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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): MARCH 30, 1999
WINSLOEW FURNITURE, INC.
(Exact name of registrant as specified in its charter)
FLORIDA
(State or other jurisdiction of incorporation)
0-25246 63-1127982
(Commission File Number) (I.R.S. Employer Identification No.)
160 VILLAGE STREET
BIRMINGHAM, ALABAMA 35242
(Address of principal executive offices) (Zip Code)
(205) 408-7600
(Registrant's telephone number, including area code)
(NOT APPLICABLE)
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On March 30, 1999, WinsLoew Furniture, Inc. ("WinsLoew") and Trivest Furniture
Corporation (the "Purchaser"), a Florida corporation formed by Earl W. Powell of
Trivest, Inc., who is also the Chairman of WinsLoew's Board of Directors,
amended their Agreement and Plan of Merger to, among other things, (i) increase
the per share cash purchase price from $30.00 per share to $33.00 per share,
(ii) increase the "break-up" fee, and (iii) eliminate the Purchaser's financing
condition. The amendment to the Agreement and Plan of Merger was approved by
WinsLoew's board of directors, as well as the Special Committee of the Board
appointed to evaluate the initial Trivest proposal and possible strategic
alternatives.
Pursuant to the amended agreement, the proposed merger is subject, among other
things, to (i) shareholder approval and (ii) compliance with all applicable
regulatory and governmental requirements. Accordingly, there can be no assurance
that the Trivest merger will be consummated.
The foregoing is qualified in its entirety by reference to the text of
the Amended and Restated Agreement and Plan of Merger and WinsLoew's press
release dated March 31, 1999, which are attached hereto as Exhibits 2.1 and
99.1, respectively, and are incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
EXHIBIT NO. DESCRIPTION
----------- -----------
2.1 Amended and Restated Agreement and Plan of Merger
dated as of March 30, 1999 between WinsLoew
Furniture, Inc. and Trivest Furniture Corporation.
99.1 Press Release of WinsLoew Furniture, Inc. dated
March 31, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WINSLOEW FURNITURE, INC.
Date: April 1, 1999 By: /s/ Bobby Tesney
--------------------------------
Bobby Tesney
President and Chief Executive Officer
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -----------
2.1 Amended and Restated Agreement and Plan of Merger dated as of
March 30, 1999 between WinsLoew Furniture, Inc. and Trivest
Furniture Corporation.*
99.1 Press Release of WinsLoew Furniture, Inc. dated March 31, 1999.
- ------------------------
* The schedules thereto have not been filed herewith. The Registrant
agrees to furnish copies of such schedules supplementally to the
Commission upon request.
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Exhibit 2.1
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
BETWEEN
TRIVEST FURNITURE CORPORATION
AND
WINSLOEW FURNITURE, INC.
DATED AS OF MARCH 30, 1999
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TABLE OF CONTENTS
<TABLE>
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PAGE
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ARTICLE I
SECTION 1.01. The Merger..................................................................1
SECTION 1.02. Closing.....................................................................1
SECTION 1.03. Effective Time..............................................................1
SECTION 1.04. Effects of the Merger.......................................................2
SECTION 1.05. Articles of Incorporation and Bylaws........................................2
SECTION 1.06. Directors...................................................................2
SECTION 1.07. Officers....................................................................2
ARTICLE II
SECTION 2.01. Effect on Capital Stock.....................................................2
SECTION 2.02. Exchange of Certificates....................................................3
ARTICLE III
SECTION 3.01. Organization................................................................4
SECTION 3.02. Subsidiaries................................................................4
SECTION 3.03. Capitalization..............................................................4
SECTION 3.04. Authority...................................................................5
SECTION 3.05. Consents and Approvals; No Violations.......................................5
SECTION 3.06. SEC Reports and Financial Statements........................................6
SECTION 3.07. Absence of Certain Changes or Events........................................6
SECTION 3.08. No Undisclosed Liabilities..................................................7
SECTION 3.09. Information Supplied........................................................7
SECTION 3.10. Benefit Plans...............................................................7
SECTION 3.11. Other Compensation Arrangements.............................................8
SECTION 3.12. Litigation..................................................................8
SECTION 3.13. Permits; Compliance with Law................................................8
SECTION 3.14. Tax Matters.................................................................9
SECTION 3.15. State Takeover Statutes....................................................10
