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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) October 29, 1996
AM INTERNATIONAL, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-683 34-0054940
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
431 Lakeview Court
Mt. Prospect, Illinois 60056
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code 847-375-1700
N/A
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On October 29, 1996, AM International, Inc., a Delaware corporation
(the "Company"), announced that it has entered into a Merger Purchase Agreement
(the "Merger Agreement"), dated October 29, 1996, with 8044 Acquisition Inc., a
Delaware corporation ("Buyer"), and 8044 Acquisition Sub Inc., a Delaware
corporation and a wholly owned subsidiary of Buyer ("Sub"), providing for the
merger of Sub with and into the Company, with the Company being the surviving
corporation in the merger. Following the merger, the Company will be a wholly
owned subsidiary of Buyer. Pursuant to the Merger Agreement and subject to the
terms and conditions thereof, each share of Company common stock will be
converted into the right to receive $5.00 per share in cash. The Merger
Agreement is attached hereto as Exhibit 2.1 and is hereby incorporated by
reference.
A press release of the Company dated October 29, 1996 is attached
hereto as Exhibit 99.1 and is hereby incorporated by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
Exhibit No. Exhibit
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2.1 Merger Purchase Agreement dated October
29, 1996 among AM International, Inc., 8044
Acquisition Inc., and 8044 Acquisition Sub Inc.
99.1 Press Release dated October 29, 1996.
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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.
AM INTERNATIONAL, INC.
Date: October 29, 1996 By: /s/ Thomas D. Rooney
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Thomas D. Rooney
Vice President and
Chief Financial Officer
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EXHIBIT INDEX
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The following exhibits are filed herewith as noted below.
Exhibit No. Exhibit
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2.1 Merger Purchase Agreement dated October
29, 1996 among AM International, Inc., 8044
Acquisition Inc., and 8044 Acquisition Sub Inc.
99.1 Press Release dated October 29, 1996.
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EXHIBIT 2
MERGER PURCHASE AGREEMENT
AMONG
AM INTERNATIONAL, INC.,
8044 ACQUISITION, INC.
AND
8044 ACQUISITION SUB INC.
DATED AS OF OCTOBER 29, 1996
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TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
1. Definitions 1
2. Basic Transaction 5
(a) The Merger 5
(b) The Closing 5
(c) Actions at the Closing and on the Closing Date 5
(d) Effect of Merger 5
(e) Procedure for Payment 6
(f) Closing of Transfer Records 8
3. Representations and Warranties of the Target 8
(a) Organization, Qualification, and Corporate Power 8
(b) Capitalization 8
(c) Authorization of Transaction 8
(d) Noncontravention 9
(e) Filings with the SEC 9
(f) Financial Statements 10
(g) Events Subsequent to July 31, 1996 10
(h) Undisclosed Liabilities 10
(i) Brokers' Fees 10
(j) Insurance 10
(k) Litigation 11
(l) Product Warranty 11
(m) Product Liability 11
(n) Employees 12
(o) Employee Benefits 12
(p) Guaranties 14
(q) Environment, Health and Safety 14
(r) Disclosure 15
(s) Opinion of Financial Advisor 15
4. Representations and Warranties of the Buyer and the Transitory Subsidiary 15
(a) Organization 15
(b) Financing 16
(c) Authorization of Transaction 16
(d) Noncontravention 16
(e) Brokers' Fees 17
(f) Disclosure 17
(g) Litigation 17
</TABLE>
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<TABLE>
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(h) Solvency 17
(i) Undertaking 17
5. Covenants 18
(a) General 18
(b) Notices and Consents 18
(c) Regulatory Matters and Approvals 18
(d) Financing 19
(e) Operation of Business 20
(f) Access 21
(g) Notice of Developments 21
(h) Exclusivity 21
(i) Insurance and Indemnification 21
(j) Target Stock Options 22
(k) Deferred Compensation Shares 22
6. Conditions to Obligation to Close 23
(a) Conditions to Each Party's Obligation To Effect the Merger 23
(b) Conditions to Obligation of the Buyer and the Transitory Subsidiary 23
(c) Conditions to Obligation of the Target 25
7. Termination 26
(a) Termination of Agreement 26
(b) Effect of Termination 28
8. Miscellaneous 28
(a) Survival 28
(b) Press Releases and Public Announcements 28
(c) No Third Party Beneficiaries 28
(d) Entire Agreement 28
(e) Successors and Assignment 28
(f) Counterparts 29
(g) Headings 29
(h) Notices 29
(i) Governing Law 30
(j) Amendments and Waivers 30
(k) Severability 30
(l) Expenses 30
(m) Construction 30
(n) Incorporation of Exhibits and Schedules 30
</TABLE>
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LIST OF EXHIBITS
Exhibit A - Certificate of Merger
Exhibit B - Permitted Investments for Payment Fund
Exhibit C - Legal Opinion of Counsel to the Target
Exhibit D - Legal Opinion of Counsel to the Buyer
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MERGER PURCHASE AGREEMENT
THIS MERGER PURCHASE AGREEMENT ("Agreement") is entered into as of
October 29, 1996 among AM INTERNATIONAL, INC., a Delaware corporation (the
"Target"), 8044 ACQUISITION, INC., a Delaware corporation (the "Buyer"), and
8044 ACQUISITION SUB INC., a Delaware corporation and a wholly-owned Subsidiary
of the Buyer (the "Transitory Subsidiary"). The Buyer, the Transitory
Subsidiary and the Target are individually referred to as a "Party" and
collectively as the "Parties."
R E C I T A L S:
This Agreement contemplates a transaction in which the Buyer will acquire
all of the outstanding capital stock of the Target for cash through a reverse
subsidiary merger of the Transitory Subsidiary with and into the Target.
Now, therefore, in consideration of the premises and the mutual covenants
and undertakings contained hereinafter, and the Parties agree as follows.
1. Definitions.
Unless the context otherwise requires, capitalized terms used in this
Agreement shall have the respective meanings ascribed to them in this Section
1.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Buyer" has the meaning set forth in the preface above.
"Buyer-owned Share" means any Target Share that the Buyer or the
Transitory Subsidiary owns of record or beneficially.
"Certificate of Merger" has the meaning set forth in Section below.
"Certificates" has the meaning set forth in Section 2(e) below.
"Closing" has the meaning set forth in Section 2(e) below.
"Closing Date" has the meaning set forth in Section 2(b) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information concerning the businesses
and affairs of the Target and its Subsidiaries that is not already available to
the public or generally known in the businesses in which the Target and its
Subsidiaries are engaged.
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"Confidentiality Agreement" has the meaning set forth in Section 5(f)
below.
"Controlled Group of Corporations" has the meaning set forth in Section
1563 of the Code.
"Deferred Compensation Consideration" has the meaning set forth in Section
5(k) below.
"Deferred Compensation Shares" has the meaning set forth in Section 3(b)
below.
"Definitive Financing Agreements" has the meaning set forth in Section
5(d) below.
"Definitive Proxy Materials" means the definitive proxy materials relating
to the Special Meeting.
"Delaware General Corporation Law" means the General Corporation Law of
the State of Delaware, as amended.
"Disclosure Schedule" has the meaning set forth in Section 3 below.
"Dissenting Share" means any Target Share held of record by a stockholder
who or which has exercised his or its appraisal rights under the Delaware
General Corporation Law.
"Effective Time" has the meaning set forth in Section 3 below.
"Employee Benefit Plan" means any (a) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit Plan,
(b) qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan), or (d) Employee Welfare Benefit Plan or material fringe
benefit plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA Section
3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA Section
3(1).
"Environmental, Health, and Safety Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and the Occupational Safety and Health
Act of 1970, each as amended, together with all other laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings,
and charges thereunder) of federal, state, local, and foreign governments (and
all agencies thereof) concerning pollution or protection of the environment,
public health and safety, or employee health and safety, including laws
relating to emissions, discharges, releases, or threatened releases of
pollutants, contaminants, or chemical, industrial, hazardous, or toxic
materials or wastes.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Fairness Opinion" has the meaning set forth in Section 3(s) below.
"Financing Commitments" has the meaning set forth in Section 5(d) below.
"Financing Proposals" has the meaning set forth in Section 4(b) below.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"Hart-Scott-Rodino Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
Indemnified Parties" has the meaning set forth in Section 5(i) below.
"Knowledge" means, with respect to Target, the actual knowledge of Jerome
Brady, Thomas Rooney, Gregory Knipp, David Rutherford and Steven Andrews after
reasonable investigation (unless stated otherwise).
"Merger" has the meaning set forth in Section below.
"Merger Consideration" has the meaning set forth in Section 2(d)(v) below.
"1996 10-K" has the meaning set forth in Section 3(e) below.
"Option Consideration" has the meaning set forth in Section 5(j) below.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity
and frequency).
"Party" and "Parties" have the respective meanings set forth in the
preface above.
"Paying Agent" has the meaning set forth in Section 2(e) below.
"Payment Fund" has the meaning set forth in Section 2(e) below.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization or a governmental entity (or any
department, agency or political subdivision thereof).
"Public Reports" has the meaning set forth in Section 3(e) below.
