As filed with the Securities and Exchange Commission
on November ___, 1994
Registration No. ________
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
HUGHES SUPPLY, INC.
(Exact name of Registrant as specified in its charter)
Florida 59-0559446
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) Number)
20 North Orange Avenue
Suite 200
Orlando, Florida 32801
(407) 841-4755
(Address and telephone number of
Registrant's principal executive offices)
Robert N. Blackford, Esquire
Maguire, Voorhis & Wells, P.A.
Two South Orange Plaza
Post Office Box 633
Orlando, Florida 32802
(407) 244-1100
(Name, address and telephone number
of agent for service)
Approximate date of commencement of proposed sale to the public:
From time to time following the effective date of this Registration
Statement.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box. [ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. [ x ]
(Cover page continued)
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered per Share (1) Price (1) Fee
Common Stock, 103,632 shs. $18.75 $1,943,100 $670.70
par value
$1.00 per
share
(1) Estimated solely for the purpose of determining the
registration fee and calculated in accordance with Rule 457(b)
under the Securities Act of 1933, as amended, on the basis of the
last reported sale price of the Company's Common Stock on November
8, 1994 as reported by the New York Stock Exchange.
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date
until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall
become effective on such date as the Commission acting pursuant to
said section 8(a), may determine.
___________________________________
<PAGE>
HUGHES SUPPLY, INC.
CROSS REFERENCE SHEET
Item Number and Caption Heading in Prospectus
1. Forepart of the Registration *
Statement and Outside Front Cover
Page of Prospectus
2. Inside Front and Outside Back *
Cover Pages of Prospectus
3. Summary Information, Risk Factors "The Company"
and Ratio of Earnings to Fixed
Charges
4. Use of Proceeds "Use of Proceeds"
5. Determination of Offering Price Cover Page - "Plan of
Distribution"
6. Dilution *
7. Selling Security Holders "Selling Shareholders"
8. Plan of Distribution "Plan of Distribution"
9. Description of Securities to be "Incorporation of
Registered Certain Documents by
Reference"
10. Interest of Named Experts and "Experts" - "Legal
Counsel Matters"
11. Material Changes "Recent Developments"
12. Incorporation of Certain "Incorporation of
Information by Reference Certain Documents by
Reference"
13. Disclosure of Commission Position "Indemnification of
on Indemnification for Securities Directors and Officers"
Act Liabilities
____________________________
* Not applicable or item caption is sufficiently descriptive to
locate required information in Prospectus.
PROSPECTUS
103,632 SHARES
HUGHES SUPPLY, INC.
Common Stock
This Prospectus relates to the sale of a maximum of 103,632
Shares of Common Stock, par value $1.00 (the "Shares"), by certain
shareholders of the Company (the "Selling Shareholders"). See
"Selling Shareholders."
The Shares may be offered by or on behalf of the Selling
Shareholders from time to time in transactions on the New York
Stock Exchange at the prices prevailing thereon, or in privately
negotiated transactions at prices as may be agreed upon at the time
of sale. The Shares may be publicly offered through underwriters,
dealers or agents. When a particular offer of the Shares is made
in which underwriting discounts and commissions (as defined in the
Securities Act of 1933, as amended) may be deemed to be involved,
a supplement to this Prospectus will be delivered together with
this Prospectus setting forth with respect to such offer the number
and price of the Shares offered and the terms of the offering,
including the names of any underwriters, dealers or agents
involved, any discounts, commissions and other items of
compensation from, and the net proceeds to, the Selling
Shareholders. See "Plan of Distribution." The Company will
receive no proceeds from this offering.
The Selling Shareholders will bear all expenses with respect
to the offering of their respective shares, except the costs
associated with registering the Shares, including the preparation
and printing of this Prospectus, which will be borne by the
Company.
The Common Stock of the Company, $1.00 par value, is traded on
the New York Stock Exchange (ticker symbol HUG). On November 8,
1994, the last reported sale price of the Common Stock was $18.75.
_____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
_____________________
This date of this Prospectus is __________, 1994.
<PAGE>
TABLE OF CONTENTS
CAPTION PAGE
Available Information ................................. 3
Copies of Certain Documents ........................... 3
The Company ........................................... 4
Use of Proceeds ....................................... 4
Selling Shareholders .................................. 5
Plan of Distribution .................................. 6
Recent Developments ................................... 6
Legal Matters ......................................... 6
Experts ............................................... 7
Incorporation of Certain Documents by Reference ....... 7
Indemnification of Directors and Officers ............. 7
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and, in accordance therewith, files reports, proxy
statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and
other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450
5th Street, N.W., Washington, D.C. 20549, and at the Commission's
regional offices at CitiCorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60621-2511 and 7 World Trade Center, 13th
Floor, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the Commission at
prescribed rates at the principal office of the Commission at 450
5th Street, N.W., Washington, DC 20549. In addition, the Common
Stock of the Company is listed on the New York Stock Exchange and
such reports, proxy statements and information concerning the
Company can be inspected at the New York Stock Exchange, Room 401,
20 Broad Street, New York, New York 10005.
COPIES OF CERTAIN DOCUMENTS
The Company will provide without charge to each person,
including any beneficial owner of such person, to whom this
Prospectus is delivered, upon written or oral request, a copy of
any and all information incorporated by reference in this
Prospectus (not including exhibits to the information that has been
incorporated by reference, unless such exhibits are specifically
incorporated by reference into the information that this Prospectus
incorporates). Such requests should be directed to Hughes Supply,
Inc. Attention: J. Stephen Zepf, Treasurer and Chief Financial
Officer, at 20 North Orange Avenue, Suite 200, Orlando, Florida
32801, or telephone (407) 841-4755.
________________________
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE
ANY REPRESENTATIONS OTHER THAN AS CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER CONTAINED HEREIN, AND IF GIVEN OR MADE
SUCH INFORMATION OR REPRESENTATIONS SHALL NOT BE RELIED UPON. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE
SECURITIES LAWS OF SUCH STATE. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE FACTS
HEREIN SET FORTH SINCE THE DATE HEREOF.
THE COMPANY
Hughes Supply, Inc. (the "Company") was founded as a general
partnership in Orlando, Florida in 1928. The Company was
incorporated as a Florida corporation in 1947.
The Company is primarily engaged in the wholesale distribution
of a broad range of materials, equipment and supplies to the
construction industry and the electrical and mechanical trades.
Major product lines distributed by the Company include electrical,
plumbing, electric utility equipment, building materials, water and
sewer equipment, air conditioning and heating equipment and pipe,
valves, and fittings.
As of the date of this Prospectus the Company distributes its
product lines through 152 wholesale sales outlets located in
Florida and 9 other states throughout the Southeast. The Company
operates 62 sales outlets in Florida, 21 sales outlets in Georgia,
8 sales outlets in Alabama and two sales outlets in South Carolina
under the name of Hughes Supply, Inc. The subsidiaries of the
Company operate a total of 59 sales outlets located in Florida,
Georgia, North Carolina, South Carolina, Mississippi, Tennessee,
Kentucky, Maryland and Virginia. Since the beginning of the
current fiscal year the Company acquired 3 previously unaffiliated
sales outlets located in Savannah, Georgia, Jacksonville, Florida
and Longwood, Florida.
The principal executive offices of the Company are located at
20 North Orange Avenue, Suite 200, Orlando, Florida 32801 and its
telephone number is (407) 841-4755.
USE OF PROCEEDS
The Shares offered hereby are being offered for the account of
the Selling Shareholders and the Company will receive no proceeds
from the sale of the Shares.
<PAGE>
SELLING SHAREHOLDERS
The following table sets forth certain information as of
November 8, 1994, with respect to the beneficial ownership of the
Shares. In addition, the following table reflects the effect of
the sale of the Shares offered hereby.
Before Offering After Offering
Number of
Shares Percent of Number of Percent of
Owned Outstanding Shares to Number of Outstanding
(1) Shares (2) be Sold Shares Owned Shares
Trust Under the
Will of William
S. Swaim
c/o James B. Sloan,
Trustee
300 Woodbrook Drive
High Point, NC
27262 96,149 1.6(2) 96,149 -0- -0-
James B. Sloan (4)
300 Woodbrook Drive
High Point, NC
27262 7,483 -(3) 7,483 -0- -0-
(1) On January 28, 1994, the Company, pursuant to an Acquisition
Agreement dated as of January 28, 1994 (the "Acquisition
Agreement") by and among the Company, the Selling
Shareholders, and Swaim Supply Company, Inc., a North Carolina
corporation ("SSC"), acquired 100% of the issued and
outstanding capital stock of SSC from the Selling Shareholders
in exchange for an aggregate, after adjustment, of 103,632
Shares of the Common Stock of the Company. SSC is currently
operated as a wholly-owned subsidiary of the Company.
Pursuant to the terms of the Acquisition Agreement, the
Company agreed to register the shares of Common Stock of the
Company transferred to each of the Selling Shareholders under
the Securities Act of 1933, as amended. The Selling
Shareholders listed in the above table were the shareholders
of SSC.
(2) Calculated on the basis of 6,130,923 shares deemed to be
outstanding, including 6,128,659 shares presently outstanding,
the shares beneficially owned by the Selling Shareholders and
referred to the in table above, and 337,857 shares subject to
options which are presently exercisable.
(3) Shares beneficially owned constitute less than 1% of the
shares outstanding.
(4) Prior to January 28, 1994, James B. Sloan served as President
of SSC and since that date Mr. Sloan has served as Vice
President and Secretary of SSC.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time to purchasers
directly by any of the Selling Shareholders, acting independently
of one another, or the Selling Shareholders may from time to time
sell the Shares in transactions on the New York Stock Exchange at
the prices prevailing thereon. Alternatively, the Selling
Shareholders may from time to time offer the Shares through
underwriters, dealers or agents, who may receive compensation in
the form of underwriting discounts, concessions or commissions from
the Selling Shareholders and/or the purchasers of the Shares for
whom they may act as agent. The Selling Shareholders and any
underwriters, dealers or agents that participate in a distribution
of the Shares may be deemed underwriters, and any profit on the
sale of the Shares by them and any discounts, commissions or
concessions received by any such underwriters, dealers or agents
might be deemed to be underwriting discounts and commissions under
the Securities Act of 1933, as amended. At the time a particular
offer of the Shares is made in which underwriting discounts and
commissions (as defined in the Securities Act of 1933, as amended)
may be deemed to be involved, a supplement to this Prospectus will
be distributed which will set forth the number and price of the
Shares being offered and the terms of the offering, including the
name or names of any underwriters, dealers or agents, any
discounts, commissions and other items constituting compensation
from the Selling Shareholders and any discounts, commissions or
concessions allowed or paid to dealers.
The Shares may be sold from time to time in one or more
transactions at a fixed offering price, which may be changed, or a
varying price determined at the time of sale or at negotiated
prices.
RECENT DEVELOPMENTS
No material changes in the business or affairs of the Company
have occurred since January 28, 1994, which have not been described
in any report on Form 10-Q or Form 8-K.
LEGAL MATTERS
Maguire, Voorhis & Wells, P.A., Two South Orange Plaza,
Orlando, Florida 32801, counsel to the Company, has rendered an
opinion with respect to the valid issuance and nonassessability of
the Shares being offered hereby and as to certain other matters.
Robert N. Blackford, a member of that firm, is Secretary and a
Director of the Company. Certain members of that firm beneficially
own 22,637 shares of the Company's Common Stock.
EXPERTS
The consolidated financial statements of the Company and its
subsidiaries incorporated by reference in the Company's annual
report on Form 10-K for the year ended January 28, 1994, have been
audited by Coopers & Lybrand, independent accountants, as set forth
in their report dated March 17, 1994 accompanying such financial
statements and are incorporated herein by reference in reliance
upon the report of such firm, which report is given upon their
authority as experts in accounting and auditing.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year
ended January 28, 1994, and the Company's quarterly Reports on Form
10-Q for the fiscal quarters ended April 30 and July 31, 1994, and
Current Reports on Form 8-K dated May 24, 1994 and October 20, 1994
filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") are hereby incorporated in this Prospectus by
reference and all documents subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act,
prior to the termination of the offering described herein shall be
deemed to be incorporated in this Prospectus and to be a part
hereof from the date of the filing of such documents. The
description of the Company's Common Stock which is contained in a
Registration Statement filed under the Exchange Act, and any
amendments or reports filed for the purpose of updating such
description are hereby incorporated in this Prospectus by
reference.
Any statement contained in a document incorporated by
reference herein shall be deemed to be modified or superseded for
all purposes to the extent that a statement contained in this
Prospectus or in any other subsequently filed document which is
also incorporated by reference modifies or replaces such statement.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company, as a Florida corporation, is permitted, and in
some cases required, under circumstances set forth in the
provisions of Section 607.0850 of the Florida Business Corporation
Act, to indemnify a director, officer, employee, or agent of the
Company against certain expenses and liabilities incurred as a
party to any proceeding (including, among others, a proceeding
under the Securities Act of 1933) brought against such person by
reason of the fact that such person is or was a director, officer,
employee, or agent of the Company or is or was serving in such
capacity with respect to another entity at the request of the
Company. Such provisions also permit the Company to purchase and
maintain liability insurance on behalf of directors and officers.
For some years the Company has maintained an insurance policy
which insures directors and officers of the Company against amounts
the director or officer is obligated to pay as respects his legal
liability, whether actual or asserted, for any negligent act, any
error, any omission or any breach of duty, subject to the
applicable limits and terms of the policy, which amounts may
include damages, judgments, settlements, costs of investigation,
and costs, charges and expenses incurred in the defense of actions,
suits or proceedings or appeals therefrom, subject to the
exceptions, limitations and conditions set forth in the policy.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is therefore unenforceable.
O:\CORP\032\HUGHES\S-3
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
It is estimated that the Registrant will incur the following
expenses in connection with the offering of the securities being
registered.
Registration Fee - Securities and
Exchange Commission................. $ 670.70
Accounting .............................. 5,500.00
Legal Fees............................... 5,000.00
Printing................................. 500.00
Miscellaneous Expenses................... 1,000.00
Total.......................... $12,670.70
Item 15. Indemnification of Directors and Officers.
The Section 607.0850 of the Florida Business Corporation Act
permits, and in some cases requires, the Registrant as a Florida
corporation to indemnify a director, officer, employee, or agent of
the Registrant, or any person serving at the request of the
Registrant in any such capacity with respect to another entity
against certain expenses and liabilities incurred as a party to any
proceeding brought against such person by reason of the fact that
such person is or was a director, officer, employee, or agent of
the Registrant or is or was serving in such capacity with respect
to another entity at the reguest of the Registrant. With respect
to actions, other than in the right of the Registrant, such
indemnification is permitted if such person acted in good faith and
in a manner such person reasonably believed to be in, or not
opposed to, the best interests of the Registrant, and with respect
to any criminal action or proceeding, if such person had no
reasonable cause to believe his or her conduct was unlawful.
Termination of any such action by judgment, order, settlement or
conviction or a plea of nolo contendere, or its equivalent shall
not, of itself, create a presumption that such person did not act
in good faith and in a manner he or she reasonably believed to be
in, or not opposed to, the best interests of the Registrant, or
with respect to any criminal action or proceeding, had reasonable
cause to believe that his or her conduct was unlawful.
