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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event
reported): September 3, 1996
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MILLER INDUSTRIES, INC.
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(Exact name of Registrant as Specified in its Charter)
Tennessee 0-24298 62-1566286
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(State or other Jurisdiction of (Commission File (IRS Employer
Incorporation or Organization) Number) Identification No.)
900 Circle 75
Parkway
Atlanta, Georgia 30339
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (770) 988-0797
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On September 3, 1996, Miller Industries, Inc. (the "Company")
completed the acquisition of Vulcan International, Inc.
("Vulcan") through the merger of Vulcan with a wholly-owned
subsidiary of the Company, pursuant to an Agreement and Plan of
Merger dated September 2, 1996 between the Company, its merger
subsidiary, Vulcan and all of the shareholders of Vulcan. The
consideration paid by the Company consisted of 489,552 shares of
its Common Stock (as adjusted to reflect the 2-for-1 stock split
approved on August 30, 1996 for distribution on September 30,
1996 to shareholders of record on September 16, 1996). Vulcan is
a manufacturer of towing and recovery equipment headquartered in
Olive Branch, Mississippi. The number of shares issued in this
transaction was determined by dividing $8,200,000, the negotiated
purchase price, by the closing sale price of the Company's Common
Stock on the New York Stock Exchange on the trading day
immediately preceding the closing of the transaction.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
A. Financial Statements of Businesses Acquired
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The following consolidated financial statements of Vulcan have
not been completed as of the date of this report and will be
filed as an amendment to this report as soon as practicable in
accordance with Item 7(a)(4) of Form 8-K.
1. Independent auditors opinion
2. Consolidated balance sheets as of April 30, 1996
and as of July 31, 1996 (unaudited)
3. Consolidated statements of operations for the
fiscal year ended April 30, 1996 and three months
ended July 31, 1996 (unaudited)
4. Consolidated statements of shareholders equity for
the fiscal year ended April 30, 1996 and three
months ended July 31, 1996 (unaudited)
5. Consolidated statements of cash flows for the
fiscal year ended April 30, 1996 and three months
ended July 31, 1996 (unaudited)
6. Notes to the consolidated financial statements
B. Pro Forma Financial Information
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The following pro forma financial information has not
been completed as of the date of this report, and will
be filed as an amendment to this report as soon as
practicable in accordance with Item 7(a)(4) of Form 8-
K.
1. Pro forma consolidated balance sheet as of July 31,
1996
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2. Pro forma consolidated income statements for the
nine months ended April 30, 1994, fiscal years ended
April 30, 1995 and 1996 and three months ended July 31, 1996
C. Exhibits
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The following exhibits are filed with this report:
2.1 Agreement and Plan of Merger
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned hereunto duly authorized.
Date: September 17, 1996 MILLER INDUSTRIES, INC.
By: /s/ Frank Madonia
Name: Frank Madonia
Title: Vice President
AGREEMENT AND PLAN OF MERGER
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THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is made
and entered into as of the 2nd day of September, 1996, by and
among MILLER INDUSTRIES, INC., a Tennessee corporation
("Parent"), CANADA ACQUISITION CORP., a Delaware corporation and
wholly owned subsidiary of Parent ("Merger Sub"), VULCAN
INTERNATIONAL, INC. a Mississippi corporation (the "Company"),
and the shareholders of the Company identified on the signature
page below (collectively, the "Shareholders" and individually a
"Shareholder").
W I T N E S S E T H:
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WHEREAS, Parent and its subsidiaries and the Company and its
subsidiaries are engaged in the manufacture, sale and
distribution of towing and recovery equipment and related
services (collectively, the "Company's Products") (such term and
other capitalized terms used herein being defined either in
Article 13 or at the places in this Agreement indicated in
Article 13); and
WHEREAS, the Company owns 94.367% of the issued and
outstanding shares of capital stock of Vulcan Equipment Company,
Inc. (the "Subsidiary"); and
WHEREAS, the Shareholders own all of the issued and
outstanding shares of capital stock of the Company (the "Shares")
and the Reorganization Securities Voting Trust (the "Trust") owns
5.633% of the issued and outstanding shares of capital stock of
the Subsidiary; and
WHEREAS, Parent and the Shareholders deem it advisable and
in their respective best interests to effect the merger of the
Company with and into Merger Sub; and
WHEREAS, Parent and the Shareholders intend that this
Agreement be approved and adopted by all relevant parties as a
plan of reorganization within the provisions of Sections
368(a)(1)(A) and 368(a)(2)(D) of the Internal Revenue Code of
1986, as amended (the "Code");
NOW, THEREFORE, for and in consideration of the premises,
and the mutual covenants and agreements contained herein, and
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
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1. THE MERGER
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1.1. THE MERGER. At the Effective Time, upon the
terms and subject to the conditions set forth herein, and in
accordance with the corporate Laws of the state of incorporation
of Merger Sub and the Company (the "Corporate Laws"), the Company
shall be merged with and into Merger Sub, the separate existence
of the Company shall cease, and Merger Sub shall continue as the
surviving corporation (the "Merger"). Merger Sub after the
Merger is sometimes hereafter referred to as the "Surviving
Corporation."
1.2. EFFECT OF THE MERGER. At the Effective Time, the
Surviving Corporation shall continue its corporate existence
under the Laws of its state of incorporation and shall succeed to
all rights, privileges, immunities, franchises and powers, and be
subject to all duties, liabilities, debts and obligations, of the
Company in accordance with the provisions of the Corporate Laws.
2. THE SURVIVING CORPORATION
2.1. CERTIFICATE. The certificate of incorporation of
Merger Sub as in effect immediately prior to the Effective Time
shall be the certificate of incorporation of the Surviving
Corporation until thereafter amended in accordance with
applicable Law and such certificate of incorporation; provided,
however, that such certificate shall be amended at the Effective
Time to change the name of Merger Sub to "Vulcan International,
Inc."
2.2. BYLAWS. The bylaws of Merger Sub as in effect
immediately prior to the Effective Time shall be the bylaws of
the Surviving Corporation until thereafter amended in accordance
with applicable Law, the certificate of incorporation of such
Surviving Corporation and such bylaws.
2.3. BOARD OF DIRECTORS. The directors of Merger Sub
immediately prior to the Effective Time shall be the initial
board of directors of the Surviving Corporation, each of such
persons to serve until his or her successor, if there is to be
one, is duly elected and qualified.
2.4. OFFICERS. The officers of Merger Sub immediately
prior to the Effective Time shall be the initial officers of the
Surviving Corporation, each of such officers to serve until his
or her successor, if there is to be one, is duly qualified.
3. MERGER CONSIDERATION; CONVERSION
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3.1. COMPANY SHARES. At the Effective Time, by virtue
of the Merger, and without any action on the part of the
Shareholders, all of the Shares issued and outstanding
immediately prior to the Effective Time shall be canceled,
retired and converted into and become the right to receive the
Merger Consideration described in this Article 3.
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3.2. MERGER CONSIDERATION. The "Merger Consideration"
is 244,776 shares of Parent's Common Stock, $.01 par value per
share (the "Parent Stock"), which is equal to EIGHT MILLION TWO
HUNDRED THOUSAND (8,200,000) divided by the lesser of (a) thirty-
five (35) and (b) the closing price per share of the Parent Stock
for the date immediately preceding the Closing on the New York
Stock Exchange.
3.3. ALLOCATION. The Merger Consideration payable at
the Closing shall be allocated among the Shareholders of the
Company in accordance with the percentages set forth opposite
each such Shareholder's name next to his or her signature set
forth below. If the allocation results in fractional shares,
then no fractional shares shall be issued, and in lieu thereof a
Shareholder shall be paid an amount in cash equal to such
fractional part of a share multiplied by $35.00.
3.4. OTHER SHARES. Each share of common stock of
Merger Sub issued and outstanding immediately prior to the
Effective Time shall be converted into and become one share of
common stock of the Surviving Corporation.
3.5. CLOSING. (a) Subject to the termination of this
Agreement pursuant to Article 11, the consummation of the
transactions contemplated in this Agreement (the "Closing") shall
take place at (i) the offices of Kilpatrick & Cody, 1100
Peachtree Street, Suite 2800, Atlanta, Georgia, at 9:00 a.m.,
Atlanta time, on the later of (A) September 3, 1996 or (B) the
first business day after all of the conditions set forth in
Articles 8 and 9 hereof have been satisfied or waived, or (ii)
such other place and time as the parties may mutually agree.
(b) On the date of the Closing, the following
transactions shall occur:
(i) Parent shall deliver the Merger Consideration
to the Shareholders, less the Escrow Shares, as defined
herein;
(ii) Norma Alm shall deliver the original
Redemption Note (as defined below), marked cancelled,
to the Company; and
(iii) The Company and Merger Sub shall file
the documents required by the Corporate Laws to effect
the Merger, which shall be in form and substance
satisfactory to Parent and the Company and such
documents shall become effective at the close of
business on the date of the Closing (the "Effective
Time").
(c) All of the deliveries, payments and other
transactions and documents relating thereto shall be
interdependent and none shall be effective unless and until all
are effective (except to the extent that the party entitled to
the benefit thereof has waived satisfaction or performance
thereof as a condition precedent hereto).
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3.6. COMPANY SHAREHOLDERS. The parties acknowledge
that Norma Alm's one share of the Company's common stock was
redeemed on May 5, 1995 in exchange for a promissory note of the
Company in the aggregate principal amount of $1,000,000 dated
May 5, 1995 (the "Redemption Note"), but that for all purposes of
this Agreement, including without limitation the indemnity
provisions of Article 10, Norma Alm shall be deemed to be a
"Shareholder" of the Company owning 25% of the "Shares", as such
terms are used herein.
4. ADDITIONAL AGREEMENTS
4.1. EXPENSES. Except as otherwise provided herein,
all expenses incurred by Merger Sub and Parent in connection with
the negotiations among the parties, and the authorization,
preparation, execution and performance of this Agreement and the
transactions contemplated hereby shall be paid by Merger Sub or
Parent, as the case may be. Except as otherwise provided herein,
all reasonable expenses incurred by the Shareholders and the
Company since August 1, 1996 in connection with the negotiations
among the parties, and the authorization, preparation, execution
and performance of this Agreement and the consummation of the
transactions contemplated hereby shall be paid by the Company
provided that such expenses are approved in advance by Parent.
4.2. BROKERS. Parent shall indemnify the Shareholders
(and, if the Merger is not consummated, the Company) and hold
them harmless from and against all claims or demands for
commissions or other compensation by any broker, finder, or
similar agent claiming to have been employed by or on behalf of
Parent or Merger Sub. The Shareholders (and, if the Merger is
not consummated, the Company) shall indemnify Parent, Merger Sub
and the Surviving Corporation and hold them harmless from and
against all claims or demands for commissions or other
compensation by any broker, finder or similar agent claiming to
have been employed by or on behalf of the Shareholders (or any of
them) or the Company.
4.3. PUBLICITY. All press releases and other public
announcements respecting the subject matter hereof shall be made
only by Parent; provided, however, that the Company and
Shareholders may make any disclosure required to be made under
applicable Law if they have determined in good faith that it is
necessary to do so and have used their best efforts, prior to the
issuance of the disclosure, to provide Parent with a copy of the
proposed disclosure and to discuss the proposed disclosure with
Parent.
4.4. COOPERATION. The parties shall cooperate fully
with each other and with their respective counsel and accountants
in connection with any steps required to be taken as part of
their respective obligations hereunder, and all parties shall use
commercially reasonable efforts to consummate the transactions
contemplated herein and to fulfill their obligations hereunder.
From time to time and at any time, at the Surviving Corporation's
or Parent's request, whether on or after the date hereof, and
without further consideration, the Shareholders shall, at their
expense, execute and deliver such further documents and
instruments of conveyance, assignment, and transfer and shall
take such further reasonable actions as may be necessary or
desirable, in the opinion of the Surviving Corporation, in
connection with the consummation of the transactions described
herein.
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4.5. PARENT'S PUBLIC DOCUMENTS AND ACCESS TO
INFORMATION. Parent has delivered to the Company and the
Shareholders a true and complete copy of (i) Parent's Annual
Report on Form 10-K for the year ended April 30, 1996, (ii)
Parent's definitive proxy statement relating to its 1996 annual
shareholders meeting, (iii) Parent's prospectus dated January 26,
1996, and (iv) all other filings (other than preliminary
registration and proxy statements) made by Parent with the
Securities and Exchange Commission ("SEC") between January 26,
1996, and the date hereof (collectively, the "SEC Documents").
In addition to the SEC Documents, Parent has provided the Company
and each Shareholder with opportunities to become familiar with
the business, financial condition, management, prospects and
operations of Parent, including reasonable opportunities to ask
questions of, receive answers from and obtain information
regarding Parent and its business which is material to their
investment decision.