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"Requisite Stockholder Approval" means the affirmative vote of the holders
of a majority of the outstanding Target Shares entitled to vote thereon in
respect of this Agreement and the Merger.
"SEC" means the Securities and Exchange Commission.
"SEC Filings" has the meaning set forth in Section 5(c)(i) below.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance, charge
or other security interest, excepting only (a) mechanic's, materialman's and
similar liens, (b) liens for taxes not yet due and payable or for taxes that
the taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens securing rental payments under capital lease arrangements,
and (d) other liens arising in the Ordinary Course of Business and not incurred
in connection with the borrowing of money.
"Solvency Opinion" has the meaning set forth in Section 6(a)(iv) below.
"Special Meeting" has the meaning set forth in Section 5(c)(ii) below.
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of securities entitled to vote generally in
the election of directors sufficient to elect a majority of the directors.
"Surviving Corporation" has the meaning set forth in Section 2(a) below.
"Target" has the meaning set forth in the preface above.
"Target Preferred Stock" has the meaning set forth in Section 3(b) below.
"Target Share" means any share of the Common Stock, $.01 par value per
share, of the Target.
"Target Stock Options" has the meaning set forth in Section 3(b) below.
"Target Stockholder" means any Person who or which is a holder of record
of any Target Shares.
"Third Party Offer" has the meaning set forth in Section 5(h) below.
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"Transitory Subsidiary" has the meaning set forth in the preface above.
2. Basic Transaction.
(a) The Merger. On and subject to the terms and conditions of this
Agreement, the Transitory Subsidiary shall merge with and into the
Target (the "Merger") at the Effective Time. The Target shall be the
corporation surviving the Merger (in this capacity, the "Surviving
Corporation").
(b) The Closing. The closing of the Merger (the "Closing") shall take
place at the offices of Sidley & Austin, One First National Plaza,
Chicago, Illinois 60603, commencing at 9:00 a.m. local time on the second
business day following the satisfaction or waiver of all conditions set forth
in Section 6 (other than conditions with respect to actions the respective
Parties will take at the Closing itself) or such other date as the Parties may
mutually determine in writing (the "Closing Date").
(c) Actions at the Closing and on the Closing Date. At the Closing,
(i) the Target will deliver to the Buyer and the Transitory Subsidiary
the certificates, instruments and documents referred to in Section 6(b) below,
(ii) the Buyer and the Transitory Subsidiary will deliver to the Target the
certificates, instruments and documents referred to in Section 6(c) below. On
the Closing Date, (i) the Target and the Transitory Subsidiary will file with
the Secretary of State of the State of Delaware a Certificate of Merger in the
form attached hereto as Exhibit A (the "Certificate of Merger"), and (ii) the
Buyer will deliver the Payment Fund to the Paying Agent in the manner provided
below in this Section .
(d) Effect of Merger.
(i) General. The Merger shall become effective at the time (or at
such later time as the Parties shall agree and specify in the
Certificate of Merger) (the "Effective Time") the Target and the
Transitory Subsidiary file the Certificate of Merger with the Secretary
of State of the State of Delaware. The Merger shall have the effects set
forth in the Delaware General Corporation Law. Subject to the terms and
conditions of this Agreement, the Surviving Corporation may, at any time
after the Effective Time, take any action (including executing and
delivering any document) in the name and on behalf of either the Target
or the Transitory Subsidiary in order to carry out and effectuate the
transactions contemplated by this Agreement.
(ii) Certificate of Incorporation. The Certificate of
Incorporation of the Surviving Corporation shall be amended and restated
at and as of the Effective Time to be identical to the Certificate of
Incorporation of the Transitory Subsidiary immediately prior to the
Effective Time except that the name of the Surviving Corporation will be
changed to "Multigraphics, Inc.". Bylaws. The Bylaws of the Surviving
Corporation shall be amended and restated at and as of the Effective Time
to be identical to the Bylaws of the Transitory
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Subsidiary immediately prior to the Effective Time except that the name
of the Surviving Corporation will be changed to "Multigraphics, Inc.".
(iv) Directors and Officers. The directors of the Transitory
Subsidiary shall become the directors of the Surviving Corporation
at and as of the Effective Time (retaining their respective positions and
terms of office). The officers of the Target shall, subject to Section
6(b)(vii) hereof, become the officers of the Surviving Corporation at and
as of the Effective Time.
(v) Conversion of Target Shares. At and as of the Effective Time,
(A) each Target Share then issued and outstanding (other than any
Dissenting Share or Buyer-owned Share) shall be converted into the right
to receive an amount equal to Five Dollars ($5.00) in cash (without
interest) (the "Merger Consideration") (B) each Dissenting Share shall
be converted into the right to receive payment from the Surviving
Corporation with respect thereto to the extent provided by, and in
accordance with, the provisions of the Delaware General Corporation Law,
and (C) each Buyer-owned Share shall be canceled; provided, however, that
the Merger Consideration shall be subject to equitable adjustment in the
event of any stock split, stock dividend, reverse stock split, or other
change in the number of Target Shares outstanding. After the Effective
Time, no Target Share shall be deemed to be outstanding or to have any
rights other than those set forth above in this Section .
(vi) Conversion of Capital Stock of the Transitory Subsidiary. At
and as of the Effective Time, each share of Common Stock, $.01 par
value per share, of the Transitory Subsidiary shall be converted into one
share of Common Stock, $.01 par value per share, of the Surviving
Corporation.
(e) Procedure for Payment.
(i) Immediately after the Effective Time, (A) the Buyer will deposit
with a commercial bank or such other Person as shall be reasonably
acceptable to the Target (the "Paying Agent") a corpus (the "Payment
Fund") consisting of cash sufficient in the aggregate for the Paying
Agent to make full payment of the Merger Consideration to the holders of
record immediately prior to the Effective Time of all of the outstanding
Target Shares (other than any Dissenting Shares and Buyer-owned Shares)
and (B) the Buyer will cause the Paying Agent to mail a letter of
transmittal in customary and reasonable form (which shall specify that
delivery shall be effected, and risk of loss and title to the
certificates (the "Certificates") which represented his or its Target
Shares shall pass only upon actual delivery thereof to the Paying Agent
and shall contain instructions for use in effecting the surrender of such
Certificates in exchange for the Merger Consideration). Upon surrender of
a Certificate to the Paying Agent for cancellation, together with a duly
executed letter of transmittal and such other documents as may be
reasonably requested by the Paying Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor the amount of cash,
without interest, into which the Target Shares theretofore represented by
such Certificate shall have
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been converted at the Effective Time pursuant to Section 2(d)(v); and the
Certificate so surrendered shall forthwith be canceled. In the event of
a transfer of ownership of Target Shares that is not registered in the
transfer records of the Surviving Corporation, payment may be made to a
person other than the person in whose name the Certificate so surrendered
is registered if such Certificate shall be properly endorsed or otherwise
be in proper form for transfer and the person requesting such payment
shall pay any transfer or other taxes required by reason of the payment
to a person other than the registered holder of such Certificate or
establish to the satisfaction of the Surviving Corporation that such tax
has been paid or is not applicable. Until surrendered as
contemplated by Section 2(e)(i), each Certificate shall be deemed at any
time after the Effective Time to represent only the right to receive upon
such surrender the amount of cash, without interest, into which the
Target Shares theretofore represented by such Certificate shall have been
converted at the Effective Time pursuant to this Section 2(d)(v). No
interest will accrue or be paid to the holder of any outstanding Target
Shares.
In the event a Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming such
Certificate to be lost, stolen or destroyed and, if required by Buyer or
the Surviving Corporation, upon the posting by such person of a bond in
such amount as Buyer or the Surviving Corporation may reasonably direct
as indemnity against any claim that may be made against it with respect
to such Certificate and upon such person's compliance with the other
requirements set forth in this Section 2(e)(i), the Paying Agent will
issue in respect of such lost, stolen or destroyed Certificate, the
Merger Consideration to be received by virtue of the Merger with respect
to the Target Shares represented thereby.
(ii) The Buyer may cause the Paying Agent to invest the Payment
Fund in one or more of the permitted investments set forth on Exhibit B
attached hereto; provided, however, that the terms and conditions of the
investments shall be such as to permit the Paying Agent to make prompt
payment of the Merger Consideration as necessary. The Buyer may cause
the Paying Agent to pay over to the Surviving Corporation any net
earnings with respect to the investments, and the Buyer will deposit
promptly with the Paying Agent any portion of the Payment Fund which is
lost through investments.
(iii) The Buyer may cause the Paying Agent to pay over to the
Surviving Corporation any portion of the Payment Fund (including any
earnings thereon) remaining one hundred eighty (180) days after the
Effective Time, and thereafter all former stockholders shall be entitled
to look to the Surviving Corporation (subject to abandoned property,
escheat, and other similar laws) as general creditors thereof with
respect to the cash payable upon surrender of their certificates.
(iv) The Buyer shall pay all charges and expenses of the Paying
Agent.
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(f) Closing of Transfer Records. After the close of business on the
Closing Date, transfers of Target Shares outstanding prior to the Effective
Time shall not be made on the stock transfer books of the Surviving
Corporation.