SECTION 3.16. Brokers; Fees and Expenses.................................................10
SECTION 3.17. Intellectual Property......................................................10
SECTION 3.18. Vote Required..............................................................11
SECTION 3.19. Labor Matters..............................................................11
SECTION 3.20. Title to Property..........................................................11
SECTION 3.21. Environmental Matters......................................................12
SECTION 3.22. Accounts Receivable........................................................12
SECTION 3.23. Customers..................................................................12
SECTION 3.24. Interested Party Transactions..............................................12
SECTION 3.25. Absence of Certain Payments................................................12
SECTION 3.26. Insurance..................................................................13
SECTION 3.27. Product Liability and Recalls..............................................13
SECTION 3.28. Inventory..................................................................13
SECTION 3.29. Full Disclosure............................................................13
ARTICLE IV
SECTION 4.01. Organization...............................................................13
SECTION 4.02. Authority..................................................................14
SECTION 4.03. Consents and Approvals; No Violations......................................14
SECTION 4.04. Information Supplied.......................................................14
SECTION 4.05. Purchaser's Financing Capability...........................................14
</TABLE>
(i)
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<TABLE>
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SECTION 4.06. Surviving Corporation Solvency.............................................15
SECTION 4.07. Brokers....................................................................15
SECTION 4.08. Board Determination........................................................15
SECTION 4.09. Full Disclosure............................................................15
ARTICLE V
SECTION 5.01. Covenants of the Company...................................................15
SECTION 5.02. No Solicitation............................................................17
SECTION 5.03. Other Actions..............................................................19
SECTION 5.04. Financing Covenants of Purchaser and Sub...................................19
SECTION 5.05. Solvency...................................................................19
SECTION 5.06. Amendment of Management Agreement..........................................19
ARTICLE VI
SECTION 6.01. Shareholder Approval; Preparation of Proxy Statement.......................19
SECTION 6.02. Access to Information......................................................20
SECTION 6.03. Reasonable Efforts.........................................................21
SECTION 6.04. Company Stock Options; Plans...............................................21
SECTION 6.05. Confidentiality............................................................21
SECTION 6.06. Fees and Expenses..........................................................22
SECTION 6.07. Indemnification; Insurance.................................................22
SECTION 6.08. Employment and Benefit Arrangements........................................22
ARTICLE VII
SECTION 7.01. Conditions to Each Party's Obligation To Effect the Merger.................23
SECTION 7.02. Conditions to Obligations of Purchaser to Effect the Merger................23
SECTION 7.03. Conditions to Obligations of the Company to Effect the
Merger...................................................................24
ARTICLE VIII
SECTION 8.01. Termination................................................................24
SECTION 8.02. Effect of Termination......................................................25
SECTION 8.03. Amendment..................................................................26
SECTION 8.04. Extension; Waiver..........................................................26
ARTICLE IX
SECTION 9.01. Nonsurvival of Representations and Warranties..............................26
SECTION 9.02. Notices....................................................................26
SECTION 9.03. Interpretation.............................................................27
SECTION 9.04. Counterparts...............................................................27
SECTION 9.05. Entire Agreement; Third Party Beneficiaries................................27
SECTION 9.06. Governing Law..............................................................28
SECTION 9.07. Publicity..................................................................28
SECTION 9.08. Assignment.................................................................28
SECTION 9.09. Enforcement................................................................28
</TABLE>
(ii)
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made and entered into as of March
30, 1999, between Trivest Furniture Corporation, a Florida corporation
("PURCHASER"), and WinsLoew Furniture, Inc., a Florida corporation (the
"COMPANY").