4.6. COVENANT AGAINST COMPETITION. (a) In order to
induce Merger Sub and Parent to enter into this Agreement and to
issue the Parent Stock and make payments as provided herein, each
Shareholder agrees that, for the period of five (5) years
immediately following the date of the Closing, he or she will
not, without the prior written consent of the Surviving
Corporation, for his or her own account or jointly with another,
directly or indirectly, for or on behalf of any Person, as
principal, agent or otherwise:
(i) own, control, manage or otherwise participate
in the ownership, control or management of a business
engaged within the Territory in the representation of
any manufacturer, distributor or other seller of, or
which offers for sale, sells, distributes or installs,
Company's Products or products substitutable therefor;
(ii) solicit, call upon or attempt to solicit the
patronage of any Person having an office or place of
business within the Territory and to whom the Company
or the Subsidiary sold or provided any Company's
Products on, or during the two (2) year period prior
to, the date of the Closing, for the purpose of
obtaining the patronage of any such Person for the
purchase of Company's Products or products
substitutable therefor, except as an employee or on
behalf of Parent or the Surviving Corporation or their
respective Affiliates; or
(iii) solicit or induce, or in any manner
attempt to solicit or induce, any person employed or
engaged by Parent or the Surviving Corporation in any
capacity (including, without limitation, as an
employee, distributor, independent contractor or
agent), with the exception of those Persons set forth
in the Disclosure Memorandum that may be solicited to
work for Smith Transportation, to leave such employment
or engagement, whether or not such employment or
engagement is pursuant to a contract or is at will.
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(b) Notwithstanding anything herein to the contrary,
it shall not be a breach of the covenants contained in
subparagraphs (a)(i) and (ii) above for any Shareholder to own
shares of the Parent and not more than five percent (5%) of the
equity interests of any Person whose equity interests are
publicly traded.
(c) Although the parties have, in good faith, used
their best efforts to make the provisions of this Paragraph 4.6
reasonable in both geographic area and in duration, and it is not
anticipated, nor is it intended, by any of the parties hereto
that a Forum of competent jurisdiction would find it necessary to
reform the provisions hereof to make it reasonable in both
geographic area and in duration, or otherwise, the parties
understand and agree that if a Forum of competent jurisdiction
determines it necessary to reform the scope of this Paragraph 4.6
in order to make it reasonable in either geographic area or
duration, or otherwise, damages, if any, for a breach hereof, as
so reformed, would be deemed to accrue to the Surviving
Corporation as of and from the date of such a breach only insofar
as the damages for such breach relate to an action which occurred
within the scope of the geographic area and duration as so
reformed.
(d) The rights of Parent contained in this Paragraph
4.6 may not be assigned other than as part of a sale or transfer
of the business of the Subsidiary or any substantial portion
thereof.
4.7. POOLING OF INTERESTS TREATMENT AND RESALE
RESTRICTIONS. The Company and the Shareholders agree to use
their respective best efforts to cause the Merger to be accounted
for as a "pooling of interests." The Company and the
Shareholders further warrant and agree that they have not since
August 1, 1996 and will not through the date on which Parent has
published and disseminated consolidated financial results which
include results of combined operations of the Surviving
Corporation and Parent for at least thirty days on a consolidated
basis (i) sell, assign, exchange, transfer, encumber, pledge,
distribute or otherwise dispose of any shares of Parent Stock
received by such Shareholder in the Merger or any interest in any
such shares of Parent Stock, in whole or in part, and no such
attempted transfer shall be treated as effective for any purpose;
(ii) engage in any transaction with respect to any shares of
Parent Stock or any interest therein, the intent or effect of
which is to reduce the risk of owning shares of Parent Stock; or
(iii) take any action described in the Arthur Andersen LLP
booklet entitled "Accounting for Business Combinations" that
could in any manner adversely affect such "pooling of interests"
qualification. Parent will file with the SEC the quarterly
report containing such results of combined operations of Parent
and the Surviving Corporation within the time period required by
the SEC.
4.8. LEGENDING OF PARENT STOCK. The Shareholders
acknowledge and agree that all shares of Parent Stock received by
them hereunder are subject to the registration rights set forth
in Paragraph 4.10, but as of the date hereof have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities Laws of any state. The
Shareholders acknowledge that there shall be placed on all
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certificates representing the shares of Parent Stock issued to
the Shareholders pursuant to this Agreement appropriate
restrictive legends referencing the restrictions imposed by
applicable securities Laws and those relating to "pooling of
interests" treatment discussed in Paragraph 4.7. Each
Shareholder agrees that he or she will not offer to sell, sell or
otherwise dispose of any Parent Stock issued to him or her
pursuant to this Agreement in violation of the requirements of
the Securities Act, including, without limitation Rule 145(d)
promulgated thereunder. With respect to any such sale or
disposition, each Shareholder agrees to furnish to the Surviving
Corporation or Parent upon request such information as its
counsel may reasonably deem necessary to assure that such sale or
disposition is made in full compliance with this Agreement, such
rule and all applicable federal and state securities Laws.
4.9. SECRECY AGREEMENT. Each of the Shareholders
acknowledges and agrees to abide by and be bound by each of the
terms and conditions of the Secrecy Agreement between Parent and
the Company dated August 4, 1996.
4.10. REGISTRATION STATEMENT. (a) Parent agrees
that it will file within 60 days of the Closing and use its
reasonable best efforts to obtain the prompt effectiveness of, a
registration statement under the Securities Act to register for
public sale all of the outstanding shares of Parent Stock, so
that such shares may be offered and sold by or for the account of
the Shareholders, from time to time as market conditions permit,
in The New York Stock Exchange or otherwise, at prices and on
terms then prevailing or in negotiated transactions, by one or
more of the following methods: (i) a block trade in which a
broker or dealer so engaged will attempt to sell the shares as
agent, but may position and resell a portion of the block as
principal to facilitate the transaction; (ii) purchases by a
broker or dealer as principal and resale by such broker or dealer
for its account pursuant to a Prospectus; (iii) ordinary
brokerage transactions and transactions in which the broker
solicits purchasers; and (iv) face-to-face transactions between
sellers and purchasers without a broker-dealer. Parent will
maintain the effectiveness of such registration statement until
such time as the Parent Stock may be sold by the Shareholders
pursuant to the terms and conditions of Rule 144 promulgated
under the Securities Act.
(b) If, during the time Parent is required to maintain
the effectiveness of a registration statement under this
Paragraph 4.10, Parent shall be engaged in a transaction with
respect to which disclosure would be required in such
registration statement, but for which financial or other
information necessary for such required disclosure is not then
available to Parent, or with respect to which Parent's Board of
Directors shall have determined that disclosure at such time
could have an adverse effect on the Parent or its business or
prospects, then Parent shall be entitled to notify the
Shareholders that no sales may be made pursuant to the
registration statement for up to 90 days, which notice shall
state the basis for such prohibition. In addition, if during the
time that Parent is required to maintain the effectiveness of a
registration statement under this Paragraph 4.10 there takes
place an underwritten public offering of Parent securities, then
each Shareholder (if requested by the managing underwriter of
such offering) shall agree to refrain from selling any of its
shares of Parent Stock that are otherwise registered pursuant to
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this Paragraph 4.10 during the period of such distribution and
during the period in which the underwriting syndicate
participates in the after-market for such offering; provided that
such restriction shall not apply to the extent that the
Shareholder participates in such offering pursuant to Paragraph
4.10(d). Such Shareholder shall, however, be entitled to sell
such Parent Stock, commencing on the 26th day after the effective
date of the registration statement for the underwritten offering,
if then lawful to do so under applicable securities laws and
rules of the Commission.
(c) Parent shall pay all expenses incurred by it in
complying with this Paragraph 4.10, including, without
limitation, all registration and filing fees, printing expenses,
fees and disbursements of counsel and independent public
accountants for Parent, fees of the National Association of
Securities Dealers, Inc., New York Stock Exchange, transfer
taxes, and fees of transfer agents and registrars. All
underwriting discounts and selling commissions applicable to the
sale of any Parent Stock, and all fees and expenses of any
counsel, accountant, or other advisor to a seller of Parent Stock
incurred in connection with such sale, shall be borne by the
participating Shareholders in proportion to the number of shares
registered by each of them.
(d) If Parent sells shares of its Common Stock, $.01
par value per share, pursuant to an underwritten public offering
within one hundred eighty (180) days of the Closing, the
Shareholders shall have the right to sell their shares of Parent
Stock in such offering on terms and conditions no less favorable
than any other shareholder of Parent participating in such
offering, subject to customary underwriters' allocations and
adjustments, if any.
4.11. NON-SOLICITATION OF THIRD PARTY OFFERS. The
Shareholders and the Company agree that neither a Shareholder nor
any of his or her relatives, Affiliates, heirs or
representatives, nor the Company or the Subsidiary, or any of
their respective officers, directors, management employees,
Affiliates, related Persons or agents, will, directly or
indirectly (a) negotiate or discuss with any other Person any
other transaction involving a merger of the Company or the
Subsidiary, or the sale of any shares in or assets of the Company
(except for sales of inventory in the ordinary course of
business) or any other business combination involving the Company
or the Subsidiary, (b) reveal the terms of this Agreement to any
Person except for the purpose of carrying out the transactions
contemplated herein, or (c) solicit, encourage, negotiate,
discuss or accept any offer, bid or proposal from any other
Person respecting any transaction involving a merger of the
Company or the Subsidiary, the sale of any shares in or assets of
the Company or the Subsidiary (except for sales of inventory in
the ordinary course of business) or any other business
combination involving the Company or the Subsidiary. If the
Company or any Shareholder receives a proposal of the kind
described in the preceding subparagraph (c) prior to the date of
the Closing, then the Company or such Shareholder (as the case
may be) shall immediately notify Parent of the receipt of such
proposal and shall promptly provide Parent with a copy of such
proposal (or if such proposal is not in writing, a written
summary of its terms).
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4.12. POST-CLOSING ACTIONS BY PARENT, SURVIVING
CORPORATION AND SHAREHOLDERS. (a) Parent agrees that it will or
will cause the Surviving Corporation to (i) obtain the release of
Stephen D. Alm from any personal guarantees with respect to
obligations of the Company to First American National Bank,
Memphis, Tennessee, Navistar International Transportation Corp.
and Navistar Financial Corp., and (ii) indemnify him for all
payments made after the Closing by him to such bank thereunder.
(b) The Shareholders agree that they will or will
cause Properties to (i) obtain the release of the Subsidiary from
any guarantees with respect to obligations of Properties to First
American National Bank, Memphis, Tennessee and (ii) indemnify it
for all payments made after the Closing by it to First American
National Bank, Memphis, Tennessee thereunder.
4.13. EMPLOYMENT ARRANGEMENTS. The employment of
Stephen D. Alm, Andrew James Alm, Carolyn Alm Santos and Victor
Santos with the Subsidiary shall continue in accordance with the
present format disclosed in the Disclosure Memorandum until such
time as the Parent Stock is registered with the SEC and available
for resale pursuant to Paragraph 4.10. At such time, the
Subsidiary, on the one hand, and each of the aforementioned
individuals, on the other hand, shall each execute and deliver an
employment agreement in the form attached hereto as Exhibit A
subject to the additional terms and conditions set forth on
Exhibit B.
4.14. SOFTWARE LICENSE. At the Closing, the
Surviving Corporation shall cancel and deem the $15,000 debt
presently owed by Vulcan Management Systems, Inc. ("Systems") to
the Company to be paid in full in exchange for Systems granting
the Surviving Corporation a royalty-free, perpetual, non-
exclusive software license with respect to its fully integrated
manufacturing organization software system in form and substance
satisfactory to the parties.
4.15. USE OF NAMES. The Shareholders shall cause
to be filed with the Secretary of State of the appropriate
jurisdictions, within ten (10) days after the Closing, Articles
of Amendment or other appropriate papers changing Properties',
Systems' and all other entities owned or controlled by the
Shareholders name so as not to include the name "Vulcan" or any
other similar name. Promptly after the Closing, following the
Closing, the Shareholders shall (i) file all documents and papers
necessary to advise the appropriate officials in each state or
other jurisdiction in which such entities have registered or
qualified to transact business under such new name, and (ii)
cause to be filed in each jurisdiction in which such entities
have filed a trade name or similar registration all documents and
papers necessary to revoke or terminate such registration. The
Shareholders shall not, without the prior written consent of
Parent, for their own account or jointly with another, directly
or indirectly, for or on behalf of any Person, as principal,
agent or otherwise, use or authorize any other person to use the
name "Vulcan," or any name similar thereto.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SHAREHOLDERS AND THE COMPANY
The Shareholders and the Company have delivered to
Parent the disclosure memorandum attached hereto (the "Disclosure
Memorandum") which contains certain information regarding the
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Company, the Subsidiary and the Shareholders. The information
contained in the Disclosure Memorandum shall be deemed to be part
of and qualify those sections and only those sections of this
Article 5 which correspond to or are referred to in the sections
of the Disclosure Memorandum. In addition to the Disclosure
Memorandum, the Shareholders and the Company have delivered to
Parent certain documents and materials as a part of Parent's due
diligence investigation, and the Disclosure Memorandum and all
such documents and materials are or were true, correct and
complete originals or copies of originals as of the date
furnished, and any and all modifications or amendments thereto
have been or will be delivered to Parent. At all times prior to
and including the date of the Closing, the Shareholders and the
Company shall promptly provide Parent with written notification
of any event, occurrence or other information of any kind
whatsoever which affects or may affect, the continued truth,
correctness or completeness of any representation or warranty
made in this Agreement or any information contained in the
Disclosure Memorandum. To induce Merger Sub and Parent to enter
into and perform this Agreement, the Shareholders and the Company
represent and warrant to Merger Sub and Parent as follows:
5.1. ORGANIZATION, AUTHORITY AND QUALIFICATION. (a)
The Company is a corporation duly organized and validly existing
under the Laws of the State of Mississippi. The Subsidiary is a
corporation duly organized and validly existing under the Laws of
the State of Mississippi. Vulcan Manufacturing Limited is a
corporation duly organized and validly existing under the Laws of
the Province of Ontario. Each of the Company and the Subsidiary
has offices and places of business at the respective locations
specified in the Disclosure Memorandum. Each of the Company and
the Subsidiary has full corporate power and authority and is
entitled to own or lease its respective properties and to carry
on its respective business as and in all places where such
business is conducted and such properties are owned or leased.