With respect to any action threatened, pending or completed in
the right of the Registrant to procure a judgment in its favor
against any such person, the Registrant may indemnify any such
person against expenses actually and reasonably incurred by him or
her in connection with the defense or settlement of such action or
suit, including the appeal thereof, if he or she acted in good
faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interests of the Registrant, except that
no indemnification shall be made in respect of any claim, issue or
matter as to which any such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his or
her duties to the Registrant unless the Court in which the action
was brought determines that despite the adjudication of liability,
but in view of all the circumstances in the case, such person is
fairly and reasonably entitled to indemnity for such expenses.
Section 607.0850 also provides that if any such person has
been successful on the merits or otherwise in defense of any
action, suit or proceeding, whether brought in the right of the
Registrant or otherwise, such person shall be indemnified against
expenses actually and reasonably incurred by him or her in
connection therewith.
If any director or officer does not succeed upon the merits or
otherwise in defense of an action, suit or proceeding, then unless
pursuant to a determination made by a court, indemnification by the
Registrant shall be made only as authorized in the specific case
upon a determination that indemnification of the director or
officer is proper because he or she has met the applicable standard
of conduct. Any such determination may be made:
(a) By the Board of Directors by a majority vote of a quorum
consisting of directors who are not parties to such action, suit,
or proceeding;
(b) If such a quorum is not obtainable or, even if
obtainable, by a majority vote of a committee duly designated by
the Board of Directors (in which Directors who are parties may
participate) consisting solely of two or more Directors not at the
time parties to the proceeding;
(c) By independent legal counsel selected by the Board of
Directors prescribed in paragraph (a) or the committee prescribed
in paragraph (b); or if a quorum of the Directors cannot be
obtained for paragraph (a) or the committee cannot be designated
under paragraph (b) selected by a majority vote of the full Board
of Directors (in which Directors who are parties may participate);
or
(d) By the shareholders by a majority vote of a quorum
consisting of shareholders who were not parties to the proceeding
or, if no such quorum is obtainable, by a majority vote of
shareholders who were not parties to such proceedings.
Section 607.0850 also contains a provision authorizing
corporations to purchase and maintain liability insurance on behalf
of its directors and officers. For some years the Registrant has
maintained an insurance policy which insures directors and officers
of the Registrant against amounts the director or officer is
obligated to pay in respect of his legal liability, whether actual
or asserted, for any negligent act, any error, any omission or any
breach of duty which, subject to the applicable limits and terms of
the policy, include damages, judgments, settlements, costs of
investigation, and costs, charges and expenses incurred in the
defense of actions, suits, or proceedings or appeals thereto,
subject to the exceptions, limitations and conditions set forth in
the policy.
Item 16. Exhibits.
(1) Underwriting agreement - Not applicable.
(2) Plan of acquisition, reorganization, liquidation or
sucession:
2.1 Acquisition Agreement dated January 28, 1994 by and
among Hughes Supply, Inc., Swaim Supply Company,
Testamentary Trust Under the Will of William S.
Swaim amd James B. Sloan.
(4) Instruments defining the rights of security holders,
including indentures:
4.1 A Specimen Stock Certificate representing shares of
the Company's common stock, $1.00 par value, filed
as Exhibit 4.2 to Form 10-Q for the Quarter Ended
October 31, 1984.
4.2 Resolution Approving and Implementing Shareholder
Rights Plan filed as Exhibit 4.4 to Form 8-K dated
May 17, 1988.
(5) Opinion re: legality - Opinion of Maguire, Voorhis &
Wells, P.A. is filed as Exhibit 5 to the Registration
Statement.
(8) Opinion re tax matters - Not applicable.
(12) Statements re computation of ratios - Not applicable.
(15) Letter re unaudited interim financial information - Not
applicable.
(23) Consents of experts and counsel:
23.1 The consent of Coopers & Lybrand is filed as
Exhibit 23.1 to the Registration Statement.
23.2 The Consent of Maguire, Voorhis & Wells, P.A. is
included in their opinion filed as Exhibit 5 to the
Registration Statement.
(24) Power of attorney - Not applicable.
(25) Statement of eligibility of trustee - Not applicable.
(26) Invitations for competitive bids - Not applicable.
(27) Financial Data Schedules - Not applicable.
(28) Information from reports furnished to state insurance
regulatory authorities - Not applicable.
(99) Additional exhibits - Not applicable.
Item 17. Undertakings.
The undersigned hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to the registration to
include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(b) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(d) For purposes of determining any liability under the
Securities Act of 1933, that each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the
offering of such securities as that time shall be deemed to be the
initial bona fide offering thereof.
(e) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
provisions described under Item 15 above or otherwise, the
Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of
the Registrant in the successful defense of any action, suit or
proceeding) is asserted against the Registrant by such director,
officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and
has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City
of Orlando, State of Florida, on this 21st day of October, 1994.
HUGHES SUPPLY, INC.
(Registrant)
By: s/David H. Hughes
David H. Hughes, Chairman of the
Board, and Chief Executive Officer
s/J. Stephen Zepf
J. Stephen Zepf, Treasurer and
Chief Financial Officer, Chief
Accounting Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints David H. Hughes,
J. Stephen Zepf and Robert N. Blackford, or any of them, his true
and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities to sign any or all amendments to
this Registration Statement, and to file the same, with all
exhibited thereto and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto each of said
attorneys-in-fact and agents, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done in and about the premises, as fully as to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that each of said attorneys-in-fact and agents, or
his substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following
persons in the capacities and on the dates indicated.
Signature Title Date
s/David H. Hughes Director October 21, 1994
David H. Hughes
s/A. S. Hall, Jr. Director October 21, 1994
A. Stewart Hall, Jr.
s/Vincent S. Hughes Director October 21, 1994
Vincent S. Hughes
Director October __, 1994
Russell V. Hughes
s/John D. Baker, II Director October 19, 1994
John D. Baker, II
s/Robert N. Blackford Director October 21, 1994
Robert N. Blackford
s/Clifford M. Hames Director October 19, 1994
Clifford M. Hames
s/H. B. McManaway Director October 19, 1994
Herman B. McManaway
s/John B. Ellis Director October 19, 1994
John B. Ellis
s/Donald C. Martin Director October 19, 1994
Donald C. Martin
O:\CORP\032\HUGHES\S-3
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
2.1 Acquisition Agreement dated January
28, 1994 by and among Hughes Supply,
Inc., Swaim Supply Company, Testamentary
Trust Under the Will of William S. Swaim
amd James B. Sloan.
5 Opinion re Legality - Opinion of
Maguire, Voorhis & Wells, P.A.
23.1 Consent of Coopers & Lybrand
Item 16 of Part II of this Registration Statement lists the
Exhibits which are filed with or incorporated by reference into
this Registration Statement. The above listed Exhibits are filed
with this Registration Statement and, as set forth in Item 16, all
other Exhibits are incorporated herein by reference.
<PAGE>
Exhibit 2.1
ACQUISITION AGREEMENT
Dated January 28, 1994
By and Among
HUGHES SUPPLY, INC.,
SWAIM SUPPLY COMPANY,
TESTAMENTARY TRUST UNDER THE WILL OF WILLIAM S. SWAIM
AND
JAMES B. SLOAN
<PAGE>
TABLE OF CONTENTS
ARTICLE I - Acquisition of the Common Stock. . . . . . . . . . 1
1.1 Acquisition of the Common Stock. . . . . . . . . . . 1
1.2 Consideration for the Common Stock . . . . . . . . . 1
1.2.1 Merger Consideration . . . . . . . . . . . 2
1.2.1.1 Base Price. . . . . . . . . . . . . . 2
1.2.1.2 Final Adjusted Price. . . . . . . . . 2
1.2.1.4 Ratable Interest. . . . . . . . . . . 4
1.2.2 Disbursement of the Merger
Consideration . . . . . . . . . . . . . . . . . 4
1.2.2.1 Base Price. . . . . . . . . . . . . . 4
1.2.2.2 Final Adjusted Price. . . . . . . . . 4
1.2.2.3 Form of Payment of Merger
Consideration: Hughes Stock; Cash and
Hughes Stock . . . . . . . . . . . . . . . 4
1.2.2.4 Proportional Payments of Cash and
Hughes Stock . . . . . . . . . . . . . . . 5
1.2.2.5 No Fractional Shares. . . . . . . . . 5
1.2.3 No Dissenting Shares . . . . . . . . . . . 5
ARTICLE II - Representations and Warranties of SSC and the
Stockholders. . . . . . . . . . . . . . . . . . . . . . . 5
2.1 Valid Corporate Existence; Qualification . . . . . . 5
2.2 Capitalization . . . . . . . . . . . . . . . . . . . 6
2.3 No Subsidiaries. . . . . . . . . . . . . . . . . . . 6
2.4 Consents . . . . . . . . . . . . . . . . . . . . . . 6
2.5 Corporate Authority; Binding Nature of Agreement;
Title to SSC Stock, etc. . . . . . . . . . . . . . . 6
2.6 Financial Statements . . . . . . . . . . . . . . . . 7
2.7 Liabilities. . . . . . . . . . . . . . . . . . . . . 7
2.8 Actions Since Balance Sheet Date . . . . . . . . . . 7
2.9 Absence of Changes . . . . . . . . . . . . . . . . . 8
2.10 Taxes. . . . . . . . . . . . . . . . . . . . . . . . 8
2.11 Ownership of Assets; Trademarks, etc.. . . . . . . . 9
2.12 Insurance. . . . . . . . . . . . . . . . . . . . . . 9
2.13 Litigation, Compliance with Law. . . . . . . . . . . 10
2.14 Real Property. . . . . . . . . . . . . . . . . . . . 10
2.15 Agreements and Obligations, Performance. . . . . . . 11
2.16 Condition of Assets. . . . . . . . . . . . . . . . . 12
2.17 Accounts and Notes Receivable. . . . . . . . . . . . 12
2.18 Permits and Licenses . . . . . . . . . . . . . . . . 12
2.19 Banking Arrangements . . . . . . . . . . . . . . . . 12
2.20 Interest in Assets . . . . . . . . . . . . . . . . . 13
2.21 Salary Information . . . . . . . . . . . . . . . . . 13
2.22 Employee Benefit Plans . . . . . . . . . . . . . . . 13
2.22.1 Welfare Plans; Claims. . . . . . . . . . . 13
2.22.2 Welfare Plans; Compliance. . . . . . . . . 13
2.22.3 Welfare Plans; Prohibited Transactions . . 13
2.22.4 COBRA. . . . . . . . . . . . . . . . . . . 14
2.23 No Breach. . . . . . . . . . . . . . . . . . . . . . 14
2.24 Brokers. . . . . . . . . . . . . . . . . . . . . . . 14
2.25 Labor Discussions. . . . . . . . . . . . . . . . . . 15
2.26 Change of Name . . . . . . . . . . . . . . . . . . . 15
2.27 Pollution and Other Regulations. . . . . . . . . . . 15
2.28 Untrue or Omitted Facts. . . . . . . . . . . . . . . 15
2.29 Accuracy of Information Supplied for Registration
Statement. . . . . . . . . . . . . . . . . . . . . . 16
2.30 Investment Representation. . . . . . . . . . . . . . 16
2.31 Access to Information. . . . . . . . . . . . . . . . 16
ARTICLE III - Representations and Warranties of Purchaser. . . 17
3.1 Valid Corporate Existence; Qualification . . . . . . 17
3.2 Capitalization . . . . . . . . . . . . . . . . . . . 17
3.3 Consents . . . . . . . . . . . . . . . . . . . . . . 17
3.4 Corporate Authority; Hughes Stock Validly Issued;
Binding Nature of Agreement. . . . . . . . . . . . . 18
3.5 No Breach. . . . . . . . . . . . . . . . . . . . . . 18
3.6 Financial Statements . . . . . . . . . . . . . . . . 18
3.7 Absence of Changes . . . . . . . . . . . . . . . . . 19
3.8 Brokers. . . . . . . . . . . . . . . . . . . . . . . 19
3.9 Litigation; Compliance with Laws . . . . . . . . . . 20
3.10 Untrue or Omitted Facts. . . . . . . . . . . . . . . 20
3.11 Accuracy of Information Supplied for Registration
Statement. . . . . . . . . . . . . . . . . . . . . . 20
3.12 Access to Information. . . . . . . . . . . . . . . . 20
ARTICLE IV - Covenants . . . . . . . . . . . . . . . . . . . . 21
4.1 Pre-Closing Covenants of SSC and the Stockholders. . 21
4.1.1 Access . . . . . . . . . . . . . . . . . . 21
4.1.2 Conduct of Business. . . . . . . . . . . . 21
4.1.3 Insurance. . . . . . . . . . . . . . . . . 21
4.1.4 Liabilities. . . . . . . . . . . . . . . . 22
4.1.5 Preservation of Business . . . . . . . . . 22
4.1.6 No Breach. . . . . . . . . . . . . . . . . 22
4.1.7 No Negotiations. . . . . . . . . . . . . . 22
4.1.8 SSC's Reserve for Doubtful Accounts. . . . 22
4.1.9 Acquisition of Computer System . . . . . . 22
4.2 Pre-Closing Covenants of the Purchaser . . . . . . . 23
4.2.1 Access . . . . . . . . . . . . . . . . . . 23
4.2.2 No Breach. . . . . . . . . . . . . . . . . 23
4.3 Post Closing Covenants of the Stockholders . . . . . 24
4.3.1 Surrender of Merger Consideration to
Satisfy Obligation With Respect to Final
Adjusted Price. . . . . . . . . . . . . . . . . 24
4.3.2 Restrictions on Stock Sales. . . . . . . . 24
4.4 Post Closing Covenants of the Purchaser. . . . . . . 24
4.4.1 Payment of Additional Merger
Consideration If Required for Final Adjusted
Price . . . . . . . . . . . . . . . . . . . . . 24
4.4.2 Publication of Financial Statements. . . . 24
4.4.3 Indemnification with Respect to
Litigation. . . . . . . . . . . . . . . . . . . 24
4.5 Covenants of the Purchaser and the Stockholders
with Respect to Registration of the Hughes Stock . . 25
4.5.1 Covenants of the Purchaser . . . . . . . . 25
4.5.2 Covenants of the Stockholders. . . . . . . 26
4.5.3 Conditions to Indemnification Under
Sections 4.5.1 and 4.5.2. . . . . . . . . . . . 27
ARTICLE V - Conditions Precedent to the Obligation of the
Purchaser to Close. . . . . . . . . . . . . . . . . . . . 28
5.1 Approval of Shareholders . . . . . . . . . . . . . . 28
5.2 Representations and Warranties . . . . . . . . . . . 28
5.3 Covenants. . . . . . . . . . . . . . . . . . . . . . 28
5.4 No Actions . . . . . . . . . . . . . . . . . . . . . 28
5.5 Consents; Licenses and Permits . . . . . . . . . . . 28
5.6 Certificate. . . . . . . . . . . . . . . . . . . . . 29
5.7 Opinion. . . . . . . . . . . . . . . . . . . . . . . 29
5.8 No Material Adverse Change . . . . . . . . . . . . . 29
5.9 Escrow Agreement . . . . . . . . . . . . . . . . . . 29
5.10 Employment Agreement . . . . . . . . . . . . . . . . 29
5.11 Non-Competition Agreement. . . . . . . . . . . . . . 29
5.12 Lease Agreements . . . . . . . . . . . . . . . . . . 29
5.13 Additional Documents . . . . . . . . . . . . . . . . 29
5.14 Approval of Counsel. . . . . . . . . . . . . . . . . 29
ARTICLE VI - Conditions Precedent to the Obligation of SSC and
the Stockholders to Close . . . . . . . . . . . . . . . . 30
6.1 Approval of Shareholders . . . . . . . . . . . . . . 30
6.2 Representations and Warranties . . . . . . . . . . . 30
6.3 Covenants. . . . . . . . . . . . . . . . . . . . . . 30
6.4 No Actions . . . . . . . . . . . . . . . . . . . . . 30
6.5 Consents . . . . . . . . . . . . . . . . . . . . . . 30
6.6 No Material Adverse Change . . . . . . . . . . . . . 30
6.7 Certificate. . . . . . . . . . . . . . . . . . . . . 30
6.8 Opinion. . . . . . . . . . . . . . . . . . . . . . . 31
6.9 Execution of Other Agreements. . . . . . . . . . . . 31
6.10 Additional Documents . . . . . . . . . . . . . . . . 31
6.11 Approval of Counsel. . . . . . . . . . . . . . . . . 31
6.12 Release of Stockholder Guarantees and Payment of
Designated Indebtedness of SSC . . . . . . . . . . . 31
ARTICLE VII - Closing. . . . . . . . . . . . . . . . . . . . . 31
7.1 The Closing. . . . . . . . . . . . . . . . . . . . . 31
7.2 Location, Time and Date. . . . . . . . . . . . . . . 32
7.3 Conditions of the Closing. . . . . . . . . . . . . . 32
7.4 Items to be Delivered by SSC and the Stockholders. . 32
7.5 Items to be Delivered by Purchaser . . . . . . . . . 33
ARTICLE VIII - Survival of Representations; Indemnification. . 33
8.1 Survival . . . . . . . . . . . . . . . . . . . . . . 33
8.2 Indemnification by SSC and the Stockholders. . . . . 33
8.3 Indemnification by the Purchaser . . . . . . . . . . 34
8.4 Nature of Liability of SSC and the Stockholders. . . 34
8.5 Limitations of Liability . . . . . . . . . . . . . . 34
8.5.1 Claims . . . . . . . . . . . . . . . . . . 34
8.5.2 Liability of SSC and the Stockholders. . . 34
8.5.3 Liability of the Purchaser . . . . . . . . 34
8.5.4 Final Determination. . . . . . . . . . . . 35
8.6 Defense of Claims. . . . . . . . . . . . . . . . . . 35
ARTICLE IX - Termination and Waiver. . . . . . . . . . . . . . 35
9.1 Termination. . . . . . . . . . . . . . . . . . . . . 35
9.2 Waivers. . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE X - Miscellaneous Provisions . . . . . . . . . . . . . 36
10.1 Expenses . . . . . . . . . . . . . . . . . . . . . . 36
10.2 Confidential Information . . . . . . . . . . . . . . 37
10.3 Modification, Termination or Waiver. . . . . . . . . 37
10.4 Publicity. . . . . . . . . . . . . . . . . . . . . . 37
10.5 Notices. . . . . . . . . . . . . . . . . . . . . . . 37
10.6 Binding Effect and Assignment. . . . . . . . . . . . 38
10.7 Entire Agreement . . . . . . . . . . . . . . . . . . 38
10.8 Exhibits . . . . . . . . . . . . . . . . . . . . . . 39
10.9 Governing Law. . . . . . . . . . . . . . . . . . . . 39
10.10 Section Headings. . . . . . . . . . . . . . . . . . 39
10.11 Gender. . . . . . . . . . . . . . . . . . . . . . . 39
10.12 Severability. . . . . . . . . . . . . . . . . . . . 39
10.13 Counterparts. . . . . . . . . . . . . . . . . . . . 40
<PAGE>
ACQUISITION AGREEMENT
ACQUISITION AGREEMENT, dated January 28, 1994 (this
"Agreement") by and among HUGHES SUPPLY, INC., a Florida
corporation (the "Purchaser"), SWAIM SUPPLY COMPANY, a North
Carolina corporation ("SSC"), TESTAMENTARY TRUST UNDER THE WILL OF
WILLIAM S. SWAIM, and JAMES B. SLOAN (collectively, the
"Stockholders").