WHEREAS the respective Boards of Directors of Purchaser and the Company
have approved the acquisition of the Company by Purchaser on the terms and
subject to the conditions set forth in this Agreement; and
WHEREAS the respective Boards of Directors of Purchaser and the Company
have each approved the merger of Purchaser into the Company (the "MERGER"), upon
the terms and subject to the conditions set forth in this Agreement, whereby
each outstanding share of Common Stock, par value $0.01 per share, of the
Company (the "COMPANY COMMON STOCK"; the outstanding shares of Company Common
Stock being hereinafter collectively referred to as the "SHARES"), other than
shares of Company Common Stock owned directly or indirectly by Purchaser or the
Company, will be converted into the right to receive $33.00 in cash; and
WHEREAS Purchaser and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Purchaser and the Company hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. THE MERGER. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the Corporation Law (as
defined below), Purchaser shall be merged with and into the Company at the
Effective Time (as defined in Section 1.03). Following the Effective Time, the
separate corporate existence of Purchaser shall cease and the Company shall
continue as the surviving corporation (the "SURVIVING CORPORATION") and shall
succeed to and assume all the rights and obligations of Purchaser in accordance
with the Florida Business Corporation Act (the "CORPORATION LAW"). At the
election of Purchaser, any direct or indirect wholly owned subsidiary (as
defined in Section 9.03) of Purchaser may be substituted for Purchaser as a
constituent corporation in the Merger. In such event, the parties agree to
execute an appropriate amendment to this Agreement in order to reflect the
foregoing.
SECTION 1.02. CLOSING. The closing of the Merger will take place at
10:00 a.m. (Miami time) on a date to be specified by Purchaser which shall be no
later than the second business day after satisfaction or waiver of the
conditions set forth in Article VII (the "CLOSING DATE"), at the offices of
Greenberg, Traurig, P.A., counsel to Purchaser (or, at Purchaser's request, the
offices of counsel to any lender providing financing in connection with the
Merger), unless another date, time or place is agreed to in writing by the
parties hereto.
SECTION 1.03. EFFECTIVE TIME. Subject to the provisions of this
Agreement, as soon as practicable on or after the Closing Date, the parties
shall file articles of merger or other appropriate documents (in any such case,
the "ARTICLES OF MERGER") executed in accordance with the relevant provisions of
the Corporation Law and shall make all other filings or recordings required
under the Corporation Law. The Merger shall become effective at such time as the
Articles of Merger are duly filed with the Florida Secretary of State, or at
such other time as Purchaser and the Company shall agree
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should be specified in the Articles of Merger (the time the Merger becomes
effective being hereinafter referred to as the "EFFECTIVE TIME").
SECTION 1.04. EFFECTS OF THE MERGER. The Merger shall have the effects
set forth in the applicable provisions of the Corporation Law.
SECTION 1.05. ARTICLES OF INCORPORATION AND BYLAWS.
(a) The Articles of Incorporation of Purchaser as in effect
immediately prior to the Effective Time shall be the articles of incorporation
of the Surviving Corporation until thereafter changed or amended as provided
therein or by applicable law; provided that Article I thereof shall be amended
to provide that the corporate name of the Surviving Corporation is "WinsLoew
Furniture, Inc.".
(b) The bylaws of Purchaser as in effect immediately prior to
the Effective Time shall be the bylaws of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law.
SECTION 1.06. DIRECTORS. The directors of Purchaser immediately prior
to the Effective Time shall be the directors of the Surviving Corporation until
the earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
SECTION 1.07. OFFICERS. The officers of the Company immediately prior
to the Effective Time and such other persons as Purchaser shall designate shall
be the officers of the Surviving Corporation until the earlier of their
resignation or removal or until their respective successors are duly elected and
qualified, as the case may be.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 2.01. EFFECT ON CAPITAL STOCK. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
Shares or any shares of capital stock of Purchaser:
(a) CAPITAL STOCK OF PURCHASER. Each issued and outstanding
share of capital stock of Purchaser shall be converted into and become one fully
paid and nonassessable share of Common Stock, par value $.01 per share, of the
Surviving Corporation.
(b) CANCELLATION OF PURCHASER OWNED STOCK. Each share of
Company Common Stock that is owned by Purchaser or any subsidiary of Purchaser
shall automatically be canceled and retired and shall cease to exist, and no
consideration shall be delivered in exchange therefor.
