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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MARCH 31, 1997
RAVENS METAL PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-1709 55-0398374
(State or other jurisdiction of (Commission (IRS employer identification
incorporation or organization) file number) number)
P.O. BOX 10002, 861 EAST TALLMADGE AVENUE, AKRON, OHIO 44310
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (330) 630-4528
Former name or former address, if changed since last report: NOT APPLICABLE
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On March 31, 1997, Ravens
Metal Products, Inc. (the "Company") completed a holding company reorganization,
as described below in Item 5, and the acquisition of two complementary
businesses.
RVM Industries, Inc. ("RVM"), the holding company parent of the Company
following the reorganization, has acquired all the issued and outstanding
capital stock of Albex Aluminum, Inc. ("Albex") and Signs and Blanks, Inc.
("SABI"), each an Ohio corporation. Albex and SABI had been wholly owned by
Jacob Pollock, the largest shareholder (holding 87.16% of the outstanding
capital stock) and an officer and director of the Company. Mr. Pollock also
will serve as an officer and director of RVM and will hold 87.16% of its
outstanding capital stock.
The purchase price of the Albex shares will be that dollar amount that is equal
to seven times the average earnings of Albex before interest and taxes (plus
depreciation and amortization and less capital expenditures) for the fiscal
years ending March 31, 1999 and March 31, 2000, less all interest bearing debt,
all determined in accordance with generally accepted accounting principles (the
"Albex Purchase Price").
The purchase price of the SABI shares will be that dollar amount that is equal
to seven times the average earnings of SABI before interest and taxes (plus
depreciation and amortization and less capital expenditures) for the fiscal
years ending March 31, 1999 and March 31, 2000, less all interest bearing debt,
all determined in accordance with generally accepted accounting principles (the
"SABI Purchase Price").
Accordingly, neither the Albex Purchase Price nor the SABI Purchase Price can be
determined until the respective earnings of Albex and SABI, for the fiscal year
ending March 31, 2000, are known.
The Albex Purchase Price and the SABI Purchase Price each will be paid over a
five-year term, with interest thereon, at the rate of eight percent (8%) per
annum, accruing from and after July 1, 2000. In each case a payment of principal
only will be due on July 1, 2000, and a payment of principal and interest will
be due on August 1, 2000 and on the first day of each month thereafter, until
both the Albex Purchase Price (and all interest thereon) and the SABI Purchase
Price (and all interest thereon) have been paid in full.
Albex is the obligor on a note payable to Jacob Pollock in the principal amount
of $2,900,000 (the "Albex Note"), and SABI is the obligor on a note payable to
J. Pollock & Co. in the principal amount of $1,131,000 (the "SABI Note"). Albex
will repay the Albex Note, and SABI will repay the SABI Note, over a five-year
term, with interest thereon, at the rate of seven percent (7%) per annum,
accruing from and after April 1, 1997. A payment of interest only on the Albex
Note and on the SABI Note will be due on May 1, 1997 and on the first day of
each month thereafter through December 1, 1997; a payment of principal in the
amount of $48,333.33 and interest on the Albex Note and in the amount of $18,850
and interest on the SABI Note will be due on January 1, 1998 and on the first
day of each month thereafter, until the principal amount (and all interest
thereon) of each Note has been paid in full; provided, however, that no payment
of principal on either Note will be due during the period that RVM is making
payments with respect
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to the Albex Purchase Price or the SABI Purchase Price. However, interest will
continue to accrue and be paid during any period in which no principal payments
are being made with respect to the Notes.
Payments with respect to the Albex Purchase Price, the SABI Purchase Price, the
Albex Note and the SABI Note will be subordinated to the repayment of certain
bank loans. A notice describing these acquisitions is being given or sent to all
Company shareholders of record today, March 31, 1997.
ITEM 5. OTHER EVENTS. On March 31, 1997, the Company also completed a
reorganization of its legal structure pursuant to Section 251(g) of the Delaware
General Corporation Law. The effective date was March 31, 1997. Shareholder
approval of the reorganization is not required and has not been sought.
Shareholders of the Company are not entitled to dissenters' rights under Section
262 of the Delaware General Corporation Law. The principal purpose of the
reorganization is to improve internal operating flexibility. The business
conducted by the Company will not be changed as a result of the reorganization;
its assets and liabilities will remain substantially unchanged. A new parent
holding company has been created, with the Company (the existing publicly held
company) as its wholly owned subsidiary. The name of the new parent company is
RVM Industries, Inc., also a Delaware corporation ("RVM"). Each holder of the
Company's common stock will become the holder of an equal number of shares of
RVM common stock (evidencing the same proportional interest) pursuant to an
exchange of certificates, and the rights of holders of RVM common stock will be
substantially the same rights that they had as holders of the Company's common
stock. RVM common stock will be issued solely as part of the reorganization of
the Company into a holding company structure. As of the effective time of the
reorganization, the Board of Directors of RVM and the Company (as the
surviving corporation) are identical to the Board of Directors of the Company
as constituted at the time of the Merger. Management of RVM and the Company
(both immediately prior to the Merger and as the surviving corporation) are
substantially identical, except that, while Lowell Morgan will continue as
President of the Company (as the surviving corporation), Richard D. Pollock will
serve as President of RVM. RVM will register its common stock on Form 8-B
pursuant to Section 12(g) of the Securities Exchange Act of 1934. The
reorganization will be tax-free to shareholders of the Company. The name of the
Company following the reorganization is Ravens, Inc. A notice describing the
reorganization in detail is being given or sent to all Company shareholders of
record today, March 31, 1997.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(C) EXHIBITS.
2.1 Stock Purchase Agreement
2.2 Agreement and Plan of Reorganization
20 Notice to Shareholders regarding the Reorganization
of Ravens Metal Products, Inc. and the Acquisition
by RVM Industries, Inc. of Albex Aluminum, Inc.
and Signs and Blanks, Inc.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RAVENS METAL PRODUCTS, INC.
By: /s/ John J. Stitz
-------------------------
John J. Stitz
Chief Financial Officer
Dated: March 31, 1997
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RAVENS METAL PRODUCTS, INC.
FORM 8-K CURRENT REPORT
INDEX OF EXHIBITS
2.1 Stock Purchase Agreement
2.2 Agreement and Plan of Reorganization
20 Notice to Shareholders regarding the Reorganization
of Ravens Metal Products, Inc. and the Acquisition
by RVM Industries, Inc. of Albex Aluminum, Inc.
and Signs and Blanks, Inc.
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RAVENS METAL PRODUCTS, INC.
FORM 8-K CURRENT REPORT
MARCH 31, 1997
EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
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STOCK PURCHASE AGREEMENT
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TABLE OF CONTENTS
1. INCORPORATION OF RECITALS.....................................1
2. SALE AND PURCHASE OF SHARES...................................1
3. PURCHASE PRICE................................................1
4. PAYMENT OF PURCHASE PRICE.....................................1
5. CLOSING.......................................................2
6. SELLER'S REPRESENTATIONS......................................2
6.1 ORGANIZATION.........................................2
6.2 AUTHORIZATION........................................2
6.3 OWNERSHIP OF SHARES..................................3
6.4 CAPITALIZATION.......................................3
6.5 FINANCIAL STATEMENTS.................................3
6.6 DIRECTOR, OFFICER, EMPLOYEE AND
AGENT INDEBTEDNESS...................................3
6.7 NO UNDISCLOSED LIABILITIES...........................3
6.8 ACCOUNTS RECEIVABLE..................................4
6.9 INVENTORY............................................4
6.10 PLANT AND EQUIPMENT..................................4
6.11 PROPERTY.............................................4
6.12 LEASES...............................................5
6.13 AGENTS' AGREEMENTS...................................5
6.14 EMPLOYEE CONTRACTS, UNION AGREEMENTS AND
BENEFIT PLANS........................................5
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6.15 INDEBTEDNESS...........................................5
6.16 PATENTS, TRADEMARKS AND PROPRIETARY RIGHTS.............6
6.17 LITIGATION.............................................6
6.18 LABOR RELATIONS........................................6
6.19 BANK ACCOUNTS..........................................7
6.20 RESTRICTIVE COVENANTS..................................7
6.21 OSHA AND OTHER FILINGS.................................7
6.22 ENVIRONMENTAL PROTECTION...............................7
6.23 LICENSE AGREEMENTS.....................................8
6.24 INSURANCE POLICIES.....................................8
6.25 CONTRACTS AND COMMITMENTS..............................8
6.26 ABSENCE OF CERTAIN CHANGES AND EVENTS..................9
6.27 BROKER'S OR FINDER'S FEES.............................10
6.28 NO VIOLATION OF LAW...................................10
6.29 COPIES OF DOCUMENTS...................................10
6.30 REQUIRED CONSENTS AND APPROVALS.......................11
6.31 REQUIRED LICENSES AND PERMITS.........................11
6.32 TAX MATTERS...........................................11
A. TAXES DEFINED................................11
B. TAX RETURNS AND LIABILITIES..................11
C. RESERVES.....................................12
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D. SUBMISSION OF TAX RETURNS....................12
E. ELECTIONS....................................12
6.33 PENSION MATTERS.......................................12
6.34 AGREEMENTS IN FULL FORCE AND EFFECT...................14
6.35 DISCLOSURE............................................14
6.36 SCHEDULES.............................................14
7. REPRESENTATIONS AND WARRANTIES OF PURCHASER....................14
7.1 ORGANIZATION..........................................14
7.2 AUTHORIZATION.........................................14
7.3 BROKER'S OR FINDER'S FEES.............................15
8. COVENANTS OF THE SELLER........................................15
8.1 ORDINARY COURSE.......................................15
8.2 NO AMENDMENTS.........................................15
8.3 NO CAPITAL CHANGES....................................15
8.4 NO DIVIDENDS OR REDEMPTIONS...........................15
8.5 FORBEARANCE BY ALBEX AND SABI.........................15
8.6 INSURANCE AND MAINTENANCE OF PROPERTY.................16
8.7 ACCESS................................................16
8.8 SATISFACTION OF CONDITIONS............................17
8.9 NO DEFAULT............................................17
8.10 COMPLIANCE WITH LAWS..................................17
8.11 OCCURRENCES AFTER SIGNING.............................17
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9. COVENANTS OF THE PURCHASER.....................................17
10. TAX MATTERS....................................................17
10.1 FILING OF TAX RETURNS.................................17
10.2 ACCESS AND ASSISTANCE.................................17
10.3 TRANSFER TAXES........................................18
11. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS...................18
11.1 REPRESENTATIONS AND WARRANTIES TRUE AT
CLOSING DATE..........................................18
11.2 LITIGATION............................................18
11.3 OPINION OF COUNSEL TO THE PURCHASER...................18
12. CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATIONS............19
12.1 REPRESENTATIONS AND WARRANTIES
TRUE AT CLOSING DATE..................................19
12.2 CONSENTS..............................................19
12.3 INVESTIGATIONS........................................19
12.4 NO MATERIAL CHANGE....................................20
12.5 INDEBTEDNESS..........................................20
12.6 LITIGATION............................................20
12.7 SHARE CERTIFICATES AND RESIGNATIONS...................20
12.8 REAL PROPERTY TITLE...................................20
12.9 OPINION OF COUNSEL TO THE SELLER......................20
12.10 APPROVAL AND AUTHORIZATION BY NECESSARY
CORPORATION ACTION....................................21
12.11 DOCUMENTS SATISFACTORY IN FORM AND SUBSTANCE..........22
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12.12 CLOSING ON ALBEX AND SABI.............................22
13. TERMINATION....................................................22
14. INDEMNITIES BY THE SELLER......................................22
14.1 INDEMNITY.............................................22
14.2 TIME TO ASSERT CLAIM..................................22
14.3 CLAIMS BY THIRD PARTIES...............................23
14.4 PAYMENT TO INDEMNIFIED PARTIES........................23
15. INDEMNITIES BY THE PURCHASER...................................24
15.1 INDEMNITY.............................................24
15.2 CLAIMS................................................24
16. MISCELLANEOUS..................................................24
16.1 BINDING EFFECT........................................24
16.2 ASSIGNMENT............................................24
16.3 SURVIVAL OF REPRESENTATIONS...........................24
16.4 FURTHER ASSURANCES....................................24
16.5 NOTICES...............................................24
16.6 COUNTERPARTS..........................................25
16.7 HEADINGS AND TABLE OF CONTENTS........................25
16.8 GOVERNING LAW.........................................25
16.9 EXPENSES..............................................25
16.10 SCHEDULES.............................................25
16.11 ENTIRE AGREEMENT......................................26
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16.12 SELLER'S REPRESENTATIVE...............................26
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STOCK PURCHASE AGREEMENT
------------------------
THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into effective
March 31, 1997, by and among JACOB POLLOCK, TRUSTEE OF THE JACOB POLLOCK TRUST
U/A DATED MARCH 12, 1991, of Akron, Ohio ("Seller"), and RVM INDUSTRIES. INC., a
Delaware corporation ("Purchaser").
