toxic substance" under any provision of
Environmental Law, including petroleum products, asbestos,
radioactive material and polychlorinated biphenyls. For
purposes of this Section, "Environmental Law" means any
foreign, federal, state or local statute, regulation,
ordinance, decree, order or rule of common law in any way
relating to human health and safety or the environment
including the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. ss. 9601 et seq.),
the Hazardous Materials Transportation Act (49 U.S.C. ss.
1801 et seq.), the Resource Conservation and Recovery Act
(42 U.S.C. ss. 6901 et seq.), the Clean Water Act (33 U.S.C.
ss. 1251 et seq.), the Clean Air Act (42 U.S.C. ss. 7401 et
seq.), the Toxic Substances Control Act (15 U.S.C. ss. 2601
et seq.), the Federal Insecticide, Fungicide, and
Rodenticide Act (7 U.S.C. ss. 136 et seq.), and the
Occupational Safety and Health Act (29 U.S.C. ss. 651 et
seq.), as each has been amended from time to time, the
regulations promulgated pursuant thereto, and any, Permits
required thereunder.
(p) Title to Properties; Encumbrances. Except
as set forth in Section 3.1(p) of the Disclosure Schedule,
each of the Company and the Material Subsidiaries has good
and valid title to (a) all material tangible properties and
assets (real and personal) owned by the Company and the
Material Subsidiaries, respectively, including all the
properties and assets reflected in the consolidated balance
sheet as of December 31, 1994, except as indicated in the
notes thereto and except for any such properties and assets
which have been sold or otherwise disposed of in the
ordinary course of business, and (b) all the tangible
properties and assets purchased by the Company and any
Material Subsidiary since June 30, 1995, except for such
properties and assets which have been sold or otherwise
disposed of in the ordinary course of business, in each case
subject to no Lien, in each case except for (1) Liens
reflected in the Company's most recently audited
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consolidated financial statements included in the Filed SEC
Documents, (2) Liens consisting of zoning or planning
restrictions, easements, permits and other restrictions or
limitations on the use of real property which do not
materially detract from the value of, or impair the use of,
such property by the Company or any Material Subsidiary in
the operation of its respective business as presently
conducted and (3) Liens for current taxes, assessments or
governmental charges or levies on property not yet due and
delinquent.
(q) Real Property; Leases of Real Property.
Section 3.1(q) of the Disclosure Schedule contains a
complete and correct list of the real property owned by or
leased to the Company and/or any Material Subsidiary, and
with respect to such leased property, all material lease
agreements relating thereto. Except as set forth in Section
3.1(q) of the Disclosure Schedule, all of such leases are in
full force and effect. Complete and correct copies of each
such lease have been furnished or made available to Parent
on or prior to August 22, 1995. Assuming such leases
constitute the valid and binding agreement of the third
parties party thereto, except as set forth in Section 3.1(q)
of the Disclosure Schedule, all such leases are valid and
binding obligations of the Company and the Material
Subsidiaries, as the case may be, have not been amended or
modified, and upon consummation of the transactions
contemplated hereby, will continue to entitle the Company or
any such Material Subsidiary (as the case may be) to the use
and possession of the real property specified in such leases
and for the purposes for which such real property is now
being used by the Company or any such Material Subsidiary
(as the case may be). Except as set forth in Section 3.1(q)
of the Disclosure Schedule, neither the Company nor any
Material Subsidiary is in default or, since July 9, 1993,
has received written notice of default under any such lease,
and to the Company's knowledge, there has been no default
thereunder by any third party.
(r) Insurance. Section 3.1(r) of the
Disclosure Schedule contains a complete and correct list of
all fire and other casualty and liability insurance policies
covering the Company and/or the Material Subsidiaries, and
such policies are in full force and effect. Complete and
correct copies of the commitments in respect of each such
policy have been furnished or made available to Parent.
(s) Material Contracts. Except as listed in
Section 3.1(s) of the Disclosure Schedule, neither the
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Company nor any Material Subsidiary is a party to any
(i) material contract not made in the ordinary course of
business; (ii) contract for the employment of any officer or
key employee; (iii) franchise, distributorship or sales
agency agreement providing for annual payments thereunder in
excess of $1,000,000; (iv) contract for the future purchase
of materials, supplies, merchandise or equipment providing
for annual payments thereunder in excess of $1,000,000;
(v) agreement for the sale or lease of any of the assets of
the Company and/or any Material Subsidiary other than in the
ordinary course of business; (vi) contract or commitment for
capital expenditures in excess of $1,000,000;
(vii) mortgage, pledge, conditional sales contract, security
agreement, factoring agreement, or other similar agreement
with respect to any material real or personal property of
the Company and/or any Material Subsidiary; (viii) lease of
machinery or equipment involving annual payments in excess
of $1,000,000; (ix) agreement with a labor union or labor
association; (x) loan or credit agreement, note, bond,
mortgage, indenture or other agreement or instrument
pursuant to which any indebtedness of the Company or any of
its Subsidiaries is outstanding or may be incurred (other
than indebtedness issued by a Subsidiary of the Company to
the Company or another of its Subsidiaries) (where
"indebtedness" for this purpose shall mean, with respect to
any person, without duplication, (A) all obligations of such
person for borrowed money, (B) all obligations of such
person evidenced by bonds, debentures, notes or similar
instruments, (C) all obligations of such person under
conditional sale or other title retention agreements or as
part of deferred purchase price arrangements, (D) all
capitalized lease obligations of such person, (E) all
obligations of other persons secured, guaranteed or
otherwise assumed by such person, (F) all obligations of
such person under interest rate or currency hedging
transactions and (G) all letters of credit issued for the
account of such person), and Section 3.1(s) of the
Disclosure Schedule sets forth the Company's consolidated
long-term debt (net of cash and cash equivalents) position
as of August 31, 1995 as would have been stated in a
consolidated balance sheet at such date prepared in
accordance with generally accepted accounting principles;
(xi) except as set forth in Schedule 3.1(h) of the
Disclosure Schedule, stock option, retirement, severance,
pension, bonus, profit sharing, group insurance, medical or
other fringe benefit plan or program providing employee
benefits; (xii) any agreement providing for the
indemnification of any officer, director or employee;
(xiii) consulting agreement providing for annual payments
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thereunder in excess of $1,000,000; or (xiv) any non-compete
or similar agreement which in any way restricts the
operation of the Company's business, other than restrictions
in licenses providing for the exclusive use of certain
Intellectual Property. Complete and correct copies of each
such agreement have been furnished or made available to
Parent. Except as set forth in Section 3.1(s) of the
Disclosure Schedule, the Company and each Material
Subsidiary party thereto have performed all of the
obligations required to be performed by them to date and
(x) are not in default in any material respect under any of
the agreements, leases, contracts or other documents
referred to in clause (iv) above that are identified in
Section 3.1(s) of the Disclosure Schedule and (y) are not in
default in any respect under any of the other agreements,
leases, contracts or other documents not referred to in
clause (x) that are identified in Section 3.1(s) of the
Disclosure Schedule, except for such defaults which would
not, individually or in the aggregate, have a Material
Adverse Effect with respect to the Company. Except as set
forth in Section 3.1(s) of the Disclosure Schedule, to the
Company's knowledge, no party with whom the Company or any
Material Subsidiary has an agreement which is of material
importance to the businesses of the Company or such Material
Subsidiary taken as a whole is in material default
thereunder. Except as disclosed in Section 3.1(s) of the
Disclosure Schedule or in the express terms of any such
agreement furnished or made available to Parent, consent of
the other parties to each such agreement is not required in
order for the Surviving Corporation to retain all rights
under each such agreement.
(t) Labor Disputes. There are no strikes or
other labor disputes (other than possible individual
employee grievances) against the Company or any Material
Subsidiary pending or, to the knowledge of the Company,
threatened.