(c) CANCELLATION OF COMPANY OWNED STOCK. All Shares (if any)
that are held in the treasury of the Company or by any wholly owned subsidiary
of the Company and any Shares owned by Purchaser or any wholly owned subsidiary
of Purchaser shall be cancelled and no consideration shall be delivered in
exchange therefor.
(d) CONVERSION OF COMPANY COMMON STOCK. Each Share issued and
outstanding (other than Shares to be canceled in accordance with Section
2.01(b)) shall be converted into the right to receive from the Surviving
Corporation in cash, without interest, $33.00 (the "MERGER CONSIDERATION"). As
of the Effective Time, all such Shares shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each holder
of a certificate representing any such Shares shall cease to have any rights
with respect thereto, except the right to receive the Merger Consideration,
without interest.
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SECTION 2.02. EXCHANGE OF CERTIFICATES.
(a) PAYING AGENT. Prior to the Effective Time, Purchaser shall
designate American Stock Transfer & Trust Company or other bank or trust company
acceptable to the Company to act as paying agent in the Merger (the "PAYING
AGENT"), and, prior to the Effective Time, Purchaser shall make available, or
cause the Surviving Corporation to make available, to the Paying Agent funds in
amounts necessary for the payment of the Merger Consideration upon surrender of
certificates representing Shares as part of the Merger pursuant to Section 2.01
(it being understood that any and all interest earned on funds made available to
the Paying Agent pursuant to this Agreement shall be turned over to Purchaser).
(b) EXCHANGE PROCEDURE. As soon as reasonably practicable
after the Effective Time, the Paying Agent shall mail to each holder of record
of a certificate or certificates which immediately prior to the Effective Time
represented Shares (the "CERTIFICATES"), other than Shares to be cancelled in
accordance with Section 2.01(b) hereof, (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Paying
Agent and shall be in form and have such other provisions as Purchaser and the
Company may reasonably specify) and (ii) instructions, in form reasonably
acceptable to the Company, for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Paying Agent or to such other agent or
agents as may be appointed by Purchaser, together with such letter of
transmittal, duly executed, and such other documents as may reasonably be
required by the Paying Agent, the holder of such Certificate shall be entitled
to receive in exchange therefor the amount of cash into which the Shares
theretofore represented by such Certificate shall have been converted pursuant
to Section 2.01, and the Certificate so surrendered shall forthwith be canceled.
In the event of a transfer of ownership of Shares that is not registered in the
transfer records of the Company, payment may be made to a person other than the
person in whose name the Certificate so surrendered is registered, if such
Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of such Certificate or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. Until surrendered
as contemplated by this Section 2.02, each Certificate shall be deemed at any
time after the Effective Time to represent only the right to receive upon such
surrender the amount of cash, without interest, into which the Shares
theretofore represented by such Certificate shall have been converted pursuant
to Section 2.01. No interest will be paid or will accrue on the cash payable
upon the surrender of any Certificate. In the event any Certificate shall have
been lost, stolen or destroyed, Purchaser may, in its discretion and as a
condition precedent to the payment of the Merger Consideration in respect of the
shares represented by such Certificate, require the owner of such lost, stolen
or destroyed Certificate to deliver a bond in such sum as it may reasonably
direct as indemnity against any claim that may be made against Purchaser, the
Surviving Corporation or the Paying Agent.
(c) NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. All
cash paid upon the surrender of Certificates in accordance with the terms of
this Article II shall be deemed to have been paid in full satisfaction of all
rights pertaining to the Shares theretofore represented by such Certificates. At
the Effective Time, the stock transfer books of the Company shall be closed, and
there shall be no further registration of transfers on the stock transfer books
of the Surviving Corporation of the Shares that were outstanding immediately
prior to the Effective Time. If, after the Effective Time, Certificates are
presented to the Surviving Corporation or the Paying Agent for any reason, they
shall be canceled and exchanged as provided in this Article III.