Neither the Company nor the Subsidiary is required to be
qualified as a foreign corporation in any jurisdiction where the
absence of such qualification would have a material adverse
effect on the business of the Company or the Subsidiary. The
Shareholders have previously furnished to Parent true, correct
and complete copies of the articles of incorporation and bylaws
of the Company and the Subsidiary, as amended to date. The
Shareholders have previously furnished to Parent true, correct
and complete copies of: (i) the minutes and other similar
records of meetings of the Company's and the Subsidiary's
respective shareholders and board of directors, which contain all
records of meetings and actions taken in lieu thereof by such
corporation's shareholders and show all corporate actions
required to be taken or formally taken by such corporation's
board of directors or any committees thereof, and (ii) the
Company's and the Subsidiary's respective share transfer records,
which reflect fully all issuances, transfers and redemptions of
shares of such corporation since the date of incorporation.
(b) The Company has the full corporate power and
authority to execute, deliver and perform this Agreement and any
other agreements or instruments contemplated by this Agreement
("Other Agreements") to which it is a party. This Agreement has
been and the Other Agreements to which the Company is a party
have been duly and validly executed and delivered by the Company
and constitute the valid and legally binding obligations of the
Company, enforceable in accordance with their respective terms,
-10-<PAGE>
except that (i) such enforcement may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium or similar
laws affecting the enforcement of creditors' rights generally
from time to time in effect; (ii) such enforcement may be limited
by equitable principles of general application; (iii) such
enforcement may be limited by courts with respect to any
unconscionable provisions contained therein; and (iv) certain of
the covenants contained herein may not be specifically
enforceable and courts may award money damages rather than
specific performance for contractual provisions involving matters
other than the payment of money.
5.2. OWNERSHIP OF SHARES; SUBSIDIARIES. (a) The total
authorized capital stock of each of the Company and the
Subsidiary is as set forth in the Disclosure Memorandum.
(b) All of the issued and outstanding shares of the
Company and the Subsidiary are owned of record and beneficially
by the shareholders as set forth in the Disclosure Memorandum.
(c) Except as set forth in the Disclosure Memorandum,
all of the Shares are duly authorized, validly issued, fully paid
and nonassessable and were authorized, offered, issued and sold
in accordance with all applicable securities and other Laws and
all rights of the Company's shareholders and other Persons. No
Person has any preemptive rights with respect to shares of the
Company. There are no outstanding securities convertible into
the capital stock or rights to subscribe for or to purchase, or
any options for the purchase of, or any agreements or
arrangements providing for the issuance (contingent or otherwise)
of, or any Actions relating to, the capital stock of the Company.
There are no voting trusts, proxies or other agreements or
understandings with respect to the voting of the capital stock of
the Company. The Company is not subject to any obligation to
repurchase or otherwise acquire or retire any of its capital
stock, and the Company has no Liability for dividends declared or
accrued, but unpaid, with respect to its capital stock. The
Company has not purchased or redeemed any of its capital stock,
and except as set forth in the Disclosure Memorandum has not paid
any dividend or made any other payment to any of the Shareholders
or other Related Parties within the past two years.
(d) Except as set forth in the Disclosure Memorandum,
all of the outstanding shares of the Subsidiary are duly
authorized, validly issued, fully paid and nonassessable and were
authorized, offered, issued and sold in accordance with all
applicable securities and other Laws and all rights of the
Subsidiary's shareholders and other Persons. No Person has any
preemptive rights with respect to shares of the Subsidiary.
There are no outstanding securities convertible into the capital
stock or rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements or arrangements providing
for the issuance (contingent or otherwise) of, or any Actions
relating to, the capital stock of the Subsidiary. There are no
-11-<PAGE>
voting trusts, proxies or other agreements or understandings with
respect to the voting of the capital stock of the Subsidiary.
The Subsidiary is not subject to any obligation to repurchase or
otherwise acquire or retire any of its capital stock, and the
Subsidiary has no Liability for dividends declared or accrued,
but unpaid, with respect to its capital stock. Except as set
forth in the Disclosure Memorandum, the Subsidiary has not paid
any dividend or made any other payment to any of its shareholders
or other Related Parties and has not purchased or redeemed any of
its capital stock within the past two years. All such purchases
and redemptions of its capital stock have been in accordance with
its articles of incorporation, bylaws and all applicable Laws.
(e) Neither the Company nor the Subsidiary owns or has
an interest, direct or indirect, or any commitment to purchase or
otherwise acquire, any capital stock or other equity interest,
direct or indirect, in any other Person, except as set forth in
the Disclosure Memorandum. All such interests so set forth are
owned of record and beneficially by the Company or the Subsidiary
as set forth in the Disclosure Memorandum and are duly
authorized, validly issued, fully paid and nonassessable, and
were authorized, offered, issued and sold in accordance with all
applicable securities and other Laws.
(f) Each Shareholder is the legal and beneficial owner
of the Shares, as set forth on the Disclosure Memorandum, free
and clear of any and all Liens. The Company is the owner of all
investments disclosed under the Disclosure Memorandum with
respect to Paragraph 5.2(e), free and clear of any and all Liens.
There are no outstanding contracts, demands, commitments or other
agreements or arrangements under which the Shareholders (or any
of them) or the Company are or may become obligated to sell,
transfer or assign any of the Shares or such investments.
5.3. CAPACITY; INCONSISTENT OBLIGATIONS. (a) Each
Shareholder has the full right, power and legal capacity to
execute, deliver and perform his or her obligations under this
Agreement and the Other Agreements to which such Shareholder is a
party. This Agreement and the Other Agreements have been duly
and validly executed and delivered by such Shareholder and
constitute the valid and legally binding obligations of such
Shareholder, enforceable in accordance with their respective
terms, except that (i) such enforcement may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting the enforcement of creditors' rights
generally from time to time in effect; (ii) such enforcement may
be limited by equitable principles of general application; (iii)
such enforcement may be limited by courts with respect to any
unconscionable provisions contained therein; and (iv) certain of
the covenants contained herein may not be specifically
enforceable and courts may award money damages rather than
specific performance for contractual provisions involving matters
other than the payment of money.
(b) The execution, delivery and performance of this
Agreement and the Other Agreements to which any Shareholder or
the Company is a party will not (i) result in a violation of the
Company's or the Subsidiary's respective articles of
incorporation or bylaws, or any Law, or (ii) result in a breach
of, conflict with or default under any term or provision of any
indenture, note, mortgage, bond, security agreement, loan
-12-<PAGE>
agreement, guaranty, pledge, voting trust, or other instrument,
contract, agreement or commitment or any Order, to which the
Company, the Subsidiary or any Shareholder is a party or by which
any of them or any of their respective assets and properties,
including, without limitation, the Shares, is subject or bound;
nor will such actions result in (w) the creation of any Lien on
any of the Shares or any of the Company's or the Subsidiary's
respective assets or properties, (x) the acceleration or creation
of any Liability of the Company or the Subsidiary, (y) the
forfeiture of any right or privilege of the Company or the
Subsidiary, or (z) the forfeiture of any right or privilege of
any Shareholder which may affect such Shareholder's ability to
perform under this Agreement.
5.4. CONSENTS. Other than the Articles of Merger and
as otherwise expressly set forth in this Agreement, the
execution, delivery and performance by each Shareholder and the
Company of this Agreement and the Other Agreements to which he,
she or it is a party, and the consummation of the transactions
contemplated herein and therein does not (a) require the consent,
approval or action of, or any filing with or notice to, any
Government or other Person, or (b) impose any other term,
condition or restriction on Merger Sub or the Surviving
Corporation pursuant to any business combination or takeover Law,
except for such consents, approvals, actions or filings the
failure of which to obtain or make do not and will not affect the
enforceability of the Agreement or the consummation of the
transactions contemplated herein.
5.5. NO VIOLATION; COMPLIANCE WITH LAWS. Neither the
Company nor the Subsidiary is in default under or in violation of
(a) its respective articles of incorporation or bylaws or (b) any
Order. The operations of the Company, the Subsidiary and their
respective predecessors have been conducted in all material
respects in compliance with all applicable Laws. (For purposes of
this paragraph, any violation of applicable Law that could result
in imposition of a fine or other monetary penalty in excess of
one hundred dollars ($100) upon the Company or the Subsidiary
shall be deemed to be a material non-compliance). Neither the
Company nor any Shareholder has received any notification of any
asserted past or present failure by the Company or the Subsidiary
to comply with any applicable Law.
5.6. POSSESSION OF LICENSES. Each of the Company and
the Subsidiary possesses all franchises, certificates, licenses,
permits and other authorizations from Governments and all other
Persons ("Licenses"), other than those Licenses the failure of
which to obtain would not have a material adverse effect on the
business, assets, operations, prospects, properties, or condition
(financial or otherwise) of the Company or the Subsidiary, free
from burdensome restrictions, that are necessary for the
ownership, maintenance and operation of their respective
properties and assets and the conduct of their respective
businesses, and neither the Company nor the Subsidiary is in
material violation thereof.
5.7. FINANCIAL STATEMENTS, FINANCIAL CONDITION. Prior
to the date hereof, the Shareholders have delivered to Parent
copies of the Company's and the Subsidiary's financial statements
and related documents as identified in the Disclosure Memorandum
(collectively, the "Financial Statements"). The Financial
-13-<PAGE>
Statements include each of the Company's and the Subsidiary's
Balance Sheet (the "Reference Date Balance Sheet") as at April
30, 1996 (the "Reference Date"), which is the most recent balance
sheet of such corporation. The Financial Statements have been
prepared in accordance with GAAP consistently applied (except as
indicated in the Disclosure Memorandum), present fairly the
financial condition of the Company and the Subsidiary as at the
respective dates thereof and the results of the Company's and the
Subsidiary's respective operations and cash flows for the periods
then ended, and are consistent with the books and records of each
of the Company and the Subsidiary. The books and records of each
of the Company and the Subsidiary are maintained in accordance
with GAAP and are true, correct and complete in all material
respects.
5.8. LIABILITIES. Neither the Company nor the
Subsidiary has any Liability, except (i) those reflected on such
corporation's Reference Date Balance Sheet, (ii) Liabilities
incurred in the ordinary course of business since the Reference
Date consistent with the Company's or the Subsidiary's, as the
case may be, past experience during the periods covered by such
corporation's Financial Statements (none of which results from,
arises out of, relates to, is in the nature of, or was caused by
any breach of contract, breach of representation or warranty,
tort, product liability, infringement or violation of Law or
Order), and (iii) as may be set forth in the Disclosure
Memorandum.
5.9. TITLE TO PROPERTIES. Except as set forth in the
Disclosure Memorandum, each of the Company and the Subsidiary has
good and complete title to all their respective properties and
assets reflected in such corporation's Reference Date Balance
Sheet, except inventories and other immaterial assets which have
been disposed of in the ordinary course of business since the
Reference Date, and all other properties and assets necessary to
conduct its business as currently being conducted and as
conducted during the periods covered by the Financial Statements
(other than any leased property), free and clear of Liens, except
as may be set forth in the notes to such corporation's Reference
Date Balance Sheet.
5.10. RECEIVABLES. All notes and accounts
receivable shown on such corporation's Reference Date Balance
Sheet and all such receivables now held by each of the Company
and the Subsidiary are valid and collectible obligations and were
not and are not subject to any offset or counterclaim, except for
a reserve against such receivables of $20,000.
5.11. INVENTORIES. (a) The respective inventories
of the Company and the Subsidiary are merchantable and conform in
all respects to all orders, contracts or commitments for such
goods and customary trade standards for merchantable goods.
Except as set forth on the Disclosure Memorandum, no material
portion of such items of inventory is slow moving, obsolete or
below standard quality. Each item of inventory reflected on such
corporation's Reference Date Balance Sheet and the books and
records of the Company or the Subsidiary, as the case may be, has
been valued at the lower of cost or market in accordance with
GAAP.
(b) All products held by each of the Company and the
Subsidiary for sale to their respective customers meet the
standards of (i) to the knowledge of the Company and the
-14-<PAGE>
Shareholders, all applicable Laws and (ii) all contractual
commitments and warranties of each of the Company and the
Subsidiary to customers. During the 12 months after the Closing
or, if shorter, for the length of the Survival Period, the total
costs of product warranty claims made after the Closing for
repair or replacement of any products sold by the Company or the
Subsidiary prior to the Closing shall not exceed $100,000 (or a
pro rated amount for the Survival Period if it is less than 12
months). None of the products sold or otherwise distributed by
the Company or the Subsidiary or their respective predecessors
prior to the date hereof was, nor has the Company, the Subsidiary
or their respective predecessors received any notice claiming the
same to be, hazardous or unsafe in design, specification,
material, content, function or otherwise.
5.12. PERSONAL PROPERTY. (a) Except as set forth
in the Disclosure Memorandum, all machinery, equipment, vehicles,
and other items of tangible personal property which are owned or
leased by each of the Company and the Subsidiary are in good
condition and repair, subject to normal wear and tear, suited for
the use intended and are and have been operated in conformity
with all applicable Laws. To the knowledge of the Company and
the Shareholders, there are no defects or conditions which would
cause such tangible personal property to be or become inoperable
or unsafe.