(u) Related Party Transactions and Interests.
Except with respect to certain intercompany arrangements in
the ordinary course of business and as disclosed in the
Filed SEC Documents and except with respect to the fees and
expenses payable to Donaldson, Lufkin & Jenrette Securities
Corporation referred to in Section 3.1(i), neither the
Company nor any executive officer or director of the Company
or OSi Inc. (i) has borrowed any monies from or has
outstanding any indebtedness or other similar obligations to
the Company or any of the Material Subsidiaries in excess of
$60,000 principal amount in the aggregate or (ii) owns any
direct or indirect
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interest of any kind in, or controls or is a director,
officer, employee or partner of, or consultant to, or lender
to or borrower from or has the right to participate in the
profits of, any person which is (A) a competitor, supplier,
customer, landlord, tenant, creditor or debtor of the
Company or any Material Subsidiary, (B) engaged in a
business related to the business of the Company and the
Material Subsidiaries or (C) participating in any
transaction to which the Company or any Material Subsidiary
is a party. Notwithstanding anything in the foregoing to
the contrary, the Company or any executive officer or
director of the Company or any Material Subsidiary may make
investments in a company or companies whose stock is listed
on a national securities exchange or actively traded in the
over-the-counter market, which investment does not give the
Company the right to control or influence the policy
decisions of any such company.
(v) Unlawful Payments and Contributions. To
the knowledge of any director or executive officer of the
Company, neither the Company, any Subsidiary nor any of
their respective directors, officers or any of their
respective employees or agents has (i) used any Company
funds for any unlawful contribution, endorsement, gift,
entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government
official or employee; (iii) violated or is in violation of
any provision of the Foreign Corrupt Practices Act of 1977,
as amended; or (iv) made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any
person.
(w) No Actions Relating to Silicone Gel.
During the period from and after July 9, 1993, neither the
Company nor any of its Subsidiaries, affiliates, directors,
officers, employees or agents (i) has engaged in the
production or distribution of silicone gel for use in
connection with any of the Specified Purposes (as defined
herein) or (ii) has conducted research on, provided
information regarding, or in any manner facilitated any
person with the production or distribution of, silicone gel
for use in connection with any of the Specified Purposes.
For purposes of this Agreement, "Specified Purposes" means
those purposes referred to in Section 3.2(iii) of the Asset
Purchase and Sale Agreement dated as of April 12, 1993
between Union Carbide Chemicals and Plastics Company Inc.
("Union Carbide") and OSi Inc. (the "Union Carbide
Agreement").
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SECTION 3.2. Representations and Warranties of
Parent and Sub. Parent and Sub represent and warrant to the
Company as follows:
(a) Organization, Standing and Corporate
Power. Each of Parent and Sub is a corporation duly
organized, validly existing and in good standing under the
laws of the jurisdiction in which it is incorporated and has
the requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as
now being conducted. Each of Parent and Sub is duly
qualified or licensed to do business and is in good standing
in each jurisdiction in which the nature of its business or
the ownership or leasing of its properties makes such
qualification or licensing necessary, other than in such
jurisdictions where the failure to be so qualified or
licensed (individually or in the aggregate) would not have a
Material Adverse Effect with respect to Parent. Parent has
delivered, and Sub will deliver, to the Company complete and
correct copies of their Certificates of Incorporation and
By-laws, as amended to the date of this Agreement.
(b) Authority; Noncontravention. Parent and
Sub have all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions
contemplated by this Agreement. The execution and delivery
of this Agreement by Parent and Sub and the consummation by
Parent and Sub of the transactions contemplated by this
Agreement have been duly authorized by all necessary
corporate action on the part of Parent and Sub and by
Parent, as the sole stockholder of Sub. This Agreement has
been duly executed and delivered by and, assuming this
Agreement constitutes the valid and binding agreement of the
Company, constitutes a valid and binding obligation of each
of Parent and Sub, enforceable against such party in
accordance with its terms. The execution and delivery of
this Agreement do not, and the consummation of the
transactions contemplated by this Agreement and compliance
with the provisions of this Agreement will not, (i) conflict
with any of the provisions of the Certificates of
Incorporation or By-laws of Parent or the Certificate of
Incorporation or By-laws of Sub, (ii) subject to the
governmental filings and other matters referred to in the
following sentence, conflict with, result in a breach of or
default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation
or acceleration of any obligation or loss of a material
benefit under, or require the consent of any person under,
any indenture, or other agreement, permit, concession,
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franchise, license, credit agreement, mortgage, lease,
employee benefit plan or similar obligation, instrument or
undertaking to which Parent or any of its subsidiaries is a
party or by which Parent or any of its subsidiaries or any
of their assets is bound or affected, or (iii) subject to
the governmental filings and other matters referred to in
the following sentence, contravene any law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or award, domestic or foreign, applicable to
Parent or Sub or their respective properties or assets
which, in the case of clauses (ii) and (iii) above, would
have a Material Adverse Effect with respect to Parent. No
consent, approval, order or authorization of, or
registration, declaration or filing with, or notice to, any
Governmental Entity which has not been received or made is
required by or with respect to Parent or Sub in connection
with the execution and delivery of this Agreement by Parent
or Sub or the consummation by Parent or Sub, as the case may
be, of any of the transactions contemplated by this
Agreement, except for (A) the filing of premerger
notification and report forms under the HSR Act with respect
to the Merger, (B) the filing with the SEC of such reports
under the Exchange Act as may be required in connection with
this Agreement and the transactions contemplated hereby, (C)
the filing of the Certificate of Merger with the Delaware
Secretary of State, and appropriate documents with the
relevant authorities of other states in which the Company is
qualified to do business, (D) such other consents,
approvals, authorizations, filings or notices as are set
forth in Section 3.1(c)(E) of the Disclosure Schedule and
(E) any applicable filings under state antitakeover laws, or
filings, authorizations, consents or approvals the failure
to make or obtain which, in the aggregate, would not have a
Material Adverse Effect with respect to Parent.
(c) Voting Requirements. No vote of the
holders of the shares of any class or series of capital
stock of Parent is necessary to approve this Agreement or
consummate the transactions contemplated by this Agreement.
(d) No Prior Activities. Sub has not
incurred, and will not incur, directly or through any
Subsidiary, any liabilities or obligations for borrowed
money or otherwise, except incidental liabilities or
obligations not for borrowed money incurred in connection
with its organization and except in connection with
obtaining financing in connection with the Merger. Except as
contemplated by this Agreement, Sub (i) has not engaged,
directly or through any Subsidiary, in any business
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activities of any type or kind whatsoever, (ii) has not
entered into any agreements or arrangements with any person
and (iii) is not subject to or bound by any obligation or
undertaking.
(e) Brokers. No broker, investment banker,
financial advisor or other person, other than J.P. Morgan &
Co. Incorporated and The Chase Manhattan Bank, N.A., the
fees and expenses of which will be paid by Parent, is
entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Parent.
(f) Financing. The Parent has access to funds
necessary to consummate the Merger and the transactions
contemplated thereby, and to pay all related fees and
expenses.
(g) Employee Benefit Plans. Parent intends to
cause the Surviving Corporation and its Subsidiaries to
maintain for a period of two years following the Effective
Time employee benefit plans, arrangements or policies (other
than stock based plans) which provide benefits to employees
of the Surviving Corporation and its Subsidiaries that are
comparable in the aggregate to those currently provided by
the Benefit Plans. Thereafter, Parent intends to maintain
health and welfare plans which provide benefits to such
employees that are at least comparable in the aggregate to
those enjoyed by similarly situated employees of Parent or
its relevant foreign subsidiaries.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
PRIOR TO MERGER
SECTION 4.1. Conduct of Business of the Company.
