<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 11)
Grow Group, Inc.
(Name of issuer)
Common Stock, par value $.10 per share
(Title of class of securities)
399820-10-9
(CUSIP Number)
Jose Gregorio Garcia
Corimon, S.A.C.A., Calle Hans Neumann
Edificion Corimon, Los Cortijos de Lourdes
Caracas, Venezuela 0171 011 (582) 203-5560
(Name, address and telephone number of person authorized
to receive notices and communications)
April 30, 1995
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A
fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent
of the class of securities described in Item 1; and (2) has filed no
amendment subsequent thereto reporting beneficial ownership of five percent
or less of such class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
(Continued on following pages)
(Page 1 of 13 pages)
<PAGE>
PAGE> 2
- -------------------- ---------------------
CUSIP NO. 399820-10-9 13D Page 2 of 13 Pages
- -------------------- ---------------------
- ------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Corimon Corporation
- ------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- ------------------------------------------------------------
3. SEC USE ONLY
- ------------------------------------------------------------
4. SOURCE OF FUNDS
Not Applicable
- ------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
[ ]
- ------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 4,025,841 shares**
SHARES ------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY -0-
EACH ------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 4,025,841 shares**
WITH ------------------------------------------
10. SHARED DISPOSITIVE POWER
-0-
- ------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
4,025,841 shares
- ------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
- ------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.00%
- ------------------------------------------------------------
* SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE
COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE
SCHEDULE, AND THE SIGNATURE ATTESTATION.
** See description of the Option Agreement with Imperial Chemical
Industries PLC in Items 4 and 6 herein.
<PAGE>
<PAGE> 3
14. TYPE OF REPORTING PERSON
CO
- ------------------------------------------------------------
<PAGE>
<PAGE> 4
- -------------------- ---------------------
CUSIP NO. 399820-10-9 13D Page 3 of 13 Pages
- -------------------- ---------------------
- ------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Corimon International Holdings Limited
- ------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
- ------------------------------------------------------------
3. SEC USE ONLY
- ------------------------------------------------------------
4. SOURCE OF FUNDS
Not Applicable
- ------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
[ ]
- ------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
- ------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 4,025,841 shares*
SHARES ------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY -0-
EACH ------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 4,025,841 shares*
WITH ------------------------------------------
10. SHARED DISPOSITIVE POWER
-0-
- ------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
4,025,841 shares (possible indirect beneficial
ownership)
- ------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
- ------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.00%
- ------------------------------------------------------------
14. TYPE OF REPORTING PERSON
HC, CO
- ------------------------------------------------------------
* See description of the Option Agreement with Imperial Chemical
Industries PLC in Items 4 and 6 herein.
<PAGE>
<PAGE> 5
- -------------------- ---------------------
CUSIP NO. 399820-10-9 13D Page 4 of 13 Pages
- -------------------- ---------------------
- ------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Corimon, S.A.C.A.
- ------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
- ------------------------------------------------------------
3. SEC USE ONLY
- ------------------------------------------------------------
4. SOURCE OF FUNDS
Not Applicable
- ------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
[ ]
- ------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Venezuela
- ------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 4,025,841 shares*
SHARES ------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY -0-
EACH ------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 4,025,841 shares*
WITH ------------------------------------------
10. SHARED DISPOSITIVE POWER
-0-
- ------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
4,025,841 shares (possible indirect beneficial
ownership)
- ------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
- ------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.00%
- ------------------------------------------------------------
14. TYPE OF REPORTING PERSON
HC, CO
- ------------------------------------------------------------
* See description of the Option Agreement with Imperial Chemical
Industries PLC in Items 4 and 6 herein.
<PAGE>
<PAGE> 6
Item 1. Security and Issuer
This statement relates to the common stock, par value $.10 per
share (the "Common Stock"), of Grow Group, Inc., a New York corporation
(the "Company"). The principal executive offices of the Company are
located at 200 Park Avenue, New York, New York 10166.
Introductory Statement.
This statement is filed on behalf of Corimon Corporation, a
Delaware corporation ("Corimon Corp."), which is a wholly-owned subsidiary
of Corimon International Holdings Limited ("Holdings"), which is a wholly-
owned subsidiary of Corimon, S.A.C.A., a Venezuelan corporation
("Corimon"). The principal executive offices of Corimon Corp., Holdings
and Corimon are located at Edificio Corimon, Calle Hans Neumann, Los
Cortijos de Lourdes, Caracas, Venezuela. Corimon Corp., Holdings and
Corimon are herein referred to collectively as the "Reporting Persons."
This Amendment No. 11 includes amendments to Items 4 and 6
only.
Item 4. Purpose of Transaction
The following supplements, but does not replace, the contents
of Item 4 of this report on Schedule 13D, as previously amended. Reference
is made to the Standstill Agreement, dated July 21, 1992, as amended,
between the
<PAGE>
<PAGE> 7
Company, on the one hand, and Corimon and Corimon Corp., on the other
(previously filed).
On April 30, 1995, the Company entered into an Agreement and
Plan of Merger (the "Merger Agreement") with Imperial Chemical Industries
PLC, a corporation organized under the laws of England ("ICI"), and GDEN
Corporation, a New York corporation and an indirect wholly owned subsidiary
of ICI ("GDEN"). Pursuant to the terms of the Merger Agreement, ICI agreed
to acquire all of the outstanding Common Stock of the Company pursuant to a
cash tender offer at a purchase price of $18.10 per share and a merger of a
wholly owned subsidiary of ICI with and into the Company. A copy of the
Merger Agreement is filed as Exhibit 11 hereto. The description of the
Merger Agreement contained herein is subject to and qualified in its
entirety by reference to such exhibit, which is incorporated herein by
reference.
In order to induce ICI and GDEN to enter into the Merger
Agreement, Corimon and Corimon Corp. entered into an Option Agreement
(the "Option Agreement") with ICI and GDEN pursuant to which, under the
conditions specified therein, Corimon Corp. agreed to sell (the "Option")
and ICI agreed to purchase all of the shares of Common Stock owned
by Corimon Corp. (the "Shares") at a purchase price of $17.50 per Share.
A copy of the Option Agreement is filed as Exhibit 12 hereto. The
description of the Option Agreement contained herein is subject to and
qualified in its entirety by reference to such exhibit, which is
incorporated herein by reference.
Certain provisions of the Standstill Agreement, as amended,
were waived by a resolution adopted by the members of the Board of
Directors of the Company who are not designees of Corimon in order to
permit Corimon and Corimon Corp. to enter into and perform their
obligations under the Option Agreement.
<PAGE>
<PAGE> 8
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
The following supplements, but does not replace, the contents
of Item 6 of this report on Schedule 13D, as previously amended.
Corimon Corp. and Corimon have entered into the Option
Agreement, dated as of April 30, 1995, pursuant to which Corimon Corp.
granted to ICI the Option enabling ICI to purchase all of the Shares at a
purchase price of $17.50 per Share.
Pursuant to the terms of the Option Agreement, ICI must
exercise the Option in whole within two business days following the date
the Minimum Condition is satisfied, provided that the date of such
exercise is not later than the earlier of (i) November 5, 1995 or
(ii) five business days after the Outside Termination Date (as defined in
the Merger Agreement). ICI may exercise the Option only if the Minimum
Condition has been satisfied. For purposes of the Option Agreement, the
Minimum Condition shall have been satisfied only if (i) ICI has paid for or
accepted for payment all shares of Common
<PAGE>
<PAGE> 9
Stock properly tendered and not withdrawn pursuant to the terms of the
tender offer and the Merger Agreement (the "Tendered Shares") and (ii) the
sum of the Tendered Shares plus the Shares constitutes not less than a
majority of the outstanding shares of Common Stock on a fully diluted
basis.
The Option Agreement will terminate upon termination of the
Merger Agreement.
In accordance with the terms of the Option Agreement, Corimon
Corp. has agreed that, prior to the termination of the Merger Agreement, it
will vote the Shares in favor of the Merger Agreement and any transactions
contemplated thereunder and against any other proposal for any
recapitalization, merger, sale of assets or other business combination
between the Company and any person or group (other than ICI and GDEN).
<PAGE>
<PAGE> 10
Item 7. Material to be Filed as Exhibits
Additional exhibits as follows are filed herewith:
Exhibit 11 Agreement and Plan of Merger dated as of April 30,
1995 among Grow Group, Inc., Imperial Chemical
Industries PLC and GDEN Corporation.
Exhibit 12 Option Agreement, dated as of April 30, 1995, among
Imperial Chemical Industries PLC, GDEN Corporation,
Corimon Corporation and Corimon S.A.C.A.
<PAGE>
<PAGE> 11
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
CORIMON CORPORATION
By: /s/ Arthur W. Broslat
Name: Arthur W. Broslat
Title: Director
Date: May 1, 1995
<PAGE>
<PAGE> 12
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
CORIMON INTERNATIONAL HOLDINGS
LIMITED
By: /s/ Arthur W. Broslat
Name: Arthur W. Broslat
Title: President
Date: May 1, 1995
<PAGE>
<PAGE> 13
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
CORIMON, S.A.C.A.
By: /s/ Arthur W. Broslat
Name: Arthur W. Broslat
Title: Executive Vice President
Date: May 1, 1995
<PAGE>
<PAGE> 14
INDEX TO EXHIBITS
Sequentially
Numbered
Exhibit No. Description Page
11 Agreement and Plan of Merger
dated as of April 30, 1995 among
Grow Group, Inc., Imperial
Chemical Industries PLC and
GDEN Corporation.
12 Option Agreement, dated as of
April 30, 1995, among Imperial
Chemical Industries PLC, GDEN
Corporation, Corimon Corporation
and Corimon S.A.C.A.
<PAGE> 1
Exhibit 11
AGREEMENT AND PLAN OF MERGER
DATED AS OF
APRIL 30, 1995
AMONG
GROW GROUP, INC.,
IMPERIAL CHEMICAL INDUSTRIES PLC
AND
GDEN CORPORATION
<PAGE>
<PAGE> i
TABLE OF CONTENTS(1)
ARTICLE I
THE OFFER
SECTION 1.01. The Offer . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02. Company Action. . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.03. Directors. . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II
THE MERGER
SECTION 2.01. The Merger. . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.02. Conversion of Shares. . . . . . . . . . . . . . . . . . 7
SECTION 2.03. Surrender and Payment. . . . . . . . . . . . . . . . . 7
SECTION 2.04. Dissenting Shares. . . . . . . . . . . . . . . . . . . 9
SECTION 2.05. Stock Options. . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.06. Merger Without Meeting of Shareholders . . . . . . . . . 10
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.01. Certificate of Incorporation. . . . . . . . . . . . . . 10
SECTION 3.02. Bylaws. . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.03. Directors and Officers. . . . . . . . . . . . . . . . . 10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
SECTION 4.01. Corporate Existence and Power. . . . . . . . . . . . . 11
SECTION 4.02. Corporate Authorization. . . . . . . . . . . . . . . . 11
SECTION 4.03. Governmental Authorization. . . . . . . . . . . . . . . 11
SECTION 4.04. Non-Contravention. . . . . . . . . . . . . . . . . . . . 12
SECTION 4.05. Capitalization. . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.06. Subsidiaries. . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.07. Investments. . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.08. SEC Filings. . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.09. Financial Statements. . . . . . . . . . . . . . . . . . 15
SECTION 4.10. Disclosure Documents. . . . . . . . . . . . . . . . . . 15
SECTION 4.11. Absence of Certain Changes. . . . . . . . . . . . . . . 16
SECTION 4.12. No Undisclosed Material Liabilities. . . . . . . . . . . 17
SECTION 4.13. Litigation. . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.14. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.15. Employee Matters. . . . . . . . . . . . . . . . . . . . 20
SECTION 4.16. Labor Matters. . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.17. Compliance with Laws. . . . . . . . . . . . . . . . . . 24
SECTION 4.18. Finders' Fees. . . . . . . . . . . . . . . . . . . . . 24
(1) The Table of Contents is not a part of this
Agreement.
<PAGE>
<PAGE> ii
SECTION 4.19. Environmental Matters. . . . . . . . . . . . . . . . . . 24
SECTION 4.20. Property. . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.21. Trademarks. . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.22. Material Contracts. . . . . . . . . . . . . . . . . . . 27
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF BUYER AND MERGER SUBSIDIARY
SECTION 5.01. Corporate Existence and Power. . . . . . . . . . . . . 27
SECTION 5.02. Corporate Authorization. . . . . . . . . . . . . . . . . 27
SECTION 5.03. Governmental Authorization. . . . . . . . . . . . . . . 28
SECTION 5.04. Non-Contravention. . . . . . . . . . . . . . . . . . . . 28
SECTION 5.05. Disclosure Documents. . . . . . . . . . . . . . . . . . 28
SECTION 5.06. Finders' Fees. . . . . . . . . . . . . . . . . . . . . . 29
SECTION 5.07. Financing. . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 5.08. Share Ownership . . . . . . . . . . . . . . . . . . . . 29
SECTION 5.09. Merger Subsidiary's Operations . . . . . . . . . . . . . 29
ARTICLE VI
COVENANTS OF THE COMPANY
SECTION 6.01. Conduct of the Company. . . . . . . . . . . . . . . . . 30
SECTION 6.02. Stockholder Meeting; Proxy Material. . . . . . . . . . 30
SECTION 6.03. Access to Information. . . . . . . . . . . . . . . . . . 31
SECTION 6.04. Other Offers. . . . . . . . . . . . . . . . . . . . . . 31
SECTION 6.05. Notices of Certain Events. . . . . . . . . . . . . . . 32
SECTION 6.06. Amendment of Rights Agreement. . . . . . . . . . . . . . 33
SECTION 6.07. Conveyance Taxes. . . . . . . . . . . . . . . . . . . . 33
ARTICLE VII
COVENANTS OF BUYER
SECTION 7.01. Obligations of Merger Subsidiary. . . . . . . . . . . . 33
SECTION 7.02. Voting of Shares. . . . . . . . . . . . . . . . . . . . 33
SECTION 7.03. Director and Officer Liability. . . . . . . . . . . . . 34
ARTICLE VIII
COVENANTS OF BUYER
AND THE COMPANY
SECTION 8.01. Best Efforts. . . . . . . . . . . . . . . . . . . . . . 35
SECTION 8.02. Certain Filings. . . . . . . . . . . . . . . . . . . . . 35
SECTION 8.03. Public Announcements. . . . . . . . . . . . . . . . . . 35
SECTION 8.04. Conveyance Taxes . . . . . . . . . . . . . . . . . . . . 35
SECTION 8.05. Further Assurances . . . . . . . . . . . . . . . . . . . 36
SECTION 8.06. Employee Matters. . . . . . . . . . . . . . . . . . . . 36
<PAGE>
<PAGE> iii
ARTICLE IX
CONDITIONS TO THE MERGER
SECTION 9.01. Conditions to the Obligations of Each Party . . . . . . 38
ARTICLE X
TERMINATION
SECTION 10.01. Termination. . . . . . . . . . . . . . . . . . . . . . 39
SECTION 10.02. Effect of Termination. . . . . . . . . . . . . . . . . 40
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices. . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 11.02. Survival of Representations and Warranties. . . . . . . 42
SECTION 11.03. Amendments; No Waivers. . . . . . . . . . . . . . . . 42
SECTION 11.04. Expenses. . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 11.05. Successors and Assigns. . . . . . . . . . . . . . . . . 43
SECTION 11.06. Governing Law. . . . . . . . . . . . . . . . . . . . . 43
SECTION 11.07. Severability. . . . . . . . . . . . . . . . . . . . . . 43
SECTION 11.08. Third Party Beneficiaries . . . . . . . . . . . . . . . 44
SECTION 11.09. Entire Agreement . . . . . . . . . . . . . . . . . . . 44
SECTION 11.10. Counterparts; Effectiveness. . . . . . . . . . . . . . 44
SECTION 11.11. Jurisdiction . . . . . . . . . . . . . . . . . . . . . 44
ANNEX I
Schedule 4.01: Licenses
Schedule 4.03: Governmental Authorization
Schedule 4.04: Non-Contravention
Schedule 4.05: Stock Options
Schedule 4.06: Subsidiaries
Schedule 4.07: Investments
Schedule 4.11: Absence of Certain Changes
Schedule 4.12: Material Liabilities
Schedule 4.13: Litigation
Schedule 4.15: Employee Matters
Schedule 4.16: Labor Matters
Schedule 4.17: Compliance with Laws
Schedule 4.19: Environmental Matters
Schedule 4.21: Trademarks
Schedule 4.22: Material Contracts
Schedule 7.03: Director and Officer Liability
<PAGE>
<PAGE> 1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of April 30, 1995 (this
"Agreement") among Grow Group, Inc., a New York corporation (the
"Company"), Imperial Chemical Industries PLC, a corporation organized under
the laws of England ("Buyer"), and GDEN Corporation, a New York corporation
and an indirect wholly owned subsidiary of Buyer ("Merger Subsidiary").
