SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20579
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 4, 1995
AMERICAN BILTRITE INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
Delaware 1-4773 04-1701350
(STATE OR OTHER (COMMISSION (IRS EMPLOYER
JURISDICTION OF FILE NUMBER) IDENTIFICATION NO.)
INCORPORATION)
57 River Street, Wellesley Hills, MA 02181
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (617) 237-6655
N/A
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
Item 2. Acquisition or Disposition of Assets.
On May 4, 1995, American Biltrite Inc., a Delaware
corporation (the "Company"), indirectly acquired an aggregate
56.5% interest in K&M Associates L.P., a Rhode Island limited
partnership ("K&M"), in which the Company indirectly has held a
limited partnership interest since 1983. K&M is a business
engaged in the sale, distribution and servicing of costume
jewelry and other related accessories. The acquisition was
accomplished through its wholly owned subsidiary Ocean State
Jewelry, Inc., a Rhode Island corporation and a limited partner
of K&M ("Ocean State"), and as a result of a forward subsidiary
merger, whereby AIMPAR, Inc., a New York corporation and general
partner of K&M ("AIMPAR"), was merged with and into Jewelco
Acquisition Co., Inc., a New York corporation and a wholly owned
subsidiary of the Company ("Jewelco"). Prior to May 4, 1995, the
Company indirectly held an 8% limited partnership interest in K&M
through Ocean State.
Pursuant to a Purchase Agreement dated as of March 31,
1995 (the "Purchase Agreement") by and among Ocean State and
certain limited partners of K&M including Donald J. Fulford,
Patti Ann Ross, Bruce S. Maier, Nancy E. Maier, Richard C. Maier,
Susan Maier, Anne F. Cowett, Frederick D. Cowett, Margaret F.
Cowett and Edythe J. Wagner, Inc. (the "Purchase Agreement
Sellers"), Ocean State purchased an aggregate 49.5% limited
partnership interest in K&M from the Purchase Agreement Sellers
for an aggregate amount of $10,962,113, of which $5,238,507 was
paid in cash and $5,723,606 was paid in the form of promissory
notes issued by the Company and due January 1, 1996 or January 1,
1999. Pursuant to the Agreement and Plan of Merger dated as of
April 1, 1995 by and among the Company, Jewelco, AIMPAR, Arthur
I. Maier, Bruce Maier and Edythe J. Wagner, the Company
indirectly acquired the 7% sole general partnership interest in
K&M held by AIMPAR for $705,927, which was paid in cash and the
issuance of 32,178 shares of the Company's common stock.
The Company, through Ocean State, may acquire up to an
additional 29.5% limited partnership interest in K&M pursuant to
an Option Agreement dated as of April 1, 1995 by and among Ocean
State and certain limited partners of K&M including Arthur I.
Maier Limited, Susan Maier, ARTWIL Associates, John Caito, Donald
J. Fulford, Patti Ann Ross and Edythe J. Wagner, Inc., which
becomes exercisable in increments over a 45-month period. In
addition, pursuant to an Agreement and Plan of Merger dated as of
May 3, 1995 by and among the Company, Zirconia Acquisition Co.,
Inc., a New York corporation and a wholly owned subsidiary of the
Company ("Zirconia"), Wilbur A. Cowett Incorporated, a New York
corporation and a limited partner in K&M ("WACI"), and Wilbur A.
Cowett, the sole stockholder of WACI, the Company indirectly will
acquire a 5% limited partnership interest in K&M as a result of a
forward subsidiary merger whereby WACI will be merged with and
into Zirconia on or about August 31, 1995.
The sources of funds for the transactions described
herein include funds borrowed under existing lines of credit from
each of The First National Bank of Boston, Bank Hapoalim and
Fleet Bank.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(a) Financial Statements of Business Acquired. At the
time of the filing of this Form 8-K, it is
impracticable for the Company to provide the
financial statements required by Rule 3-05(b) of
Regulation S-X with respect to the acquisition of
K&M. Such required financial information will be
filed by amendment under cover of Form 8-K/A not
later than July 18, 1995, in accordance with Item
7, paragraph (a)(4) of Form 8-K.
(b) Pro Forma Financial Information. At the time of
the filing of this Form 8-K, it is impracticable
for the Company to provide the pro forma financial
information required by Rule 11-d(c) of Regulation
S-X with respect to the acquisition of K&M. Such
required financial information will be filed by
amendment under cover of Form 8-K/A not later than
July 18, 1995, in accordance with Item 7,
Paragraph (b)(2) of Form 8-K.
(c) Exhibits.
2.1 Purchase Agreement dated as of March 31, 1995
by and among Ocean State and certain limited
partners of K&M (filed herewith).
2.2 Agreement and Plan of Merger dated as of
April 1, 1995 by and among the Company,
Jewelco Acquisition Co., Inc., AIMPAR, Inc.,
Arthur I. Maier, Bruce Maier and Edythe J.
Wagner (filed herewith).
2.3 Option Agreement dated as of April 1, 1995 by
and among Ocean State and certain limited
partners of K&M (filed herewith).
2.4 Agreement and Plan of Merger dated as of
May 3, 1995 by and among the Company,
Zirconia Acquisition Co., Inc., Wilbur A.
Cowett Incorporated and Wilbur A. Cowett
(filed herewith).
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
AMERICAN BILTRITE INC.
(Registrant)
By: /s/ Gilbert K. Gailius
________________________
Gilbert K. Gailius
Vice President, Finance,
Chief Financial Officer
and Director
(principal financial
and accounting officer)
May 17, 1995
(Date)
K&M ASSOCIATES L.P.
PURCHASE AGREEMENT
by and among
OCEAN STATE JEWELRY, INC.
and
CERTAIN LIMITED PARTNERS OF K&M ASSOCIATES L.P.
dated as of March 31, 1995
ARTICLE I
PURCHASE AND SALE OF INTERESTS
1.1. Interests to be Sold . . . . . . . . . . . . . 2
1.2. Consideration . . . . . . . . . . . . . . . . . 2
1.3. Closing . . . . . . . . . . . . . . . . . . . . 2
1.4. Deliveries by the Sellers . . . . . . . . . . . 2
1.5. Deliveries by Buyer . . . . . . . . . . . . . . 3
1.6. Acknowledgement of the Sellers . . . . . . . . 3
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
2.1. Authorization . . . . . . . . . . . . . . . . . 3
2.2. Ownership of Interests . . . . . . . . . . . . 3
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF BUYER
3.1. Corporate Organization . . . . . . . . . . . . 4
3.2. Authorization . . . . . . . . . . . . . . . . . 4
3.3. Authorization of ABI . . . . . . . . . . . . . 4
3.4. Acknowledgement of Buyer . . . . . . . . . . . 5
ARTICLE IV
SURVIVAL AND INDEMNIFICATION
4.1. Survival . . . . . . . . . . . . . . . . . . . 5
4.2. Indemnification . . . . . . . . . . . . . . . . 5
4.3. Procedure for Indemnification . . . . . . . . . 6
ARTICLE V
GENERAL PROVISIONS
5.1. Amendment and Waiver . . . . . . . . . . . . . 7
5.2. Expenses . . . . . . . . . . . . . . . . . . . 8
5.3. Notices . . . . . . . . . . . . . . . . . . . . 8
5.4. Entire Agreement; Binding Effect . . . . . . . 9
5.5. Applicable Law . . . . . . . . . . . . . . . . 10
5.6. Parties in Interest . . . . . . . . . . . . . . 10
5.7. Counterparts . . . . . . . . . . . . . . . . . 10
5.8. Headings; Pronouns and Conjunctions . . . . . . 10
5.9. Severability . . . . . . . . . . . . . . . . . 10
SCHEDULE A . . . . . . . . . . . . . . . . . . . . . 13
PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of
this 31st day of March, 1995, by and among Ocean State
Jewelry, Inc., a Rhode Island corporation ("Buyer"), and
those persons and entities listed on Schedule A hereto
(each a "Seller" and collectively the "Sellers").
WHEREAS, the Sellers are certain of the limited
partners of K&M Associates L.P., a Rhode Island limited
partnership (the "Partnership"); and
WHEREAS, the Sellers are parties to a Restated
Agreement of Limited Partnership made as of April 1,
1988, as amended through October 27, 1994, by and among
AIMPAR, Inc., as sole general partner of the Partnership,
and those persons (which include the Sellers) listed on
Schedule A thereto as limited partners of the
Partnership; and
WHEREAS, the Restated Agreement of Limited
Partnership is being amended and restated (as so amended
and restated, the "Partnership Agreement"); and
WHEREAS, each Seller desires to sell to Buyer,
and Buyer desires to purchase from each Seller, some or
all of its respective interest (including its respective
profits interest and capital account) in the Partnership
immediately prior to the amendment and restatement of the
Partnership Agreement as set forth opposite such Seller's
name on Schedule A (each an "Interest" and collectively
the "Interests"), upon the terms and subject to the
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the
foregoing and the respective representations, warranties,
covenants and agreements hereinafter set forth, and
intending to be legally bound hereby, the parties hereto
agree as follows:
ARTICLE I
PURCHASE AND SALE OF INTERESTS
1.1. Interests to be Sold. Upon the terms and
subject to the conditions contained herein, at the
Closing (as hereinafter defined), each Seller is selling
and transferring to Buyer, and Buyer is purchasing and
accepting from each Seller, its respective Interest.
1.2. Consideration. Upon the terms and
subject to the conditions contained herein and in
consideration of, and in full payment for, the aforesaid
sale and transfer of the Interests, at the Closing, Buyer
is delivering or causing to be delivered to each Seller
the respective amount and form of consideration set forth
opposite such Seller's name on Schedule A (the
"Consideration").
1.3. Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") is
occurring simultaneously with the execution and delivery
of this Agreement at the offices of Skadden, Arps, Slate,
Meagher & Flom, 919 Third Avenue, New York, New York, at
10:00 A.M. local time, at such time and date as may be
agreed upon by the parties. The time and date of the
Closing is sometimes referred to herein as the "Closing
Date." Upon consummation of the transactions
contemplated herein, the Closing shall be deemed to have
taken place as of the close of business on the Closing
Date.
1.4. Deliveries by the Sellers. On the
Closing Date, each Seller is delivering or causing to be
delivered to Buyer:
(a) a "Nonforeign Person Affidavit," as
provided in Section 1445 of the Internal Revenue Code of
1986, as amended (the "Code"), duly executed by each
Seller; and
(b) such other instruments or documents
as may be reasonably necessary to carry out the
transactions contemplated by this Agreement and to comply
with the terms hereof.
1.5. Deliveries by Buyer. On the Closing
Date, Buyer is delivering or causing to be delivered to
each Seller the following:
(a) the Consideration for such Seller's
Interest; and
(b) such other instruments or documents
as may be reasonably necessary to carry out the
transactions contemplated by this Agreement and to comply
with the terms hereof.
1.6. Acknowledgement of the Sellers. Each
Seller hereby acknowledges and agrees that after the
Closing he no longer has any interest in the Interest
being transferred.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers hereby severally represents
and warrants to Buyer as follows:
2.1. Authorization. The Seller has the
requisite capacity to enter into this Agreement and the
other agreements, documents and instruments to be
executed and delivered by such Seller pursuant hereto
(the "Additional Seller's Documents") and to carry out
the transactions contemplated hereby and thereby. When
fully executed and delivered, this Agreement and each of
the Additional Seller's Documents will constitute the
valid and binding agreements of the Seller, enforceable
against the Seller in accordance with their respective
terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and by
general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or
at law).
2.2. Ownership of Interests. The Seller has,
and at the Closing, upon delivery by Buyer to the Seller
of the Consideration therefor, Buyer will acquire, good
and valid title to the Seller's Interest, free and clear
of any mortgage, pledge, security interest, encumbrance,
lien, claim or charge of any kind or right of others of
whatever nature.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF BUYER
Buyer hereby represents and warrants to each
Seller as follows:
3.1. Corporate Organization. Buyer is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Rhode Island.
3.2. Authorization. Buyer has the requisite
corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated
hereby. The execution, delivery and performance of this
Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by the
Board of Directors of Buyer, and no other corporate
proceedings on the part of Buyer or its stockholders are
necessary to authorize this Agreement and the
transactions contemplated hereby. When fully executed
and delivered, this Agreement will constitute the valid
and binding agreement of Buyer, enforceable against Buyer
in accordance with its respective terms, except as such
enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or
other similar laws now or hereafter in effect relating to
creditors' rights and by general equitable principles
(regardless of whether enforceability is considered in a
proceeding in equity or at law).
3.3. Authorization of ABI. American Biltrite
Inc., a Delaware corporation ("ABI"), has the requisite
corporate power and authority to execute, deliver and
perform its obligations under the promissory notes being
delivered at the Closing, and when delivered, such notes
will be valid and binding and enforceable against ABI in
accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or
other similar laws now or hereafter in effect relating to
creditors' rights and by general equitable principles
(regardless of whether enforceability is considered in a
proceeding in equity or at law).
3.4. Acknowledgement of Buyer. Buyer hereby
acknowledges that the Interests purchased hereunder do
not include any distributions of Partnership Profits (as
defined in the Partnership Agreement) for the Fiscal Year
(as defined in the Partnership Agreement) ended March 31,
1995.
ARTICLE IV
SURVIVAL AND INDEMNIFICATION
4.1. Survival. All representations and
warranties contained in this Agreement shall survive the
Closing for the applicable statute of limitations period.
4.2. Indemnification.
(a) Each Seller severally agrees to
indemnify and hold harmless Buyer and its subsidiaries
and affiliates and their respective officers, directors,
employees and agents against and in respect of any loss,
liability (including, without limitation, any liability
for taxes due or claimed to be due in respect to periods
ending on or before the Closing Date), damage, demand,
claim, cost, suit, action or cause of action, judgment,
award, assessment, interest, penalty or expense
(including, without limitation, reasonable attorneys' or
consultants' fees), net of any tax benefits, insurance
proceeds or settlement proceeds received in connection
therewith (individually a "Loss" and collectively
"Losses") incurred or sustained by any of them as a
result of a breach by such Seller of the representations,
warranties, covenants and agreements contained herein or
in any document delivered pursuant hereto or in
connection herewith, provided that no Seller shall be
liable for any amount in excess of the aggregate amount
of Consideration set forth opposite such Seller's name on
Schedule A and the principal amount of debt of such
Seller assumed by Buyer, if any.
(b) Buyer agrees to indemnify and hold
harmless each Seller, and if applicable, its subsidiaries
and affiliates and their respective officers, directors,
employees and agents against and in respect of any Losses
incurred or sustained by any of them as a result of a
breach by Buyer of the representations, warranties,
covenants and agreements contained herein or in any
document delivered pursuant hereto or in connection
herewith, provided that Buyer shall not be liable for any
amount in excess of the aggregate amount of Consideration
set forth opposite such Seller's name on Schedule A.
4.3. Procedure for Indemnification.
(a) Any person or entity entitled to
assert a claim for indemnification under this Agreement
(the "Indemnitee") shall give prompt written notice to
the indemnifying party (the "Indemnitor") of any claim or
event known to it which does or may give rise to a claim
for indemnification hereunder by the Indemnitee against
the Indemnitor; provided that the failure of any
Indemnitee to give notice as provided in this Section 4.3
shall not relieve the Indemnitor of its obligations under
this Article IV, except to the extent that such failure
has materially and adversely affected the rights of the
Indemnitor. In the case of any claim for indemnification
hereunder arising out of a claim, action, suit or
proceeding brought by any person who is not a party to
this Agreement (a "Third Party Claim"), the Indemnitee
shall also give the Indemnitor copies of any written
claims, process or legal pleadings with respect to such
Third Party Claim promptly after such documents are
received by the Indemnitee.
(b) An Indemnitor may elect to compromise
or defend, at such Indemnitor's own expense and by such
Indemnitor's own counsel, any Third Party Claim. If an
Indemnitor elects to compromise or defend a Third Party
Claim, it shall, within 30 days of the date of its
receipt of the notice provided pursuant to Section 4.3(a)
hereof (or sooner, if the nature of such Third Party
Claim so requires), notify the related Indemnitee of its
intent to do so, and such Indemnitee shall reasonably
cooperate in the compromise of, or defense against, such
Third Party Claim. Such Indemnitor shall pay such
Indemnitee's actual out-of-pocket expenses incurred in
connection with such cooperation. After notice from an
Indemnitor to an Indemnitee of its election to assume the
defense of a Third Party Claim, such Indemnitor shall not
be liable to such Indemnitee under this Article IV for
any legal expenses subsequently incurred by such
Indemnitee in connection with the defense thereof;
provided that such Indemnitee shall have the right to
employ one counsel of its choice in each applicable
jurisdiction (if more than one jurisdiction is involved)
to represent such Indemnitee if, in such Indemnitee's
reasonable judgment, a conflict of interest between such
Indemnitee and such Indemnitor exists in respect of such
claim, and in that event the fees and expenses of such
separate counsel shall be paid by such Indemnitor. If an
Indemnitor elects not to compromise or defend against a
Third Party Claim, or fails to notify an Indemnitee of
its election as provided in this Section 4.3, such
Indemnitee may negotiate, pay, compromise or defend such
Third Party Claim on behalf of and for the account and
risk of the Indemnitor. No Indemnitor shall consent to
entry of any judgment or enter into any settlement
without the written consent of each related Indemnitee
(which consent shall not be unreasonably withheld),
unless such judgment or settlement provides solely for
money damages or other money payments for which such
Indemnitee is entitled to indemnification hereunder and
includes as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnitee of a release
from all liability in respect of such Third Party Claim.
(c) Notwithstanding the rights of an
Indemnitor to elect to compromise or defend a Third Party
Claim in subparagraph (b) above, if there is a reasonable
likelihood that a Third Party Claim may have a material
adverse effect on an Indemnitee, other than as a result
of money damages or other money payments for which such
Indemnitee is entitled to indemnification hereunder, such
Indemnitee will have the right, after consultation with
the Indemnitor and at the cost and expense of the
Indemnitor, to defend such Third Party Claim.
ARTICLE V
GENERAL PROVISIONS
5.1. Amendment and Waiver. This Agreement may
be amended, modified or supplemented only by a written
agreement of the parties hereto. Any failure of any
party to comply with any obligation, agreement or
condition hereunder may only be waived in writing by the
other parties, but such waiver shall not operate as a
waiver of, or estoppel with respect to, any subsequent or
other failure. No failure by any party to take any
action against any breach of this Agreement or default by
the other parties shall constitute a waiver of such
party's right to enforce any provision hereof or to take
any such action.
5.2. Expenses. Each of the parties hereto
agrees to pay all costs and expenses incurred by it in
connection with this Agreement and the transactions
contemplated hereby, including without limitation the
fees of its counsel, consultants and accountants.