Except as expressly contemplated by this Agreement, during
the period from the date of this Agreement to the Effective
Time, the Company shall, and shall cause its Subsidiaries
to, act and carry on their respective businesses in the
ordinary course of business and, to the extent consistent
therewith, use reasonable efforts to preserve intact their
current business organizations, keep available the services
of their current key officers and employees and preserve the
goodwill of those engaged in material business relationships
with them. Without limiting the generality of the
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foregoing, during the period from the date of this Agreement
to the Effective Time, the Company shall not, and shall not
permit any of its Subsidiaries to, without the prior consent
of Parent:
(i) (x) declare, set aside or pay any
dividends on, or make any other distributions (whether in
cash, stock or property) in respect of, any of its
outstanding capital stock, other than dividends and
distributions by a direct or indirect wholly owned
Subsidiary of the Company to its parent, (y) 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 capital
stock or (z) purchase, redeem or otherwise acquire any
shares of its capital stock or any other securities thereof
or any rights, warrants or options to acquire any such
shares or other securities except, in the case of this
clause (z), for (A) the acquisition of shares of Common
Stock from holders of Options in full or partial payment of
the exercise price payable by such holder upon exercise of
Options outstanding on the date of this Agreement and in
accordance with their present terms and (B) the purchase of
shares of Common Stock from a holder thereof in the ordinary
course of business in connection with the termination of
such holder's employment with the Company or a Subsidiary of
the Company;
(ii) issue, deliver, sell, grant, pledge or
otherwise encumber any shares of its capital stock, any
other voting securities or any securities convertible into,
or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities other
than upon the exercise of Options outstanding on the date of
this Agreement and in accordance with their present terms;
(iii) amend its certificate of incorporation,
by-laws or other comparable charter or organizational
documents;
(iv) acquire (by merger, acquisition of stock
or assets or otherwise) (A) any business or any corporation,
partnership, joint venture, association or other business
organization or division thereof or (B) any assets that
individually or in the aggregate are material to the Company
and its Subsidiaries taken as a whole, except purchases of
inventory, supplies and assets acquired through capital
expenditures permitted under clause (x) below in the
ordinary course of business;
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(v) sell, lease, license, mortgage or
otherwise encumber or subject to any Lien or otherwise
dispose of any of its properties or assets except in the
ordinary course of business (which shall include all Liens
arising under the Credit Agreement);
(vi) (A) incur any indebtedness for borrowed
money or guarantee any such indebtedness of another person,
other than (x) indebtedness owing to, or guarantees of
indebtedness owing to, the Company or any direct or indirect
wholly owned Subsidiary of the Company, (y) long-term
indebtedness incurred pursuant to the financing plan
attached hereto as Schedule A or (z) additional immaterial
amounts of short-term indebtedness incurred in the ordinary
course of business, in respect of which the Company shall
provide a weekly written report to Parent detailing all such
indebtedness, or (B) make any loans or advances to any other
person, other than to the Company or to any direct or
indirect wholly owned Subsidiary of the Company and other
than routine business travel and entertainment advances to
employees;
(vii) pay, discharge, settle or satisfy any
claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than
the payment, discharge or satisfaction, in the ordinary
course of business consistent with past practice or in
accordance with their terms, of liabilities reflected or
reserved against in, or contemplated by, the most recent
consolidated financial statements (or the notes thereto) of
the Company included in the Filed SEC Documents or incurred
since the date of such financial statements in the ordinary
course of business consistent with past practice;
(viii) except in the ordinary course of
business, modify, amend or terminate any material agreement,
permit, concession, franchise, license or similar instrument
to which the Company or any Subsidiary is a party or waive,
release or assign any material rights or claims thereunder;
(ix) except as required to comply with
applicable law or as otherwise expressly required by this
Agreement, (A) adopt, enter into, terminate or amend any
Benefit Plan or other arrangement for the benefit or welfare
of any director, officer or current or former employee, (B)
increase in any manner the compensation or fringe benefits
of any director, officer or employee, except in accordance
with the Company's 1995 salary plan included in the
Company's budget (a copy of which has been provided to
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Parent), (C) pay any benefit not provided for under any
Benefit Plan, (D) grant any awards under any bonus,
incentive, performance or other compensation plan or
arrangement or Benefit Plan (including the grant of stock
options, stock appreciation rights, stock based or stock
related awards, performance units or restricted stock, or
the removal of existing restrictions in any Benefit Plans or
agreement or awards made thereunder), except for amounts
accrued therefor in accordance with the Company's 1995
salary plan included in the Company's budget (a copy of
which has been provided to Parent), or (E) take any action
to fund or in any other way secure the payment of
compensation or benefits in excess of amounts required to be
so funded or paid under the terms of any employee plan,
agreement, contract, arrangement or Benefit Plan existing on
the date hereof;
(x) make any new capital expenditure or
expenditures in excess of those set forth in Section 4.1 of
the Disclosure Schedule which individually is in excess of
$1,000,000 or in the aggregate is in excess of $5,000,000;
(xi) (A) except as it may relate to any Tax
return for the 1994 taxable year, make any Tax election
affecting a material amount of Tax liability or (B) settle
or compromise any material Tax liability;
(xii) take any action other than in the
ordinary course of business and in a manner consistent with
past practice (none of which actions shall be unreasonable
or unusual) with respect to the payments of accounts
payable, collection of accounts receivable or any other
component of working capital; and
(xiii) authorize any of, or commit or agree
to take any of, the foregoing actions.
SECTION 4.2. Other Actions. (a) The Company and
Parent shall not, and shall not permit any of their
respective Subsidiaries to, take any action that would, or
that could reasonably be expected to, result in (i) any of
the representations and warranties of such party set forth
in this Agreement becoming untrue in any material respect or
(ii) any of the conditions of the Merger set forth in
Article VI not being satisfied.
(b) From the date hereof until the Effective
Time, (i) the Company and its Subsidiaries will file all
material Tax returns, statements, reports and forms
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(collectively, the "Company Post-Signing Returns") required
to be filed with any taxing authority in accordance with all
applicable laws, (ii) the Company and its Subsidiaries will
timely pay all Taxes shown as due and payable on the Company
Post-Signing Returns that are so filed and as of the time of
filing, the Company Post-Signing Returns will correctly
reflect the facts regarding the income, business, assets,
operations, activities and the status of the Company and its
Subsidiaries in all material respects, (iii) the Company and
its Subsidiaries will make provision for all Taxes payable
by the Company and its Subsidiaries for which no Company
Post-Signing Return is due prior to the Effective Time and
(iv) the Company and its Subsidiaries will promptly notify
Parent of any action, suit, proceeding, investigation, audit
or claim pending against or with respect to the Company or
any of its Subsidiaries in respect of any Tax where there is
a reasonable possibility of a determination or decision
which would reasonably be expected to have a significant
adverse effect of the Company's Tax liabilities or other Tax
attributes. In addition, the Company and the Material
Subsidiaries shall take any actions necessary to cause any
tax sharing or similar agreements with respect to or
involving the Company and any Material Subsidiary to be
terminated as of the Effective Time, with no liability
thereunder continuing thereafter.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1. Access to Information;
Confidentiality. The Company shall, and shall cause each of
its Subsidiaries to, afford to Parent and to the officers,
employees, counsel, financial advisors and other
representatives of Parent reasonable access during normal
business hours during the period prior to the Effective Time
to all its properties, books, contracts, commitments,
personnel and records and, during such period, the Company
shall, and shall cause each of its Subsidiaries to, furnish
as promptly as practicable to Parent such information
concerning its business, properties, financial condition,
operations and personnel as Parent may from time to time
reasonably request. Parent will hold, and will cause its
respective directors, officers, partners, employees,
accountants, counsel, financial advisors and other
representatives and affiliates (as defined in Section 8.3)
to hold, any information obtained from the Company in
confidence in accordance with the provisions of the
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confidentiality agreement previously entered into between
Parent and the Company.