WHEREAS, the Boards of Directors of Buyer, Merger Subsidiary and
the Company have each determined that it is in the best interests of their
respective shareholders for Buyer to acquire all of the outstanding capital
stock of the Company upon the terms and subject to the conditions set forth
herein; and
WHEREAS, in furtherance of such acquisition, it is proposed that
Buyer shall make a cash tender offer (the "Offer") to acquire all the
issued and outstanding shares of Common Stock, par value $.10 per share, of
the Company (the "Shares") for $18.10 per Share net to the seller in cash,
upon the terms and subject to the conditions of this Agreement and the
Offer; and
WHEREAS, the Board of Directors of the Company has unanimously
approved the making of the Offer and resolved and agreed to recommend that
holders of Shares tender their Shares pursuant to the Offer; and
WHEREAS, also in furtherance of such acquisition, the Boards of
Directors of Buyer, Merger Subsidiary and the Company have each approved
the merger of Merger Subsidiary with and into the Company in accordance
with the Business Corporation Law of the State of New York ("New York Law")
following the consummation of the Offer and upon the terms and subject to
the conditions set forth herein;
WHEREAS, in consideration of the willingness of Buyer and Merger
Subsidiary to enter into this Agreement, Corimon Corporation, a Delaware
corporation ("Corimon Corp.") and Corimon, S.A.C.A., a corporation
organized under the laws of Venezuela ("Corimon"), have entered into a
Stockholders Agreement, dated as of the date hereof, with Buyer and Merger
Subsidiary (the "Corimon Option Agreement"), pursuant to which Corimon
Corp. has granted Buyer an option to purchase 4,025,841 Shares (the
"Corimon Shares"), all upon the terms and subject to the conditions set
forth in the Corimon Option Agreement;
<PAGE>
<PAGE> 2
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally
bound hereby, Buyer, Merger Subsidiary and the Company hereby agree as
follows:
ARTICLE I
THE OFFER
SECTION 1.01. The Offer. (a) Provided that nothing shall have
occurred that would result in a failure to satisfy any of the conditions
set forth in Annex I hereto, Buyer shall, as promptly as practicable after
the date hereof, but in no event later than five business days following
the public announcement of the terms of this Agreement, commence the Offer
to purchase all of the outstanding Shares at a price of $18.10 per Share
(the "Offer Price"), net to the sellers in cash, subject to any amounts
required to be withheld under applicable federal, state, local or foreign
income tax regulations. The Offer shall be subject to the condition that
there shall be validly tendered in accordance with the terms of the Offer
prior to the expiration date of the Offer and not withdrawn a number of
Shares which, together with the Corimon Shares and any other Shares then
owned by Buyer, represents at least two-thirds of the Shares outstanding on
a fully diluted basis (the "Minimum Condition") and to the other conditions
set forth in Annex I hereto. Buyer expressly reserves the right to waive
the Minimum Condition (provided that in no event shall Buyer be permitted
to accept Shares for payment pursuant to the Offer unless the Shares so
accepted for payment, together with the Corimon Shares and any other Shares
then owned by Buyer, represent at least a majority of the outstanding
Shares on a fully diluted basis) or any of the other conditions to the
Offer and to make any change in the terms or conditions of the Offer;
provided that no change may be made which changes the form of consideration
to be paid or decreases the price per Share or the number of Shares sought
in the Offer or which imposes conditions to the Offer in addition to those
set forth in Annex I or which amends any condition to the Offer in any
manner adverse to the holders of the Shares. Notwithstanding the
foregoing, Buyer shall extend the Offer at any time up to the Outside
Termination Date (as defined in Section 10.01) for one or more periods of
not more than 10 business days, if at the initial expiration date of the
Offer, or any extension thereof, the condition to the Offer requiring the
expiration or termination of any applicable waiting periods under the HSR
Act and the Exon-Florio Provision (as such terms are defined in Section
4.03) is not
<PAGE>
<PAGE> 3
satisfied or required. In addition, the Offer Price may be increased and
the Offer may be extended to the extent required by law in connection with
such increase in each case without the consent of the Company. Subject to
the terms and conditions of the Offer, Buyer shall pay, as promptly as
practicable after expiration of the Offer, for all Shares validly tendered
and not withdrawn.
(b) As soon as practicable on the date of commencement of the
Offer, Buyer shall file (i) with the Securities and Exchange Commission
(the "SEC"), a Tender Offer Statement on Schedule 14D-1 with respect to the
Offer which will contain the offer to purchase and form of the related
letter of transmittal (together with any supplements or amendments thereto,
collectively, the "SEC Offer Documents") and (ii) with the Attorney General
of the State of New York, a Registration Statement (together with any
supplements or amendments thereto, collectively, the "New York Disclosure
Documents") in accordance with Article 16 (the "Security Takeover
Disclosure Act") of New York Law. (The SEC Offer Documents and the New
York Disclosure Documents are collectively referred to herein as the "Offer
Documents".) Buyer and the Company each agrees promptly to correct any
information provided by it for use in the Offer Documents if and to the
extent that it shall have become false or misleading in any material
respect. Buyer agrees to take all steps necessary to cause the Offer
Documents as so corrected to be filed with the SEC and to be disseminated
to holders of Shares, in each case as and to the extent required by
applicable federal securities laws. The Company and its counsel shall be
given a reasonable opportunity to review and comment on the Offer Documents
prior to their being filed with the applicable authorities.
SECTION 1.02. Company Action. (a) The Company hereby consents to
the Offer and represents that its Board of Directors, at a meeting duly
called and held on April 30, 1995, has (i) unanimously determined that this
Agreement and the transactions contemplated hereby, including the Offer and
the Merger (as defined in Section 2.01), are fair to and in the best
interest of the Company's stockholders, (ii) unanimously approved this
Agreement and the transactions contemplated hereby, including the Offer and
the Merger, which approval satisfies in full the requirements of New York
Law and Section 11(c)(ii) of the Certificate of Incorporation of the
Company and (iii) unanimously resolved to recommend acceptance of the Offer
and approval and adoption of this Agreement and the Merger by its
stockholders; provided that such recommendation may be withdrawn, modified
or amended if, in the opinion of the Board of Directors, after consultation
with independent
<PAGE>
<PAGE> 4
legal counsel, such recommendation would be inconsistent with its fiduciary
duties to the Company's shareholders under applicable law. The parties
agree that this Agreement shall constitute the memorandum of understanding
contemplated by Section 11 of the Company's Certificate of Incorporation
setting forth the principal terms of the Merger and related transactions.
The Company represents that all members of the Board of Directors
of the Company who are not designees of Corimon have, in accordance with
the Standstill Agreement between the Company, Corimon and Corimon Corp.,
dated July 21, 1992, as amended (the "Standstill Agreement"), adopted a
resolution providing for a waiver of the restrictions in Sections 3.1 and
4.1 of the Standstill Agreement to permit Corimon and Corimon Corp. to
enter into and perform its obligations under the Corimon Option Agreement.
The Company further represents that Wertheim Schroder & Co. Inc., as
financial advisors to the Company, has delivered to the Company's Board of
Directors its written opinion that the consideration to be paid in the
Offer and the Merger is fair to the holders of Shares (other than Corimon
and Corimon Corp.) from a financial point of view. The Company has been
advised that all of its directors and executive officers intend to tender
their Shares (other than the Corimon Shares) pursuant to the Offer. The
Company will promptly furnish Buyer with a list of its stockholders,
mailing labels and any available listing or computer file containing the
names and addresses of all holders of record of Shares and lists of
securities positions of Shares held in stock depositories, in each case
true and correct as of the most recent practicable date, and will provide
to Buyer such additional information (including, without limitation,
updated lists of stockholders, mailing labels and lists of securities
positions) and such other assistance as Buyer or Merger Subsidiary may
reasonably request in connection with the Offer.
(b) As soon as practicable on the day that the Offer is commenced
the Company will file with the SEC a Solicitation/Recommendation Statement
on Schedule 14D-9 (the "Schedule 14D-9") which shall reflect the
recommendations of the Company's Board of Directors referred to above, but
subject to the proviso to the sentence referring to such recommendations
above. The Company, Buyer and Merger Subsidiary each agree to correct
promptly any information provided by it for use in the Schedule 14D-9 if
and to the extent that it shall have become false or misleading in any
material respect. The Company agrees to take all steps necessary to cause
the Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to holders of
<PAGE>
<PAGE> 5
Shares, in each case as and to the extent required by applicable federal
securities laws. Buyer and its counsel shall be given a reasonable
opportunity to review and comment on the Schedule 14D-9 prior to its being
filed with the SEC.
(c) References herein to the "fiduciary duties" of the members of
the Board of Directors of the Company mean the fiduciary duties of such
members to the holders of Shares other than Corimon Corp.
SECTION 1.03. Directors. (a) Effective upon the acceptance for
payment by Buyer of any Shares, Buyer shall be entitled to designate the
number of directors, rounded up to the next whole number, on the Company's
Board of Directors that equals the product of (i) the total number of
directors on the Company's Board of Directors (giving effect to the
election of any additional directors pursuant to this Section) and (ii) the
percentage that the number of Shares owned by Buyer (including Shares
accepted for payment and, assuming the number of Shares owned by Buyer or
accepted for payment constitute at least a majority of the outstanding
Shares on a fully diluted basis, the Corimon Shares) bears to the total
number of Shares outstanding, and the Company shall take all action
necessary to cause Buyer's designees to be elected or appointed to the
Company's Board of Directors, including, without limitation, increasing the
number of directors and seeking and accepting resignations of incumbent
directors. At such times, the Company will use its best efforts to cause
individuals designated by Buyer to constitute the same percentage as such
individuals represent on the Company's Board of Directors of (x) each
committee of the Board (other than any committee of the Board established
to take action under this Agreement), (y) each board of directors of each
Subsidiary (as defined in Section 4.06) and (z) each committee of each such
board. Notwithstanding the foregoing, until the Effective Time (as defined
in Section 2.01), the Company shall retain as members of its Board of
Directors at least two directors who are directors of the Company on the
date hereof (the "Company Designees").
(b) The Company's obligations to appoint designees to the Board
of Directors shall be subject to Section 14(f) of the Exchange Act (as
defined in Section 4.03) and Rule 14f-1 promulgated thereunder. The
Company shall promptly take all actions required pursuant to Section 14(f)
and Rule 14f-1 in order to fulfill its obligations under this Section and
shall include in the Schedule 14D-9 such information with respect to the
Company and its officers and directors as is required under Section 14(f)
and Rule 14f-1 to fulfill its obligations under this Section
<PAGE>
<PAGE> 6
1.03. Buyer will supply to the Company in writing and be solely
responsible for any information with respect to itself and its nominees,
officers, directors and affiliates required by Section 14(f) and Rule
14f-1.
(c) From and after the time, if any, that Buyer's designees
constitute a majority of the Company's Board of Directors, any amendment of
this Agreement, any termination of this Agreement by the Company, any
extension of time for performance of any of the obligations of Buyer or
Merger Subsidiary hereunder, any waiver of any condition to the obligations
of the Company or any of the Company's rights hereunder or other action by
the Company hereunder may be effected only by the action of a majority of
the directors of the Company then in office who were directors of the
Company on the date hereof, which action shall be deemed to constitute the
action of the full Board of Directors; provided that if there shall be no
such directors, such actions may be effected by majority vote of the entire
Board of Directors of the Company.
ARTICLE II
THE MERGER
SECTION 2.01. The Merger. (a) At the Effective Time (as defined
in Section 2.01(b)), Merger Subsidiary shall be merged (the "Merger") with
and into the Company in accordance with the New York Law, whereupon the
separate existence of Merger Subsidiary shall cease, and the Company shall
be the surviving corporation (the "Surviving Corporation").
(b) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, the Company
and Merger Subsidiary will file a certificate of merger with the Department
of State of the State of New York and make all other filings or recordings
required by New York Law in connection with the Merger. The Merger shall
become effective on such date as the certificate of merger is duly filed
with the Department of State of the State of New York or at such later date
as is specified in the certificate of merger (the "Effective Time").
(c) From and after the Effective Time, the Surviving Corporation
shall possess all the rights, privileges, powers and franchises and be
subject to all of the restrictions, disabilities, liabilities and duties of
<PAGE>
<PAGE> 7
the Company and Merger Subsidiary, all as provided under New York Law.
SECTION 2.02. Conversion of Shares. At the Effective Time:
(a) each Share held by the Company as treasury stock or owned by
Buyer, Merger Subsidiary or any other subsidiary of Buyer immediately
prior to the Effective Time shall be canceled, and no payment shall be
made with respect thereto;
(b) each share of common stock of Merger Subsidiary outstanding
immediately prior to the Effective Time shall be converted into and
become one share of common stock of the Surviving Corporation with the
same rights, powers and privileges as the shares so converted and shall
constitute the only outstanding shares of capital stock of the Surviving
Corporation; and
(c) each Share outstanding immediately prior to the Effective
Time shall, except as otherwise provided in Section 2.02(a) or as
provided in Section 2.04 with respect to Shares as to which appraisal
rights have been exercised, be converted into the right to receive
$18.10 in cash or any higher price paid for each Share in the Offer,
without interest (the "Merger Consideration").
SECTION 2.03. Surrender and Payment. (a) Prior to the Effective
Time, Buyer shall appoint a depositary (the "Depositary") for the purpose
of exchanging certificates representing Shares for the Merger
Consideration. The Depositary shall at all times be a commercial bank
having a combined capital and surplus of at least $100,000,000. Buyer will
pay to the Depositary immediately prior to the Effective Time, the Merger
Consideration to be paid in respect of the Shares. For purposes of
determining the Merger Consideration to be so paid, Buyer shall assume that
no holder of Shares will perfect his right to appraisal of his Shares.
Promptly after the Effective Time, Buyer will send, or will cause the
Depositary to send, but in no event later than three business days after
the Effective Time, to each holder of Shares at the Effective Time a letter
of transmittal for use in such exchange (which shall specify that the
delivery shall be effected, and risk of loss and title shall pass, only
upon proper delivery of the certificates representing Shares to the
Depositary).
<PAGE>
<PAGE> 8
(b) Each holder of Shares that have been converted into a right
to receive the Merger Consideration, upon surrender to the Depositary of a
certificate or certificates properly representing such Shares, together
with a properly completed letter of transmittal covering such Shares, will
be entitled to receive the Merger Consideration payable in respect of such
Shares. Until so surrendered, each such certificate shall, after the
Effective Time, represent for all purposes, only the right to receive such
Merger Consideration.
(c) If any portion of the Merger Consideration is to be paid to a
Person other than the registered holder of the Shares represented by the
certificate or certificates surrendered in exchange therefor, it shall be a
condition to such payment that the certificate or certificates so
surrendered shall be properly endorsed or otherwise be in proper form for
transfer and that the Person requesting such payment shall pay to the
Depositary any transfer or other taxes required as a result of such payment
to a Person other than the registered holder of such Shares or establish to
the satisfaction of the Depositary that such tax has been paid or is not
payable. For purposes of this Agreement, "Person" means an individual, a
corporation, limited liability company, a partnership, an association, a
trust or any other entity or organization, including a government or
political subdivision or any agency or instrumentality thereof.
(d) After the Effective Time, there shall be no further
registration of transfers of Shares. If, after the Effective Time,
certificates representing Shares are presented to the Surviving
Corporation, they shall be canceled and exchanged for the consideration
provided for, and in accordance with the procedures set forth, in this
Article II.