WHEREAS, the Purchaser and SSC executed a letter of intent
dated December 15, 1993 providing for the acquisition by the
Purchaser of all of the outstanding shares of common stock, $100
par value, of SSC (the "Common Stock") subject to the negotiation
and execution of an acquisition agreement setting forth the mutual
rights and obligations of the parties in connection with such
acquisition.
WHEREAS, the Purchaser and SSC together with the Stockholders
have negotiated mutually acceptable terms and conditions for a
merger under a plan adopted in accordance with the provisions of
Section 55-11-01 of the North Carolina Business Corporation Act
(the "NCBCA") pursuant to which the Purchaser will acquire all of
the Common Stock of SSC as hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual benefits to be
derived hereby and the representations, warranties, covenants and
agreements herein contained, the Purchaser, SSC and the
Stockholders agree as follows:
ARTICLE I
Acquisition of the Common Stock
1.1 Acquisition of the Common Stock. Upon the terms and
subject to the conditions set forth in this Agreement and in the
Plan and Agreement of Merger (the "Plan of Merger") entered into
between the Purchaser and SSC, a copy of which is attached hereto
as Exhibit 1.1, by virtue of the merger provided for in the Plan of
Merger (the "Merger") each certificate representing shares of
Common Stock held by a Stockholder at the Effective Time of the
Merger (as defined in Section 2.1 of the Plan of Merger) shall be
deemed canceled and extinguished and converted into and become a
right to receive the Merger Consideration (as defined in Section
1.2.1 of this Agreement) and each share of Common Stock formerly
represented by each such canceled certificate shall be converted
and become the sole property of the Purchaser.
1.2 Consideration for the Common Stock. As consideration for
the cancellation of the share certificates held by the Stockholders
representing shares of Common Stock converted in the Merger, the
Purchaser shall deliver to the Stockholders the Merger
Consideration provided for in Section 1.2.1 of this Agreement in
the manner set forth in Section 1.2.2 of this Agreement.
1.2.1 Merger Consideration. As consideration for the
conversion of each Stockholder's Common Stock and the cancellation
of the certificate representing such Common Stock in the Merger,
each Stockholder shall be entitled to receive a Ratable Interest
(as defined in Section 1.2.1.4 of this Agreement) in the Base Price
(as defined in Section 1.2.1.1 of this Agreement) as adjusted to
the Final Adjusted Price (as defined in Section 1.2.1.2), as such
Stockholder's Merger Consideration (the "Merger Consideration")
distributable in the manner set forth in Section 1.2.2 of this
Agreement.
1.2.1.1 Base Price. The base price of One Million Nine
Hundred Twenty Six Thousand Dollars ($1,926,000) (the "Base Price")
has been determined by the parties by utilizing the formula
illustrated below (the "Pricing Formula") based upon the book value
of SSC on its Balance Sheet at December 31, 1992 as follows:
Book Value $2,286,000
Add: LIFO Reserve
Net of Tax Effect + 408,000
Minus: Estimate of Non-
Qualifying Inventory - 713,000
Estimate of Non-Qualifying
Accounts Receivable over
Reserve for Bad Debts - 55,000
Base Price $1,926,000
1.2.1.2 Final Adjusted Price. The final adjusted price (the
"Final Adjusted Price") shall be calculated by the Purchaser on or
before May 31, 1994 by utilizing the Pricing Formula used to
determine the Base Price and substituting in the calculation the
following:
(a) SSC will prepare financial statements as of
January 29, 1994 (the "Valuation Date") and have such financial
statements reviewed by its certified public accountants. The cost
associated with the review will be borne by SSC. The Purchaser
shall have the right to engage a certified public accountant to
review the results of the review by SSC's certified public
accountants. The cost of the review, if any, undertaken by the
Purchaser's certified public accountant shall be borne entirely by
the Purchaser. The net book value of SSC on the Valuation Date
acceptable to SSC's reviewing accountant, and, in the event of a
review by Purchaser's reviewing accountant, acceptable to
Purchaser's reviewing accountant, shall be substituted for the Book
Value in the Pricing Formula.
(b) The LIFO Reserve on the Valuation Date net of
tax calculated using the Purchaser's estimated Federal Income Tax
rate shall be substituted in the Pricing Formula for the LIFO
Reserve Net of Tax Effect used to determine the Base Price.
(c) The Non-Qualifying Inventory determined as
hereinafter set forth as of the Valuation Date shall be substituted
for the Estimate of Non-Qualifying Inventory in the Pricing
Formula. Non-Qualifying Inventory for purposes of calculating the
Final Adjusted Price shall be determined according to the following
guidelines:
(i) The Purchaser will rely on the accuracy of
the physical inventory taken for the preparation of SSC's financial
statements as of the Valuation Date and observed by the Purchaser's
auditors. The inventory taking, cutoff and costing thereof will be
completed in accordance with the existing policies of the Purchaser
and in conformity with generally accepted accounting and auditing
principles including, among others, those specifically relating to
costing. The Purchaser's personnel and its representatives will be
allowed to review the results of this inventory and of the costing
thereof.
(ii) Any damaged or defective item, any
special order item not covered by an existing customer order and
not normally stocked by SSC or Purchaser's USCO, Incorporated
subsidiary ("USCO"), and any items not currently listed in a
current vendor catalog shall be valued at zero;
(iii) Any items which have not sold within
twelve (12) months will be valued at thirty five percent (35%) of
cost and any items which have not sold within twenty four (24)
months will be valued at zero; and
(iv) Any items which are in excess of a two
(2) year supply of such items shall be valued at zero.
The foregoing guidelines are for the purpose of
excluding only non-saleable items from valuation and all questions
between the parties with respect to the application of these
guidelines to accomplish such purpose shall be resolved on behalf
of the parties by the mutual consent of James B. Sloan on behalf of
SSC and the Stockholders and James C. Plyler, Jr., President of
USCO, on behalf of the Purchaser.
(d) Non-Qualifying Accounts and Notes Receivable
determined as hereinafter set forth, net of reserve for bad debts
shall be substituted for Estimate of Non-Qualifying Accounts
Receivable over Reserve for Bad Debts in the Pricing Formula. Non-
Qualifying Accounts and Notes Receivable for determination of the
Final Adjusted Price shall mean any accounts and/or notes
receivable which are ninety (90) days or more past the due date of
the invoice ninety (90) days after the Closing Date (as defined in
Section 7.1 of this Agreement). The proceeds of collection, net of
expenses, of any subsequent recovery on Non-Qualifying Accounts and
Notes Receivable within one (1) year of the Closing Date will be
paid one-half (1/2) to the Purchaser and one-half (1/2) to the
Stockholders.
1.2.1.4 Ratable Interest. A Stockholder's ratable interest
in the Merger Consideration ("Ratable Interest") shall be
determined by dividing the number of his shares of Common Stock by
the total number of shares of Common Stock which were outstanding
immediately prior to the Merger.
1.2.2 Disbursement of the Merger Consideration. The
Merger Consideration shall be disbursed as hereinafter provided to
each Stockholder in accordance with such Stockholder's Ratable
Interest.
1.2.2.1 Base Price. At the Closing (as defined in Section
7.1 of this Agreement) the Purchaser shall pay the Base Price by
delivery of Merger Consideration equal to eighty percent (80%) of
the Base Price directly to the Stockholders and delivery of Merger
Consideration equal to twenty percent (20%) of the Merger
Consideration to the Escrow Agent under the terms of the Escrow
Agreement provided for in Section 5.9 of this Agreement as security
for a possible reduction from the Base Price to the Final Adjusted
Price.
1.2.2.2 Final Adjusted Price. In the event there is a
difference between Base Price and the Final Adjusted Price the
amount of such difference shall be paid within thirty (30) days
after determination of the Final Adjusted Price. In the event the
Final Adjusted Price is higher than the Base Price, the Purchaser
shall pay the Stockholders by delivery of to them of Merger
Consideration equal to the amount of such difference. In the event
the Final Adjusted Price is lower than the Base Price by an amount
in excess of the amount of the Merger Consideration held by the
Escrow Agent under the terms of the Escrow Agreement, the amount of
such excess shall be paid to the Purchaser pro rata by the
Stockholders in accordance with their Ratable Interests. Upon the
determination by the Purchaser of the Final Adjusted Price, the
Purchaser shall give written instructions to the Escrow Agent under
the terms of the Escrow Agreement with respect to the delivery of
the Merger Consideration held in escrow.
1.2.2.3 Form of Payment of Merger Consideration: Hughes
Stock; Cash and Hughes Stock. At the sole option of the Purchaser,
the Merger Consideration to be disbursed in accordance with Section
1.2.2 of this Agreement may be paid either entirely in shares of
common stock, $1.00 par value per share, of the Purchaser ("Hughes
Stock") or in cash with respect to up to fifteen percent (15%) of
the Merger Consideration and the balance of the Consideration in
Hughes Stock. For purposes of all payments of Consideration in
Hughes Stock the value of Hughes Stock shall have the value of
Nineteen Dollars ($19.00) per share.
1.2.2.4 Proportional Payments of Cash and Hughes Stock.
Should the Purchaser elect to pay any portion of the Merger
Consideration in cash, each disbursement of the Merger
Consideration to each Stockholder, and any return of Merger
Consideration due from any Stockholder to the Purchaser, shall be
made in the same such proportions of cash and Hughes Stock.
1.2.2.5 No Fractional Shares. No fractional shares of
Hughes Stock will be issued as Merger Consideration. The amount
Merger Consideration which would otherwise have been made in a
fractional share interest will be paid in cash by the Purchaser
based upon the value of Hughes Stock set forth in Section 1.2.2.3
of this Agreement.
1.2.3 No Dissenting Shares. In accordance with the terms
of paragraph 4.1(c) of the Plan of Merger and as set forth in
Section 5.1 of this Agreement, it shall be a condition of the
approval by the Stockholders of the Merger and a condition
precedent to the obligation of the Purchaser to enter into and
complete the Closing under this Agreement that the Plan of Merger
be approved by the Stockholders holding one hundred percent (100%)
of the shares of Common Stock and, therefore, the acquisition of
the Common Stock by the Purchaser will not be consummated if there
are shares of Common Stock which might qualify to be dissenting
shares under the applicable provisions of the NCBCA.
ARTICLE II
Representations and Warranties
of SSC and the Stockholders
SSC and each Stockholder makes the following representations
and warranties to the Purchaser, each of which shall be deemed
material (and the Purchaser, in executing, delivering and
consummating this Agreement, has relied and will rely upon the
correctness and completeness of each of such representations and
warranties):
2.1 Valid Corporate Existence; Qualification. SSC is a
corporation duly organized, validly existing and in good standing
under the laws of the State of North Carolina. SSC has the
corporate power to carry on its business as now conducted and to
own its assets. SSC is duly qualified to conduct business and is
in good standing as a foreign corporation in those jurisdictions
set forth on Exhibit 2.1 and in those jurisdictions in which SSC is
required to qualify in order to own its assets or properties or to
carry on its business as now conducted, and there has not been any
claim by any other jurisdiction to the effect that SSC is required
to qualify or otherwise be authorized to do business as a foreign
corporation therein. The copies of SSC's Articles of Incorporation
(certified by the appropriate authority) and By-Laws (certified by
SSC's Secretary), as amended to date, which constitute a part of
Exhibit 2.1 are true and complete copies of those documents as now
in effect. The minute books of SSC contain accurate records of all
meetings of its Board of Directors and Stockholders since its
incorporation, and accurately reflect all transactions referred to
therein.