SECTION 5.2. Commercially Reasonable Best Efforts.
Upon the terms and subject to the conditions and other
agreements set forth in this Agreement, each of the parties
agrees to use its commercially reasonable best efforts to
take, or cause to be taken, all actions, and to do, or cause
to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable
to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions
contemplated by this Agreement, including the satisfaction
of the respective conditions set forth in Article VI.
SECTION 5.3. Indemnification and Insurance. Parent
and Sub agree that all rights to indemnification and
exculpation from liability for acts or omissions occurring
prior to the Effective Time now existing in favor of the
current or former directors or officers of the Company and
its Subsidiaries as provided in their respective
certificates of incorporation or by-laws shall survive the
Merger and shall continue in full force and effect in
accordance with their terms (whether or not actually amended
pursuant to Section 1.5(b) or otherwise) for a period of not
less than six years from the Effective Time. Parent shall
cause to be maintained for a period of three years from the
Effective Time the Company's current directors' and
officers' insurance and indemnification policy to the extent
that it provides coverage for events occurring prior to the
Effective Time (the "D&O Insurance") for all persons who are
directors or officers of the Company or any Subsidiary on
the date of this Agreement, so long as the annual premium
therefor would not be in excess of 175% of the last annual
premium paid prior to the date of this Agreement (175% of
such premium, the "Maximum Premium"); provided, however,
that Parent may, in lieu of maintaining such existing D&O
Insurance as provided above, cause comparable coverage to be
provided under any policy maintained for the benefit of the
directors and officers of Parent or any of its Subsidiaries,
so long as (i) the issuer thereof has at least an equal
claims-paying ability and (ii) the material terms thereof
are no less advantageous than the existing D&O Insurance to
the extent commercially available. If the existing D&O
Insurance expires, is terminated or cancelled during such
three-year period, Parent will use all reasonable efforts to
cause to be obtained as much D&O Insurance as can be
obtained for the remainder of such
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period for an annualized premium not in excess of the
Maximum Premium, on terms and conditions no less
advantageous than the existing D&O Insurance to the extent
commercially available. The Company represents to Parent
that the Maximum Premium is $341,250.
SECTION 5.4. Public Announcements. Parent and Sub,
on the one hand, and the Company, on the other hand, will
consult with each other before issuing, and provide each
other the opportunity to review and comment upon, any press
release or other public statements with respect to the
transactions contemplated by this Agreement, including the
Merger, and shall not issue any such press release or make
any such public statement prior to such consultation, except
as may be required by applicable law, court process or by
obligations pursuant to any listing agreement with any
national securities exchange.
SECTION 5.5. Acquisition Proposals. The Company,
its Subsidiaries and their respective officers, directors,
employees, representatives, agents or affiliates (including
any investment banker, attorney or accountant retained by
the Company or any of its Subsidiaries) (collectively, the
"Company Representatives") shall immediately cease any
discussions or negotiations with any person other than
Parent that may be ongoing with respect to an Acquisition
Proposal (as defined below). From and after the date hereof
until the termination of this Agreement, the Company shall
not, nor shall it permit any of its Subsidiaries or Company
Representatives to, directly or indirectly, (i) solicit,
initiate or encourage the submission of any Acquisition
Proposal or (ii) participate in any discussions or
negotiations regarding, or furnish to any person any
information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal. Notwithstanding anything in this
Agreement to the contrary, the Company shall promptly advise
Parent orally (within one business day), and at any time
after five days after the date of this Agreement, in writing
(as promptly as practicable) of the receipt by it (or any of
the other entities or persons referred to above) after the
date hereof of any Acquisition Proposal or any inquiry which
is intended to lead to any Acquisition Proposal. The Company
will keep Parent fully informed orally (within one business
day) and in writing (as promptly as practicable) of all the
relevant details of any such Acquisition Proposal or
inquiry. For purposes of this Agreement, "Acquisition
Proposal" means any proposal with respect to a merger,
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consolidation, share exchange or similar transaction
involving the Company or any Material Subsidiary, or any
purchase of all or any significant portion of the assets of
the Company or any Material Subsidiary, or any equity
interest in the Company or any Material Subsidiary, other
than the transactions contemplated hereby. Notwithstanding
the foregoing, the Company may take and disclose to its
stockholders a position contemplated by Rule 14e-2(a)
promulgated under the Exchange Act and may make any
disclosure to the Company's stockholders which, in the good
faith judgment of the Board of Directors of the Company
based on the advice of its legal advisors, may be required
under applicable law.
SECTION 5.6. Consents, Approvals and Filings. (a)
The Company and Parent will make and cause their respective
Subsidiaries to make all necessary filings, as soon as
practicable, including those required under the HSR Act, the
Securities Act and the Exchange Act in order to facilitate
prompt consummation of the Merger and the other transactions
contemplated by this Agreement. In addition, the Company and
Parent will each use their commercially reasonable best
efforts, and will cooperate fully with each other (i) to
comply as promptly as practicable with all governmental
requirements applicable to the Merger and the other
transactions contemplated by this Agreement and (ii) to
obtain as promptly as practicable all necessary permits,
orders or other consents of Governmental Entities and
consents of all third parties necessary for the consummation
of the Merger and the other transactions contemplated by
this Agreement. Each of the Company and Parent shall use
commercially reasonable best efforts to provide such
information and communications to Governmental Entities as
such Governmental Entities may reasonably request.
(b) Each of the parties shall provide to the
other party copies of all applications in advance of filing
or submission of such applications to Governmental Entities
in connection with this Agreement.
SECTION 5.7. Special Severance Arrangements. The
Severance Benefit Plan for Employees of OSi Specialties
Effective August 1, 1995 (the "Terminated Plan") will be
terminated on or prior to the Effective Time. With respect
to the approximately 129 employees hired by the Company and
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its Subsidiaries since June 1993 (excluding those located in
Europe and South America):
(a) Severance benefits for those who are
executive officers of OSi Inc. and are parties to an
employment contract providing for severance benefits
will be as provided in such contracts.
(b) Any such employee who is an executive
officer of OSi Inc. but not a party to such an
employment contract will be entitled to special
severance payments from the Company at the level
contemplated by the Terminated Plan only if one of the
following events shall take place within one year after
the Effective Time with respect to such employee:
(i) an affirmative discharge from
employment (other than for cause);
(ii) a diminution of salary; or
(iii) relocation to an office more than
50 miles from his present site of employment.
(c) Any other such employee will be entitled
to special severance payments from the Company at the
level contemplated by the Terminated Plan only in the
event of an affirmative discharge (other than for
cause) within one year after the Effective Time.
Except as provided above, employees of the Company or its
Subsidiaries whose employment is terminated after the
Effective Time shall be entitled to severance benefits in
accordance with Parent's then applicable severance policies.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1. Conditions to Each Party's Obligation
to Effect the Merger. The respective obligation of each
party to effect the Merger is subject to the satisfaction or
waiver on or prior to the Closing Date of the following
conditions:
(a) Governmental and Regulatory Consents. All
filings required to be made prior to the Effective Time
with, and all consents, approvals, permits and
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authorizations required to be obtained prior to the
Effective Time from, Governmental Entities, including those
set forth in Section 3.1(c)(E) of the Disclosure Schedule,
in connection with the execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby by the Company, Parent and Sub shall
have been made or obtained (as the case may be).
(b) HSR Act, etc. The waiting period (and any
extension thereof) applicable to the Merger under the HSR
Act and those foreign jurisdictions identified in Section
3.1(c)(E) of the Disclosure Schedule shall have been
terminated or shall have otherwise expired.