5.3. Notices. All notices, requests and other
communications hereunder shall be in writing and shall be
deemed given if delivered personally, if sent by Federal
Express or other overnight courier or delivery service or
mailed by registered or certified mail (postage prepaid,
return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall
be specified by like notice):
(a) If to Buyer:
c/o American Biltrite Inc.
57 River Street
Wellesley Hills, Massachusetts 02181
Attention: Richard G. Marcus
With a copy to:
Skadden, Arps, Slate, Meagher & Flom
One Beacon Street
Boston, Massachusetts 02108
Attention: Louis A. Goodman, Esq.
(b) Bruce S. Maier, Nancy E. Maier,
Richard C. Maier, Susan Maier or
Edythe J. Wagner, Inc.: to the
address set forth under each of the
above Seller's names on Schedule A
With a copy to:
Lowenthal, Landau, Fischer & Bring,
P.C.
250 Park Avenue
New York, New York 10177
Attention: Robert E. Fischer, Esq.
(c) If to Anne Cowett, Frederick Cowett
or Margaret Cowett: to the address
set forth under each of the above
Seller's names on Schedule A
With a copy to:
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, New York 10103
Attention: William Bush, Esq.
(d) If to Donald Fulford: to the address
set forth under the Seller's name on
Schedule A
(e) If to Patti Ann Ross: to the address
set forth under the Seller's name on
Schedule A
The address of a party, for the purposes of
this Section 5.3, may be changed by giving written notice
to the other party of such change in the manner provided
herein for giving notice. Unless and until such written
notice is received, the addresses as provided herein
shall be deemed to continue in effect for all purposes
hereunder.
5.4. Entire Agreement; Binding Effect. This
Agreement and the documents referred to herein (a)
constitute the entire agreement and supersede all other
agreements and understandings (including without
limitation any existing Withdrawal Rights Agreements by
and between AIMPAR, Inc. and any Seller) both written and
oral, between the parties with respect to the subject
matter hereof and (b) shall not be assigned by either
party (by operation of law or otherwise) without the
prior written consent of the other party, except that
Buyer may assign, in its sole discretion, any of its
rights, interests and obligations hereunder to any
affiliate of Buyer; provided, however, that no such
assignment shall relieve Buyer of its obligations
hereunder.
5.5. Applicable Law. This Agreement shall be
governed by the laws of the State of New York (without
giving effect to the principles of conflicts of laws
thereof) as to all matters, including but not limited to,
matters of validity, construction, effect, performance
and remedies.
5.6. Parties in Interest. This Agreement
shall be binding upon and inure solely to the benefit of
each party hereto and with respect to Section 1.6, the
Partnership and, subject to Section 5.4(b) hereof, their
respective successors and assigns, and nothing in this
Agreement, express or implied, is intended to confer upon
any other Person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
5.7. Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall
be deemed an original, but all of which together shall
constitute one and the same instrument.
5.8. Headings; Pronouns and Conjunctions. The
section and other headings contained in this Agreement
are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.
Unless otherwise indicated herein or the context
otherwise requires, the masculine pronoun shall include
the feminine and neuter and the singular shall include
the plural. The word "or" shall not be deemed exclusive.
5.9. Severability. In case any term,
provision, covenant or restriction of this Agreement is
held to be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability
of the remaining terms, provisions, covenants or
restrictions, or of such term, provision, covenant or
restriction in any other jurisdiction, shall not in any
way be affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have
signed this Agreement as of the date first written above.
OCEAN STATE JEWELRY, INC.
By/s/Richard G. Marcus
______________________
Name: Richard G. Marcus
Title: President
Donald J. Fulford
______________________
Patti Ann Ross
______________________
Bruce S. Maier
______________________
Nancy E. Maier
______________________
Richard C. Maier
______________________
Anne F. Cowett,
______________________
by Wilbur A. Cowett,
as attorney-in-fact
Frederick D. Cowett,
______________________
by Wilbur A. Cowett,
as attorney-in-fact
Margaret F. Cowett
______________________
Susan Maier
______________________
by Bruce Maier
as attorney-in-fact
EDYTHE J. WAGNER, INC.
By/s/Edythe J. Wagner
______________________
Edythe J. Wagner
President
SCHEDULE A
Interest Being Form of
Transferred Consideration
Percentage Principal
Name and Address of Profit Capital Amount of
Seller Interest Account Cash Note(2)
Donald J. Fulford 0.75% $52,729 $ 70,592 $ 105,887
1027 Cellar Avenue
Scotch Plains, NJ
08820
Patti Ann Ross 0.25 17,576 23,530 35,296
404 East 75th Street
New York, NY 10021
Bruce S. Maier 13.25(1) 703,047 1,444,649 1,444,648
1035 Seahaven Drive
Mamaroneck, NY 10543
Nancy E. Maier 13.25(1) 703,047 1,155,719 1,733,578
51 West 81st St. Apt.
7C
New York, NY 10024
Richard C. Maier 13.25(1) 703,047 1,155,719 1,733,578
24 Highridge Rd
Hartsdale, NY 10530
Anne F. Cowett 1.00 70,305 94,122 141,183
c/o Wilbur A. Cowett
1040 Fifth Avenue
New York, NY 10028
Frederick D. Cowett 1.00 70,305 94,122 141,183
c/o Wilbur A. Cowett
1040 Fifth Avenue
New York, NY 10028
Margaret F. Cowett 1.00 70,305 94,122 141,183
c/o Wilbur A. Cowett
1040 Fifth Avenue
New York, NY 10028
Susan Maier 4.00 281,219 941,219 N/A
320 Glendale Road
Scarsdale, NY 10583
Edythe J. Wagner, 1.75 123,033 164,713 247,070
Inc.
c/o Edythe J. Wagner
300 East 74th Street
Apartment 12A
New York, NY 10021
_________
1 Includes a 3.25% Profits Interest (as defined in the Partnership
Agreement) representing such Partner's share of the Float (as
defined in the Partnership Agreement) allocated to it but not owned
by it. As a result of the transactions contemplated by the
Purchase Agreement and the Partnership Agreement, the Float will
cease to exist and any Profits Interest with respect to the Float
shall be allocated to Ocean State Jewelry, Inc.
2 The form of the Note is attached hereto as Annex I.
ANNEX I
PROMISSORY NOTE
$[ ] As of [ ]
1. Promise to Pay. For value received,
American Biltrite Inc., a Delaware corporation ("Maker"),
hereby promises to pay to or to the order of [ ]
("Payee"), the principal amount of $[ ] plus simple
interest thereon, as set forth in Section 2.
2. Payment of the Note. The principal amount
of this Note from time to time outstanding, shall be
payable in [consecutive equal annual installment[s] in
arrears commencing on March 31, 199[ ] and] maturing on
January 1, 199[ ], plus simple interest thereon computed
on the basis of a 360-day year of 30-day months at an
annual rate of 1% over the base lending rate charged as
of the last day of such month by The First National Bank
of Boston, which shall be paid in quarterly installments
commencing on June 30, 1995 and ending on January 1,
199[ ], at which time all unpaid principal, interest and
other sums due hereunder shall be paid in full.
If any installment of principal or interest is
due on a Saturday, Sunday or legal holiday, the payment
to be made on such date shall be paid on the next
succeeding business day following such due date. Payment
of both principal and interest is to be made in the
lawful money of the United States at the offices of Maker
at the address specified in Section 5 or at such other
place as the holder of this Note designates from time to
time. If any events of default occur pursuant to Section
4, this Note and accrued but unpaid interest shall
continue to bear interest at the rate provided herein.
3. Prepayments. This Note may be prepaid, in
full at any time without premium or penalty.
4. Default. Each of the following events
shall constitute an event of default hereunder:
(a) Maker fails to pay any part of the
principal of this Note or interest thereon within 10 days
after notice of such failure to pay is given to Maker at
the address specified in Section 5.
(b) Maker makes an assignment for the
benefit of its creditors, or applies for or acquiesces in
the appointment of a receiver, trustee or other custodian
for any of its properties or assets;
(c) any proceedings shall be commenced by
or against Maker for any relief which includes, or might
result in, any modification of the obligations of Maker
under this Note or relief under any bankruptcy or
insolvency laws or other laws relating to the relief of
debtors, readjustments or indebtedness, reorganizations,
compositions or extensions, unless, in the case of
involuntary proceedings not consented or acquiesced to by
Maker, such proceedings shall have been dismissed within
45 days after the same were commenced;
(d) Maker defaults on the payment of any
note made in connection with the transactions
contemplated by the Purchase Agreement dated as of March
31, 1995 by and among Ocean State Jewelry, Inc. and
certain limited partners of K&M Associates, L.P.;
provided that such nonpayment does not arise as a result
of a good faith dispute between Maker and the payee of
such note; or
(e) any acceleration of any debt for
money borrowed by Maker.
5. Remedies. Upon the occurrence of an event
of default, and at any time thereafter (unless such event
of default is promptly cured by Maker), the holder of
this Note, at its option, evidenced by the mailing of a
written notice to Maker at 57 River Street, Wellesley
Hills, Massachusetts 02181, attention: President, may
declare the entire unpaid principal amount hereunder and
interest thereon to be immediately due and payable
without presentment, demand, diligence, protest or
further notice of any kind, all of which are hereby
expressly waived by Maker, and the holder of this Note
may immediately enforce payment hereof.
6. Successors and Assigns. All of the terms
and conditions contained in this Note shall be binding
upon and be enforceable against and inure to the benefit
of the successors and permitted assigns of Maker and the
holder.
7. Waiver. This Note is one of a series of
notes being issued as of the date hereof or at a later
date (the "Partnership Notes") in connection with the
acquisition by Maker of interests in K&M Associates L.P.,
a Rhode Island limited partnership (the "Partnership"),
pursuant to a Purchase Agreement dated as of March 31,
1995 by and among Ocean State Jewelry, Inc., a Rhode
Island corporation ("Ocean State"), and certain limited
partners of the Partnership set forth on Schedule A
thereto and an Option Agreement dated as of March 31,
1995 by and among Ocean State and certain limited
partners of the Partnership set forth on Schedule A
thereto. Any default by Maker of any Partnership Note
may be waived by the holders of a majority in interest of
the aggregate principal amount outstanding of such
Partnership Notes at the time of default. However, no
waiver by the holder of any breach hereof or default
hereunder shall be deemed a waiver of any preceding or
succeeding breach or default, and no failure of the
holder to exercise any right or privilege hereunder shall
be deemed a waiver of the holder's right to exercise the
same or any other right or privilege at any subsequent
time or times.
8. Governing Law. This Note shall be
governed by the law of the State of New York without
giving effect to the principles of conflicts of law
thereof.
9. Jury Trial. By acceptance of this Note,
to the extent permitted by law, Maker and Payee hereby
waive jury trial.
IN WITNESS WHEREOF, Maker has caused this Note
to be executed in its corporate name by the signature of
its duly authorized officer or representative on the date
first above written.
AMERICAN BILTRITE INC.
By_________________________
Name:
Title:
ATTEST:
______________________
AIMPAR, INC.
AGREEMENT AND PLAN OF MERGER
by and among
AMERICAN BILTRITE INC.,
JEWELCO ACQUISITION CO., INC.,
AIMPAR, INC.,
ARTHUR I. MAIER, BRUCE MAIER
and EDYTHE WAGNER
dated as of April 1, 1995
ARTICLE I
THE MERGER AND RELATED MATTERS
1.1. General . . . . . . . . . . . . . . . . . . . . . 1
1.2. Delivery of Consideration . . . . . . . . . . . . 2
1.3. Conversion of Company Common Stock . . . . . . . 2
1.4. Surviving Corporation . . . . . . . . . . . . . . 2
1.5. Effects of the Merger . . . . . . . . . . . . . . 2
1.6. Organizational Documents . . . . . . . . . . . . 3
1.7. Directors and Officers . . . . . . . . . . . . . 3
1.8. Effective Time . . . . . . . . . . . . . . . . . 3
1.9. Tax Consequences . . . . . . . . . . . . . . . . 3
1.10. Closing . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS
2.1. Corporate Organization . . . . . . . . . . . . . 4
2.2. Authorization . . . . . . . . . . . . . . . . . . 4
2.3. Capitalization and Ownership of Company Shares . 5
2.4. Company's Net Fair Value . . . . . . . . . . . . 5
2.5. Valid S Corporation . . . . . . . . . . . . . . . 6
2.6. Tax Returns . . . . . . . . . . . . . . . . . . . 6
2.7. Ownership of Partnership Interest . . . . . . . . 6
2.8. Consents and Approvals; Non-Contravention . . . . 6
2.9. Access to Parent Information . . . . . . . . . . 7
2.10. Stockholders' Status and Investment Intent . . . 7
2.11. Tax-Free Reorganization Treatment . . . . . . . . 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF PARENT
3.1. Corporate Organization . . . . . . . . . . . . . 9
3.2. Authorization . . . . . . . . . . . . . . . . . . 9
3.3. Authorization and Issuance of ABI Shares . . . . 10
3.4. Listing on American Stock Exchange . . . . . . . 10
3.5. Consents and Approvals; Non-Contravention . . . . 10
3.6. Tax-Free Reorganization Treatment . . . . . . . . 11
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1. Securities Legend; Stop Transfer Instructions . . 12
4.2. Related Agreements and Instruments . . . . . . . 12
4.3. Further Assurances . . . . . . . . . . . . . . . 13
4.4. Dividend . . . . . . . . . . . . . . . . . . . . 13
ARTICLE V
SURVIVAL AND INDEMNIFICATION
5.1. Survival . . . . . . . . . . . . . . . . . . . . 13
5.2. Indemnification . . . . . . . . . . . . . . . . . 13
5.3. Procedure for Indemnification . . . . . . . . . . 14
ARTICLE VI
GENERAL PROVISIONS
6.1. Amendment and Waiver . . . . . . . . . . . . . . 16
6.2. Expenses . . . . . . . . . . . . . . . . . . . . 16
6.3. Notices . . . . . . . . . . . . . . . . . . . . . 16
6.4. Entire Agreement; Binding Effect . . . . . . . . 18
6.5. Applicable Law . . . . . . . . . . . . . . . . . 18
6.6. Parties in Interest . . . . . . . . . . . . . . . 18
6.7. Counterparts . . . . . . . . . . . . . . . . . . 18
6.8. Heading; Pronouns and Conjunctions . . . . . . . 18
6.9. Severability . . . . . . . . . . . . . . . . . . 18
Exhibit A -- Form of Certificate of Merger
Exhibit B -- Consideration to be delivered to each
Stockholder
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made and
entered into as of this 1st day of April, 1995, by and
among American Biltrite Inc., a Delaware corporation
("Parent"), Jewelco Acquisition Co., Inc., a New York
corporation and a wholly owned subsidiary of Parent
("SUB"), AIMPAR, Inc., a New York corporation (the
"Company"), and Arthur I. Maier, Bruce Maier and Edythe
Wagner (each a "Stockholder" and collectively
"Stockholders").
WHEREAS, the Company is a general partner of
K&M Associates L.P., a Rhode Island limited partnership
(the "Partnership"); and
WHEREAS, Stockholders are the owners of all of
the issued and outstanding capital stock of the Company;
and
WHEREAS, Parent desires to acquire the Company
upon the terms and subject to conditions set forth in
this Agreement; and
NOW, THEREFORE, in consideration of the
foregoing and the respective representations,
warranties, covenants and agreements hereinafter set
forth, and intending to be legally bound hereby, the
parties hereto agree as follows:
ARTICLE I
THE MERGER AND RELATED MATTERS
1.1. General. This Agreement and the form of
Certificate of Merger attached hereto as Exhibit A
provide for a merger (the "Merger") of the Company with
and into SUB. In the Merger, it is contemplated that
the then outstanding shares of the Company's common
stock, par value $.01 per share ("Company Common
Stock"), will be converted at the Effective Time (as
hereinafter defined) into the right to receive, at or
subsequent to the Closing (as hereinafter defined), an
aggregate of 32,178 shares ("ABI Shares")* of Parent's
common stock, no par value per share ("ABI Common
Stock") and $705,926.34 in cash (the "Cash Portion of
the Purchase Price" and together with the ABI Common
Stock, the "Consideration").
1.2. Delivery of Consideration. Subject to
the terms and conditions of this Agreement, in reliance
on the representations, warranties, covenants and
agreements of Stockholders contained herein, at the
Effective Time, Parent is delivering to each Stockholder
the respective amount and form of consideration set
forth opposite such Stockholder's name on Exhibit B
hereto.
________________
* The value of the ABI Shares shall be 29 1/4 per
share.
1.3. Conversion of Company Common Stock.
Each share of Company Common Stock issued and
outstanding immediately prior to the Effective Time
other than shares of Company Common Stock which are held
by the Company or by Parent or any subsidiary of Parent
(which shares will be cancelled at the Effective Time)
shall, by virtue of this Agreement and without any
action on the part of the holder thereof, be converted
into the right to receive (i) for Arthur Maier, 32,178
ABI Shares and $12.34 of the Cash Portion of the
Purchase Price and (ii) for each of Bruce Maier and
Edythe Wagner, $352,957 of the Cash Portion of the
Purchase Price.
1.4. Surviving Corporation. In accordance
with the provisions of this Agreement and the New York
Business Corporation Law ("NYBCL"), at the Effective
Time, the Company shall be merged with and into SUB, and
SUB shall be the surviving corporation (the "Surviving
Corporation") and shall continue its corporate existence
under the laws of the State of New York. The separate
corporate existence of the Company shall terminate at
the Effective Time.
1.5. Effects of the Merger. The Merger shall
have the effects set forth in the NYBCL. Without
limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the properties,
rights, privileges, powers and franchises of the Company
and SUB shall vest in the Surviving Corporation, and all
debts, liabilities and duties of the Company and SUB
shall become the debts, liabilities and duties of the
Surviving Corporation.
1.6. Organizational Documents. The
Certificate of Incorporation of SUB, as in effect at the
Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until
thereafter amended as provided by law, except that
Article 1 of such Certificate of Incorporation shall be
amended to change the name from Jewelco Acquisition Co.,
Inc. to AIMPAR, Inc., such change without further action
of the stockholders of SUB or the Surviving Corporation.
The By-Laws of SUB, as in effect immediately prior to
the Effective Time, shall be the By-Laws of the
Surviving Corporation, until amended as provided by law
and the express terms of the By-Laws. At the Closing,
Stockholders or the Company shall deliver or cause to be
delivered to Parent the stock book, stock ledger, minute
book and corporate seal, if any, of the Company.
1.7. Directors and Officers. The directors
and officers of the Surviving Corporation shall consist
of the directors and officers of SUB immediately prior
to the Effective Time, each to hold office in accordance
with NYBCL, the Certificate of Incorporation of the
Surviving Corporation and the By-Laws of the Surviving
Corporation.