(e) Any portion of the Merger Consideration paid to the
Depositary pursuant to Section 2.03(a) that remains unclaimed by the
holders of Shares one year after the Effective Time shall be returned to
Surviving Corporation, upon demand, and any such holder who has not
exchanged his Shares for the Merger Consideration in accordance with this
Section prior to that time shall thereafter look only to Surviving
Corporation for payment of the Merger Consideration in respect of his
Shares. Notwithstanding the foregoing, Buyer, Merger Subsidiary and the
Surviving Corporation shall not be liable to any holder of Shares for any
amount paid to a public official pursuant to applicable abandoned property
laws. Any amounts remaining unclaimed by holders of Shares on the day
immediately prior to such time
<PAGE>
<PAGE> 9
as such amounts would otherwise escheat to or become property of any
governmental entity shall, to the extent permitted by applicable law,
become the property of Buyer free and clear of any claims or interest of
any Person previously entitled thereto.
(f) Any portion of the Merger Consideration paid to the
Depositary pursuant to Section 2.03(a) to pay for Shares for which
appraisal rights have been perfected shall be returned to Surviving
Corporation upon demand.
SECTION 2.04. Dissenting Shares. Notwithstanding Section 2.02,
Shares outstanding immediately prior to the Effective Time and held by a
holder who has not voted in favor of the Merger or consented thereto in
writing and who has demanded appraisal for such Shares in accordance with
New York Law shall not be converted into a right to receive the Merger
Consideration, unless such holder fails to perfect or withdraws or
otherwise loses his right to appraisal. If after the Effective Time such
holder fails to perfect or withdraws or loses his right to appraisal, such
Shares shall be treated as if they had been converted as of the Effective
Time into a right to receive the Merger Consideration. The Company shall
give Buyer prompt notice of any demands received by the Company for
appraisal of Shares, and Buyer shall have the right to participate in all
negotiations and proceedings with respect to such demands. The Company
shall not, except with the prior written consent of Buyer, make any payment
with respect to, or settle or offer to settle, any such demands.
SECTION 2.05. Stock Options. (a) Immediately prior to the
Effective Time, each outstanding employee stock option (an "Option") to
purchase Shares granted under any employee stock option or compensation
plan or arrangement of the Company shall be canceled, and each holder of
any such Option, whether or not then vested or exercisable, shall be paid
by the Company at the Effective Time for each such Option an amount
determined by multiplying (i) the excess, if any, of $18.10 per Share over
the applicable exercise price of such Option by (ii) the number of Shares
such holder could have purchased (assuming full vesting of all Options) had
such holder exercised such Option in full immediately prior to the
Effective Time.
(b) Prior to the Effective Time, the Company shall (i) use its
best efforts to obtain any consents from holders of Options and (ii) make
any amendments to the terms of such stock option or compensation plans or
arrangements, to the extent such consents or amendments are necessary to
give effect to the transactions contemplated by Section
<PAGE>
<PAGE> 10
2.05(a). Notwithstanding any other provision of this Section, payment may
be withheld in respect of any Option until necessary consents are obtained.
SECTION 2.06. Merger Without Meeting of Shareholders.
Notwithstanding Section 6.02 hereof, in the event that Buyer, Merger
Subsidiary or any other subsidiary of Buyer shall acquire at least 90% of
the outstanding shares of each class of capital stock of the Company,
pursuant to the Offer or otherwise, the parties hereto agree to take all
necessary and appropriate action to cause the Merger to become effective as
soon as practicable after such acquisition, without a meeting of
shareholders of the Company, in accordance with Section 905 of the New York
Law.
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.01. Certificate of Incorporation. The certificate of
incorporation of Merger Subsidiary in effect at the Effective Time shall be
the certificate of incorporation of the Surviving Corporation until amended
in accordance with applicable law, except that the name of the Surviving
Corporation shall be "Grow Group, Inc.".
SECTION 3.02. Bylaws. The bylaws of Merger Subsidiary in effect
at the Effective Time shall be the bylaws of the Surviving Corporation
until amended in accordance with applicable law.
SECTION 3.03. Directors and Officers. From and after the
Effective Time, until successors are duly elected or appointed and
qualified in accordance with applicable law, the directors of Merger
Subsidiary at the Effective Time shall be the initial directors of the
Surviving Corporation and the officers of Merger Subsidiary at the
Effective Time shall be the initial officers of the Surviving Corporation,
in each case until their respective successors are duly elected and
appointed or qualified.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to Buyer and Merger Subsidiary
that:
<PAGE>
<PAGE> 11
SECTION 4.01. Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of New York, and except as set forth on Schedule
4.01, has all corporate powers and all governmental licenses,
authorizations, consents and approvals (collectively, "Licenses") required
to carry on its business as now conducted except where the failure to have
any such License would not, individually or in the aggregate, have a
Material Adverse Effect (as defined below). The Company is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction where the character of the property owned or leased by it or
the nature of its activities makes such qualification necessary, except for
those jurisdictions where the failure to be so qualified would not,
individually or in the aggregate, have a Material Adverse Effect. As used
herein, the term "Material Adverse Effect" means a material adverse effect
on the condition (financial or otherwise), business, assets or results of
operations of the Company and its Subsidiaries (as defined in Section 4.06)
taken as a whole, that is not a result of general changes in the economy or
the industries in which the Company and its Subsidiaries operate. The
Company has heretofore delivered to Buyer true and complete copies of the
Company's certificate of incorporation and bylaws as currently in effect.
SECTION 4.02. Corporate Authorization. The execution, delivery
and performance by the Company of this Agreement and the consummation by
the Company of the transactions contemplated hereby are within the
Company's corporate powers and, except for any required approval by the
Company's stockholders in connection with the consummation of the Merger,
have been duly authorized by all necessary corporate action. This
Agreement, assuming due and valid authorization, execution and delivery by
the parties hereto, constitutes a valid and binding agreement of the
Company except that (i) enforcement may be subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws,
now or hereafter in effect, affecting creditors' rights generally, and (ii)
the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
SECTION 4.03. Governmental Authorization. Except as set forth in
Schedule 4.03, the execution, delivery and performance by the Company of
this Agreement and the consummation by the Company of the transactions
contemplated hereby require no action by or in respect of, or filing
<PAGE>
<PAGE> 12
with, any governmental body, agency, official or authority (each, a
"Governmental Entity") other than: (i) the filing of a certificate of
merger in accordance with New York Law; (ii) compliance with any applicable
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976
(the "HSR Act"); (iii) compliance with any applicable requirements of the
Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder (the "Exchange Act"); (iv) compliance with any applicable
requirements of the New Jersey Industrial Site Recovery Act ("ISRA"); (v)
compliance with any applicable requirements of the Security Takeover
Disclosure Act; and (vi) compliance with any applicable requirements of
Section 721 of the Defense Production Act of 1950, as amended (the "Exon-
Florio Provision").
SECTION 4.04. Non-Contravention. The execution, delivery and
performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby do not and will not (i)
contravene or conflict with the Certificate of Incorporation or Bylaws of
the Company, (ii) except as set forth in Schedule 4.04 and assuming
compliance with the matters referred to in Section 4.03, contravene or
conflict with or constitute a violation of any provision of any law,
regulation, judgment, injunction, order or decree binding upon or
applicable to the Company or any Subsidiary, (iii) except as set forth in
Schedule 4.04, with or without the giving of notice or passage of time or
both, constitute a default under or give rise to a right of termination,
cancellation or acceleration of any right or obligation of the Company or
any Subsidiary or to a loss of any benefit to which the Company or any
Subsidiary is entitled under any provision of any agreement, contract or
other instrument binding upon the Company or any Subsidiary or any license,
franchise, permit or other similar authorization held by the Company or any
Subsidiary, or (iv) result in the creation or imposition of any Lien on any
asset of the Company or any Subsidiary excluding from the foregoing clauses
(ii), (iii) or (iv) such violations, breaches, defaults or Liens which
would not, individually or in the aggregate, have a Material Adverse Effect
on the Company and its Subsidiaries taken as a whole, and which will not
materially impair the ability of the Company to consummate the transactions
contemplated hereby. For purposes of this Agreement, "Lien" means, with
respect to any asset, any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind in respect of such asset.
SECTION 4.05. Capitalization. The authorized capital stock of
the Company consists of 50,000,000 shares
<PAGE>
<PAGE> 13
of common stock, par value $0.10 per Share and 1,000,000 shares of
preferred stock. As of April 29, 1995, there were outstanding (1)
16,101,712 Shares and (2) employee stock options to purchase an aggregate
of 318,699 Shares (the "Options") with a weighted average exercise price of
$12.74 and a maximum exercise price of $18.13. Schedule 4.05 accurately
sets forth information regarding the exercise prices of the Options. All
outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable. Except
as set forth in this Section, except as provided in the Standstill
Agreement, except for the Rights (as defined below), and except for changes
since April 29, 1995 resulting from the exercise of employee stock options
outstanding on such date, there are outstanding (i) no shares of capital
stock or other voting securities of the Company, (ii) no securities of the
Company or of any Subsidiary convertible into or exchangeable for shares of
capital stock or voting securities of the Company, and (iii) no options or
other rights to acquire from the Company, and no obligation of the Company
to issue, any capital stock, voting securities or securities convertible
into or exchangeable for capital stock or voting securities of the Company
(the items in clauses (i), (ii) and (iii) being referred to collectively as
the "Company Securities"). There are no outstanding obligations of the
Company or any Subsidiary to repurchase, redeem or otherwise acquire any
Company Securities.
SECTION 4.06. Subsidiaries. (a) Each Subsidiary that is actively
engaged in any business or owns any material assets (an "Active
Subsidiary") (i) is a corporation duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation, (ii)
except as set forth in Schedule 4.06, has all corporate powers and all
material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted and (iii) is duly
qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the character of the property owned or leased by
it or the nature of its activities makes such qualification necessary,
except in each case to the extent the failure of this representation and
warranty to be true would not have a Material Adverse Effect. For purposes
of this Agreement, "Subsidiary" means any corporation or other entity of
which securities or other ownership interests having ordinary voting power
to elect a majority of the board of directors or other persons performing
similar functions are directly or indirectly owned by the Company. All
Active Subsidiaries and their respective jurisdictions of incorporation are
either identified in the Company's annual report on Form 10-K for
<PAGE>
<PAGE> 14
the fiscal year ended June 30, 1994 (the "Company 10-K") or in Schedule
4.06.
(b) Except to the extent the failure of the representations and
warranties set forth in this subsection (b) would not have a Material
Adverse Effect, and except that the stock of the Active Subsidiaries is
pledged under the Loan Agreement set forth on Schedule 4.04 (the "Loan
Agreement"), which Loan Agreement restricts the sale of such stock, all of
the outstanding capital stock of, or other ownership interests in, each
Active Subsidiary, is owned by the Company, directly or indirectly, free
and clear of any Lien and free of any other limitation or restriction
(including any restriction on the right to vote, sell or otherwise dispose
of such capital stock or other ownership interests); there are no
outstanding (i) securities of the Company or any Subsidiary convertible
into or exchangeable for shares of capital stock or other voting securities
or ownership interests in any Subsidiary, or (ii) options or other rights
to acquire from the Company or any Subsidiary, and no other obligation of
the Company or any Subsidiary to issue, any capital stock, voting
securities or other ownership interests in, or any securities convertible
into or exchangeable for any capital stock, voting securities or ownership
interests in, any Subsidiary (the items in clauses (i) and (ii) being
referred to collectively as the "Subsidiary Securities"); and, there are no
outstanding obligations of the Company or any Subsidiary to repurchase,
redeem or otherwise acquire any outstanding Subsidiary Securities.
SECTION 4.07. Investments. Except as disclosed in Schedule 4.07
and except to the extent the failure of this representation and warranty to
be true would not have a Material Adverse Effect, neither the Company nor
any of its Subsidiaries, directly or indirectly, owns any shares or has any
ownership interest in any other Person or is a partner with any other
Person.
SECTION 4.08. SEC Filings. (a) The Company has delivered to
Buyer (i) the annual reports on Form 10-K for its fiscal years ended June
30, 1992, 1993 and 1994, (ii) its quarterly reports on Form 10-Q for its
fiscal quarters ended September 30, 1994 and December 31, 1994 (such
reports are hereinafter referred to as the "Company 10-Qs"), (iii) its
proxy or information statements relating to meetings of, or actions taken
without a meeting by, the stockholders of the Company held since October
25, 1994, and (iv) all of its other reports, statements, schedules and
registration statements filed by the Company with the SEC since June 30,
1994. As used herein, the term "Company SEC Documents"
<PAGE>
<PAGE> 15
means, the annual report of the Company on Form 10-K for its fiscal year
ended June 30, 1994, the Company 10-Qs, the proxy statement of the Company
for the annual meeting of shareholders on October 26, 1994 and the current
reports of the Company on Form 8-K dated February 25, 1995 and August 17,
1994 (as amended by the Form 8K/A dated October 12, 1994).
(b) As of its filing date, each such report or statement filed
pursuant to the Exchange Act did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading.
(c) Each such registration statement, as amended or supplemented,
if applicable, filed pursuant to the Securities Act of 1933 as of the date
such statement or amendment became effective did not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading.
SECTION 4.09. Financial Statements. The audited consolidated
financial statements and unaudited consolidated interim financial
statements of the Company included in its annual reports on Form 10-K and
the Company Form 10-Qs fairly present, in conformity with generally
accepted accounting principles applied on a consistent basis (except as may
be indicated in the notes thereto and, in the case of the interim financial
statements included in the Company Form 10-Qs, except for the absence of
certain footnotes that would be required under GAAP), the consolidated
financial position of the Company and its consolidated subsidiaries as of
the dates thereof and their consolidated results of operations and cash
flows for the periods then ended (subject to normal year-end adjustments in
the case of any unaudited interim financial statements). For purposes of
this Agreement, "Balance Sheet" means the consolidated balance sheet of the
Company as of December 31, 1994 set forth in the Company 10-Q and "Balance
Sheet Date" means December 31, 1994.
SECTION 4.10. Disclosure Documents. (a) Each document required
to be filed by the Company with the SEC in connection with the transactions
contemplated by this Agreement (the "Company Disclosure Documents"),
including, without limitation, the Schedule 14D-9 will, when filed, comply
as to form in all material respects with the applicable requirements of all
applicable law, including without limitation, the Exchange Act.
<PAGE>
<PAGE> 16
(b) The information with respect to the Company or any Subsidiary
that the Company furnishes to Buyer in writing specifically for use in the
Offer Documents will not, at the time of the filing thereof, at the time of
any distribution thereof and at the time of the consummation of the Offer,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading.
SECTION 4.11. Absence of Certain Changes. Since the Balance
Sheet Date, and except as set forth in Schedule 4.11 or as contemplated by
this Agreement, the Company and Subsidiaries have conducted their business
in the ordinary course consistent with past practice and there has not
been:
(a) any event, occurrence or facts which has had or reasonably
could be expected to have a Material Adverse Effect;
(b) any declaration, setting aside or payment of any dividend
(other than regular quarterly dividends not to exceed $.07 per Share per
quarter) or other distribution with respect to any shares of capital
stock of the Company, or any repurchase, redemption or other acquisition
by the Company or any Subsidiary of any outstanding shares of capital
stock or other securities of, or other ownership interests in, the
Company or any Subsidiary;
(c) any amendment of any material term of any outstanding
security of the Company or any Subsidiary;
(d) any incurrence, assumption or guarantee by the Company or any
Subsidiary of any indebtedness for borrowed money other than in the
ordinary course of business and in amounts and on terms consistent with
past practices;
(e) any creation or assumption by the Company or any Subsidiary
of any Lien on any asset other than in the ordinary course of business
consistent with past practices and other than Liens which, individually
or in the aggregate, do not have and could not reasonably be expected to
have a Material Adverse Effect;
(f) any making of any loan, advance or capital contributions to
or investment in any Person other than advances to employees in the
ordinary course of business consistent with past practice and loans,
<PAGE>
<PAGE> 17
advances or capital contributions to or investments in wholly owned
Subsidiaries made in the ordinary course of business consistent with past
practices;
(g) any damage, destruction or other casualty loss (whether or
not covered by insurance) affecting the business or assets of the
Company or any Subsidiary which, individually or in the aggregate, has
had or could reasonably be expected to have a Material Adverse Effect;
(h) any transaction or commitment made, or any contract or
agreement entered into, by the Company or any Subsidiary relating to its
assets or business (including the acquisition or disposition of any
assets) or any relinquishment by the Company or any Subsidiary of any
contract or other right, in either case, that, individually or in the
aggregate, have had or could reasonably be expected to have a Material
Adverse Effect, other than transactions and commitments in the ordinary
course of business consistent with past practice and those contemplated
by this Agreement;
(i) any material change in any method of accounting or accounting
practice by the Company or any Subsidiary, except for any such change
required by reason of a concurrent change in generally accepted
accounting principles; or
(j) any (i) grant of any severance or termination pay to any
director, officer or employee of the Company or any Subsidiary, (ii)
entering into of any employment, deferred compensation or other similar
agreement (or any amendment to any such existing agreement) with any
director, officer or employee of the Company or any Subsidiary,
(iii) increase in benefits payable under any existing severance or
termination pay policies or employment agreements or (iv) increase in
compensation, bonus or other benefits payable to directors, officers or
employees of the Company or any Subsidiary, in each case, other than in
the ordinary course of business consistent with past practice.