2.2 Capitalization. The authorized capital stock of SSC
consists of 250 shares of Common Stock, par value $100 per share,
of which 138.5 shares are issued and outstanding. All of such
outstanding shares are validly issued, fully paid and
nonassessable. There are no subscriptions, options, warrants,
rights or calls or other commitments or agreements to which SSC or
the Stockholders are a party or by which such persons are bound,
calling for the issuance, transfer, sale or other disposition of
any class of securities of SSC. There are no outstanding
securities of SSC convertible or exchangeable, actually or
contingently, into shares of Common Stock, or any other securities
of SSC.
2.3 No Subsidiaries. Except as set forth on Exhibit 2.3,
there are no corporations, partnerships or other business entities
controlled by SSC (collectively, "Subsidiaries"). As used herein,
"controlled by" means (i) the ownership of not less than fifty
percent (50%) of the voting securities or other interests of a
corporation, partnership or other business entity, or (ii) the
possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a corporation,
partnership or other business entity, whether through the ownership
of voting shares, by contract or otherwise. SSC has not made any
investment in, and does not own, any capital stock of, or any other
proprietary interest in, any other corporation, partnership or
other business entity that is not reflected on its books and
records.
2.4 Consents. Except as set forth on Exhibit 2.4, there are
no consents of governmental or other regulatory agencies, foreign
or domestic or of other parties required to be received by or on
the part of SSC or the Stockholders to enable such persons to enter
into and carry out this Agreement in all material respects.
2.5 Corporate Authority; Binding Nature of Agreement; Title
to SSC Stock, etc. SSC and the Stockholders have the power to
enter into this Agreement and to carry out its or their obligations
hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by SSC's Board of Directors and upon approval of the
Plan of Merger by the shareholders of SSC no other corporate
proceeding on the part of SSC is necessary to authorize the
execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby. This Agreement constitutes
the valid and binding agreement of each of SSC and the Stockholders
and, assuming that this Agreement constitutes the legal, valid and
binding agreement of the other parties, is enforceable in
accordance with its terms subject to applicable bankruptcy,
insolvency and similar laws affecting the rights of creditors and
subject to general principles of equity. Each Stockholder
represents and warrants with respect to the shares set forth
opposite such Stockholder's name on the List of Shareholders and
Shares Held attached hereto as Exhibit 2.5, that (a) such
Stockholder is and until the merger will be the sole record and
beneficial owner of such shares free and clear of all manner of
liens, charges, encumbrances and claims; and (b) such Stockholder
has and until the merger at the Closing will have, good and
marketable title to such shares and the absolute and unqualified
right to sell, transfer and deliver such shares to the Purchaser.
2.6 Financial Statements. Except as set forth on Exhibit
2.6, the books of accounts of SSC taken as a whole, fairly reflect
its income, expenses, assets and liabilities in all material
respects. The reviewed financial statements of SSC for the fiscal
years ended December 31, 1992, December 31, 1991, and December 31,
1990, respectively, and the interim financial statements for the
eleven (11) month period ended November 30, 1993, copies of which
are attached hereto as Exhibit 2.6 fairly present the financial
position of SSC as of such dates and the results of their
operations for such fiscal years and fiscal periods, and; except as
set forth therein or in Exhibit 2.6, were prepared in conformity
with generally accepted accounting principles consistently applied
throughout the fiscal years and fiscal period covered thereby.
2.7 Liabilities. As at November 30, 1993 (the "Balance Sheet
Date"), SSC had no material debts, liabilities or obligations,
contingent or absolute, that would normally be reflected on the
books of SSC, other than those debts, liabilities and obligations
reflected or reserved against in SSC's Balance Sheet at the Balance
Sheet Date (the "Balance Sheet") or as set forth on Exhibit 2.7.
2.8 Actions Since Balance Sheet Date. Except as otherwise
expressly provided or set forth in, or required by, this Agreement,
or as set forth in Exhibit 2.8, since the Balance Sheet Date, SSC
has not: (i) issued or sold, or agreed to issue or sell any of its
capital stock, options, warrants, rights or calls to purchase such
stock, any securities convertible or exchangeable into such capital
stock or other corporate securities, or effected any subdivision or
other recapitalization affecting its capital stock; (ii) incurred
any material obligation or liability, absolute or contingent,
except those arising in the ordinary and usual course of its
business that would normally be reflected on the books of SSC;
(iii) discharged or satisfied any lien or encumbrance, except in
the ordinary and usual course of business, or paid or satisfied any
liability, absolute or contingent, other than liabilities as at the
Balance Sheet Date in the ordinary and usual course of business;
(iv) made any wage or salary increases or granted any bonuses other
than wage and salary increases and bonuses granted in accordance
with its normal salary increase and bonus policies; (v) mortgaged,
pledged or subjected to any lien or other encumbrance any of its
properties or assets, or permitted any of its property or assets to
be subjected to any lien or other encumbrance, except in the
ordinary and usual course of business; (vi) sold, assigned or
transferred any of its properties or assets, except in the ordinary
and usual course of business; (vii) entered into any material
transaction not in the ordinary and usual course of business;
(viii) waived any rights of substantial value, or cancelled,
modified or waived any indebtedness for borrowed money held by it,
except in the ordinary and usual course of business; (ix) declared,
paid or set aside any dividends or other distributions or payments
on its capital stock, or redeemed or repurchased, or agreed to
redeem or repurchase, any shares of its capital stock; (x) made any
loans or advances to any person, or assumed, guaranteed, or
otherwise become responsible for the obligations of any person; or
(xi) incurred any indebtedness for borrowed money (except for
endorsement, for collection or deposit of negotiable instruments
received in the ordinary and usual course of business).
2.9 Absence of Changes. Except as otherwise expressly
provided or set forth in, or required by, this Agreement, or as set
forth in Exhibit 2.9, since the Balance Sheet Date, there has not
been any material change, whether or not adverse, in the assets,
properties, operations or financial condition of SSC and since the
Balance Sheet Date no event has occurred, other than in the
ordinary and usual course of business and as set forth in such
Exhibit 2.9, which could be reasonably expected to have a material
effect upon the business of SSC, and neither management of SSC nor
any Stockholder knows of any development or threatened development
of a nature that will have, or which could be reasonably expected
to have, a material effect upon the business of SSC or upon any of
its assets, properties, operations or financial condition,
including, without limitation, the loss of any licenses or permits,
suppliers, customers or employees, which loss would be of a
material nature.
2.10 Taxes. SSC has delivered to the Purchaser true and
complete copies of the federal income tax returns on Form 1120 of
SSC as filed with the Internal Revenue Service for each of the
fiscal years ending December 31, 1992, December 31, 1991 and
December 31, 1990, respectively. Each of such returns was prepared
in conformity with information contained in the books and records
of SSC. Except as set forth in Exhibit 2.10, all taxes, including,
without limitation, income, property, sales, use, franchise,
capital stock, excise, added value, employees' income withholding,
social security and unemployment taxes imposed by the United
States, any state or any foreign country, or by any other taxing
authority, which have become due or payable by SSC and all interest
and penalties thereon, whether disputed or not, have been paid in
full or adequately provided for by reserves shown in its books of
account; all deposits required by law to be made by SSC with
respect to estimated income, franchise and employees' withholding
taxes have been duly made; and all tax returns, including estimated
tax returns, required to be filed have been duly filed. No
extension of time for the assessment of deficiencies for any year
is in effect. Except as set forth in said Exhibit 2.10, no
deficiency is proposed, or to the knowledge of any Stockholder, is
threatened against SSC. Except as set forth in Exhibit 2.10, the
federal and state income tax returns of SSC have never been
audited. Exhibit 2.10 also sets forth a list of those states in
which income, franchise or sales and use tax returns were filed by
SSC for the fiscal years ending December 31, 1992, December 31,
1991 and December 31, 1990, respectively.
2.11 Ownership of Assets; Trademarks, etc. Except as set
forth in Exhibit 2.11, SSC owns outright, and has good and
marketable title to all of its assets, properties and businesses
(including all assets reflected in the Balance Sheet, except as the
same may have been disposed of in the ordinary course of business
since the Balance Sheet Date), free and clear of all liens,
mortgages, pledges, conditional sales agreements, restrictions on
transfer or other encumbrances or changes.
To the best knowledge of each Stockholder: (a) Exhibit 2.11
sets forth a true and complete list and brief description of all
patents, copyrights, trademarks, trade names and other similar
intangible assets which are either owned by SSC or in which it has
an interest as owner or licensee; (b) and except as set forth in
said Exhibit 2.11, no other person, firm or corporation has any
proprietary-or other interest in any such intangible assets; (c)
such assets so owned or licensed are, in the reasonable business
judgment of management of SSC, sufficient to permit SSC to conduct
its business as now conducted; (d) and except as set forth in
Exhibit 2.11, SSC is not a party to or bound by any license or
agreement requiring the payment to any person, firm or corporation
of any royalty; (e) neither management of SSC nor any Stockholder
knows, or has reasonable grounds to know, of any violation by
others of the trademark, trade name or patent rights of SSC; and
(f) SSC is not infringing upon any patent, copyright, trade name or
trademark or otherwise violating the rights of any third party with
respect thereto, and no proceedings have been instituted or are
threatened and no claim has been received by SSC or any Stockholder
alleging any such violation.
2.12 Insurance. Exhibit 2.12 sets forth a list and brief
description of all policies of fire, liability and other forms of
insurance held by SSC as of the date hereof. To the best knowledge
of each Stockholder, and except as set forth in Exhibit 2.12, such
policies are valid, outstanding and enforceable policies, as to
which premiums have been paid currently, are with reputable
insurers believed by the management of SSC to be financially sound
and are consistent with the practices of similar concerns engaged
in substantially similar operations as those currently conducted by
SSC. Except as set forth in said Exhibit 2.12, neither management
of SSC nor any of the Stockholders knows of any state of facts, or
of the occurrence of any event which might reasonably (i) form the
basis for any damages against SSC not fully covered by insurance
for liability on account of any express or implied warranty or
tortious omission or commission, or (ii) result in a material
increase in insurance premiums of SSC.
2.13 Litigation, Compliance with Law. Except as set forth in
Exhibit 2.13, there are no actions, suits, proceedings or
governmental investigations relating to SSC or to any of its
properties, assets or businesses filed or commenced and pending or,
to the knowledge of any Stockholder, threatened, or any order,
injunction, award or decree outstanding, against SSC or against or
relating to any of its properties, assets or businesses; and
neither management of SSC nor any of the Stockholders knows of any
basis for any such action, suits or proceedings within the past two
(2) years which governmental investigations, orders, injunctions or
decrees could have a material adverse effect on the business,
financial condition or operations of SSC. To the best knowledge of
each Stockholder, and except as set forth in Exhibit 2.13, SSC is
not in violation of any law, regulation, ordinance, order,
injunction, decree, award, or other requirement of any governmental
body, court or arbitrator relating to its properties, assets or
business.
2.14 Real Property. Exhibit 2.14 sets forth a brief
description of all real properties which are owned by, or leased
to, SSC including all material structures located thereon. To the
best knowledge of each Stockholder, (a) SSC owns outright the fee
simple title in and to the real properties shown on said Exhibit
2.14 as being owned by it, free and clear of all claims, liens
mortgages, charges, or encumbrances of any nature whatsoever,
except as otherwise described in Exhibit 2.14; (b) the real
property leases described in Exhibit 2.14 that relate to the leased
properties described therein are now in full force and effect, and
all amounts payable thereunder have been paid; (c) and except as
set forth in Exhibit 2.14, none of such leases could reasonably be
expected to result in material liability for restoration of
premises; (d) all uses of such owned or leased property by SSC
conform, in all material respects, to all applicable building and
zoning ordinances, laws, and regulations and, in the case of leased
property, to all terms of the leases relating thereto; and (e)
except as otherwise described in Exhibit 2.14, all of the real
properties owned or leased by SSC or to be leased by SSC pursuant
to the Leases referred in Section 5.12 of this Agreement are in
usable and operating condition without the necessity of any major
repairs, and all such real properties can be used for their
intended purposes.
2.15 Agreements and Obligations, Performance. To the best
knowledge of each Stockholder, except as listed and briefly
described in Exhibit 2.15 or elsewhere in this Agreement or the
Exhibits hereto (the "Listed Agreements"), SSC is not a party to,
nor is bound by any: (i) written or oral agreement or other
contractual commitment, understanding or obligation which involves
aggregate payments in excess of Twenty Five Thousand Dollars
($25,000.00); (ii) contract, arrangement, commitment or
understanding which involves aggregate payments in excess of Twenty
Five Thousand Dollars ($25,000.00) that cannot be cancelled on
thirty (30) days or less notice without penalty or premium or any
continuing obligation or liability; (iii) contractual obligation or
contractual liability of any kind to the Stockholders; (iv)
contract, arrangement, commitment or understanding with its
customers or any officer, employee, Stockholder, director,
representative or agent thereof for the repurchase of products,
sharing of fees, the rebating of charges to such customers, bribes,
kickbacks from such customers or other similar arrangements; (v)
contract for the purchase or sale of any materials, products or
supplies which contain, or which commits or will commit it for a
fixed term; (vi) contract of employment with any officer or
employee not terminable at will without penalty or premium or any
continuing obligation or liability; (vii) deferred compensation
bonus or incentive plan or agreement not cancelable at will without
penalty or premium or any continuing obligation or liability;
(viii) union or other collective bargaining agreement; (ix)
agreement, commitment or understanding relating to indebtedness for
borrowed money; (x) contract which, by its terms, requires the
consent of any party thereto to the consummation of the
transactions contemplated hereby; (xi) contract containing
covenants limiting the freedom of SSC to engage or compete in any
line of business or with any person in any geographical area; (xii)
contract or option relating to the acquisition or sale of any
business; (xiii) voting trust agreement or similar stockholders'
agreement; (xiv) option for the purchase of any asset, tangible or
intangible; or (xv) other contract, agreement, commitment or
understanding which materially affects any of its properties,
assets or business, whether directly or indirectly, or which was
entered into other than in the ordinary course of business. Except
as set forth in said Exhibit 2.15, SSC has not during the last
thirty-six (36) months entered into any of the types of contracts,
arrangements, commitments or understandings with any of its
suppliers or customers referred to in item (iv) of this Section
2.15. A true and correct copy of each of the written Listed
Agreements has been delivered to the Purchaser. To the best
knowledge of each of the Stockholders, (a) SSC has in all material
respects performed all obligations required to be performed by it
to date under all of the Listed Agreements, is not in default in
any material respect under any of the Listed Agreements, and has
received no notice of any default or alleged default hereunder
which has not heretofore been cured or which notice has not
heretofore been withdrawn; and (b) SSC does not know of any
material default under any of the Listed Agreements by any other
party thereto or by any other person, firm or corporation bound
thereunder.
2.16 Condition of Assets. To the best knowledge of each
Stockholder, except for normal breakdowns and servicing
requirements, all machinery and equipment regularly used by SSC in
the conduct of its business has been maintained and repaired in
accordance with SSC's maintenance standards, and the inventories of
SSC are and will be substantially in usable and saleable condition.
2.17 Accounts and Notes Receivable. Except as set forth on
Exhibit 2.17, all of the accounts and notes receivable reflected in
the books of account of SSC arose in the ordinary course of its
business, from the sale of services or goods, and neither
management of SSC nor any of the Stockholders knows, or has a
reason to know, of any valid defense or right of set-off to the
rights of SSC to collect such accounts receivable in the full
amounts shown on such books of account, subject, however, to a
reasonable reserve for bad debts.