(b) To the knowledge of the Company and the
Shareholders, all lessors of machinery, equipment or other
tangible personal property leased by each of the Company and the
Subsidiary have performed and satisfied their respective duties
and obligations under such leases. Neither the Company nor the
Subsidiary has brought or threatened any Action against any such
lessor for failure to perform and satisfy its duties and
obligations thereunder.
5.13. REAL PROPERTY. (a) Neither the Company nor
the Subsidiary owns any real property.
(b) Each parcel or tract of real property which is
used by the Company or the Subsidiary, as the case may be, in
their respective businesses (the "Leased Real Property," or the
"Real Property") is subject to a written lease or sublease to
which the Company or the Subsidiary, as the case may be, is a
party as lessee or sublessee (individually a "Real Property
Lease"). All such Real Property Leases are valid and in full
force and effect in accordance with their terms. The
Shareholders have previously furnished Parent with true, correct
and complete copies of all Real Property Leases. There is not,
with respect to any Real Property Lease (i) any default by the
Company or the Subsidiary, or any event of default or event which
with notice or lapse of time, or both, would constitute a default
by the Company or the Subsidiary or (ii) to the knowledge of the
Company and the Shareholders, any existing default by any other
party to any Real Property Lease, or event of default or event
which with notice or lapse of time, or both, would constitute a
default by any other party to any Real Property Lease.
(c) To the knowledge of the Company and the
Shareholders, all of the Real Property is free from development,
use or occupancy restrictions, except those imposed by applicable
Law, and from special taxes or assessments, except those
generally applicable to other properties in the tax districts in
-15-<PAGE>
which the Real Property is located. No options have been granted
by the Company or the Subsidiary or, to the knowledge of the
Company and the Shareholders, by any other Person to others to
purchase, lease or otherwise acquire any interest in the Real
Property. Each of the Company and the Subsidiary has the
exclusive right of possession of each tract or parcel comprising
such corporation's Real Property.
(d) To the Company's and the Shareholder's knowledge,
the present use, occupancy and operation of the Real Property,
and all aspects of the Improvements to the Real Property are in
compliance with all Laws and private restrictive covenants, and
there has not been any proposed change thereto that would affect
any of the Real Property or its use, occupancy or operation.
There exists no conflict or dispute with any Government or other
Person relating to any Real Property or the activities thereon.
No portion of the Real Property is subject to any classification,
designation or preliminary determination of any Government or
pursuant to any Law which would restrict its use, development,
occupancy or operation in connection with the Company's or the
Subsidiary's business. All Improvements are in good condition
and repair, and are suited for the operation of each of the
Company's and the Subsidiary's business.
(e) Neither the Company, the Subsidiary nor, to the
knowledge of the Company and the Shareholders, any other Person
has caused any work or improvements to be performed upon or made
to any of the Real Property for which there remains outstanding
any payment obligation that would or might serve as the basis for
any Lien in favor of the Person who performed the work.
(f) To the knowledge of the Company and the
Shareholders, all requisite certificates of occupancy and other
permits and approvals required with respect to the Real Property
or the Improvements and the use, occupancy and operation thereof
have been obtained and paid for and are currently in effect and
free of restrictions.
5.14. ABILITY TO CONDUCT BUSINESS AND INTELLECTUAL
PROPERTY RIGHTS. (a) To the knowledge of the Company and the
Shareholders, each of the Company and the Subsidiary has the
rights, contractual authorizations and information required to
offer and sell the products now being offered and sold by such
corporation and to perform the services that are presently being
performed by such corporation. Except as set forth in the
Disclosure Memorandum, neither the Company nor the Subsidiary is
a party to, either as a licensor or licensee, nor is it bound by
or subject to, any license agreement for any patent, process,
trademark, service mark, trade name, copyright, trade secret or
confidential information. To the Company's and the Shareholders'
knowledge, set forth in the Disclosure Memorandum are all of the
Company's and Subsidiary's patents, copyrights, trademarks,
service marks, trade names, and applications therefor and
registrations thereof, and the Company and the Shareholders will
take all steps necessary to effect the transfer of all right,
title and interest in and to any of such items which are not
owned by the Company or the Subsidiary. To the Company's and the
Shareholders' knowledge, there is no prior art which could be
used by a third party in any action or otherwise to invalidate
any of the intellectual property rights of the Company and the
Subsidiary. To the Company's and the Shareholders' knowledge,
there are no rights of third parties with respect to any such
-16-<PAGE>
trademark, service mark, trade secret, confidential information,
trade name, patent, patent application, copyright, invention,
device or process which has or could have an adverse effect on
the operations of each of the Company or the Subsidiary. Each of
the Company and the Subsidiary has complied with all applicable
Laws relating to the filing or registration of "fictitious names"
or trade names.
(b) To the Company's and the Shareholders' knowledge,
and except as disclosed in the Disclosure Memorandum, neither the
Company nor the Subsidiary has interfered with, infringed,
misappropriated or otherwise come into conflict with any
intellectual property rights of any other Person, and neither the
Company, the Subsidiary nor their respective officers and
directors has ever received any charge, complaint, claim, demand
or notice alleging any such interference, infringement,
misappropriation or violation. To the Company's and the
Shareholders' knowledge, no Person has interfered with,
infringed, misappropriated, or otherwise come into conflict with
the proprietary inventions, designs, ideas, processes, methods
and other know-how or other intellectual property of the Company
or the Subsidiary which are owned or used in the operation of
their respective business.
5.15. CONTRACTS. (a) All Company Contracts have
been entered into in the ordinary course of the Company's or the
Subsidiary's, as the case may be, business on commercially
reasonable terms, are valid and enforceable in all material
respects in accordance with their terms, are in full force and
effect, and will continue to be valid and enforceable and in full
force and effect on identical terms following the date of the
Closing. No Company Contract is likely to result in a loss to
the Company or the Subsidiary, as the case may be, upon
completion of performance, and the Company and the Shareholders
expect that all Company Contracts can be fulfilled or performed
by the Company or the Subsidiary, as the case may be, in
accordance with their respective terms without undue or unusual
expenditures of money or effort. All Company Contracts are
listed on the Disclosure Memorandum, and true, correct and
complete copies of all Company Contracts have been delivered to
Parent.
(b) There are no existing material defaults, events of
default or events which, with the giving of notice or lapse of
time, or both, would constitute a material default by the Company
or the Subsidiary under any Company Contract. No event has
occurred which may hereafter give rise to any right of
termination, acceleration, damages or any other remedy under any
Company Contract.
(c) To the Company's and the Shareholders' knowledge,
neither this Agreement, the Closing or the relationship between
the Company and Parent has caused or is likely to cause the
termination or nonrenewal of any Company Contract.
5.16. INSURANCE. Each of the Company and the
Subsidiary has obtained and maintains insurance policies which
provide adequate coverage to insure their respective assets,
properties and business against such risks and in such amounts as
are prudent and customary in the industry in which the Company
and the Subsidiary operate, and all such policies are in full
force and effect. All premiums due on such policies have been
-17-<PAGE>
paid, and neither the Company nor the Subsidiary has received any
notice of cancellation with respect thereto. Neither the Company
nor the Subsidiary has Liability for premiums or for
retrospective premium adjustments for any period. The Disclosure
Memorandum lists the types, amounts of coverage and deductibles
of all such insurance policies, and true, correct and complete
copies thereof have been delivered to Parent prior to the date
hereof.
5.17. LITIGATION; CONTINGENCIES. No Action is
pending or, to the knowledge of the Shareholders and the Company,
threatened against, by or affecting the Company, the Subsidiary
or the Shares. There are no unsatisfied judgments or Orders
against the Company, the Subsidiary or any Shareholder to which
any of them or their assets and properties are subject.
5.18. TAXES. The Company and any entity at any
time eligible or required to file a consolidated or combined Tax
return with the Company or the Subsidiary (individually, an
"Affiliated Entity" and collectively, the "Affiliated Entities"),
have duly and timely filed all federal, state, municipal, local
and foreign, if any, Tax returns and reports (including returns
for estimated tax), and all reports and returns of all other
Governments having jurisdiction (collectively, "Returns") with
respect to all Taxes (including, without limitation, consolidated
or combined Tax returns of some or all of the Company and the
Affiliated Entities); all such Tax returns and reports show the
correct and proper amount due; and the Taxes shown on all Tax
returns and reports and all Tax assessments received by the
Company, the Subsidiary or any Affiliated Entities have been paid
to the extent that such Taxes or estimates are due. The Company
and the Subsidiary previously provided to Parent true, correct
and complete copies of all Returns filed with respect to the tax
years beginning on and after April 30, 1993. All Taxes imposed
on the Company, the Subsidiary and their Affiliated Entities by
any Government (including all deposits in connection therewith
required by applicable Law, and all interest and penalties
thereon) which have become due and payable by the Company or the
Subsidiary for all periods through the date hereof have been paid
in full, net of refunds or offsets, except as reflected on the
Financial Statements, and adequate reserves for all other Taxes,
whether or not due and payable, and whether or not disputed, have
been set up on the books of the Company or the Subsidiary, as the
case may be, and such reserves will be adequate to pay all Taxes
of the Company and the Subsidiary, as the case may be, for all
periods through July 31, 1996. There is not now any proposed
assessment against the Company, the Subsidiary or any Affiliated
Entity of additional Taxes of any kind. Neither the Company nor
the Subsidiary is a party to any Tax sharing or Tax allocation
agreement, understanding, arrangement or commitment. There is no
dispute or Action concerning any Tax Liability of the Company
raised by a Government in writing.
5.19. EMPLOYMENT AND LABOR MATTERS. (a) To the
Company's and the Shareholders' knowledge, no employee, agent,
consultant or independent contractor who performs services on a
regular basis for the Company or the Subsidiary plans to
discontinue such relationship with such corporation after the
Closing.
(b) Neither the Company nor the Subsidiary is a party
to any agreement of any kind which deals with wages, conditions
of employment, benefits or other matters affecting the
-18-<PAGE>
employer/employee relationship with any union, labor organization
or employee group. There are no controversies pending, or, to
the Company's and the Shareholders' knowledge, threatened,
between the Company or the Subsidiary and any union, labor
organization or employee group representing, or seeking to
represent, any of such corporation's employees, and there has
been no attempt by any union, labor organization or employee
group to organize any of the Company's or the Subsidiary's
employees at any time in the past five years. Each of the
Company and the Subsidiary has substantially complied with all
applicable Laws relating to wages, hours, health and safety,
payment of social security withholding and other taxes,
maintenance of workers' compensation insurance, labor and
employment relations and employment discrimination. There have
been no citations, complaints, notifications of employee
complaints or claims with regard to OSHA matters since January 1,
1993.
(c) The Disclosure Memorandum lists all contracts,
agreements or arrangements (written or oral) concerning the
employment of any individual by each of the Company and the
Subsidiary, including each such individual's title, compensation
and duties.
5.20. EMPLOYEE BENEFIT MATTERS. (a) The
Disclosure Memorandum lists all "employee benefit plans" (the
"ERISA Plans") within the meaning of Section 3(3) of Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), to
which the Company or the Subsidiary contributes or is required to
contribute and all other practices, commitments, arrangements and
agreements pursuant to which the Company or the Subsidiary
provides, directly or indirectly, any benefits for employees.
Neither the Company nor the Subsidiary is required to contribute,
and has never been required to contribute, to any multi-employer
plan within the meaning of Section 3(37)(A) of ERISA. True
correct and complete copies of all ERISA Plans, together with
related trusts, insurance contracts, summary plan descriptions,
annual reports and Form 5500 filings for the past three years,
have been delivered to Parent.
(b) Each ERISA Plan has been operated and administered
in all material respects in accordance with all applicable Laws,
including, without limitation, ERISA and the Code. Neither the
Company, the Subsidiary nor the Shareholders nor any of their
respective directors, officers, employees or agents, nor, to the
Company's and the Shareholders' knowledge, any "party in
interest" or "disqualified person" (as such terms are defined in
Section 3(14) of ERISA and Section 4975 of the Code) has been
engaged in or been a party to any "prohibited transaction" (as
such term is defined in Section 406 of ERISA or Section 4975 of
the Code), nor has any such person been involved in or caused an
ERISA Plan to be involved in a breach of fiduciary duty under
Section 404 of ERISA. Each ERISA Plan that is a group health
plan within the meaning of Section 607(1) of ERISA and Section
4980B of the Code has complied with and is in compliance with the
continuation coverage requirements of Section 601 of ERISA and
Section 4980B of the Code. There are no pending claims or, to
the Company's and the Shareholders' knowledge, threatened claims,
by or against any of the ERISA Plans by any employee or
-19-<PAGE>
beneficiary covered under such ERISA Plan, or by any Government
or otherwise involving such ERISA Plan or any of its fiduciaries
(other than for routine claims for benefits).
(c) The Disclosure Memorandum separately identifies
any ERISA Plan that is an "employee pension benefit plan" within
the meaning of Section 3(2) of ERISA ("Company Pension Plan") and
also lists any Company Pension Plan that has been terminated in
the last five years. Each Company Pension Plan constitutes a
qualified plan within the meaning of Section 401(a) of the Code
and the trust thereunder is exempt from federal income tax under
Section 501(a) of the Code. All Company, Subsidiary and employee
contributions required to be made to each Company Pension Plan
have been made in a timely manner.