1.8. Effective Time. The Merger shall be
effected by the filing of the Certificate of Merger by
the Department of State of the State of New York on the
day of the Closing. The term "Effective Time" shall be
the date when the Merger becomes effective.
1.9. Tax Consequences. It is intended that
the Merger shall constitute a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code") and that this Agreement
shall constitute a "plan of reorganization" for the
purposes of Section 368 of the Code.
1.10. Closing. The closing of the
transactions contemplated by this Agreement (the
"Closing") is occurring simultaneously with the
execution and delivery of this Agreement at the offices
of Skadden, Arps, Slate, Meagher & Flom, 919 Third
Avenue, New York, New York, at such time and date as may
be agreed upon by the parties. The time and date of the
Closing is sometimes referred to herein as the "Closing
Date."
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS
Stockholders hereby severally represent and
warrant to Parent and SUB as follows:
2.1. Corporate Organization. The Company is
a corporation duly organized, validly existing and in
good standing under the laws of the State of New York
and has the corporate power and authority to own or
lease its properties and to carry on its business as it
is presently being conducted. The copies of the
Certificate of Incorporation and By-Laws of the Company
heretofore delivered to Parent are complete and correct
copies of such instruments as presently in effect.
2.2. Authorization.
(a) Stockholders have the requisite
capacity to enter into this Agreement and the other
agreements, documents or instruments to be executed and
delivered by Stockholders pursuant hereto (the
"Additional Stockholders' Documents") and to carry out
the transactions contemplated hereby and thereby. When
fully executed and delivered, this Agreement and each of
the Additional Stockholders' Documents will constitute
the valid and binding agreements of Stockholders,
enforceable against Stockholders in accordance with
their respective terms, except as such enforceability
may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors'
rights and by general equitable principles (regardless
of whether enforceability is considered in a proceeding
in equity or at law).
(b) The Company has full corporate power
and authority to enter into this Agreement and the other
documents or instruments to be executed and delivered by
the Company pursuant hereto (the "Additional Company
Documents") and to carry out the transactions
contemplated hereby and thereby. The Board of Directors
and Stockholders of the Company have taken all action
required by law, the Company's Certificate of
Incorporation, its By-Laws or otherwise to be taken by
each of them to authorize the execution and delivery of
this Agreement and the Additional Company Documents and
the consummation of the transactions contemplated hereby
and thereby. When fully executed and delivered, this
Agreement and the Additional Company Documents will
constitute the valid and binding agreements of the
Company, enforceable against the Company in accordance
with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or
other similar laws now or hereafter in effect relating
to creditors' rights and by general equitable principles
(regardless of whether enforceability is considered in a
proceeding in equity or at law).
2.3. Capitalization and Ownership of Company
Shares. As of the date and time of execution of this
Agreement, the authorized capital stock of the Company
consists of 100 shares (the "Company Shares") of Company
Common Stock, 70 shares of which are issued and
outstanding. Stockholders have good and valid title to
the 70 Company Shares, which are issued of record to
them (40 of which are issued to Arthur Maier, 15 of
which are issued to Bruce Maier and 15 of which are
issued to Edythe Wagner). All issued and outstanding
Company Shares have been validly issued, are fully paid
and nonassessable and free and clear of any mortgage,
pledge, security interest, encumbrance, lien, claim or
charge of any kind or right of others of whatever nature
("Liens"), preemptive rights or other restrictions with
respect thereto. There are no securities outstanding
which are convertible into or exercisable or
exchangeable for shares of capital stock of the Company,
and there are no outstanding options, rights, contracts,
warrants, subscriptions, conversion rights or other
agreements or commitments pursuant to which the Company
may be required to purchase, redeem, issue or sell any
shares of capital stock or other securities of the
Company or in any way relating to the issuance or voting
of any capital stock or other securities of the Company.
2.4. Company's Net Fair Value. The net fair
value of assets and liabilities of the Company, before
taking into account the Company's interest in the
Partnership, equals or exceeds zero.
2.5. Valid S Corporation. The Company,
effective as of March 31, 1988, duly and effectively
elected to operate as, and at all times since then has
been and currently is operating as, a valid S
corporation within the meaning of the Code, and
comparable provisions of the laws of the State of New
York.
2.6. Tax Returns. All tax (or similar)
returns required to be filed by the Company in any
jurisdiction have been filed, other than those filings
being contested in good faith and for which adequate
reserves with respect thereto are maintained on the
books of the Company in accordance with generally
accepted accounting principles, and all taxes, including
withholding taxes, penalties and interest, assessments,
fees and other charges due or claimed to be due from the
Company have been paid, other than those being contested
in good faith and for which adequate reserves have been
provided or those currently payable without penalty or
interest.
2.7. Ownership of Partnership Interest. The
Company has good and valid title to its interest in the
Partnership, free and clear of any Liens or other
restrictions, except those, if any, set forth in the
Partnership Agreement.
2.8. Consents and Approvals; Non-
Contravention. Neither the execution, delivery or
performance of this Agreement or of any of the
Additional Stockholders' Documents, nor the consummation
by Stockholders or the Company of the transactions
contemplated hereby or thereby, nor compliance by
Stockholders or the Company with any of the provisions
hereof or thereof will (a) violate any provision of the
Certificate of Incorporation or By-Laws of the Company,
(b) to the best knowledge of Stockholders, require any
filing with, or permit, authorization, consent or
approval of, any court, arbitral tribunal,
administrative agency or commission or other
governmental or regulatory authority or agency (a
"Governmental Entity"), (c) require any consent,
approval or authorization under any contract, lease or
other agreement, (d) to the best knowledge of
Stockholders, violate any order, writ, injunction,
decree, statute, rule or regulation applicable to
Stockholders or the Company or any of their respective
properties or assets or (e) result in a violation or
breach of, or constitute (with or without notice or
lapse of time or both) a default (or give rise to any
right of termination, amendment, cancellation or
acceleration or any loss of a material benefit) under,
or result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the
respective properties or assets of Stockholders or the
Company under, any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument
or obligation to which Stockholders or the Company is a
party or by which Stockholders or the Company or any of
their respective properties or assets may be bound,
except, in the case of clauses (c) or (e), for such
consents, approvals or authorizations or violations,
breaches, defaults or Liens which would not materially
impair the ability of Stockholders to perform his
obligations hereunder and which would not, either
individually or in the aggregate, have a material
adverse effect on the Company.
2.9. Access to Parent Information.
Stockholders have been furnished by Parent during the
course of this transaction with all information
regarding Parent which they had requested. All
documents that have been reasonably requested by
Stockholders have been made available for Stockholders
or Stockholders' counsels' inspection and review.
Stockholders have been afforded the opportunity to ask
questions of and receive answers from duly authorized
officers or other representatives of Parent concerning
the terms and conditions of the issuance and delivery of
the ABI Shares to them by Parent in the Merger. Any
other additional information which they have requested
has been provided.
2.10. Stockholders' Status and Investment
Intent. Stockholders are accredited investors within
the meaning of Rule 501(a) of Regulation D promulgated
under the Securities Act of 1933, as amended (the
"Securities Act"). The ABI Shares being issued and
delivered to Stockholders hereunder are being acquired
for their own account, for investment for an indefinite
period of time, not as nominee or agent for any other
person, firm or corporation and not for distribution or
resale to others.
2.11. Tax-Free Reorganization Treatment. In
connection with the intended treatment of the Merger as
a reorganization within the meaning of Section 368(a) of
the Code:
(a) Mr. Maier has no plan or intention
to sell, exchange or otherwise dispose of a number of
ABI Shares that would reduce his ownership of ABI Common
Stock to a number of ABI Shares having a value, as of
the Effective Time, of less than 50% of the value of the
outstanding Company Shares immediately prior to the
Effective Time. For purposes of this representation,
Company Shares exchanged for cash or other property in
the Merger will be treated as outstanding Company Shares
immediately prior to the Effective Time. Moreover,
Company Shares and shares of ABI Common Stock held by
Mr. Maier and otherwise sold, redeemed or disposed of
prior or subsequent to the Merger will be considered in
making this representation;
(b) Following the Merger, SUB will hold
at least 90% of the fair market value of the net assets
and at least 70% of the fair market value of the gross
assets owned by the Company immediately prior to the
Merger. For purposes of this representation, cash or
other property paid by the Company to Stockholders,
amounts used by the Company to pay Merger expenses, and
all redemptions and distributions (except for regular,
normal dividends) made by the Company, if any, will be
included as assets of the Company immediately prior to
the Merger;
(c) Any liabilities of the Company
assumed by SUB in the Merger and any liabilities to
which the assets of the Company transferred in the
Merger are subject have been incurred by the Company in
the ordinary course of its business;
(d) The Company has no plan or intention
to issue additional Company Shares that would result in
Parent losing control of the Company within the meaning
of Section 368(c)(1) of the Code;
(e) At the Effective Time, the Company
will not have outstanding any warrants, options,
convertible securities or any other type of right
pursuant to which any person could acquire Company
Shares that, if exercised or converted, would affect
Parent's acquisition or retention of control of the
Company, as defined in Section 368(c)(1) of the Code;
(f) Stockholders and the Company shall
pay their respective expenses incurred in connection
with this transaction; and
(g) There is no intercorporate
indebtedness between the Company and Parent that was
issued, acquired or settled at a discount.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF PARENT
Parent hereby represents and warrants to
Stockholders as follows:
3.1. Corporate Organization. Parent is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. SUB
is a corporation duly organized, validly existing and in
good standing under the laws of the State of New York.
The copies of the Certificate of Incorporation and
By-Laws of SUB heretofore delivered to Stockholders are
complete and correct copies of such instruments as
presently in effect.
3.2. Authorization. Parent and SUB each has
the requisite corporate power and authority to enter
into this Agreement and the other agreements, documents
or instruments to be executed and delivered by Parent or
SUB pursuant hereto (the "Additional Parent's
Documents") and to carry out the transactions
contemplated hereby and thereby. The execution,
delivery and performance of this Agreement and the
Additional Parent's Documents and the consummation of
the transactions contemplated hereby and thereby have
been duly authorized by the Board of Directors of Parent
and SUB and the sole stockholder of SUB, and no other
corporate proceedings on the part of Parent and, where
applicable, SUB or their respective stockholders are
necessary to authorize the execution and delivery of
this Agreement and the Additional Parent's Documents and
the consummation of the transactions contemplated hereby
and thereby. When fully executed and delivered, this
Agreement and each of the Additional Parent's Documents
will constitute the valid and binding agreements of
Parent and, where applicable, SUB, enforceable against
Parent and SUB, respectively, in accordance with their
respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors'
rights and by general equitable principles (regardless
of whether enforceability is considered in a proceeding
in equity or at law).
3.3. Authorization and Issuance of ABI
Shares. The issuance of the ABI Shares has been duly
authorized by Parent and, upon delivery to Stockholders
of the certificates therefor in accordance with Article
I hereof, the ABI Shares will be validly issued, fully
paid and nonassessable, free and clear of all Liens and
restrictions other than the restrictions imposed herein
or by the Securities Act and the rules and regulations
promulgated thereunder.
3.4. Listing on American Stock Exchange. The
ABI Shares have been approved for listing on the
American Stock Exchange.
3.5. Consents and Approvals; Non-
Contravention. Neither the execution, delivery or
performance of this Agreement or any of the Additional
Parent's Documents by Parent nor the consummation by
Parent of the transactions contemplated hereby or
thereby nor compliance by Parent with any of the
provisions hereof or thereof will (a) violate any
provision of the Restated Certificate of Incorporation
or By-Laws, as amended and restated of Parent, (b) to
the best knowledge of Parent, require any filing with,
or permit, authorization, consent or approval of, any
Governmental Entity, (c) require any consent, approval
or authorization under any contract, lease or other
agreement, (d) to the best knowledge of Parent, violate
any order, writ, injunction, decree, statute, rule or
regulation applicable to Parent or SUB or any of their
respective properties or assets or (e) result in a
violation or breach of, or constitute (with or without
notice or lapse of time or both) a default (or give rise
to any right of termination, amendment, cancellation or
acceleration or any loss of a material benefit) under,
or result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the
respective properties or assets of Parent or SUB under,
any note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation to
which Parent or SUB is a party or by which Parent or SUB
or any of their respective properties or assets may be
bound, except, in the case of clauses (c) or (e), for
such consents, approvals or authorizations or
violations, breaches, defaults or Liens which would not
materially impair the ability of Parent or Sub to
perform their obligations hereunder and which would not,
either individually or in the aggregate, have a material
adverse effect on Parent.
3.6. Tax-Free Reorganization Treatment. In
connection with the intended treatment of the Merger as
a reorganization within the meaning of Section 368(a) of
the Code:
(a) Prior to the Merger, Parent will be
in control of SUB within the meaning of Section
368(c)(1) of the Code;
(b) Following the Merger, SUB will not
issue additional shares of its stock that would result
in Parent losing control of SUB within the meaning of
Section 368(c)(1) of the Code;
(c) Parent has no plan or intention to
reacquire any of the ABI Shares issued in the Merger;
(d) Parent has no plan or intention to
liquidate SUB, to merge SUB with or into another
corporation, to sell or otherwise dispose of the stock
of SUB, or to cause SUB to sell or otherwise dispose of
any of the Company's assets acquired in the Merger,
except for dispositions made in the ordinary course of
business or transfers of assets described in Section
368(a)(2)(C) of the Code;
(e) Following the Merger, SUB will
continue the Company's historic business or use a
significant portion of the Company's business assets in
a business;
(f) Parent and Sub will pay their
respective expenses incurred in connection with this
transaction; and
(g) There is no intercorporate
indebtedness between Parent and Sub that was issued,
acquired or will be settled at a discount.
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1. Securities Legend; Stop Transfer
Instructions. Stockholders agree that they will not
sell or otherwise transfer their ABI Shares unless they
are registered under the Securities Act or unless an
exemption from such registration is available.
Stockholders consent to the placement of a legend on any
certificate or other document evidencing their ABI
Shares, stating that such ABI Shares have not been
registered under the Securities Act or any state
securities or "blue sky" laws and setting forth or
referring to the restrictions on transferability and
sale thereof, including the restrictions set forth
herein. Stockholders are aware that Parent will make a
notation in its appropriate records with respect to the
restrictions on the transferability of such ABI Shares.
Stockholders also consent and acknowledge that "stop
transfer" instructions may be noted against the ABI
Shares received by them hereunder. Parent hereby
undertakes to remove any legend described in this
Section 4.1 or to rescind any "stop transfer"
instructions described in this Section 4.1 if
Stockholders shall have furnished the Company with an
opinion of counsel or other written information
satisfactory in form and content to Parent that such
legend or any such instructions are no longer required
(as applicable) or (b) with respect to and at the time
of the disposition of any such ABI Shares pursuant to an
effective registration statement under the Securities
Act.
4.2. Related Agreements and Instruments. On
the Closing Date, Stockholders shall deliver or cause to
be delivered to Parent such other instruments or
documents as may be reasonably necessary to carry out
the transactions contemplated by this Agreement and to
comply with the terms hereof.
4.3. Further Assurances. From time to time
after the Closing, and at the request of any party
hereto and without further consideration, any other
party shall execute and deliver to the requesting party
such documents and take such other action as the
requesting party may reasonably request in order to
consummate more effectively the transactions
contemplated hereby.
4.4. Dividend. Parent acknowledges that the
Company has declared a dividend to Stockholders equal in
the aggregate to the profits in the Partnership for the
year ended March 31, 1995 allocable to the Company.
ARTICLE V
SURVIVAL AND INDEMNIFICATION
5.1. Survival. All representations,
warranties, covenants and agreements contained in this
Agreement shall survive the Closing for the applicable
statute of limitations period.
5.2. Indemnification.
(a) Each Stockholder agrees to indemnify
and hold harmless Parent and its subsidiaries and
affiliates and their respective officers, directors,
employees and agents against and in respect of any loss,
liability (including without limitation any liability
for taxes due or claimed to be due in respect to periods
ending on or before the Closing Date), damage, demand,
claim, cost, suit, action or cause of action, judgment,
award, assessment, interest, penalty or expense
(including without limitation, reasonable expenses of
investigation and reasonable attorneys' or consultants'
fees), net of any tax benefits, insurance proceeds or
settlement proceeds received in connection therewith
(individually a "Loss" and collectively "Losses"), (i)
of or against the Company arising prior to the Effective
Time or in connection with any action or event occurring
on or prior to the Effective Time other than Losses of
or against the Partnership, or (ii) otherwise incurred
or sustained by any of them as a result of a breach by
any Stockholder of the representations, warranties,
covenants and agreements contained herein or in any
document delivered pursuant hereto or in connection
herewith, provided that no Stockholder shall be liable
for any amount in excess of the aggregate amount of
Consideration set forth opposite such Stockholder's name
on Exhibit B and the principal amount of debt of the
Company assumed by Parent, if any.
(b) Parent agrees to indemnify and hold
harmless each Stockholder and their respective
affiliates and agents against and in respect of any
Losses incurred or sustained by any of them as a result
of a breach by Parent of the representations,
warranties, covenants and agreements contained herein or
in any document delivered pursuant hereto or in
connection herewith, provided that Parent shall not be
liable for any amount in excess of the aggregate amount
of Consideration set forth opposite such Stockholder's
name on Exhibit B.
5.3. Procedure for Indemnification.
(a) Any person or entity entitled to
assert a claim for indemnification under this Agreement
(the "Indemnitee") shall give prompt written notice to
the indemnifying party (the "Indemnitor") of any claim
or event known to it which does or may give rise to a
claim for indemnification hereunder by the Indemnitee
against the Indemnitor; provided that the failure of any
Indemnitee to give notice as provided in this Section
5.3 shall not relieve the Indemnitor of its obligations
under this Article V, except to the extent that such
failure has materially and adversely affected the rights
of the Indemnitor. In the case of any claim for
indemnification hereunder arising out of a claim,
action, suit or proceeding brought by any Person who is
not a party to this Agreement (a "Third Party Claim"),
the Indemnitee shall also give the Indemnitor copies of
any written claims, process or legal pleadings with
respect to such Third Party Claim promptly after such
documents are received by the Indemnitee.