2.18 Permits and Licenses. To the best knowledge of
management of SSC and each Stockholder, (a) Exhibit 2.18 sets forth
all permits, licenses, orders, franchises and approvals from all
federal, state, local and foreign governmental regulatory bodies
held by SSC; (b) SSC has all permits, licenses, orders, franchises
and approvals of all federal, state, local and foreign governmental
or regulatory bodies required of it to carry on its business as
presently conducted and such permits, licenses, orders, franchises
and approvals are in full force and effect, and no suspension or
cancellation of any of such other permits, licenses, etc. is
threatened; and SSC is in compliance in all material respects with
all requirements, standards and procedures of the federal, state,
local and foreign governmental bodies which have issued such
permits, licenses, orders, franchises and approvals; and (c) said
Exhibit 2.18 also sets forth a brief description of all vans,
automobiles, trucks or other vehicles owned or leased by SSC and
the jurisdiction in which such vehicle is titled.
2.19 Banking Arrangements. Exhibit 2.19 sets forth the name
of each bank in or with which SSC has an account, credit line or
safety deposit box, and a brief description of each such account,
credit line or safety deposit box, including the names of all
persons currently authorized to draw thereon or having access
thereto; and the names of all persons, if any, now holding powers
of attorney from SSC and a summary statement of the terms thereof.
2.20 Interest in Assets. To the best knowledge of management
of SSC and each Stockholder, and except as set forth in Exhibit
2.20, neither the Stockholders nor any affiliates of any
Stockholder owns any property or rights, tangible or intangible,
used in or related, directly or indirectly, to the business of SSC.
As used herein, "affiliate of any Stockholder" means any person,
corporation or other entity which directly or indirectly controls,
is controlled by or is under common control with such Stockholder.
2.21 Salary Information. Exhibit 2.21 contains a list of the
names and current salary rates of and bonus commitments to all
present officers of SSC and the names and current annual salary
rates of all other persons employed by SSC whose annual salaries
exceed Fifteen Thousand Dollars ($15,000.00).
2.22 Employee Benefit Plans. Other than as set forth on
Exhibit 2.22 there are no "employee pension benefit plans" (within
the meaning of Section 3(2)(A) of the Employee Retirement Income
Security Act of 1974, as amended ["ERISA"]) (collectively, the
"Pension Plans") maintained by SSC. There are no outstanding
liabilities of SSC, and the Stockholders do not know of any
potential liabilities in connection therewith.
2.22.1 Welfare Plans; Claims. All of the "employee
welfare benefit plans" (within the meaning of Section 3(1) of
ERISA) maintained by SSC or to which it makes employer
contributions with respect to its employees (collectively, the
"Welfare Plans") are listed in Exhibit 2.22. There are no actions,
suits or claims, pending or threatened, and neither management of
SSC nor any of the Stockholders has any knowledge of any facts
which could give rise to any actions, suits or claims against any
of the Welfare plans, or against SSC with respect to any thereof.
2.22.2 Welfare Plans; Compliance. SSC is in
compliance in all material respects with all reporting and
disclosure requirements applicable to it under the Internal Revenue
Code of 1986, as amended (the "Code") and ERISA, and the Department
of Labor and Internal Revenue Service regulations promulgated
thereunder, with respect to all of the Pension Plans and Welfare
Plans.
2.22.3 Welfare Plans; Prohibited Transactions. To the
best knowledge of management of SSC and each Stockholder, none of
the Pension Plans and Welfare Plans, or any of their related
trusts, or SSC or any trustee, administrator or other "party in
interest" or "disqualified person" (within the meaning of Section
3(14) of ERISA or Section 4975(e)(2) of the Code, as amended (the
"Code"), respectively) with respect to the Pension Plans and
Welfare Plans, has engaged in any "prohibited transaction" (within
the meaning of Section 406 of ERISA or Section 4975(c) of the Code,
respectively) with respect to the participation of SSC therein,
which could subject any of the Pension Plans or Welfare Plans or
related trusts, or any trustee, administrator or other fiduciary of
any such Pension Plan or Welfare Plan, or SSC or the Purchaser, or
any other party dealing with the Pension Plans or Welfare Plans, to
the penalties or excise tax imposed on prohibited transactions by
Sections 409 or 502 of ERISA or Section 4975 of the Code.
2.22.4 COBRA. To the best knowledge of management of
SSC and each of the Stockholders, SSC has complied with the
continuation coverage requirements of group health plans provided
in Section 4980B of the Code and Sections 601 et. seq. of ERISA.
2.23 No Breach. To the best knowledge of management of SSC
and each Stockholder, neither the execution and delivery of this
Agreement nor compliance by SSC and the Stockholders with any of
the provisions hereof nor the consummation of the transactions
contemplated hereby, will:
(a) violate or conflict with any provision of the
Articles of Incorporation or By-laws of SSC;
(b) violate or, alone or with notice or the passage of
time, result in the material breach or termination of, or otherwise
give any contracting party the right to terminate, or declare a
default under, the terms of any agreement or,other document or
undertaking, oral or written to which any of SSC or the
Stockholders are a party or by which any of them or any of their
respective properties or assets may be bound (except for such
violations, conflicts, breaches or defaults as to which required
waivers or consents by other parties have been, or will, prior to
the Closing, be, obtained);
(c) result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or
assets of SSC or pursuant to the terms of any such agreement or
instrument;
(d) violate any judgment, order, injunction, decree or
award against, or binding upon, SSC or the Stockholders or upon
their respective properties or assets; or
(e) violate any law or regulation of any jurisdiction
relating to SSC or any of its securities, assets or properties,
other than laws applicable to the Purchaser, SSC and the
Stockholders.
2.24 Brokers. Except as described in Exhibit 2.24, all
negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on directly with the
Purchaser by SSC and the Stockholders without the intervention of
any broker, finder, investment banker or other third party. Except
as described in Exhibit 2.24, neither SSC nor the Stockholders have
engaged, consented to, or authorized any broker, finder, investment
banker or other third party to act on its or his behalf, directly
or indirectly, as a broker or finder in connection with the
transactions contemplated by this Agreement, and SSC the
Stockholders, jointly and severally, agree to indemnify the
purchaser against, and to hold it harmless from any claim for
brokerage or similar commission or other compensation which may be
made against the Purchaser by any third party in connection with
any transactions contemplated hereby which claim is based upon any
action by SSC the Stockholders.
2.25 Labor Discussions. Except with respect to the
agreements listed in Exhibit 2.15 pursuant to Section 2.15 (viii),
and otherwise as set forth in Exhibit 2.25, SSC is not, and nor
during the past five (5) years has it been, involved in any labor
discussions with any unit or group seeking to become the bargaining
unit for any of its employees. With respect to said agreements,
Exhibit 2.25 sets forth a description of the status thereof,
including any demands or proposals with respect to the renewal,
extension or replacement thereof.
2.26 Change of Name. SSC has not conducted business under
any name during the past five (5) years except those set forth on
Exhibit 2.26.
2.27 Pollution and Other Regulations. Except as set forth on
Exhibit 2.27, SSC (i) has complied in all material respects with
all applicable federal, state and local environmental laws to which
it is subject, including without limitation, the Resource
Conservation and Recovery Act of 1976, as amended ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986 ("CERCLA"), the Federal Water Pollution
Control Act, as amended ("FWPCA"), the Federal Clean Air Act, as
amended ("FCAA"), and the Toxic Substance Control Act ("TSCA"), and
laws with respect to asbestos, and does not have any liability
under, or have any knowledge of any potential liability under any
such environmental laws, nor has it received a written request for
information under, or written notice of potential violation of, or
liability under, CERCLA or any other environmental law or under any
public health or safety or welfare law, (ii) has obtained all
permits, licenses or other authorizations required for its
operations under the foregoing laws, and (iii) complies in all
material respects with all laws and regulations relating to equal
employment opportunity and employee safety in all jurisdictions in
which it is doing business.
2.28 Untrue or Omitted Facts. No representation, warranty or
statement by the Stockholders in this Agreement contains any untrue
statement of a material fact, or omits or will omit to state a fact
necessary in order to make such representations, warranties or
statements not materially misleading. To the best knowledge of
each Stockholder, without limitation of the foregoing, there is no
fact known to the Stockholders that has had, or which may be
reasonably expected to have, a material adverse effect on SSC or
any of its assets, properties, operations or businesses and that
has not been disclosed in writing to the Purchaser.
2.29 Accuracy of Information Supplied for Registration
Statement. None of the information which has been or will be
supplied by each Stockholder to the Purchaser for inclusion in the
Registration Statement on Form S-3 (or its successor or any other
form permitting such registration) to be filed by the Purchaser
with the Securities and Exchange Commission (the "Commission") (the
"Registration Statement"), or the prospectus included therein,
will, at the time the Registration Statement becomes effective, be
false or misleading with respect to any material fact, or omit to
state any material fact necessary in order to make the statements
therein not misleading other than conditions affecting the business
of SSC's customers generally. If at any time prior to or after the
effective date of the Registration Statement, any event relating to
the Stockholders should occur which should be set forth in an
amendment of, or a supplement to, the Registration Statement or
prospectus, each Stockholder shall promptly inform the Purchaser.
2.30 Investment Representation. The Stockholders hereby
represent that they understand that the transaction contemplated by
this Agreement is to be carried out as a transaction exempt from
registration under the Securities Act of 1933, as amended (the
"Act") and, accordingly the shares of Hughes Stock will not have
been registered under the Act. The Stockholders hereby further
represent that they are acquiring the shares of the Hughes Stock
for investment purposes only and not with a view to or for resale
in connection with any distribution of the Hughes Stock, nor with
any intention of distribution of the Hughes Stock or of selling the
Hughes Stock. The Stockholders understand that because the shares
of Hughes Stock will not have been registered under the Act, the
Purchaser will not permit the transfer of such shares without
registration under the Act, or upon the issuance to the Purchaser
of a favorable opinion of its counsel or of the submission to the
Purchaser of such other evidence as may be satisfactory to counsel
for the Purchaser, in either case, to the effect that any such
transfer, whether pursuant to Rule 144 of the Act or otherwise,
shall not be in violation of the Act, and any applicable state
securities laws, and that the share certificates representing such
shares will be issued with a restrictive legend providing notice of
such restriction.
2.31 Access to Information. The Stockholders represent and
warrant to the Purchaser that they have had an opportunity to ask
questions of, and receive answers from, appropriate officers and
representatives of the Purchaser concerning the terms and
conditions of the issuance of the Hughes Stock and to obtain any
additional information concerning the Purchaser which the
Stockholders have requested. In addition, the Stockholders
represent and warrant that the Purchaser has made available for
inspection by the Stockholders various documents connected with the
Purchaser's business and has not refused in any way to permit the
Stockholders to inspect any document requested to be inspected by
the Stockholders.
ARTICLE III
Representations and Warranties of Purchaser
The Purchaser makes the following representations and
warranties to SSC and the Stockholders, each of which shall be
deemed material (and SSC and the Stockholders, in executing,
delivering and consummating this Agreement, have relied and will
rely upon the correctness and completeness of each of such
representations and warranties):
3.1 Valid Corporate Existence; Qualification. The Purchaser
is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida. The Purchaser has
the corporate power to carry on its business as now conducted and
to own its assets. The Purchaser is duly qualified to conduct
business and is in good standing as a foreign corporation in those
jurisdictions in which it is required to qualify in order to own
its assets or properties or to carry on its business as now
conducted, and there has not been any claim by any other
jurisdiction to the effect that the Purchaser is required to
qualify or otherwise be, authorized to do business as a foreign
corporation therein. The copies of the Purchaser's Certificate of
Incorporation (certified by the Florida Secretary of State) and
By-Laws (certified by the Purchaser's Secretary), as amended to
date which will be delivered to SSC and the Stockholders at least
ten (10) days prior to the Closing; are true and complete copies of
those documents as now in effect. The minute books of the
Purchaser contain accurate records of meetings of its Board of
Directors, Executive Committee of the Board, if any, and
Stockholders since its incorporation and accurately reflect all
transactions referred to therein.
3.2 Capitalization. The authorized capital stock of the
Purchaser consists of 10,000,000 shares of Common Stock, par value
$1.00 per share, of which 4,552,946 shares were issued and
outstanding as of January 19, 1994 and 10,000,000 shares of
Preferred Stock, no par value, none of which were outstanding on
January 19, 1993. All of such shares of outstanding Common Stock
are duly authorized and validly issued, fully paid and
nonassessable.
3.3 Consents. Except as set forth on Exhibit 3.3, there are
no consents of governmental or other regulatory agencies, foreign
or domestic, or of other parties required to be received by or on
the part of the Purchaser to enable the purchaser to enter into and
carry out this Agreement in all material respects.
3.4 Corporate Authority; Hughes Stock Validly Issued;
Binding Nature of Agreement. The Purchaser has the power to enter
into this Agreement and to carry out its obligations thereunder.
The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized
by the Purchaser's Board of Directors and no other corporate
proceeding on the part of the Purchaser is necessary to authorize
the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby. The Hughes Stock shall
have been duly authorized and issued and when issued shall be
outstanding, fully paid and nonassessable. This Agreement
constitutes the valid and binding agreement of the Purchaser and is
enforceable in accordance with its terms.
3.5 No Breach. To the best knowledge of the Purchaser,
neither the extension and delivery of this Agreement nor compliance
by the Purchaser with any of the provisions hereof nor the
consummation of the transactions contemplated hereby, will:
(a) violate or conflict with any provisions of the
Certificate of Incorporation or By-Laws of the Purchaser;
(b) violate or, alone or with the passage of time,
result in the material breach or termination of, or otherwise give
any contracting party the right to terminate, or declare a default
under, the terms of any agreement or other document or undertaking,
oral or written to which the Purchaser is a party or by which it or
any of its properties or assets may be bound (except for such
violations, conflicts, breaches or defaults as to which required
waivers or consents by other parties have been, or will, prior to
Closing, be, obtained);
(c) result in the creation of any lien, security
Interest, charge or encumbrance upon any of the properties or
assets of the Purchaser or pursuant to the terms of any such
agreement or, instrument;
(d) violate any judgment, order, injunction, decree or
award against, or binding upon the Purchaser or upon its properties
or assets; or
(e) violate any law or regulation of any jurisdiction
relating to the Purchaser or any of securities, assets or
properties other than laws applicable to the Purchaser, SSC and the
Stockholders.
3.6 Financial Statements. The Purchaser has furnished the
Stockholders with consolidated balance sheets of the Purchaser and
its consolidated subsidiaries as at the fiscal year end in each of
the last three (3) years, up to and including the fiscal year
ending January 29, 1993, and with the related consolidated
statements of income, stockholders' equity and changes in financial
position for the periods then ended, all such financial statements
as at the fiscal year end for each of the last three (3) fiscal
years, reported on by Coopers & Lybrand. Such financial statements
(including the notes thereto) are correct and complete, are in
accordance with the books and records of the Purchaser and the
Purchaser's consolidated subsidiaries and fairly present the
consolidated financial position and the results of the operations,
changes in stockholders' equity and changes in financial position
of the Purchaser and the Purchaser's consolidated subsidiaries as
at and for the periods indicated, in each case in conformity with
generally accepted accounting principles consistently applied,
except as otherwise indicated in such statements. The Purchaser's
Report on Form 10-K for the fiscal year ended January 29, 1993,
Proxy Statement dated April 17, 1993, and Reports on Form 10-Q for
the quarters ended April 30, 1993, July 31, 1993 and October 31,
1993, true and correct copies of which have been delivered to the
Stockholders, contain no untrue statement of a material fact or
omit to state any fact required to make any such document not
materially misleading and are in accordance with the books and
records of the Purchaser and the Purchaser's consolidated
subsidiaries and fairly present the consolidated financial position
and the results of the operations, changes in stockholders' equity
and changes in financial position of the Purchaser and the
Purchaser's consolidated subsidiaries as at and for the periods
indicated, in each case in conformity with generally accepted
accounting principles consistently applied, except as otherwise
indicated in such statements.