(c) No Injunctions or Restraints. No
temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger shall be in
effect; provided, however, that the party invoking this
condition shall use its commercially reasonable best efforts
to have any such order or injunction vacated.
SECTION 6.2. Conditions to Obligations of Parent
and Sub. The obligations of Parent and Sub to effect the
Merger are further subject to the following conditions:
(a) Representations and Warranties. The
representations and warranties of the Company set forth in
Section 3.1 that are qualified as to materiality shall be
true and correct, and those representations and warranties
that are not so qualified shall be true and correct in all
material respects, in each case as of the date of this
Agreement and as of the Closing Date as though made on and
as of the Closing Date, except to the extent such
representations and warranties speak as of an earlier date,
and Parent shall have received a certificate signed on
behalf of the Company by the chief executive officer and the
chief financial officer of the Company to the effect set
forth in this paragraph.
(b) Performance of Obligations of the
Company. The Company shall have performed in all material
respects all obligations required to be performed by it
under this Agreement at or prior to the Closing Date, and
Parent shall have received a certificate signed on behalf of
the Company by the chief executive officer and the chief
financial officer of the Company to such effect. Without
limiting the generality of the foregoing, the Company shall
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have performed in all respects its obligations under
Sections 2.2 and 2.3 with respect to the Options and
Warrants, respectively. In addition, the Company shall have
delivered to Parent immediately prior to the Effective Time
a certificate signed by the chief financial officer of the
Company which sets forth the aggregate amount of Transaction
Fees, and the corresponding Per Share Transaction Fee,
incurred by the Company through the Effective Time.
(c) Dissenting Common Shares. The number of
Dissenting Common Shares shall not exceed 3% of the number
of shares of Company Common Stock outstanding on the date
hereof.
(d) Severance Benefit Plan. The Severance
Benefit Plan for Employees of OSi Specialties Effective
August 1, 1995 shall have been terminated and no employee of
the Company or any of its Subsidiaries shall have any rights
thereunder.
SECTION 6.3. Conditions to Obligations of the
Company. The obligation of the Company to effect the Merger
is further subject to the following conditions:
(a) Representations and Warranties. The
representations and warranties of Parent and Sub set forth
in Section 3.2 that are qualified as to materiality shall be
true and correct, and those representations and warranties
that are not so qualified shall be true and correct in all
material respects, in each case as of the date of this
Agreement and as of the Closing Date as though made on and
as of the Closing Date, except to the extent such
representations and warranties speak as of an earlier date,
and the Company shall have received a certificate signed on
behalf of Parent by the chief executive officer and the
chief financial officer of Parent to the effect set forth in
this paragraph.
(b) Performance of Obligations of Parent and
Sub. Parent and Sub shall have performed in all material
respects all obligations required to be performed by them
under this Agreement at or prior to the Closing Date, and
the Company shall have received a certificate signed on
behalf of Parent by the chief executive officer and the
chief financial officer of Parent to such effect.
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ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1. Termination. This Agreement may be
terminated and abandoned at any time prior to the Effective
Time:
(a) by mutual written consent of Parent and
the Company; or
(b) by either Parent or the Company if the
Merger shall not have been consummated on or before November
30, 1995, except that if any required governmental or
regulatory approvals under Section 6.1(a) or (b) shall not
have then been obtained, such date shall be extended until
each such approval is obtained (but in no event shall such
date be extended beyond January 31, 1996), unless the
failure to consummate the Merger is the result of a willful
and material breach of this Agreement by such party; or
(c) by either Parent or the Company if any
Government Entity shall have issued an order, decree or
ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the Merger and such
order, decree, ruling or other action shall have become
final and nonappealable.
SECTION 7.2. Effect of Termination. In the event
of termination of this Agreement by either the Company or
Parent as provided in Section 7.1, this Agreement shall
forthwith become void and have no effect, without any
liability or obligation on the part of Parent, Sub or the
Company, other than the last sentence of Section 5.1 and
Sections 3.1(1), 3.2(e), 7.2 and 8.2. Nothing contained in
this Section shall relieve any party from any liability
resulting from any willful and material breach of the
representations, warranties, covenants or agreements set
forth in this Agreement.
SECTION 7.3. Amendment. Subject to the applicable
provisions of the DGCL, 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 no amendment shall be made which reduces the
consideration payable in the Merger or adversely affects the
rights of the Company's stockholders hereunder without the
approval by such stockholders as set forth in
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Section 3.1(j). This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the
parties.
SECTION 7.4. 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 7.3,
waive compliance with any of the agreements or conditions 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 an instrument in writing
signed 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.
SECTION 7.5. Procedure for Termination, Amend-
ment, Extension or Waiver. A termination of this Agreement
pursuant to Section 7.1, an amendment of this Agreement
pursuant to Section 7.3 or an extension or waiver pursuant
to Section 7.4 shall, in order to be effective, require in
the case of Parent, Sub or the Company, action by its Board
of Directors or the duly authorized designee of its Board of
Directors.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.1. Nonsurvival of Representations and
Warranties. None of the representations and warranties in
this Agreement or in any instrument delivered pursuant to
this Agreement shall survive the Effective Time. This
Section 8.1 shall not limit any covenant or agreement of the
parties which by its terms contemplates performance after
the Effective Time.
SECTION 8.2. Fees and Expenses. Whether or not the
Merger shall be consummated, each party hereto shall pay its
own expenses incident to preparing for, entering into and
carrying out this Agreement and the consummation of the
transactions contemplated hereby.
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SECTION 8.3. Definitions. For purposes of this
Agreement:
(a) an "affiliate" of any person means
another person that directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is under
common control with, such first person;
(b) an "ERISA Affiliate" means any person,
whether or not incorporated, that together with the Company,
would be treated as single employer under Section 414 of the
Code;
(c) a "Material Adverse Effect" means, with
respect to any person, the result of one or more events,
changes or effects which, individually or in the aggregate,
would have a material adverse effect on the business,
results of operations or financial condition of such person
and its Subsidiaries taken as a whole;
(d) a "Material Subsidiary" means each
Subsidiary of the Company that constitutes a "significant
subsidiary" within the meaning of Rule 1-02 of Regulation
S-X of the Securities and Exchange Commission (the "SEC"),
including each of OSi Inc., OSi Specialties SA, OSi
Specialties Italia S.p.A., OSi Specialties Benelux N.V. and
OSi Specialties do Brasil Ltda.;
(e) "person" means an individual,
corporation, partnership, joint venture, association, trust,
unincorporated organization or other entity; and
(f) a "Subsidiary" of any person means any
person of which such first person owns, directly or
indirectly, 50% or more of the equity securities the holders
of which are generally entitled to vote for the election of
the board of directors or similar governing body of such
person.
SECTION 8.4. Notices. All notices, requests,
claims, demands and other communications under this
Agreement shall be in writing and shall be deemed given if
delivered personally or sent by overnight courier (providing
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proof of delivery) to the parties at the following addresses
(or at such other address for a party as shall be specified
by like notice):
(a) if to Parent or Sub, to
Witco Corporation
One American Lane
Greenwich, Connecticut 06831
Attention: General Counsel
with a copy to:
Cravath, Swaine & Moore
825 Eighth Avenue
New York, New York 10019
Attention: Ronald S. Rolfe, Esq.; and
(b) if to the Company, to
OSi Specialties Holding Company
39 Old Ridgebury Road
Danbury, Connecticut 06810
Attention: General Counsel
with copies to:
Donaldson, Lufkin & Jenrette Securities
Corporation
140 Broadway
48th Floor
New York, New York 10005-1285
Attention: Steven G. Puccinelli
and
DLJ Merchant Banking, Inc.
140 Broadway
48th Floor
New York, New York 10005-1285
Attention: Lawrence M.v.D. Schloss
and
Gerald S. Backman, P.C.