(b) An Indemnitor may elect to
compromise or defend, at such Indemnitor's own expense
and by such Indemnitor's own counsel, any Third Party
Claim. If an Indemnitor elects to compromise or defend
a Third Party Claim, it shall, within 30 days of the
date of its receipt of the notice provided pursuant to
Section 5.3(a) hereof (or sooner, if the nature of such
Third Party Claim so requires), notify the related
Indemnitee of its intent to do so, and such Indemnitee
shall reasonably cooperate in the compromise of, or
defense against, such Third Party Claim. Such
Indemnitor shall pay such Indemnitee's actual out-of-
pocket expenses incurred in connection with such
cooperation. After notice from an Indemnitor to an
Indemnitee of its election to assume the defense of a
Third Party Claim, such Indemnitor shall not be liable
to such Indemnitee under this Article V for any legal
expenses subsequently incurred by such Indemnitee in
connection with the defense thereof; provided that such
Indemnitee shall have the right to employ one counsel of
its choice in each applicable jurisdiction (if more than
one jurisdiction is involved) to represent such
Indemnitee if, in such Indemnitee's reasonable judgment,
a conflict of interest between such Indemnitee and such
Indemnitor exists in respect of such claim, and in that
event the fees and expenses of such separate counsel
shall be paid by such Indemnitor. If an Indemnitor
elects not to compromise or defend against a Third Party
Claim, or fails to notify an Indemnitee of its election
as provided in this Section 5.3, such Indemnitee may
negotiate, pay, compromise or defend such Third Party
Claim on behalf of and for the account and risk of the
Indemnitor. No Indemnitor shall consent to entry of any
judgment or enter into any settlement without the
written consent of each related Indemnitee (which
consent shall not be unreasonably withheld), unless such
judgment or settlement provides solely for money damages
or other money payments for which such Indemnitee is
entitled to indemnification hereunder and includes as an
unconditional term thereof the giving by the claimant or
plaintiff to such Indemnitee of a release from all
liability in respect of such Third Party Claim.
(c) Notwithstanding the rights of an
Indemnitor to elect to compromise or defend a Third
Party Claim in subparagraph (b) above, if there is a
reasonable likelihood that a Third Party Claim may have
a material adverse effect on an Indemnitee, other than
as a result of money damages or other money payments for
which such Indemnitee is entitled to indemnification
hereunder, such Indemnitee will have the right, after
consultation with the Indemnitor and at the cost and
expense of the Indemnitor, to defend such Third Party
Claim.
ARTICLE VI
GENERAL PROVISIONS
6.1. Amendment and Waiver. This Agreement
may be amended, modified or supplemented only by a
written agreement of the parties hereto. Any failure of
any party to comply with any obligation, agreement or
condition hereunder may only be waived in writing by the
other parties, but such waiver shall not operate as a
waiver of, or estoppel with respect to, any subsequent
or other failure. No failure by any party to take any
action against any breach of this Agreement or default
by the other parties shall constitute a waiver of such
party's right to enforce any provision hereof or to take
any such action.
6.2. Expenses. Each of the parties hereto
agrees to pay all costs and expenses incurred by it in
connection with this Agreement and the transactions
contemplated hereby, including without limitation the
fees of its counsel, consultants and accountants.
6.3. Notices. All notices, requests and
other communications hereunder shall be in writing and
shall be deemed given if delivered personally, if sent
by Federal Express or other overnight courier or
delivery service or if mailed by registered or certified
mail (postage prepaid, return receipt requested) to the
parties at the following addresses (or to such other
address for a party as shall be specified by like
notice):
(a) If to Parent, SUB or the Company:
c/o American Biltrite Inc.
57 River Street
Wellesley Hills, Massachusetts 02181
Attention: Richard G. Marcus
With a copy to:
Skadden, Arps, Slate, Meagher & Flom
One Beacon Street
Boston, Massachusetts 02108
Attention: Louis A. Goodman, Esq.
(b) If to Arthur I. Maier:
Arthur I. Maier
411 Fifth Avenue
New York, New York 10016
With a copy to:
Lowenthal, Landau, Fischer & Bring, P.C.
250 Park Avenue
New York, New York 10177
Attention: Robert E. Fischer, Esq.
(c) If to Bruce Maier:
Bruce Maier
1035 Seahaven Drive
Mamaroneck, New York 10543
With a copy to:
Lowenthal, Landau, Fischer & Bring, P.C.
250 Park Avenue
New York, New York 10177
Attention: Robert E. Fischer, Esq.
(d) If to Edythe Wagner:
Edythe Wagner
300 East 74th Street, Apt. 12A
New York, New York 10021
With a copy to:
Lowenthal, Landau, Fischer & Bring, P.C.
250 Park Avenue
New York, New York 10177
Attention: Robert E. Fischer, Esq.
The address of a party, for the purposes of this Section
6.3, may be changed by giving written notice to the other
party of such change in the manner provided herein for
giving notice. Unless and until such written notice is
received, the addresses as provided herein shall be
deemed to continue in effect for all purposes hereunder.
6.4. Entire Agreement; Binding Effect. This
Agreement and the documents referred to herein (a)
constitute the entire agreement and supersede all other
agreements and understandings, both written and oral,
between the parties with respect to the subject matter
hereof and (b) shall not be assigned by either party (by
operation of law or otherwise) without the prior written
consent of the other party, except that Parent may
assign, in its sole discretion, any of its rights,
interests and obligations hereunder to any affiliate of
Parent; provided, however, that no such assignment shall
relieve Parent of its obligations hereunder.
6.5. Applicable Law. This Agreement shall be
governed by the laws of the State of New York (without
giving effect to the principles of conflicts of laws
thereof) as to all matters, including but not limited to,
matters of validity, construction, effect, performance
and remedies.
6.6. Parties in Interest. This Agreement
shall be binding upon and inure solely to the benefit of
each party hereto and, subject to Section 6.4(b) hereof,
their respective successors and assigns, and nothing in
this Agreement, express or implied, is intended to confer
upon any other Person any rights or remedies of any
nature whatsoever under or by reason of this Agreement.
6.7. Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall
be deemed an original, but all of which together shall
constitute one and the same instrument.
6.8. Heading; Pronouns and Conjunctions. The
section and other headings contained in this Agreement
are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.
Unless otherwise indicated herein or the context
otherwise requires, the masculine pronoun shall include
the feminine and neuter and the singular shall include
the plural. The word "or" shall not be deemed exclusive.
6.9. Severability. In case any term,
provision, covenant or restriction of this Agreement is
held to be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability
of the remaining terms, provisions, covenants or
restrictions, or of such term, provision, covenant or
restriction in any other jurisdiction, shall not in any
way be affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have
signed this Agreement as of the date first written above.
AMERICAN BILTRITE INC.
By/s/Richard G. Marcus
_____________________
Name: Richard G. Marcus
Title: President
JEWELCO ACQUISITION CO., INC.
By/s/Richard G. Marcus
_____________________
Name: Richard G. Marcus
Title: President
AIMPAR, INC.
By/s/Arthur I. Maier
______________________
Name: Arthur I. Maier
Title: Chairman
Arthur I. Maier
______________________
Bruce S. Maier
______________________
Edythe Wagner
______________________
EXHIBIT A
CERTIFICATE OF MERGER
OF
JEWELCO ACQUISITION CO., INC.
AND
AIMPAR, INC.
INTO
JEWELCO ACQUISITION CO., INC.
UNDER SECTION 904 OF THE BUSINESS CORPORATION LAW
We, the undersigned, Richard G. Marcus and
Henry W. Winkleman being respectively the President and
the Secretary of Jewelco Acquisition Co., Inc. and Edythe
Wagner and Bruce Maier being respectively the President
and the Secretary of AIMPAR, Inc., hereby certify:
1. (a) The name of each constituent
corporation is as follows:
Jewelco Acquisition Co., Inc.
AIMPAR, Inc.
(b) The name of the surviving corporation
is Jewelco Acquisition Co., Inc. and following the merger
its name shall be AIMPAR, Inc.
2. As to each constituent corporation, the
designation and number of outstanding shares of each
class and series and the voting rights thereof are as
follows:
Name of Outstanding Entitled to Vote
Corporation
Jewelco 1 share of Common 1 share of Common
Acquisition Co., Stock, par value Stock
Inc. $.01 per share
AIMPAR, Inc. 70 shares of 70 shares of
Common Stock, par Common Stock
value $.01 per
share
3. The Certificate of Incorporation of
Jewelco Acquisition Co., Inc. as in effect immediately
prior to the filing of this Certificate of Merger shall
be the certificate of incorporation of the surviving
corporation until thereafter amended as provided by law,
except that Article 1 of such Certificate of
Incorporation shall be amended to change the name from
Jewelco Acquisition Co., Inc. to AIMPAR, Inc., such
change without further action of the stockholders of the
Jewelco Acquisition Co., Inc. or the Surviving
Corporation.
4. The date when the certificate of
incorporation of each constituent corporation was filed
by the Department of State is as follows:
NAME OF CORPORATION DATE OF ADOPTION
Jewelco Acquisition Co., March 23, 1995
Inc.
AIMPAR, Inc. March 31, 1988
5. The merger was adopted by each constituent
corporation in the following manner:
(a) As to Jewelco Acquisition Co., Inc. by the
unanimous consent of the shareholders.
(b) As to AIMPAR, Inc., by the unanimous
consent of the shareholders.
IN WITNESS WHEREOF, we have signed this
certificate on the day of May, 1995 and we affirm the
statements contained therein as true under penalties of
perjury.
Jewelco Acquisition Co., Inc.
________________________
(name of Corporation)
________________________
(signature)
Richard G. Marcus - President
________________________
(type name and title of person signing)
________________________
(signature)
Henry W. Winkleman - Secretary
________________________
(type name and title of person signing)
AIMPAR, INC.
________________________
(name of Corporation)
________________________
(signature)
Edythe Wagner - President
________________________
(type name and title of person signing)
________________________
(signature)
Bruce Maier - Secretary
________________________
(type name and title of person signing)
EXHIBIT B
Consideration
Name of Stockholder No. of ABI Shares** Cash
Arthur I. Maier 32,178 $ 12.34
Bruce Maier N/A 352,957.00
Edythe Wagner N/A 352,957.00
_________________________
** At the Effective Time, Parent is issuing such shares in the name
of Arthur I. Maier.
K&M ASSOCIATES L.P.
OPTION AGREEMENT
by and among
OCEAN STATE JEWELRY, INC.
and
CERTAIN LIMITED PARTNERS OF K&M ASSOCIATES L.P.
dated as of April 1, 1995
ARTICLE I
PURCHASE AND SALE OF INTERESTS
1.1. Grant of Option . . . . . . . . . . . . . . . . 2
1.2. Consideration . . . . . . . . . . . . . . . . . 2
1.3. Exercise of Option . . . . . . . . . . . . . . 3
1.4. Acceleration of the Trigger Date . . . . . . . 3
1.5. Deliveries by the Sellers . . . . . . . . . . . 6
1.6. Deliveries by Buyer . . . . . . . . . . . . . . 6
1.7. Acknowledgement of the Sellers . . . . . . . . 6
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
2.1. Authorization . . . . . . . . . . . . . . . . . 6
2.2. Ownership of Interests . . . . . . . . . . . . 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF BUYER
3.1. Corporate Organization . . . . . . . . . . . . 7
3.2. Authorization . . . . . . . . . . . . . . . . . 7
3.3. Authorization of ABI . . . . . . . . . . . . . 8
ARTICLE IV
COVENANTS AND FURTHER AGREEMENTS OF THE SELLERS
4.1. Covenants and further Agreements of the
Seller . . . . . . . . . . . . . . . . . . 8
ARTICLE V
SURVIVAL AND INDEMNIFICATION
5.1. Survival . . . . . . . . . . . . . . . . . . . 9
5.2. Indemnification . . . . . . . . . . . . . . . . 9
5.3. Procedure for Indemnification . . . . . . . . 10
ARTICLE VI
GENERAL PROVISIONS
6.1. Amendment and Waiver . . . . . . . . . . . . . 11
6.2. Expenses . . . . . . . . . . . . . . . . . . . 12
6.3. Notices . . . . . . . . . . . . . . . . . . . . 12
6.4. Entire Agreement; Binding Effect . . . . . . . 13
6.5. Specific Performance . . . . . . . . . . . . . 13
6.6. Applicable Law . . . . . . . . . . . . . . . . 13
6.7. Parties in Interest . . . . . . . . . . . . . . 14
6.8. Counterparts . . . . . . . . . . . . . . . . . 14
6.9. Headings; Pronouns and Conjunctions . . . . . . 14
6.10. Severability . . . . . . . . . . . . . . . . . 14
Schedule A Sellers; Profits Interests; Trigger and
Exercise Events; Forms and Amounts of
Exercise Prices
Annex I Form of Note
OPTION AGREEMENT
THIS AGREEMENT is made and entered into as of
the 1st day of April, 1995, by and among Ocean State
Jewelry, Inc., a Rhode Island corporation ("Buyer"), and
those persons and entities listed on Schedule A hereto
(each a "Seller" and collectively the "Sellers").
WHEREAS, Buyer and the Sellers are certain of
the limited partners of K&M Associates L.P., a Rhode
Island limited partnership (the "Partnership"), pursuant
to a Restated Agreement of Limited Partnership dated as
of April 1, 1988, as amended through October 27, 1994, by
and among AIMPAR, Inc. ("AIM") and Wilbur A. Cowett
Incorporated, as general partners of the Partnership, and
those persons (which include the Sellers) listed on
Schedule A thereto as limited partners of the Partner-
ship;
WHEREAS, as of immediately prior to the effec-
tive time of this Agreement, the Restated Agreement of
Limited Partnership is being amended and restated by and
among AIM, as sole general partner of the Partnership,
and those persons (including without limitation the
Sellers) listed on Schedule A thereto as limited partners
of the Partnership (as so amended and restated, the
"Partnership Agreement"); and
WHEREAS, each Seller desires to grant to Buyer
the option to buy, and Buyer desires to grant to each
Seller the option to sell, all of such Seller's respec-
tive interest in the Partnership as set forth opposite
such Seller's name on Schedule A (each an "Interest" and
collectively the "Interests"), upon the terms and subject
to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the forego-
ing and the other good and valuable consideration, re-
spective representations, warranties, covenants and
agreements hereinafter set forth, receipt and sufficiency
of which is hereby acknowledged, and intending to be
legally bound hereby, the parties hereto agree as fol-
lows:
ARTICLE I
PURCHASE AND SALE OF INTERESTS
1.1. Grant of Option. Upon the terms and
subject to the conditions contained herein, each Seller
hereby grants to Buyer an irrevocable and exclusive
option to buy (each a "Call Option"), and Buyer hereby
grants to each Seller an irrevocable and exclusive option
to sell to Buyer (each a "Put Option" and, together with
the Call Options, the "Options"), such Seller's respec-
tive Interest, including with respect to the Sellers
designated as Special Limited Partners on Schedule A,
such Seller's Special Limited Partner Interest (as de-
fined in the Partnership Agreement).
1.2. Consideration. Upon the terms and sub-
ject to the conditions contained herein and in consider-
ation of, and in full payment for, the aforesaid sale and
transfer of the Interests, each Option shall be exercis-
able for the respective amount and form of consideration
corresponding to the description entitled "Exercise
Event" set forth opposite each respective Seller's name
on Schedule A (each an "Exercise Price"). At any Clos-
ing, Buyer will deliver:
(a) with respect to Arthur I. Maier Limited,
ARTWIL Associates and Susan Maier, that portion
of the Exercise Price designated as "(ii)"
opposite such Sellers' names under the column
entitled "Amount of Exercise Price" set forth
on Schedule A; and
(b) with respect to any other Seller not list-
ed in clause (a) above, that portion of the
Exercise Price designated as "1(ii)" (whether
arising from an Exercise Event designated "1"
or "3") or the amount designated as the "prod-
uct" in "2," as the case may be, in each case
opposite such Sellers' names under the column
entitled "Amount of Exercise Price" set forth
on Schedule A.
Buyer shall deliver the remainder of the Exercise Price,
if any, to Seller as soon as practicable thereafter, but
in no event later than 90 days following the Fiscal Year
(as defined in the Partnership Agreement) of such Clos-
ing. Notwithstanding the foregoing, if the Partnership's
Property (as defined in the Partnership Agreement) is re-
valued on the Partnership's books at an amount in excess
of the aggregate value of the Capital Accounts as set
forth on Schedule B of the Partnership Agreement, such
excess shall be excluded from the calculation of Capital
Accounts for all purposes of this Agreement (including
without limitation Schedule A hereto).
1.3. Exercise of Option. Each Call Option may
be exercised by Buyer or its permitted assignee at any
time or from time to time, and each Put Option may be
exercised by Seller at any time or from time to time,
from and after the date set forth opposite such Seller's
name on Schedule A (each a "Trigger Date") until
March 31, 2005 (the "Termination Date"), except that if
the Option cannot be exercised by reason of any applica-
ble judgment, decree or order granted, the Termination
Date shall be extended until ten business days after such
impediment to exercise shall have been removed. In the
event Buyer or any Seller desires to exercise an Option,
Buyer or such Seller, as the case may be, shall send a
written notice to the other party stating its intent to
exercise and specifying a date not earlier than 10 nor
later than 20 business days from the date such notice is
given for the closing of such purchase (with respect to
such Option, the "Closing"). Any Closing of the transac-
tions contemplated by this Agreement shall occur on the
date specified in such notice at such time and place as
may be agreed upon by the parties. The time and date of
each Closing is sometimes referred to herein as a "Clos-
ing Date." Upon consummation of any of the respective
transactions contemplated herein, such Closing shall be
deemed to have taken place as of the close of business on
such Closing Date.
1.4. Acceleration of the Trigger Date. Not-
withstanding any provision of this Agreement to the
contrary, the Trigger Date for a Call Option or a Put
Option, as the case may be, will accelerate and such
Option will become exercisable immediately upon the
following terms and conditions (each an "Acceleration
Event"):
(a) With respect to Arthur I. Maier
Limited and Susan Maier,
(i) a Call Option Trigger Date will accelerate
(A) in the event Mr. Maier's employment by the
Partnership is terminated by Mr. Maier volun-
tarily or by the Partnership for Cause (as
defined below), (B) in the event Mr. Maier's
employment by the Partnership is terminated by
the Partnership for any reason other than for
Cause (including without limitation any termi-
nation resulting from his death or Permanent
Disability) and (C) in the event AIM causes the
Partnership to effectuate the withdrawal from
the Partnership of Arthur I. Maier Limited or
Susan Maier other than in connection with the
immediately preceding sub-clause (A) of this
sentence; and
(ii) a Put Option Trigger Date will accelerate
(A) in the event Mr. Maier's employment by the
Partnership is terminated by the Partnership
for any reason other than for Cause (including
without limitation any termination resulting
from his death or Permanent Disability) or (B)
in the event AIM causes the Partnership to
effectuate the withdrawal from the Partnership
of Arthur I. Maier Limited or Susan Maier other
than in connection with sub-clause (A) of
clause (i) of this sentence and (C) and a Put
Option will be deemed to be exercised without
any action by a Seller immediately prior to any
action of the General Partner or General Part-
ners to terminate or dissolve the Partnership.