3.7 Absence of Changes. Since January 29, 1993, except as
set forth on Exhibit 3.7, there have been no material adverse
changes in the condition (financial or otherwise), assets,
liabilities, earnings or business of the Purchaser and its
subsidiaries, taken as a whole, and no event has occurred, other
than in the ordinary and usual course of business and as set forth
in such Exhibit 3.7 which could be reasonably expected to have a
material adverse effect upon the business of the Purchaser, and the
purchaser knows of no development or threatened development of a
nature that will have, or which could reasonably be expected to
have, a material adverse effect upon the business of the Purchaser
or upon any of its assets, properties operations or financial
condition, including, without limitation, the loss of any licenses
or permits, suppliers, customers or employees, which loss would be
of a material adverse nature.
3.8 Brokers. Except as described in Exhibit 3.8, all
negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on directly with SSC and the
Stockholders by the Purchaser without the intervention of any
broker, finder, investment banker or other third party. Except as
described in Exhibit 3.8, the Purchaser has not engaged, connected
to, or authorized any broker, finder, investment banker or other
third party to act on its behalf, directly or indirectly, as a
broker or finder in connection with the transactions contemplated
bye this Agreement, and the Purchaser agrees to indemnify SSC and
the Stockholders against, and to hold them harmless from, any claim
for brokerage or similar commission or other compensation which may
be made against SSC or the Stockholders by any third party in
connection with the transactions contemplated hereby, which claim
is based upon any action by the Purchaser.
3.9 Litigation; Compliance with Laws. Except as set forth
in Exhibit 3.9, there are no actions, suits, proceedings or
governmental investigations relating to the Purchaser or any of its
subsidiaries or any of their properties, assets or businesses filed
or commenced and pending or, to the knowledge of the Purchaser,
threatened, or any order, injunction, award or decree outstanding
against purchaser or any of its subsidiaries or against or relating
to any of their properties assets or businesses which, if
successful, would have a material adverse effect on the business,
financial condition or operation of the Purchaser; and the
Purchaser does not know of any basis for any such actions, suits or
proceedings within the past two (2) years, which governmental
investigations, orders, injunctions or decrees could have a
material adverse effect on the business, financial condition or
operation of the Purchaser.
3.10 Untrue or Omitted Facts. No representations warranty or
statement by the Purchaser in this Agreement contains any untrue
statement of a material fact, or omits or will omit to state a fact
necessary in order to make such representations, warranties or
statements not materially misleading. Without limitation of the
foregoing, there is no fact known to the Purchaser that has had or
which may reasonably be expected to have, a materially adverse
effect on the purchaser or any of its assets, properties,
operations or businesses and that has not been disclosed in writing
to the Stockholders.
3.11 Accuracy of Information Supplied for Registration
Statement. None of the information which will be supplied by the
Purchaser for inclusion in the Registration Statement to be filed
by the Purchaser with the Commission, or the prospectus included
therein, will, at the time the Registration Statement becomes
effective, be false or misleading with respect to any material fact
or omit to state any material fact necessary in order to make the
statements therein not misleading.
3.12 Access to Information. The Purchaser represents and
warrants to SSC and the Stockholders that it has had an opportunity
to ask questions of, and receive answers from, appropriate officers
and representatives of SSC concerning the terms and conditions of
the acquisition of the Common Stock and to obtain any additional
information concerning SSC which the Purchaser has requested. In
addition, the Purchaser represents and warrants that SSC has made
available for inspection by the Purchaser various documents
connected with SSC's business and has not refused in any way to
permit the Purchaser to inspect any document requested to be
inspected by the Purchaser. The Purchaser's access to information
referred to in this Section 3.12 does not in any way diminish any
duty, obligation, warranty or representation of SSC or the
Stockholders set forth elsewhere in this Agreement or reduce in any
way the Purchaser's reliance thereon in the execution, delivery and
consummation of this Agreement.
ARTICLE IV
Covenants
4.1 Pre-Closing Covenants of SSC and the Stockholders. SSC
and each Stockholder, jointly and severally, hereby covenant that,
from and after the date hereof and until the Closing or earlier
termination of this Agreement:
4.1.1 Access. SSC shall afford, and the Stockholders
shall cause SSC to afford to the officers, attorneys, accountants
and other authorized representatives of the Purchaser free and full
access, during regular business hours and upon reasonable notice,
to all of the books, records, personnel and properties of SSC so
that the Purchaser may have full opportunity to make such review,
examination and investigation as it may desire of its business and
affairs. SSC will cause its employees, accountants and attorneys
to cooperate fully with said review, examination and investigation
and to make full disclosure to the Purchaser of all material facts
affecting its financial condition and business operations.
4.1.2 Conduct of Business. Except as hereinafter set
forth in this Section 4.1, SSC shall conduct its business only in
the ordinary and usual course and make no material change in any of
its policies without the prior written consent of the Purchaser,
which shall not be unreasonably withheld or delayed.
4.1.3 Insurance. SSC shall maintain in force the
insurance policies listed in Exhibit 2.12, except to the extent
that they may be replaced with equivalent policies at the same or
lower rates. If, in the Purchaser's opinion, additional coverage
is necessary to keep adequately insured SSC's properties, SSC shall
obtain (to the extent available) such additional insurance, at the
Purchaser's expense, from financially sound and reputable insurers
for a period ending no sooner than the close of business on the
Closing Date; provided that, if the Closing shall fail to occur,
SSC shall promptly cancel such policies for additional insurance
and return to the Purchaser any refunds of premiums paid by the
Purchaser on account thereof.
4.1.4 Liabilities. Except as set forth elsewhere in
this Section 4.1, SSC shall not incur any obligation or liability,
absolute or contingent, except for those incurred in the ordinary
and usual course of its business; nor shall it pay any obligation
or liability other than: (i) the foregoing obligations and
liabilities; (ii) debts, liabilities, and obligations set forth in
the Balance Sheet; (iii) debts, liabilities and obligations arising
after the Balance Sheet Date in the ordinary and usual course of
its business; and (iv) debts, liabilities and obligations under the
contracts, agreements, past practices, arrangements, relationships,
documents and instruments listed, described or contained in this
Agreement or in the Exhibits attached to this Agreement, or related
to SSC's performance of this Agreement.
4.1.5 Preservation of Business. The Stockholders
will use their best efforts to preserve SSC's business organization
intact, to keep available the services of SSC's present officers,
employees and consultants (except as the Purchaser may otherwise
approve) and to preserve its goodwill.
4.1.6 No Breach. SSC and the Stockholders will use
their best efforts to assure that all of their representations and
warranties contained herein are true in all material respects as of
the Closing as if repeated at and as of such time, and that no
material breach or default shall occur with respect to any of its
or their covenants, representations or warranties contained herein
that has not been cured by the Closing. Neither SSC nor any of the
Stockholders will voluntarily take any action or do anything which
will cause a breach of or default respecting such covenants,
representations or warranties and SSC and the Stockholders shall
promptly notify the Purchaser of any event or fact which represents
or is likely to cause such a breach or default.
4.1.7 No Negotiations. Neither SSC nor any of its
officers or directors nor any of the Stockholders shall enter into
or conduct negotiations, or enter into any agreement or
understanding, for the sale or possible sale of any securities of
SSC or the business or the assets of SSC with anyone other than the
Purchaser unless the Closing shall not have occurred by February
15, 1994.
4.1.8 SSC's Reserve for Doubtful Accounts. SSC shall
afford, and the Stockholders shall cause SSC to afford to the
officers, accountants and other authorized representatives of the
Purchaser the opportunity to review the customer credit history and
reasonableness of SSC's reserve for doubtful accounts. SSC shall
reflect in its financial statements an allowance for doubtful
accounts in accordance with generally accepted accounting
principles consistently applied.
4.1.9 Acquisition of Computer System. Prior to the
Closing, SSC shall purchase its computer system from Swaim
Investment Company under an agreement of purchase which will
include among its terms (i) a purchase price equal to the book
value computed using straight-line depreciation with a five (5)
year life (which book value is estimated to be $126,896), (ii) a
subsequent adjustment to the book value to be determined at the
time the computer system is discontinued to adjust for depreciation
to the date of discontinuance, (iii) an agreement with USCO to
determine the items of SSC computer hardware which may be utilized
in bringing SSC on line with the USCO computer and to reduce the
new adjusted book value of the entire computer system by the new
adjusted book value of the computer hardware items being retained
by USCO, (iv) the sale or offering for sale, at the best obtainable
price or prices, of the then remaining and unusable items of
computer hardware and the sharing equally by Swaim Investment
Company and USCO of the book losses upon any such sale or sales to
the extent that the total proceeds from the sales of the remaining
computer hardware is less than the remaining and unrecovered new
adjusted book value of those items.
4.2 Pre-Closing Covenants of the Purchaser. The Purchaser
hereby covenants that, from and after the date hereof and until the
Closing or earlier termination of this Agreement:
4.2.1 Access. The Purchaser shall afford to the
officers, attorneys, accountants and other authorized
representatives of SSC and the Stockholders free and full access,
during regular business hours and upon reasonable notice, to all of
the books, records and properties of the Purchaser so that SSC and
the Stockholders may have full opportunity to make such review,
examination, and investigation as they desire of its business and
affairs. The Purchaser will cause its employees, accountants and
attorneys to cooperate fully with said review, examination and
investigation and to make full disclosure to SSC and the
Stockholders of all material facts affecting its financial
condition and business operations.
4.2.2 No Breach. The Purchaser will use its best
efforts to assure that all of its representations and warranties
contained herein are true in all material respects as of the
Closing as if repeated at and as of such time, and that no material
breach or default shall occur with respect to any of its covenants,
representations or warranties contained herein that has not been
cured by the Closing. The Purchaser will not voluntarily take any
action or do anything which will cause a breach of or default
respecting such covenants, representations and warranties and shall
promptly notify SSC and the Stockholders of any event or fact which
represents or is likely to cause such breach or default.
<PAGE>
4.3 Post Closing Covenants of the Stockholders.
4.3.1 Surrender of Merger Consideration to Satisfy
Obligation With Respect to Final Adjusted Price. Each Stockholder
covenants and agrees that if, in accordance with the terms of
Section 1.2.2.2 of this Agreement, it is determined that the
Stockholders have an obligation to surrender Merger Consideration
because the Final Adjusted Price is determined to be lower than the
Base Price, such Stockholder will satisfy and discharge such
Stockholder's Ratable Interest of obligation by authorizing the
Escrow Agent under the terms of the Escrow Agreement to deliver to
the Purchaser such Stockholder's Ratable Interest of such
obligation and, if further required to pay such obligation, such
Stockholder will surrender to the Purchaser the additional amount
of the Merger Consideration required to pay such Stockholder's
Ratable Interest of such reduction.
4.3.2 Restrictions on Stock Sales. Each Stockholder
covenants and agrees that such Stockholder will not sell any shares
of Hughes Stock received pursuant to this Agreement until the
Purchaser shall have published consolidated financial statements
including at least one (1) calendar month's results of operations
of the Purchaser including SSC as a consolidated subsidiary of the
Purchaser. If Purchaser fails to comply with the provisions of
Section 4.4.2 hereof and to publish such statements by July 31,
1994, the restriction contained in this Section no longer shall be
binding on the Stockholders.
4.4 Post Closing Covenants of the Purchaser.
4.4.1 Payment of Additional Merger Consideration If
Required for Final Adjusted Price. The Purchaser covenants and
agrees to pay to the Stockholders, in accordance with the
provisions of Section 1.2.2.2 of this Agreement, any additional
Merger Consideration which may be required upon a determination
that the Final Adjusted Price is greater than the Base Price.
4.4.2 Publication of Financial Statements. The
Purchaser shall publish the consolidated financial statements
referred to in Section 4.3.2.
4.4.3 Indemnification with Respect to Litigation.
The Purchaser agrees to save, defend and indemnify SSC and the
Stockholders against and hold them harmless from (i) any and all
liabilities costs or damages (including, without limitation,
reasonable attorneys' fees and disbursements) in connection with
any action, claim or proceeding arising prior to the Closing Date
and relating to the affairs of the Purchaser, including this
Agreement and (ii) any and all liabilities, costs or damages
(including, without limitation, reasonable attorneys' fees and
disbursements) in connection with any action, claim or proceeding
brought against SSC and/or any of the Stockholders by a shareholder
of the Purchaser, other than a Stockholder in connection with the
transactions contemplated by this Agreement.
4.5 Covenants of the Purchaser and the Stockholders with
Respect to Registration of the Hughes Stock.
4.5.1 Covenants of the Purchaser. With respect to
the Hughes Stock to be issued as the Merger Consideration, the
Purchaser covenants and agrees:
(a) To file with the Commission within ninety
(90) days of the Closing Date, the Registration Statement
permitting the registration of shares of the Hughes Stock to be
issued pursuant to this Agreement for the purpose of registering
said shares of Hughes Stock with the Commission;
(b) To use its best efforts to cause the
Registration Statement to become effective as soon as possible and
to, as expeditiously as possible, prepare and file with the
Commission any amendments and supplements to the Registration
Statement as may be necessary;
(c) To, as expeditiously as possible, furnish
to each Stockholder such documents as the Stockholder may
reasonably request in order to facilitate the public sale or other
disposition of the shares of Hughes Stock owned by the Stockholders
and so registered;
(d) To, as expeditiously as possible, use its
best efforts to register or qualify the shares of Hughes Stock
covered by the Registration Statement under the securities or Blue
Sky laws of those states set forth on schedules to be furnished to
the Purchaser by the Stockholders within fifteen (15) days of the
effective date of the Registration Statement listing those states
in which it is reasonable that registration or qualification will
be required to enable the Stockholders, through registered broker-
dealers, to consummate the public sale or other disposition of the
Hughes Stock by the Stockholders, and do any and all other acts and
things that may be necessary or desirable to enable the
Stockholders, through registered broker-dealers, to consummate the
public sale or other disposition of the Hughes Stock owned by them,
provided, however, that each Stockholder holding shares of Hughes
Stock included in any such registration shall furnish in writing to
the Purchaser such information regarding such Stockholder and the
distribution proposed by such Stockholder as the Purchaser may
request in writing and as shall be required in connection with any
registrations qualification or compliance;
(e) To, as expeditiously as possible, use its best
efforts to list or register the shares of Hughes Stock issued
pursuant to this Agreement on the New York Stock Exchange;
(f) To pay all expenses incurred by the Purchaser
in complying with this Section 4.5.1 including, without limitation,
exchange listing fees, printing expenses, fees and disbursements of
counsel for the purchaser and Stockholders, state Blue Sky fees and
expenses, and the expense of any special audits incident to or
required by any such registration, but excluding underwriting
discounts and selling commissions, if any; and,
(g) In the event of any registration of shares of
the Hughes Stock pursuant to this Agreement, to indemnify and hold
harmless the Stockholder selling such shares, any underwriter of
such shares and each other person, if any, who controls such
Stockholder or underwriter within the meaning of the Act or the
Securities and Exchange Act of 1934, as amended (the "Exchange
Act"), against any losses, claims, damages or liabilities, joint or
several, to which such seller, underwriter or controlling person
may become subject under the Act, the Exchange Act, state
securities laws or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement of any material fact
contained in the Registration Statement, any prospectus contained
in the Registration Statement, or any amendment or supplement to
such Registration Statement, or arise out of or are based upon the
omission or alleged omission to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; and the Purchaser will reimburse such Stockholder,
underwriter and each such controlling person for any legal or any
other expenses reasonably incurred by such Stockholder, underwriter
or controlling person in connection with investigating or defending
any such loss, claim, damage or action; provided, however, that the
Purchaser will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or omission made in such Registration
Statement, preliminary prospectus or prospectus, or any such
amendment or supplement, in reliance upon and in conformity with
information furnished to the purchaser, in writing, by or on behalf
of such Stockholder, underwriter or controlling person specifically
for use in the preparation thereof.