R E C I T A L S
---------------
A. Seller is the owner of 100 shares of common stock of Albex Aluminum,
Inc., an Ohio corporation ("Albex") and desires to sell to Purchaser all of the
100 shares of common stock ("Albex Shares"), and Purchaser desires to purchase
the Albex Shares.
B. Seller is the owner of 450 shares of common stock of Signs and
Blanks, Inc., an Ohio corporation ("SABI") and desires to sell to Purchaser all
of the 450 shares of common stock ("SABI Shares"), and Purchaser desires to
purchase the SABI Shares. The Albex Shares and the SABI Shares are collectively
referred to hereinafter as the "Shares".
NOW, THEREFORE, in consideration of the mutual promises and covenants
of the parties as set forth hereinafter, it is agreed by and between the parties
as follows:
1. INCORPORATION OF RECITALS. The recitals contained above are
incorporated herein by this reference.
2. SALE AND PURCHASE OF SHARES. Seller hereby sells to Purchaser and
Purchaser hereby purchases from Seller the Shares. The rights, terms, and
conditions of the Shares are as set forth in a certificate of designation
attached hereto as Schedule 2. and incorporated herein by this reference.
3. PURCHASE PRICE. Purchaser shall pay to Seller for the Shares a
contingent purchase price ("Purchase Price") that will be calculated separately
for Albex Shares and SABI Shares. The Purchase Price will be based on seven
times average earnings before interest and taxes (plus depreciation and
amortization and less capital expenditures) for the years ended March 31, 1999
and March 31, 2000, less all interest bearing debt, all determined in accordance
with generally accepted accounting principles and as set forth on Schedule 3
attached hereto.
4. PAYMENT OF PURCHASE PRICE. The Purchase Price plus interest at 8%
per annum will be paid over five years. Interest will not begin to accrue until
July 1, 2000. A payment of principal only will be due on July 1, 2000, and a
payment of principal and interest will be due August 1, 2000 and on the first
day of each month thereafter until the Purchase Price (and all interest thereon)
have been paid in full. Payments will be subject to the limitations called for
in Purchaser's agreements with
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its lenders. The Purchase Price will be evidenced by promissory notes in
form substantially the same as those attached hereto as SCHEDULES 4. A and B
("Notes").
5. CLOSING. On the closing date ("Closing") Seller shall deliver to the
Purchaser certificates representing the Shares, duly endorsed in blank or
accompanied by duly executed stock transfer powers. Purchaser will issue and
deliver the Notes to Seller on or before July 1, 2000. The transfer of the
Shares, and the delivery of the other instruments, certificates and legal
opinions required herein, shall take place at 861 East Tallmadge Avenue, Akron,
Ohio 44310, at 10:00 a.m. local time, on March 31, 1997 or on such other date or
at such other time or place as the parties shall agree to in writing (the date
and time of the Closing being referred to herein as the "Closing Date"). The
sale and purchase of the Shares shall be effective 12:01 a.m. on the Closing
Date.
6. SELLER'S REPRESENTATIONS. Seller warrants and represents to
Purchaser and acknowledges that Purchaser is relying on such warranties and
representations, the following:
6.1 ORGANIZATION. Albex and SABI are corporations duly organized,
validly existing and in good standing under the laws of the State of Ohio, and
have all requisite power and authority, corporate or otherwise, to conduct their
businesses and to own their properties. They are duly qualified and in good
standing as foreign corporations in each jurisdiction in which qualification is
required. The copies of the articles of incorporation and by-laws of Albex and
SABI delivered to Purchaser are the complete, true and correct articles of
incorporation and by-laws of Albex and SABI, in effect as of the date hereof.
The minutes of directors' and stockholders' meetings and records of stock
issuance of Albex and SABI delivered to the Purchaser are the complete, true and
correct records of directors' and stockholders' meetings and stock issuance
through and including the date hereof and reflect all transactions required to
be contained in such records. Neither Albex nor SABI have any subsidiaries or
own any interest in any other corporation, partnership or joint venture.
6.2 AUTHORIZATION. This Agreement and its execution, delivery and
performance have been duly authorized by all necessary action on the part of
Seller. This Agreement, when signed and delivered by the Seller, will have been
duly executed and delivered by each stockholder of Albex and SABI and will
constitute the legal, valid and binding agreement of each stockholder,
enforceable in accordance with its terms. The execution and delivery of this
Agreement does not, and the consummation of the transactions contemplated hereby
will not, result in the change in any interest rates payable by Albex or SABI or
a violation of, or any conflict with, or any default or acceleration under, (i)
any term or provision of the articles of incorporation or by-laws of Albex and
SABI, (ii) any provision of any mortgage, lien, lease, agreement, instrument,
order, award, judgment, injunction or decree to which any stockholder or Albex
or SABI is a party or by which any of them or any of their
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respective properties is bound (including, but not limited to, any
outstanding industrial revenue bond or similar or other financing relating to
Albex or SABI or any of their leased properties) or (iii) any federal, state or
local law, or regulation of any governmental body, agency or authority
applicable to any stockholder or Albex or SABI.
6.3 OWNERSHIP OF SHARES. Seller has good and marketable title to the
Shares, free and clear of any claims, security interests, liens or encumbrances.
The transfer of the Shares will pass to the Purchaser good and marketable title
to the Shares, free and clear of any claims, security interests, liens or
encumbrances whatsoever.
6.4 CAPITALIZATION. The authorized capital stock of Albex consists
solely of 750 shares of common stock, no par value, of which 100 shares are
issued and outstanding. The authorized capital stock of SABI consists solely of
750 shares of common stock, no par value, of which 450 shares are issued and
outstanding. The Shares constitute all of the issued and outstanding shares of
capital stock of Albex and SABI. The Shares are validly issued, fully paid, and
non-assessable. There are no outstanding subscriptions, options, warrants,
preemptive rights, convertible securities or other agreements or commitments of
any character obligating Albex or SABI to issue, sell, redeem or purchase shares
of capital stock of Albex or SABI or obligating any stockholder to sell,
transfer, surrender, redeem, assign or convey any of the Shares.
6.5 FINANCIAL STATEMENTS. Seller has delivered to Purchaser balance
sheets ("Balance Sheets") of Albex and SABI as of December 31, 1996. The Balance
Sheets fairly present the financial conditions with respect to assets and
liabilities (whether accrued, absolute, contingent or otherwise) of Albex and
SABI as of December 31, 1996 in each case in accordance with generally accepted
accounting principles applied on a consistent basis.
6.6 DIRECTOR, OFFICER, EMPLOYEE AND AGENT INDEBTEDNESS. There are no
loans and advances outstanding to directors, officers, employees and agents of
Albex and SABI respectively, except as disclosed on SCHEDULE 6.6 attached
hereto.
6.7 NO UNDISCLOSED LIABILITIES. Except with respect to: (a) the items
reflected or reserved against in the Balance Sheets; (b) matters set forth in
SCHEDULE 6.7 attached hereto; and (c) the purchase or sale contracts or
commitments in the ordinary course of business, Seller does not have knowledge
of any liabilities or obligations of any nature, whether absolute, accrued,
contingent or otherwise and whether due or to become due (including without
limitation, liabilities for taxes in respect of or measured by the income of
Albex or SABI, and liabilities for taxes arising out of any transaction entered
into prior to such date out of any state of facts existing prior thereto).
Furthermore, Seller has no knowledge of and does not have any
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reasonable ground to know of any basis for the assertions against Albex
and SABI of any liability or obligation as of the last date of the Balance
Sheets of any nature in any amount not fully reflected or reserved against in
the Balance Sheets, except for purchase or sale contracts or commitments in the
ordinary course of business, and except for those matters set forth in this
Section.
6.8 ACCOUNTS RECEIVABLE. All accounts receivable of Albex and SABI
reflected on the Balance Sheets represent sales actually made or services
performed in the ordinary course of business, and are collectible in the normal
course of business and without resort to litigation. All accounts receivable
reflected on the Balance Sheets will represent sales actually made or services
performed in the ordinary course of business and will be collectible in the
normal course of business and without resort to litigation.
6.9 INVENTORY. (i) All of the inventories of Albex and SABI consist of
quality and quantity usable and saleable in the ordinary and usual course of
Albex's and SABI's business; (ii) all inventories have been priced at the lower
of cost or market; (iii) the quantities of each type of inventory (whether raw
materials, work-in-process, or finished goods) are not excessive, but are
reasonable, adequate and appropriate in the present circumstances of Albex and
SABI; and (iv) since December 31, 1996, neither Albex nor SABI have experienced
any difficulties in obtaining any raw materials necessary to the operation of
their respective business, and the Seller knows of no threatened difficulties in
obtaining such raw materials.
6.10 PLANT AND EQUIPMENT. The plants, structures, equipment, and
tangible personal property of Albex and SABI are structurally sound (with no
known defects material to the suitability thereof to present operations) and in
good operating condition and repair; Albex and SABI have not received
notification that Albex and SABI or the owners of the real estate and buildings
are in violation of any applicable building, zoning, anti-pollution, health or
other law, ordinance or regulation in respect of its plants, structures,
equipment or tangible personal property, or their operations and no such
violation exists.
6.11 PROPERTY.
A. SCHEDULE 6.11 hereto sets forth a complete and accurate
list or description of all the real and personal property that Albex and SABI
owns or leases, or have agreed (or have an option) to purchase, sell, or lease.
B. Except as disclosed in SCHEDULE 6.11, Albex and SABI have
good, valid, and marketable title to all the properties and assets reflected in
the Balance Sheet, free and clear of all title defects or objections, liens,
claims, charges, security interests or other encumbrances of any nature
whatsoever, including without
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limitation, any leases, chattel mortgages, conditional sales contracts,
collateral security arrangements and other title or interest retention
arrangements.