SECTION 4.12. No Undisclosed Material Liabilities. Except as set
forth in Schedule 4.12, there are no liabilities of the Company or any
Subsidiary of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, and there is no existing condition
or fact which could reasonably be expected to result in such a liability,
other than:
<PAGE>
<PAGE> 18
(a) liabilities disclosed or provided for in the Balance Sheet;
(b) other liabilities the presence of which, individually or in
the aggregate, do not have and could not reasonably be expected to have a
Material Adverse Effect;
(c) liabilities incurred in the ordinary course of business
consistent with past practice since the Balance Sheet Date; and
(d) liabilities under this Agreement or in connection with this
Agreement or disclosed hereunder.
SECTION 4.13. Litigation. Except as set forth in the Company
10-K or in Schedule 4.13, there is no action, suit, investigation or
proceeding pending against, or to the knowledge of the Company threatened
against, the Company or any Subsidiary or any of their respective
properties before any court or arbitrator or any governmental body, agency
or official which, if determined or resolved adversely to the Company or
any Subsidiary in accordance with the plaintiff's demands, could reasonably
be expected to have a Material Adverse Effect.
SECTION 4.14. Taxes. (a) (i) all income and other material Tax
returns, statements, reports and forms (including estimated Tax returns and
reports and information returns and reports) required to be filed with any
taxing authority with respect to any Pre-Closing Tax Period by or on behalf
of the Company or any subsidiary of the Company (collectively, the
"Returns") were filed when due (including any applicable extension periods)
in accordance with all applicable laws; (ii) as of the time of filing, such
Returns correctly reflected in all material respects the facts regarding
the income, business, assets, operations, activities and status of the
Company, its Subsidiaries and any other information required to be shown
therein; (iii) the Company and its Subsidiaries have timely paid, or
withheld and remitted to the appropriate taxing authority, all Taxes shown
as due and payable on the Returns that have been filed; (iv) the charges,
accruals and reserves for taxes with respect to the Company and any
Subsidiary for any Pre-Closing Tax Period (including any Pre-Closing Tax
Period for which no Return has yet been filed) reflected on the books of
the Company and its Subsidiaries (excluding any provision for deferred
income taxes) are adequate (in accordance with GAAP) to cover such Taxes;
(v) neither the Company nor any Subsidiary of the Company has been a member
of an affiliated group (as defined in Section 1504 of the Internal Revenue
Code of 1986, as amended (the "Code"))
<PAGE>
<PAGE> 19
other than one of which the Company was the common parent, or filed or been
included in a combined, consolidated or unitary Return other than one filed
by the Company; (vi) the Company is not and has not been within five years
of the date hereof a "United States real property holding corporation" as
defined in Section 897 of the Code; (vii) neither the Company nor any
Subsidiary owns (excluding any leasehold interest) any interest in real
property in the State of New York; and (viii) there is no claim, action,
suit or proceeding now pending or threatened in writing against or in
respect of any Tax or "tax asset" of the Company or any Subsidiary the
resolution of which would as proposed, or audit or investigation now
pending or threatened in writing against or in respect of any Tax or "tax
asset" of the Company or any Subsidiary the resolution of which the Company
believes would (taking into account any changes, accruals and reserves
referred to in clause (iv) above), individually or in the aggregate, have a
material adverse effect on the financial position of the Company and its
Subsidiaries taken as a whole. (The term "tax asset" means any net
operating loss, net capital loss, investment tax credit, foreign tax
credit, charitable deduction or any other credit or tax attribute which
could reduce Taxes).
(b) As used in this Section 4.14, "Taxes" mean (i) all Federal,
state, local and foreign income, franchise, alternative or add-on minimum
tax, gross receipts, transfer, withholding on amounts paid to or by the
Company or any of its Subsidiaries, payroll, employment, license, property,
sales, use, excise and other taxes, tariffs or governmental charges of any
nature whatsoever, together with any interest, penalty or additional tax
attributable to such taxes; (ii) liability of the Company or any Subsidiary
for the payment of any amounts of the type described in clause (i) of this
paragraph as a result of being a member of an affiliated, consolidated,
combined or unitary group, or being a party to any agreement or arrangement
whereby liability of the Company or any Subsidiary for payments of such
amounts was determined or taken into account with reference to the
liability of any other person; and (iii) liability of the Company or any
Subsidiary for the payment of any amounts as a result of being party to any
tax sharing agreement or with respect to the payment of any amounts of the
type described in clauses (i) or (ii) of this paragraph as a result of any
express or implied obligation to indemnify any other person.
"Pre-Closing Tax Period" means any Tax period (or portion thereof)
ending on or before the close of business on the Closing Date.
<PAGE>
<PAGE> 20
SECTION 4.15. Employee Matters. (a) For purposes of this
Section, the following terms shall have the meanings set forth below:
(A) "Benefit Arrangement" means any contract (other than the
Employee Agreements), arrangement or policy, or any plan or arrangement
(whether or not written) providing for severance benefits, insurance
coverage (including any self-insured arrangements), workers'
compensation, disability benefits, supplemental unemployment benefits,
vacation benefits, retirement benefits, deferred compensation,
profit-sharing, bonuses, stock options, stock appreciation rights or
other forms of incentive compensation or post-retirement insurance,
compensation or benefits that (i) is not an Employee Plan, (ii) is
entered into or maintained, as the case may be, by the Company or any of
its affiliates and (iii) covers any employee or former employee of the
Company or any of its Subsidiaries.
(B) "Employee Agreement" means all written employment agreements
and severance agreements with employees of the Company or any of its
Subsidiaries
(C) "Employee Plan" means any "employee benefit plan", as defined
in Section 3(3) of ERISA, that (i) is subject to any provision of ERISA,
(ii) is maintained, administered or contributed to by the Company, any
Subsidiary or any of their ERISA Affiliates for employees or former
employees of the Company or any of its Subsidiaries and (iii) covers any
employee or former employee of the Company or any of its Subsidiaries.
(D) "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, and the rules and
regulations promulgated thereunder.
(E) "ERISA Affiliate" of any entity means any other entity which,
together with such entity, would be treated as a single employer under
Section 4001(b)(1) of ERISA.
(F) "Multiemployer Plan" means each Employee Plan that is a
multiemployer plan, as defined in Section 3(37) of ERISA.
<PAGE>
<PAGE> 21
(G) "Title IV Plan" means an Employee Plan, other than any
Multiemployer Plan, subject to Title IV of ERISA.
(b) Schedule 4.15 identifies each Employee Plan. The Company has
furnished or made available to Buyer copies of the Employee Plans (and, if
applicable, related trust agreements) and all amendments thereto and
written interpretations thereof together with (i) the three most recent
annual reports prepared in connection with any material Employee Plan (Form
5500 including, if applicable, Schedule B thereto) and (ii) the most recent
actuarial valuation report prepared in connection with any Employee Plan.
No Employee Plan is (i) except as set forth in Schedule 4.15, a
Multiemployer Plan, (ii) a Title IV Plan or (iii) maintained in connection
with any trust described in Section 501(c)(9) of the Code. Except for the
Supplemental Retirement and Death Benefit Agreements with the employees or
former employees of the Company or its Subsidiaries who are identified on
Schedule 4.15, no Employee Plan is a plan described in Section 401(a)(1) of
ERISA.
(c) With respect to each Employee Plan, except as disclosed in
Section 4.15: (i) no "prohibited transaction", as defined in Section 406 of
ERISA or Section 4975 of the Code, has, to the knowledge of the officers of
the Company, occurred with respect to any Employee Plan, excluding
transactions effected pursuant to a statutory or administrative exemption;
(ii) neither (A) disputes in the ordinary course of the operation of an
Employee Plan that might reasonably be expected to have a Material Adverse
Effect nor (B) disputes outside the ordinary course of the operation of an
Employee Plan, are pending, or to the knowledge of the Company, threatened;
and (iii) all contributions required to be made to each Employee Plan as of
the date hereof (taking into account any extensions permitted by the Code
or the IRS) have been made in full.
(d) No liability under Title IV of ERISA has been incurred by the
Company or any ERISA Affiliate that has not been satisfied in full and
except as disclosed in Schedule 4.15, to the knowledge of officers of the
Company, no condition exists that presents a material risk to the Company
or its ERISA Affiliates of incurring any liability to the PBGC, Department
of Labor, or the plan participants. No Employee Plan has incurred an
accumulated funding deficiency, as defined in Section 302 of ERISA or
Section 312 of the Code, whether or not waived.
(e) If a "complete withdrawal" by the Company, all its
Subsidiaries and all of their ERISA Affiliates were
<PAGE>
<PAGE> 22
to occur as of the Closing Date with respect to all Multiemployer Plans, to
the knowledge of the officers of the Company, based on information received
by such officers as of the date hereof, none of the Company, any of its
Subsidiaries nor any of their ERISA Affiliates would incur any material
withdrawal liability under Title IV of ERISA.
(f) Each Employee Plan that is intended to be qualified under
Section 401(a) of the Code has been determined by the Internal Revenue
Service to be so qualified and no event has occurred since the date of such
determination that, to the knowledge of the officers of the Company, would
adversely affect such qualification, and each trust created under any such
Employee Plan has been determined by the Internal Revenue Service to be
exempt from tax under Section 501(a) of the Code and no event has occurred
since the date of such determination that, to the knowledge of the officers
of the Company, would adversely affect such exemption. The Company has
provided Buyer with the most recent determination letter of the Internal
Revenue Service relating to each such Employee Plan. Each Employee Plan
has been maintained in substantial compliance (to include timely, complete
and substantially correct filing of Form 5500 and any attachments) with its
terms and with the requirements prescribed by any and all applicable
statutes, orders, rules and regulations, including but not limited to ERISA
and the Code. Except as disclosed on Schedule 4.15, no Employee Plan is or
has been audited or is or has been under investigation by the Department of
Labor or the Internal Revenue Service.
(g) Schedule 4.15 identifies each material Benefit Arrangement.
The Company has furnished or made available to Buyer copies or descriptions
of each material Benefit Arrangement. Each such Benefit Arrangement has
been maintained in substantial compliance with its terms and with the
requirements prescribed by any and all applicable statutes, orders, rules
and regulations.
(h) Schedule 4.15 identifies by name all Employee Agreements in
effect or committed to be put in effect as of the date hereof and provides
the following information with respect to each Employee Agreement:
(1) 1995 compensation rate used in determining change of control
severance payment;
(2) 1994, 1993, and 1992 bonuses, if any, used to calculate
change of control severance payment;
<PAGE>
<PAGE> 23
(3) Period used to calculate change of control severance
payment; and
(4) Good faith estimate of total severance payment due each
employee with an Employee Agreement; provided that in no
event will the estimate have more than a 5% margin of error.
No changes have been made to any Employee Agreement on or after January 1,
1995 and no new Employee Agreements will be entered into by the Company
after May 1, 1995 and before the Effective Time, the effect of which is not
disclosed on Schedule 4.15.
(i) Except as disclosed on Schedule 4.15, neither the Company nor
any of its ERISA Affiliates has any current or projected liability in
respect of post-employment or post-retirement health or medical or life
insurance benefits for retired or former employees of the Company, except
as required to avoid excise tax under Section 4980B of the Code.
(j) Except as disclosed in Schedule 4.15, there has been no
amendment or announcement by the Company or any of its ERISA Affiliates
relating to, or change in benefits, employee participation or coverage
under, any Employee Plan or Benefit Arrangement, that would increase
materially the expense of maintaining such Employee Plan or Benefit
Arrangement above the level of the expense incurred in respect thereof for
the fiscal year ended prior to the date hereof.
(k) Except as set forth in Schedule 4.15, the Company is not
aware of any Employee Agreement or other contract, agreement, plan or
arrangement covering any employee or former employee of the Company that,
individually or collectively, could give rise to the payment of any amount
that would not be deductible pursuant to the terms of Section 280G of the
Code.
(l) Except as disclosed in Schedule 4.15, no excise tax under
Section 4980B or other provision of the Code has been incurred by the
Company or an ERISA Affiliate in respect of any Employee Plan.
(m) Schedule 4.15 lists by policy number and issuer all corporate
owned life insurance policies owned by the Company or an ERISA Affiliate
and with respect to each such policy lists the (1) current cash surrender
value, net of any loan, (2) name of insured and (3) the face amount.
<PAGE>
<PAGE> 24
Each policy so identified is a life insurance contract within the meaning
of Code Section 7702.
(n) The Supplemental Retirement and Death Benefit Agreements
identified in Schedule 4.15 do not permit any employee or former employee
of the Company or an ERISA Affiliate who is over age 65 to receive an
undiscounted lump sum payment of any installment payments due under said
agreements.
SECTION 4.16. Labor Matters. Except as set forth in Schedule
4.16 and except to the extent the failure of this representation and
warranty to be true would not have a Material Adverse Effect, (i) there are
no controversies pending or, to the best knowledge of the Company,
threatened between the Company or any Subsidiary and any of their
respective employees; and (ii) neither the Company nor any Subsidiary is a
party to any collective bargaining agreement or other labor union contract
applicable to persons employed by the Company or any Subsidiary (any such
agreement or contract a "CBA"), nor, to the knowledge of the Company, are
there any activities or proceedings of any labor union to organize any such
employees. The Company has furnished or made available, to Buyer true and
complete copies of all CBAs.
SECTION 4.17. Compliance with Laws. Except as set forth in
Schedule 4.17, neither the Company nor any Subsidiary is in violation of,
or has violated, any applicable provisions of any laws, statutes,
ordinances or regulations except where such violations would not have a
Material Adverse Effect or a material adverse effect on the reputation of
the Company and any of its Subsidiaries taken as a whole.
SECTION 4.18. Finders' Fees. Except for Wertheim Schroder & Co.
Inc., a true copy of whose engagement agreement has been provided to Buyer,
there is no investment banker, broker, finder or other intermediary which
has been retained by or is authorized to act on behalf, of the Company or
any Subsidiary who would be entitled to any fee or commission from the
Company, any Subsidiary, Buyer or any of its affiliates upon consummation
of the transactions contemplated by this Agreement.
SECTION 4.19. Environmental Matters. (a) Except as set forth in
the Company SEC Documents or in Schedule 4.19:
(i) since June 30, 1994, the Company has not received any
written communication from any person or entity
<PAGE>
<PAGE> 25
(including any Governmental Entity) stating that it or its Subsidiaries may
be a potentially responsible party under Environmental Law (as defined in
(c) below) with respect to any actual or alleged environmental
contamination; neither the Company nor its Subsidiaries nor, to the
Company's knowledge, any Governmental Entity is conducting or has conducted
any environmental remediation or environmental investigation which could
reasonably be expected to result in liability for the Company or its
Subsidiaries under Environmental Law; and the Company and its Subsidiaries
have not received any request for information under Environmental Law from
any Governmental Entity with respect to any actual or alleged environmental
contamination, except, in each case, for communications, environmental
remediation and investigations and requests for information which would
not, individually or in the aggregate, have a Material Adverse Effect;
(ii) since June 30, 1994, the Company and its Subsidiaries have
not received any written communication from any person or entity (including
any Governmental Entity) stating or alleging that the Company or its
Subsidiaries may have violated any Environmental Law, or that the Company
or its Subsidiaries has caused or contributed to any environmental
contamination that has caused any property damage or personal injury under
Environmental Law, except, in each case, for statements and allegations of
violations and statements and allegations of responsibility for property
damage and personal injury which would not, individually or in the
aggregate, have a Material Adverse Effect;
(iii) all underground storage tanks ("UST's") on property
currently owned or leased by the Company comply with applicable
Environmental Law, except for failures to comply which would not,
individually or in the aggregate, have a Material Adverse Effect.