4.5.2 Covenants of the Stockholders. With respect to
the shares of Hughes Stock to be registered under the Act and sold
by any Stockholder, such selling Stockholder covenants and agrees:
(a) To, severally and not jointly, indemnify and
hold harmless the Purchaser, each of its directors and officers and
each underwriter (if any) and each person, if any, who controls the
Purchaser or any such underwriter within the meaning of the Act or
the Exchange Act, against any losses, claims, damages or
liabilities, joint or several, to which the Purchaser, such
directors and officers, underwriter or controlling person may
become subject under the Act, Exchange Act, state securities laws
or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement under which
such shares of Hughes Stock were registered under the Act, any
preliminary prospectus or final prospectus contained in the
Registration Statement, or any amendment or supplement to the
Registration Statement, or arise out of or are based upon any
omission or alleged omission to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, if the statement or omission was made in reliance upon
and in conformity with information furnished in writing to the
Purchaser by or on behalf of such selling Stockholder, specifically
for use in connection with the preparation of such Registration
Statement, prospectus, amendment or supplement; provided, however,
that the obligations of such individual Stockholders hereunder
shall be limited to an amount equal to the proceeds received by
each such Stockholder for shares of Hughes Stock sold pursuant to
a Registration Statement.
4.5.3 Conditions to Indemnification Under Sections
4.5.1 and 4.5.2. Each party entitled to indemnification under
Section 4.5.1 or 4.5.2 (the "Indemnified Party") shall give notice
to the party required to provide indemnification (the "Indemnifying
Party") promptly after such Indemnified Party has actual knowledge
of any claim as to which indemnity may be sought, and shall permit
the Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom; provided, that counsel for the
Indemnifying Party, who shall conduct the defense of such claim of
litigation, shall be approved by the Indemnified Party (whose
approval shall not be unreasonably withheld); and, provided,
further, that the failure of any Indemnified Party to give notice
as provided herein shall not relieve the Indemnifying Party of its
obligations under Section 4.5.1 or Section 4.5.2, as applicable.
The Indemnified Party may participate in such defense at such
party's expense; provided, however, that the Indemnifying Party
shall pay such expense if representation of such Indemnifying Party
by the counsel retained by the Indemnifying Party would be
inappropriate due to actual or potential differing interests
between the Indemnified Party and any other party represented by
such counsel in such proceeding. No Indemnifying Party, in the
defense of any such claim or litigation shall, except with the
consent of each Indemnified Party, consent to entry of any judgment
or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party or a release from all liability in
respect of such claim or litigation.
<PAGE>
ARTICLE V
Conditions Precedent to the
Obligation of the Purchaser to Close
The obligation of the Purchaser to enter into and complete the
Closing is subject to the fulfillment, prior to or on the Closing
Date, of each of the following conditions, any one or more of which
may be waived by the Purchaser (except when the fulfillment of such
condition is a requirement of law).
5.1 Approval of Shareholders. The Plan of Merger shall have
been approved by the affirmative vote of the holders of one hundred
percent (100%) of the outstanding shares of SSC and all filing and
other requirements which are conditions precedent to the
effectiveness of the Plan of Merger shall have been satisfied.
5.2 Representations and Warranties. All representations and
warranties of SSC and the Stockholders contained in this Agreement
and in any written statement (including financial statements),
exhibit, certificates schedule or other document delivered pursuant
hereto or in connection with the transactions contemplated hereby
shall be true and correct in all material respects as at the
Closing Date, as if made at the Closing and as of the Closing Date.
5.3 Covenants. SSC and the Stockholders shall have
performed and complied in all material respects with all covenants
and agreements required by this Agreement to be performed or
complied with by each of them prior to or at the Closing.
5.4 No Actions. No action, suit, proceeding or
investigation shall have been instituted, and be continuing before
a court or before or by a governmental body or agency, or shall
have been threatened and be unresolved, to restrain or to prevent
or to obtain damages in respect of, the carrying out of the
transactions contemplated hereby, or which, if successful, would
materially affect the right of the Purchaser to own the Common
Stock of SSC or to operate or control the assets, properties and
business of SSC after the Closing Date, or which, if successful,
would have a material adverse effect thereon.
5.5 Consents; Licenses and Permits. SSC and the
Stockholders shall have each obtained all consents, licenses and
permits of third parties necessary for the performance by each of
them of all of their respective obligations under this Agreement,
and such other consents, if any, to prevent (i) agreements of SSC
from terminating, the termination of which, in the aggregate, would
have a material adverse effect on the business, financial condition
or assets of SSC or (ii) any material indebtedness of SSC from
becoming due or being subject to becoming due with the passage of
time or on notice as a result of the performance of this Agreement;
any other provision of this Agreement to the contrary
notwithstanding.
5.6 Certificate. The Purchaser shall have received a
certificate in the form annexed hereto as Exhibit 5.6 dated the
Closing Date, signed by the President and Secretary of SSC and by
the Stockholders as to the satisfaction of the conditions contained
in Section 5.1, 5.2 and 5.3.
5.7 Opinion. The Purchaser shall have received the written
opinion of Keziah, Gates & Samet, L.L.P. dated the Closing Date, in
form and substance reasonably satisfactory to the Purchaser and its
counsel substantially to the effect set forth on Exhibit 5.7
hereto.
5.8 No Material Adverse Change. There shall have been no
material change, whether or not adverse at the Closing Date in the
business, assets, properties, operations, financial status or
prospects of SSC since December 31, 1992.
5.9 Escrow Agreement. At the Closing the Stockholders, the
Purchaser and Maguire, Voorhis & Wells, P.A. (the "Escrow Agent")
shall have entered into an escrow agreement substantially in the
form annexed hereto as Exhibit 5.9.
5.10 Employment Agreement. At the Closing James B. Sloan
shall have executed the Employment Agreement between SSC and James
B. Sloan annexed hereto as Exhibit 5.10.
5.11 Non-Competition Agreement. At the Closing James B.
Sloan shall have executed the Non-Competition Agreement annexed
hereto as Exhibit 5.11.
5.12 Lease Agreements. At the Closing the Lease Agreements
annexed hereto as Exhibits 5.12(a) through (f) shall have been
executed between SSC and Swaim Investment Company.
5.13 Additional Documents. SSC and the Stockholders shall
have delivered all such other certificates and documents as the
purchaser or its counsel may have reasonably requested.
5.14 Approval of Counsel. All actions, proceedings,
instruments and documents required to carry out this Agreement, or
under the conditions of the Closing as provided in Section 7.3
hereof, and all other related legal matters shall have been
approved as to the form and substance by Maguire, Voorhis & Wells,
P.A. as counsel to the Purchaser, which approval shall not be
unreasonably withheld or delayed.
<PAGE>
ARTICLE VI
Conditions Precedent to the Obligation of
SSC and the Stockholders to Close
The obligation of SSC and the Stockholders to enter into and
complete the Closing is subject to the fulfillment, prior to or on
the Closing Date, of each of the following conditions, any one or
more of which may be waived by SSC and all of the Stockholders
(except when the fulfillment of such condition is a requirement of
law).
6.1 Approval of Shareholders. The condition for approval by
the shareholders of SSC set forth in Section 5.1 hereof shall have
been satisfied.
6.2 Representations and Warranties. All representations and
warranties of the Purchaser contained in this Agreement and in any
written statement (including financial statements), exhibit,
certificate, schedule or other document delivered pursuant hereto
or in connection with the transactions contemplated hereby shall be
true and correct in all material respects as at the Closing Date,
as if made at the Closing and as of the Closing Date.
6.3 Covenants. The Purchaser shall have performed and
complied in all material respects with all covenants and agreements
required by this Agreement and the Plan of Merger to be performed
or complied by it prior to or at the Closing.
6.4 No Actions. No action, suit, proceeding, or
investigation shall have been instituted, and be continuing, before
a court or before or by a governmental body or agency, or have been
threatened, and be unresolved, by any governmental body or agency
to restrain or prevent, or obtain damages in respect of, the
carrying out of the transactions contemplated hereby, or which, if
successful, would materially affect the right of the Stockholders
to own the Hughes Stock or which, if successful, would have a
material adverse effect on the assets, properties and business of
the Purchaser.
6.5 Consents. The Purchaser shall have obtained all
consents, licenses and permits of third parties necessary for the
performance of all its respective obligations under this Agreement
and the Plan of Merger.
6.6 No Material Adverse Change. There shall have been no
material adverse change at the Closing Date in the business,
assets, properties, operations, financial status or prospects of
the Purchaser since January 29, 1993.
6.7 Certificate. SSC and the Stockholders shall have
received a certificate in the form annexed hereto as Exhibit 6.7
dated the Closing Date, signed by the President and Secretary of
the Purchaser as to the satisfaction of the conditions contained in
Sections 6.2 and 6.3.
6.8 Opinion. SSC and the Stockholders shall have received
the written opinion of Maguire, Voorhis & Wells, P.A. dated the
Closing Date, in form and substance satisfactory to SSC and the
Stockholders and their counsel substantially to the effect set
forth on Exhibit 6.8 hereto.
6.9 Execution of Other Agreements. The Purchaser and SSC
shall have executed the Escrow Agreement referred to in Section 5.9
and the Purchaser shall have deposited with the Escrow Agent the
amount of the Merger Consideration required thereunder and SSC
shall have executed the Employment Agreement, Non-Competition
Agreement and Lease Agreements referred to in Sections 5.10 through
5.12 of this Agreement.
6.10 Additional Documents. The Purchaser shall have
delivered all such certified resolutions, certificates and
documents with respect to the Purchaser as SSC and the Stockholders
or their counsel may have reasonably requested.
6.11 Approval of Counsel. All actions, proceedings,
instruments and documents required to carry out this Agreement or
under the conditions of the Closing as provided in Section 7.3
hereof, and all other related legal matters, shall have been
approved as to form and substance by Keziah, Gates & Samet, L.L.P.,
as counsel to SSC and the Stockholders, which approval shall not be
unreasonably withheld or delayed.
6.12 Release of Stockholder Guarantees and Payment of
Designated Indebtedness of SSC. The Purchaser shall have used, and
shall after the Closing continue to use, its best efforts to obtain
the release, concurrently with the Closing or thereafter, of any
personal guarantees given by the Stockholders with respect to
obligations of SSC; and at the Closing shall pay or cause the
payment of the existing indebtedness of SSC to NationsBank of North
Carolina, N.A., the Testamentary Trust Under the Will of William S.
Swaim, and Swaim Investment Company.
ARTICLE VII
Closing
7.1 The Closing. The closing of the acquisition of the
Common Stock contemplated by this Agreement (the "Closing") shall
be deemed to occur simultaneously with the Effective Date of the
Plan of Merger subject to and contemporaneously with the filing of
the Plan of Merger with the North Carolina Secretary of State and
the satisfaction and/or waiver of all of the other conditions of
the Effective Date under the Plan of Merger and of the Closing as
set forth in Section 7.3 hereof. The date on which the Closing
shall be deemed to have occurred is referred to in this Agreement
as the "Closing Date."
7.2 Location, Time and Date. The location for the delivery
of the items to be delivered by the parties under the conditions of
the Closing set forth in Section 7.3 hereof shall be the offices of
Keziah, Gates & Samet, 400 High Point Bank Building, 300 North Main
Street, High Point, North Carolina, and the time and date for such
delivery shall be 10:00 o'clock a.m. on January 28, 1994 or at
such other time and place as may be actually agreed to by the
parties hereto, but in any event not later than February 15, 1994.
7.3 Conditions of the Closing. The delivery of the items to
be delivered of SSC and the Stockholders as provided in Section 7.4
hereof and the delivery of the items to be delivered by the
Purchaser as provided in Section 7.5 hereof, together with the
filing of the Articles of Merger with the North Carolina Secretary
of State as provided in paragraph 2.1(a) of the Plan of Merger
shall constitute the conditions of the Closing.
7.4 Items to be Delivered by SSC and the Stockholders. At
the Closing, SSC and the Stockholders will deliver or cause to be
delivered to the Purchaser:
(a) The certificates which represented one hundred
percent (100%) of the outstanding shares of Common Stock
immediately prior to the Effective Time of the Merger (as defined
in the Plan of Merger);
(b) The certificate required by Section 5.6;
(c) The opinion of Keziah, Gates & Samet, L.L.P. as
required by Section 5.7;
(d) The Escrow Agreement required by Section 5.9:
(e) The Employment Agreement required by Section 5.10;
(f) The Non-Competition Agreement required by Section
5.11;
(g) The Lease Agreements required by Section 5.12; and
(h) Such other certified resolutions, documents and
certificates as are required to be delivered by SSC and the
stockholders pursuant to the provisions of this Agreement.
<PAGE>
7.5 Items to be Delivered by Purchaser. At the Closing, the
Purchaser will deliver or cause to be delivered to SSC and the
Stockholders:
(a) The Merger Consideration constituting the Base Price
to be delivered to the Stockholders in accordance with Section
1.2.2.1 of this Agreement;
(b) The certificate required by Section 6.7;
(c) The opinion of Maguire, Voorhis & Wells, P.A.
required by Section 6.8; and
(d) The Escrow Agreement (together with evidence of the
deposit by the Purchaser with the Escrow Agent of the Base
Consideration required by Section 1.2.2.1 of this Agreement), the
Employment Agreement, the Non-Competition Agreement, and Lease
Agreements required by Sections 5.9 through 5.12;
(e) Such other certified resolutions, documents and
certificates as are required to be delivered by the Purchaser
pursuant to the provisions of this Agreement.
(f) Evidence of compliance with the Purchaser's
obligations under Section 6.12.
ARTICLE VIII
Survival of Representations; Indemnification
8.1 Survival. The parties hereto agree that their
respective representations, warranties, covenants and agreements
contained in this Agreement shall survive the Closing for a period
of three (3) years from the Closing Date.
8.2 Indemnification by SSC and the Stockholders. SSC and
the Stockholders agree to save, defend and indemnify the Purchaser
against and hold it harmless from any and all liabilities, of every
kind, nature and description, fixed or contingent (including,
without limitation, reasonable counsel fees and expenses in
connection with any action, claim or proceeding relating to such
liabilities) ("Damages") arising from the breach of any of their
representations, warranties or covenants contained herein or the
several exhibits hereto, including, without limitation, any tax
liabilities to the extent not so reflected or reserved against in
the Balance Sheet, subject to the provisions of Sections 8.5.1,
8.5.2 and 8.5.4. Prior to the Closing, indemnification provided
for in this Section 8.2 shall be a liability of and shall be paid
solely by SSC. After the Closing, any liability for
indemnification provided for in this Section 8.2 shall be a
liability solely of the Stockholders limited, in each case, to the
pro rata amount of such liability represented by the Stockholder's
pro rata ownership of shares of SSC immediately prior to the
acquisition of the shares of SSC by the Purchaser.