C. Except as disclosed in SCHEDULE 6.11, no real property
owned or leased by Albex or SABI are subject to (i) any governmental decree or
order (or threatened or personal order) to be sold or taken by public authority
or (ii) any rights of way, building use restrictions, exceptions, variances,
reservations or limitations of any nature whatsoever which limit the use of such
real property in manners which adversely affect or otherwise limit the present
use of such real property.
D. The rights, properties and other assets presently owned,
leased, or licensed by Albex or SABI and described elsewhere in this Agreement
include all rights, properties and other assets necessary to permit Albex and
SABI to conduct their business in the same manner as their business has been
conducted since January 1, 1996 as to Albex and July 10, 1989 as to SABI.
6.12 LEASES. All leases pursuant to which Albex and SABI leases real or
personal property are valid, binding, and enforceable in accordance with their
terms and are in full force and effect; there are no existing defaults with
respect thereto by Albex or SABI; no event has occurred which (whether with or
without notice, lapse of time or the happening or occurrence of any other event)
would constitute a default thereunder.
6.13 AGENTS' AGREEMENTS. SCHEDULE 6.13 hereto sets forth a complete and
accurate list or description of all written agents', salesmen's, brokers',
dealers', distributors', subcontractors', manufacturer's representatives' or
similar agreements, arrangements or understandings to which Albex or SABI is a
party.
6.14 EMPLOYEE CONTRACTS, UNION AGREEMENTS AND BENEFIT PLANS. SCHEDULE
6.14 hereto sets forth a complete and accurate list or description of all
employment, consulting or collective bargaining contracts, deferred
compensation, pension [as defined in Section 3(2) of the Employee Retirement
Income Security Act, as amended ("ERISA")], profit-sharing, bonus, stock option,
stock purchase or other compensation commitments, arrangements or plans,
including all welfare plans as defined in Section 3(1) ERISA, of or pertaining
to the recent or former employees of Albex or SABI, which are in writing and are
in effect on the date hereof or which are not in writing and are binding on
Albex or SABI. Albex and SABI have complied with all of their obligations,
including the payment of all contributions and the filing of all reports, with
respect to such contracts, commitments, arrangements and plan.
6.15 INDEBTEDNESS. SCHEDULE 6.15 hereto sets forth a complete and
accurate list or description of all instruments or other documents relating to
any direct or indirect indebtedness of Albex or SABI, including indebtedness by
way of lease-purchase arrangement, guarantee, undertaking on which others rely
in extending
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credit, or otherwise, and all conditional sales contracts, chattel
mortgages and other security arrangements with respect to personal property used
or owned by Albex or SABI.
6.16 PATENTS, TRADEMARKS AND PROPRIETARY RIGHTS. SCHEDULE 6.16 hereto
sets forth a complete and accurate list or description of (i) all trademarks,
service marks, trademark registrations, trademark and service mark registration
applications, label filings, copyrights, inventions, patents and patent
applications owned by Albex or SABI, and the jurisdiction in or by which such
trademarks, service marks, trademark registrations, trademark and service mark
registration applications, label filings, copyrights, patents and patent
applications have been registered, filed or issued; (ii) all trade names owned
or used by Albex or SABI, and, in the case of each trade name owned by Albex or
SABI, the jurisdiction in which such trade name has been registered or filed;
and (iii) all contracts, agreements or understandings pursuant to which Albex or
SABI have authorized any person to use or any person has the right to use, in
any business or commercial activity, any of the items listed in clauses (i) and
(ii) above that are owned by Albex or SABI.
6.17 LITIGATION. Except as set forth in SCHEDULE 6.17 hereto, there are
no suits, actions, administrative or arbitration or other proceedings, in which
liabilities in excess of $10,000 are claimed, that are pending or threatened
against or relating to Albex or SABI or any of their properties or business, and
no judgments, orders, injunctions, decrees, stipulations or awards (whether
rendered by a court, administrative agency, or by arbitration, pursuant to a
grievance or other procedure) against or relating to Albex or SABI or any of its
properties or business.
6.18 LABOR RELATIONS. Except to the extent set forth in SCHEDULE 6.18:
A. Albex and SABI are in compliance with all applicable laws
and collective bargaining agreements respecting employment and employment
practices, terms and conditions of employment and wages and hours and
occupational safety and health, and are not engaged in any unfair labor practice
within the meaning of Section 8 of the National Labor Relations Act;
B. There is no unfair labor practice, charge, compliant or any
other matter against or involving, directly or indirectly Albex or SABI
threatened or pending before the National Labor Relations Board or any court of
law;
C. There is no labor strike, dispute, slowdown or stoppage
actually pending or threatened against or affecting Albex or SABI;
D. No representation question exists or has existed or has been
threatened within the past twelve months respecting the employees of Albex or
SABI;
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E. No grievance nor any arbitration proceeding arising out of
or under collective bargaining agreements is pending and no claim thereon
exists;
F. No agreement (including any collective bargaining agreement),
arbitration or court decision or governmental order which is binding on Albex or
SABI in any way limits or restricts Albex or SABI from relocating or closing
any of its operations;
G. Albex or SABI have not experienced any work stoppage or other
labor difficulty since January 1, 1996; and
H. There are no charges, investigations, audits,
administrative proceedings or complaints of discrimination (including but not
limited to discrimination based upon sex, age, race, national origin, sexual
preference, handicap or veteran status) threatened or pending before the Equal
Employment Opportunity Commission or any federal, state or local agency or
court, nor has any person suggested to any Seller or Albex or SABI that there
may be any basis therefor.
I. No collective bargaining Agreement is currently being
negotiated by Albex or SABI.
6.19 BANK ACCOUNTS. SCHEDULE 6.19 hereto sets forth a complete and
accurate list of each bank or financial institution in which Albex or SABI have
an account (giving the account numbers) or safe deposit box and the names of the
persons authorized to draw thereon or to have access thereto.
6.20 RESTRICTIVE COVENANTS. SCHEDULE 6.20 hereto sets forth a
complete and accurate list or description of all contracts containing covenants
limiting the freedom of Albex or SABI to compete in any line of business.
6.21 OSHA AND OTHER FILINGS. SCHEDULE 6.21 hereto sets forth a complete
and accurate list or description of all reports and filings made or filed by
Albex or SABI pursuant to the Occupational Safety and Health Act, Resource
Conservation and Recovery Act and Executive Order 11246 since January 1, 1996.
6.22 ENVIRONMENTAL PROTECTION. Albex and SABI have obtained all
permits, licenses and other authorizations which are required to be obtained by
Albex and SABI for the operation of their business under federal, state and
local laws relating to pollution or protection of the environment. Albex and
SABI are in compliance with all terms and conditions of such required permits,
licenses and authorizations, and are also in compliance with all other
applicable limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in those laws or
contained in any regulation, code, plan, order, decree, judgment, notice or
demand letter issued, entered, promulgated or approved thereunder. Albex
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and SABI are not aware of, nor have they received notice of, any past,
present or future events, conditions, circumstances activities practices,
incidents, actions or plans which may interfere with or prevent continued
compliance, or which may give rise to any common law or legal liability, or
otherwise form the basis of any claim, action, suit, proceeding, hearing or
investigation, based on or related to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling, or the emission,
discharge, release or threatened release into the environment, of any pollutant,
contaminant, or hazardous or toxic material or waste by them.
6.23 LICENSE AGREEMENTS. SCHEDULE 6.23 hereto sets forth a complete and
accurate list of all license agreements under which Albex and SABI conduct their
business.
6.24 INSURANCE POLICIES. SCHEDULE 6.24 hereto sets forth a complete and
accurate list of all insurance policies in force on the date hereof naming Albex
and SABI as an insured or beneficiary or as a loss payable payee or for which
Albex or SABI have paid all or part of the premiums. Such policies adequately
cover all risks reasonably and prudently foreseeable in the operation and
conduct of the business of Albex or SABI; there are no notices of any pending or
threatened terminations or premium increases with respect thereto and Albex and
SABI are in compliance with all conditions contained therein. Albex or SABI have
not been refused any insurance nor has their coverage been limited by any
insurance carrier to which they have applied for any such insurance.
6.25 CONTRACTS AND COMMITMENTS. Except as set forth in SCHEDULE 6.25 or
in any other Schedule:
A. Albex or SABI do not have any agreements, contracts,
commitments or restrictions which are material to their business, operations or
prospects or which require the making of any charitable contribution;
B. No purchase contracts or commitments of Albex or SABI
continue for a period of more than six months from the date hereof or are in
excess of the normal, ordinary and usual requirements of their business or any
excessive price;
C. There are no outstanding sales contracts, commitments or
bids of Albex or SABI which continue for a period of more than six months from
the date hereof or which will result in any loss to Albex or SABI upon
completion or performance thereof;
D. Albex or SABI do not have any outstanding contracts with
officers, employees, agents, consultants, advisors, salesmen, sales
representatives, distributors, dealers or brokers that are not cancelable by
them on notice of not longer than 30
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days and without liability, penalty, or premium or any agreement or
arrangement providing for the payment of any bonus or commission based on sales
or earnings;
E. Albex or SABI are not in default, nor is there any basis for
any valid claim of default, under any contract made or obligation owed by Albex
or SABI;
F. Albex or SABI are not under any liability or obligation
under any agreement with respect to the return of inventory or merchandise in
the possession of wholesalers, distributors, retailers or other customers; and,
following the Closing, Albex or SABI will not have any liability with respect to
the return of inventory or merchandise sold prior to the Closing;
G. Albex or SABI do not have any outstanding loan to any person;
H. Albex or SABI do not have any power of attorney outstanding
or any obligations or liabilities (whether absolute, accrued, contingent or
otherwise), as guarantor, surety, co-signor, endorser, co-maker, indemnitor or
otherwise in respect of the obligation of any other person, corporation,
partnership, joint venture, association, organization or other entity besides
themselves.
6.26 ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as set forth in
SCHEDULE 6.26 hereto and as otherwise contemplated by this Agreement, since
January 1, 1997, Albex and SABI have conducted their business only in the
ordinary course, and have not: (i) suffered any damage, destruction, or loss
adversely affecting the properties or business of Albex or SABI; (ii) made any
declaration, setting aside or payment of any dividend or other distribution of
assets (whether in cash, stock or property) with respect to the capital stock of
Albex or SABI or any direct or indirectredemption, purchase or other acquisition
of such stock; (iii) suffered any adverse change in the working capital, assets,
financial condition, business or operations, liabilities, reserves or prospects
of Albex or SABI; (iv) increased the compensation payable or to become payable
to employees of Albex or SABI having annual earnings in excess of $100,000 per
year, or increased any bonus, insurance, pension or other employee benefit plan,
payment or arrangement for such employees; (v) granted options or warrants,
subscriptions, calls, stock appreciation rights or other rights or commitments
calling for the issuance of capital stock of Albex or SABI or obligations
convertible into capital stock or other corporate securities of Albex or SABI or
issued or sold any capital stock, bonds, notes or other corporate securities of
Albex or SABI; (vi) incurred any liability or obligation (absolute, accrued,
contingent or otherwise) not incurred in the ordinary course of business and
consistent with past practice; (vii) paid, discharged, or satisfied any claim,
liability or obligation, other than payment in the ordinary course of business
and consistent with past practice, of liabilities reflected or reserved against
in the Balance Sheets; (viii) permitted any of their assets to be subject to any
mortgage, lien, security interest, restriction or charge of any kind; (ix)
cancelled any debts or waived any claims or rights; (x) sold, transferred or
otherwise disposed of any
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of their assets, except in the ordinary course of business consistent with
past practice; (xi) made total capital expenditures or investments in excess of
$100,000 as to SABI and $500,000 as to Albex; (xii) made any change in any
method, practice or principle of accounting; (xiii) paid, loaned or advanced any
amount or asset to or sold, transferred or leased any asset to any employee
except for compensation at rates not exceeding rates paid as of December 31,
1996; (xiv) entered into any material commitment or transaction, other than in
the ordinary course of business, affecting the operations of Albex or SABI; or
(xv) agreed, in writing or otherwise, to take any action described in this
Section.