(d) Except for a Company Pension Plan, neither the
Company nor the Subsidiary is bound to provide, and the Company
does not provide, benefits, including, without limitation, death,
health or medical benefits (whether or not insured), with respect
to current or former employees of the Company or the Subsidiary
beyond their retirement or other termination of service with the
Company or the Subsidiary other than as required by applicable
Law. Neither this Agreement nor any transaction contemplated
hereby will entitle any current or former employee, officer or
director of the Company or the Subsidiary to severance pay,
unemployment compensation or any similar payment.
5.21. ENVIRONMENTAL MATTERS. Each of the Company
and the Subsidiary holds all Environmental Permits necessary for
conducting their respective businesses and operations and has
conducted, and is presently conducting, their businesses and
operations in full compliance with all applicable Environmental
Laws and Environmental Permits, including, without limitation,
all record keeping and filing requirements. There is no existing
or pending Environmental Law with a future compliance date that
will require operational changes, business practice modifications
or capital expenditures at any Real Property (or any other
property presently or formerly owned, operated or controlled by
the Company or the Subsidiary or as to which the Company or the
Subsidiary may bear responsibility or Liability), or any of the
Improvements thereon. All Hazardous Materials and Solid Waste
on, in, or under the Real Property or real property operated by
the Company or the Subsidiary, wherever located, have been
properly removed and disposed of, and no past or present
disposal, discharge, spill or other release of, or treatment,
transportation or other handling of Hazardous Materials or Solid
Waste on, in, under or off-site from any Real Property, or, to
the knowledge of the Shareholders and the Company, any adjacent
property, will subject the Company, the Subsidiary or, to the
knowledge of the Shareholders and the Company, any subsequent
owner, occupant or operator of such Real Property to corrective
or compliance action or any other Liability. There are no
presently pending, or, to the Company's and the Shareholders'
knowledge, threatened Actions or Orders against or involving the
Company or the Subsidiary (including any Person for whose acts or
omissions the Company or the Subsidiary is responsible) relating
to any alleged, past or ongoing violation.
5.22. ABSENCE OF CERTAIN BUSINESS PRACTICES. To the
knowledge of the Company and the Shareholders, neither the
Company, the Subsidiary nor any or their respective officers,
employees or agents, nor any other person acting on behalf of the
-20-<PAGE>
Company or the Subsidiary, has, directly or indirectly, within
the past five years, given or agreed to give any gift or similar
benefit to any Person who is or may be in a position to help or
hinder the Company's or the Subsidiary's business (or assist the
Company or the Subsidiary in connection with any actual or
proposed transaction) which (a) might subject the Company or the
Subsidiary to any material damage or penalty in any Action or
which might have a material adverse effect on the Company, the
Subsidiary or their respective assets and properties, (b) if not
given in the past, might have had a material adverse effect on
the Company's or the Subsidiary's business or their respective
assets and properties, or (c) if not continued in the future,
might have a material adverse effect on the Company or the
Subsidiary or which might subject the Company or the Subsidiary
to suit or penalty in any Action.
5.23. AGREEMENTS AND TRANSACTIONS WITH RELATED
PARTIES. Except as set forth in the Disclosure Memorandum, the
Company is not, directly or indirectly, a party to any contract,
agreement or lease with, or any other commitment to, (a) any
Person owning, or formerly owning, beneficially or of record,
directly or indirectly, any of the Shares of or other equity
interest in the Company or the Subsidiary, (b) any Affiliate of
such Person, (c) any director or officer of the Company or the
Subsidiary, (d) any Person in which any of the foregoing Persons
has, directly or indirectly, at least a three percent (3.0%)
beneficial interest in the capital stock or other type of equity
interest of such Person, or (e) any partnership in which any of
the foregoing Persons is a general partner or has at least a
three percent (3.0%) beneficial interest (any or all of the
foregoing being referred to herein as "Related Parties").
Without limiting the generality of the foregoing, (x) no Related
Party, directly or indirectly, owns or controls any assets or
properties which are or have been used in the Company's or the
Subsidiary's business, and (y) no Related Party, directly or
indirectly, engages in or has any significant interest in or
connection with any business (i) which is or which within the
last three years has been a competitor, customer or supplier of
the Company or the Subsidiary or has done business with the
Company or the Subsidiary, or (ii) which as of the date hereof
sells or distributes products or services which are similar or
related to the Company's or the Subsidiary's products or
services.
5.24. ABSENCE OF CHANGES. Except as expressly
provided for in this Agreement, or as set forth in the Disclosure
Memorandum, since the Reference Date:
(a) There has been no material adverse change in the
business, assets, properties, Liabilities (known to the Company
or the Shareholders), affairs, results of operations, condition
(financial or otherwise), cash flows or prospects of each of the
Company or the Subsidiary or in their respective relationships
with suppliers, customers, employees, lessors or others, other
than changes in the ordinary course of business, none of which
have had or will have an adverse effect on the Company or the
Subsidiary, in the aggregate;
(b) There has been no damage, destruction or loss to
the assets, properties, or business of the Company or the
Subsidiary, whether or not covered by insurance, materially
-21-<PAGE>
adversely affecting its assets or properties, in the aggregate,
or its business;
(c) The business of each of the Company and the
Subsidiary has been operated in the ordinary course and
consistent with its prior practices;
(d) The books, accounts and records of each of the
Company and the Subsidiary have been maintained in the usual,
regular and ordinary manner on a basis consistent with prior
years and in accordance with GAAP, and there has been no
amendment to the respective articles of incorporation or bylaws
of the Company or the Subsidiary;
(e) There has been no declaration, setting aside or
payment of any dividend or other distribution on or in respect of
the capital stock of the Company or the Subsidiary, nor has there
been any direct or indirect redemption, retirement, purchase or
other acquisition of any of the capital stock or other securities
of the Company or the Subsidiary;
(f) Neither Company nor the Subsidiary has
discontinued or determined to discontinue selling any products or
services previously sold by the Company or the Subsidiary, the
sales of which have been material to the Company or the
Subsidiary;
(g) There has been no Lien (other than Liens for
current Taxes which are not yet due and payable) created on or in
the assets of the Company or the Subsidiary;
(h) There has been no sale, transfer, lease or other
disposition of any asset of the Company or the Subsidiary to any
Related Party or, except in the ordinary course of the Company's
or the Subsidiary's respective business, to any other Person, and
no debt to, or material claim or right of, the Company or the
Subsidiary has been canceled, compromised, waived or released;
(i) There has been no amendment, termination or waiver
of, or any notice of any amendment, termination or waiver of, any
right of the Company or the Subsidiary under any Company Contract
or under any franchise, certificate, license, permit or
authorization from any Government;
(j) Neither the Company or the Subsidiary has delayed
or postponed the payment of any accounts payable or other
Liabilities outside the ordinary course of business;
(k) Neither the Company nor the Subsidiary has paid or
committed to pay any bonus, profit-share or other extraordinary
compensation payment or other arrangement (except in the ordinary
course of business and consistent with past practices), nor has
the Company or the Subsidiary entered into any agreement,
contract or commitment with any Shareholder or any Related Party
or amended the terms of any existing agreement, contract or
commitment with any Shareholder or any Related Party; and
(l) There has been no change in the authorized, issued
or outstanding capital stock or other securities of each of the
Company and the Subsidiary.
-22-<PAGE>
5.25. RETURNS; CONSIGNMENTS. Except as disclosed
in the Disclosure Memorandum, no customer of the Company or the
Subsidiary has any right to return any goods for credit or refund
pursuant to any oral or written agreement, understanding or
practice which individually or in the aggregate is material, and
neither the Company nor the Subsidiary presently has any goods in
the possession of its customers on consignment or a similar
basis.
5.26. BANK ACCOUNTS AND SAFETY DEPOSIT BOXES. The
Disclosure Memorandum lists each bank in which the Company or the
Subsidiary maintains an account or safety deposit box, the
account numbers, and the names of all persons authorized to draw
thereon or have access thereto.
5.27. PRODUCTS LIABILITY. No action is pending by
or before any Government or Forum, and, to the Company's and
Shareholders' knowledge, no Action has been threatened against or
involving the Company or the Subsidiary in connection with any
product sold or service provided by the Company or the
Subsidiary, alleging that the product has a defect in
manufacture, design or installation, or alleging any failure to
warn of any defect; nor is there any reasonable basis therefor;
and there has not been any accident, happening or event caused or
allegedly caused by any hazard or defect or alleged hazard or
alleged defect in the manufacture, design, materials, workmanship
or installation, or any failure or alleged failure to warn of the
hazard, defect or alleged hazard or alleged defect, of any
product sold or distributed or service provided by the Company or
the Subsidiary.
5.28. INVESTMENT REPRESENTATION. Each Shareholder
is receiving shares of Parent Stock for investment for the
Shareholder's own account, not on behalf of others and not with a
view to sell or otherwise distribute such shares other than
pursuant to an effective registration statement or valid
exemption from registration under the Securities Act. The
financial condition of each Shareholder is currently adequate to
bear the economic risk of an investment in the Parent Stock.
Each Shareholder has sufficient knowledge and experience in
investment and business matters to understand the economic risk
of such an investment and the risk involved in a commercial
enterprise such as Parent. Each Shareholder has received and
carefully read the SEC Documents. Each Shareholder has had an
opportunity to ask questions of, and receive answers from,
officers of Parent, concerning Parent and the Parent Stock and to
obtain any additional information which each Shareholder
reasonably requested and is material to its investment decision.
Each Shareholder is an "accredited investor" within the meaning
of Regulation D under the Securities Act.
5.29 ASSETS AND REVENUES. The consolidated revenues
and assets of the Company, the Subsidiary, and all other entities
controlled by the Company, according to the April 30, 1996
Financial Statements, are less than $25,000,000. The April 30,
1996 Financial Statements are prepared on a basis consistent with
all prior years and in accordance with the accounting principles
normally used by the Company, and are the last regularly prepared
annual statements of income of the Company. All interim
financial statements since April 30, 1996 have been prepared on a
basis consistent with the April 30, 1996 Financial Statements.
-23-<PAGE>
5.30. BANKRUPTCY MATTERS. The Shareholders have
previously furnished to Parent true, correct and complete copies
of: (a) the Subsidiary's Plan of Reorganization, (b) the
confirmation order of the appropriate authority confirming such
plan and (c) the disclosure statement related thereto approved by
the appropriate authority. Neither the Company nor the
Subsidiary is in default under or in violation of such plan.
5.31. FULL DISCLOSURE. No representation or
warranty of any Shareholder contained in this Agreement, the
Other Agreements or the Disclosure Memorandum contains any untrue
or incomplete statement of a material fact or omits (or will
omit) to state a material fact necessary to make the statements
contained herein and therein not misleading. To the Company's
and the Shareholders' actual knowledge, there is no fact which
materially adversely affects, or in the future may materially
adversely affect, the business, assets, properties, Liabilities,
affairs, results of operations, condition (financial or
otherwise), cash flows or prospects of each of the Company and
the Subsidiary which has not been or is not disclosed in this
Agreement, the Other Agreements, the Disclosure Memorandum, or in
the other instruments, certificates, agreements or writings
furnished to Merger Sub or Parent by or on behalf of the
Shareholders pursuant to this Agreement on the Other Agreements
or in connection with the transactions contemplated herein.
6. REPRESENTATIONS AND WARRANTIES OF PARENT
----------------------------------------
As an inducement to the Company and the Shareholders to
enter into and perform this Agreement, Merger Sub and Parent
hereby represent and warrant as follows:
6.1. ORGANIZATION. Parent is a corporation duly
organized and validly existing under the Laws of the State of
Tennessee. Merger Sub is a corporation duly organized and
validly existing under the Laws of the State of Delaware.
6.2. AUTHORIZATION; NO INCONSISTENT AGREEMENTS. Each
of Merger Sub and Parent has full corporate power and authority
to execute, deliver and perform this Agreement and the Other
Agreements to which it is a party. This Agreement has been, and
the Other Agreements have been duly and validly executed and
delivered by Merger Sub and Parent and constitute the valid and
legally binding obligations of Merger Sub and Parent, enforceable
in accordance with their respective terms, except that (i) such
enforcement may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting
the enforcement of creditors' rights generally from time to time
in effect; (ii) such enforcement may be limited by equitable
principles of general application; (iii) such enforcement may be
limited by courts with respect to any unconscionable provisions
contained therein; and (iv) certain of the covenants contained
herein may not be specifically enforceable and courts may award
-24-<PAGE>
money damages rather than specific performance for contractual
provisions involving matters other than the payment of money.
6.3. INCONSISTENT OBLIGATIONS. The execution,
delivery and performance of this Agreement and the Other
Agreements to which Merger Sub or Parent is a party, will not (i)
result in a violation of their respective charters or
certificates of incorporation or bylaws or any Law, or (ii)
result in a breach of, conflict with or default under any term or
provision of any indenture, note, mortgage, bond, security
agreement, loan agreement, guaranty, pledge or other instrument,
contract, agreement or commitment or any Order to which Merger
Sub or Parent is a party or by which either of them or any of
their respective assets or properties are subject or bound, nor
will such actions result in the creation of any Lien on any of
the assets of Merger Sub or Parent, the acceleration or creation
of any Liability or the forfeiture of any right or privilege of
Merger Sub or Parent which may affect its ability to perform
under this Agreement.
6.4. AUTHORIZATION OF PARENT STOCK. The shares of
Parent Stock to be issued to the Shareholders pursuant to this
Agreement will be duly authorized and reserved for issuance at or
before the Closing and upon issuance to the Shareholders will be
fully paid and nonassessable.