(iv) with respect to UST's other than those covered by section
4.19(a)(iii), to the Company's knowledge, all obligations for which the
Company and its Subsidiaries have retained liability either contractually
or by operation of law would not have a Material Adverse Effect; and
(v) to the Company's knowledge, the Company and its Subsidiaries
have no liabilities under Environmental Law that, individually or in the
aggregate, have had or may reasonably be expected to result in a Material
Adverse Effect.
<PAGE>
<PAGE> 26
(b) (i) The Company has not knowingly withheld from Buyer any
material environmental investigation, study, audit, test, review and other
analysis in the possession of the Company or its Subsidiaries conducted in
relation to the business of the Company or any property or facility now or
previously owned, operated or leased by the Company or any Subsidiary; and
(ii) the Company has not knowingly withheld from Buyer any consent decree,
consent order or similar document in force and to which it is a party
relating to any property currently owned, leased or operated by the Company
or its Subsidiaries.
(c) For purposes of this Section 4.19, "Environmental Law" means
all applicable state, federal and local laws, regulations and rules,
including common law, judgments, decrees and orders relating to pollution,
the preservation of the environment, and the release of material into the
environment.
SECTION 4.20. Property. The Company and the Subsidiaries have
good and marketable title to, or in the case of leased property, have valid
leasehold interests in all properties and assets necessary to conduct the
business of the Company as currently conducted except to the extent the
failure of this representation and warranty to be true would not have a
Material Adverse Effect. There are no developments affecting any of such
properties or assets pending or, to the knowledge of Seller threatened,
which, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
SECTION 4.21. Trademarks. (a) The Company and the Subsidiaries
own or possess adequate licenses or other valid rights to use all
trademarks, trademark rights, trade names and trade name rights which are
material to the Company's business and operations (collectively, "Material
Trademarks") used or held for use in connection with the business of the
Company and the Subsidiaries as currently conducted in all material
respects. All Material Trademarks are validly registered or registrations
have been applied for.
(b) The Company, except as set forth in Schedule 4.21, is unaware
of any assertion or claim challenging the validity of any Material
Trademark. Except as set forth in Schedule 4.21, the conduct of the
business of the Company and the Subsidiaries as currently conducted does
not conflict with any trademark, trademark right, trade name or trade name
right of any third party in a manner that could reasonably be expected to
have a Material Adverse Effect.
<PAGE>
<PAGE> 27
To the best knowledge of the Company, there are no material infringements
of any Material Trademarks.
SECTION 4.22. Material Contracts. (a) Except as set forth in
Schedule 4.22, the Company 10-K lists each material contract or agreement
(including, but not limited to, all material leases, licensing agreements,
manufacturing, production or distribution contracts and any material
contracts or agreements pursuant to which the Company or any Subsidiary has
licensed intellectual property to a third party) (collectively, the
"Material Contracts") to which the Company or any of its Subsidiaries is a
party.
(b) To the knowledge of the Company, each Material Contract is in
full force and effect and is enforceable in all material respects against
the parties thereto (other than the Company and the Subsidiaries) in
accordance with its terms and no condition or state of facts exist that,
with notice or the passage or time, or both, would constitute a material
default by the Company or any Subsidiary or, to the best knowledge of the
Company, any third party under any Material Contract.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF BUYER AND MERGER SUBSIDIARY
Buyer and Merger Subsidiary represent and warrant to the Company
that:
SECTION 5.01. Corporate Existence and Power. Each of Buyer and
Merger Subsidiary is a corporation duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation.
Since the date of its incorporation, Merger Subsidiary has not engaged in
any activities other than in connection with or as contemplated by this
Agreement.
SECTION 5.02. Corporate Authorization. The execution, delivery
and performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions
contemplated hereby are within the corporate powers of Buyer and Merger
Subsidiary and have been duly authorized by all necessary corporate action.
This Agreement, assuming due and valid authorization, execution and
delivery by the other parties hereto, constitutes a valid and binding
agreement of each of Buyer and Merger Subsidiary except that (i)
enforcement may
<PAGE>
<PAGE> 28
be subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws, now or hereafter in effect, affecting creditors'
rights generally, and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.
SECTION 5.03. Governmental Authorization. The execution, delivery
and performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions
contemplated by this Agreement require no action by or in respect of, or
filing with, any governmental body, agency, official or authority other
than (i) the filing of a certificate of merger in accordance with New York
Law; (ii) compliance with any applicable requirements of the HSR Act;
(iii) compliance with any applicable requirements of the Exchange Act; (iv)
compliance with any applicable requirements of ISRA; (v) compliance with
any applicable requirements of the Security Takeover Disclosure Act; and
(vi) compliance with any applicable requirements of the Exon-Florio
Provision.
SECTION 5.04. Non-Contravention. The execution, delivery and
performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions
contemplated hereby do not and will not (i) contravene or conflict with the
certificate of incorporation or bylaws of Merger Subsidiary or the charter
documents of Buyer, (ii) assuming compliance with the matters referred to
in Section 5.03, contravene or conflict with any provision of law,
regulation, judgment, order or decree binding upon Buyer or Merger
Subsidiary, or (iii) constitute a default under or give rise to any right
of termination, cancellation or acceleration of any right or obligation of
Buyer or Merger Subsidiary or to a loss of any benefit to which Buyer or
Merger Subsidiary is entitled under any agreement, contract or other
instrument binding upon Buyer or Merger Subsidiary, except in the case of
clauses (ii) and (iii) as would not materially impair the consummation of
the Offer or the Merger.
SECTION 5.05. Disclosure Documents. (a) The information with
respect to Buyer and its subsidiaries and Merger Subsidiary that Buyer and
Merger Subsidiary furnish to the Company in writing specifically for use in
any Company Disclosure Document will not contain, any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading (i) in the case of the Company Proxy
<PAGE>
<PAGE> 29
Statement at the time the Company Proxy Statement or any amendment or
supplement thereto is first mailed to stockholders of the Company, at the
time the stockholders vote on adoption of this Agreement and at the
Effective Time, and (ii) in the case of any Company Disclosure Document
other than the Company Proxy Statement, at the time of the filing thereof
and at the time of any distribution thereof.
(b) The SEC Offer Documents, when filed, will comply as to form
in all material respects with the applicable requirements of the Exchange
Act and the New York Disclosure Documents, when filed, will comply as to
form in all material respects with the applicable requirements of the New
York Disclosure Act. The Offer Documents will not at the time of the
filing thereof, at the time of any distribution thereof or at the time of
consummation of the Offer, contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading; provided that this representation and warranty will not apply
to statements or omissions in the Offer Documents based upon information
furnished to Buyer or Merger Subsidiary in writing by the Company
specifically for use therein.
SECTION 5.06. Finders' Fees. Except for Goldman, Sachs & Co.,
whose fees will be paid by Buyer, there is no investment banker, broker,
finder or other intermediary who might be entitled to any fee or commission
from the Company or any of its affiliates upon consummation of the
transactions contemplated by this Agreement.
SECTION 5.07. Financing. Buyer has or will have, prior to the
expiration of the Offer, sufficient funds available to purchase all of the
Shares outstanding on a fully diluted basis and to pay all related fees and
expenses pursuant to the Offer and this Agreement.
SECTION 5.08. Share Ownership. As of the date hereof, Buyer and
Merger Subsidiary do not beneficially own any Shares.
SECTION 5.09. Merger Subsidiary's Operations. Merger Subsidiary
was formed solely for the purpose of engaging in the transactions
contemplated hereby and has not engaged in any business activities or
conducted any operations other than in connection with the transactions
contemplated hereby.
<PAGE>
<PAGE> 30
ARTICLE VI
COVENANTS OF THE COMPANY
The Company agrees that:
SECTION 6.01. Conduct of the Company. From the date hereof until
the Effective Time, the Company and the Subsidiaries shall conduct their
business in the ordinary course consistent with past practice and shall use
their best efforts to preserve intact their business organizations and
relationships with third parties and to keep available the services of
their present officers and employees. Without limiting the generality of
the foregoing, from the date hereof until the Effective Time:
(a) the Company will not adopt or propose any change in its
certificate of incorporation or bylaws;
(b) except for the Merger, the Company will not, and will not
permit any Subsidiary to, merge or consolidate with any other Person or
acquire a material amount of assets of any other Person;
(c) the Company will not, and will not permit any Subsidiary to,
sell, lease, license or otherwise dispose of any material assets or
property except (i) pursuant to existing contracts or commitments and
(ii) inventory in the ordinary course consistent with past practice;
(d) the Company will not, and will not permit any Subsidiary to,
agree or commit to do any of the foregoing; or
(e) the Company will not, and will not permit any Subsidiary to,
willfully and knowingly (i) take or agree or commit to take any action
that would make any representation and warranty of the Company hereunder
inaccurate in any material respect at, or as of any time prior to, the
Effective Time or (ii) omit, or agree or commit to omit, to take any
action necessary to prevent any such representation or warranty from
being inaccurate in any material respect at any such time.
SECTION 6.02. Stockholder Meeting; Proxy Material. The Company
shall cause a meeting of its stockholders (the "Company Stockholder
Meeting") to be duly called and held as soon as reasonably practicable for
the purpose of voting on the approval and adoption of this
<PAGE>
<PAGE> 31
Agreement and the Merger unless a vote of stockholders of the Company is
not required by New York Law. The Directors of the Company shall, subject
to their fiduciary duties as advised by counsel, recommend approval and
adoption of this Agreement and the Merger by the Company's stockholders.
In connection with such meeting, the Company (i) will promptly, after the
consummation of the Offer, prepare and file with the SEC, will use its best
efforts to have cleared by the SEC and will thereafter mail to its
stockholders as promptly as practicable the Company Proxy Statement and all
other proxy materials for such meeting, (ii) will use its best efforts to
obtain the necessary approvals by its stockholders of this Agreement and
the transactions contemplated hereby and (iii) will otherwise comply with
all legal requirements applicable to such meeting.
SECTION 6.03. Access to Information. From the date hereof until
the Effective Time, the Company will give Buyer, its counsel, financial
advisors, auditors and other authorized representatives reasonable access
during normal business hours to the offices, properties, books and records
of the Company and the Subsidiaries, will furnish to Buyer, its counsel,
financial advisors, auditors and other authorized representatives such
financial and operating data and other information as such Persons may
reasonably request and will instruct the Company's employees, counsel and
financial advisors to cooperate with Buyer in its investigation of the
business of the Company and the Subsidiaries; provided that all requests
for information, to visit plants or facilities or to interview the
Company's employees or agents should be directed to and coordinated with an
executive officer of the Company or one of the five general managers of the
Company's operations; and provided further that no investigation pursuant
to this Section shall affect any representation or warranty given by the
Company to Buyer hereunder and any information received by Buyer or its
representatives shall remain subject to the Confidentiality Agreement dated
December 1, 1994 between Buyer and the Company (the "Confidentiality
Agreement").
SECTION 6.04. Other Offers. From the date hereof until the
termination hereof, the Company and the Subsidiaries and the officers,
directors, employees or other agents of the Company and the Subsidiaries
will not, directly or indirectly, (i) take any action to solicit, initiate
or encourage any Acquisition Proposal or (ii) subject to the fiduciary
duties of the Board of Directors under applicable law as advised by
counsel, engage in negotiations with, or disclose any nonpublic information
relating to the Company or any Subsidiary or afford access to the
properties, books or records of the Company or any
<PAGE>
<PAGE> 32
Subsidiary to, any Person that may be considering making, or has made, an
Acquisition Proposal. The Company will promptly notify Buyer after receipt
of any Acquisition Proposal or any indication that any Person is
considering making an Acquisition Proposal or any request for nonpublic
information relating to the Company or any Subsidiary or for access to the
properties, books or records of the Company or any Subsidiary by any Person
that may be considering making, or has made, an Acquisition Proposal and
will keep Buyer fully informed of the status and details of any such
Acquisition Proposal, indication or request. For purposes of this
Agreement, "Acquisition Proposal" means any offer or proposal for, or any
indication of interest in, a merger or other business combination involving
the Company or any Subsidiary or the acquisition of any equity interest in,
or a substantial portion of the assets of, the Company or any Subsidiary,
other than the transactions contemplated by this Agreement. Furthermore,
nothing contained in this Section 6.04 shall prohibit the Company or its
Board of Directors from taking and disclosing to the Company's shareholders
a position with respect to a tender or exchange offer by a third party
pursuant to Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act or
from making such disclosure to the Company's shareholders or otherwise
which, in the judgment of the Board of Directors with the advice of
independent legal counsel, may be required under applicable law or rules of
any stock exchange.
SECTION 6.05. Notices of Certain Events. The Company shall
promptly notify Buyer of:
(i) any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection with
the transactions contemplated by this Agreement;
(ii) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement; and
(iii) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge threatened against, relating
to or involving or otherwise affecting the Company or any Subsidiary
which, if pending on the date of this Agreement, would have been
required to have been disclosed pursuant to Section 4.13 or which relate
to the consummation of the transactions contemplated by this Agreement.
<PAGE>
<PAGE> 33
SECTION 6.06. Amendment of Rights Agreement. The Company agrees
that promptly after the date hereof, and in any event within five days of
the date hereof, it will amend, to the extent necessary, its Amended and
Restated Shareholder Rights Agreement, dated as of August 7, 1992, between
the Company and the Bank of New York, as Rights Agent (the "Rights
Agreement"), to permit the commencement and closing of the Offer and the
consummation of the Merger without any such event or the passage of time
resulting in the occurrence of the Distribution Date (as defined in the
Rights Agreement), and upon the written request of Buyer, will redeem, in
accordance with the terms of the Rights Agreement all outstanding rights
issued pursuant to the Rights Agreement (the "Rights") at a redemption
price of $.01 per Right. Except as set forth above, the Company shall not
redeem the Rights other than in connection with a merger, consolidation,
business combination, acquisition of Shares or sale of assets or similar
transaction that a majority of the Board of Directors of the Company
(excluding directors who are designees of the Buyer or who are employees of
the Company) determines in the exercise of its fiduciary responsibilities
is more favorable to the Company's stockholders than the transactions
contemplated hereby.
SECTION 6.07. Conveyance Taxes. The Company shall timely pay
any real property transfer or gains, sales, use, transfer, value added,
stock transfer and stamp taxes, any transfer, recording, registration and
other fees, and any similar taxes which become payable prior to the
Effective Time in connection with the transactions contemplated hereunder
that are required to be paid in connection therewith.
ARTICLE VII
COVENANTS OF BUYER
Buyer agrees that:
SECTION 7.01. Obligations of Merger Subsidiary. Buyer will take
all action necessary to cause Merger Subsidiary to perform its obligations
under this Agreement and to consummate the Merger on the terms and
conditions set forth in this Agreement.
SECTION 7.02. Voting of Shares. Buyer agrees to vote all Shares
beneficially owned by it or by its Subsidiaries in favor of adoption of
this Agreement at the Company Stockholder Meeting.
<PAGE>
<PAGE> 34
SECTION 7.03. Director and Officer Liability. For six years
after the Effective Time, Buyer will, and will cause the Surviving
Corporation to, (i) indemnify and hold harmless the present and former
officers, directors, employees and agents of the Company in respect of acts
or omissions occurring prior to the Effective Time (including, without
limitation, in respect of acts or omissions in connection with this
Agreement and the transactions contemplated hereby) and (ii) advance to
such Persons expenses incurred in defending any action or suit with respect
to such matters, in each case to the extent such Persons are entitled to
indemnification or advancement of expenses under the Company's or any
Subsidiary's certificate of incorporation and bylaws in effect on the date
hereof and subject to the terms of such certificates of incorporation and
bylaws. In the event any claim or claims are asserted or made within such
six year period, all rights to indemnification in respect of any such claim
or claims shall continue until disposition of any and all such claims.