(b) With respect to each of the Limited
Partners (other than Arthur I. Maier Limited, ARTWIL
Associates and Susan Maier) set forth on Schedule A who
is designated thereon (or whose principal is designated
thereon) as a Partnership Employee,
(i) a Call Option Trigger Date will accelerate
(A) in the event such Partnership Employee's
employment by the Partnership is terminated by
such Partnership Employee voluntarily or by the
Partnership for Cause, (B) in the event such
Partnership Employee's employment by the Part-
nership is terminated by the Partnership for
any reason other than for Cause (including
without limitation any termination resulting
from such Partnership Employee's death or Per-
manent Disability) and (C) in the event AIM
causes the Partnership to effectuate the with-
drawal of such Partner from the Partnership
other than in connection with the immediately
preceding sub-clause (A) of this sentence; and
(ii) a Put Option Trigger Date will accelerate
(A) in the event such Partnership Employee's
employment by the Partnership is terminated by
the Partnership for any reason other than for
Cause (including without limitation any termi-
nation resulting from such Partnership
Employee's death or Permanent Disability) or
(B) in the event AIM causes the Partnership to
effectuate the withdrawal of such Partner from
the Partnership other than in connection with
sub-clause (A) of clause (i) of this sentence
and (C) and a Put Option will be deemed to be
exercised without any action by a Seller imme-
diately prior to any action of the General
Partner or General Partners to terminate or
dissolve the Partnership.
For purposes of this Agreement, the termination
of a Partnership Employee "for Cause" occurs if such
termination arises as a result of, any one or more of the
following reasons: dishonesty, conviction of any crime
involving moral turpitude, conviction of a felony, con-
viction of a misdemeanor which could have a material
adverse effect on such person's ability to perform his
employment obligations, material breach of such
employee's employment obligations after notice thereof
and a reasonable opportunity to cure, willful misconduct
injurious to the Partnership whether monetarily or other-
wise of a material nature, habitual drunkenness, drug
abuse or excessive absenteeism not related to such
person's Permanent Disability, if any.
For purposes of this Agreement, a "Permanent
Disability" occurs with respect to any Partnership Em-
ployee who is unable to fully perform his duties and
employment obligations to the Partnership for (a) a
continuous period of 90 days or (b) an aggregate of 120
days, in each case during any period of twelve consecu-
tive months by reason of a [medically determinable ill-
ness] or injury (other than habitual drunkenness or drug
abuse).
1.5. Deliveries by the Sellers. On each
Closing Date, the respective Seller shall deliver or
cause to be delivered to Buyer:
(a) a "Nonforeign Person Affidavit," as
provided in Section 1445 of the Internal Revenue Code of
1986, as amended, duly executed by such Seller; and
(b) such other instruments or documents
as may be reasonably necessary to carry out the transac-
tions contemplated by this Agreement (with respect to
such Option) and to comply with the terms hereof.
1.6. Deliveries by Buyer. On each Closing
Date, Buyer shall deliver or cause to be delivered to the
respective Seller the following:
(a) the respective Exercise Price for
such Option, subject to the terms and provisions of
Sections 1.2 and 1.3 hereof and Schedule A; and
(b) such other instruments or documents
as may be reasonably necessary to carry out the transac-
tions contemplated by this Agreement and to comply with
the terms hereof.
1.7. Acknowledgement of the Sellers. Each
Seller hereby acknowledges that, upon the Closing in
connection with the exercise of the Call Option or Put
Option relating to Seller's Interest, such Seller will no
longer have any Interest in the Partnership.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers hereby severally represents
and warrants to Buyer as follows:
2.1. Authorization. The Seller has the requi-
site capacity to enter into this Agreement and the other
agreements, documents and instruments to be executed and
delivered by such Seller pursuant hereto (the "Additional
Seller's Documents") and to carry out the transactions
contemplated hereby and thereby. When fully executed and
delivered, this Agreement and each of the Additional
Seller's Documents will constitute the valid and binding
agreements of the Seller, enforceable against the Seller
in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or
other similar laws now or hereafter in effect relating to
creditors' rights and by general equitable principles
(regardless of whether enforceability is considered in a
proceeding in equity or at law).
2.2. Ownership of Interests. The Seller has,
and at the respective Closing, upon delivery by Buyer to
the Seller of the Exercise Price therefor, Buyer will
acquire, good and valid title to the Seller's Interest,
free and clear of any mortgage, pledge, security inter-
est, encumbrance, lien, claim or charge of any kind or
right of others of whatever nature ("Liens").
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF BUYER
Buyer hereby represents and warrants to each
Seller as follows:
3.1. Corporate Organization. Buyer is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Rhode Island.
3.2. Authorization. Buyer has the requisite
corporate power and authority to enter into this Agree-
ment and to carry out the transactions contemplated
hereby. The execution, delivery and performance of this
Agreement and the consummation of the transactions con-
templated hereby have been duly authorized by the Board
of Directors of Buyer, and no other corporate proceedings
on the part of Buyer or its stockholders are necessary to
authorize this Agreement and the transactions contemplat-
ed hereby. When fully executed and delivered, this
Agreement will constitute the valid and binding agreement
of Buyer, enforceable against Buyer in accordance with
its respective terms, except as such enforceability may
be limited by bankruptcy, insolvency, fraudulent convey-
ance, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights
and by general equitable principles (regardless of wheth-
er enforceability is considered in a proceeding in equity
or at law).
3.3. Authorization of ABI. American Biltrite
Inc., a Delaware corporation ("ABI"), has the requisite
corporate power and authority to execute, deliver and
perform its obligations under the promissory notes being
delivered at any Closing, and when delivered, such notes
will be valid and binding and enforceable against ABI in
accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or
other similar laws now or hereafter in effect relating to
creditors' rights and by general equitable principles
(regardless of whether enforceability is considered in a
proceeding in equity or at law).
ARTICLE IV
COVENANTS AND FURTHER AGREEMENTS OF THE SELLERS
Each of the Sellers hereby severally covenants
and further agrees with Buyer as follows:
4.1. Covenants and further Agreements of the
Seller. At all times from the date hereof through the
earlier of the exercise of the Option and the Termination
Date, the Seller will be the record and beneficial owner
of Seller's Interest, will maintain such Interest free
and clear of all Liens and will not grant any beneficial
interest in and to such Interest to any other party. In
the event of exercise of the Option, the Seller will
deliver title to such Interest to Buyer, free and clear
of all Liens.
ARTICLE V
SURVIVAL AND INDEMNIFICATION
5.1. Survival. All representations and war-
ranties contained in this Agreement shall survive the
Closing for the applicable statute of limitations period.
5.2. Indemnification.
(a) Each Seller severally agrees to
indemnify and hold harmless Buyer and its subsidiaries
and affiliates and their respective officers, directors,
employees and agents against and in respect of any loss,
liability (including, without limitation, any liability
for taxes due or claimed to be due in respect to periods
ending on or before the Closing Date), damage, demand,
claim, cost, suit, action or cause of action, judgment,
award, assessment, interest, penalty or expense (includ-
ing, without limitation, reasonable attorneys' or
consultants' fees), net of any tax benefits, insurance
proceeds or settlement proceeds received in connection
therewith (individually a "Loss" and collectively "Loss-
es") incurred or sustained by any of them as a result of
a breach by such Seller of the representations, warran-
ties, covenants and agreements contained herein or in any
document delivered pursuant hereto or in connection
herewith, provided, that no Seller shall be liable for
any amount in excess of the aggregate Exercise Price set
forth opposite such Seller's name on Schedule A and the
principal amount of debt of such Seller assumed by Buyer,
if any.
(b) Buyer agrees to indemnify and hold
harmless each Seller, and, if applicable, its subsidiar-
ies and affiliates, and their respective officers, direc-
tors, employees and agents against and in respect of any
Losses incurred or sustained by any of them as a result
of a breach by Buyer of the representations, warranties,
covenants and agreements contained herein or in any
document delivered pursuant hereto or in connection
herewith, provided, that Buyer shall not be liable to any
Seller for any amount in excess of the aggregate Exercise
Price set forth opposite such Seller's name on Sched-
ule A.
5.3. Procedure for Indemnification.
(a) Any person or entity entitled to
assert a claim for indemnification under this Agreement
(the "Indemnitee") shall give prompt written notice to
the indemnifying party (the "Indemnitor") of any claim or
event known to it which does or may give rise to a claim
for indemnification hereunder by the Indemnitee against
the Indemnitor; provided that the failure of any Indemni-
tee to give notice as provided in this Section 5.3 shall
not relieve the Indemnitor of its obligations under this
Article IV, except to the extent that such failure has
materially and adversely affected the rights of the
Indemnitor. In the case of any claim for indemnification
hereunder arising out of a claim, action, suit or pro-
ceeding brought by any person who is not a party to this
Agreement (a "Third Party Claim"), the Indemnitee shall
also give the Indemnitor copies of any written claims,
process or legal pleadings with respect to such Third
Party Claim promptly after such documents are received by
the Indemnitee.
(b) An Indemnitor may elect to compromise
or defend, at such Indemnitor's own expense and by such
Indemnitor's own counsel, any Third Party Claim. If an
Indemnitor elects to compromise or defend a Third Party
Claim, it shall, within 30 days of the date of its re-
ceipt of the notice provided pursuant to Section 5.3(a)
hereof (or sooner, if the nature of such Third Party
Claim so requires), notify the related Indemnitee of its
intent to do so, and such Indemnitee shall reasonably
cooperate in the compromise of, or defense against, such
Third Party Claim. Such Indemnitor shall pay such
Indemnitee's actual out-of-pocket expenses incurred in
connection with such cooperation. After notice from an
Indemnitor to an Indemnitee of its election to assume the
defense of a Third Party Claim, such Indemnitor shall not
be liable to such Indemnitee under this Article IV for
any legal expenses subsequently incurred by such Indemni-
tee in connection with the defense thereof; provided that
such Indemnitee shall have the right to employ one coun-
sel of its choice in each applicable jurisdiction (if
more than one jurisdiction is involved) to represent such
Indemnitee if, in such Indemnitee's reasonable judgment,
a conflict of interest between such Indemnitee and such
Indemnitor exists in respect of such claim, and in that
event the fees and expenses of such separate counsel
shall be paid by such Indemnitor. If an Indemnitor
elects not to compromise or defend against a Third Party
Claim, or fails to notify an Indemnitee of its election
as provided in this Section 5.3, such Indemnitee may
negotiate, pay, compromise or defend such Third Party
Claim on behalf of and for the account and risk of the
Indemnitor. No Indemnitor shall consent to entry of any
judgment or enter into any settlement without the written
consent of each related Indemnitee (which consent shall
not be unreasonably withheld), unless such judgment or
settlement provides solely for money damages or other
money payments for which such Indemnitee is entitled to
indemnification hereunder and includes as an uncondition-
al term thereof the giving by the claimant or plaintiff
to such Indemnitee of a release from all liability in
respect of such Third Party Claim.
(c) Notwithstanding the rights of an
Indemnitor to elect to compromise or defend a Third Party
Claim in subparagraph (b) above, if there is a reasonable
likelihood that a Third Party Claim may have a material
adverse effect on an Indemnitee, other than as a result
of money damages or other money payments for which such
Indemnitee is entitled to indemnification hereunder, such
Indemnitee will have the right, after consultation with
the Indemnitor and at the cost and expense of the Indem-
nitor, to defend such Third Party Claim.
ARTICLE VI
GENERAL PROVISIONS
6.1. Amendment and Waiver. This Agreement may
be amended, modified or supplemented only by a written
agreement of the parties hereto. Any failure of any
party to comply with any obligation, agreement or condi-
tion hereunder may only be waived in writing by the other
parties, but such waiver shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other
failure. No failure by any party to take any action
against any breach of this Agreement or default by the
other parties shall constitute a waiver of such party's
right to enforce any provision hereof or to take any such
action.
6.2. Expenses. Each of the parties hereto
agrees to pay all costs and expenses incurred by it in
connection with this Agreement and the transactions
contemplated hereby, including without limitation the
fees of its counsel, consultants and accountants.
6.3. Notices. All notices, requests and other
communications hereunder shall be in writing and shall be
deemed given if delivered personally, if sent by Federal
Express or other overnight courier or delivery service or
mailed by registered or certified mail (postage prepaid,
return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall
be specified by like notice):
(a) If to Buyer:
c/o American Biltrite Inc.
57 River Street
Wellesley Hills, Massachusetts 02181
Attention: Richard G. Marcus
With a copy to:
Skadden, Arps, Slate, Meagher & Flom
One Beacon Street
Boston, Massachusetts 02108
Attention: Louis A. Goodman, Esq.;
(b) If to Arthur I. Maier Limited, ARTWIL
Associates, Susan Maier or Edythe J.
Wagner, Inc.: to the address set
forth under such Seller's name on
Schedule A hereto
With a copy to:
Lowenthal, Landau, Fischer & Bring,
P.C.
250 Park Avenue
New York, New York 10177
Attention: Robert E. Fischer, Esq.;
(c) If to John A. Caito: to the address
set forth under such Seller's name on
Schedule A hereto;
(e) If to Donald J. Fulford: to the ad-
dress set forth under such Seller's
name on Schedule A hereto; and
(f) If to Patti Ann Ross: to the address
set forth under such Seller's name on
Schedule A hereto.
The address of a party, for the purposes of
this Section 6.3, may be changed by giving written notice
to the other party of such change in the manner provided
herein for giving notice. Unless and until such written
notice is received, the addresses as provided herein
shall be deemed to continue in effect for all purposes
hereunder.
6.4. Entire Agreement; Binding Effect. This
Agreement and the documents referred to herein (a) con-
stitute the entire agreement and supersede all other
agreements and understandings (including without limita-
tion any existing Withdrawal Rights Agreements by and
between AIM and any Seller) both written and oral, be-
tween the parties with respect to the subject matter
hereof and (b) shall not be assigned by either party (by
operation of law or otherwise) without the prior written
consent of the other party, except that Buyer may assign,
in its sole discretion, any of its rights, interests and
obligations hereunder to any affiliate of Buyer; provid-
ed, however, that no such assignment shall relieve Buyer
of its obligations hereunder.
6.5. Specific Performance. The parties hereto
agree that money damages are an inadequate remedy for
breach of this Agreement because of the difficulty of
ascertaining the amount of damage that will be suffered
by Buyer and any Seller in the event that this agreement
is breached. Buyer and each of the Sellers, therefore,
agree that any party hereto may obtain specific perfor-
mance of this Agreement.
6.6. Applicable Law. This Agreement shall be
governed by the laws of the State of New York (without
giving effect to the principles of conflicts of laws
thereof) as to all matters, including but not limited to,
matters of validity, construction, effect, performance
and remedies.
6.7. Parties in Interest. This Agreement
shall be binding upon and inure solely to the benefit of
each party hereto and with respect to Section 1.7, the
Partnership and, subject to Section 6.4(b) hereof, their
respective successors and assigns, and nothing in this
Agreement, express or implied, is intended to confer upon
any other individual, partnership, corporation, trust or
other entity any rights or remedies of any nature whatso-
ever under or by reason of this Agreement.
6.8. Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall
be deemed an original, but all of which together shall
constitute one and the same instrument.
6.9. Headings; Pronouns and Conjunctions. The
section and other headings contained in this Agreement
are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.
Unless otherwise indicated herein or the context other-
wise requires, the masculine pronoun shall include the
feminine and neuter and the singular shall include the
plural. The word "or" shall not be deemed exclusive.
6.10. Severability. In case any term, provi-
sion, covenant or restriction of this Agreement is held
to be invalid, illegal or unenforceable in any jurisdic-
tion, the validity, legality and enforceability of the
remaining terms, provisions, covenants or restrictions,
or of such term, provision, covenant or restriction in
any other jurisdiction, shall not in any way be affected
or impaired thereby.
* * *
IN WITNESS WHEREOF, the parties hereto have
signed this Agreement as of the date first written above.
OCEAN STATE JEWELRY, INC.
By/s/Richard G. Marcus
_______________________
Name: Richard G. Marcus
Title: President
SELLERS:
Arthur I. Maier Limited
By/s/Arthur I. Maier
_______________________
Name: Arthur I. Maier
Title: President
ARTWIL Associates
By/s/Arthur I. Maier
_______________________
Name: Arthur I. Maier
Title: Partner
Susan Maier
_________________________
by Bruce Maier
as Attorney-in-fact
John A. Caito
_________________________
Donald J. Fulford
_________________________
Patti Ann Ross
_________________________
EDYTHE J. WAGNER, INC.
By/s/Edythe J. Wagner
_______________________
Name: Edythe J. Wagner
Title: President
AIMPAR, Inc., as sole General Partner of the
Partnership and pursuant to Section 6.4 of this Agreement
and Section 10.8 of the Partnership Agreement, hereby
consents to the transfer, if any, of any Seller's Inter-
est in accordance with and pursuant to the terms and
provisions of this Agreement.
AIMPAR, INC.
By/s/Richard G. Marcus
_______________________
Name: Richard G. Marcus
Title: Authorized Signatory
SCHEDULE A
<TABLE>
<CAPTION>
Profits Form of
Name and Address Interest Exercise Price
of Seller as of Trigger Amount of
4/1/95 Date Exercise Event Cash Notes+ Exercise Price
Section
<S> <C> <C> <C> <C> <C> <C>
Arthur I. Maier 10.00 1/1/97 1. prior to 1/1/99, any 1.100% 1. -- an amount equal to the sum of:
Limited(*) Call exercise other
c/o Arthur I. Maier(#) than a Call exercise (i) the respective Capital Account
320 Glendale Road (whether or not balance as of the end of the
Scarsdale, NY 10583 accelerated) Fiscal Year of the Closing prior
pursuant to to the allocation thereto of the
the events respective share of any Profits
described in and Losses for such Fiscal Year
Sec. 1.4(a)(i)(A) (which Profits and Losses shall
be distributed by the
2. prior to 1/1/99, any 2.100% 2. -- Partnership in accordance with
Put exercise (whether the terms and provisions of the
or not accelerated) Partnership Agreement); provided,
pursuant to the however, that in the event of an
events described exercise of a Call Option (whether
in Sec. 1.4(a)(ii) or not accelerated) pursuant to the
events described in Section
3. prior to 1/1/99, any 3.40% 3.60% 1.4(a)(i)(A) hereof, the Buyer
other Put exercise and shall have the right, in its sole
any Call exercise discretion, to elect, within ten
(whether or not business days following the date
accelerated) pursuant of notice of such exercise in
to the events described accordance with Section 1.3 hereof,
in Sec. 1.4(a)(i)(A) whether, for purposes of computing
the Exercise Price, to pay to such
4. any Put or Call 4.100% 4. -- Seller the respective Captial Account
exercise on or after balance as of the end of the Fiscal
1/1/99 Year immediately preceding or
immediately following the date of
Susan Maier(*) 9.75 1/1/96 1. prior to 1/1/99, any 1.100% 1. -- such notice; and
320 Glendale Road Call exercise other
Scarsdale, NY 10583 than a Call exercise (ii) the respective Special
(whether or not Account balance on the date
accelerated) pursuant of the Closing.
to the events
described in
Sec. 1.4(a)(i)(A)
2. prior to 1/1/99, any 2.100% 2. --
Put exercise
(whether or not
accelerated)
pursuant to
the events
described in
Sec. 1.4(a)(ii)
3. prior to 1/1/99, any 3.40% 3.60%
other Put
exercise and
any Call exercise
(whether or not
accelerated)
pursuant to
the events
described in
Sec. 1.4(a)(i)(A)
4. any Put or Call 4.100% 4. --
exercise on or after
1/1/99
ARTWIL Associates(*) 2.00 1/1/96 1. any Put or Call 1. 40% 1. 60%
411 Fifth Avenue exercise prior to
New York, NY 10016 1/1/99
2. any Put or 2.100% 2. --
Call exercise
on or after
1/1/99
SECTION Capitalized terms used in this column have the meanings ascribed to them in the Partnership
Agreement. Notwithstanding the foregoing, if the Partnership's Property (as defined in the
Partnership Agreement) is re-valued on the Partnership's books at an amount in excess of the
aggregate value of the Capital Accounts as set forth on Schedule B of the Partnership Agreement,
such excess shall be excluded from the calculation of Capital Accounts for all purposes of this
Agreement (including without limitation this Schedule A).