6.5. PARENT DOCUMENTS. The SEC Documents constitute
all of the documents (other than preliminary filings and
supplemental material) that Parent was required by applicable
securities Laws to file with the SEC since January 26, 1996. The
financial statements of Parent for fiscal year 1996 included or
incorporated by reference in the SEC Documents were prepared in
accordance with GAAP and present fairly, in all material
respects, in accordance with GAAP, the consolidated financial
condition, results of operations and changes in financial
position as of the dates thereof. As of their respective dates,
the SEC Documents comply in all material respects with the
requirements of applicable securities Laws and none of the SEC
Documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
6.6. CONSENTS. Other than the Articles of Merger and
as otherwise expressly set forth herein, the execution, delivery
and performance by Merger Sub and Parent of this Agreement and
the Other Agreements to which they are a party, and the
consummation of the transactions contemplated herein and therein
does not (a) require the consent, approval or action of, or any
filing with or notice to, any Government or other Person, or
(b) impose any other term, condition or restriction on Merger Sub
or the Surviving Corporation pursuant to any business combination
or takeover Law except for such consents, approvals, actions or
filings the failure of which to obtain or make do not and will
not affect the enforceability of the Agreement or the
consummation of the transactions contemplated herein.
6.7. FULL DISCLOSURE. No representation or warranty of
Merger Sub or Parent contained in this Agreement or any Other
Agreement, or in any instrument, certificate, agreement or other
writing delivered by Merger Sub or Parent pursuant to this
-25-<PAGE>
Agreement or the Other Agreements or in connection with the
transactions contemplated herein or therein contains any untrue
statement of a material fact or omits (or will omit) to state a
material fact necessary to make the statements contained herein
or therein not misleading.
7. CONDUCT OF BUSINESS OF THE COMPANY AND THE SUBSIDIARY
-----------------------------------------------------
PENDING CLOSING
---------------
The Shareholders and the Company covenant and agree
that, except as may otherwise be provided herein, without the
prior written consent of Parent, between the date hereof and the
date of the Closing:
7.1. BUSINESS IN THE ORDINARY COURSE. The business of
each of the Company and the Subsidiary shall be conducted only in
the ordinary and usual course and consistent with prior
practices. Without limiting the generality of the foregoing:
(a) neither the Company nor the Subsidiary shall enter
into any material contracts, agreements or other arrangements in
connection with the business or affecting the assets of the
Company or the Subsidiary, other than those (i) entered into in
the ordinary course of the business of the Company or the
Subsidiary, as the case may be, at prices and on terms consistent
with the prior operating practices of the Company or the
Subsidiary, as the case may be, or (ii) which do not obligate the
Company or the Subsidiary, as the case may be, to provide goods
or services to any customer or third party for a period in excess
of twelve (12) months (unless terminable upon thirty (30) days
notice or less) or do not involve the payment of an amount in
excess of $10,000; provided, however, that neither the Company
nor the Subsidiary will enter into any contract nor effect any
transaction with any Related Party;
(b) except for the disposal of used furniture,
fixtures and equipment, the utilization of miscellaneous office
supplies and the sale of inventory to customers, all in the
ordinary course of the business of the Company or the Subsidiary,
as the case may be, in accordance with past practices, neither
the Company nor the Subsidiary shall sell, assign, transfer,
convey, pledge, mortgage, encumber or otherwise dispose of, or
cause the sale, assignment, transfer, conveyance, pledge,
mortgage, encumbrance or other disposition of, any of the assets
or properties of either corporation, and in no event shall any of
the assets or properties of either corporation be disposed of to
Related Parties without Parent's prior written consent;
(c) all efforts to collect notes and accounts
receivable shall be undertaken in the ordinary course in
accordance with past practices, and no rebates, discounts or
concessions shall be granted after the date of this Agreement
other than in the ordinary course in accordance with past
practices;
-26-<PAGE>
(d) each of the Company and the Subsidiary shall
maintain, preserve and protect all of their respective assets and
properties in good condition, except for ordinary wear and tear;
(e) the books, records and accounts of each of the
Company and the Subsidiary shall be maintained in the ordinary
course of business on a basis consistent with prior practices and
in accordance with GAAP;
(f) each Shareholder shall use his or her reasonable
best efforts, and shall cause the Company to use its reasonable
best efforts, to preserve each of the Company's and the
Subsidiary's business, to preserve the goodwill of each of the
Company's and the Subsidiary's suppliers, customers and others
having business relations with the Company and/or the Subsidiary
which relate to their respective businesses, and to assist Merger
Sub in retaining the services of key employees and agents of the
Company and the Subsidiary, to the extent desired by Merger Sub;
(g) neither the Company nor the Subsidiary shall
declare or pay any dividend or make any distribution in respect
of its capital stock whether now or hereafter outstanding, or
purchase, redeem or otherwise acquire or retire for value any
shares of their respective capital stock; and
(h) each Shareholder and the Company shall not take,
or agree to take, any action which would make any representation
or warranty by him or her or the Company contained herein,
untrue, incorrect or misleading in any material respect as of the
date when made or at any time through the Closing.
7.2. COMPENSATION. No increase in the compensation or
rate of compensation or commissions payable or to become payable
with respect to any employee of the Company or the Subsidiary
shall be given, and no payment of or commitment to pay any bonus,
profit-share or other extraordinary compensation payment or other
arrangement (whether current or deferred) shall be made to or
with any employee.
8. CONDITIONS TO OBLIGATIONS OF MERGER SUB AND PARENT
--------------------------------------------------
All obligations of Merger Sub and Parent hereunder to
consummate the transactions contemplated herein at the Closing
are subject to the fulfillment and satisfaction of each of the
following conditions on or prior to the Closing, any or all of
which may be waived in whole or in part by Merger Sub or Parent,
provided that no such waiver shall be effective unless it is set
forth in a writing executed by Merger Sub or Parent:
8.1. REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Company and the
Shareholders contained in this Agreement, any Other Agreement and
in the Disclosure Memorandum shall have been true and correct in
all material respects as of the date when made and shall be
deemed to be made again at and as of the date of the Closing and
shall be true and correct in all material respects at and as of
such time.
-27-<PAGE>
8.2. COMPLIANCE WITH AGREEMENTS AND CONDITIONS. Each
Shareholder and the Company shall have performed and complied
with in all material respects all covenants, agreements and
conditions required by this Agreement to be performed or complied
with by them prior to or on the date of the Closing.
8.3. CERTIFICATE OF THE SHAREHOLDERS. Each Shareholder
shall have delivered to Merger Sub a certificate executed by such
Shareholder, dated the date of the Closing, certifying in such
detail as Merger Sub may reasonably request as to the fulfillment
and satisfaction of the conditions specified in Paragraphs 8.1
and 8.2.
8.4. RESOLUTIONS. Parent shall have received duly
adopted resolutions of the Board of Directors of the Company,
certified by the Secretary of the Company as of the date of the
Closing, authorizing and approving the execution hereof and all
other documents executed by it, including, without limitation,
the Other Agreements to which the Company is a party, and the
taking of any and all other actions necessary to enable the
Company to comply with the terms hereof and to consummate the
Merger.
8.5. GOVERNMENT CONSENTS. Parent, Merger Sub and the
Company shall have received all authorizations, consents and
approvals of any Government necessary or desirable for the
execution, delivery and performance of this Agreement and the
transactions contemplated hereby, all such authorizations,
consents and approvals shall be in full force and effect, and all
notices required to be given to any Government shall have been
given and all applicable waiting periods shall have expired.
8.6. OTHER CONSENTS. The Shareholders and the Company
shall have delivered to Parent all authorizations, consents
(including estoppel letters from lenders, suppliers, lessors, and
others), and approvals from the Persons identified on Exhibit C
attached hereto; provided, however, that none of such
authorizations, consents or approvals shall be given on terms
that adversely affect the business, assets, properties,
Liabilities, affairs, results of operations, condition (financial
or otherwise), cash flows or prospects of each of the Company and
the Subsidiary, in the aggregate.
8.7. [INTENTIONALLY OMITTED].
8.8. NO INCONSISTENT REQUIREMENTS. No Action shall
have been instituted by any Government or other Person (i)
against a party hereto to restrain or prohibit the consummation
of the transactions herein or (ii) which could reasonably be
expected to have a material adverse effect on the business,
assets, properties, Liabilities, affairs, results of operations,
condition (financial or otherwise), cash flows or prospects of
each of the Company and the Subsidiary.
-28-<PAGE>
8.9. [Intentionally Omitted].
8.10. PROCEEDINGS AND DOCUMENTS SATISFACTORY. All
proceedings taken in connection with the consummation of the
transactions contemplated herein and all documents and papers
reasonably required in connection therewith shall be reasonably
satisfactory to Parent and its counsel, and Parent and its
counsel shall have timely received copies of such documents and
papers, all in form and substance satisfactory to Parent and its
counsel, as reasonably requested by Parent or its counsel in
connection therewith.
8.11. POOLING OF INTERESTS TREATMENT. Parent shall
be satisfied, in its sole discretion, that the transactions
contemplated herein can be accounted for under the "pooling of
interests" method.
8.12. ESCROW AGREEMENT. Parent, Escrow Agent and
the Shareholders shall have executed and delivered the Escrow
Agreement in substantially the form of Exhibit D attached hereto.
8.13 LEASE. Merger Sub and Properties shall have
executed and delivered a lease agreement in the form attached
hereto as Exhibit E.
9. CONDITIONS TO OBLIGATIONS OF THE SHAREHOLDERS AND THE
-----------------------------------------------------
COMPANY
-------
All obligations of the Shareholders and the Company
hereunder to consummate the transactions contemplated herein at
the Closing are subject to the fulfillment and satisfaction of
each of the following conditions on or prior to the Closing, any
or all of which may be waived in whole or in part by the
Shareholders, provided that no such waiver shall be effective
unless it is set forth in a writing executed by each Shareholder:
9.1. REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Merger Sub and Parent contained
in this Agreement and any Other Agreement shall be true and
correct in all material respects as of the date when made and
shall be deemed to be made again at and as of the date of the
Closing and shall be true and correct in all material respects at
and as of such time.
9.2. COMPLIANCE WITH AGREEMENTS AND CONDITIONS. Merger
Sub and Parent shall have performed and complied with in all
material respects all covenants, agreements and conditions
required by this Agreement to be performed or complied with by
Merger Sub or Parent prior to or on the date of the Closing.
-29-<PAGE>
9.3. CERTIFICATES OF PARENT AND MERGER SUB. Parent and
Merger Sub shall have delivered to the Shareholders a certificate
executed by one of their respective officers, dated the date of
the Closing, certifying in such detail as the Shareholders may
reasonably request as to the fulfillment and satisfaction of the
conditions specified in Paragraphs 9.1 and 9.2.
9.4. RESOLUTIONS. Merger Sub and Parent shall have
delivered to the Shareholders duly adopted resolutions of the
Board of Directors of Merger Sub and Parent, certified by the
Secretary or an Assistant Secretary of Merger Sub or Parent as of
the date of the Closing, authorizing and approving the execution
hereof and the taking of all other actions necessary to enable
Merger Sub and Parent to comply with the terms hereof and to
consummate the Merger.
9.5. GOVERNMENT CONSENTS. Parent, Merger Sub and the
Company shall have received all authorizations, consents and
approvals of any Government necessary or desirable for the
execution, delivery and performance of this Agreement and the
transactions contemplated hereby, all such authorizations,
consents and approvals shall be in full force and effect, and all
notices required to be given to any Government shall have been
given and all applicable waiting periods shall have expired.
9.6. OTHER CONSENTS. The Shareholders and the Company
shall have delivered to Parent all authorizations, consents
(including estoppel letters from lenders, suppliers, lessors, and
others), and approvals from the Persons identified on Exhibit C
attached hereto; provided, however, that none of such
authorizations, consents or approvals shall be given on terms
that adversely affect the business, assets, properties,
Liabilities, affairs, results of operations, condition (financial
or otherwise), cash flows or prospects of each of the Company and
the Subsidiary, in the aggregate.
9.7. NO INCONSISTENT REQUIREMENTS. No Action shall
have been instituted by any Government or other Person (i)
against a party hereto to restrain or prohibit the consummation
of the transactions herein or (ii) which could reasonably be
expected to have a material adverse effect on the business,
assets, properties, Liabilities, affairs, results of operations,
condition (financial or otherwise), cash flows or prospects of
each of the Company and the Subsidiary.
9.8. PROCEEDINGS AND DOCUMENTS SATISFACTORY. All
proceedings taken in connection with the consummation of the
transactions contemplated herein and all documents and papers
reasonably required in connection therewith shall be reasonably
satisfactory to the Shareholders and their counsel, and the
Shareholders and their counsel shall have timely received copies
of such documents and papers, all in form and substance
satisfactory to the Shareholders and their counsel, as reasonably
requested by Parent or its counsel in connection therewith.
-30-
<PAGE>
9.9. ESCROW AGREEMENT. Parent, Escrow Agent and the
Shareholders shall have executed and delivered the Escrow
Agreement in substantially the form of Exhibit D attached hereto.