Buyer and the Company agree that all rights to indemnification and all
limitations on liability existing in favor of any such officer, director,
employee or agent as provided in the Company's Certificate of Incorporation
and By-laws as in effect as of the date hereof shall survive the Merger and
shall continue in full force and effect. Any determination required to be
made with respect to whether any of the foregoing Persons is entitled to
indemnification as set forth above shall be made by independent legal
counsel selected mutually by such Person and Buyer. For six years after
the Effective Time, Buyer will cause the Surviving Corporation to use its
best efforts to provide officers' and directors' liability insurance in
respect of acts or omissions occurring prior to the Effective Time covering
each such Person currently covered by the Company's officers' and
directors' liability insurance policy on terms with respect to coverage and
amount no less favorable than those of such policy in effect on the date
hereof; provided that in satisfying its obligation under this Section,
Buyer shall not be obligated to cause the Surviving Corporation to pay
premiums in excess of $400,000 per annum; provided further that if the
premiums would exceed $400,000 in a given year, the Surviving Corporation
shall use its best efforts to purchase coverage that in the opinion of the
Surviving Corporation is the best available for $400,000 per year. Buyer
shall cause the Surviving Corporation to continue to indemnify in
accordance with the Company's past practices each of the employees listed
on Schedule 7.03 in respect of the lawsuit set forth opposite such
employee's name on Schedule 7.03.
<PAGE>
<PAGE> 35
ARTICLE VIII
COVENANTS OF BUYER
AND THE COMPANY
The parties hereto agree that:
SECTION 8.01. Best Efforts. Subject to the terms and conditions
of this Agreement, each party will use its best efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement; provided that
Buyer and its affiliates shall not be required to agree to any consent
decree or order in connection with any objections of the Department of
Justice or Federal Trade Commission (each an "HSR Authority") to the
transactions contemplated by this Agreement or in connection with any
objections of any governmental authority in respect of the Exon-Florio
Provision to the transactions contemplated by this Agreement.
SECTION 8.02. Certain Filings. The Company and Buyer shall
cooperate with one another (a) in connection with the preparation of the
Company Disclosure Documents and the Offer Documents, and (b) in
determining whether any action by or in respect of, or filing with, any
governmental body, agency or official, or authority is required, or any
actions, consents, approvals or waivers are required to be obtained from
parties to any material contracts, in connection with the consummation of
the transactions contemplated by this Agreement and (c) in seeking any such
actions, consents, approvals or waivers or making any such filings,
furnishing information required in connection therewith or with the Company
Disclosure Documents or the Offer Documents and seeking timely to obtain
any such actions, consents, approvals or waivers.
SECTION 8.03. Public Announcements. Buyer and the Company will
consult with each other before issuing any press release or making any
public statement with respect to this Agreement and the transactions
contemplated hereby and, except as may be required by applicable law or any
listing agreement with any national securities exchange or foreign
securities exchange, will not issue any such press release or make any such
public statement prior to such consultation.
SECTION 8.04. Conveyance Taxes. Buyer and the Company shall
cooperate in the preparation, execution and filing of all returns,
questionnaires, applications, or
<PAGE>
<PAGE> 36
other documents regarding any real property transfer or gains, sales, use,
transfer, value added, stock transfer and stamp taxes, any transfer,
recording, registration and other fees, and any similar taxes which become
payable in connection with the transactions contemplated hereunder that are
required or permitted to be filed on or before the Effective Time.
SECTION 8.05. Further Assurances. At and after the Effective
Time, the officers and directors of the Surviving Corporation will be
authorized to execute and deliver, in the name and on behalf of the Company
or Merger Subsidiary, any deeds, bills of sale, assignments or assurances
and to take and do, in the name and on behalf of the Company or Merger
Subsidiary, any other actions and things to vest, perfect or confirm of
record or otherwise in the Surviving Corporation any and all right, title
and interest in, to and under any of the rights, properties or assets of
the Company acquired or to be acquired by the Surviving Corporation as a
result of, or in connection with, the Merger.
SECTION 8.06. Employee Matters. (a) Except as provided in
(c), Buyer and Merger Subsidiary agree that, effective as of the Effective
Time and for a six month period following the Effective Time, the Surviving
Corporation and its Subsidiaries and successors shall continue for those
persons who, immediately prior to the Effective Time, were employees of the
Company or its Subsidiaries ("Retained Employees") the Employee Plans and
material Benefit Arrangements or provide benefits that are not less
favorable in the aggregate to such Employee Plans and Benefit Arrangements.
With respect to such benefits, service accrued by such Retained Employees
during employment with the Company and its Subsidiaries prior to the
Effective Time shall be recognized to the extent and for the purposes such
service was recognized prior to the Effective Time by the applicable
Employee Plan or Benefit Arrangements. Nothing contained in the foregoing
is intended to preclude the Surviving Corporation from terminating the
employment of any Retained Employee after the Effective Time. Further,
none of Buyer, the Merger Subsidiary or the Surviving Corporation shall be
required to recognize service with the Company or its Subsidiaries prior to
the Effective Time after the end of such six month period except as
required by law; provided that with respect to Retained Employees who are
participants in a nonunion Employee Plan, the Buyer and the Merger
Subsidiary agree to cause its nonunion employee benefit plans ("Benefit
Plans") to recognize, for purposes of vesting and eligibility to
participate only, service which is recognized for such purposes by the
comparable
<PAGE>
<PAGE> 37
Employee Plan with respect to Retained Employees who otherwise become
eligible to participate in a Benefit Plan.
(b) Buyer and Merger Subsidiary agree to honor, and cause the
Surviving Corporation to honor, without modification, the Employee
Agreements on the same terms as disclosed in Schedule 4.15 hereof (whether
or not executed as of the date hereof), and all Supplemental Retirement and
Death Benefit Agreements, as amended through December 31, 1994, between the
Company and certain officers (collectively, "Retirement Agreements") which
Employee Agreements and Retirement Agreements are listed on Schedule 4.15
hereto. Buyer and Merger Subsidiary acknowledge that the consummation of
the Offer shall constitute a "change in control" for purposes of the
Employee Agreements and Retirement Agreements.
(c) For the fiscal year of the Company ending June 30, 1995, the
Company shall determine the bonus pools for the short term bonus
arrangements of the Company using the same objective criteria that were
used to determine such bonus pools for the fiscal year of the Company ended
June 30, 1994. The Buyer shall, to the extent said bonus arrangements call
for a discretionary allocation of the bonus pool, allocate the entire bonus
pool and consult with Messrs. Banks, Frank, and Keane to ascertain their
views with respect to the appropriate allocation of said bonus pool.
(d) As of the Effective Time, all participants in the Company's
Employee Stock Ownership and Savings Plan ("ESOP") shall become fully
vested in their account balances under the ESOP. Buyer and Merger
Subsidiary acknowledge that, prior to the consummation of the Offer, the
Company may make such contribution to the ESOP as may be necessary to
permit the ESOP to repay any remaining debt of the ESOP and may allocate,
as of the Effective Time (as if the Effective Time were the last day of the
ESOP's plan year), the remainder of its Shares to the ESOP accounts of ESOP
participants in accordance with the provisions of the ESOP, Buyer and
Merger Subsidiary agree that the Company may cause the ESOP to be
terminated as of the Effective Time and may take such steps as may be
necessary (including amending the ESOP and its related trust) to cause the
trustee of the ESOP to offer each ESOP participant the opportunity to
receive his or her account balance under the ESOP in a lump sum
distribution as soon as practicable after the date the amounts described
herein have been allocated or to have such account balance transferred to
an individual retirement account.
<PAGE>
<PAGE> 38
(e) Buyer and Merger Subsidiary agree to honor, and cause the
Surviving Corporation to honor, without modification, for such directors
and/or former directors and in such amounts as are set forth in Schedule
4.15, the Company's Non-Employee Director Fee Continuation Plan and the
individual fee continuation agreement set forth on such Schedule 4.15,
which provides certain benefits to non-employee directors, and agrees and
acknowledges that consummation of the Offer shall constitute a "Change in
Control" for purposes of such Plan.
(f) In the event Buyer or Merger Subsidiary or the Surviving
Corporation or any of their successors or assigns (i) consolidates with or
merges into any other person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger, or (ii) transfers or
conveys all substantially all of its properties and assets to any person,
then, and in each such case, to the extent necessary to effectuate the
purposes of this Section 8.05, proper provision shall be made so that the
successors and assigns of Buyer, Merger Subsidiary or the Surviving
Corporation, as the case may be, assume the obligations set forth in this
Section 8.05 and none of the actions described in clauses (i) and (ii)
shall be taken until such provision is made.
ARTICLE IX
CONDITIONS TO THE MERGER
SECTION 9.01. Conditions to the Obligations of Each Party. The
obligations of the Company, Buyer and Merger Subsidiary to consummate the
Merger are subject to the satisfaction of the following conditions:
(i) if required by New York Law, this Agreement shall have been
adopted by the stockholders of the Company in accordance with such Law;
(ii) any applicable waiting period under the HSR Act relating to
the Merger shall have expired;
(iii) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation of
the Merger;
(iv) Buyer shall have purchased Shares pursuant to the Offer;
<PAGE>
<PAGE> 39
(v) any applicable waiting period under the Exon-Florio Provision
relating to the Merger shall have expired; and
(vi) Buyer shall have received or be reasonably satisfied that it
will receive all consents and approvals contemplated by Section 4.04 or
other material consents necessary in connection with the consummation of
the Merger or to enable the Surviving Corporation to continue to carry
on the business of the Company and the Subsidiaries as presently
conducted in all material respects.
ARTICLE X
TERMINATION
SECTION 10.01. Termination. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of this Agreement by the stockholders of the
Company):
(i) by mutual written consent of the Company and Buyer;
(ii) by either the Company or Buyer if the Offer has not been
consummated by August 31, 1995 (as such date may be extended pursuant to
the proviso to this sentence, the "Outside Termination Date"); provided
that if an HSR Authority shall have requested additional information
from any of the parties hereto or any of their affiliates pursuant to 15
U.S.C. sec. 18a(e)(1) or the rules and regulations thereunder on or
prior to August 31, 1995, Buyer may elect to change the Outside
Termination Date to a date not later than October 31, 1995 if this
Agreement has not been terminated by the Company pursuant to the terms
of this Agreement prior to the date of such election; provided, however,
that the right to terminate this Agreement under this paragraph shall
not be available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the failure
to meet the date requirements of this paragraph;
(iii) by either the Company or Buyer, if there shall be any law or
regulation that makes consummation of the Merger illegal or if any
judgment, injunction, order or decree enjoining Buyer or the Company
from consummating the Merger is entered and such judgment,
<PAGE>
<PAGE> 40
injunction, order or decree shall become final and nonappealable;
(iv) by Buyer, upon the occurrence of any Trigger Event described
in Section 11.04(b);
(v) by the Company, upon the occurrence of the Trigger Event
described in clause (i) or (ii) of Section 11.04(b);
(vi) by the Company if Buyer or Merger Subsidiary breaches or fails
in any material respect to perform or comply with any of its material
covenants and agreements contained herein or breaches its
representations and warranties in any material respect; or
(vii) by Buyer, if Buyer shall have received any communication from
an HSR Authority (which communication shall be confirmed to the other
parties by the HSR Authority) that causes such party to reasonably
believe that any HSR Authority has authorized the institution of
litigation challenging the transactions contemplated by this Agreement
under the U.S. antitrust laws, which litigation will include a motion
seeking an order or injunction prohibiting the consummation of any of
the transactions contemplated by this Agreement.
The party desiring to terminate this Agreement pursuant to clauses (ii),
(iii), (iv), (v), (vi) or (vii) shall give written notice of such
termination to the other party.
SECTION 10.02. Effect of Termination. If this Agreement is
terminated pursuant to Section 10.01, this Agreement shall become void and
of no effect with no liability on the part of any party hereto, except that
the agreements contained in Section 11.04 and the Confidentiality Agreement
shall survive the termination hereof.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including
telecopy or similar writing) and shall be given,
<PAGE>
<PAGE> 41
if to Buyer or Merger Subsidiary, to:
Imperial Chemical Industries PLC
9 Millbank
London SW1P 3JF
England
Telecopy: (071) 798-5878
Attention: Company Secretary
with a copy to:
Paul R. Kingsley, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopy: (212) 450-4800
if to the Company, to:
Grow Group, Inc.
Metropolitan Life Building
200 Park Avenue
New York, NY 10166
Telecopy: (212) 286-0940
Attention: Mr. Russell Banks, President and
Chief Executive Officer
with a copy to:
Parker Chapin Flattau & Klimpl
1211 Avenue of the Americas
New York, New York 10036
Telecopy: (212) 704-6288
Attention: Lloyd Frank, Esq.
and a copy to:
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Telecopy: (212) 735-2000
Attention: Daniel E. Stoller, Esq.
or such other address or telecopy number as such party may hereafter
specify for the purpose by notice to the other parties hereto. Each such
notice, request or other communication shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number
specified in this Section and the appropriate telecopy confirmation is
received or (ii) if given by any other
<PAGE>
<PAGE> 42
means, when delivered at the address specified in this Section.
SECTION 11.02. Survival of Representations and Warranties. The
representations and warranties contained herein and in any certificate or
other writing delivered pursuant hereto shall not survive the Effective
Time or the termination of this Agreement. All covenants and agreements
contained herein which by their terms are to be performed in whole or in
part subsequent to the Effective Time shall survive the Merger in
accordance with their terms. Nothing contained in this Section 11.02 shall
relieve any party from liability for any willful breach of this Agreement.
SECTION 11.03. Amendments; No Waivers. (a) Any provision of
this Agreement may be amended or waived prior to the Effective Time if, and
only if, such amendment or waiver is in writing and signed, in the case of
an amendment, by the Company, Buyer and Merger Subsidiary or in the case of
a waiver, by the party against whom the waiver is to be effective; provided
that after the adoption of this Agreement by the stockholders of the
Company, no such amendment or waiver shall, without the further approval of
such stockholders, alter or change (i) the amount or kind of consideration
to be received in exchange for any shares of capital stock of the Company
or (ii) any of the terms or conditions of this Agreement if such alteration
or change could adversely affect the holders of any shares of capital stock
of the Company.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 11.04. Expenses. (a) Except as otherwise provided in
this Section, all costs and expenses incurred in connection with this
Agreement shall be paid by the party incurring such cost or expense.
(b) The Company agrees to pay Buyer in respect of its expenses an
amount in immediately available funds equal to $8,000,000 promptly, but in
no event later than two business days, after the occurrence of any of the
events set forth below (a "Trigger Event"):
<PAGE>
<PAGE> 43
(i) the Company shall have entered into, or shall have
publicly announced its intention to enter into, an agreement or an
agreement in principle with respect to any Acquisition Proposal other
than the transactions contemplated by this Agreement;
(ii) the Board of Directors of the Company shall have withdrawn
or materially modified its approval or recommendation of the Offer or
this Agreement other than as a result of Buyer's breach of this
Agreement; or
(iii) any person or group (as defined in Section 13(d)(3) of the
Exchange Act) (other than Buyer or any of its affiliates) shall have
become the beneficial owner (as defined in Rule 13d-3 promulgated under
the Exchange Act) of at least 25% of any class or series of capital
stock of the Company (including the Shares), or shall have acquired,
directly or indirectly, at least 25% of the assets of the Company other
than acquisitions of securities for bona fide arbitrage purposes only
and other than Corimon or its affiliates; or Corimon and its affiliates
shall beneficially own more than 28% of the Shares.
SECTION 11.05. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, provided that no party
may assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement without the consent of the other parties hereto except
that Buyer may transfer or assign, in whole or from time to time in part,
to one or more of its direct or indirect wholly owned subsidiaries, the
right to purchase Shares pursuant to the Offer, but any such transfer or
assignment will not relieve Buyer of its obligations under the Offer or
prejudice the rights of tendering stockholders to receive payment for
Shares validly tendered and accepted for payment pursuant to the Offer.