(d) NO LIABILITY. At any time following the expiration of six
months after the Effective Time, the Surviving Corporation shall be entitled to
require the Paying Agent to deliver to it any funds (including any interest
received with respect thereto) which had been made available to the Paying Agent
and which have not been disbursed to holders of Certificates, and thereafter
such holders shall be entitled to look to the Surviving Corporation (subject to
any applicable abandoned property, escheat or similar law) only as general
creditors thereof with respect to the Merger Consideration payable upon due
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surrender of their Certificates, without any interest thereon. Notwithstanding
the foregoing, none of Purchaser, the Company or the Paying Agent shall be
liable to any person in respect of any cash delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Purchaser as follows:
SECTION 3.01. ORGANIZATION. The Company and each of its subsidiaries is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has all requisite corporate
power and authority to carry on its business as now being conducted, except
where the failure to be so organized, existing and in good standing or to have
such power and authority could not be reasonably expected to (i) prevent or
materially delay the consummation of the Merger, or (ii) have a Material Adverse
Effect (as defined in Section 9.03) on the Company. The Company and each of its
subsidiaries is duly qualified or licensed to do business and in good standing
in each jurisdiction in which the property owned, leased or operated by it or
the nature of the business conducted by it makes such qualification or licensing
necessary, except in such jurisdictions where the failure to be so duly
qualified or licensed and in good standing could not reasonably be expected to
have a Material Adverse Effect on the Company or prevent or materially delay the
consummation of the Merger. The Company has made available to Purchaser complete
and correct copies of its Articles of Incorporation and Bylaws and the
certificates of incorporation and bylaws (or similar organizational documents)
of its subsidiaries.
SECTION 3.02. SUBSIDIARIES. The only subsidiaries of the Company are
Winston Furniture Company of Alabama, Inc., an Alabama corporation, Lowenstein
Furniture Group, Inc., a Florida corporation, Texacraft, Inc., a Texas
corporation, and Tropic Craft, Inc., a Florida corporation (the "SUBSIDIARIES").
All the outstanding shares of capital stock of each such subsidiary are owned by
the Company, by another wholly owned subsidiary of the Company or by the Company
and another wholly owned subsidiary of the Company, free and clear of all
pledges, claims, liens, charges, encumbrances and security interests of any kind
or nature whatsoever (collectively, "LIENS"), except for a first priority lien
granted to Heller Financial, Inc. upon the capital stock of the Subsidiaries
pursuant to a Credit Agreement dated as of February 2, 1995, as amended, and are
duly authorized, validly issued, fully paid and nonassessable. Except for the
capital stock of its subsidiaries and the Company's ownership interest in
certain incidental investments (the aggregate book value of which do not exceed
$5,000), the Company does not own, directly or indirectly, any capital stock or
other ownership interest in any corporation, partnership, joint venture or other
entity.
SECTION 3.03. CAPITALIZATION. The authorized capital stock of the
Company consists of 20,000,000 shares of Company Common Stock and 5,000,000
shares of preferred stock, par value $0.01 per share ("COMPANY PREFERRED
STOCK"). At the close of business on March 1, 1999, (i) 7,181,908 shares of
Company Common Stock were issued and outstanding, (ii) 765,400 shares of Company
Common Stock were reserved for issuance upon exercise of outstanding Company
Stock Options (as defined in Section 6.04), and (iii) no shares of Company
Preferred Stock were issued and outstanding. Except as set forth above, and
except for shares issued upon the exercise of Company Stock Options since March
1, 1999, as of the date of this Agreement, no shares of capital stock or other
voting securities of the Company were issued, reserved for issuance or
outstanding. All outstanding shares of capital stock of the Company are, and all
shares which may be issued will be, when issued, duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive rights. There
are no bonds, debentures, notes or other indebtedness of the Company having the
right to vote (or convertible into, or exchangeable for, securities having the
right to vote) on any matters on which shareholders of the Company may vote.
Except as set forth above, as of the date of this Agreement, there are not any
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Company or any of its
subsidiaries is a party or by which any of them is bound obligating the Company
or any of its subsidiaries to issue, deliver or sell, or cause to be issued,
delivered
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or sold, additional shares of capital stock or other voting securities of the
Company or of any of its subsidiaries or obligating the Company or any of its
subsidiaries to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or undertaking. Except
as disclosed in Section 3.03 of the Disclosure Schedule, there are not any
outstanding contractual obligations (i) of the Company or any of its
subsidiaries to repurchase, redeem or otherwise acquire any shares of capital
stock of the Company or (ii) of the Company to vote or to dispose of any shares
of the capital stock of any of its subsidiaries. Except as set forth in Section
3.03 of the disclosure schedule annexed hereto (the "DISCLOSURE SCHEDULE"),
there are no restrictions on the right of the Company to vote or dispose of any
shares of the capital stock of its subsidiaries.