+ The form of the Note is attached hereto as Annex I; each Note to be issued by Buyer, if any, will
mature and become due and payable on January 1, 1999 (or sooner if accelerated in accordance with
its terms).
(*) Denotes Special Limited partner whose Interest subject to this Agreement includes both a
Limited Partnership interest and a Special Limited Partnership interest.
(#) Denotes Partnership Employee.
Profits Form of
Name and Address Interest Exercise Price
of Seller as of Trigger Amount of
4/1/95 Date Exercise Event Cash Notes+ Exercise Price
Section
Pursuant to
Exercise Event
<S> <C> <C> <C> <C> <C> <C>
John A. Caito(#) 0.75 1/1/99 1. on or prior to 1/1/99, 1.100% 1. -- 1. an amount equal
11 Greenbrier Road any Call exercise to the sum of:
Greenville, RI 02828 other than
pursuant to (i) the respective
Sec. 1.4(b)(i)(A) Capital Account
and any Put balance as of
exercise the end of the
pursuant to Fiscal Year of
Sec. 1.4(b)(ii) the Closing prior to the
allocation thereto of the
2. any Call exercise 2. 40% 2. 60% respective share of any Profits
pursuant to and Losses for such Fiscal Year
Sec 1.4.(b)(i)(A) (which Profits and Losses shall
be distributed by the Partnership
(a) on or prior to in accordance with the terms and
Donald J. Fulford(#) 1.00 1/1/99 1/1/96; provisions of the Partnership
1027 Cellar Avenue Agreement); provided,
Scotch Plains, NJ 08820 (b) from 1/2/96 however, that in the event of an
until 1/1/97; exercise of a Call Option
pursuant to Section 1.4(b)(i)(A)
(c) from 1/2/97 hereof, the Buyer shall have
until 1/1/98; the right, in its sole discretion,
and to elect, within ten business
days following the Trigger
(d) from 1/2/98 Date, whether, for purposes of
until 1/1/99 computing the Exercise Price,
to pay to such Seller the respective
3. any Put or Call 3.100% 3. -- Capital Account balance as of the
exercise on or end of the Fiscal Year immediately
after 1/2/99 preceding or immediately following
the Trigger Date; and
Edythe J. Wagner, Inc. 5.25 1/1/99
c/o Edythe J. Wagner (#) (ii) the product of the respective
300 East 74th Street Profits Interest and $16,500,000.
Apt. 12A
New York, NY 10021 2. an amount equal to the sum of the
figure in 1(i) above and the
Patti Ann Ross(#) 0.75 1/1/99 product of the respective Profits
404 East 75th Street Interest and, with respect to the
New York, NY 10021 Exercise Event labelled:
2(a) $6,000,000;
2(b) $9,000,000;
2(c) $12,000,000; and
2(d) $15,000,000.
3. same as (1) above.
SECTION Capitalized terms used in this column have the meanings ascribed to them in the Partnership
Agreement. Notwithstanding the foregoing, if the Partnership's Property (as defined in the
Partnership Agreement) is re-valued on the Partnership's books at an amount in excess of the
aggregate value of the Capital Accounts as set forth on Schedule B of the Partnership Agreement,
such excess shall be excluded from the calculation of Capital Accounts for all purposes of this
Agreement (including without limitation this Schedule A).
+ The form of the Note is attached hereto as Annex I; each Note to be issued by Buyer, if any, will
mature and become due and payable on January 1, 1999.
(*) Denotes Special Limited partner whose Interest subject to this Agreement includes both a Limited
Partnership interest and a Special Limited Partnership interest.
(#) Denotes Partnership Employee.
</TABLE>
ANNEX I
PROMISSORY NOTE
$[ ] As of [ ]
1. Promise to Pay. For value received,
American Biltrite Inc., a Delaware corporation ("Maker"),
hereby promises to pay to or to the order of [ ]
("Payee"), the principal amount of $[ ] plus simple
interest thereon, as set forth in Section 2.
2. Payment of the Note. The principal amount
of this Note from time to time outstanding, shall be
payable in [consecutive equal annual installment[s] in
arrears commencing on March 31, 199[ ] and] maturing on
January 1, 199[ ], plus simple interest thereon computed
on the basis of a 360-day year of 30-day months at an
annual rate of 1% over the base lending rate charged as
of the last day of such month by The First National Bank
of Boston, which shall be paid in quarterly installments
commencing on June 30, 1995 and ending on January 1,
199[ ], at which time all unpaid principal, interest and
other sums due hereunder shall be paid in full.
If any installment of principal or interest is
due on a Saturday, Sunday or legal holiday, the payment
to be made on such date shall be paid on the next
succeeding business day following such due date. Payment
of both principal and interest is to be made in the
lawful money of the United States at the offices of Maker
at the address specified in Section 5 or at such other
place as the holder of this Note designates from time to
time. If any events of default occur pursuant to Section
4, this Note and accrued but unpaid interest shall
continue to bear interest at the rate provided herein.
3. Prepayments. This Note may be prepaid*,
in full at any time without premium or penalty.
4. Default. Each of the following events
shall constitute an event of default hereunder:
(a) Maker fails to pay any part of the
principal of this Note or interest thereon within 10 days
after notice of such failure to pay is given to Maker at
the address specified in Section 5.
*The form of Option Note for Susan Maier will include an
acceleration clause whereby such Note immediately becomes
due and payable in the event of any option exercise with
respect to Arthur I. Maier Limited where the form of
Exercise Price is 100% cash. A similar acceleration
clause will be included in the form of Option Note for
ARTWIL Associates, except that such note will not
accelerate prior to December 31, 1995.
(b) Maker makes an assignment for the
benefit of its creditors, or applies for or acquiesces in
the appointment of a receiver, trustee or other custodian
for any of its properties or assets;
(c) any proceedings shall be commenced by
or against Maker for any relief which includes, or might
result in, any modification of the obligations of Maker
under this Note or relief under any bankruptcy or
insolvency laws or other laws relating to the relief of
debtors, readjustments or indebtedness, reorganizations,
compositions or extensions, unless, in the case of
involuntary proceedings not consented or acquiesced to by
Maker, such proceedings shall have been dismissed within
45 days after the same were commenced;
(d) Maker defaults on the payment of any
note made in connection with the transactions
contemplated by the Purchase Agreement dated as of March
31, 1995 by and among Ocean State Jewelry, Inc. and
certain limited partners of K&M Associates, L.P.;
provided that such nonpayment does not arise as a result
of a good faith dispute between Maker and the payee of
such note; or
(e) any acceleration of any debt for
money borrowed by Maker.
5. Remedies. Upon the occurrence of an event
of default, and at any time thereafter (unless such event
of default is promptly cured by Maker), the holder of
this Note, at its option, evidenced by the mailing of a
written notice to Maker at 57 River Street, Wellesley
Hills, Massachusetts 02181, attention: President, may
declare the entire unpaid principal amount hereunder and
interest thereon to be immediately due and payable
without presentment, demand, diligence, protest or
further notice of any kind, all of which are hereby
expressly waived by Maker, and the holder of this Note
may immediately enforce payment hereof.
6. Successors and Assigns. All of the terms
and conditions contained in this Note shall be binding
upon and be enforceable against and inure to the benefit
of the successors and permitted assigns of Maker and the
holder.
7. Waiver. This Note is one of a series of
notes being issued as of the date hereof or at a later
date (the "Partnership Notes") in connection with the
acquisition by Maker of interests in K&M Associates L.P.,
a Rhode Island limited partnership (the "Partnership"),
pursuant to a Purchase Agreement dated as of March 31,
1995 by and among Ocean State Jewelry, Inc., a Rhode
Island corporation ("Ocean State"), and certain limited
partners of the Partnership set forth on Schedule A
thereto and an Option Agreement dated as of March 31,
1995 by and among Ocean State and certain limited
partners of the Partnership set forth on Schedule A
thereto. Any default by Maker of any Partnership Note
may be waived by the holders of a majority in interest of
the aggregate principal amount outstanding of such
Partnership Notes at the time of default. However, no
waiver by the holder of any breach hereof or default
hereunder shall be deemed a waiver of any preceding or
succeeding breach or default, and no failure of the
holder to exercise any right or privilege hereunder shall
be deemed a waiver of the holder's right to exercise the
same or any other right or privilege at any subsequent
time or times.
8. Governing Law. This Note shall be
governed by the law of the State of New York without
giving effect to the principles of conflicts of law
thereof.
9. Jury Trial. By acceptance of this Note,
to the extent permitted by law, Maker and Payee hereby
waive jury trial.
IN WITNESS WHEREOF, Maker has caused this Note
to be executed in its corporate name by the signature of
its duly authorized officer or representative on the date
first above written.
AMERICAN BILTRITE INC.
By_________________________
Name:
Title:
ATTEST:
______________________
WILBUR A. COWETT INCORPORATED
AGREEMENT AND PLAN OF MERGER
by and among
AMERICAN BILTRITE INC.,
ZIRCONIA ACQUISITION CO., INC.,
WILBUR A. COWETT INCORPORATED
and
WILBUR A. COWETT
dated May 3, 1995
ARTICLE I
THE MERGER AND RELATED MATTERS
1.1. General; Voting Rights . . . . . . . . . . . . . . 1
1.2. Delivery of Consideration . . . . . . . . . . . . . 2
1.3. Conversion of Company Stock . . . . . . . . . . . . 2
1.4. Surviving Corporation . . . . . . . . . . . . . . . 3
1.5. Effects of the Merger . . . . . . . . . . . . . . . 3
1.6. Organizational Documents . . . . . . . . . . . . . 3
1.7. Directors and Officers . . . . . . . . . . . . . . 3
1.8. Effective Time . . . . . . . . . . . . . . . . . . 4
1.9. Tax Consequences . . . . . . . . . . . . . . . . . 4
1.10. Closing . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER
2.1. Corporate Organization . . . . . . . . . . . . . . 5
2.2. Authorization . . . . . . . . . . . . . . . . . . . 5
2.3. Capitalization and Ownership of Company Shares . . 6
2.4. Company's Assets . . . . . . . . . . . . . . . . . 6
2.5. Balance Sheet . . . . . . . . . . . . . . . . . . . 6
2.6. Subordinated Promissory Notes . . . . . . . . . . . 7
2.7. Tax Returns . . . . . . . . . . . . . . . . . . . . 7
2.8. Ownership of Partnership Interest . . . . . . . . . 7
2.9. Consents and Approvals; Non-Contravention . . . . . 7
2.10. Access to Parent Information . . . . . . . . . . . 8
2.11. Stockholder's Status and Investment Intent . . . . 8
2.12. Tax-Free Reorganization Treatment . . . . . . . . . 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
3.1. Corporate Organization . . . . . . . . . . . . . . 10
3.2. Authorization . . . . . . . . . . . . . . . . . . . 10
3.3. Authorization and Issuance of ABI Shares . . . . . 10
3.4. Consents and Approvals; Non-Contravention . . . . . 11
3.5. Tax-Free Reorganization Treatment . . . . . . . . . 11
ARTICLE IV
COVENANTS OF THE PARTIES
4.1. Conduct of Business Pending the Closing . . . . . . 12
4.2. Listing on American Stock Exchange . . . . . . . . 12
4.3. Related Agreements and Instruments . . . . . . . . 12
ARTICLE V
CONDITIONS TO THE OBLIGATIONS OF PARENT
5.1. Representations and Warranties . . . . . . . . . . 13
5.2. Performance . . . . . . . . . . . . . . . . . . . . 13
5.3. Officer's Certificate . . . . . . . . . . . . . . . 13
5.4. No Injunction . . . . . . . . . . . . . . . . . . . 13
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF STOCKHOLDER
6.1. Representations and Warranties . . . . . . . . . . 13
6.2. Performance . . . . . . . . . . . . . . . . . . . . 14
6.3. Officer's Certificate . . . . . . . . . . . . . . . 14
6.4. No Injunction . . . . . . . . . . . . . . . . . . . 14
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1. Securities Legend; Stop Transfer Instructions . . . 14
7.2. Further Assurances . . . . . . . . . . . . . . . . 15
7.3. Access to Information . . . . . . . . . . . . . . . 15
ARTICLE VIII
EMPLOYEE BENEFIT MATTERS
8.1. Benefit Plans . . . . . . . . . . . . . . . . . . . 15
8.2. Employees . . . . . . . . . . . . . . . . . . . . . 16
8.3. Group Health Plans -- COBRA . . . . . . . . . . . . 17
8.4. The Company's DB Plan . . . . . . . . . . . . . . . 17
ARTICLE IX
SURVIVAL AND INDEMNIFICATION
9.1. Survival . . . . . . . . . . . . . . . . . . . . . 18
9.2. Indemnification . . . . . . . . . . . . . . . . . . 18
9.3. Procedure for Indemnification . . . . . . . . . . . 19
ARTICLE X
GENERAL PROVISIONS
10.1. Amendment and Waiver . . . . . . . . . . . . . . . 20
10.2. Expenses . . . . . . . . . . . . . . . . . . . . . 20
10.3. Notices . . . . . . . . . . . . . . . . . . . . . 21
10.4. Entire Agreement; Binding Effect . . . . . . . . . 21
10.5. Applicable Law . . . . . . . . . . . . . . . . . . 22
10.6. Parties in Interest . . . . . . . . . . . . . . . 22
10.7. Counterparts . . . . . . . . . . . . . . . . . . . 22
10.8. Headings; Pronouns and Conjunctions . . . . . . . 22
10.9. Severability . . . . . . . . . . . . . . . . . . . 22
Exhibit A -- Form of Certificate of Merger
Schedule A -- Conduct of Business Pending the Closing
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made and
entered into this 3rd day of May, 1995, by and among
American Biltrite Inc., a Delaware corporation ("Parent"),
Zirconia Acquisition Co., Inc., a New York corporation and a
wholly owned subsidiary of Parent ("SUB"), Wilbur A. Cowett
Incorporated, a New York corporation (the "Company") and
Wilbur A. Cowett ("Stockholder").
WHEREAS, the Company is a limited partner of K&M
Associates L.P., a Rhode Island limited partnership (the
"Partnership"); and
WHEREAS, Stockholder is the owner of 2,000 shares
of the Company's Class A Common Stock, par value $10.00 per
share (the "Class A Stock") and 500 shares of the Company's
Class B Common Stock, par value $10.00 per share (the "Class
B Stock" and together with the Class A Stock, the "Company
Stock"), which represents all of the issued and outstanding
capital stock of the Company; and
WHEREAS, Parent desires to acquire the Company upon
the terms and subject to conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the foregoing
and the respective representations, warranties, covenants and
agreements hereinafter set forth, and intending to be legally
bound hereby, the parties hereto agree as follows:
ARTICLE I
THE MERGER AND RELATED MATTERS
1.1. General; Voting Rights. This Agreement and
the form of Certificate of Merger attached hereto as Exhibit
A provide for a merger (the "Merger") of the Company with and
into SUB. In the Merger, it is contemplated that the then
outstanding shares of the Company Stock will be converted at
the Effective Time (as hereinafter defined) into the right to
receive, at the Closing (as hereinafter defined), the
Consideration (as hereinafter defined). The Company's
Certificate of Incorporation provides that the holders of
Class B Stock possess sole voting power for the election of
directors and for all other purposes, except as otherwise
provided by the New York Business Corporate Law ("NYBCL").
1.2. Delivery of Consideration. Subject to the
terms and conditions of this Agreement, in reliance on the
representations, warranties, covenants and agreements of
Stockholder contained herein, at the Closing, Parent shall
deliver to Stockholder the consideration (the
"Consideration") in an amount equal to the sum of the
following: (a) $1,176,523.55, plus (b) $700,000, representing
the aggregate principal amount outstanding under three (3)
separate subordinated promissory notes originally issued by
the Partnership to Stockholder on March 31, 1989, March 31,
1992 and March 31, 1993, respectively (the "Subordinated
Promissory Notes"), plus (c) the amount of the Company's cash
assets in excess of liabilities (which assets and
liabilities, for purposes of determining the amount of the
Consideration, shall be determined without reference to any
tax liability of the Company attributable to its ownership of
a profits interest in the Partnership subsequent to March 31,
1995 and to any Special Return allocable to it under the
Amended and Restated Agreement of Limited Partnership of the
Partnership subsequent to March 31, 1995), as of the
Effective Time, plus (d) an amount equal to the sum of the
amounts computed on the basis of a 360-day year of 30-day
months for each month commencing April 1, 1995 through the
Effective Time by multiplying $1,176,523.55 by one-twelfth of
a percentage equal to 1% greater than the annual base lending
rate charged by The First National Bank of Boston on the last
business day of each such month. The Consideration shall be
paid in the form of shares (the "ABI Shares") of Parent's
common stock, no par value per share ("ABI Common Stock"),
issued in the name of Stockholder, having a value equal to
57% of the Consideration (rounded to the nearest whole share)
and cash in an amount equal to the balance of the
Consideration (the "Cash Portion of the Purchase Price").
For purposes of determining the number of ABI Shares
representing 57% of the Consideration, the value of the ABI
Shares shall be based upon the average of the high and low
prices of such shares on the American Stock Exchange as
reported by The Wall Street Journal for the 15 trading days
immediately preceding the Effective Time on which there is
trading in ABI Common Stock on the American Stock Exchange.
1.3. Conversion of Company Stock. The shares of
Company Stock issued and outstanding immediately prior to the
Effective Time other than shares of Company Stock which are
held by the Company or by Parent or any subsidiary of Parent
(which shares will be cancelled at the Effective Time) shall,
by virtue of this Agreement and without any action on the
part of the holder thereof, be converted into the right to
receive the Consideration.