3. Representations and Warranties of the Target. The Target represents
and warrants to the Buyer and the Transitory Subsidiary that the
statements contained in this Section are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date
of this Agreement throughout this Section ), except as set forth in the
disclosure schedule delivered by the Target simultaneously with the execution
and delivery of this Agreement and initialed by the Parties (the "Disclosure
Schedule"). The Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this
Section 3.
(a) Organization, Qualification, and Corporate Power. Each of the
Target and its Subsidiaries is a corporation duly organized, validly
existing and in good standing (or the local law equivalent) under the laws of
the jurisdiction of its incorporation. Each of the Target and its Subsidiaries
is duly authorized to conduct business and is in good standing (or the local
law equivalent) under the laws of each jurisdiction where such qualification is
required except where the lack of such qualification would not have a material
adverse effect on the financial condition of the Target and its Subsidiaries
taken as a whole or on the ability of the Parties to consummate the
transactions contemplated by this Agreement. Each of the Target and its
Subsidiaries has full corporate power and authority to carry on the businesses
in which it is engaged and to own and use the properties owned and used by it.
(b) Capitalization. The entire authorized capital stock of the Target
consists of 40,000,000 Target Shares and 10,000,000 shares of Preferred Stock,
$.01 par value per share ("Target Preferred Stock"). As of the date hereof,
7,010,000 Target Shares are issued and outstanding and 1,579 Target Shares are
held in treasury. As of the date hereof, no shares of Target Preferred Stock
are outstanding. All of the issued and outstanding Target Shares have been
duly authorized and are validly issued, fully paid and non-assessable. Other
than the Target's EICP deferred compensation awards ("Deferred Compensation
Shares") described in the Disclosure Schedule and as set forth in the
Disclosure Schedule, which sets forth information regarding options to purchase
396,000 Target Shares ("Target Stock Options') issued pursuant to the Target's
stock option and similar benefit plans, there are no outstanding or authorized
options, warrants, purchase rights, subscription rights, conversion rights,
exchange rights, or other contracts or commitments that could require the
Target to issue, sell, or otherwise cause to become outstanding any of its
capital stock. There are no outstanding or authorized stock appreciation,
phantom stock, profit participation, or similar rights with respect to the
Target.
(c) Authorization of Transaction. The Board of Directors of the Target,
at a meeting duly called and held, has duly adopted resolutions
approving this Agreement and the Merger, determining that the terms of the
Merger are fair to, and in the best interests of the Target's stockholders and
recommending that the Target's stockholders approve and adopt this Agreement
and the Merger. The
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Target has full power and authority (including full corporate power and
authority) to execute and deliver this Agreement and to perform its obligations
hereunder; subject to approval and adoption of this Agreement and the Merger by
the Requisite Stockholder Approval. The execution, delivery and performance of
this Agreement and the consummation by the Target of the Merger and of the
other transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of the Target and no other corporate
proceedings on the part of the Target are necessary to authorize this Agreement
or to consummate the transactions so contemplated (in each case, other than,
with respect to this Agreement and the Merger, the Requisite Stockholder
Approval). This Agreement has been duly executed and delivered by the Target
and, assuming this Agreement constitutes a valid and binding obligation of the
Buyer and the Transitory Subsidiary, constitutes a valid and binding obligation
of the Target enforceable against the Target in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights generally and to general principles of equity.
(d) Noncontravention. Except as set forth in of the Disclosure Schedule,
except for filings, permits, authorizations, consents and approvals as may be
required under, and other applicable requirements of, the Securities Exchange
Act (including the filing with the SEC of Definitive Proxy Materials relating
to the Requisite Stockholder Approval), the Hart-Scott-Rodino Act, the laws of
the State of Delaware, the laws of other states in which the Target is
qualified to do or is doing business and state takeover laws, and except for
the Requisite Stockholder Approval and the filing with the Secretary of State
of the State of Delaware and the Recorder of Deeds of the applicable county in
the State of Delaware of the Certificate of Merger following receipt of the
Requisite Stockholder Approval, neither the execution and the delivery of this
Agreement nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which any of the Target and its Subsidiaries
is subject or any provision of the charter or bylaws of any of the Target and
its Subsidiaries or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
any of the Target and its Subsidiaries is a party or by which it is bound or to
which any of its assets is subject (or result in the imposition of any Security
Interest upon any of its assets), except where the violation, conflict, breach,
default, acceleration, termination, modification, cancellation, failure to give
notice, or Security Interest would not have a material adverse effect on the
financial condition of the Target and its Subsidiaries taken as a whole or on
the ability of the Parties to consummate the transactions contemplated by this
Agreement.
(e) Filings with the SEC. Since May 17, 1993, the Target has made all
filings with the SEC that it has been required to make under Sections
13(a) and 14(a) of the Securities Exchange Act (collectively, including the
Target Annual Report on Form 10-K for the fiscal year ended July 31, 1996 (the
"1996 10-K"), the "Public Reports"). At the time filed with the SEC, each of
the Public Reports complied in all material respects with the Securities
Exchange Act and the applicable rules and regulations of the SEC thereunder.
At the time filed with the SEC, the Public Reports, as of their
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respective filing dates, did not include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The Target has delivered to the Buyer a correct and complete copy
of each Public Report (together with all exhibits and schedules thereto and as
amended to date).
(f) Financial Statements. The Target has filed the 1996 10-K with the
SEC. The financial statements included in or incorporated by reference
into the 1996 10-K (including the related notes and any schedule(s)) complied
as to form in all material respects with the applicable accounting requirements
and the published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with GAAP applied on a consistent basis throughout
the periods covered thereby (except as may be indicated therein or in the notes
thereto), and present fairly the financial condition of the Target and its
Subsidiaries as of the indicated dates and the results of operations and cash
flows of the Target and its Subsidiaries for the indicated periods.
(g) Events Subsequent to July 31, 1996. Except as disclosed in the Public
Reports, since July 31, 1996 there has not been any material adverse change in
the business, financial condition, operations or results of operations of the
Target and its Subsidiaries, taken as a whole.
(h) Undisclosed Liabilities. Except as set forth in the Disclosure
Schedule, none of the Target and its Subsidiaries has any material
liability (whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated and whether due or to become due), including any material
liability for taxes, except for (i) liabilities set forth in the Public Reports
or for which reasonable reserves are maintained and (ii) liabilities which have
arisen after July 31, 1996 in the Ordinary Course of Business.
(i) Brokers' Fees. Except as set forth in the Disclosure Schedule, none
of the Target and its Subsidiaries has any liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
(j) Insurance. Section 3(j) of the Disclosure Schedule sets forth the
following information with respect to each insurance policy in effect on the
date hereof (including policies providing property, casualty, liability and
workers' compensation coverage and bond and surety arrangements) to which any
of the Target and its Subsidiaries is a party, a named insured or otherwise the
beneficiary of coverage.
(i) the name, address and telephone number of the agent;
(ii) the name of the insurer, the name of the policyholder and the
name of each covered insured;
(iii) the policy number and the period of coverage;
<PAGE> 15
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(iv) the scope (including an indication of whether the coverage was
on a claims made, occurrence or other basis) and amount (including a
description of how deductibles and ceilings are calculated and operate) of
coverage; and
(v) a description of any retroactive premium adjustments or other
loss-sharing arrangements.
With respect to each such insurance policy, to the Target's Knowledge: (A) the
policy is legal, valid, binding, enforceable and in full force and effect; (B)
the policy will continue to be legal, valid, binding, enforceable and in full
force and effect on identical terms following the consummation of the Merger;
(C) neither any of the Target and its Subsidiaries nor any other party to the
policy is in material breach or default (including with respect to the payment
of premiums or the giving of notices) and no event has occurred which, with
notice or the lapse of time, would constitute such a breach or default, or
permit termination, modification or acceleration, under the policy; and (D) no
party to the policy has repudiated any provision thereof. Each of the Target
and its Subsidiaries has been covered since May 17, 1993 by insurance in scope
and amount customary and reasonable for the businesses in which it has engaged
during the aforementioned period. Section 3(j) of the Disclosure Schedule
describes any self-insurance arrangements affecting any of the Target and its
Subsidiaries.
(k) Litigation. Section 3(k) of the Disclosure Schedule sets forth, as
of the date hereof, each instance in which any of the Target and its
Subsidiaries (i) is subject to any outstanding injunction, judgment, order,
decree, ruling or charge or (ii) is a party or is, to the Target's Knowledge,
threatened to be made a party to any action, suit, proceeding, hearing or
investigation of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, local or foreign jurisdiction or before any
arbitrator. None of the actions, suits, proceedings, hearings and
investigations set forth in Section 3(k) of the Disclosure Schedule is
reasonably expected to result in any material adverse change in the business,
financial condition, operations or results of operations of the Target and its
Subsidiaries, taken as a whole. The Target has no reason to believe that any
action, suit, proceeding, hearing or investigation that could reasonably be
expected to result in any such material adverse change may be brought or
threatened against any of the Target and its Subsidiaries.