8.3 Indemnification by the Purchaser. The Purchaser agrees
to save, defend and indemnify SSC and the Stockholders against and
hold them harmless from any and all Damages arising from the breach
of any of its representations, warranties or covenants contained
herein or the several exhibits hereto, subject to the provisions of
Section 8.5.1, 8.5.3 and 8.5.4, provided, however, that the maximum
cumulative amount of such indemnification shall not exceed One
Million Dollars ($1,000,000.00).
8.4 Nature of Liability of SSC and the Stockholders. Each
of the representations and warranties of the Stockholders contained
in this Agreement are joint and several subject, however, to the
limitations on liability set forth in Sections 8.2 and 8.5 hereof.
8.5 Limitations of Liability.
8.5.1 Claims. No claim for indemnification hereunder
shall be made by the Purchaser against the Stockholders under
Section 8.2 or by the Stockholders against the Purchaser under
Section 8.3 unless and until the aggregate of any and shall such
claims then being made shall exceed the sum of Twenty Five Thousand
Dollars ($25,000.00). All claims for Damages arising out of
breaches of representations or warranties regarding tax deficiency
assessments relating to federal and state income tax returns filed
prior to closing, shall be computed net of the present value of all
readily ascertainable future tax benefits associated therewith. No
claim shall be made for matters adequately covered by insurance.
The parties waive subrogation rights against each other with
respect to all matters as to which an insurance recovery shall have
been actually received after the Closing so long as the terms of
any insurance policy are not violated by such waiver.
8.5.2 Liability of SSC and the Stockholders. Upon a
final determination (as Provided in Section 8.5.4) of the amount of
any specific claim for Damages made against SSC or the Stockholders
by the Purchaser, the Purchaser shall be entitled to recover the
amount of such Damages as finally determined, provided, however,
that no liability of the Stockholders shall exceed the limitation
set forth in Section 8.2 hereof.
8.5.3 Liability of the Purchaser. Upon a final
determination (as provided in Section 8.5.4) of the amount of any
specific claim for Damages made against the Purchaser by SSC or the
Stockholders, SSC and the Stockholders shall be entitled to recover
the amount of such Damages as finally determined, provided,
however, that no liability of the Purchaser shall exceed the
limitation set forth in Section 8.3 hereof.
8.5.4 Final Determination. In the event of a final
determination (as defined herein) that the aggregate Damages
asserted by the Purchaser or by SSC or by the Stockholders exceed
the sum of Twenty Five Thousand Dollars ($25,000.00), the asserting
party shall be entitled to recover the aggregate amount of such
Damages in excess of Twenty Five Thousand Dollars ($25,000.00).
For the purposes of Section 8.5.2 or 8.5.3, a final determination
shall exist when (i) the parties agree upon the amount, or (ii) a
court of competent jurisdiction shall have made a final
determination with respect thereto and appeal therefrom shall not
have been taken within thirty (30) days from the date of such
determination. The asserting party will assign to the other party
any claims against which the asserting party has been indemnified
and has been paid as provided herein, as to which there may be
claims against others, and the other party in all respects shall be
subrogated to the rights of the asserting party in connection
therewith.
8.6 Defense of Claims. Each party entitled to
indemnification under this Article VIII (the "Indemnified Party")
agrees to notify the party required to provide indemnification (the
"Indemnifying Party") with reasonable promptness of any claim
asserted against it in respect of which the Indemnifying Party may
be liable under this Agreement, which notification shall be
accompanied by a written statement setting forth the basis of such
claim and the manner of calculation thereof. The Indemnifying
Party shall have the right, at its election, to defend or
compromise any such claim at their own expense with counsel of
their choice; provided, however, that (i) such counsel shall have
been approved by the Indemnified Party prior to engagement, which
approval shall not be unreasonably withheld or delayed; (ii) the
Indemnified Party may participate in such defense, if it so chooses
with its own counsel and at its own expense; and (iii) any such
defense or compromise shall be conducted in a manner which is
reasonable and not contrary to the Indemnified Party's interest.
In the event the Indemnifying Party does not undertake to defend or
compromise, the Indemnifying Party shall promptly notify the
Indemnified Party of its intention not to undertake to defend or
compromise the claim.
ARTICLE IX
Termination and Waiver
9.1 Termination. Anything herein or elsewhere to the
contrary notwithstanding, this Agreement may be terminated and the
transactions provided for herein abandoned at any time prior to the
Closing:
(a) By mutual consent of the Purchaser, SSC and all of
the Stockholders;
(b) By the Purchaser if any of the conditions set forth
in Article V hereof shall not have been fulfilled on or prior to
February 15, 1994, or shall become incapable of fulfillment, and
shall not have been waived;
(c) By SSC and all the Stockholders if any of the
conditions set forth in Article VI hereof shall not have been
fulfilled on or prior to February 15, 1994, or shall have become
incapable of fulfillment, and shall not have been waived;
(d) By the Purchaser or the Stockholders holding more
than twenty percent (20%) of the SSC Stock, if any legal action or
proceeding shall have been instituted or threatened seeking to
restrain, prohibit, invalidate or otherwise affect the consummation
of the transactions contemplated by this Agreement which makes it
inadvisable, in the judgment of the Purchaser or all the
Stockholders, to consummate same.
In the event that this Agreement is terminated as described
above, this Agreement shall be void and of no force and effect,
without any liability or obligation on the part of any of the
parties hereto except for any liability which may arise pursuant to
Section 10.2.
9.2 Waivers. Any condition to the performance of SSC, the
Stockholders or the Purchaser which legally may be waived on or
prior to the Closing Date may be waived at any time by the party
entitled to the benefit thereof by action taken or authorized by an
instrument in writing executed by the relevant party or parties.
The failure of any party at any time or times to require
performance of any provision hereof shall in no manner affect the
right of such party at a later time to enforce the same. No waiver
by any part of the breach of any term, covenant, representation or
warranty contained in this Agreement as a condition to such party's
obligations hereunder shall release or affect any liability
resulting from such breach, and no waiver of any nature, whether by
conduct or otherwise, in any one or more instances, shall be deemed
to be or construed as a further or continuing waiver of any such
condition or of any breach of any other term, covenant,
representation or warranty of this Agreement.
ARTICLE X
Miscellaneous Provisions
10.1 Expenses. Except as otherwise expressly provided or set
forth in, or required by, this Agreement, Purchaser and SSC shall
bear its own expenses in connection herewith.
10.2 Confidential Information. Each party agrees that such
party and its representatives will hold in strict confidence all
information and documents received from the other parties and, if
the transactions herein contemplated shall not be consummated, each
party will continue to hold such information and documents in
strict confidence and will return to such other parties all such
documents (including the exhibits attached to this Agreement) then
in such receiving party's possession without retaining copies
thereof; provided, however, that each party's obligations under the
Section 10.2 to maintain such confidentiality shall not apply to
any information or documents that are in the public domain at the
time furnished by the others or that come in the public domain
thereafter through any means other than as a result of any act of
the receiving party or of its agents, officers, directors or
stockholders which constitutes a breach of this Agreement, or that
are required by applicable law to be disclosed.
10.3 Modification, Termination or Waiver. This Agreement may
be amended, modified, superseded or terminated, and any of the
terms, covenants, representations, warranties or conditions hereof
may be waived, but only by a written instrument executed by the
party waiving compliance. The failure of any party at any time or
times to require performance of any provision hereof shall in no
manner affect the right of such party at a later time to enforce
the same.
10.4 Publicity. The parties agree that no publicity, release
or other public announcement concerning the transactions
contemplated by this Agreement shall be issued by either party
without the advance approval of both the form and substance of the
same by the other party and its counsel, which approval, in the
case of any publicity, release or other public announcement
required by applicable law, shall not be unreasonably withheld or
delayed.
10.5 Notices. Any notice or other communication required or
which may be given hereunder shall be in writing and either be
delivered personally or be mailed, certified or registered mail,
postage prepaid, and shall be deemed given when so delivered
personally, or if mailed, two (2) days after the date of mailing,
as follows:
If to the Purchaser, to: Hughes Supply, Inc.
20 North Orange Avenue
Suite 200
Orlando, Florida 32802-2273
Attn: J. Stephen Zepf
Chief Financial Officer
<PAGE>
With a copy to: Maguire, Voorhis & Wells, P.A.
Post Office Box 633
Orlando, Florida 32802
Attn: Robert N.Blackford, Esq.
If to SSC, to: Swaim Supply Company
300 Woodbrook Drive
High Point, North Carolina 27262
Attn: James B. Sloan
President
With a copy to: Keziah, Gates & Samet, L.L.P.
Post Office Box 2608
High Point, North Carolina
27261-2608
Attn: S. Perry Keziah, Esq.
If to the Stockholders, to
each of them as follows: Testamentary Trust Under Will of
William S. Swaim
c/o James B. Sloan, Trustee
300 Woodbrook Drive
High Point, North Carolina
27262
James B. Sloan
300 Woodbrook Drive
High Point, North Carolina
27262
With a copy to: Keziah, Gates & Samet, L.L.P.
Post Office Box 2608
High Point, North Carolina
27261-2608
Attn: S. Perry Keziah, Esq.
The parties may change the persons and addresses to which the
notices or other communications are to be sent by giving written
notice of any such change in the manner provided herein for giving
notice.
10.6 Binding Effect and Assignment. This Agreement shall be
binding upon and inure to the benefit of the successors and assigns
of the parties hereto; provided, however, that no assignment of any
rights or delegation of any obligations provided for herein may be
made by any party without the express written consent of the other
parties.
10.7 Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the subject matter
hereof.
10.8 Exhibits. All Exhibits annexed hereto and the documents
and instruments referred to herein or required to be delivered
simultaneously herewith or at the Closing are expressly made a part
of this Agreement as fully as though completely set forth herein,
and all references to this Agreement herein or in any of such
Exhibits, documents or instruments shall be deemed to refer to and
include all such Exhibits, documents and instruments.
10.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida
applicable to agreements made and to be performed entirely within
that State, excluding the choice of law rules thereof. Agreement
may be executed in counterparts each of which shall be deemed to be
an original, but which together shall constitute one and the same
instrument.
10.10 Section Headings. The section headings contained in
this Agreement are inserted for convenience of reference only and
shall not affect the meaning or interpretation of this Agreement.
10.11 Gender. Words of the masculine gender in this Agreement
shall be deemed and construed to include correlative words of the
feminine and neuter genders and words of the neuter gender shall be
deemed and construed to include correlative words of the masculine
and feminine genders.
10.12 Severability. The invalidity or unenforceability of any
term or provision of this Agreement shall in no way impair or
affect the balance thereof, which shall remain in full force and
effect.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]<PAGE>
10.13 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
(SEAL) HUGHES SUPPLY, INC.
Attest:s/Robert N. Blackford By: s/J. Stephen Zepf
Robert N. Blackford J. Stephen Zepf
Secretary Treasurer
(SEAL) SWAIM SUPPLY COMPANY
Attest:s/Patricia S. Sloan By: s/James B. Sloan
Patricia S. Sloan James B. Sloan
Secretary President
STOCKHOLDERS
TESTAMENTARY TRUST UNDER WILL OF
WILLIAM S. SWAIM
By: s/James B. Sloan
James B. Sloan, Trustee
s/James B. Sloan
JAMES B. SLOAN
(O:\CORP\032\HUGHES\SSC\ACQ4.AGT)
<PAGE>
List of Exhibits
1.1 Plan of Merger
2.1 Good Standing as a Foreign Corporation, Certified Copy
of Articles of Incorporation and Certified Copy of By-
Laws
2.3 Subsidiaries
2.4 Consents
2.5 List of Shareholders and Shares Held
2.6 Audited Financial Statements
2.7 Liabilities
2.8 Actions Since Balance Sheet Date
2.9 Material Changes
2.10 Taxes and List of States Where Tax Returns Filed
2.11 Ownership of Assets; Trademarks, etc.
2.12 Insurance
2.13 Litigation, Compliance with Law
2.14 Description of all Real Properties Owned or Leased
2.15 Other Agreements, Obligations, Performance
2.17 Accounts and Notes Receivable
2.18 Permits, Licenses, Orders, Franchises and Approvals
2.19 Bank Accounts
2.20 Interest in Assets
2.21 Salary Information
2.22 Employee Benefit Plans
2.24 Broker Agreements
2.25 Labor Discussions
2.26 Business Conducted Under any Other Name
2.27 Pollution and Other Regulations
3.3 Consents of Purchaser
3.7 Absence of Changes
3.8 Brokers - Purchaser
3.9 Litigation; Compliance with Laws by Purchaser
5.6 Certificate of Officers of SSC and Stockholders
5.7 Opinion of Keziah, Gates & Samet, L.L.P.
5.9 Escrow Agreement
5.10 Employment Agreement of James B. Sloan
5.11 Non-Competition Agreement of James B. Sloan
5.12
(a)-(f) Lease Agreements between SSC and Swaim Investment
Company
6.7 Certificate of Officers of Purchaser
6.8 Opinion of Maguire, Voorhis & Wells, P.A.
(o:\corp\032\hughes\ssc\acq4.agt)
Exhibit 5
November 8, 1994
Hughes Supply, Inc.
20 North Orange Avenue
Suite 200
Orlando, Florida 32801
Re: Registration Statement on Form S-3
Gentlemen:
We refer to the proposed sale of 103,632 shares of Common
Stock, par value $1.00 per share (the "Stock"), of Hughes Supply,
Inc. (the "Company") whereby the Stock will be offered for the
account of certain shareholders. We have examined the Registration
Statement on Form S-3 proposed to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended.
We have also examined copies of your Articles of Incorporation,
including all amendments to the date hereof, and all other
corporate records and documents deemed necessary to render this
opinion.
Based on the foregoing, it is our opinion that the shares of
the Stock being offered for the account of the selling shareholders
are presently legally issued and outstanding, fully paid and
nonassessable shares of Common Stock of the Company and when the
Registration Statement shall have become effective and the sale of
all or a part of the Stock shall have been duly completed as
contemplated in the Prospectus forming a part of the Registration
Statement, the shares of the Stock so sold, will upon the execution
and delivery of the proper certificates therefor, be legally issued
and outstanding, fully paid and nonassessable shares of Common
Stock of the Company.
<PAGE>
Hughes Supply, Inc.
November 8, 1994
Page Two
We hereby consent (i) to be named in the Registration
Statement and in the Prospectus, which constitutes a part thereof,
as the attorneys who will pass on the legal matters in connection
with the proposed sale of the Stock by the selling stockholders,
and (ii) to the filing of this opinion as Exhibit 5 to the
Registration Statement.
Very truly yours,
MAGUIRE, VOORHIS & WELLS, P.A.
By: s/Robert N. Blackford
Robert N. Blackford
o:\corp\032\hughes\s-3.opn
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-3 of Coopers & Lybrand's report dated March 17,
1994, on Coopers & Lybrand's audits of the consolidated financial
statements of Hughes Supply, Inc. and subsidiaries, which report is
incorporated by reference in the Company's Annual Report on Form
10-K for the fiscal year ended January 28, 1994. We also consent
to the reference to Coopers & Lybrand under the caption "Experts".
Coopers & Lybrand L.L.P.
Orlando, Florida
November 14, 1994