1.4. Surviving Corporation. In accordance with
the provisions of this Agreement and the NYBCL, at the
Effective Time, the Company shall be merged with and into
SUB, and SUB shall be the surviving corporation (the
"Surviving Corporation") and shall continue its corporate
existence under the laws of the State of New York. At the
Effective Time, the name of the Surviving Corporation shall
be changed to WCI Incorporated. The separate corporate
existence of the Company shall terminate at the Effective
Time.
1.5. Effects of the Merger. The Merger shall have
the effects set forth in the NYBCL. Without limiting the
generality of the foregoing, and subject thereto, at the
Effective Time, all the properties, rights, privileges,
powers and franchises of the Company and SUB shall vest in
the Surviving Corporation, and all debts, liabilities and
duties of the Company and SUB shall become the debts,
liabilities and duties of the Surviving Corporation.
1.6. Organizational Documents. The Certificate of
Incorporation of SUB, as in effect at the Effective Time,
shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter amended as provided by law,
except that Article 1 of such Certificate of Incorporation
shall be amended to change the name from Zirconia Acquisition
Co., Inc. to WCI Incorporated. The By-Laws of SUB, as in
effect immediately prior to the Effective Time, shall be the
By-Laws of the Surviving Corporation, until amended as
provided by law and the express terms of the By-Laws. At the
Closing, Stockholder or the Company shall deliver or cause to
be delivered to Parent the stock book, stock ledger, minute
book and corporate seal, if any, of the Company.
1.7. Directors and Officers. The directors and
officers of the Surviving Corporation shall consist of the
directors and officers of SUB immediately prior to the
Effective Time, each to hold office in accordance with NYBCL,
the Certificate of Incorporation of the Surviving Corporation
and the By-Laws of the Surviving Corporation.
1.8. Effective Time. The Merger shall be effected
by the filing of the Certificate of Merger by the Department
of State of the State of New York on August 31, 1995. The
term "Effective Time" shall be the date when the Merger
becomes effective.
1.9. Tax Consequences. It is intended that the
Merger shall constitute a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code") and that this Agreement shall constitute
a "plan of reorganization" for the purposes of Section 368 of
the Code.
1.10. Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take
place at the offices of Skadden, Arps, Slate, Meagher & Flom,
919 Third Avenue, New York, New York, at 10:00 A.M., local
time, within 5 business days after Stockholder's delivery to
Parent of a balance sheet for the Company as of the Effective
Time (the "Balance Sheet"), which Balance Sheet shall be
delivered by Stockholder to Parent within 15 days after the
Effective Time, or at such other time and place as may be
agreed upon by the parties. The time and date of the Closing
is sometimes referred to herein as the "Closing Date." At
the Closing, Parent shall deliver to Stockholder, in addition
to the Consideration, cash in an amount equal to the sum of
(a) interest from the Effective Time to the Closing Date with
respect to the Cash Portion of the Purchase Price computed on
the basis of a 360-day year of 30-day months at an annual
rate equal to the base lending rate charged by The First
National Bank of Boston, as in effect at the Effective Time,
and (b) an amount equal to any dividends which would have
been payable by Parent with respect to the ABI Shares had
Stockholder been the holder of record of the ABI Shares as of
the Effective Time, but which were not payable to Stockholder
because the record date for such dividends falls between the
Effective Time and the date on which the ABI Shares are
issued to Stockholder.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER
Stockholder hereby represents and warrants to
Parent and SUB as follows:
2.1. Corporate Organization. The Company is a
corporation duly organized, validly existing and in good
standing under the laws of the State of New York and has the
corporate power and authority to own or lease its properties
and to carry on its business as it is presently being
conducted. The copies of the Certificate of Incorporation
and By-Laws of the Company heretofore delivered to Parent are
complete and correct copies of such instruments as presently
in effect.
2.2. Authorization.
(a) Stockholder has the requisite capacity to
enter into this Agreement and the other agreements, documents
or instruments to be executed and delivered by Stockholder
pursuant hereto (the "Additional Stockholder's Documents")
and to carry out the transactions contemplated hereby and
thereby. When fully executed and delivered, this Agreement
and each of the Additional Stockholder's Documents will
constitute the valid and binding agreements of Stockholder,
enforceable against Stockholder in accordance with their
respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and by
general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at
law).
(b) The Company has full corporate power and
authority to enter into this Agreement and the other
documents or instruments to be executed and delivered by the
Company pursuant hereto (the "Additional Company Documents")
and to carry out the transactions contemplated hereby and
thereby. The Board of Directors and sole stockholder of the
Company have taken all action required by law, the Company's
Certificate of Incorporation, its By-Laws or otherwise to be
taken by each of them to authorize the execution and delivery
of this Agreement and the Additional Company Documents and
the consummation of the transactions contemplated hereby and
thereby. When fully executed and delivered, this Agreement
and the Additional Company Documents will constitute the
valid and binding agreements of the Company, enforceable
against the Company in accordance with their respective
terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and by
general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at
law).
2.3. Capitalization and Ownership of Company
Shares. As of the date and time of execution of this
Agreement, the authorized capital stock of the Company
consists of 2,500 shares (the "Company Shares") of Company
Stock, all of which are issued and outstanding. Stockholder
has good and valid title to the Company Shares, which are
issued of record to him. All issued and outstanding Company
Shares have been validly issued, are fully paid and
nonassessable and free and clear of any mortgage, pledge,
security interest, encumbrance, lien, claim or charge of any
kind or right of others of whatever nature ("Liens"),
preemptive rights or other restrictions with respect thereto.
There are no securities outstanding which are convertible
into or exercisable or exchangeable for shares of capital
stock of the Company, and there are no outstanding options,
rights, contracts, warrants, subscriptions, conversion rights
or other agreements or commitments pursuant to which the
Company may be required to purchase, redeem, issue or sell
any shares of capital stock or other securities of the
Company or in any way relating to the issuance or voting of
any capital stock or other securities of the Company.
2.4. Company's Assets. As of the Effective Time,
the cash assets of the Company, before taking into account
the Company's interest in the Partnership (including its
profits interest and capital account) and the Subordinated
Promissory Notes, will exceed its liabilities.
2.5. Balance Sheet. The Balance Sheet will fairly
present the financial position of the Company and will be
prepared in conformity with generally accepted accounting
principles, applied on a consistent basis. Other than those
liabilities which are accrued or reserved against or
disclosed in the Balance Sheet, there will be no liabilities
or obligations of the Company.
2.6. Subordinated Promissory Notes. The Company
owns the Subordinated Promissory Notes, free and clear of any
Liens or other restrictions. To the best of Stockholder's
knowledge, the Notes are valid and binding and enforceable
against the Partnership in accordance with their respective
terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and by
general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at
law).
2.7. Tax Returns. All tax (or similar) returns
required to be filed by the Company on or before the
Effective Time in any jurisdiction have been or will be
timely filed by the Effective Time, other than those filings
being contested in good faith and for which adequate reserves
with respect thereto are maintained on the books of the
Company in accordance with generally accepted accounting
principles, and all taxes, including withholding taxes,
penalties and interest, assessments, fees and other charges
due or claimed to be due from the Company have been paid,
other than those being contested in good faith and for which
adequate reserves have been provided or those currently
payable without penalty or interest.
2.8. Ownership of Partnership Interest. The
Company has good and valid title to its interest in the
Partnership, free and clear of any Liens or other
restrictions, except those, if any, set forth in the
Partnership Agreement.
2.9. Consents and Approvals; Non-Contravention.
Neither the execution, delivery or performance of this
Agreement or of any of the Additional Stockholder's
Documents, nor the consummation by Stockholder or the Company
of the transactions contemplated hereby or thereby, nor
compliance by Stockholder or the Company with any of the
provisions hereof or thereof will (a) violate or conflict
with any provision of the Certificate of Incorporation or By-
Laws of the Company, (b) to the best knowledge of
Stockholder, require any filing with, or permit,
authorization, consent or approval of, any court, arbitral
tribunal, administrative agency or commission or other
governmental or regulatory authority or agency (a
"Governmental Entity"), (c) require any consent, approval or
authorization under any contract, lease or other agreement,
(d) to the best knowledge of Stockholder, violate any order,
writ, injunction, decree, statute, rule or regulation
applicable to Stockholder or the Company or any of their
respective properties or assets or (e) result in a violation
or breach of, or constitute (with or without notice or lapse
of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration or any
loss of a material benefit) under, or result in the creation
or imposition of (or the obligation to create or impose) any
Lien upon any of the respective properties or assets of
Stockholder or the Company under, any note, bond, mortgage,
indenture, lease, license, contract, agreement or other
instrument or obligation to which Stockholder or the Company
is a party or by which Stockholder or the Company or any of
their respective properties or assets may be bound, except,
in the case of clauses (c) or (e), for such consents,
approvals or authorizations or violations, breaches, defaults
or Liens which would not materially impair the ability of
Stockholder to perform his obligations hereunder and which
would not, either individually or in the aggregate, have a
material adverse effect on the Company.
2.10. Access to Parent Information. Stockholder
has been furnished by Parent during the course of this
transaction with all information regarding Parent which he
had requested. All documents that have been reasonably
requested by Stockholder have been made available for
Stockholder or Stockholder's counsel's inspection and review.
Stockholder has been afforded the opportunity to ask
questions of and receive answers from duly authorized
officers or other representatives of Parent concerning the
terms and conditions of the issuance and delivery of the ABI
Shares to him by Parent in the Merger. Any other additional
information which he has requested has been provided.
2.11. Stockholder's Status and Investment Intent.
Stockholder is an accredited investor within the meaning of
Rule 501(a) of Regulation D promulgated under the Securities
Act of 1933, as amended (the "Securities Act"). The ABI
Shares being issued and delivered to Stockholder hereunder
are being acquired for his own account, for investment for an
indefinite period of time, not as nominee or agent for any
other person, firm or corporation and not for distribution or
resale to others.
2.12. Tax-Free Reorganization Treatment. In
connection with the intended treatment of the Merger as a
reorganization within the meaning of Section 368(a) of the
Code:
(a) Stockholder has no plan or intention to
sell, exchange or otherwise dispose of a number of ABI Shares
that would reduce Stockholder's ownership of ABI Common Stock
to a number of ABI Shares having a value, as of the Effective
Time, of less than 50% of the value of the outstanding
Company Shares immediately prior to the Effective Time. For
purposes of this representation, Company Shares exchanged for
cash or other property in the Merger will be treated as
outstanding Company Shares immediately prior to the Effective
Time. Moreover, Company Shares and shares of ABI Common
Stock held by Stockholder and otherwise sold, redeemed or
disposed of prior or subsequent to the Merger will be
considered in making this representation;
(b) Following the Merger, SUB will hold at
least 90% of the fair market value of the net assets and at
least 70% of the fair market value of the gross assets owned
by the Company immediately prior to the Merger. For purposes
of this representation, cash or other property paid by the
Company to Stockholder, amounts used by the Company to pay
Merger expenses, and all redemptions and distributions
(except for regular, normal dividends) made by the Company,
if any, will be included as assets of the Company immediately
prior to the Merger;
(c) Any liabilities of the Company assumed by
SUB in the Merger and any liabilities to which the assets of
the Company transferred in the Merger are subject have been
incurred by the Company in the ordinary course of its
business;
(d) The Company has no plan or intention to
issue additional Company Shares that would result in Parent
losing control of the Company within the meaning of Section
368(c)(1) of the Code;
(e) At the Effective Time, the Company will
not have outstanding any warrants, options, convertible
securities or any other type of right pursuant to which any
person could acquire Company Shares that, if exercised or
converted, would affect Parent's acquisition or retention of
control of the Company, as defined in Section 368(c)(1) of
the Code; and
(f) There is no intercorporate indebtedness
between the Company and Parent that was issued, acquired or
settled at a discount.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents and warrants to
Stockholder as follows:
3.1. Corporate Organization. Parent is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. SUB is a
corporation duly organized, validly existing and in good
standing under the laws of the State of New York. The copies
of the Certificate of Incorporation and By-Laws of SUB
heretofore delivered to Stockholder are complete and correct
copies of such instruments as presently in effect.
3.2. Authorization. Parent and SUB each has the
requisite corporate power and authority to enter into this
Agreement and the other agreements, documents or instruments
to be executed and delivered by Parent or SUB pursuant hereto
(the "Additional Parent's Documents") and to carry out the
transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement and the Additional
Parent's Documents and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by
the Board of Directors of Parent and SUB and the sole
stockholder of SUB, and no other corporate proceedings on the
part of Parent and, where applicable, SUB or their respective
stockholders are necessary to authorize the execution and
delivery of this Agreement and the Additional Parent's
Documents and the consummation of the transactions
contemplated hereby and thereby. When fully executed and
delivered, this Agreement and each of the Additional Parent's
Documents will constitute the valid and binding agreements of
Parent and, where applicable, SUB, enforceable against Parent
and SUB, respectively, in accordance with their respective
terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and by
general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at
law).
3.3. Authorization and Issuance of ABI Shares.
The issuance of the ABI Shares has been duly authorized by
Parent and, upon delivery to Stockholder of the certificates
therefor in accordance with Article I hereof, the ABI Shares
will be validly issued, fully paid and nonassessable, free
and clear of all Liens and restrictions other than the
restrictions imposed herein or by the Securities Act and the
rules and regulations promulgated thereunder.
3.4. Consents and Approvals; Non-Contravention.
None of the execution, delivery or performance of this
Agreement or any of the Additional Parent's Documents by
Parent, the consummation by Parent of the transactions
contemplated hereby or thereby and compliance by Parent with
any of the provisions hereof or thereof will (a) violate or
conflict with any provision of the Restated Certificate of
Incorporation or By-Laws, as amended and restated of Parent,
(b) to the best knowledge of Parent, require any filing with,
or permit, authorization, consent or approval of, any
Governmental Entity, (c) require any consent, approval or
authorization under any contract, lease or other agreement,
(d) to the best knowledge of Parent, violate any order, writ,
injunction, decree, statute, rule or regulation applicable to
Parent or SUB or any of their respective properties or assets
or (e) result in a violation or breach of, or constitute
(with or without notice or lapse of time or both) a default
(or give rise to any right of termination, amendment,
cancellation or acceleration or any loss of a material
benefit) under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien upon any of
the respective properties or assets of Parent or SUB under,
any note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation to
which Parent or SUB is a party or by which Parent or SUB or
any of their respective properties or assets may be bound,
except, in the case of clauses (c) or (e), for such consents,
approvals or authorizations or violations, breaches, defaults
or Liens which would not materially impair the ability of
Parent or SUB to perform their obligations hereunder and
which would not, either individually or in the aggregate,
have a material adverse effect on Parent.
3.5. Tax-Free Reorganization Treatment. In
connection with the intended treatment of the Merger as a
reorganization within the meaning of Section 368(a) of the
Code:
(a) Prior to the Merger, Parent will be in
control of SUB within the meaning of Section 368(c)(1) of the
Code;
(b) Following the Merger, SUB will not issue
additional shares of its stock that would result in Parent
losing control of SUB within the meaning of Section 368(c)(1)
of the Code;
(c) Parent has no plan or intention to
reacquire any of the ABI Shares issued in the Merger;
(d) Parent has no plan or intention to
liquidate SUB, to merge SUB with or into another corporation,
to sell or otherwise dispose of the stock of SUB, or to cause
SUB to sell or otherwise dispose of any of the Company's
assets acquired in the Merger, except for dispositions made
in the ordinary course of business or transfers of assets
described in Section 368(a)(2)(C) of the Code;
(e) Following the Merger, SUB will continue
the Company's historic business or use a significant portion
of the Company's business assets in a business; and
(f) There is no intercorporate indebtedness
between Parent and Sub that was issued, acquired or will be
settled at a discount.
ARTICLE IV
COVENANTS OF THE PARTIES
4.1. Conduct of Business Pending the Closing.
During the period from the date of this Agreement through the
Closing, other than as set forth on Schedule A attached
hereto, the Company shall not enter into any executory
contracts extending beyond the Effective Time, unless
otherwise agreed to in writing by Parent.
4.2. Listing on American Stock Exchange. The ABI
Shares shall be listed on the American Stock Exchange, upon
official notice of issuance.
4.3. Related Agreements and Instruments. On the
Closing Date, each of the parties shall deliver or cause to
be delivered to the other parties such other instruments and
documents as may be reasonably necessary to carry out the
transactions contemplated by this Agreement and to comply
with the terms hereof.
ARTICLE V
CONDITIONS TO THE OBLIGATIONS OF PARENT
The obligations of Parent under this Agreement to
consummate the transactions contemplated by this Agreement
are subject to satisfaction, on or before the Closing, of
each of the following conditions, unless waived in writing by
Parent:
5.1. Representations and Warranties. The
representations and warranties of Stockholder contained in
Article II shall be true, complete and correct as of the date
when made and at and as of the Effective Time as though such
representations and warranties were made at and as of such
date.
5.2. Performance. Stockholder shall have
performed and complied with all covenants and agreements
required by this Agreement to be performed or complied with
by him on or prior to the Closing.
5.3. Officer's Certificate. Stockholder shall
have delivered to Parent a certificate, dated the Closing
Date, certifying, to the best of his knowledge, to the
fulfillment of the conditions specified in Sections 5.1 and
5.2.
5.4. No Injunction. Stockholder shall not be
prohibited by any order, judgment, writ, injunction, decree,
statute, rule or regulation of any court or other regulatory
or administrative agency or commission of competent
jurisdiction from consummating the transactions contemplated
by this Agreement.
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF STOCKHOLDER
The obligations of Stockholder under this Agreement
to consummate the transactions contemplated by this Agreement
are subject to satisfaction, on or before the Closing, of
each of the following conditions, unless waived in writing by
Stockholder:
6.1. Representations and Warranties. The
representations and warranties of Parent contained in Article
III shall be true, complete and correct as of the date when
made and at and as of the Effective Time as though such
representations and warranties were made at and as of such
date.
6.2. Performance. Parent shall have performed and
complied with all covenants and agreements required by this
Agreement to be performed or complied with by it on or prior
to the Closing.
6.3. Officer's Certificate. Parent shall have
delivered to Stockholder a certificate, dated the Closing
Date and signed by its president or vice president,
certifying, to the best of such officer's knowledge, to the
fulfillment of the conditions specified in Sections 6.1 and
6.2.