(l) Product Warranty. Except as set forth in the Disclosure Schedule,
none of the Target and its Subsidiaries has any liabilities in excess
of the liabilities set forth in the Public Reports or for which reasonable
reserves are maintained for any guaranty, warranty or other indemnity arising
from products manufactured, sold, leased or delivered by any of the Target and
its Subsidiaries, except for (i) liabilities which are not reasonably expected
to result in any material adverse change in the business, financial condition,
operations or results of operations of the Target and its Subsidiaries, taken
as a whole, and (ii) liabilities which have arisen after July 31, 1996 in the
Ordinary Course of Business.
(m) Product Liability. Except as reserved for in the financial
statements contained in the 1996 10-K, to the Target's Knowledge, none
of the Target and its Subsidiaries has any liability arising out of any injury
to individuals or property as a result of the ownership, possession or use of
any
<PAGE> 16
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product manufactured, sold, leased or delivery by any of the Target and its
Subsidiaries except for any such liabilities which are not reasonably expected
to result in any material adverse change in the business, financial condition,
operations or results of operations of the Target and its Subsidiaries, taken
as a whole.
(n) Employees. Except as set forth in the Disclosure Schedule, to
Target's Knowledge, no executive, key employee or group of employees
has any plans to terminate employment with any of the Target and its
Subsidiaries other than such terminations, the effect of which is not
reasonably expected to result in any material adverse change in the business,
financial condition, operations or results of operations of the Target and its
Subsidiaries, taken as a whole. None of the employees of Target or its
Subsidiaries are subject to any collective bargaining agreement. Since May 17,
1993, none of the Target and its Subsidiaries has committed any unfair labor
practice (as such term is defined in Federal labor law) or experienced any
strikes, claims of unfair labor practices or other collective bargaining
disputes, except for any such practices, strikes, claims or disputes which are
not reasonably expected to result in any material adverse change in the
business, financial condition, operations or results of operations of the
Target and its Subsidiaries, taken as a whole. The Target has no Knowledge of
any organizational effort presently being made or threatened by or on behalf of
any labor union with respect to employees of any of the Target and its
Subsidiaries.
(o) Employee Benefits.
(i) Section 3(o) of the Disclosure Schedule lists each Employee
Benefit Plan that any of the Target and its Subsidiaries maintains or
to which any of the Target and its Subsidiaries contributes.
(A) Each such Employee Benefit Plan (and each related trust,
insurance contract or fund) substantially complies in form and in
operation in all respects with the applicable requirements of
ERISA, the Code and other applicable laws.
(B) All required reports and descriptions (including Form 5500
Annual Reports, Summary Annual Reports, PBGC-1s and Summary Plan
Descriptions) have been filed or distributed appropriately with
respect to each such Employee Benefit Plan. The requirements of
Part 6 of Subtitle B of Title 1 of ERISA and of Code Section 4980B
have materially been met with respect to each such Employee Benefit
Plan which is an Employee Welfare Benefit Plan.
(C) All contributions (including all employer contributions and
employee salary reduction contributions) which are due prior to the
date of this Agreement have been paid to each such Employee Benefit
Plan which is an Employee Pension Benefit Plan and all
contributions which are due for any period ending on or before the
Closing Date will have been paid on or before the Closing Date to
each such Employee Pension Benefit Plan or will have been accrued
in accordance with the past custom and practice of the Target and
its Subsidiaries. All premiums or other
<PAGE> 17
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payments which are due for all periods ending on or before the
Closing Date will have been paid on or before the Closing Date with
respect to each such Employee Benefit Plan which is an Employee
Welfare Benefit Plan.
(D) Each such Employee Benefit Plan which is an Employee
Pension Benefit Plan substantially meets the requirements of a
"qualified plan" under Code Section 401(a) and has received a
favorable determination letter form the Internal Revenue Service or
has pending an application for a determination letter which was
timely filed.
(E) The market value of assets under each such Employee
Benefit Plan which is an Employee Pension Benefit Plan (other
than any multiemployer plan) equals or exceeds (or does not fail by
an amount which is material to the Target to equal or exceed) the
present value of all vested and nonvested liabilities thereunder
determined in accordance with PBGC methods, factors and assumptions
applicable to an Employee Pension Benefit Plan terminating on the
date for determination.
(F) The Target has delivered to the Buyer correct and
complete copies of the plan documents and summary plan
description, the most recent determination letter received from the
Internal Revenue Service, the most recent Form 5500 Annual Report,
and all related trust agreements, insurance contracts and other
funding agreements which implement each such Employee Benefit Plan.
(ii) With respect to each Employee Benefit Plan that any of the
Target, its Subsidiaries and the Controlled Group of Corporations which
includes the Target and its Subsidiaries maintains or ever has
maintained, within the seven years ending on the Closing Date, or to
which any of them contributes, contributed within the seven years ending
on the Closing Date, or ever has been required to contribute, within the
seven years ending on the Closing Date.
(A) No such Employee Benefit Plan which is an Employee
Pension Benefit Plan (other than any Multiemployer Plan) has
been completely or partially terminated or been the subject of a
Reportable Event as to which notices would be required to be filed
with the PBGC (except for Reportable Events for which PBGC has
waived the 30 day notice requirement). No proceeding by the PBGC
to terminate any such Employee Pension Benefit Plan (other than any
Multiemployer Plan) has been instituted or, to the Target's
Knowledge, threatened.
(B) There have been no prohibited transactions (as defined in
ERISA Section 406 and Code Section 4975) with respect to any such
Employee Benefit Plan. No Fiduciary (as defined in ERISA Section
3(21)) has any liability for breach of fiduciary duty or any other
failure to act or comply in connection with the administration or
investment of the assets of any such Employee Benefit Plan. No
action, suit, proceeding, hearing or
<PAGE> 18
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investigation with respect to the administration or the investment
of the assets of any such Employee Benefit Plan (other than routine
claims for benefits) is pending or, to the Target's Knowledge,
threatened. The Target has no Knowledge of any basis for any such
action, suit, proceeding, hearing or investigation.
(C) None of the Target and its Subsidiaries has incurred,
and the Target and has no reason to expect that any of the
Target and its Subsidiaries will incur, any liability to the PBGC
(other than PBGC premium payments) or otherwise under Title IV of
ERISA (including any withdrawal liability) or under the Code with
respect to any such Employee Benefit Plan which is an Employee
Pension Benefit Plan.
(iii) None of the Target, its Subsidiaries and the other members
of the Controlled Group of Corporations that includes the Target and
its Subsidiaries contributes to, has, within the seven years ending on
the Closing Date, contributed to, or been required to contribute to any
multiemployer plan or has any liability (including withdrawal liability)
under any multiemployer plan.
(iv) None of the Target and its Subsidiaries contributes or is
required to contribute to any Employee Welfare Benefit Plan providing
medical, health or life insurance or other welfare-type benefits for
current or future retired or terminated employees, their spouses or their
dependents (other than in accordance with Code Section 4980B).
(p) Guaranties. Except as set forth in the Disclosure Schedule or
the Public Reports, none of the Target and its Subsidiaries is a
guarantor or otherwise is liable for any material liability or obligation
(including indebtedness) of any other Person.
(q) Environment, Health and Safety.
(i) Each of the Target and its Subsidiaries are in compliance in
all material respects with all Environmental, Health and Safety
Laws. Without limiting the generality of the preceding sentence, each of
the Target and its Subsidiaries has obtained and since May 17, 1993 been
in compliance in all material respects with the terms and conditions of
all permits, licenses and other authorizations which are required under,
and has complied in all material respects with all other limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables which are contained in, all
Environmental, Health and Safety Laws.
(ii) To the Target's Knowledge, none of the Target and its
Subsidiaries has any material liability for damage to any
site, location or body of water (surface or subsurface), for any illness
of or personal injury to any employee or other individual, or for any
reason under any Environmental, Health and Safety Law.
<PAGE> 19
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(iii) To the Target's Knowledge, all properties and equipment
used in the business of the Target and its Subsidiaries have been free
of asbestos, PCBs, methylene chloride, trichloroethylene,
1,2-trans-dichloroethylene, dioxins, dibenzofurans and Extremely
Hazardous Substances (as defined in Section 302 of the Emergency Planning
and Community Right-to-Know Act of 1986, as amended) except for such
uses, the effect of which is not reasonably expected to result in any
material adverse change in the business, financial condition, operations
or results of operations of the Target and its Subsidiaries, taken as a
whole.
(r) Disclosure. The Definitive Proxy Materials will comply in all
material respects with the Securities Exchange Act and the applicable
rules and regulations thereunder. None of the information that the Target will
supply that is included in the Definitive Proxy Materials will, at the time the
Definitive Proxy Materials are first mailed to the Target's stockholders or at
the time of the Special Meeting, include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they will be made, not
misleading; provided, however, that the Target makes no representation or
warranty with respect to any information that the Buyer and the Transitory
Subsidiary supply that is included in the Definitive Proxy Materials.
(s) Opinion of Financial Advisor. The Target has received the opinion
of Bear Stearns & Co., Inc., dated the date of this Agreement, to the
effect that, as of the date of this Agreement, the Merger Consideration to be
paid in the Merger is fair, from a financial point of view, to the
stockholders of the Target (other than the Buyer and its affiliates) (the
"Fairness Opinion"), and the Fairness Opinion has not been withdrawn.