6.27 BROKER'S OR FINDER'S FEES. Seller and Albex or SABI have not
authorized any person to act as a broker, finder or in any other similar
capacity in connection with the transactions contemplated by this Agreement in
such manner as to give rise to a valid claim against the Purchaser or Albex or
SABI for any broker's or finder's fee or similar compensation.
6.28 NO VIOLATION OF LAW. Except as may be determined in connection
with any action, claim or proceeding described in any Schedules delivered
hereunder, (i) Albex and SABI are not engaged, and since December 31, 1996 have
not engaged in any activity or are not omitting to take any action as a result
of which they are or have been in violation of any applicable federal, state or
other law or regulation, ordinance, order, injunction or decree, or any other
requirement of any governmental body, agency, authority or court relating to
them, or to their properties or business or their advertising or sales practices
and (ii) (without limiting the generality of the foregoing) Albex and SABI are
in compliance with all applicable laws and regulations in respect of tariffs,
employment and employment practices, civil rights, terms and conditions of
employment, wages and hours, and safety, occupational safety, and health or
welfare conditions relating to premises occupied.
6.29 COPIES OF DOCUMENTS. The Seller and Albex and SABI have made
available to Purchaser:
A. With respect to each parcel of real property listed or
described in SCHEDULE 6.11, the deed evidencing Albex's or SABI's ownership of
such property and each mortgage or other encumbrance thereon reflected in a
written instrument, each instrument (if any) evidencing a grant by or to Albex
or SABI of any option to purchase or lease such property, and each lease and
leasehold mortgage (if any) with respect to such property;
B. Each of the contracts, lease agreements, plans, instruments,
reports or documents that are in writing and are listed in the SCHEDULES hereto;
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C. Each trademark and service mark registrations or application
therefor, patent or patent application or other item listed in SCHEDULE 6.18 and
each assignment or license with respect to any thereof;
D. The pleading and briefs filed in each pending suit or
proceeding listed in SCHEDULE 6.17 and the judgments, orders, injunctions,
decrees, stipulations and awards listed in said SCHEDULE;
E. All written licenses, permits and other authorizations and
consents listed in SCHEDULE 6.23; and
F. All contracts and commitments listed in SCHEDULE 6.25.
6.30 REQUIRED CONSENTS AND APPROVALS. Except as set forth in SCHEDULE
6.30, no consent or approval is required by virtue of the execution hereof or
the consummation of any of the transactions contemplated herein to avoid the
loss of any permit or license or other governmental authorization or the
violation or breach of, or the default under, or the creation of a lien on
assets of Albex or SABI pursuant to the terms of any regulation, order, decree
or award of any court or governmental agency or any lease, contract, mortgage,
note or any other instrument to which Albex or SABI are a party or to which they
or any of their property is subject.
6.31 REQUIRED LICENSES AND PERMITS. Albex and SABI have all licenses,
permits or other authorizations of governmental authorities used or required by
them in the production and sale of their products and all the licenses, permits
or other authorizations of governmental authorities used or required in the
conduct of their business.
6.32 TAX MATTERS.
A. TAXES DEFINED. For purposes of this Agreement, "Taxes" shall
mean all taxes, assessments, charges, duties, fees, levies or other governmental
charges, including, without limitation, federal, state, city, county, foreign or
other income, franchise, capital stock, real property, personal
property, tangible, withholding, FICA, unemployment compensation, disability,
transfer, sales, use, excise and all other taxes of any kind for which Albex,
SABI and Seller (since Albex and SABI are Subchapter S corporations) may have
any liability imposed by the United States or any state, county, city, country
or foreign government or subdivision or agency thereof to include any interest,
penalties or additions attributable thereto, whether disputed or not.
B. TAX RETURNS AND LIABILITIES. Except as otherwise disclosed
in SCHEDULE 6.32 hereto, all returns, including estimated returns, and reports
of every kind with respect to Taxes for which Albex or SABI or Seller may have
any liability
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which have been filed in accordance with any applicable law; and all Taxes,
deposits or other payments for which Albex or SABI or Seller may have any
liability have been paid in full. The amounts so paid have been adequate to
satisfy all Taxes due and payable by Albex or SABI or Seller in any jurisdiction
for all periods ending on or before the date hereof and the amounts so paid on
or before the Closing Date, together with any amounts accrued as liabilities for
Taxes on the Closing Balance Sheet and the Balance Sheets will be adequate to
satisfy all Taxes of Albex or SABI or Seller accruable through the Closing Date,
whether or not disputed. There are not now any extensions of time in force with
respect to the dates on which any returns or reports of Taxes were or are due to
be filed. All deficiencies asserted as a result of any examination of any return
or report of Taxes have been paid or finally settled and no issue has been
raised in any such examination which, by application of the same or similar
principles, reasonably could be expected to result in a proposed deficiency for
any other period not so examined. No claims, proposals or deficiencies for any
Taxes are being asserted, proposed or threatened and no audit or investigation
of any return or report of Taxes is currently underway, pending or threatened.
All returns or reports of any Taxes have either been examined by all relevant
tax authorities or the taxable years therefor have been closed by operation of
law. There are no outstanding waivers or agreements by Albex or SABI for the
extension of any item for the assessments of any Taxes or deficiency thereof,
nor are there any other matters pending between Albex or SABI and any taxing
authority. There are no tax liens upon any property or assets of Albex or SABI
except liens for current Taxes not yet due. There are no facts which exist or
have existed which would constitute grounds for the assessment of any Taxes with
respect to the periods which have not been audited by the Internal Revenue
Service or other taxing authorities.
C. RESERVES. Adequate provision will be made in the Closing
Balance Sheet and the Balance Sheets for all deferred and accrued liabilities
for Taxes as of the Closing Date.
D. SUBMISSION OF TAX RETURNS. Seller has delivered to the
Purchaser, true and complete copies of all federal and state income tax returns
(together with any Revenue Agent's Reports) relating to the operations of Albex
or SABI for their fiscal years ending 1993, 1994, and 1995. Copies of such
income tax returns for the 1996 taxable period and for the 1997 taxable period
through the Closing Date will be promptly delivered to the Purchaser by the
Seller after such returns have been prepared.
E. ELECTIONS. Albex and SABI have not filed a consent pursuant
to Section 341(f) of the Internal Revenue Code of 1954, as amended ("Code").
6.33 PENSION MATTERS. Except as otherwise disclosed in SCHEDULE 6.33
hereto:
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A. Albex and SABI have established employees' retirement plans
("Plans") which plans are listed on SCHEDULE 6.14. The assets of the Plans are
held in trusts established under the Plans. The Plans have been funded in
accordance with ERISA and reasonable actuarial assumptions, which actuarial
assumptions are set forth in SCHEDULE 6.33. Such actuarial assumptions include
factors relating to interest rates, mortality, rate of wage rate increases and
employee turnover.
B. The Plans are qualified under Section 401(a) of the Code,
have been the subject of a favorable determination letter and have been
administered and operated in accordance with their respective terms and in such
a manner as to preserve such qualification.
C. Neither the Seller nor Albex or SABI have engaged in or
have knowledge of a transaction in connection with which Albex or SABI could be
subject to either a civil penalty assessed pursuant to Section 502 of ERISA, a
tax imposed by Section 4975 of the Code or liability for a breach of fiduciary
responsibility under ERISA.
D. No liability to the Pension Benefit Guaranty Corporation
has been incurred with respect to any of the Plans by the Seller or Albex or
SABI. All premiums due and payable to the Pension Benefit Guaranty Corporation
with respect to the Plans have been paid. The Pension Benefit Guaranty
Corporation has not instituted proceedings to terminate any of the Plans. No
event has occurred, and there exists no condition or set of circumstances, which
presents a risk of the termination of any Plan which could result in liability
on the part of the Seller or Albex or SABI to the Pension Benefit Guaranty
Corporation.
E. The Plans do not have an accumulated funding deficiency. As
used in this paragraph, the term "accumulated funding deficiency" shall have the
meaning specified in Section 302 of ERISA and Sections 412 and 418(b) of the
Code. In addition, the Plans have been funded and have met the minimum funding
requirements based upon the actuarial assumptions contained in SCHEDULE 6.33, as
of the date hereof.
F. No notice of a reportable event (within the meaning of
Section 4043(b) of ERISA) has been filed by the plan administrator of the Plans
with the Pension Benefit Guaranty Corporation since July 10, 1989 as to SABI and
since May 1, 1991 as to Albex.
G. The Plans, their operation and reports filed with respect
thereto are in compliance with all applicable federal laws, including but not
limited to ERISA, and there are no claims, pending or threatened, by any Plan
participant or any basis to anticipate any such claim or claims.
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H. All documents, including but not limited to any Plan and
trust instruments, annual reports and actuarial reports, relating to the Plans
have been furnished to the Purchaser.
I. Neither Albex or SABI nor any trade or business under
common control with Albex or SABI (within the meaning of Section 414 (i) of the
Code) has, since December 31, 1996, with respect to any Plan which is a
Multiemployer Plan, suffered or otherwise caused a "complete withdrawal" or
"partial withdrawal", as such terms are respectively defined in Sections 4203
and 4205 of ERISA.
6.34 AGREEMENTS IN FULL FORCE AND EFFECT. All contracts, agreements,
plans, leases, policies and licenses referred to in any Schedule delivered
hereunder are valid, in full force and effect and enforceable by Albex or SABI
in accordance with their respective terms, and true copies thereof have been
heretofore delivered to the Purchaser.
6.35 DISCLOSURE. No representations or warranties by the Seller in this
Agreement and no statement contained in any document, including without
limitation, financial statements and the Schedules, certificates, or other
writings furnished or to be furnished by the Seller (or caused to be furnished
by the Seller) to the Purchaser or any of its representatives pursuant to the
provisions hereof contains or will contain any untrue statement of material fact
or omits or will omit to state any material fact necessary, in light of the
circumstances under which it was made, in order to make the statements herein or
therein not misleading.
6.36 SCHEDULES. The Schedules hereto are deemed to be a part of the
Seller's representations and Warranties for all purposes of this Agreement.
Disclosure in a Schedule shall not be deemed to be a disclosure for purposes of
any other Schedule unless referenced therein.
7. REPRESENTATIONS AND WARRANTIES OF PURCHASER. The Purchaser
warrants and represents to the Seller and acknowledges that the Seller is
relying on such warranties and representations, as follows:
7.1 ORGANIZATION. The Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
7.2 AUTHORIZATION. This Agreement and its execution, delivery and
performance have been duly authorized by all necessary corporate action on the
part of the Purchaser and are within its corporate powers. This Agreement, when
signed and delivered by the Purchaser, will have been duly executed and
delivered by the Purchaser, and will constitute the legal, valid and binding
agreement of the Purchaser enforceable in accordance with its terms.
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7.3 BROKER'S OR FINDER'S FEES. The Purchaser has not authorized any
person to act as broker, finder or in any other similar capacity in connection
with the transactions contemplated by this Agreement in such manner as to give
rise to a valid claim against the Seller for any broker's or finder's fee or
similar compensation.