10. INDEMNITIES
-----------
10.1. INDEMNIFICATION BY THE SHAREHOLDERS. (a) In
accordance with and subject to the provisions of this Article 10,
the Shareholders shall indemnify and hold harmless the Surviving
Corporation, Parent, their Affiliates, and the officers,
directors, agents and employees of the Surviving Corporation,
Parent, and their Affiliates (collectively, the "Indemnitees")
from and against and in respect of any and all loss, damage,
Liability actually incurred, cost and expense, including
reasonable attorneys' fees and amounts paid in settlement
(collectively, the "Indemnified Losses"), suffered or incurred by
any one or more of the Indemnitees by reason of, or arising out
of:
(i) any breach of representation or warranty
contained in this Agreement, the Other Agreements or the
Disclosure Memorandum, or the breach of any covenant or
agreement of any Shareholder or the Company contained in
this Agreement, any Other Agreement, or in the Disclosure
Memorandum; and
(ii) any and all Actions, Orders, assessments,
fees and expenses incident to any of the foregoing or
incurred in investigating or attempting to avoid the same or
to oppose the imposition thereof, or in enforcing this
indemnification.
(b) "Indemnified Losses" shall not include amounts
necessary to implement in the ordinary course of business the
repairs, acquisitions, additions and/or improvements described in
the Scherer memorandum dated August 30, 1996 listed in
Section 5.21 of the Disclosure Memorandum in the manner described
in such memo, but shall include amounts relating to or arising
out of such matters that are not expressly referenced in such
memo, such as, by way of illustration only and not limitation,
any penalties which may be assessed in connection with the air
permitting process.
(c) The Shareholders shall reimburse Indemnitees on
demand for any Indemnified Losses suffered by the Indemnitees,
based on the judgment of any court of competent jurisdiction or
pursuant to a bona fide compromise or settlement of claims,
demands, or actions in respect of any Indemnified Losses. The
Shareholders shall have the opportunity to defend at their
expense any claim, action or demand for which the Indemnitees
claim indemnity against the Shareholders; provided that (i) the
defense is conducted by reputable counsel approved by the
Indemnitees, which approval shall not be unreasonably withheld or
delayed; (ii) the defense is expressly assumed in writing within
ten (10) days after written notice of the claim, action or demand
is given to the Shareholders; and (iii) counsel for the
-31-<PAGE>
Indemnitees may participate at all times and in all proceedings
(formal and informal) relating to the defense, compromise and
settlement of the claim, action or demand at the expense of the
Indemnitees. If the Shareholders are successful in the defense
of any claim, action or demand, the Indemnitees shall reimburse
them for then reasonable costs of such defense. For purposes
hereof, "successful in the defense" shall mean securing a final,
nonappealable judgment or an unconditional, enforceable
settlement agreement, that provides for no damages, payment of
expenses or other relief to the claimant.
10.2. LIMITATIONS AND PAYMENT ON CLAIMS. (a) No
claim shall be brought by any Indemnitee under this Article 10
for breach of (i) the representations and warranties set forth in
Paragraph 5.10, (ii) the representations and warranties set forth
in Paragraph 5.11, or (iii) all other representations and
warranties contained herein, unless and until the aggregate
amount of such claim(s) with respect to any such individual type
of breach equals or exceeds $10,000, and until the aggregate
amount of all such claims with respect to all three types of
breaches collectively equals or exceeds $50,000, and after such
time the Indemnitees may assert all such future claims against
the Shareholders with respect to such type of breach on a dollar
for dollar basis. Any delay in asserting a claim or claims
against the Shareholders pursuant to this Paragraph 10.2, shall
in no way prejudice the Indemnitees under any statute or period
of limitations or similar Law or under any principle of equity.
Anything to the contrary notwithstanding, (i) each Shareholder
will be liable to the Indemnitees for the percentage of such
Indemnified Losses set forth opposite his or her name on the
signature page below; (ii) no Shareholder shall be liable to the
Indemnitees for Indemnified Losses in excess of such
Shareholder's percentage of the aggregate value, as of the date
of Closing, of the Merger Consideration; and (iii) the
Shareholders shall not be liable to the Indemnitees under this
Article 10 for Indemnified Losses, if any, in excess of
$1,500,000; provided, however, that such limitation shall not
apply to any loss suffered by the Indemnitees attributable to
fraudulent misrepresentations.
(b) The Indemnified Losses hereunder will be reduced
by (i) the amount, if any, of the net tax benefits received by
the Indemnitees as a result of the Indemnified Losses incurred
thereby; and (ii) the amount, if any, received by the Indemnitees
from any insurance company or other insurance provider, in
respect of the Indemnified Losses suffered thereby.
10.3. NO LIABILITY OR CONTRIBUTION BY THE SURVIVING
CORPORATION. The Surviving Corporation shall not have any
Liability to any Shareholder as a result of any misrepresentation
or breach of representation or warranty by the Company contained
in this Agreement, any Other Agreement, the Disclosure Memorandum
or any certificate, instrument, agreement or other writing
delivered by or on behalf of any Shareholder or the Company
pursuant to this Agreement, any Other Agreement, or in connection
with the transactions contemplated herein, or the breach of any
-32-<PAGE>
covenant or agreement of any Shareholder or the Company contained
in this Agreement, any Other Agreement, or the Disclosure
Memorandum or any certificate, instrument, agreement or other
writing by or on behalf of any Shareholder or the Company
pursuant to the provisions of this Agreement or in connection
with the transactions contemplated herein, and no Shareholder
shall have any right of indemnification or contribution against
the Surviving Corporation or the Subsidiary on account of any
event or condition occurring or existing prior to or on the date
hereof.
10.4. SURVIVAL. The representations and warranties
of each Shareholder and the Company contained in this Agreement,
any Other Agreement, the Disclosure Memorandum or in any
certificate, instrument, agreement or other writing delivered by
or on behalf of any Shareholder or the Company pursuant to this
Agreement or in connection with the transactions contemplated
herein shall survive any investigation heretofore or hereafter
made by or on behalf of Merger Sub or Parent and the consummation
of the transactions contemplated herein and all such
representations and warranties shall be of no further force and
effect (the Shareholders shall have no further Liability under
this Article 10 thereafter) after the expiration of (i) the date
of the first audit report (after the Effective Time) on the
financial statements of the Parent with respect to items expected
to be encountered in such audit in light of the audit scope, and
(ii) one (1) year from the date of the Closing with respect to
all other matters ("Survival Period"). Anything to the contrary
notwithstanding, the Survival Period shall be extended
automatically to include any time period necessary to resolve a
claim for indemnification which was made before expiration of the
Survival Period but not resolved prior to its expiration, and any
such extension shall apply only as to the claims asserted and not
so resolved within the Survival Period. The Survival Period for
any such item shall continue until such claim shall have been
finally settled, decided or adjudicated.
10.5. ESCROW. Each of the Shareholders agrees that
at the Closing Parent shall deliver to Escrow Agent a certificate
representing ten percent (10%) of the shares of Parent Stock (the
"Escrow Shares") to be held as an escrow fund to be administered
in accordance with the terms and provisions of the Escrow
Agreement. Each of the Shareholders agrees that Parent or the
Surviving Corporation shall have the right to cause the Escrow
Agent to transfer to the appropriate Indemnitee in accordance
with the terms of the Escrow Agreement the number of the Escrow
Shares (or such other securities or property received in exchange
for the Escrow Shares held by the Escrow Agent in any
reorganizations, consolidations, mergers or liquidations
involving Parent) approximately equal in value to the total
amount of the Indemnified Losses. For purposes of satisfying the
Indemnified Losses hereunder, the parties agree that the Escrow
Shares shall be assigned a value equal to the closing price per
share for the date of the Closing of the Parent Stock on the New
York Stock Exchange as reported by the Wall Street Journal. To
the extent that the Indemnified Losses exceed the value of the
Escrow Shares at the price per share set forth in the foregoing
sentence, all payments will be made to the Indemnitees by the
Shareholders for Indemnified Losses under this Article 10 in
legal tender of the United States of America. It is understood
and agreed that any Indemnified Loss shall be satisfied first
from the Escrow Shares and thereafter, to the extent applicable,
from direct payments from Shareholders.
-33-<PAGE>
10.6 INDEMNIFICATION BY PARENT. Parent shall indemnify
and hold harmless the Shareholders from and against and in
respect of any and all loss, damage, Liability, cost and expense,
including reasonable attorneys' fees, suffered or incurred by
them resulting from challenge to the merger by any Government or
Person, unless such challenge is attributable, in any substantial
manner, to the acts or omissions of the Company or the Subsidiary
prior to the Closing or of any Shareholder at any time.
10.7. INDEMNIFICATION EXCLUSIVE REMEDY.
Indemnification pursuant to and as limited by the provisions of
this Article 10 shall be the exclusive remedy of any party for
any misrepresentation or breach of any warranty, covenant or
agreement contained herein, any Other Agreement or in any closing
document executed and delivered pursuant to the provisions
hereof. Notwithstanding anything contained in this Paragraph
10.7, the rights of any party shall not be impaired or otherwise
affected in any manner (i) to pursue the remedy of specific
performance, injunctive relief or other equitable relief as a
result of the breach of any covenant or agreement contained
herein, any Other Agreement or in any closing document executed
and delivered pursuant to the provisions hereof and (ii) with
respect to fraudulent misrepresentations.
11. TERMINATION
-----------
11.1 PASSAGE OF TIME. This Agreement may be terminated
by any party if the conditions to Closing contained in Articles 8
and 9 shall not have been satisfied or waived in writing on or
before September 30, 1996; provided, however, that the
terminating party has complied with or performed or tendered
performance of all covenants and agreements, and satisfied all
conditions contained herein which are to be complied with,
performed or satisfied by such party immediately prior to or at
the Closing; provided, further, that a party shall promptly
notify the other parties hereto in writing if it becomes aware of
circumstances which would cause such other party to breach or be
unable to comply with or perform the conditions to Closing
contained in Articles 8 or 9 as applicable. Upon any such
termination, no party shall have any further rights, Liabilities
or obligations hereunder; provided, however, if any of the terms
and conditions contained herein have been breached by any party,
the non-breaching parties may pursue whatever rights and remedies
they may have at Law, in equity or otherwise, by reason of such
breach regardless of such termination, and such termination shall
not constitute an election of remedies. Nothing contained herein
shall effect in any manner whatsoever the continuing
effectiveness of the Secrecy Agreement described in Paragraph
4.9.
12. MISCELLANEOUS
-------------
12.1. NOTICES. All notices or other communications
required or permitted to be given or made hereunder shall be in
writing and delivered personally or sent by pre-paid, first class
certified or registered mail, return receipt requested, or by
facsimile transmission, to the intended recipient thereof at its
address or facsimile number set out below. Any such notice or
communication shall be deemed to have been duly given immediately
-34-<PAGE>
(if given or made in person or by facsimile confirmed by mailing
a copy thereof to the recipient in accordance with this Paragraph
12.1 on the date of such facsimile), or five days after mailing
(if given or made by mail), and in proving same it shall be
sufficient to show that the envelope containing the same was
delivered to the delivery service and duly addressed, or that
receipt of a facsimile was confirmed by the recipient as provided
above. The addresses and facsimile numbers of the parties for
purposes of this Agreement are set forth on the signature page
hereto below their respective signatures. Either party may
change the address to which notices or other communications to
such party shall be delivered or mailed by giving notice thereof
to the other party hereto in the manner provided herein.
12.2. COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and the
same instrument.
12.3. GOVERNING LAW; CONSENT TO JURISDICTION AND
VENUE. Except where the corporate laws of the States of
Mississippi, Tennessee and Delaware apply by their terms to the
transactions contemplated by this Agreement, the validity and
effect of this Agreement shall be governed by and construed and
enforced in accordance with the Laws of the State of Georgia,
without regard to its conflicts of Laws rules. The Shareholders
and the Company hereby irrevocably and unconditionally consent
and submit to the personal jurisdiction of any state or federal
court sitting in Fulton County, Georgia, with respect to any
Action to enforce this Agreement and the transactions
contemplated hereby, and the Shareholders and the Company also
expressly consent and submit to and agree that venue in any such
Action is proper in said courts and county, and the Shareholders
and the Company hereby expressly waive any and all personal
rights under applicable law or in equity to object to the
jurisdiction and venue of said courts and county. The
jurisdiction and venue of the courts and county consented and
submitted to and agreed upon in this Paragraph are not exclusive,
but are cumulative and in addition to the jurisdiction and venue
of any other court under any applicable law or in equity.
12.4. [INTENTIONALLY OMITTED].
12.5. SUCCESSORS AND ASSIGNS. This Agreement shall
be binding upon and shall inure to the benefit of the parties
hereto and their respective permitted successors and assigns.
Neither the Company nor any Shareholder may assign, delegate or
otherwise transfer any of their rights or obligations under this
Agreement without the written consent by Parent. This Agreement
may be assigned by Merger Sub to any Affiliate or Parent,
provided that no such assignment shall relieve Merger Sub of its
obligations hereunder.
12.6. PARTIAL INVALIDITY AND SEVERABILITY. All
rights and restrictions contained herein may be exercised and
shall be applicable and binding only to the extent that they do
not violate any applicable Laws and are intended to be limited to
the extent necessary to render this Agreement legal, valid and
enforceable. If any term of this Agreement, or part thereof, not
essential to the commercial purpose of this Agreement shall be
-35-<PAGE>
held to be illegal, invalid or unenforceable by a Forum of
competent jurisdiction, it is the intention of the parties that
the remaining terms hereof, or part thereof, shall constitute
their agreement with respect to the subject matter hereof and all
such remaining terms, or parts thereof, shall remain in full
force and effect. To the extent legally permissible, any
illegal, invalid or unenforceable provision of this Agreement
shall be replaced by a valid provision which will implement the
commercial purpose of the illegal, invalid or unenforceable
provision.