4. Representations and Warranties of the Buyer and the Transitory
Subsidiary. Each of the Buyer and the Transitory Subsidiary represents and
warrants to the Target that the statements contained in this Section 4 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section 4),
except as set forth in the Disclosure Schedule delivered by the Buyer
simultaneously with the execution and delivery of this Agreement and initialed
by the Parties. The Disclosure Schedule will be arranged in paragraphs
corresponding to the numbered and lettered paragraphs contained in this
Section 4.
(a) Organization. Each of the Buyer and the Transitory Subsidiary is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware. The Buyer and the Transitory Subsidiary were
each formed solely for the purpose of engaging in the transactions contemplated
hereby, have engaged in no other business activities and have conducted their
operations only as contemplated hereby.
(b) Financing. The Buyer has furnished to the Target correct and complete
copies of a written proposal or proposals from third parties (the "Financing
Proposals") proposing to provide the Buyer and the Transitory Subsidiary with
all of the financing necessary to purchase all of the Target Shares pursuant to
the Merger, pay all fees and expenses related to the transactions
<PAGE> 20
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contemplated by this Agreement and fund the working capital needs of the
Surviving Corporation and its Subsidiaries after the Closing. As of the date
hereof, the Buyer and the Transitory Subsidiary, in the aggregate, have valid
and binding cash and funding undertakings (copies of which have been delivered
to the Target) of at least $2.0 million and equity (assuming the funding
undertakings are performed) of at least $2.0 million. At the Closing Date, the
Buyer and the Transitory Subsidiary, in the aggregate, will have equity of at
least $2.0 million.
(c) Authorization of Transaction. Each of the Buyer and the Transitory
Subsidiary has full power and authority (including full corporate power and
authority) to execute and deliver this Agreement and to perform its obligations
hereunder. The execution, delivery and performance of this Agreement by the
Buyer and the Transitory Subsidiary and the consummation by the Buyer and the
Transitory Subsidiary of the Merger and of the other transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of the Buyer and the Transitory Subsidiary and no other corporate proceedings
on the part of the Buyer and the Transitory Subsidiary are necessary to
authorize this Agreement or to consummate the transactions so contemplated. No
further vote of the Buyer's stockholders is required to approve this Agreement
or the transactions contemplated hereby. This Agreement has been duly executed
and delivered by the Buyer and the Transitory Subsidiary and, assuming this
Agreement constitutes a valid and binding obligation of the Target, constitutes
a valid and binding obligation of each of the Buyer and the Transitory
Subsidiary enforceable against the Buyer and the Transitory Subsidiary in
accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally and to
general principles of equity.
(d) Noncontravention. Except as set forth in the Disclosure Schedule,
except for filings, permits, authorizations, consents and approvals as may be
required under, and other applicable requirements of, the Securities Exchange
Act (including the filing with the SEC of the Definitive Proxy Materials
relating to the Requisite Stockholder Approval), the Hart-Scott-Rodino Act, the
laws of the State of Delaware, the laws of other states in which the Target is
qualified to do or is doing business and state takeover laws, and except for
the Requisite Stockholder Approval and the filing with the Secretary of State
of the State of Delaware and the Recorder of Deeds of the applicable county in
the State of Delaware of the Certificate of Merger following receipt of the
Requisite Stockholder Approval neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which either the Buyer or the Transitory
Subsidiary is subject or any provision of the charter or bylaws of either the
Buyer or the Transitory Subsidiary or (ii) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument or other
arrangement to which either the Buyer or the Transitory Subsidiary is a party
or by which it is bound or to which any of its assets is subject, except where
the violation, conflict, breach, default, acceleration, termination,
modification, cancellation, or failure to give notice would not have a material
adverse effect on the ability of the Parties to consummate the transactions
contemplated by this Agreement.
<PAGE> 21
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(e) Brokers' Fees. Neither the Buyer nor the Transitory Subsidiary has any
liability or obligation to pay any fees or commissions to any broker, finder or
agent with respect to the transactions contemplated by this Agreement for which
any of the Target and its Subsidiaries could become liable or obligated.
(f) Disclosure. None of the information that the Buyer and the Transitory
Subsidiary will supply specifically for use in the Definitive Proxy Materials
will contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they will be made, not misleading.
(g) Litigation. As of the date of this Agreement, there is no suit,
claim, action, proceeding or investigation pending or, to the knowledge of the
Buyer and the Transitory Subsidiary, threatened against Buyer or any of its
Subsidiaries that could reasonably be expected to prevent or materially delay
the consummation of the Merger. As of the date of this Agreement, neither the
Buyer nor any of its Subsidiaries is subject to any outstanding order, writ,
injunction or decree that could reasonably be expected to prevent or materially
delay the consummation of the Merger.
(h) Solvency. Assuming that the representations and warranties in
Section 3 above are true and correct as of the Effective Time, (i) the
Surviving Corporation and its Subsidiaries will be solvent on the date of the
Effective Time, (ii) neither the Surviving Corporation nor any of its
Subsidiaries will become insolvent as a result of the Merger and the payment of
the Merger Consideration, (iii) at the time of the payment of the Merger
Consideration, the Surviving Corporation will not be engaged in a business or
transaction, or about to engage in a business or transaction, for which the
property remaining with the Surviving Corporation constitutes an unreasonably
small capital and (iv) the Surviving Corporation does not, and at the time of
the payment of the Merger Consideration will not, intend to incur, or believe
that it would incur, debts that would be beyond its ability to pay as such
debts mature.
(i) Undertaking. The Buyer and the Transitory Subsidiary have received an
Undertaking dated the date hereof from PM Delaware Inc. and Pacholder
Associates Inc. relating to a covenant and undertaking to invest in, or
otherwise provide equity contributions or funds in the form of equity for, the
Buyer and the Transitory Subsidiary in an amount equal to Two Million Dollars
($2,000,000). A correct and complete copy of such Undertaking has been
delivered by the Buyer to the Target. Each of PM Delaware Inc. and Pacholder
Associates Inc. has full power and authority (including full corporate power
and authority) to execute and deliver the Undertaking and to perform its
obligations thereunder. The execution, delivery and performance of the
Undertaking by PM Delaware Inc. and Pacholder Associates Inc. of the
Undertaking have been duly authorized by all necessary corporate action on the
part of PM Delaware Inc. and Pacholder Associates Inc. The Undertaking has
been duly executed and delivered by PM Delaware Inc. and Pacholder Associates
Inc. and constitutes a valid and binding obligation of each of PM Delaware Inc.
and Pacholder Associates Inc. enforceable against each of PM Delaware Inc. and
Pacholder Associates Inc. in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws relating to creditors'
rights generally and to general principles of equity.
<PAGE> 22
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5. Covenants. The Parties agree as follows with respect to the period
from and after the execution of this Agreement.
(a) General. Each of the Parties will use its reasonable best efforts
to take all action and to do all things necessary, proper, or advisable in
order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions
set forth in Section 6 below).
(b) Notices and Consents. The Target will give any notices (and will
cause each of its Subsidiaries to give any notices) to third parties
and will use its reasonable best efforts to obtain (and will cause each of its
Subsidiaries to use its reasonable best efforts to obtain) any third party
consents, that the Buyer reasonably may request in connection with the matters
referred to in Section (d) above.
(c) Regulatory Matters and Approvals. Each of the Parties will (and the
Target will cause each of its Subsidiaries to) give any notices to, make any
filings with, and use its reasonable best efforts to obtain any authorizations,
consents, and approvals of governments and governmental agencies in connection
with the matters referred to in Section 3(d) and Section 4(d) above. Without
limiting the generality of the foregoing:
(i) Securities Exchange Act. The Parties will promptly after the
execution of this Agreement prepare and file with the SEC preliminary
proxy materials and any other statements or filings required under the
Securities Exchange Act relating to the Special Meeting and the
transactions contemplated hereunder (the "SEC Filings"). The Target
will use its reasonable best efforts to respond to the comments of the
SEC thereon and will make any further filings (including amendments and
supplements) in connection therewith that may be necessary, proper or
advisable. The Buyer and the Transitory Subsidiary will provide the
Target, and the Target will provide the Buyer and the Transitory
Subsidiary, with whatever information and assistance in connection with
the SEC Filings that Target, the Buyer or the Transitory Subsidiary
reasonably may request. Each of the Target, the Buyer and the Transitory
Subsidiary shall correct promptly any information specifically provided
by it which is included in the Definitive Proxy Materials and SEC Filings
which shall have become false or misleading in any material respect.
Each of the Target, the Buyer and the Transitory Subsidiary shall take
all steps necessary to file or to cause to be filed with the SEC and have
cleared by the SEC any amendment or supplement to the Definitive Proxy
Materials so as to correct the same and to cause the Definitive Proxy
Materials as so corrected to be disseminated to the Target Stockholders,
in each case as and to the extent required by applicable law.