8. COVENANTS OF THE SELLER. The Seller agrees that from and after the
date hereof and to and including the Closing Date (unless otherwise agreed to
in advance in writing by the Purchaser):
8.1 ORDINARY COURSE. Albex and SABI shall conduct their business
diligently and in the ordinary course consistent with past practice and shall
maintain intact their business, organization and their relationships with
employees, suppliers, customers and others.
8.2 NO AMENDMENTS. No change or amendment shall be made in the
articles of incorporation or by-laws of Albex or SABI.
8.3 NO CAPITAL CHANGES. Albex or SABI shall not issue or sell, or grant
options, warrants, or rights to purchase or to subscribe to, or enter into any
arrangement or contract with respect to, the issuance, sale, or purchase of, any
of their capital stock or any securities or obligations convertible into or
exchangeable for any shares of their capital stock, or make any changes in their
capital stock.
8.4 NO DIVIDENDS OR REDEMPTIONS. Albex and SABI shall not declare,
pay or set aside for payment any dividend or other distribution in respect of
their capital stock, or redeem, purchase or otherwise acquire any shares of
their capital stock.
8.5 FORBEARANCE BY ALBEX AND SABI. Except pursuant to contracts or
other instruments or documents listed or described in any Schedule hereto, Albex
and SABI shall not:
A. Incur any obligation or liability, direct or indirect, absolute
or contingent, other than liabilities incurred in the ordinary course of
business, or pay any obligation or liability of any kind other than current
liabilities and current maturities of existing long-term debt;
B. Incur any indebtedness for borrowed money, assume, guarantee,
endorse or otherwise become responsible for the obligations of any other
individual, firm or corporation, or make any loans or advances (other than
normal travel advances) to any individual, firm or corporation;
C. Mortgage, pledge or otherwise encumber or in any way subject to
encumbrance any of its properties or assets;
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D. Sell or transfer any of their properties or assets or
cancel, release or assign any indebtedness owed to them or any claim held by
them;
E. Except as provided in SCHEDULE 6.26, make any investment of
a capital nature either by purchase of stock or securities, contributions to
capital, property transfers or otherwise, or by the purchase of any property or
assets of any other individual, firm or corporation in excess of, in each
instance, $20,000 as to Albex and $10,000 as to SABI;
F. Enter into or terminate any contracts or agreement other
than in the ordinary course of business, or make any material change in any of
their leases or contracts;
G. Increase in any manner the compensation of any of their
employees in excess of $100,00 (except in accordance with SCHEDULE 8.5) or pay
or agree to pay any pension or retirement allowance not required by any existing
plan or agreement to any employees, or commit themselves to any pension,
retirement or profit-sharing plan or agreement or employment agreement with or
for the benefit of any officer, employee or other person;
H. Hire or commit to hire any employee or terminate any
employee;
I. Change any of the banking or financial institution
arrangements described in SCHEDULE 6.19 or open any new accounts;
J. Grant or extend any power of attorney or appoint any
agent;
K. Loan money or assets to any person;
L. Make or commit to make any charitable contributions; or
M. Agree, in writing or otherwise, to do any of the
foregoing.
8.6 INSURANCE AND MAINTENANCE OF PROPERTY. Albex and SABI shall
continue to insure their business, operations, employees and all of their
property (real, personal and mixed, tangible and intangible, and owned or
leased) against all ordinary and insurable risks in the manner and to the extent
such business, operations, employees, and property were insured on the date
hereof; and all such property shall be used, operated, maintained and repaired
in a careful and reasonably efficient manner.
8.7. ACCESS. The Seller and Albex and SABI shall afford the
Purchaser and its respective counsel, auditors and authorized
representatives full access to all personnel, properties, records and documents
of Albex and SABI and shall furnish such financial, operating data and other
information with respect to the business,
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properties and personnel of Albex and SABI as the Purchaser may reasonably,
from time to time, request.
8.8 SATISFACTION OF CONDITIONS. The Seller and Albex and SABI shall
cause all of the conditions set forth in Section 12 hereof to be satisfied on or
prior to the Closing Date.
8.9 NO DEFAULT. Albex and SABI shall not do any act or omit to do
any act, or permit any act or omission to act, which will cause a breach of
contract or commitment of or which would cause the breach of any warranty made
hereunder.
8.10 COMPLIANCE WITH LAWS. Albex and SABI shall duly comply in all
respects with all laws applicable to them and their properties, operations,
business and employees.
8.11 OCCURRENCES AFTER SIGNING. The Seller shall disclose to Purchaser
immediately upon discovery thereof the occurrence of any state of facts,
circumstances or events which would have been required to be disclosed on the
Schedules hereto at the time of signing as if such state of facts, circumstances
or events had then existed.
9. COVENANTS OF THE PURCHASER. The Purchaser shall cause all of the
conditions set forth in Section 11 hereof to be satisfied on or prior to the
Closing Date.
10. TAX MATTERS.
10.1 FILING OF TAX RETURNS. The Seller shall be responsible for
causing the preparation and filing of all returns and reports of taxes for
the taxable periods ending on or before the Closing Date. In the preparation of
the federal and state income tax returns for the 1996 taxable period and for the
1997 taxable period through the Closing Date, the Seller shall not materially
deviate from the manner in which any item of income or expense of Albex or SABI
was reported in prior years. Any returns or reports of Taxes relating to the
periods prior to and through the Closing Date which are to be prepared by Seller
pursuant to this SECTION 10. shall be submitted to the Purchaser for review at
least four weeks prior to the filing date for any such return or report. The
Purchaser shall be responsible for filing or causing Albex and SABI to file all
returns and reports of Taxes for the taxable periods not ending on or before the
Closing Date.
10.2 ACCESS AND ASSISTANCE. The Purchaser and Albex and SABI on the
one hand and the Seller on the other hand shall provide each other with
such assistance as may reasonably be requested by any of them in connection with
the preparation of any return of Taxes, any audit or other examination by any
taxing authority, or any judicial or administrative proceedings relating to
liability for Taxes of Albex or SABI.
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The party requesting assistance hereunder shall reimburse the other for
reasonable out-of-pocket expenses incurred in providing such assistance.
10.3 TRANSFER TAXES. All sales and transfer taxes arising out of or
in connection with the consummation of the transactions contemplated hereby
shall be paid by the Seller.
11. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS. Each of the
obligations of the Seller to be performed hereunder shall be subject to the
satisfaction (or waiver by the Seller) at or prior to the Closing Date of each
of the following conditions:
11.1 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING DATE. The
Purchaser's representations and warranties contained in this Agreement
shall be true in all respects on and as of the Closing Date with the same force
and effect as though made on and as of such date, and as if the Purchaser shall
have delivered to the Seller a certificate dated the Closing Date and signed by
a duly authorized officer of the Purchaser, to such effect.
11.2 LITIGATION. No suit, investigation, action or other proceeding
shall be overtly threatened or pending against the Purchaser before any court or
governmental agency which, in the reasonable opinion of counsel for the Seller,
could result in the restraint, prohibition or the obtaining of damages or other
relief in connection with this Agreement or the consummation of the transactions
contemplated hereby.
11.3 OPINION OF COUNSEL TO THE PURCHASER. The Seller shall have
received from counsel to the Purchaser an opinion, dated the Closing Date and in
form and substance reasonably satisfactory to counsel for the Seller to the
effect that:
A. The Purchaser is a corporation duly incorporated and in
good standing under the laws of the State of Delaware;
B. The Purchaser has the corporate power to execute and
deliver this Agreement and to carry out the terms and conditions hereof;
C. The execution, delivery and performance of this Agreement
by the Purchaser has been duly authorized by all necessary corporate action;
D. This Agreement constitutes a valid and binding obligation
of the Purchaser, enforceable, provided the Seller is legally bound by this
Agreement, in accordance with its terms (except as enforcement may be limited by
bankruptcy, insolvency or other laws affecting enforcement of creditors' rights
generally and except that the availability of the remedy of specific performance
or other equitable relief is
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subject to the discretion of the court before which any proceeding therefor
may be brought);
E. The Purchaser is not required to obtain any other consent,
approval or waiver in order to permit the Purchaser to consummate the
transactions contemplated hereby without violating any applicable law,
regulation, order, arbitration award, judgment, stipulation, injunction or
decree or without breaching the terms of or giving rise to any default or any
right of acceleration under any material contract, agreement or other instrument
to which the Purchaser is a party or by which the Purchaser is otherwise bound;
and
F. Such other matters as counsel for the Seller shall
reasonably request.
12. CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATIONS. The
obligations of the Purchaser to be performed hereunder shall be subject to the
satisfaction (or waiver by the Purchaser) on or before the Closing Date of each
of the following conditions:
12.1 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING DATE. The
representations and warranties of the Seller contained in this Agreement shall
be true in all respects on and as of the Closing Date with the same force and
effect as though made on and as of such date and as if the Seller shall have
delivered to the Purchaser a certificate signed by the Seller to such effect;
and the Seller and Albex and SABI shall have complied in all respects with the
covenants and agreements set forth herein to be performed by them on or before
the Closing Date.
12.2 CONSENTS. With respect to each consent, approval, registration,
filing, application, notice, transfer, order, qualification, waiver or other
action of any kind (each such action of any of the aforementioned kinds being
referred to as a "Consent") of another party pursuant to any mortgage,
indenture, deed of trust, note, lien, agreement, lease, franchise, permit or
similar instrument or of any governmental authority pursuant to any law
(including, but not limited to, the Hart, Scott, Rodino Pre-Merger Notification
Act), regulation, order, arbitration award, judgment, stipulation, injunction or
decree, required by virtue of the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby, the Purchaser shall
have received written evidence, reasonably satisfactory to it, that such Consent
has been duly and lawfully filed, given, obtained or taken and is effective,
valid and subsisting.
12.3 INVESTIGATIONS. Neither any investigation of Albex and SABI by
the Purchaser, nor any Schedule or any supplement thereto nor any other document
delivered to the Purchaser as contemplated by this Agreement, shall have
revealed any facts or circumstances which, in the sole and exclusive judgment of
the Purchaser,
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<PAGE> 28
reflect in any adverse way on the financial condition, assets,
liabilities (absolute, accrued, contingent or otherwise), reserves, business,
operations or prospects of Albex and SABI. The Purchaser shall be reasonably
satisfied that all of the assets of Albex and SABI are of suitable condition,
value, suitability, serviceability and utility.
12.4 NO MATERIAL CHANGE. Albex and SABI shall not have suffered any
adverse change (whether or not such change is referred to or described in any
supplement to any Schedule) in its business, prospects, financial conditions,
working capital, assets, liabilities (absolute, accrued, contingent or
otherwise), reserves or operations. Without limiting the generality of the
foregoing, the Purchaser shall have determined, following any review conducted
pursuant to SECTIONS 8.8 and 12.3 hereof, that no adverse change shall have
occurred in the business, operations or financial condition of Albex or SABI
since December 31, 1996.
12.5 INDEBTEDNESS. Albex or SABI shall not have indebtedness for
borrowed money in excess of $13,000,000 as to Albex and $3,000,000 as to SABI.
12.6 LITIGATION. No suit, investigation, action or other proceeding
shall be threatened or pending against Seller or Albex or SABI before any court
or governmental agency which, in the opinion of counsel for the Purchaser, could
result in the restraint, prohibition or the obtaining of damages or other relief
in connection with this Agreement or the consummation of the transactions
contemplated hereby.