Weil, Gotshal & Manges
767 Fifth Avenue
New York, New York 10153
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SECTION 8.5. Interpretation. When a reference is
made in this Agreement to a Section or Schedule, such
reference shall be to a Section of, or a Schedule to, this
Agreement unless otherwise indicated. The table of contents
and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words
"without limitation".
SECTION 8.6. Counterparts. This Agreement may be
executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become
effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION 8.7. Entire Agreement; Third-Party
Beneficiaries. This Agreement and the confidentiality
agreement referred to in Section 5.1 constitute the entire
agreement, and supersede all prior agreements and
understandings, both written and oral, among the parties
with respect to the subject matter of this Agreement. This
Agreement is not intended to confer upon any person, other
than the parties hereto and the third party beneficiaries
referred to in the following sentence, any rights or
remedies. The parties hereto expressly intend the provisions
of Section 5.3 (solely in respect of officers and directors
of the Company and its Subsidiaries) and Section 5.7 (solely
in respect to those officers and employees referred to
therein) to confer a benefit upon and be enforceable by, as
third party beneficiaries of this Agreement, the third
persons referred to in, or intended to be benefitted by,
such provisions.
SECTION 8.8. Governing Law. This Agreement shall
be governed by, and construed in accordance with, the laws
of the State of Delaware, regardless of the laws that might
otherwise govern under applicable principles of conflicts of
laws thereof.
SECTION 8.9. Assignment. Neither this Agreement
nor any of the rights, interests or obligations under this
Agreement shall be assigned, in whole or in part, by
operation of law or otherwise by any of the parties without
the prior written consent of the other parties, and any such
assignment that is not consented to shall be null and void.
Subject to the preceding sentence, this Agreement will be
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binding upon, inure to the benefit of, and be enforceable
by, the parties and their respective successors and assigns.
SECTION 8.10. Enforcement. The parties agree that
irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches
of this Agreement and to enforce specifically the terms and
provisions of this Agreement in any court of the United
States located in the State of Delaware, this being in
addition to any other remedy to which they are entitled at
law or in equity. In addition, each of the parties hereto
(a) consents to submit itself to the personal jurisdiction
of any Federal court located in the State of Delaware in the
event any dispute arises out of this Agreement or any of the
transaction contemplated by this Agreement, (b) agrees that
it will not attempt to deny or defeat such personal
jurisdiction or venue by motion or other request for leave
from any such court and (c) agrees that it will not bring
any action relating to this Agreement or any of the
transactions contemplated by this Agreement in any court
other than a Federal court sitting in the State of Delaware.
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IN WITNESS WHEREOF, Parent, Sub and the Company
have caused this Agreement to be signed by their respective
officers thereunto duly authorized, all as of the date first
written above.
WITCO CORPORATION,
By: /s/ William R. Toller
--------------------------------
Name: William R. Toller
Title: Chairman of the Board and
Chief Executive Officer
WITSIL CORPORATION,
By: /s/ Dustan E. McCoy
---------------------------------
Name: Dustan E. McCoy
Title: President
OSI SPECIALTIES HOLDING COMPANY,
By: /s/ James H. Cornell
--------------------------------
Name: James H. Cornell
Title: Vice President
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EXHIBIT 2(b)
STOCKHOLDERS AGREEMENT dated as of
September 10, 1995, among WITCO
CORPORATION, a Delaware corporation
("Parent"), OSI SPECIALTIES HOLDING
COMPANY, a Delaware corporation (the
"Company"), and the other parties
signatory hereto (each, a
"Stockholder").
WHEREAS each Stockholder desires that the Company,
Parent and Witsil Corporation, a Delaware corporation and
wholly owned subsidiary of Parent ("Sub"), enter into an
Agreement and Plan of Merger dated the date hereof (as the
same may be amended or supplemented, the "Merger Agreement")
with respect to the merger of Sub with and into the Company
(the "Merger"); and
WHEREAS each Stockholder and the Company are
executing this Agreement as an inducement to Parent to enter
into and execute, and to cause Sub to enter into and
execute, the Merger Agreement;
NOW, THEREFORE, in consideration of the execution
and delivery by Parent and Sub of the Merger Agreement and
the mutual covenants, conditions and agreements contained
herein and therein, the parties agree as follows:
1. Representations and Warranties. Each
Stockholder severally represents and warrants to Parent as
follows:
(a) Such Stockholder is the record and beneficial
owner of, or is trustee of a trust that is the record holder
of, and whose beneficiaries are the beneficial owners of,
the number of shares of Company Common Stock set forth
opposite such Stockholder's name in Schedule A hereto (such
Stockholder's "Shares"). Except for such Stockholder's
Shares and any other shares of Company Common Stock subject
hereto, such Stockholder is not the record or beneficial
owner of any shares of Company Common Stock. This Agreement
has been duly authorized, executed and delivered by, and
constitutes a valid and binding agreement of, such
Stockholder, enforceable in accordance with its terms.
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(b) Neither the execution and delivery of this
Agreement nor the consummation by such Stockholder of the
transactions contemplated hereby will result in a violation
of, or a default under, or conflict with, any contract,
trust, commitment, agreement, understanding, arrangement or
restriction of any kind to which such Stockholder is a party
or is bound or to which such Stockholder's Shares are
subject. No trust of which such Stockholder is a trustee
requires the consent of any beneficiary to the execution and
delivery of this Agreement or to the consummation of the
transactions contemplated hereby. If such Stockholder is
married and such Stockholder's Shares constitute community
property, this Agreement has been duly authorized, executed
and delivered by, and constitutes a valid and binding
agreement of, such Stockholder's spouse, enforceable against
such person in accordance with its terms. Consummation by
such Stockholder of the transactions contemplated hereby
will not violate, or require any consent, approval, or
notice under, any provision of any judgment, order, decree,
statute, law, rule or regulation applicable to such
Stockholder or such Stockholder's Shares, except for any
necessary filing under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976.
(c) Such Stockholder's Shares and the certificates
representing such Shares are now and at all times during the
term hereof will be held by such Stockholder, by a nominee
or custodian for the benefit of such Stockholder or by a
permitted transferee, free and clear of all liens, claims,
security interests, proxies, voting trusts or agreements,
understandings or arrangements or any other encumbrances
whatsoever, except for any such encumbrances or proxies
arising hereunder or under the existing terms of a trust of
which such Stockholder is the trustee.
(d) No broker, investment banker, financial
adviser or other person is entitled to any broker's,
finder's, financial adviser's or other similar fee or
commission payable by the Company in connection with the
transactions contemplated hereby based upon arrangements
made by or on behalf of such Stockholder.
(e) Such Stockholder understands and acknowledges
that Parent is entering into, and causing Sub to enter into,
the Merger Agreement in reliance upon such Stockholder's
execution and delivery of this Agreement.
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2. Voting Agreements. Each Stockholder severally
agrees with, and covenants to, Parent as follows:
(a) At any meeting of stockholders of the Company
called to vote upon the Merger and the Merger Agreement or
at any adjournment thereof or in any other circumstances
upon which a vote, consent or other approval with respect to
the Merger and the Merger Agreement is sought, such
Stockholder shall vote (or cause to be voted) such
Stockholder's Shares in favor of the Merger, the execution
and delivery by the Company of the Merger Agreement and the
approval of the terms thereof and each of the other
transactions contemplated by the Merger Agreement, provided
that the terms of the Merger Agreement shall not have been
amended to adversely affect the Stockholder.