(ii) Delaware General Corporation Law. The Target will call a special
meeting of its stockholders (the "Special Meeting"), as soon as
reasonably practicable in order that the stockholders may consider and
vote upon the adoption of this Agreement and the approval of the Merger
in accordance with the Delaware General Corporation Law. The Target will
mail the Definitive Proxy Materials to its stockholders as soon as
reasonably
<PAGE> 23
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practicable after clearance thereof by the SEC. The Target shall, through
its Board of Directors, recommend to its stockholders adoption of this
Agreement and approval of the Merger and shall not withdraw such
recommendation; provided, however, that Target's Board of Directors shall
not be required to make and shall be entitled to withdraw such
recommendation if Target's Board of Directors reasonably concludes in
good faith after consultation with, and based on the advice of, its
outside counsel, that the making of or the failure to withdraw, such
recommendation would be inconsistent with the fiduciary obligations of
Target's Board of Directors under applicable law.
(iii) Hart-Scott-Rodino Act. If required, each of the Parties will
file (and the Target will cause each of its Subsidiaries to file)
any Notification and Report Forms and related material that it may be
required to file with the Federal Trade Commission and the Antitrust
Division of the United States Department of Justice under the
Hart-Scott-Rodino Act, will use its reasonable best efforts to obtain
(and the Target will cause each of its Subsidiaries to use its reasonable
best efforts to obtain) an early termination of the applicable waiting
period, and will make (and the Target will cause each of its Subsidiaries
to make) any further filings pursuant thereto that may be necessary,
proper, or advisable.
(d) Financing. During the thirty (30) day period beginning on the date
this Agreement is executed and delivered by all Parties hereto, the
Buyer and the Transitory Subsidiary shall use their reasonable best efforts to
obtain a written commitment or commitments from third parties (the "Financing
Commitments") committing, subject only to customary closing conditions, to
provide the Buyer and the Transitory Subsidiary with all of the financing
necessary to purchase all of the Target Shares pursuant to the Merger, pay all
fees and expenses related to the transactions contemplated by this Agreement
and fund the working capital needs of the Surviving Corporation and its
Subsidiaries after the Closing. The Buyer shall furnish correct and complete
copies of the Financing Commitments to the Target no later than November 29,
1996. Thereafter, the Buyer and the Transitory Subsidiary will use their
reasonable best efforts to enter into definitive agreements (the "Definitive
Financing Agreements") as soon as reasonably practicable on terms and
conditions substantially in accordance with the Financing Commitments. The
Buyer will furnish correct and complete copies of the Definitive Financing
Agreements to the Target. In the event any or all of the financing becomes
unavailable for any reason, the Buyer will use its reasonable best efforts to
obtain replacement financing on substantially equivalent terms and conditions
from alternative sources. Any provision of this Agreement to the contrary
notwithstanding, the Target will not have any obligation to mail the Definitive
Proxy Materials to its stockholders until the Buyer has delivered copies of the
Definitive Financing Agreements to the Target.
(e) Operation of Business. The Target will (and will cause its
Subsidiaries to) engage only in practices, and only take actions, or
enter into transactions in the Ordinary Course of Business. During the period
from the date of this Agreement through the Effective Time, the Target will not
(and will not cause or permit any of its Subsidiaries to) do any of the
following without, in each instance, the prior written consent of the Buyer
(which consent shall not be withheld unreasonably):
<PAGE> 24
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(i) none of the Target and its Subsidiaries will authorize or
effect any change in its charter or bylaws;
(ii) none of the Target and its Subsidiaries will grant any
options, warrants, or other rights to purchase or obtain any of its
capital stock or issue, sell, or otherwise dispose of any of its capital
stock (except upon the conversion or exercise of options, warrants, and
other rights currently outstanding);
(iii) none of the Target and its Subsidiaries will declare, set
aside, or pay any dividend or distribution with respect to its capital
stock (whether in cash or in kind), or redeem, repurchase, or otherwise
acquire any of its capital stock;
(iv) none of the Target and its Subsidiaries will issue any note,
bond, or other debt security or, other than in the Ordinary Course of
Business, create, incur, assume or guarantee any indebtedness for
borrowed money or capitalized lease obligation;
(v) none of the Target and its Subsidiaries will impose (or
permit or cause to be imposed) any Security Interest upon any of its
assets outside the Ordinary Course of Business;
(vi) none of the Target and its Subsidiaries will make any capital
investment in, make any loan to, or acquire the securities or assets of
any other Person;
(vii) none of the Target and its Subsidiaries will make any change
in employment terms, policies or practices for any of its directors or
officers or make any change in employment terms, policies or practices
for its non-officer employees outside the Ordinary Course of Business;
(viii) none of the Target and its Subsidiaries will commit to any
of the foregoing.
Notwithstanding anything to the contrary elsewhere in this Section 5(e), the
Target shall be permitted to take the action set forth in the Disclosure
Schedule and such action shall not constitute a breach of this Agreement.
(f) Access. The Target will (and will cause each of its Subsidiaries to)
permit representatives of the Buyer to have reasonable access at reasonable
times upon reasonable notice to all premises, properties, personnel, books,
records (including tax records), contracts, and documents of or pertaining to
each of the Target and its Subsidiaries. All information obtained by the Buyer
or the Transitory Subsidiary pursuant to this Agreement shall be kept
confidential in accordance with the Confidentiality Agreement dated January 3,
1996 between Bear, Stearns & Co. Inc., on behalf of the Target, and Winton
Associates, Inc. (the "Confidentiality Agreement"). Each of the Target, the
Buyer and the Transitory Subsidiary hereby expressly affirms the terms of, and
<PAGE> 25
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acknowledges that it is bound by such Confidentiality Agreement and agrees and
acknowledges that such terms and the Confidentiality Agreement shall survive
the termination of this Agreement.
(g) Notice of Developments. Each Party will give prompt written notice
to the others of any material adverse development causing a breach of
any of its own representations and warranties in Section 3 and Section
4 above. No disclosure by any Party pursuant to this Section 5(g),
however, shall be deemed to amend or supplement the Disclosure Schedule or to
prevent or cure any misrepresentation, breach of warranty, or breach of
covenant.
(h) Exclusivity. The Target will not (and will not cause or permit any
of its Subsidiaries to) solicit, initiate, or encourage the submission
of any proposal or offer from any Person relating to a tender or exchange
offer, a merger, consolidation or other business combination involving the
Target or any of its Subsidiaries or any proposal to acquire in any manner a
substantial equity interest in, or substantial portion of the assets of, the
Target or any of its Subsidiaries (a "Third Party Offer")); provided, however,
that the Target, its Subsidiaries, and their directors and officers may engage
in discussions or negotiations with, or furnish information concerning the
Target and its properties, assets and business to any Person which makes a
Third Party Offer if the Board of Directors of the Target reasonably concludes
in good faith after consultation with, and based on the advice of, its outside
counsel, that the failure to take such action would be inconsistent with the
fiduciary obligations of such Board of Directors under applicable law; and
provided further, that notwithstanding anything to the contrary herein
contained, the Board of Directors of the Target may take and disclose to the
Target's stockholders a position contemplated by Rule 14e-2 promulgated under
the Securities Exchange Act, comply with Rule 14d-9 thereunder and make all
disclosures required by applicable law in connection therewith and such actions
shall not be considered a breach of this Section 5(h) or any other provision of
this Agreement. The Target shall promptly (but in no case later than 48 hours)
notify the Buyer (i) of the receipt of any Third Party Offer (providing the
Buyer with a summary of the material terms thereof) or (ii) of a decision by
the Target to engage in discussions or negotiations with, or furnish
information concerning the Target or its properties, assets or business to, any
Person.
(i) Insurance and Indemnification. The Buyer will provide each
individual who served as a director or officer of the Target at any time prior
to the Effective Time with liability insurance providing coverage for events
occurring at or prior to the Effective Time for a period of six (6) years
after the Effective Time no less favorable in coverage and amount that the
insurance in effect immediately prior to the Effective Time.
The charter and bylaws of the Surviving Corporation shall contain the
provisions with respect to indemnification set forth in the Certificate of
Incorporation and Bylaws of the Target on the date of this Agreement, which
provisions shall not be amended, repealed or otherwise modified for a period of
six (6) years after the Effective Time in any manner that would adversely
affect the rights thereunder of Persons who at any time prior to the Effective
Time were prospective indemnitees under the Certificate of Incorporation or
Bylaws of the Target in respect of actions or omissions
<PAGE> 26
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occurring at or prior to the Effective Time (including, without limitation, the
transactions contemplated by this Agreement), unless such modification is
required by law.
From and after the Effective Time, the Surviving Corporation shall
indemnify, defend and hold harmless the present and former officers, directors,
agents and employees of the Target and its Subsidiaries (collectively, the
"Indemnified Parties") against all losses, expenses, claims, damages,
liabilities or amounts that are paid in settlement of, with the approval of
Buyer and the Surviving Corporation (which approval shall not be unreasonably
withheld), or otherwise in connection with, any claim, action, suit, proceeding
or investigation, based in whole or in part on the fact that such Person is or
was such an officer, director, agent or employee of the Target or any
Subsidiary and arising out of actions or omissions occurring at or prior to the
Effective Time (including the transactions contemplated by this Agreement), in
each case to the fullest extent permitted under the laws of the State of
Delaware (and, from and after the Effective Time, shall pay expenses in advance
of the final disposition of any such action or proceeding to each Indemnified
Party to the fullest extent permitted by the laws of the State of Delaware).