12.7 SHARE CERTIFICATES AND RESIGNATIONS. The Purchaser shall have
received from Seller certificates evidencing the Shares pursuant to SECTION 5
hereof and the resignations of all officers and directors of Albex and SABI
requested by Purchaser.
12.8 REAL PROPERTY TITLE. Seller shall have delivered to Purchaser a
full property lien search, correcting title to be acceptable to the Purchaser
and reflecting that Albex or SABI have good, valid and marketable title in fee
simple absolute to all the real property which they purport to own, free and
clear of all title defects or objections, liens, claims, charges, security
interests or other encumbrances of any nature whatsoever except those disclosed
on Schedules hereto.
12.9 OPINION OF COUNSEL TO THE SELLER. The Purchaser shall have
received from counsel to the Seller, an opinion, dated the Closing Date and in
form and substance reasonably satisfactory to counsel to the Purchaser to the
effect that:
A. Albex and SABI are corporations duly incorporated and in
good standing under the laws of the State of Ohio;
B. Albex and SABI are qualified to do business and in good
standing in any other jurisdiction in which qualification is required;
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<PAGE> 29
C. The Seller has the power to execute and deliver this
Agreement and to carry out the terms and conditions hereof;
D. The authorized capital stock of Albex consists of 750
shares, no par value, of which 100 shares are issued and outstanding;
E. The authorized capital stock of SABI consists of 750
shares, no par value, of which 450 shares are issued and outstanding;
F. This Agreement constitutes a valid and binding obligation
of Seller, enforceable, provided the Purchaser is legally bound by this
Agreement, in accordance with its terms (except as enforcement may be limited by
bankruptcy, insolvency or other laws affecting the enforcement of creditors'
rights generally and except that the availability of the remedy of specific
performance or other equitable relief is subject to the discretion of the court
before which any proceeding therefor may be brought);
G. The Seller and Albex and SABI have obtained the consents,
approvals and waivers listed in SCHEDULE 6.26 hereto with respect to the
transactions contemplated hereby and the Seller and Albex and SABI are not
required to obtain any other consent, approval or waiver in order to permit any
of them to consummate the transactions contemplated hereby without violating any
applicable law, regulation, order, arbitration award, judgment, stipulation,
injunction or decree or without breaching the terms of or giving rise to any
default or any right of acceleration under any material contract, agreement or
other instrument to which the Seller or Albex or SABI is a party or by which the
Seller or Albex or SABI is otherwise bound;
H. To the best of such counsel's knowledge, Albex or SABI are
not engaged in or threatened with any legal action or other proceeding, or has
incurred or been charged with or is under investigation with respect to any
violation of any federal, state or local law or administrative regulation which
if adversely determined might adversely affect or impair the business or
condition, financial or otherwise, of Albex or SABI, except as specifically
disclosed in such counsel's opinion or pursuant hereto; and
I. Such other matters as counsel for the Purchaser shall
reasonably request.
12.10 APPROVAL AND AUTHORIZATION BY NECESSARY CORPORATION ACTION.The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby shall have been duly approved and authorized
by all necessary corporate action.
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12.11 DOCUMENTS SATISFACTORY IN FORM AND SUBSTANCE. All agreements,
certificates, opinions and other documents delivered by the Seller to the
Purchaser hereunder shall be in form and substance satisfactory to counsel for
the Purchaser.
12.12 CLOSING ON ALBEX AND SABI. Purchaser must close on both the
acquisition of Albex and SABI. If Purchaser is unable to close on either Albex
or SABI, Purchaser shall have the right to terminate this Agreement and not
purchase Albex or SABI.
13. TERMINATION. This Agreement shall be terminated and the
purchase and sale contemplated herein may be abandoned:
A. By mutual consent of the parties hereto; or
B. By a non-defaulting party hereto by giving written notice
of such termination on the Closing Date to the other party if, as of the Closing
Date, the conditions precedent to the performance of the obligations of the
party giving such notice shall not have been satisfied and shall not have been
waived by such party. In the event of such termination or abandonment, no party
hereto (or any of its directors or officers) shall have any liability or further
obligation to any other party to this Agreement, except that nothing herein will
relieve any party from liability for any willful breach of this Agreement.
14. INDEMNITIES BY THE SELLER.
14.1 INDEMNITY. The Seller shall indemnify the Purchaser and Albex
and SABI and any successors thereto ("Indemnified Parties") and hold each
of them wholly harmless from and against "Indemnified Liabilities" (as
hereinafter defined). For the purposes of this SECTION 14.1, the term
"Indemnified Liabilities" shall mean "Losses" (as hereinafter defined) to the
extent that such Losses result from or arise out of any event, act,
circumstance, transaction, occurrence or state of facts occurring or in
existence, or a liability in existence, on or prior to the Closing Date, or
result from or arise out of or with respect to, any inaccuracy in or breach of
any representation, warranty, covenant or agreement by or on behalf of the
Seller contained in this Agreement or contained in any certificate or document
of the Seller delivered to the Purchaser in connection with this Agreement or
the consummation of the transactions contemplated hereunder. For the purposes of
this Section 14.1, the term "Losses" shall mean any and all losses (including,
without limitation, loss of revenues or profits), liabilities, damages, costs
(including, without limitation, court costs) and expenses (including, without
limitation, reasonable attorneys' fees) suffered or incurred by an Indemnified
Party.
14.2 TIME TO ASSERT CLAIM. No claim for indemnification by any
Indemnified Party pursuant to SECTION 14.1 hereof shall be asserted later than
five years after the Closing Date, except as to claims for Taxes with respect to
which the time limitation
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shall be the expiration of the applicable statute of limitations. Any such
matters as to which a claim has been asserted pursuant to Section 14.1 hereof on
or before such date shall continue to be covered until finally terminated or
resolved.
14.3 CLAIMS BY THIRD PARTIES. If any Indemnified Party shall
receive written notice of any claim or proceeding against any of them that, if
successful, might result in a claim under SECTION 14 hereof, such party shall
promptly give the Seller written notice of such claim or proceeding and shall
permit the Seller, at Seller's option, to conduct or participate in the defense
of such claim or proceeding by counsel of the Seller's own choosing and at the
expense of the Seller. In the event that the Seller accepts the tender of the
defense of such claim, Seller shall be deemed to have accepted for Seller's
account any and all liability relating to such claim. In the event the Seller
declines to conduct the defense of such claim or proceeding by counsel of the
Seller's own choosing, the Indemnified Party shall assume the carriage of the
defense thereof. The party assuming the defense of such claim or proceeding may
elect to defend such claim or proceeding or may settle the same without the
consent of the other party.
14.4 PAYMENT TO INDEMNIFIED PARTIES. The notice provided for in
SECTION 14.3 and any other notice of demand for indemnification by an
Indemnified Party shall be given in writing promptly upon the discovery of
facts or circumstances giving rise to such demand and shall contain a
description of such claim. Following the giving of such notice, the Purchaser
may withhold from payment otherwise due under the Notes an amount reasonably
necessary to satisfy any such claim and the Seller and the Purchaser shall
negotiate in good faith for a period of 30 days to determine whether the claim
constitutes an "Indemnified Liability", as defined above, and, if so, the
appropriate method of resolving such claim. In the event the claim is ultimately
determined not to be an Indemnified Liability (except with respect to third
party claims, the defense of which has been accepted by the Seller in which
event that acceptance shall be the conclusive determination that the claim is an
Indemnified Liability), or, in the event it is determined to be an Indemnified
Liability but the Losses are less than the amount so withheld, the Purchaser
shall repay the difference between the amount so withheld and the amount of the
Losses, if any, to the person or persons from whom the payment was withheld,
with interest at the prime rate established by First National Bank of Ohio from
the date of such withholding. Notwithstanding the above, if the Seller provides
reasonable assurances to the Purchaser that, with respect to third party claims
the defense of which has been accepted by the Seller, any and all judgments will
be satisfied by Seller, neither Albex or SABI nor the Purchaser shall withhold
any amount with respect to such claim.
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15. INDEMNITIES BY THE PURCHASER.
15.1 INDEMNITY. The Purchaser shall defend and indemnify the Seller and
hold the Seller wholly harmless from and against any and all losses,
liabilities, damages, costs (including, without limitation, court costs) and
expenses (including, without limitation, reasonable attorneys' fees) that the
Seller incurs as a result of, or with respect to, any inaccuracy in or breach of
any representation, warranty, covenant, or agreement by or on behalf of the
Purchaser contained in this agreement or contained in any certificate or
document delivered to the Seller in connection with the consummation of the
transactions contemplated hereunder.
15.2 CLAIMS. If the Seller shall receive written notice of any claim or
proceeding against Seller that, if successful, might result in a claim under
SECTION 15. hereof, the Seller shall give Purchaser written notice of such claim
or proceeding and shall permit the Purchaser to participate in the defense of
such claim or proceeding by counsel of its own choosing and at its own expense.
In addition, upon the written request of the Seller, the Purchaser, if the
Seller shall so request, shall assume the carriage of the defense of any such
claim or proceeding.
16. MISCELLANEOUS.
16.1 BINDING EFFECT. Subject to the limitations upon assignment
hereinafter set forth, this Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns.
16.2 ASSIGNMENT. Without the prior written consent of the Purchaser,
the Seller may not assign its rights hereunder or any part thereof to any other
person or entity.
16.3 SURVIVAL OF REPRESENTATIONS. All representations, warranties,
covenants and agreements made by the parties in this Agreement and pursuant to
the terms hereof shall survive the consummation of the transactions contemplated
hereby.
16.4 FURTHER ASSURANCES. Each party shall cooperate with the other, and
execute and deliver, or cause to be executed and delivered, all such other
instruments, including instruments of conveyance, assignments and transfer, and
take all such other actions as such party may be reasonably requested to take
from time to time in order to effectuate the provisions and purposes of this
Agreement.
16.5 NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered or mailed, registered or certified mail, postage prepaid, to the
following addresses:
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If to Purchaser:
P.O. Box 10002
Akron, Ohio 44310
and a copy to counsel:
Nicholas T. George & Associates
3200 West Market Street, Suite 300
Akron, Ohio 44333
If to Seller:
Jacob Pollock, Trustee
P.O. Box 4810
Akron, Ohio 44310
16.6 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same instrument.
16.7 HEADINGS AND TABLE OF CONTENTS. The headings and table of
contents contained in this Agreement are inserted for convenience of reference
only and shall not constitute a part hereof.
16.8 GOVERNING LAW. This Agreement shall be deemed to have been
made in, and shall be construed in accordance with and governed by the laws of
the State of Ohio.
16.9 EXPENSES. The parties shall bear their own respective expenses
incurred in connection with this Agreement and consummation of the transactions
contemplated hereby.
16.10 SCHEDULES. The following Schedules are attached hereto and
are hereby made a part of this Agreement by reference:
Section and Schedule
--------------------
2. Certificate of Designation
3. Purchase Price Formula
4. A & B Promissory Notes
6.6 Director, Officer, Employee and Agent Indebtedness
6.7 Undisclosed Liabilities
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6.11 Property
6.13 Agents' Agreements
6.14 Employee Contracts
6.15 Indebtedness
6.16 Trademarks
6.17 Litigation
6.18 Labor Difficulties
6.19 Bank Accounts
6.20 Restrictive Covenants
6.21 OSHA and Other Filings
6.23 License Agreements
6.24 Insurance Policies
6.25 Contracts and Commitments
6.26 Certain Changes and Events
6.30 Required Consents and Approvals
6.32 Tax Matters
6.33 Pension Matters
8.5 Increase in Employee Compensation
16.11 ENTIRE AGREEMENT. This Agreement embodies the entire agreement
and understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter. This Agreement may be modified only by a written instrument
signed by each of the parties hereto.