SECTION 11.06. Governing Law. This Agreement shall be construed
in accordance with and governed by the law of the State of New York without
regard to conflicts of laws.
SECTION 11.07. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any
rule of law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect
<PAGE>
<PAGE> 44
so long as the economic or legal substance of the transactions contemplated
herein is not affected in any manner materially adverse to any party
hereto. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually
acceptable manner.
SECTION 11.08. Third Party Beneficiaries. No provision of this
Agreement other than Sections 7.03 and 8.05 is intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder.
SECTION 11.09. Entire Agreement. This Agreement, including any
exhibits or schedules hereto and the Confidentiality Agreement constitutes
the entire agreement among the parties hereto with respect to the subject
matter hereof and supersede all other prior agreements or undertaking with
respect thereto, both written and oral.
SECTION 11.10. Counterparts; Effectiveness. This Agreement may
be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement shall become effective when each
party hereto shall have received counterparts hereof signed by all of the
other parties hereto.
SECTION 11.11. Jurisdiction. Any legal action or proceeding with
respect to this Agreement or any matters arising out of or in connection
with this Agreement, and any action for enforcement of any judgment in
respect thereof shall be brought exclusively in the courts of the State of
New York or of the United States of America for the Southern District of
New York, and, by execution and delivery of this Agreement, the Company,
Buyer and Merger Subsidiary each hereby accepts for itself and in respect
of its property, generally and unconditionally, the exclusive jurisdiction
of the aforesaid courts and appellate courts thereof. The Company, Buyer
and Merger Subsidiary irrevocably consent to service of process out of any
of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid,
or by recognized international express carrier or delivery service, to the
Company, Buyer or Merger Subsidiary at their respective addresses referred
to in Section 11.01 hereof. In addition, each of Buyer and Merger
Subsidiary hereby designates ICI American Holdings Inc. ("Agent"), Olympic
Towers, 645 Fifth Avenue, 12th Floor, New York, New York 10022 as its
respective agent for service of process, and
<PAGE>
<PAGE> 45
service upon Buyer or Merger Subsidiary shall be deemed to be effective
upon service of Agent as aforesaid or of its successor designated in
accordance with the following sentence. If Agent changes its address,
Buyer will provide the Company with not less than 30 days advance notice of
such change. Buyer and Merger Subsidiary shall maintain an agent for
service of process in the Borough of Manhattan. Buyer or Merger subsidiary
may designate another corporate agent or law firm reasonably acceptable to
the Company and located in the Borough of Manhattan, in the City of New
York, as successor agent for service of process upon 30-days prior written
notice to the Company. The Company, Buyer and Merger Subsidiary each
hereby irrevocably waives any objection which it may now or hereafter have
to the laying of venue of any of the aforesaid actions or proceedings
arising out of or in connection with this Agreement or otherwise brought in
the courts referred to above and hereby further irrevocably waives and
agrees, to the extent permitted by applicable law, not to plead or claim in
any such court that any such action or proceedings brought in any such
court has been brought in an inconvenient forum. Nothing herein shall
affect the right of any party hereto to serve process in any other manner
permitted by law.
<PAGE>
<PAGE> 46
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective authorized officers
as of the day and year first above written.
GROW GROUP, INC.
By /s/ R. Banks
Name: R. Banks
Title: President
IMPERIAL CHEMICAL INDUSTRIES PLC
By /s/ John Thompson
Name: John Thompson
Title: Attorney in Fact
GDEN CORPORATION
By /s/ John Danzeisen
Name: John Danzeisen
Title: Attorney in Fact
<PAGE>
<PAGE> 47
ANNEX I
CONDITIONS TO THE OFFER
Notwithstanding any other provisions of the Offer, and in addition
to (and not in limitation of) Buyer's rights to extend and amend the Offer
at any time in its sole discretion (subject to the provisions of the Merger
Agreement), Buyer shall not be required to accept for payment or, subject
to any applicable rules and regulations of the SEC, including Rule 14e-1(c)
under the Exchange Act (relating to the Buyer's obligation to pay for or
return tendered Shares promptly after termination or withdrawal of the
Offer), pay for, and may delay the acceptance for payment of or, subject to
the restriction referred to above, the payment for, any tendered Shares,
and may terminate the Offer if (i) any applicable waiting period under the
HSR Act or Exon-Florio Provision has not expired or terminated prior to the
expiration of the Offer, (ii) the Minimum Condition has not been satisfied,
(iii) the Rights under the Rights Agreement shall have become exercisable,
or (iv) at any time on or after April 30, 1995 and before the time of
acceptance of Shares for payment pursuant to the Offer, any of the
following conditions shall exist:
(a) there shall be instituted and pending by any domestic
or foreign federal or state governmental regulatory or administrative
agency or authority or court or legislative body or commission
("Governmental Entity") (or the staff of any HSR Authority shall have
recommended the commencement of) any action or proceeding which (1) seeks
to prohibit, or impose any material limitations on, Buyer's or Merger
Subsidiary's ownership or operation of all or a material portion of the
businesses or assets of the Company and its Subsidiaries, taken as a whole,
or to compel Buyer or any of its subsidiaries or affiliates to dispose of
or hold separate all or any material portion of the business or assets of
the Company and its Subsidiaries, taken as a whole, or of Buyer or its
subsidiaries, (2) seeks to prohibit, or make illegal, the acceptance for
payment, payment for or purchase of Shares or the consummation of the Offer
or the Merger, (3) challenges or seeks to make illegal, to delay materially
or to restrain or prohibit, the making of the Offer, or seeks to restrain
or limit the ability of Buyer, or renders Buyer unable, to accept for
payment, pay for or purchase some or all of the Shares, or to consummate
the Merger, or seeks material damages relating to the transactions
contemplated by the Offer or the Merger or (4) imposes material limitations
on the ability of Merger
<PAGE>
<PAGE> 48
Subsidiary or Buyer effectively to exercise full rights of ownership of the
Shares, including without limitation, the right to vote the Shares
purchased by it on all matters properly presented to the Company's
shareholders;
(b) there shall have been any action taken, or any
statute, rule, regulation, judgment, order or injunction promulgated,
entered, enforced, enacted, issued or applicable to the Offer or the Merger
by any Governmental Entity that results in any of the consequences referred
to in clauses (1) through (4) of paragraph (a) above;
(c) unless the Shares properly tendered constitute not
less than two-thirds of the outstanding Shares on a fully diluted basis,
any event or action shall have occurred that shall materially impair,
restrain or prohibit or to materially delay the acquisition by Buyer of the
Corimon Shares in accordance with the terms of the Corimon Option
Agreement;
(d) the representations and warranties of the Company set
forth in the Merger Agreement (without giving effect to any qualification
as to materiality or Material Adverse Effect contained therein) shall not
be true and correct as of the date of consummation of the Offer as though
made on or as of such date or the Company shall have breached or failed to
perform or comply with any obligation, agreement or covenant required by
the Merger Agreement to be performed or complied with by it except, in each
case, (i) for changes specifically permitted by the Merger Agreement and
(ii) (A) those representations and warranties that address matters only as
of a particular date which are true and correct as of such date or (B)
where the failure of such representations and warranties to be true and
correct, or the performance or compliance with such obligations, agreements
or covenants, individually or in the aggregate, do not have, and could not
reasonably be expected to have, a Material Adverse Effect or a material
adverse effect on the ability of Buyer to consummate the Offer or the
Merger;
(e) the Merger Agreement shall have been terminated in
accordance with its terms;
(f) any person, entity or "group" (as defined in Section
13(d)(3) of the Exchange Act), shall have acquired beneficial ownership
(determined pursuant to Rule 13d-3 promulgated under the Exchange Act) of
more than 25% of any class or series of capital stock of the Company
(including the Shares), through the acquisition of stock, the formation of
a group or otherwise, other than Corimon or its affiliates; or Corimon and
its affiliates shall have
<PAGE>
<PAGE> 49
acquired beneficial ownership of more than 28% of the outstanding Shares or
(ii) the Company shall have entered into a definitive agreement or
agreement in principle with any person with respect to an Acquisition
Proposal or similar business combination with the Company;
(g) the Company's Board of Directors shall have withdrawn,
or modified or changed in a manner adverse to Buyer or Merger Subsidiary
(including by amendment of the Schedule 14D-9) its recommendation of the
Offer, the Merger Agreement, or the Merger, or recommended another proposal
or offer, or shall have resolved to do any of the foregoing; or
(h) Buyer shall not have received and shall not be
satisfied that it will receive the consents and approvals required under
ISRA or the Credit Agreement in connection with the consummation of the
Offer or the Merger;
which in the sole judgment of Buyer or Merger Subsidiary, in any such case,
and regardless of the circumstances giving rise to such condition, makes it
inadvisable to proceed with the Offer and/or with such acceptance for
payment or payments.
The foregoing conditions are for the sole benefit of Merger
Subsidiary and Buyer and may be waived by Buyer or Merger Subsidiary, in
whole or in part at any time and from time to time in the sole discretion
of Buyer or Merger Subsidiary. The failure by Buyer at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any
such right; the waiver of any such right with respect to particular facts
and other circumstances shall not be deemed a waiver with respect to any
other facts and circumstances; and each such right shall be deemed an
ongoing right that may be asserted at any time and from time to time.
<PAGE> 1
Exhibit 12
OPTION AGREEMENT
OPTION AGREEMENT, dated as of April 30, 1995 (this "Agreement"),
among Imperial Chemical Industries PLC, a corporation organized under the
laws of England ("Buyer"), GDEN Corporation, a New York corporation and an
indirect wholly owned subsidiary of Buyer ("Merger Subsidiary"), Corimon
Corporation, a Delaware corporation ("Stockholder" or "Corimon Corp."), and
Corimon, S.A.C.A., a Venezuelan corporation ("Corimon").
WHEREAS, Buyer and Merger Subsidiary have entered into an
Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), with Grow Group, Inc., a New York corporation (the "Company"),
which provides, among other things, for the acquisition by Buyer or its
assignee of all the outstanding shares of Common Stock, par value $0.10 per
share, of the Company (the "Company Common Stock") through (a) a tender
offer (the "Offer") for all shares of the Company Common Stock for $18.10
per share, net to the sellers thereof in cash (the "Per Share Amount"),
subject to any amounts required to be withheld under applicable federal,
state, local or foreign income tax regulations and (b) a second-step merger
pursuant to which Merger Subsidiary will merge with and into the Company
(the "Merger") and all outstanding shares of the Company Common Stock other
than shares of the Company Common Stock held by the Company as treasury
stock or owned by Buyer, Merger Subsidiary or any other subsidiary of Buyer
will be converted into the right to receive the Per Share Amount in cash,
subject to any amounts required to be withheld under applicable federal,
state, local or foreign income tax regulations; and
WHEREAS, as of the date hereof, Stockholder owns beneficially
4,025,841 shares of Company Common Stock (the "Shares");
WHEREAS, as a condition to the willingness of Buyer and Merger
Subsidiary to enter into the Merger Agreement, Buyer and Merger Subsidiary
have required that the Stockholder agree, and in order to induce Buyer and
Merger Subsidiary to enter into the Merger Agreement, the Stockholder has
agreed, to grant Buyer an option to purchase the Shares in accordance with
the terms of this Agreement; and
WHEREAS, members of the Board of Directors of the Company who are
not designees of Corimon, in accordance with the Standstill Agreement
between the Company, Corimon and Stockholder, dated July 21, 1992, as
amended, have adopted a<PAGE>
<PAGE> 2
resolution permitting Stockholder and Corimon to enter into and perform
their obligations under this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally
bound hereby, the parties hereto agree as follows:
ARTICLE I
OPTION
Section 1.1. Grant of Stock Option. Stockholder hereby
irrevocably grants to Buyer an option (the "Option") to purchase the Shares
at a purchase price of $17.50 per Share (the "Purchase Price").
Section 1.2. Exercise of Option. (a) Subject to the
satisfaction of the conditions set forth in Section 1.4 hereof, the Option
may be exercised by Buyer in whole but not in part at any time prior to the
earlier of (i) November 5, 1995 and (ii) five business days after the
Outside Termination Date (as defined in the Merger Agreement); provided
that Buyer may exercise the Option only if the Minimum Condition has been
satisfied. Upon exercise of the Option, Buyer shall send a written notice
(the "Exercise Notice") to Stockholder specifying the places, the dates
(which (a) in the case of 2,173,362 Shares, shall be two business days
after the date of the Exercise Notice; (b) in the case of 1,336,360 Shares,
shall be a business day not less than 10 calendar days, nor more than 15
calendar days after the date of the Exercise Notice; and (c) in the case of
516,129 Shares, shall be a business day not less than 15 calendar days nor
more than 20 calendar days after the date of the Exercise Notice), and the
times for the closings of such purchases. The closings of the purchases of
the Shares (the "Closings") shall take place in New York, New York at the
places, on the dates and at the times designated by Buyer in its Exercise
Notice, provided that if, at the date of any Closing herein provided for,
the conditions set forth in Section 1.4 shall not have been satisfied or
waived by Stockholder, Buyer may postpone such Closing until a date within
two business days after such conditions are satisfied. For purposes of
this Agreement, the "Minimum Condition" shall have been satisfied only if
(i) Buyer has paid for or accepted for payment all shares of Company Common
Stock properly tendered and not withdrawn pursuant to the Offer (the
"Tendered Shares") in accordance with the terms of the Offer and the Merger
Agreement and (ii) the Tendered Shares plus the Shares constitute not less
than a <PAGE>
<PAGE> 3
majority of the outstanding Shares of Company Common Stock on a fully
diluted basis.
(b) Buyer shall not be under any obligation to deliver any
Exercise Notice and may allow the Option to expire without purchasing the
Shares hereunder; provided however that once Buyer has delivered to the
Stockholder an Exercise Notice, subject to the terms and conditions of this
Agreement, Buyer shall be bound to effect the purchase as described in such
Exercise Notice; and provided further that if the Minimum Condition is
satisfied, Buyer shall thereafter be bound to exercise the Option within
two business days following the date of such satisfaction.
(c) Stockholder shall not, and shall not agree to, sell, assign,
transfer, tender or otherwise dispose of any Shares to any Person or group
that has commenced a tender offer for, or proposed to acquire, at least 50%
of the outstanding Shares of Company Common Stock, except pursuant to, and
at the price per share payable in, such offer or proposal.
Section 1.3. Closing. At each Closing, (a) the Stockholder
shall deliver or cause to be delivered to Buyer a certificate or
certificates (the "Certificates") representing the number of Shares to be
purchased at such Closing duly endorsed, or accompanied by stock powers
duly executed in blank, with all required transfer tax stamps affixed
thereto and (b) Buyer shall deliver to the Stockholder or its designee(s) a
certified or bank cashier's check or checks payable to or upon the order of
the Stockholder, or, at the option of Stockholder, a wire transfer to an
account in the United States designated by Stockholder, in an amount equal
to (i) the number of Shares to be purchased at such Closing multiplied by
(ii) the Purchase Price (the "Purchase Amount").
Section 1.4. Conditions to the Stockholder's Obligations. The
obligation of the Stockholder to sell Shares at any Closing is subject to
the following conditions:
(i) All waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder (the "HSR Act") applicable to the exercise of the
Option shall have expired or been terminated.
(ii) There shall be no preliminary or permanent injunction or other
order, decree or ruling issued by a court of competent jurisdiction or
by a governmental, <PAGE>
<PAGE> 4
regulatory or administrative agency or commission having authority with
respect thereto, nor any statute, rule, regulation or order promulgated or
enacted by any such governmental authority, prohibiting or otherwise
restraining the exercise of the Option or the sale of the Shares pursuant
thereto.
Section 1.5. Adjustment Upon Certain Changes. (a) In the event
of any change in the Company's capital stock by reason of stock dividends,
stock splits, mergers, consolidations, recapitalizations, combinations,
conversions, exchanges of shares, extraordinary or liquidating dividends,
or other changes in the corporate or capital structure of the Company,
which would have the effect of diluting or changing the Buyer's rights
hereunder, the number and kind of shares or securities subject to the
Option and the purchase price per Share shall be appropriately and
equitably adjusted so that the Buyer shall receive upon exercise of the
Option the number and class of shares or other securities or property that
the Buyer would have received in respect of the Shares purchasable upon
exercise of the Option if the Option had been exercised immediately prior
to such event.