(j) Target Stock Options. On the Closing Date and in accordance with the
Target's 1994 Long-Term Incentive Plan, each holder of a then outstanding
Target Stock Option, whether or not then exercisable, shall, in settlement
thereof and without any action by such holder, be deemed to have made a
disposition of such Target Stock Option to the Target and shall receive from
the Target for each Target Share subject to such Target Stock Option an amount
(subject to any applicable withholding tax) in cash equal to the excess, if
any, of the Merger Consideration over the per Target Share exercise price of
such Target Stock Option (such amount being hereinafter referred to as the
"Option Consideration"). Upon receipt of the Option Consideration, the related
Target Stock Option shall be automatically canceled.
(k) Deferred Compensation Shares. On the Closing Date, each holder of a
Deferred Compensation Share, whether or not then vested, shall, in settlement
thereof and without any action by such holder, be deemed to have made a
disposition of such Deferred Compensation Share to the Target and shall receive
from the Target for each Deferred Compensation Share an amount (subject to any
applicable withholding tax) in cash equal to the Merger Consideration (such
amount being hereinafter referred to as the "Deferred Compensation
Consideration"). Upon receipt of the Deferred Compensation Consideration, the
related Deferred Compensation Share shall be automatically canceled. Prior to
the Closing Date, the Target shall obtain all necessary consents or releases
from holders of Deferred Compensation Shares and to take all such other lawful
action as may be necessary to give effect to the transactions contemplated by
this Section 5(k) (except for such action that may require the approval of the
Target's stockholders).
(l) Buyer and Transitory Subsidiary Equity. The Buyer and the Transitory
Subsidiary shall take such actions as may be necessary to ensure that the Buyer
and the Transitory Subsidiary shall, in the aggregate, have at least $2.0
million in equity at the Closing Date.
6. Conditions to Obligation to Close.
<PAGE> 27
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(a) Conditions to Each Party's Obligation To Effect the Merger. The
respective obligation of each Party to effect the Merger shall be subject to
the satisfaction of the following conditions:
(i) the Requisite Stockholder Approval shall have been obtained;
(ii) the waiting period (and any extension thereof) applicable to the
consummation of the Merger under the Hart-Scott-Rodino Act shall have
expired or been terminated;
(iii) no statute, rule, regulation, executive order, decree, temporary
restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or other governmental
entity or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect; provided, however, that
each of the Parties shall have used reasonable efforts to prevent the
entry of any such injunction or other order and to appeal as promptly as
possible any injunction or other order that may be entered;
(iv) each of the Parties shall have received a solvency opinion (the
"Solvency Opinion") from a nationally recognized valuation firm
reasonably acceptable to each of the Parties, dated the date of the
Effective Time, in a form reasonably acceptable to each of the Parties;
and
(v) There shall not have been instituted or be pending, or
threatened, any suit, action or proceeding by any governmental
entity as a result of this Agreement or any of the transactions
contemplated hereby which, if such governmental entity were to prevail,
would reasonably be expected to prevent the consummation of the Merger or
have a material adverse effect on the business, financial condition or
results of operations of the Target and its Subsidiaries, taken as a
whole.
(b) Conditions to Obligation of the Buyer and the Transitory Subsidiary.
The obligation of each of the Buyer and the Transitory Subsidiary to
consummate the Merger is subject to satisfaction of the following conditions:
(i) the Target and its Subsidiaries shall have procured all of the
third party consents specified on the date of this Agreement pursuant
to Section 5(b) above;
(ii) the representations and warranties set forth in Section 3
above shall be true and correct in all material respects (other
than representations and warranties having materiality qualifiers, which
shall be true and correct in all respects) at and as of the Closing Date
(other than to the extent that any such representation and warranty is,
by its terms, expressly limited to a specific date, in which case such
representation and warranty shall be true and correct as of such date);
<PAGE> 28
- 24 -
(iii) the Target shall have performed and complied with all of its
covenants hereunder required to be performed or complied with on or
prior to the Closing Date in all material respects through the Closing;
(iv) since the date of this Agreement, there shall not have been or
occurred any material adverse change in the business, financial condition
or results of operations of the Target and its Subsidiaries, taken as a
whole, other than changes relating to the Target's industry or the
economy in general and not specifically related to the Target and its
Subsidiaries. Each of the Buyer and the Transitory Subsidiary
acknowledges that there may be disruptions to the Target's business as a
result of the announcement of the Merger and any changes primarily
attributable to the announcement of the Merger shall not constitute a
material adverse change;
(v) the Target shall have delivered to the Buyer and the
Transitory Subsidiary a certificate to the effect that each of the
conditions specified above in Section 6(b)(i)-(iv) is satisfied in all
respects;
(vi) the Buyer and the Transitory Subsidiary shall have received
from counsel to the Target an opinion in form and substance
substantially as set forth in Exhibit C attached hereto, addressed to the
Buyer and the Transitory Subsidiary, and dated as of the Closing Date;
(vii) the Buyer and the Transitory Subsidiary shall have received
the resignations, effective as of the Closing, of each director of the
Target and of each of the officers of the Target and its Subsidiaries
set forth in Paragraph 6(b)(vii) of the Disclosure Schedule delivered by
Buyer to the Target;
(viii) all Target Stock Options and all Deferred Compensation Shares
shall have been canceled; and
(ix) the Target shall have furnished to the Buyer and the
Transitory Subsidiary such other customary documents, certificates
or instruments as Buyer may reasonably request evidencing compliance by
the Target with the terms of this Agreement.
The Buyer and the Transitory Subsidiary may waive any condition
specified in this Section 6(b) if they execute a writing so stating at or
prior to the Closing.
(c) Conditions to Obligation of the Target. The obligation of the
Target to consummate the Merger is subject to satisfaction of the following
conditions:
(i) the representations and warranties set forth in Section 4 above
shall be true and correct in all material respects (other than
representations and warranties having materiality qualifiers, which shall
be true and correct in all respects), at and as of the Closing Date
(other
<PAGE> 29
- 25 -
than to the extent that any such representation and warranty is, by its
terms, expressly limited to a specific date, in which case such
representation and warranty shall be true and correct as of such date);
(ii) each of the Buyer and the Transitory Subsidiary shall have
performed and complied with all of its covenants hereunder required to
be performed or complied with on or prior to the Closing Date in all
material respects through the Closing;
(iii) the Buyer, the Transitory Subsidiary and the other parties
thereto shall have executed and delivered the Definitive Financing
Statements;
(iv) each of the Buyer and the Transitory Subsidiary shall have
delivered to the Target a certificate to the effect that each of the
conditions specified above in Section 6(c)(i)-(iii) and is satisfied in
all respects;
(v) the Fairness Opinion shall not have been withdrawn;
(vi) the Target shall have received from counsel to the Buyer and
the Transitory Subsidiary an opinion in form and substance
substantially as set forth in Exhibit D attached hereto, addressed to the
Target, and dated as of the Closing Date; and
(vii) the Buyer and the Transitory Subsidiary shall have furnished
to the Target such other customary documents, certificates or
instruments as Target may reasonably request evidencing compliance by the
Buyer and the Transitory Subsidiary with the terms of this Agreement.
The Target may waive any condition specified in this Section 6(c) if
it executes a writing so stating at or prior to the Closing.
(d) Notwithstanding anything contained herein but subject to Section
7(a)(vii), no condition involving performance of covenants, the accuracy of the
representations and warranties as of the Closing Date or the furnishing of
officers' certificates or legal opinions shall be deemed not fulfilled, and the
party to whom such condition runs shall not be entitled to terminate this
Agreement on such basis, if the respects in which such covenants have not been
performed, or the representations and warranties are untrue, or the
certificates or opinions do not conform to what is prescribed by this
Agreement, in the aggregate, are not materially adverse to the business,
financial condition, operations or results of operations of the Target
(including the Surviving Corporation) and its Subsidiaries, taken as a whole,
or the consummation of the transactions contemplated hereby, provided, however,
that the foregoing shall not constitute a waiver of any other rights a party
may have in such circumstances.