6.4. No Injunction. Parent shall not be
prohibited by any order, judgment, writ, injunction, decree,
statute, rule or regulation of any court or other regulatory
or administrative agency or commission of competent
jurisdiction from consummating the transactions contemplated
by this Agreement.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1. Securities Legend; Stop Transfer
Instructions. Stockholder agrees that he will not sell or
otherwise transfer his ABI Shares unless they are registered
under the Securities Act or unless an exemption from such
registration is available. Stockholder consents to the
placement of a legend on any certificate or other document
evidencing his ABI Shares, stating that such ABI Shares have
not been registered under the Securities Act or any state
securities or "blue sky" laws and setting forth or referring
to the restrictions on transferability and sale thereof,
including the restrictions set forth herein. Stockholder is
aware that Parent will make a notation in its appropriate
records with respect to the restrictions on the
transferability of such ABI Shares. Stockholder also
consents and acknowledges that "stop transfer" instructions
may be noted against the ABI Shares received by him
hereunder. Parent hereby undertakes to remove any legend
described in this Section 7.1 or to rescind any "stop
transfer" instructions described in this Section 7.1 if
Stockholder shall have furnished the Company with an opinion
of Fulbright & Jaworski L.L.P. or other counsel reasonably
satisfactory to Parent or other written information, in each
case, reasonably satisfactory in form and content to Parent
that such legend or any such instructions are no longer
required (as applicable) or (b) with respect to and at the
time of the disposition of any such ABI Shares pursuant to an
effective registration statement under the Securities Act.
7.2. Further Assurances. From time to time after
the Closing, and at the request of any party hereto and
without further consideration, any other party shall execute
and deliver to the requesting party such documents and take
such other action as the requesting party may reasonably
request in order to consummate more effectively the
transactions contemplated hereby.
7.3. Access to Information. From time to time
after the Closing, Parent shall afford to Stockholder or his
authorized representatives reasonable access to all of the
books, records, tax returns, reports and other tax-related
materials pertaining to the Company in respect of periods
ending on or before the Effective Time.
ARTICLE VIII
EMPLOYEE BENEFIT MATTERS
Stockholder hereby represents, warrants, covenants and
agrees with Parent and Sub as follows:
8.1. Benefit Plans.
(a) The only pension plans (within the
meaning of Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) maintained or
contributed to by the Company are the Wilbur A. Cowett
Incorporated Defined Contribution Pension Plan (the "DC
Plan") and the Wilbur A. Cowett Incorporated Defined Benefit
Pension Plan (the "DB Plan"). Prior to the Effective Time,
the Company will cause the DC Plan (including all assets and
liabilities thereof) to be assumed by WILARCO, INC., an
affiliate of the Company. Except as specifically provided
herein with respect to the DB Plan, neither Parent nor SUB
assumes or will assume sponsorship of, or responsibility for
contributions to, or liability in respect of any employee
benefit plans, contracts or arrangements of any type
described in Section 3(3) of ERISA which are or were in
effect for the benefit of any current or former employee of
the Company (or beneficiaries of any such employee). Each of
such employee benefit plans, contracts or arrangements is
herein referred to as an "Employee Plan."
(b) With respect to the DB Plan, (1) the
Company has delivered or, prior to the Effective Time, will
deliver, to Parent true, correct and complete copies of (A)
the plan document and related trust agreement, (B) the most
recent annual report (5500 series) filed with the Internal
Revenue Service ("IRS") and (C) the most recent determination
letter issued by the IRS with respect to plan qualification;
and (2) the Stockholder represents that (A) the plan is
covered by a favorable determination letter with respect to
its qualified status; (B) the plan has been amended and
restated in order to comply with the applicable requirements
of the Tax Reform Act of 1986 ("TRA '86"), and subsequent
amendments of the Code through and including the Code
amendments made by the Unemployment Compensation Amendments
and the Omnibus Budget Reconciliation Act of 1993; (C) an
application for an IRS determination letter as to the
qualified status of the DB Plan will be submitted before the
expiration of the TRA '86 remedial amendment period; (D) to
the best knowledge of Stockholder, no prohibited transactions
(as defined in Section 406 of ERISA or Section 4975 of the
Code) have occurred; (E) there has been no accumulated
funding deficiency within the meaning of Section 302(a)(2) of
ERISA or Section 412 of the Code, whether or not waived; (F)
the plan has been administered in all material respects in
accordance with its terms and the provisions of applicable
law; (G) no event has occurred and no circumstance exists or
is expected to occur or exist under which the Company or any
other person has incurred or may incur, directly or
indirectly, liability under the provisions of Title IV of
ERISA; and (H) no actions, suits or claims (other than claims
for benefits) are pending, threatened or imminent against the
Company or any fiduciary (as defined in Section 3(21) of
ERISA) of the plan.
8.2. Employees. Effective immediately prior to
the Effective Time, the Company will cause the termination of
employment of all of its employees. The Company neither is
nor was a party to any collective bargaining agreement
covering the employment of its employees, and the Company has
not maintained or contributed to a multi-employer plan
(within the meaning of Section 3(37) of ERISA).
8.3. Group Health Plans -- COBRA. With respect to
each Employee Plan which is a group health plan within the
meaning of Section 5001(b)(1) of the Code, the Company has
complied with the provisions of Section 4980(B) of the Code.
8.4. The Company's DB Plan. Parent and Sub hereby
covenant and agree with Stockholder as follows:
(a) Subject to the provisions hereof, at the
Effective Time, SUB will assume sponsorship and the assets
and liabilities of the DB Plan. At the election of Parent,
the DB Plan assets and liabilities may be transferred (either
at or after the Effective Time) to a new or existing
qualified pension plan maintained by Parent or by another
member of Parent's controlled group (within the meaning of
Section 414(b) or (c) of the Code) in a transfer which
satisfies the requirements of Section 414(1) of the Code.
Parent shall take such actions as are necessary in order to
cause the qualified status of the DB Plan (or its successor)
under Section 401(a) of the Code to be maintained through the
date of distribution of the entire accrued benefit of
Margaret F. Cowett ("MFC"), which distribution shall be made
pursuant to subsection (b) of this Section 8.4. Parent and
the Company will cooperate fully with each other, and each of
them will execute and furnish such documents and take such
other and further action as may be reasonably requested by
the other in connection with the orderly and proper transfer
and assumption of the assets and liabilities of the DB Plan
as contemplated herein.
(b) The Company will cause the DB Plan to
process a lump sum distribution of MFC's DB accrued benefit,
of which all but at least $3,000 will be paid to or for the
benefit of MFC before the Effective Time; provided, however,
that, prior to the Effective Time, the following conditions
are satisfied: (1) MFC tenders her resignation as an employee
of the Company and (2) MFC duly elects to receive her DB Plan
accrued benefit in the form of a lump sum payment (the amount
of which will be determined by The Segal Company pursuant to
the provisions of the DB Plan and applicable law). Parent
will cause the DB Plan (or its successor) on or before
December 31, 1995 to satisfy the unpaid portion of MFC's DB
Plan accrued benefit in accordance with MFC's pre-Effective
Time election, or, if no such election is made, in accordance
with the provisions of the DB Plan (as in effect immediately
before the Effective Time).
ARTICLE IX
SURVIVAL AND INDEMNIFICATION
9.1. Survival. All representations, warranties,
covenants and agreements contained in this Agreement shall
survive the Closing for the applicable statute of limitations
period.
9.2. Indemnification.
(a) Stockholder agrees to indemnify and hold
harmless Parent and its subsidiaries and affiliates and their
respective officers, directors, employees and agents against
and in respect of any loss, liability (including, without
limitation, any liability for taxes of the Company due or
claimed to be due in respect to periods ending on or before
the Closing Date other than taxes attributable to the
Company's ownership of an interest as a Limited Partner of
the Partnership subsequent to March 31, 1995), damage,
demand, claim, cost, suit, action or cause of action,
judgment, award, assessment, interest, penalty or expense
(including without limitation, reasonable expenses of
investigation and reasonable attorneys' or consultants'
fees), net of any tax benefits, insurance proceeds or
settlement proceeds received in connection therewith
(individually a "Loss" and collectively "Losses"), (i) of or
against the Company arising prior to the Effective Time or in
connection with any action or event occurring on or prior to
the Effective Time other than Losses of or against the
Partnership, or (ii) otherwise incurred or sustained by any
of them as a result of a breach by Stockholder of the
representations, warranties, covenants and agreements
contained herein or in any document delivered pursuant hereto
or in connection herewith, provided that Stockholder shall
not be liable for any amount in excess of the Consideration
and the principal amount of debt of the Company assumed by
Parent, if any.
(b) Parent agrees to indemnify and hold
harmless Stockholder against and in respect of any Losses
incurred or sustained by him as a result of a breach by
Parent of the representations, warranties, covenants and
agreements contained herein or in any document delivered
pursuant hereto or in connection herewith, provided that
Parent shall not be liable for any amount in excess of the
Consideration.
9.3. Procedure for Indemnification.
(a) Any person or entity entitled to assert a
claim for indemnification under this Agreement (the
"Indemnitee") shall give prompt written notice to the
indemnifying party (the "Indemnitor") of any claim or event
known to it which does or may give rise to a claim for
indemnification hereunder by the Indemnitee against the
Indemnitor; provided that the failure of any Indemnitee to
give notice as provided in this Section 9.3 shall not relieve
the Indemnitor of its obligations under this Article IX,
except to the extent that such failure has materially and
adversely affected the rights of the Indemnitor. In the case
of any claim for indemnification hereunder arising out of a
claim, action, suit or proceeding brought by any Person who
is not a party to this Agreement (a "Third Party Claim"), the
Indemnitee shall also give the Indemnitor copies of any
written claims, process or legal pleadings with respect to
such Third Party Claim promptly after such documents are
received by the Indemnitee.
(b) An Indemnitor may elect to compromise or
defend, at such Indemnitor's own expense and by such
Indemnitor's own counsel, any Third Party Claim. If an
Indemnitor elects to compromise or defend a Third Party
Claim, it shall, within 30 days of the date of its receipt of
the notice provided pursuant to Section 9.3(a) hereof (or
sooner, if the nature of such Third Party Claim so requires),
notify the Indemnitee of its intent to do so, and the
Indemnitee shall reasonably cooperate in the compromise of,
or defense against, such Third Party Claim. The Indemnitor
shall pay the Indemnitee's actual out-of-pocket expenses
incurred in connection with such cooperation. After notice
from an Indemnitor to an Indemnitee of its election to assume
the defense of a Third Party Claim, the Indemnitor shall not
be liable to the Indemnitee under this Article IX for any
legal expenses subsequently incurred by the Indemnitee in
connection with the defense thereof; provided that the
Indemnitee shall have the right to employ one counsel of its
choice in each applicable jurisdiction (if more than one
jurisdiction is involved) to represent the Indemnitee if, in
the Indemnitee's reasonable judgment, a conflict of interest
between the Indemnitee and the Indemnitor exists in respect
of such claim, and in that event the fees and expenses of
such separate counsel shall be paid by the Indemnitor. If an
Indemnitor elects not to compromise or defend against a Third
Party Claim, or fails to notify an Indemnitee of its election
as provided in this Section 9.3, the Indemnitee may
negotiate, pay, compromise or defend such Third Party Claim
on behalf of and for the account and risk of the Indemnitor.
No Indemnitor shall consent to entry of any judgment or enter
into any settlement without the written consent of the
Indemnitee (which consent shall not be unreasonably
withheld), unless such judgment or settlement provides solely
for money damages or other money payments for which the
Indemnitee is entitled to indemnification hereunder and
includes as an unconditional term thereof the giving by the
claimant or plaintiff to the Indemnitee of a release from all
liability in respect of such Third Party Claim.
(c) Notwithstanding the rights of an
Indemnitor to elect to compromise or defend a Third Party
Claim in subparagraph (b) above, if there is a reasonable
likelihood that a Third Party Claim may have a material
adverse effect on an Indemnitee, other than as a result of
money damages or other money payments for which the
Indemnitee is entitled to indemnification hereunder, the
Indemnitee will have the right, after consultation with the
Indemnitor and at the cost and expense of the Indemnitor, to
defend such Third Party Claim.
ARTICLE X
GENERAL PROVISIONS
10.1. Amendment and Waiver. This Agreement may be
amended, modified or supplemented only by a written agreement
of the parties hereto. Any failure of any party to comply
with any obligation, agreement or condition hereunder may
only be waived in writing by the other parties, but such
waiver shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. No failure by
any party to take any action against any breach of this
Agreement or default by the other parties shall constitute a
waiver of such party's right to enforce any provision hereof
or to take any such action.
10.2. Expenses. Each of the parties hereto agrees
to pay all costs and expenses incurred by it in connection
with this Agreement and the transactions contemplated hereby,
including without limitation the fees of its counsel,
consultants and accountants.
10.3. Notices. All notices, requests and other
communications hereunder shall be in writing and shall be
deemed given if delivered personally, if sent by Federal
Express or other overnight courier or delivery service or if
mailed by registered or certified mail (postage prepaid,
return receipt requested) to the parties at the following
addresses (or to such other address for a party as shall be
specified by like notice):
(a) If to Parent, SUB or the Company:
c/o American Biltrite Inc.
57 River Street
Wellesley Hills, Massachusetts 02181
Attention: Richard G. Marcus
With a copy to:
Skadden, Arps, Slate, Meagher & Flom
One Beacon Street
Boston, Massachusetts 02108
Attention: Louis A. Goodman, Esq.
(b) If to Stockholder:
Wilbur A. Cowett
1040 Fifth Avenue
New York, New York 10028
With a copy to:
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, New York 10103
Attention: William Bush, Esq.
The address of a party, for the purposes of this Section
10.3, may be changed by giving written notice to the
other party of such change in the manner provided herein
for giving notice. Unless and until such written notice
is received, the addresses as provided herein shall be
deemed to continue in effect for all purposes hereunder.
10.4. Entire Agreement; Binding Effect. This
Agreement and the documents referred to herein (a)
constitute the entire agreement and supersede all other
agreements and understandings, both written and oral,
between the parties with respect to the subject matter
hereof and (b) shall not be assigned by either party (by
operation of law or otherwise) without the prior written
consent of the other party, except that Parent may
assign, in its sole discretion, any of its rights,
interests and obligations hereunder to any affiliate of
Parent; provided, however, that no such assignment shall
relieve Parent of its obligations hereunder.
10.5. Applicable Law. This Agreement shall
be governed by the laws of the State of New York
(without giving effect to the principles of conflicts of
laws thereof) as to all matters, including but not
limited to, matters of validity, construction, effect,
performance and remedies.
10.6. Parties in Interest. This Agreement
shall be binding upon and inure solely to the benefit of
each party hereto and, subject to Section 10.4(b)
hereof, their respective successors and assigns, and
nothing in this Agreement, express or implied, is
intended to confer upon any other Person any rights or
remedies of any nature whatsoever under or by reason of
this Agreement.
10.7. Counterparts. This Agreement may be
executed in two or more counterparts, each of which
shall be deemed an original, but all of which together
shall constitute one and the same instrument.
10.8. Headings; Pronouns and Conjunctions.
The section and other headings contained in this
Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this
Agreement. Unless otherwise indicated herein or the
context otherwise requires, the masculine pronoun shall
include the feminine and neuter and the singular shall
include the plural. The word "or" shall not be deemed
exclusive.
10.9. Severability. In case any term,
provision, covenant or restriction of this Agreement is
held to be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability
of the remaining terms, provisions, covenants or
restrictions, or of such term, provision, covenant or
restriction in any other jurisdiction, shall not in any
way be affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have
signed this Agreement as of the date first written
above.
AMERICAN BILTRITE INC.
By/s/Richard G. Marcus
________________________
Name: Richard G. Marcus
Title: President
ZIRCONIA ACQUISITION CO., INC.
By/s/Richard G. Marcus
________________________
Name: Richard G. Marcus
Title: President
WILBUR A. COWETT INCORPORATED
By/s/Wilbur A. Cowett
_________________________
Name: Wilbur A. Cowett
Title: President
Wilbur A. Cowett
_________________________
EXHIBIT A
CERTIFICATE OF MERGER
OF
ZIRCONIA ACQUISITION CO., INC.
AND
WILBUR A. COWETT INCORPORATED
INTO
ZIRCONIA ACQUISITION CO., INC.
UNDER SECTION 904 OF THE BUSINESS CORPORATION LAW
We, the undersigned, Richard G. Marcus and
Henry W. Winkleman, being respectively the President and
the Secretary of Zirconia Acquisition Co., Inc., and
Wilbur A. Cowett and Leonard M. Leiman, being
respectively the President and the Secretary of Wilbur A.
Cowett Incorporated, hereby certify:
1. (a) The name of each constituent
corporation is as follows:
Zirconia Acquisition Co., Inc.
Wilbur A. Cowett Incorporated.
(b) The name of the surviving corporation
is Zirconia Acquisition Co., Inc. and following the
merger its name shall be WCI Incorporated.
2. As to each constituent corporation, the
designation and number of outstanding shares of each
class and series and the voting rights thereof are as
follows:
Name of Outstanding Entitled to Vote
Corporation
Zirconia 1 share of Common 1 share of
Acquisition Co., Stock, par value Common Stock
Inc. $10 per share
2,000 shares of 2,000 shares of
Wilbur A. Cowett Class A Common Class A Common
Incorporated Stock, par value Stock
$10 per share
500 shares of 500 shares of
Class B Common Class B Common
Stock, par value Stock
$10 per share 500
3. The Certificate of Incorporation of
Zirconia Acquisition Co., Inc. as in effect immediately
prior to the filing of this Certificate of Merger shall
be the certificate of incorporation of the surviving
corporation until thereafter amended as provided by law,
except that Article 1 of such Certificate of
Incorporation shall be amended to change the name from
Zirconia Acquisition Co., Inc. to WCI Incorporated, such
change without further action of the stockholders of
Zirconia Acquisition Co., Inc. or the Surviving
Corporation.
4. The date when the certificate of
incorporation of each constituent corporation was filed
by the Department of State is as follows:
NAME OF CORPORATION DATE OF ADOPTION
Zirconia Acquisition Co., March 23, 1995
Inc.
Wilbur A. Cowett January 10, 1980
Incorporated
5. The merger was adopted by each constituent
corporation in the following manner:
(a) As to Zirconia Acquisition Co., Inc. by
the unanimous written consent of the shareholders.
(b) As to Wilbur A. Cowett Incorporated, by
the unanimous written consent of the shareholders.
IN WITNESS WHEREOF, we have signed this
certificate on the 31st day of August, 1995 and we affirm
the statements contained therein as true under penalties
of perjury.
Zirconia Acquisition Co., Inc.
________________________
(name of Corporation)
________________________
(signature)
Richard G. Marcus - President
________________________
(type name and title of person signing)
________________________
(signature)
Henry W. Winkleman - Secretary
________________________
(type name and title of person signing)
Wilbur A. Cowett Incorporated
________________________
(name of Corporation)
________________________
(signature)
Wilbur A. Cowett - President
________________________
(type name and title of person signing)
________________________
(signature)
Leonard M. Leiman - Secretary
________________________
(type name and title of person signing)