(b) At any meeting of stockholders of the Company
or at any adjournment thereof or in any other circumstances
upon which their vote, consent or other approval is sought,
such Stockholder shall vote (or cause to be voted) such
Stockholder's Shares against (i) any merger agreement or
merger (other than the Merger Agreement and the Merger),
consolidation, combination, sale of substantial assets,
reorganization, recapitalization, dissolution, liquidation
or winding up of or by the Company or (ii) any amendment of
the Company's Certificate of Incorporation or By-laws or
other proposal or transaction involving the Company or any
of its subsidiaries which amendment or other proposal or
transaction would in any manner impede, frustrate, prevent
or nullify the Merger, the Merger Agreement or any of the
other transactions contemplated by the Merger Agreement
(each of the foregoing in clause (i) or (ii) above, a
"Competing Transaction").
3. Covenants. Each Stockholder severally agrees
with, and covenants to, Parent as follows:
(a) Such Stockholder shall not (i) transfer (which
term shall include, without limitation, for the purposes of
this Agreement, any sale, gift, pledge or other
disposition), or consent to any transfer of, any or all of
such Stockholder's Shares or any interest therein, except
pursuant to the Merger, (ii) enter into any contract, option
or other agreement or understanding with respect to any
transfer of any or all of such Shares or any interest
therein, (iii) grant any proxy, power-of-attorney or other
authorization in or with respect to such Shares, except for
this Agreement, or (iv) deposit such Shares into a voting
trust or enter into a voting agreement or arrangement with
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respect to such Shares; provided that any such Stockholder
may transfer (as defined above) any of such Stockholder's
Shares to any other person that is on the date hereof, or
that prior to such transfer becomes pursuant to an express
written agreement, a party to this Agreement bound by all
the obligations of a "Stockholder" hereunder.
(b) Upon the satisfaction of all the conditions
set forth in the Merger Agreement, such Stockholder's Shares
shall, pursuant to the terms of the Merger Agreement, be
exchanged for the consideration provided in the Merger
Agreement. Such Stockholder hereby waives any rights of
appraisal, or rights to dissent from the Merger, that such
Stockholder may have.
(c) Such Stockholder shall not, nor shall it
authorize any investment banker, attorney or other adviser
or representative of such Stockholder to, directly or
indirectly, (i) solicit, initiate or encourage the
submission of, any takeover proposal or (ii) participate in
any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other
action to facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to
lead to, any takeover proposal. Without limiting the
foregoing, it is understood that any violation of the
restrictions set forth in the preceding sentence by an
investment banker, attorney or other adviser or
representative of such Stockholder, whether or not such
person is purporting to act on behalf of such Stockholder or
otherwise, shall be deemed to be in violation of this
Section 3(c) by such Stockholder. For all purposes hereof,
"takeover proposal" means any proposal for a merger or other
business combination involving the Company or any of its
subsidiaries or any proposal or offer to acquire in any
manner, directly or indirectly, an equity interest in any
voting securities of, or a substantial portion of the assets
of the Company or any of its subsidiaries, other than the
Merger and the other transactions contemplated by the Merger
Agreement and other than any transfer expressly permitted by
the proviso to Section 3(a).
4. Certain Events. Each Stockholder agrees that
this Agreement and the obligations hereunder shall attach to
such Stockholder's Shares and shall be binding upon any
person or entity to which legal or beneficial ownership of
such Shares shall pass, whether by operation of law or
otherwise, including without limitation such Stockholder's
heirs, guardians, administrators or successors. In the
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event of any stock split, stock dividend, merger,
reorganization, recapitalization or other change in the
capital structure of the Company affecting the Company
Common Stock, or the acquisition of additional shares of
Company Common Stock or other voting securities of the
Company by any Stockholder, the number of Shares listed in
Schedule A beside the name of such Stockholder shall be
adjusted appropriately and this Agreement and the
obligations hereunder shall attach to any additional shares
of Company Common Stock or other voting securities of the
Company issued to or acquired by such Stockholder.
5. Stop Transfer. The Company agrees with, and
covenants to, Parent that the Company shall not register the
transfer of any certificate representing any Stockholder's
Shares, unless such transfer is made to Parent or Sub or
otherwise in compliance with this Agreement. Each
Stockholder agrees that such Stockholder will tender to the
Company, within 15 business days after the date hereof, any
and all certificates representing such Stockholder's Shares
and the Company will inscribe upon such certificates the
following legend: "The shares of Common Stock, $.01 par
value, of OSi Specialties Holding Company represented by
this certificate are subject to a Stockholders Agreement
dated as of September 10, 1994, and may not be sold or
otherwise transferred, except in accordance therewith.
Copies of such Agreement may be obtained at the principal
executive offices of OSi Specialties Holding Company".
6. Voidability. If prior to the execution hereof,
the Board of Directors of the Company shall not have duly
and validly authorized and approved by all necessary
corporate action, this Agreement, the Merger Agreement and
the transactions contemplated hereby and thereby, so that by
the execution and delivery hereof Parent or Sub would
become, or could reasonably be expected to become an
"interested stockholder" with whom the Company would be
prevented for any period pursuant to Section 203 of the DGCL
from engaging in any "business combination" (as such terms
are defined in Section 203 of the DGCL), then this Agreement
shall be void and unenforceable until such time as such
authorization and approval shall have been duly and validly
obtained.
7. Stockholder Capacity. No person executing this
Agreement who is or becomes during the term hereof a
director of the Company makes any agreement or understanding
herein in his or her capacity as such director. Each
Stockholder signs solely in his or her capacity as the
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record and beneficial owner of, or the trustee of a trust
whose beneficiaries are the beneficial owners of, such
Stockholder's Shares.
8. Regulatory Approval. Each of the provisions of
this Agreement is subject to compliance with applicable
regulatory conditions.
9. Further Assurances. Each Stockholder shall,
upon request of Parent, execute and deliver any additional
documents and take such further actions as may reasonably be
deemed by Parent to be necessary or desirable to carry out
the provisions hereof.
10. Termination. This Agreement, and all rights
and obligations of the parties hereunder, shall terminate
upon the first to occur of (i) the Effective Time of the
Merger or (ii) the date upon which the Merger Agreement is
terminated in accordance with its terms.
11. Public Announcements. Each Stockholder will
consult with Parent before issuing, and provide Parent with
the opportunity to review and comment upon, any press
release or other public statements with respect to the
transactions contemplated by this Agreement and the Merger
Agreement, and shall not issue any such press release or
make any such public statement prior to such consultation,
except as may be required by applicable law, court process
or by obligations pursuant to any listing agreement with any
national securities exchange.
12. Miscellaneous. (a) Capitalized terms used and
not otherwise defined in this Agreement shall have the
respective meanings assigned to them in the Merger
Agreement.
(b) All notices, requests, claims, demands and
other communications under this Agreement shall be in
writing and shall be deemed given if delivered personally or
sent by overnight courier (providing proof of delivery) to
the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(i) if to Parent or the Company, to the address set forth in
Section 8.4 of the Merger Agreement; and (ii) if to any
Stockholder, to it c/o DLJ Merchant Banking, Inc., 140
Broadway, 48th Floor, New York, N.Y. 10005-1285, Attention:
Lawrence M.v.D. Schloss.
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(c) The headings contained in this Agreement are
for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
(d) This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the
same agreement and shall become effective as to any
Stockholder when one or more counterparts have been signed
by each of Parent, the Company and such Stockholder and
delivered to Parent, the Company and such Stockholder.
(e) This Agreement (including the documents and
instruments referred to herein) constitutes the entire
agreement, and supersedes all prior agreements and
understandings, both written and oral, among the parties
with respect to the subject matter hereof.
(f) This Agreement shall be governed by, and
construed in accordance with, the laws of the State of
Delaware, regardless of the laws that might otherwise govern
under applicable principles of conflicts of laws thereof.
(g) Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be
assigned, in whole or in part, by operation of law or
otherwise, by any of the parties without the prior written
consent of the other parties, except by laws of descent or
as expressly contemplated by Section 3(a). Any assignment in
violation of the foregoing shall be void.