12.7. WAIVER. Any term or condition of this
Agreement may be waived at any time by the party which is
entitled to the benefit thereof, but only if such waiver is
evidenced by a writing signed by such party. No failure on the
part of any party hereto to exercise, and no delay in exercising
any right, power or remedy created hereunder, shall operate as a
waiver thereof, nor shall any single or partial exercise of any
right, power or remedy by either party preclude any other or
further exercise thereof or the exercise of any other right,
power or remedy. No waiver by either party hereto of any breach
of or default in any term or condition of this Agreement shall
constitute a waiver of or assent to any succeeding breach of or
default in the same or any other term or condition hereof.
12.8. HEADINGS. The headings of particular
provisions of this Agreement are inserted for convenience only
and shall not be construed as a part of this Agreement or serve
as a limitation or expansion on the scope of any term or
provision of this Agreement.
12.9. NUMBER AND GENDER. Where the context
requires, the use of the singular form herein shall include the
plural, the use of the plural shall include the singular, and the
use of any gender shall include any and all genders.
12.10. ENTIRE AGREEMENT. This Agreement and the
Other Agreements supersede all prior discussions and agreements
between the parties with respect to the subject matter hereof,
and this Agreement contains the sole and entire agreement between
the parties with respect to the matters covered hereby; provided,
however, that certain Secrecy Agreement, dated August 4, 1996,
between the parties hereto shall continue in full force and
effect in accordance with its terms. This Agreement shall not be
altered or amended except by an instrument in writing signed by
or on behalf of the party entitled to the benefit of the
provision against whom enforcement is sought.
13. DEFINITIONS
-----------
13.1. For purposes of this Agreement, the following
terms shall have the meanings specified with respect thereto
below:
"Action" shall mean any action, suit, litigation, complaint,
counterclaim, claim, petition, mediation contest, or
administrative proceeding, whether at Law, in equity, in
arbitration or otherwise, and whether conducted by or before any
Government or other Person.
-35-<PAGE>
"Affiliate" of any specified Person shall mean any other
Person directly or indirectly Controlling, Controlled by, or
under direct or indirect common Control with such specified
Person.
"Affiliated Entity" or "Affiliated Entities" shall have the
meaning set forth in Paragraph 5.18.
"Agreement" shall have the meaning set forth in the
Preamble.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which commercial banks in the United States
are required or authorized to be closed.
"Code" shall have the meaning set forth in the Recitals.
"Closing" shall have the meaning set forth in Paragraph 3.5.
"Company" shall have the meaning set forth in the Preamble
and, when such term is used in Articles 4, 5, 7 and 8 (except
Paragraph 5.2), it shall also mean such corporation and Vulcan
Manufacturing Limited as the context requires or permits.
"Company Contracts" means all existing written and oral
material agreements and commitments of each of the Company and
the Subsidiary, including, without limitation, all employment and
consulting contracts, union contracts, distributorship
agreements, agreements with suppliers and customers (except
purchase or sale orders entered into in the ordinary course of
business and involving the purchase or sale of goods or services
for not more than $10,000), leases, licenses, employee benefit
plans, deferred compensation agreements, indentures, notes,
bonds, mortgages, security agreements, loan agreements,
guarantees, franchise agreements, agreements in respect of the
issuance, sale, repurchase or transfer of the Company's or the
Subsidiary's capital stock, bonds or other securities, powers of
attorney, and any contract which involves a payment of more than
$10,000 or has a term or requires performance over a period of
more than 90 days.
"Company Pension Plan" shall have the meaning set forth in
Paragraph 5.20.
"Company's Products" shall have the meaning set forth in the
Recitals.
"Control" means a Person possesses, directly or indirectly,
the power to direct or cause the direction of the management and
policies of another Person, whether through the ownership of
voting securities, by contract or otherwise.
"Corporate Laws" shall have the meaning set forth in
Paragraph 1.1.
-36-<PAGE>
"Disclosure Memorandum" shall have the meaning set forth in
the introduction to Article 5.
"Effective Time" shall have the meaning set forth in
Paragraph 3.5.
"Environmental Laws" shall mean all Laws, general or
particular conditions, requirements, decrees, and covenants
relating to health, safety and the environment, including,
without limitation, Laws and covenants relating to emissions,
discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or Hazardous
Materials or wastes of every kind and nature into the environment
(including without limitation ambient air, surface water, ground
water, soil and subsoil), or otherwise relating to the
manufacture, generation, processing, distribution, application,
use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances or wastes, or to occupational or worker
safety and health, and any and all Laws, directives, guidelines,
policies, plans, Orders, stipulations, provisions and conditions
of Environmental Permits, licenses, stipulations, certificates of
authorization, and other operating authorizations, notices or
demand letters issued, entered, promulgated or approved
thereunder.
"Environmental Permits" shall mean all permits, licenses,
certificates, approvals, authorizations, regulatory plans or
compliance schedules required by applicable Environmental Laws,
or issued by a Government pursuant to applicable Environmental
Laws, or entered into by agreement of the party to be bound,
relating to activities that affect human health or the
environment, including, without limitation, permits, licenses,
certificates, approvals, authorizations, regulatory plans and
compliance schedules for air emissions, water discharges,
pesticide and herbicide or other agricultural chemical storage,
use or application, and Hazardous Material or Solid Waste
generation, use, storage, treatment and disposal.
"ERISA" shall have the meaning set forth in Paragraph 5.20.
"ERISA Plans" shall have the meaning set forth in Paragraph
5.20.
"Escrow Agreement" shall have the meaning set forth in
Paragraph 8.12.
"Escrow Shares" shall have the meaning set forth in
Paragraph 10.5.
"Financial Statements" shall have the meaning set forth in
Paragraph 5.7.
"Forum" shall mean any federal, national, state, local,
municipal or foreign court, governmental agency, administrative
body or agency, tribunal, private alternative dispute resolution
system, or arbitration panel.
"GAAP" shall mean generally accepted accounting principles,
consistently applied.
-37-<PAGE>
"Government" shall mean any federal, national, state,
provincial, local, municipal, or foreign government or any
department, commission, board, bureau, agency, instrumentality,
unit, or taxing authority thereof.
"Hazardous Material" shall mean any substance or material,
including without limitation raw materials, commercial products
and wastes or waste products that, because of its quantity,
concentration, or physical, chemical or infectious
characteristics may cause or significantly contribute to an
increase in mortality or an increase in serious, irreversible or
incapacitating illness, or pose a substantial hazard to human
health or the environment, including without limitation petroleum
and all substances and materials designated as hazardous or toxic
under any applicable Environmental Law.
"hereof," "herein," "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and
"article," "paragraph," "Exhibit" and like references are to this
Agreement unless otherwise specified.
"Improvements" shall mean all buildings, structures and
other improvements of any and every nature located on the Real
Property and all fixtures attached or affixed, actually or
constructively, to the Real Property or to any such buildings,
structures or other improvements.
"Indemnified Losses" shall have the meaning set forth in
Paragraph 10.1.
"Indemnitees" shall have the meaning set forth in Paragraph
9.1.
"Insurance Reimbursement" shall have the meaning set forth
in Paragraph 10.2.
"known," "to the knowledge of," "aware" or words of similar
import employed in this Agreement with reference to any
individual or entity (except as used in paragraph 5.31) shall be
conclusively presumed to mean that the individual or entity has
made reasonable and diligent efforts under the circumstances to
become knowledgeable; in the case of the Company, "knowledge"
shall be deemed to be the individual and collective knowledge (as
defined above) of its and the Subsidiary's directors and senior
officers and managers.
"Law" shall mean all federal, national, state, provincial,
local, municipal or foreign constitutions, statutes, rules,
regulations, norms, ordinances, acts, codes, legislation,
treaties, conventions, common law principles, judicial decisions
and similar laws and legal requirements, whether of the United
States of America or any other jurisdiction as in effect from
time to time.
"Leased Real Property" shall have the meaning set forth in
Paragraph 5.13.
"Liability" shall mean any liability or obligation whether
known or unknown, asserted or unasserted, absolute or contingent,
accrued or unaccrued, liquidated or unliquidated and whether due
-38-<PAGE>
or to become due that is material to the business, assets,
properties or condition (financial or otherwise) of the Company
or the Subsidiary.
"Licenses" shall have the meaning set forth in Paragraph
5.6.
"Lien" shall mean any mortgage, pledge, hypothecation,
security interest, encumbrance, claim, restriction on use, lien
or charge of any kind, or any rights of others, however evidenced
or created (including any agreement to give any of the foregoing,
any conditional sale or other title retention agreement, any
lease in the nature thereof, and the filing of or agreement to
give any financing statement under the lien notice records or
other similar legislation of any jurisdiction), other than those
that are of record or that do not hinder the use of the property
for its intended purpose.
"Merger" shall have the meaning set forth in Paragraph 1.1.
"Merger Consideration" shall have the meaning set forth in
Paragraph 3.2.
"Merger Sub" shall have the meaning set forth in the
Preamble.
"Orders" shall mean all applicable orders, writs, judgments,
injunctions, decrees, rulings, consent agreements, and awards of
or by any Forum or entered by consent of the party to be bound.
"Other Agreements" shall have the meaning set forth in
Paragraph 5.1(b).
"Parent" shall have the meaning set forth in the Preamble.
"Parent Stock" shall have the meaning set forth in Paragraph
3.2.
"Person" shall include an individual, a partnership, a joint
venture, a corporation, a limited liability company, a trust, an
unincorporated organization and a Government.
"Properties" shall have the meaning set forth in Paragraph
4.15.
"Real Property" shall have the meaning set forth in
Paragraph 5.13.
"Real Property Lease" shall have the meaning set forth in
Paragraph 5.13.
"Reference Date" shall have the meaning set forth in
Paragraph 5.7.
"Reference Date Balance Sheets" shall have the meaning set
forth in Paragraph 5.7.
-39-<PAGE>
"Related Parties" shall have the meaning set forth in
Paragraph 5.23.
"Returns" shall have the meaning set forth in Paragraph
5.18.
"SEC" shall have the meaning set forth in Paragraph 4.5.
"SEC Documents" shall have the meaning set forth in
Paragraph 4.5.
"Securities Act" shall have the meaning set forth in
Paragraph 4.6.
"Shareholder" or "Shareholders" shall have the meaning set
forth in the Preamble.
"Shares" shall have the meaning set forth in the Recitals.
"Solid Waste" shall mean any garbage, refuse, sludge from a
waste treatment plant, water supply treatment plant, or air
pollution control facility and other discarded material,
including solid, liquid, semisolid, or contained gaseous material
resulting from industrial, commercial, mining and agricultural
operations, and from community activities.
"Subsidiary" shall have the meaning set forth in the
Recitals.
"Survival Period" shall have the meaning set forth in
Paragraph 10.4.
"Surviving Corporation" shall have the meaning set forth in
Paragraph 1.1.
"Systems" shall have the meaning set forth in Paragraph
5.14.
"Taxes" shall mean any taxes, levies, imposts, duties, fees,
assessments, deductions, withholdings or other charges of
whatever nature, including without limitation income, gross
receipts, excise, property, sales, use, customs, value added,
consumption, transfer, license, payroll, employee income,
withholding, social security, and franchise taxes, imposed or
levied by the United States of America or any Government or by
any department, agency or other political subdivision or taxing
authority thereof or therein, all deposits required in connection
therewith, and all interests, penalties, additions to tax, and
other similar Liabilities with respect thereto.
"Territory" shall mean the United States, Canada and Mexico.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
-40-<PAGE>
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed by their duly authorized agents as of
the day and year first above written.
MILLER INDUSTRIES, INC.
By: /s/ William G. Miller
Name: William G. Miller
Title: Chief Executive Officer
Address: 900 Circle 75 Parkway
Suite 1250
Atlanta, Georgia 30339
Facsimile No.: 770-988-0622
CANADA ACQUISITION CORP.
By: /s/ Frank Madonia
Name: Frank Madonia
Title: Vice President
Address: 900 Circle 75 Parkway
Suite 1250
Atlanta, Georgia 30339
Facsimile No.: 770-992-0479
VULCAN INTERNATIONAL, INC.
By: /s/ Stephen Alm
Name: Stephen Alm
Title: President
Address: 8530 Sandridge Road
Olive Branch, MS
38654
Facsimile No.: 601-895-3465
[SIGNATURES CONTINUED ON FOLLOWING PAGE]<PAGE>
[SIGNATURES CONTINUED FROM PRECEDING PAGE]
Shareholder's
Percentage:
SHAREHOLDERS:
Parent Stock
25% /s/ N. Alm
Name: Norma Alm
Address: 8832 Three Chimneys Dr. E.
Germantown, TN
38138
Facsimile No.: (601) 362-8137
25% /s/ C. Santos
Name: Carolyn E. Santos
Address: 8002 Oxford Dr.
Olive Branch, MS
38654
Facsimile No.: (601) 362-8137
25% /s/ A. J. Alm
Name: Andrew J. Alm
Address: 4183 Old Forest Road
Memphis, TN 38125
________________________
Facsimile No.: (601) 362-8137
25% /s/ Stephen Alm
100% Name: Stephen Alm
Address: 2802 Waterleaf Dr.
Germantown, TN
38138
Facsimile No.: 601-362-8137
- 2 -