16.12 SELLER'S REPRESENTATIVE. The Seller hereby appoints Jacob
Pollock, Trustee of the Jacob Pollock Trust U/A dated March 12, 1991 as its
agent-in-fact to
<PAGE> 35
do any and all things which it may do under this Agreement, including, without
limitation, reviewing, negotiating with respect to and settling any disputes
concerning this Agreement; waiving any condition of closing contained in
SECTION 11; and reviewing, negotiating with respect to and settling any claims
for indemnification by any Indemnified Party, and accepting the defense of any
third party claim, all as provided in SECTION 14.
EXECUTED effective the day and year first above written.
SELLER:
/s/ Jacob Pollock
___________________________________________
Jacob Pollock, Trustee of The Jacob Pollock
Trust U/A Dated March 12, 1991
PURCHASER:
RVM INDUSTRIES, INC.
/s/ Richard D. Pollock
By:________________________________________
Richard D. Pollock, its President
27
<PAGE> 1
RAVENS METAL PRODUCTS, INC.
FORM 8-K CURRENT REPORT
MARCH 31, 1997
EXHIBIT 2.2
AGREEMENT AND PLAN OF REORGANIZATION
<PAGE> 2
AGREEMENT AND PLAN OF REORGANIZATION
AMONG RAVENS METAL PRODUCTS, INC.,
RVM INDUSTRIES, INC. AND RAVENS, INC.
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement"), dated as of March
24, 1997, is entered into by and among Ravens Metal Products, Inc., a Delaware
corporation (the "Company"), RVM Industries, Inc., a Delaware corporation and a
direct, wholly owned subsidiary of the Company ("RVM"), and Ravens, Inc., a
Delaware corporation and a direct, wholly owned subsidiary of RVM ("Ravens").
RECITALS
A. The Company's authorized capital stock consists of (i)
3,000,000 shares of common stock, par value $.01 per share
("Company Common Stock"), of which 1,934,255 shares are issued
and outstanding and no shares are held in treasury, and (ii)
300,000 shares of preferred stock, without par value, none of
which is currently outstanding.
B. RVM's authorized capital stock consists of (i) 3,000,000
shares of common stock, par value $.01 per share ("RVM Common
Stock"), of which 100 shares are issued and outstanding and no
shares are held in treasury and (ii) 300,000 shares of
preferred stock, without par value, none of which is currently
outstanding.
C. The designations, rights and preferences, qualifications,
limitations and restrictions of the RVM Common Stock are the
same as those of the Company Common Stock.
D. The certificate of incorporation and the by-laws of RVM
immediately after the Effective Time (defined below) will
contain provisions identical to the Restated Certificate of
Incorporation and By-Laws of the Company immediately before
the Effective Time (other than with respect to matters
excepted or required by Section 251(g) of the General
Corporation Law of the State of Delaware (the "DGCL")).
E. The directors of the Company immediately prior to the Merger
(defined below) will be the directors of RVM as of the
Effective Time.
F. RVM and Ravens are newly formed corporations organized solely
for the purpose of effecting the restructuring herein
contemplated.
G. The Company desires to create a new holding company structure
by merging the Company with Ravens (with the Company being the
surviving corporation) and converting each outstanding share
of Company Common Stock into a like number of shares of RVM
Common Stock, all in accordance with the terms and conditions
of this Agreement.
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<PAGE> 3
H. The Boards of Directors of RVM, Ravens and the Company have
approved this Agreement and the merger of the Company with
Ravens upon the terms and subject to the conditions set forth
in this Agreement (the "Merger").
I. Pursuant to authority granted by the Board of Directors of the
Company, the Company will, immediately prior to the Effective
Time of the Merger, contribute to the capital of RVM all the
shares of RVM Common Stock then owned of record and
beneficially by the Company.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained in this Agreement, and intending to be legally bound
hereby, the Company, RVM and Ravens hereby agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. In accordance with Section 251(g) of the DGCL and
subject to and upon the terms and conditions of this Agreement, the Company
shall, at the Effective Time, be merged with Ravens, the separate corporate
existence of Ravens shall cease and the Company shall continue as the surviving
corporation. The Company, as the surviving corporation after the Merger, is
hereinafter sometimes referred to as the "Surviving Corporation." At the
Effective Time, the effect of the Merger shall be as provided in Section 259 of
the DGCL.
Section 1.2 Effective Time. The Merger shall become effective upon the filing,
after the date hereof and on or before March 31, 1997, of a copy of this
Agreement with the Secretary of State of the State of Delaware (the time of such
filing being referred to herein as the "Effective Time").
Section 1.3 Certificate of Incorporation. From and after the Effective Time,
until thereafter amended as provided by law, the Certificate of Incorporation
of the Surviving Corporation will be the Certificate of Incorporation of the
Company, as in effect immediately prior to the Effective Time, except for the
following amendments (required or permitted by applicable law) to the
certificate of incorporation of the Surviving Corporation.
(i) Article 1 of the certificate of incorporation of the Surviving Corporation
will state in its entirety as follows:
"ARTICLE 1
"The name of the corporation (the "Corporation") is Ravens, Inc."
2
<PAGE> 4
(ii) Article 5 of the certificate of incorporation of the Surviving
Corporation will state in its entirety as follows:
"ARTICLE 5
The aggregate number of shares which the Corporation shall have
authority to issue is One Thousand (1,000) shares of Common Stock
having a par value of One Penny($.01) per share."
(iii) A new Article 12 of the certificate of incorporation of the Surviving
Corporation will state in its entirety as follows:
"ARTICLE 12
Any act or transaction by or involving the Corporation that requires
for its adoption under the General Corporation Law of the State of
Delaware or its certificate of incorporation the approval of the
stockholders of the Corporation shall, by virtue of this reference to
Section 251(g) of the General Corporation Law of the State of Delaware,
require, in addition, the approval of the stockholders of RVM
Industries, Inc., a Delaware corporation (or any successor by merger),
so long as such corporation or its successor is the ultimate parent,
directly or indirectly, of this Corporation, by the same vote that is
required by the General Corporation Law of the State of Delaware and/or
the certificate of incorporation of this Corporation. For the purposes
of this Article 12, the term "parent" shall mean a corporation that
owns, directly or indirectly, at least a majority of the outstanding
capital stock of this Corporation entitled to vote in the election of
directors of this Corporation without regard to the occurrence of any
contingency."
Section 1.4 By-Laws. From and after the Effective Time, the By-Laws of the
Company, as in effect immediately prior to the Effective Time, shall be the
by-laws of the Surviving Corporation until thereafter amended as provided
therein or by applicable law.
Section 1.5 Directors. The directors of the Company immediately prior to the
Effective Time shall be the initial directors of the Surviving Corporation and
will hold office from the Effective Time until their successors are duly elected
or appointed and qualified in the manner provided in the certificate of
incorporation and the by-laws of the Surviving Corporation or as otherwise
provided by law.
Section 1.6 Officers. The officers of the Company immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation and
will hold office from the Effective Time until their successors are duly elected
or appointed and qualified in the manner provided in the
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<PAGE> 5
certificate of incorporation and the by-laws of the Surviving Corporation or as
otherwise provided by law.
Section 1.7 Additional Actions. Subject to the terms of this Agreement, the
parties hereto shall take all such reasonable and lawful action as may be
necessary or appropriate in order to effectuate the Merger. If, at any time
after the Effective Time, the Surviving Corporation shall consider or be advised
that any deeds, bills of sale, assignments, assurances or any other actions or
things are necessary or desirable to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation its right, title or interest in, to or
under any of the rights, properties or assets acquired or to be acquired by the
Surviving Corporation as a result of, or in connection with, the Merger or
otherwise to carry out this Agreement, the officers and directors of the
Surviving Corporation shall be authorized to execute and deliver, in the name
and on behalf of each of Ravens and the Company, all such deeds, bills of sale,
assignments and assurances and to take and do, in the name and on behalf of each
of Ravens and the Company, all such other actions and things as may be necessary
or desirable to vest, perfect or confirm any and all right, title and interest
in, to and under such rights, properties or assets in the Surviving Corporation
or otherwise to carry out this Agreement.
Section 1.8 Conversion of Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of RVM, the Company or the holder of
any of the following securities:
(a) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time shall be converted
into and thereafter represent one duly issued, fully paid and
nonassessable share of RVM Common Stock.
(b) Each share of the Company's capital stock, if any, whether
preferred or common, issued but held by the Company in its
treasury immediately prior to the Effective Time shall be
converted into and thereafter represent one duly issued, fully
paid and nonassessable share of RVM preferred stock or Common
Stock held by RVM in its treasury.
(c) From and after the Effective Time, holders of certificates
formerly evidencing Company Common Stock shall cease to have
any rights as shareholders of the Company, except as provided
by law; provided, however, that such holders shall have the
rights set forth in Section 1.9 hereof.
Section 1.9 Notice to Shareholders of the Company; Exchange of Certificates. As
soon as practicable after the Effective Time, a notice describing the Merger
will be sent to each holder of Company Common Stock as of the date thereof,
together with instructions for surrendering certificates representing shares of
Company Common Stock in exchange for certificates representing shares of RVM
Common Stock. Until surrendered for exchange, each outstanding certificate that,
immediately prior to the Effective Time, evidenced Company Common Stock shall
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<PAGE> 6
be deemed and treated for all corporate purposes to evidence the ownership of
the number of shares of RVM Common Stock into which such shares of Company
Common Stock were converted pursuant to the provisions of Sections 1.8 (a) and
(b) hereof.
ARTICLE II
ACTIONS TO BE TAKEN IN
CONNECTION WITH THE MERGER
Section 2.1 Company Indebtedness. The Company will continue as the Surviving
Corporation, will retain all its assets, and will continue to be liable for all
its debt ("Company Debt") and other obligations. However, since the Company will
change its name as a result of the Merger, it will, if required by any lender,
execute, acknowledge and deliver any and all instruments and documents required
to confirm the liability of the Surviving Corporation for the Company Debt.
Section 2.2 Stock Plans. In connection with the Merger, the Company will cease
to be a public company, and RVM, from and after the Effective Time, will perform
all obligations of the Company pursuant to any stock option or other stock plan
of the Company ("Stock Plans").
Section 2.3 Reservation of Shares. As soon as practicable after the Effective
Time, RVM will reserve sufficient shares of RVM Common Stock to provide for the
issuance of RVM Common Stock upon exercise of options outstanding under the
Stock Plans.
ARTICLE III
CONDITIONS OF MERGER
Section 3.1 Conditions Precedent. The obligations of the parties to this
Agreement to consummate the Merger and the transactions contemplated by this
Agreement shall be subject to fulfillment or waiver by the parties of the
condition that, at the Effective Time, no order, statute, rule, regulation,
executive order, injunction, stay, decree, judgment or restraining order shall
have been enacted, entered, promulgated or enforced by any court or governmental
or regulatory authority or instrumentality which prohibits or makes illegal the
consummation of the Merger or the transactions contemplated hereby.