(h) Each Stockholder agrees that irreparable
damage would occur and that Parent would not have any
adequate remedy at law in the event that any of the
provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise
breached. It is accordingly agreed that Parent shall be
entitled to an injunction or injunctions to prevent breaches
by any Stockholder of this Agreement and to enforce
specifically the terms and provisions of this Agreement in
any court of the United States located in the State of
Delaware or in Delaware state court, this being in addition
to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (i) consents
to submit such party to the personal jurisdiction of any
Federal court located in the State of Delaware or any
Delaware state court in the event any dispute arises out of
this Agreement or any of the transactions contemplated
hereby, (ii) agrees that such party will not attempt to deny
or defeat such personal
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jurisdiction by motion or other request for leave from any
such court and (iii) agrees that such party will not bring
any action relating to this Agreement or any of the
transactions contemplated hereby in any court other than a
Federal court sitting in the State of Delaware or a Delaware
state court.
(i) If any term, provision, covenant or
restriction herein, or the application thereof to any
circumstance, shall, to any extent, be held by a court of
competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and
restrictions herein and the application thereof to any other
circumstances, shall remain in full force and effect, shall
not in any way be affected, impaired or invalidated, and
shall be enforced to the fullest extent permitted by law.
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(j) No amendment, modification or waiver in
respect of this Agreement shall be effective against any
party unless it shall be in writing and signed by such
party.
IN WITNESS WHEREOF, Parent, the Company and the
Stockholders have caused this Agreement to be duly executed
and delivered as of the date first written above.
WITCO CORPORATION,
by /s/ William R. Toller
-------------------------------
Name: William R. Toller
Title: Chairman of the
Board and Chief
Executive Officer
OSI SPECIALTIES HOLDING
COMPANY,
by /s/ James H. Cornell
-------------------------------
Name: James H. Cornell
Title: Vice President
DLJ FIRST ESC LLC,
By: DLJ LBO Plans Management
Corporation, its Manager
By: /s/ Lawrence M.v.D. Schloss
--------------------------------
Name: Lawrence M.v.D. Schloss
Title: Authorized Signatory
DLJ CAPITAL CORPORATION,
By: /s/ Lawrence M.v.D. Schloss
--------------------------------
Name: Lawrence M.v.D. Schloss
Title: Authorized Signatory
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<PAGE>
SPROUT GROWTH II, L.P.,
BY: DLJ Capital Corporation,
its General Partner
By: /s/ Lawrence M.v.D. Schloss
--------------------------------
Name: Lawrence M.v.D. Schloss
Title: Authorized Signatory
SPROUT GROWTH VI, L.P.,
BY: DLJ Capital Corporation,
its General Partner
By: /s/ Lawrence M.v.D. Schloss
--------------------------------
Name: Lawrence M.v.D. Schloss
Title: Authorized Signatory
DLJ MERCHANT BANKING FUNDING,
INC.,
By: /s/ Lawrence M.v.D. Schloss
--------------------------------
Name: Lawrence M.v.D. Schloss
Title: Authorized Signatory
DLJ OFFSHORE PARTNERS, C.V.,
BY: DLJ Merchant Banking,
Inc., its Advisory Partner
By: /s/ Lawrence M.v.D. Schloss
--------------------------------
Name: Lawrence M.v.D. Schloss
Title: Authorized Signatory
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DLJ INTERNATIONAL PARTNERS, C.V.,
BY: DLJ Merchant Banking,
Inc., its Advisory Partner
By: /s/ Lawrence M.v.D. Schloss
--------------------------------
Name: Lawrence M.v.D. Schloss
Title: Authorized Signatory
DLJ MERCHANT BANKING PARTNERS,
L.P.,
BY: DLJ Merchant Banking,
Inc., its Managing General
Partner
By: /s/ Lawrence M.v.D. Schloss
--------------------------------
Name: Lawrence M.v.D. Schloss
Title: Authorized Signatory
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<PAGE>
SCHEDULE A
TO THE STOCKHOLDERS AGREEMENT
List of Stockholders
Name Stock Ownership
---- ---------------
DLJ FIRST ESC LLC 850,542 shares of Common
Stock
DLJ CAPITAL CORPORATION 10,942 shares of Common
Stock
SPROUT GROWTH II, L.P. 107,462 shares of Common
Stock
SPROUT CAPITAL VI, L.P. 69,096 shares of Common
Stock
DLJ MERCHANT BANKING 1,555,134 shares of Common
FUNDING, INC. Stock
DLJ OFFSHORE PARTNERS, C.V. 106,770 shares of Common
Stock
DLJ INTERNATIONAL PARTNERS, 1,784,641 shares of Common
C.V. Stock
DLJ MERCHANT BANKING 4,015,413 shares of Common
PARTNERS, L.P. Stock
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EXHIBIT 20
Contact: C.R. Soderlind 203 552-2224
Senior Vice President
S. L. Levy 203 552-2266
Manager Public Relations For Immediate Release
WITCO SIGNS AGREEMENT TO ACQUIRE OSi SPECIALTIES INC.;
ANNOUNCES INTENTION TO DIVEST ITS LUBRICANTS GROUP
GREENWICH, CT, September 11, 1995 -- Witco Corporation (NYSE:WIT)
announced today that it has entered into an agreement to acquire OSi
Specialties Inc. ("OSi") from an investor group led by DLJ Merchant
Banking Partners, L.P. through a cash merger transaction which values
100 percent of OSi's equity at $486 million. The acquisition of OSi has
been approved by OSi's shareholders but remains subject to certain
domestic and foreign regulatory approvals and customary closing
conditions.
Witco also announced its intention to divest its Lubricants Group.
The Lubricants Group, with 1994 sales of $404 million, comprises three
distinct businesses; (i) Lubricants, including Kendall(R) and Amalic(R)
brand motor oils; (ii) Greases, such as private label greases, fluid
lubricants, and LubriMatic(R) brand lubricants and hand-held grease guns;
and (iii) Golden Bear(TM) naphthenic process oils and road and surface
materials.
OSi is a leading global producer of organofunctional silane and other
specialty silicone derivative products. Witco expects OSi to have 1995
sales of $450 million with close to 50 percent of sales outside of the
United States. The company has over 1250 employees with facilities in
Sistersville and South Charleston, West Virginia; Tarrytown, New York;
and Texas City, Texas; as well as Italy, Belgium, Switzerland, Brazil,
Mexico, South Korea, Singapore, Malaysia, Indonesia, and Thailand.
William R. Toller, chairman and chief executive officer of Witco
said, "Properties with the product and market fit of OSi are rarely
available and an opportunity such as this is unique. This acquisition
fits directly in with the strategy of focusing on higher-margin
specialty chemcial businesses which we have been implementing over the
past two years. We believe that this transaction will be accretive in
1996, provide an excellent platform for Witco's future growth, and will
help deliver value to our shareholders."
Witco will finance the acquisition with cash-on-hand and available
bank facilities. It is Witco's intention to replace all or part of such
bank financing in the public markets in due course.
With the acquisition of OSi and the subsequent divestiture of the
Lubricants Group, Witco will be firmly positioned as a worldwide
specialty chemical company, concentrating its resources on its key
product lines of oleochemicals, petroleum specialties, urethane systems,
surfactants, polymer additives, and silicone derivatives. Witco is
replacing businesses that have not fit into its existing core portfolio
with higher growth, higher margin specialty chemical businesses. Each
of OSi's product lines has a customer and an application fit within
Witco's existing product portfolios. OSi's presence in Asia, South
America, and Eastern Europe will provide the base for acceleration of
growth of Witco's existing products.
Witco Corporation is a worldwide manufacturer of specialty chemical
and specialty petroleum products with 1994 annual sales in excess of
$2.2 billion.
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