7. Termination.
<PAGE> 30
- 26 -
(a) Termination of Agreement. This Agreement may be terminated at any
time prior to the Effective Time (whether before or after the Requisite
Stockholder Approval) by:
(i) the Parties by mutual written consent;
(ii) the Buyer and the Transitory Subsidiary by giving written
notice to the Target (A) in the event the Target has breached any
material representation, warranty, or covenant contained in this
Agreement in any material respect, the Buyer or the Transitory Subsidiary
has notified the Target of the breach, and the breach has continued
without cure for a period of 30 days after the notice of breach or (B) if
the Closing shall not have occurred on or before April 30, 1997, unless
the failure to consummate the Merger results from the failure to satisfy
conditions set forth in Section 6(c)(i)-(iii);
(iii) the Target by giving written notice to the Buyer and the
Transitory Subsidiary (A) in the event the Buyer or the Transitory
Subsidiary has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect, the Target
has notified the Buyer and the Transitory Subsidiary of the breach, and
the breach has continued without cure for a period of 30 days after the
notice of breach or (B) if the Closing shall not have occurred on or
before April 30, 1997, unless the failure to consummate the Merger
results from the failure to satisfy the conditions set forth in Section
6(b)(ii)-(iii);
(iv) the Target, if notwithstanding the Target's compliance with
Section 5(h) hereof, the Target receives and accepts prior to the
Closing Date a Third Party Offer; provided, however, that, in the event
of such acceptance of a Third Party Offer the Target shall immediately
pay to the Buyer the sum of the Expenses and One Million and 00/100
Dollars ($1,000,000.00) as liquidated damages and not as a penalty, any
such payment to be made in immediately available funds;
(iv) the Target or the Buyer notwithstanding the Target's
compliance with Section 5(h) hereof, if the Target's Board of Directors
prior to the Closing Date withdraws its recommendation to the Target's
stockholders of this Agreement and the Merger; provided, however, that in
the event of such withdrawal the Target shall immediately pay to the
Buyer the Expenses; in addition, if within twelve (12) months after such
termination, the Target shall consummate a Third Party Offer, the Target
shall pay the Buyer the additional sum of One Million and 00/100 Dollars
($1,000,000.00), as liquidated damages and not as a penalty, any such
payment to be made in immediately available funds;
(vi) any Party by giving written notice to the other Parties (A)
at any time after the Special Meeting in the event this Agreement and
the Merger fail to receive the Requisite Stockholder Approval or (B) if
any governmental entity shall have issued an order, decree or ruling or
taken any other action permanently enjoining, restraining or otherwise
prohibiting the consummation of the Merger and such order, decree or
ruling or other action shall have become final and nonappealable; or
<PAGE> 31
- 27 -
(vii) any Party by giving written notice to the other Parties at
any time during the period commencing November 29, 1996 through 5:00
p.m., Chicago time, Friday, December 6, 1996 in the event Buyer and the
Transitory Subsidiary shall not have entered into the Financing
Commitments or the Buyer shall not have furnished copies of the Financing
Commitments to Target in accordance with Section 5(d) (except to the
extent that such failure to obtain and enter into the Financing
Commitments is materially attributable to a breach by Target of any
warranty or representation herein or any material adverse change after
October 29, 1996 in the business financial condition, operations or
results of operations of the Target and its Subsidiaries, taken as a
whole, in which event the liquidated damages provisions in the following
provisos shall be inapplicable); provided, however, that in the event the
Buyer and the Transitory Subsidiary (or either of them) shall be the
Party giving the notice of termination, the notice of termination shall
not be effective unless the Buyer and the Transitory Subsidiary shall
concurrently with such notice of termination (or in any event no later
than 5:00 p.m., Chicago time, Friday, December 6, 1996) pay to the Target
the sum of Five Hundred Thousand and 00/100 Dollars ($500,000) as
liquidated damages and not as a penalty, any such payment to be made in
immediately available funds; provided, further, that in the event the
Target shall be the Party giving the notice of termination, the Buyer and
the Transitory Subsidiary shall within two (2) business days after
receipt of such notice of termination, pay to the Target the sum of Five
Hundred Thousand and 00/100 Dollars ($500,000) as liquidated damages and
not as a penalty, any such payment to be made in immediately available
funds.
"Expenses" shall mean documented out-of-pocket fees and expenses of the
Buyer and the Transitory Subsidiary: (i) up to an aggregate One Hundred Twenty
Five Thousand and 00/100 Dollars ($125,000.00) incurred or paid after the date
hereof but prior to any termination of this Agreement if the termination occurs
prior to the time that the Buyer and/or the Transitory Subsidiary pay fees to
third parties with respect to the Financing Commitments; and (ii) up to an
aggregate of Three Hundred Seventy Five Thousand and 00/100 Dollars
($375,000.00) incurred or paid after the date hereof but prior to any
termination of this Agreement if the termination occurs after the time that the
Buyer and/or the Transitory Subsidiary pay fees to third parties with respect
to the Financing Commitments, in the case of each of (i) and (ii), in
connection with the Merger or the consummation of any of the transactions
contemplated by this Agreement, including all fees and expenses of law firms,
commercial banks, investment banking firms, accountants, experts and
consultants to the Buyer or the Transitory Subsidiary. In no event shall more
than one termination fee be payable.
(b) Effect of Termination. If any Party terminates this Agreement
pursuant to Section 7(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
(except for any liability of any Party then in breach or as set forth in
Section 7(a)); provided, however, that Section 3(i), the last sentence of
Section 4(b), Section 4(e), the confidentiality provisions contained in Section
5(f), Section 5(l), this Section 7(b) and Section 8 shall survive any such
termination.
8. Miscellaneous.
<PAGE> 32
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(a) Survival. None of the representations, warranties and covenants of
the Parties (other than the provisions in Section 2 above concerning
payment of the Merger Consideration, the provisions in Section 5(i) above
concerning insurance and indemnification and any covenant which by its terms
contemplates performance after the Effective Time) will survive the Effective
Time.
(b) Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter
of this Agreement without the prior written approval of the other Parties;
provided, however, that any Party may make any public disclosure it believes in
good faith is required by applicable law or by any listing or trading agreement
concerning its publicly-traded securities (in which case the disclosing Party
will use its reasonable best efforts to advise the other Party prior to making
the disclosure).
(c) No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns; provided, however, that (i) the
provisions in Section 2 above concerning payment of the Merger Consideration are
intended for the benefit of, and shall be enforceable by the Target
Stockholders, their heirs and their respective legal representatives and (ii)
the provisions in Section 5(i), Section 5(j) and Section 5(k) above are
intended for the benefit of, and shall be enforceable by the individuals
specified therein and their heirs and their respective legal representatives
and, with respect to the foregoing clauses (i) and (ii), shall be binding on
the Buyer, the Transitory Subsidiary, the Surviving Corporation, their
respective Subsidiaries and their respective successors and assigns.
(d) Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement among the Parties and supersedes any
prior or contemporaneous understandings, agreements or representations by or
among the Parties, written or oral, to the extent they related in any way to
the subject matter hereof.
(e) Successors and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior
written approval of the other Parties provided, however, that the Buyer may
assign its rights hereunder to an affiliated entity without the prior written
consent of the Target provided Buyer executes a written guarantee of the
obligations of any such assignee in a form reasonably acceptable to Target.
(f) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument.
(g) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
<PAGE> 33
- 29 -
(h) Notices. All notices, requests, demands, claims and other
communications hereunder will be in writing. Any notice, request, demand,
claim or other communication hereunder shall be addressed to the intended
recipient as set forth below:
If to the Target: AM International, Inc.
9899 West Higgins
Suite 900
Rosemont, Illinois 60018
Attention: Steven R. Andrews
Vice President, General Counsel & Secretary
With a required SIDLEY & AUSTIN
copy to: One First National Plaza
Chicago, Illinois 60603
Attention: Jim L. Kaput, Esq.
If to the Buyer c/o Pacholder Associates, Inc.
or the Transitory 8044 Montgomery Road
Subsidiary: Suite 382
Cincinnati, Ohio 45236
Attention: James P. Shanahan, Jr.
Copy to: KEATING, MUETHING & KLEKAMP
1800 Provident Tower
One East Fourth Street
Cincinnati, Ohio 45202
Attention: J. David Rosenberg, Esq.
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth
above using personal delivery, expedited courier, messenger service, telecopy,
telex, registered mail, certified mail, ordinary mail, or electronic mail, but
no such notice, request, demand, claim, or other communication shall be deemed
to have been duly given unless and until it actually is received by the
intended recipient. Any Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Parties notice in the manner herein set forth.
(i) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal substantive laws of the State of Delaware without
giving effect to any choice or conflict of law provision or rule (whether of
the State of Delaware or any other jurisdiction) that would cause or result in
the application of the laws of any jurisdiction other than the State of
Delaware.
<PAGE> 34
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(j) Amendments and Waivers. The Parties may mutually amend any provision
of this Agreement at any time prior to the Effective Time with the
prior authorization of their respective Boards of Directors; provided, however,
that any amendment effected subsequent to obtaining the Requisite Stockholder
Approval will be subject to the restrictions contained in the Delaware General
Corporation Law; provided, further, that any decrease in the Merger
Consideration per Target Share shall be submitted to the Target's stockholders
for approval. No amendment of any provision of this Agreement shall be valid
unless the same shall be in writing and signed by all of the Parties. No
waiver by any Party of any default, misrepresentation or breach of warranty or
covenant hereunder, whether intentional or not, shall be deemed to extend to
any prior or subsequent default, misrepresentation or breach of warranty or
covenant hereunder or affect in any way any rights arising by virtue of any
prior or subsequent such occurrence.
(k) Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(l) Expenses. Each of the Parties will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.
(m) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of
any of the provisions of this Agreement. Any reference to any federal, state,
local, or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context otherwise requires. The
word "including" shall mean including without limitation.
(n) Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
* * * * *
<PAGE> 35
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date and year first above written.
AM INTERNATIONAL, INC.
By: /s/ Jerome D. Brady
----------------------------
Name: Jerome D. Brady
Title: Chairman, CEO and President
8044 ACQUISITION INC.
By: /s/ James P. Shanahan, Jr.
-----------------------------
Name: James P. Shanahan, Jr.
Title: Treasurer
8044 ACQUISITION SUB INC.
By: /s/ James P. Shanahan, Jr.
-----------------------------
Name: James P. Shanahan, Jr.
Title: Treasurer