ARTICLE IV
COVENANTS
Section 4.1 Election of Directors. Immediately prior to the Effective Time, the
Company, in its capacity as the sole stockholder of RVM, will elect each person
who is then a member of the board of directors of the Company as a member of the
board of directors of RVM, each of whom
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<PAGE> 7
shall serve until the first annual meeting of shareholders of RVM to be held
following the expiration of his term, and until his successor shall have been
elected and qualified.
Section 4.2 Employee Benefit Plans. From and after the Effective Time, the
Surviving Corporation and RVM will take or cause to be taken all further
actions, if any, necessary or desirable in order for RVM to assume (or become a
participating employer in) each employee benefit plan and agreement of the
Company, or to adopt comparable plans, all to the extent deemed appropriate by
the Surviving Corporation and RVM and permitted under applicable law.
Section 4.3 Contribution of Treasury Stock. At the Effective Time, the Company
will contribute to the capital of RVM all the Company Common Stock then held in
the treasury of the Company.
Section 4.4 Contribution of Outstanding RVM Stock. Immediately prior to the
Effective Time, the Company will contribute to the capital of RVM all shares of
RVM Common Stock then outstanding and owned of record and beneficially by the
Company.
ARTICLE V
TERMINATION AND AMENDMENT
Section 5.1 Termination. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time prior to the Effective Time by
action of the Board of Directors of the Company, RVM or Ravens if it should
determine that for any reason the completion of the transactions provided for
herein would be inadvisable or not in the best interest of such corporation or
its stockholders. In the event of such termination and abandonment, this
Agreement shall become void and neither the Company, RVM or Ravens nor their
respective stockholders, directors or officers shall have any liability with
respect to such termination and abandonment.
Section 5.2 Amendment. This Agreement may be supplemented, amended or modified
by the mutual consent of the Boards of Directors of the parties to this
Agreement.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1 Governing Law. Except with respect to matters contained herein
governed by the DGCL, this Agreement has been executed and delivered in the
State of Ohio and shall be governed by and construed and enforced under the laws
of the State of Ohio, regardless of the laws that might otherwise govern under
applicable Ohio principles of conflicts of law.
6
<PAGE> 8
Section 6.2 Counterparts. This Agreement may be executed in one or more
counterparts, each of which when executed shall be deemed to be an original but
all of which shall constitute one and the same agreement.
Section 6.3 Entire Agreement. This Agreement, including the documents and
instruments referred to herein, constitutes the entire agreement and supersedes
all other prior agreements and undertakings, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof.
IN WITNESS WHEREOF, RVM, Ravens and the Company have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
RAVENS METAL PRODUCTS, INC.
By /s/ Jacob Pollock
------------------------------------
Chairman and Chief Executive Officer
RVM INDUSTRIES, INC.
By /s/ Jacob Pollock
------------------------------------
Chairman and Chief Executive Officer
RAVENS, INC.
By /s/ Jacob Pollock
------------------------------------
Chairman and Chief Executive Officer
7
<PAGE> 9
I, Nicholas T. George, Secretary of Ravens Metal Products, Inc., do hereby
certify that the Board of Directors of Ravens Metal Products, Inc. approved and
adopted this Agreement at a meeting duly called for the purpose on March 24,
1997 pursuant to Section 251(g) of the Delaware General Corporation Law and that
the conditions specified in the first sentence of said Section 251(g) have been
satisfied.
/s/ Nicholas T. George
----------------------
Nicholas T. George
Secretary
I, Nicholas T. George, Secretary of RVM Industries, Inc., do hereby certify that
the Board of Directors of RVM Industries, Inc. approved and adopted this
Agreement at a meeting duly called for the purpose on March 24, 1997 pursuant to
Section 251(g) of the Delaware General Corporation Law and that the conditions
specified in the first sentence of said Section 251(g) have been satisfied.
/s/ Nicholas T. George
----------------------
Nicholas T. George
Secretary
I, Nicholas T. George, Secretary of Ravens, Inc., do hereby certify that the
Board of Directors of Ravens, Inc. approved and adopted this Agreement at a
meeting duly called for the purpose on March 24, 1997 pursuant to Section 251(g)
of the Delaware General Corporation Law and that the conditions specified in the
first sentence of said Section 251(g) have been satisfied.
/s/ Nicholas T. George
----------------------
Nicholas T. George
Secretary
8
<PAGE> 1
RAVENS METAL PRODUCTS, INC.
FORM 8-K CURRENT REPORT
MARCH 31, 1997
EXHIBIT 20
NOTICE TO SHAREHOLDERS
<PAGE> 2
NOTICE TO SHAREHOLDERS OF RAVENS METAL PRODUCTS, INC.
OF CERTAIN TRANSACTIONS NOT REQUIRING SHAREHOLDER APPROVAL
MARCH 31, 1997
On March 31, 1997, Ravens Metal Products, Inc. (the "Company") completed its
holding company reorganization and the acquisition of two complementary
businesses.
HOLDING COMPANY REORGANIZATION
The Company has completed a reorganization of its legal structure pursuant to
Section 251(g) of the Delaware General Corporation Law. The effective date was
March 31, 1997.
Shareholder approval of the reorganization is not required and is not being
sought. Shareholders of the Company are not entitled to dissenters' rights under
Section 262 of the Delaware General Corporation Law.
The principal purpose of the reorganization is to improve internal operating
flexibility. The business conducted by the Company will not be changed as a
result of the reorganization; its assets and liabilities will remain
substantially unchanged.
Pursuant to the plan of reorganization, a new parent holding company has been
created, with the Company (the existing publicly held company) as its wholly
owned subsidiary. The name of the new parent holding company is RVM Industries,
Inc., also a Delaware corporation ("RVM").
Each holder of the Company's common stock will become the holder of an equal
number of shares of RVM common stock (evidencing the same proportional interest)
pursuant to an exchange of certificates, and the rights of holders of RVM common
stock will be substantially the same rights that they had as holders of the
Company's common stock. RVM common stock will be issued solely as part of the
reorganization of the Company into a holding company structure. The Board of
Directors of the Company will not change as a result of the reorganization, the
Board of Directors of RVM will be identical to the Board of Directors of the
Company, and the management of RVM and the Company will be substantially
identical, except that, while Lowell Morgan will continue as President of the
Company, Richard D. Pollock will serve as President of RVM.
RVM is registering its common stock pursuant to Section 12(g) of the Securities
Exchange Act of 1934, and, as a public company, RVM will have the same rights
and responsibilities that the Company had as a public company. However, as a
result of the reorganization, the Company will no longer be a public company.
The reorganization will be tax-free to shareholders of the Company. The name of
the Company following the reorganization is Ravens, Inc.
YOU ARE HEREBY REQUESTED TO SURRENDER ANY CERTIFICATES THAT YOU MAY HAVE
REPRESENTING SHARES OF THE COMMON STOCK OF RAVENS METAL PRODUCTS, INC. IN
EXCHANGE FOR CERTIFICATES REPRESENTING AN EQUAL NUMBER OF SHARES OF THE COMMON
STOCK OF RVM INDUSTRIES, INC., USING THE ENCLOSED TRANSMITTAL FORM.
<PAGE> 3
ACQUISITIONS
RVM Industries, Inc., the holding company parent of the Company as a result of
the reorganization described above, has acquired all the issued and outstanding
capital stock of Albex Aluminum, Inc. ("Albex") and Signs and Blanks, Inc.
("SABI"), each an Ohio corporation. Albex and SABI had been wholly owned by
Jacob Pollock, the largest shareholder (holding 87.16% of the outstanding
capital stock) and an officer and director of the Company. Mr. Pollock also will
serve as an officer and director of RVM and will hold 87.16% of its outstanding
capital stock.
The purchase price of the Albex shares will be that dollar amount equal to seven
times the average earnings of Albex before interest and taxes (plus depreciation
and amortization and less capital expenditures) for the fiscal years ending
March 31, 1999 and March 31, 2000, less all interest bearing debt, all
determined in accordance with generally accepted accounting principles (the
"Albex Purchase Price").
The purchase price of the SABI shares will be that dollar amount equal to seven
times the average earnings of SABI before interest and taxes (plus depreciation
and amortization and less capital expenditures) for the fiscal years ending
March 31, 1999 and March 31, 2000, less all interest bearing debt, all
determined in accordance with generally accepted accounting principles (the
"SABI Purchase Price").
Accordingly, neither the Albex Purchase Price nor the SABI Purchase Price can be
determined until the respective earnings of Albex and SABI, for the fiscal year
ending March 31, 2000, are known.
The Albex Purchase Price and the SABI Purchase Price each will be paid over a
five-year term, with interest thereon, at the rate of eight percent (8%) per
annum, accruing from and after July 1, 2000. In each case a payment of principal
only will be due on July 1, 2000, and a payment of principal and interest will
be due on August 1, 2000 and on the first day of each month thereafter, until
both the Albex Purchase Price (and all interest thereon) and the SABI Purchase
Price (and all interest thereon) have been paid in full.
Albex is the obligor on a note payable to Jacob Pollock in the principal amount
of $2,900,000 (the "Albex Note"), and SABI is the obligor on a note payable to
J. Pollock & Co. in the principal amount of $1,131,000 (the "SABI Note"). Albex
will repay the Albex Note, and SABI will repay the SABI Note over a five-year
term, with interest thereon, at the rate of seven percent (7%) per annum,
accruing from and after April 1, 1997. A payment of interest only on the Albex
Note and on the SABI Note will be due on May 1, 1997 and on the first day of
each month thereafter through December 1, 1997; a payment of principal in the
amount of $48,333.33 and interest on the Albex Note and in the amount of $18,850
and interest on the SABI Note will be due on January 1, 1998 and on the first
day of each month thereafter, until the principal amount (and all interest
thereon) of each Note has been paid in full; provided, however, that no payment
of principal on either Note will be due during the period that RVM is making
payments with respect to the Albex Purchase Price or the SABI Purchase Price.
However, interest will continue to accrue and be paid during any period in which
no principal payments are being made with respect to the Notes.
Payments with respect to the Albex Purchase Price, the SABI Purchase Price, the
Albex Note and the SABI Note will be subordinated to the repayment of certain
bank loans. A notice describing these acquisitions is being given or sent to all
Company shareholders of record today, March 31, 1997.
<PAGE> 4
RAVENS [logo]
March 31, 1997
Dear Shareholder of Ravens Metal
Products, Inc.:
Pursuant to the holding company reorganization described in the accompanying
Notice, please return your stock certificates representing shares of the common
stock of Ravens Metal Products, Inc. (the "Company") to the Company in the
enclosed postage paid envelope. Each certificate will be exchanged for a
certificate representing an equal number of shares of the common stock of RVM
Industries, Inc., the successor to the Company as a result of the holding
company reorganization that was effective on March 31, 1997. This is not an
offer to purchase your stock, and the Company is not purchasing stock. If the
certificates do not fit in the envelope or the envelope is not available, please
mail the certificates to:
Ravens Metal Products, Inc.
P. O. Box 10002
861 E. Tallmadge Avenue
Akron, Ohio 44310-0002
The Company will mail the new certificates to you at the address to which the
enclosed information was mailed. If you have a new address, please provide it in
the following space:
New Address: -------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
Please call Kim Reichel at (330) 630-4528 if you are unable to find your
certificate(s), or if you have any questions. Thank you for your cooperation.
Very truly yours,
RAVENS METAL PRODUCTS, INC.
RAVENS METAL PRODUCTS, INC. P.O. BOX 10002o AKRON, OH 44310-0002o
PHONE:(330)630-4528o FAX:(330)630-4535