(b) In the event the consideration per Share paid by Buyer
pursuant to the Offer or the Merger Agreement is increased, the Purchase
Price shall be increased by an amount equal to the amount of such increase.
ARTICLE II
COVENANTS OF THE STOCKHOLDER
Section 2.1. No Disposition or Encumbrance of Shares. Except as
contemplated by Article I above, and except for any Lien (as defined below)
existing as of the date hereof, Stockholder hereby covenants and agrees,
that, except as contemplated by this Agreement, it shall not, and shall not
offer or agree to, sell, transfer, tender, assign, hypothecate or otherwise
dispose of, or create or permit to exist any security interest, lien,
claim, pledge, option, right of first refusal, agreement, limitation on
Stockholder's voting or dispositive rights, charge or other encumbrance of
any nature whatsoever (collectively, "Liens") with respect to the Shares.
For the avoidance of doubt, Stockholder hereby agrees that it will not
tender the Shares into the Offer unless directed to do so by Buyer;
provided that if it is so directed by Buyer, Stockholder will, to the
extent permitted by the Permitted Liens (as defined below), properly tender
or cause to be tendered the Shares into the <PAGE>
<PAGE> 5
Offer and, so long as the Option is outstanding, not withdraw such Shares;
and provided further that if the Shares are purchased pursuant to the
Offer, Stockholder will pay, subject to applicable law, to Buyer a fee in
cash equal to $.60 multiplied by the number of Shares (such fee to be paid
by Stockholder upon payment by Buyer of the consideration for the Shares).
Section 2.2. No Solicitation of Transactions. (a) Each of
Stockholder and Corimon agrees that it shall not, and shall not permit any
affiliate to, directly or indirectly, through any agent or representative
or otherwise, (i) take any action to solicit, initiate or encourage any
Acquisition Proposal (as defined below); (ii) except as may be required by
Arthur Broslat, Philippe Erard and Harold Bittle (the "Corimon Directors")
in the exercise of their fiduciary duties in their capacity as members of
the Board of Directors of the Company, engage in negotiations with, or
disclose any nonpublic information relating to the Company or any
subsidiary of the Company or afford access to the properties, books or
records of the Company or any subsidiary of the Company to, any Person (as
defined below) that may be considering making, or has made, an Acquisition
Proposal; or (iii) except as may be required by the Corimon Directors in
the exercise of their fiduciary duties in their capacity as members of the
Board of Directors of the Company, otherwise cooperate in any way with, or
assist or participate in or facilitate or encourage, any effort or attempt
by any Person to do or seek any of the foregoing. Except as may be
required by the Corimon Directors in the exercise of their fiduciary duties
in their capacity as members of the Board of Directors of the Company, each
of Stockholder and Corimon agrees that it shall cease and cause to be
terminated all existing discussions or negotiations in which it or any of
its agents or other representatives is or has been engaged with any Person
with respect to any of the foregoing. Stockholder and Corimon shall notify
Buyer and the Company promptly after receipt of any Acquisition Proposal or
any indication that any Person is considering making an Acquisition
Proposal or any request for nonpublic information relating to the Company
or any subsidiary of the Company or for access to the properties, books or
records of the Company or any subsidiary of the Company by any Person that
may be considering making, or has made, an Acquisition Proposal and will
keep Buyer fully informed of the status and details of any such Acquisition
Proposal, indication or request.
For the purposes of this Agreement, (i) "Person" means an
individual, a corporation, limited liability company, a partnership, an
association, a trust or any other<PAGE>
<PAGE> 6
entity or organization, including a government or political subdivision or
any agency or instrumentality thereof other than Buyer or any of its
affiliates and (ii) "Acquisition Proposal" means any offer or proposal for,
or any indication of interest in, a merger or other business combination
involving the Company or any subsidiary of the Company or the acquisition
of any equity interest in, or a substantial portion of the assets of, the
Company or any subsidiary of the Company, other than the transactions
contemplated by the Merger Agreement.
(b) If there shall be a conflict between the terms of this
Agreement and the terms of the Merger Agreement with respect to the actions
that may or shall be taken by any person pursuant to such person's
fiduciary duties, the terms of the Merger Agreement shall supersede the
terms of this Agreement.
Section 2.3. Voting Agreement. Stockholder hereby agrees that
prior to the time, if any, that the Merger Agreement is terminated, at any
meeting of the stockholders of the Company, however called, and in any
action by consent of the stockholders of the Company, Stockholder shall
vote the Shares: (a) in favor of the Merger, the Merger Agreement (as
amended from time to time) or any of the transactions contemplated by the
Merger Agreement; and (b) against any proposal for any recapitalization,
merger, sale of assets or other business combination between the Company
and any Person (other than the Merger) or any other action or agreement
that would result in a breach of any covenant, representation or warranty
or any other obligation or agreement of the Company under the Merger
Agreement or which could result in any of the conditions to any party's
obligations under the Merger Agreement not being fulfilled. Stockholder
acknowledges receipt of a copy of the Merger Agreement.
Section 2.4. Certain Claims. Each of Corimon and Stockholder
agrees that it will not assert that the Board of Directors of the Company
has breached its fiduciary duties to Corimon and Stockholder if, at any
time prior to the termination of the Merger Agreement, the Board of
Directors of the Company refuses to accept or recommend an offer by a third
party to acquire any or all of the outstanding shares of Company Common
Stock for consideration not in excess of $18.10 per share. Subject to the
consummation of the Offer, Corimon and Stockholder agree to waive any
claims they may have against the Company or any of its officers or
directors with respect to the ownership interest represented by the Shares
to the extent such claims (i) arise under any <PAGE>
<PAGE> 7
contract or agreement with the Company or (ii) relate to an alleged breach
of a fiduciary duty.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of Corimon and
Stockholder.
(a) Each of Stockholder and Corimon hereby jointly and severally
represents and warrants that:
(i)it is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation,
and it has all corporate power, authority, capacity and right to
enter into this Agreement and to consummate the transactions
contemplated hereby;
(ii)the execution and delivery of this Agreement and the performance
by it of its obligations hereunder are within its corporate powers
and have been duly authorized by all necessary corporate action on
its part; this Agreement has been duly executed and delivered by
it and constitutes a valid and binding agreement enforceable by
Buyer and Merger Subsidiary against it in accordance with its
terms, except as the enforceability hereof may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting
the enforcement of creditors' rights generally and except for
limitations imposed by general principles of equity;
(iii)assuming compliance with the matters set forth in subsection (iv),
no approval, authorization, consent or filing is required in
connection with the execution, delivery and performance of this
Agreement by it;
(iv)assuming the applicable waiting periods under the HSR Act have
expired or been terminated and assuming compliance with the
Exchange Act and the Permitted Liens, the execution, delivery and
performance of this Agreement by it does not and will not
contravene or conflict with or, with the passage of time, the
serving of notice or both, violate or constitute a default under
any agreement, contract or other instrument, or any <PAGE>
<PAGE> 8
law, rule, regulation, order or decree, binding upon or applicable to it;
(v) Stockholder is the sole beneficial owner of the Shares subject to
no Liens except as set forth on Schedule A hereto (the "Permitted
Liens"), and the Shares are the only shares of Company Common
Stock which Stockholder or Corimon owns, has any rights to acquire
or over which Stockholder or Corimon exercises control or
direction either alone or in concert with third parties;
(vi) Shareholder has provided Buyer with a true and correct copy
of all agreements relating to the Permitted Liens;
(vii) Stockholder has the right to dispose of and vote its Shares
as provided in this Agreement subject to the Permitted
Liens; and,
(viii) at each Closing, Stockholder will convey to Buyer good and
valid title to the Shares to be purchased at such Closing
free and clear of any Liens, including without limitation,
the Permitted Liens.
Section 3.2. Representations and Warranties of Buyer. Buyer
hereby represents and warrants that Buyer and Merger Subsidiary are each
corporations duly incorporated and validly existing under the laws of their
jurisdictions of incorporation, Buyer and Merger Subsidiary each has all
necessary corporate power, authority, capacity and right to enter into this
Agreement and to consummate the transactions contemplated hereby and this
Agreement has been duly executed and delivered by Buyer and Merger
Subsidiary and constitutes a valid and binding agreement enforceable by
Stockholder and Corimon against Buyer and Merger Subsidiary in accordance
with its terms except as the enforceability hereof may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and except for limitations
imposed by general principles of equity.
ARTICLE IV
MISCELLANEOUS
Section 4.1. Expenses. Except as otherwise provided herein or in
the Merger Agreement, all costs and expenses incurred in connection with
the transactions <PAGE>
<PAGE> 9
contemplated by this Agreement shall be paid by the party incurring such
expenses.
Section 4.2. Further Assurances. Subject to any applicable
limits on Buyer's and Merger Subsidiary's obligations under the Merger
Agreement, each of Stockholder, Corimon, Buyer and Merger Subsidiary will
execute and deliver all such further documents and instruments and take all
such further action as may be necessary in order to permit the consummation
of the transactions contemplated hereby and to coordinate a mutually
convenient closing. Stockholder and Corimon agree to use their best
efforts to take all necessary actions, and to obtain all necessary consents
and amendments, with respect to the Permitted Liens (i) to permit each of
the Closings to take place as promptly as possible after the satisfaction
of the Minimum Condition and (ii) if requested by Buyer, to permit
Stockholder to tender the Shares into the Offer in accordance with Section
2.1; Buyer agrees to cooperate with and assist Stockholder and Corimon with
respect to the foregoing.
Section 4.3. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties
shall be entitled to specific performance of the terms hereof, in addition
to any other remedy at law or in equity.
Section 4.4. Entire Agreement. This Agreement constitutes the
entire agreement among Buyer, Merger Subsidiary, Stockholder and Corimon
with respect to the subject matter hereof and supersedes all prior
agreements and understandings, both written and oral, among Buyer, Merger
Subsidiary, Stockholder and Corimon with respect to the subject matter
hereof.
Section 4.5. Assignment. This Agreement shall not be assigned,
except that Buyer may assign all or any of its rights and obligations
hereunder to any affiliate of Buyer, provided that no such assignment shall
relieve Buyer of its obligations hereunder if such assignee does not
perform such obligations.
Section 4.6. Parties in Interest. This Agreement shall be
binding upon, inure solely to the benefit of, and be enforceable by, the
parties hereto and the Company and their respective successors and
permitted assigns. Nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.<PAGE>
<PAGE> 10
Section 4.7. Amendment; Waiver. This Agreement may not be
amended and no provision of this Agreement may be waived except by an
instrument in writing signed by the parties hereto and the Company.
Section 4.8. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any
rule of law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of this Agreement is not affected in any manner
materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the terms of this Agreement remain
as originally contemplated to the fullest extent possible.
Section 4.9. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including
telecopy or similar writing) and shall be given,
if to Buyer or to Merger Subsidiary, to:
Imperial Chemical Industries PLC
9 Millbank
London SW1P 3JF
England
Telecopy: 011-44-171-798-5878
Attention: The Secretary
with a copy to:
Paul R. Kingsley, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopy: (212) 450-4800
if to Stockholder or Corimon, to:
Corimon, S.A.C.A.
Calle Hans Neumann Edf. Corimon
Los Cortijos de Lourdes
Caracas, Venezuela 0171
Telecopy: 582-203-5707
Attention: Arthur Broslat
<PAGE>
<PAGE> 11
with a copy to:
David M. Kies, Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Telecopy: (212) 558-3588
In addition, copies of all notices hereunder shall be given to the Company
in accordance with Section 11.01 of the Merger Agreement.
Section 4.10. Termination; Survival. This Agreement shall
terminate upon termination of the Merger Agreement, provided that a party
will not be relieved from liability for any breach of this Agreement. All
representations and warranties contained in this Agreement shall survive
delivery of and payment for the Shares.
Section 4.11. Corimon Guaranty. Corimon hereby confirms the
representations and warranties of Stockholder contained herein and
irrevocably and unconditionally guarantees to Buyer and Merger Subsidiary
the prompt and full discharge by Stockholder of all of Stockholder's
covenants, agreements, obligations and liabilities under this Agreement
(collectively, the "Stockholder Obligations"), in accordance with the terms
hereof, in each case as if the Stockholder Obligations were direct and
primary obligations of Corimon. If Stockholder shall default in the due
and punctual performance of any Stockholder Obligations, Corimon will
forthwith perform or cause to be performed such Stockholder Obligation at
its sole cost and expense. The guaranty evidenced hereby is a guaranty of
payment and performance and not a guaranty of collection. Corimon agrees
to pay the expenses and costs (including, without limitation, reasonable
attorneys' fees and expenses) incurred by Buyer in connection with any
action, suit or proceeding brought or maintained against Corimon to enforce
this guaranty. Corimon hereby agrees that its obligations under this
guaranty shall be unconditional, irrespective of (a) any change in the
time, manner or place of payment, time or manner of performance or any
other term of the Stockholder Obligations or (b) any other circumstance
that might otherwise constitute a legal or equitable discharge or defense
of a guarantor, other than payment or satisfaction of the Stockholder
Obligations in full.
Section 4.12. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the <PAGE>
<PAGE> 12
laws of the State of New York applicable to contracts executed in and to be
performed in that State.
Section 4.13. Jurisdiction. Any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of
or in connection with, this Agreement or the transactions contemplated
hereby shall only be brought in the United States District Court for the
Southern District of New York or any other New York State court sitting in
New York City, and each of the parties hereby consents to the jurisdiction
of such courts (and of the appropriate appellate courts therefrom) in any
such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding in any
such court or that any such suit, action or proceeding which is brought in
any such court has been brought in an inconvenient form. Process in any
such suit, action or proceeding may be served on any party anywhere in the
world, whether within or without the jurisdiction of any such court.
Without limiting the foregoing, each party agrees that service of process
on such party as provided in Section 4.9 shall be deemed effective service
of process on such party.
Section 4.14. Headings. The descriptive headings contained in
this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
Section 4.15. Counterparts. This Agreement may be executed in
one of more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original
but all of which taken together shall constitute one and the same
agreement.
<PAGE>
<PAGE> 13
IN WITNESS WHEREOF, Buyer, Merger Subsidiary, Corimon and Corimon
Corp. have caused this Agreement to be executed by their duly authorized
officers as of the date first written above.
Imperial Chemical Industries PLC
By: /s/ John Thompson
Name: John Thompson
Title: Attorney in Fact
GDEN Corporation
By: /s/ John R. Danzeisen
Name: John R. Danzeisen
Title: Attorney in Fact
Corimon, S.A.C.A.
By: /s/ Philippe Erard
Name: Philippe Erard
Title: President
By: /s/ Arthur Broslat
Name: Arthur Broslat
Title: Executive Vice President
Corimon Corporation
By: /s/ Arthur Broslat
Name: Arthur Broslat
Title: President
By: __________________________
Name:
Title:
<PAGE>
<PAGE> 14
Schedule A
Stock Purchase Agreement, dated July 21, 1992, among Corimon Corporation,
Corimon, S.A.C.A. and Grow Group, Inc.
Standstill Agreement, dated July 21, 1992, among Corimon Corporation,
Corimon, S.A.C.A. and Grow Group, Inc., as amended on February 14, 1995
Credit Agreement, dated as of August 10, 1994, between Corimon Corporation
and The Chase Manhattan Bank (National Association), as amended in February
1995 (the only material effect of such amendment is that it extended the
termination of the Credit Agreement to May 10, 1995)
Stock and Note Purchase Agreement, dated as of February 14, 1995, among
Corimon, S.A.C.A., Corimon Corporation and Fidelity Capital & Investment
Fund
Certificate of Designations of Series A Preferred Stock of Corimon
Corporation, filed on February 13, 1995
Put Note due 2000 issued on February 14, 1995
Escrow Agreement, dated February 14, 1995, between Corimon Corporation and
United States Trust Company of New York
Pledge Agreement, dated as of February 14, 1995, between Corimon
Corporation and United States Trust Company of New York.
Collateral Agent Agreement, dated February 14, 1995, among Corimon
Corporation, Fidelity Capital & Income Fund and United States Trust Company
of New York
Security Agreement, dated as of August 10, 1994, between Corimon
Corporation and the Chase Manhattan Bank (National Association)