SECTION 3.04. AUTHORITY.
(a) The Company has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby (other than, with respect to the Merger, the
approval and adoption of the terms of this Agreement by the holders of a
majority of the Shares (the "COMPANY SHAREHOLDER APPROVAL")). The execution,
delivery and performance of this Agreement and the consummation by the Company
of the Merger and of the other transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Company and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions so contemplated (in
each case, other than, with respect to the Merger, the Company Shareholder
Approval). This Agreement has been duly executed and delivered by the Company
and, assuming this Agreement constitutes a valid and binding obligation of
Purchaser, constitutes a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights generally.
(b) The Board of Directors of the Company, as well as a
special committee (the "SPECIAL COMMITTEE") comprised of five independent
members of the Company's Board of Directors, at meetings duly called and held on
March 4, 1999, duly and unanimously adopted resolutions (i) approving this
Agreement and the Merger (and such approval is sufficient to render inapplicable
the provisions of Sections 607.0901 and 607.0902 of the Corporation Law), (ii)
determining that the Merger is substantively and procedurally fair to, and in
the best interests of, the Company's shareholders, and (iii) recommending that
the Company's shareholders approve and adopt this Agreement.
(c) The Company's Board of Directors and the Special Committee
have received the oral opinion of Mann, Armistead and Epperson, Ltd. ("MANN,
ARMISTEAD") that the proposed consideration to be received by the holders of
Shares (other than Shares to be cancelled in accordance with Section 2.01(b)
hereof) pursuant to the Merger is fair, from a financial point of view, to such
holders, and Mann, Armistead has advised the Special Committee that it will
deliver a complete and correct signed copy of such opinion to the Company and to
Purchaser, as well as a draft of the description of such opinion and Mann
Armistead's related analyses to be included in the Proxy Statement (as
hereinafter defined), not later than April 7, 1999.
SECTION 3.05. CONSENTS AND APPROVALS; NO VIOLATIONS. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), and the rules and regulations promulgated
thereunder (including the filing with the Securities and Exchange Commission
(the "SEC") of a proxy statement relating to any required approval by the
Company's shareholders of this Agreement (the "PROXY STATEMENT")), the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
ACT"), and Sections 607.1103 - 607.1105 of the Corporation Law, neither the
execution, delivery or performance of this Agreement by the Company nor the
consummation by the Company of the transactions contemplated hereby will (i)
conflict with or result in any breach of any provision of the Articles of
Incorporation or Bylaws of the Company or of the similar organizational
documents of any of its subsidiaries, (ii) require any filing with, or permit,
authorization, consent or approval of, any Federal, state or local government or
any court, tribunal, administrative agency or commission or other
5
<PAGE> 9
governmental or other regulatory authority or agency, domestic, foreign or
supranational (a "GOVERNMENTAL ENTITY") (except where the failure to obtain such
permits, authorizations, consents or approvals or to make such filings could not
reasonably be expected to have a Material Adverse Effect on the Company or
prevent or materially delay the consummation of the Merger), (iii) except as set
forth in Section 3.05 of the Disclosure Schedule, result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation or
acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which the Company or any of its subsidiaries is a
party or by which any of them or any of their properties or assets may be bound;
PROVIDED, HOWEVER, that certain contracts and agreements, the material ones of
which are listed in Section 3.05 of the Disclosure Schedule, (A) provide for
their termination upon a change of control of the Company or (B) contain
provisions restricting their assignment, or (iv) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Company, any
of its subsidiaries or any of their properties or assets, except in the case of
clauses (iii) or (iv) for violations, breaches or defaults that could not
reasonably be expected to have a Material Adverse Effect on the Company or
prevent or materially delay the consummation of the Merger.
SECTION 3.06. SEC REPORTS AND FINANCIAL STATEMENTS. The Company has
filed with the SEC, and has heretofore made available to Purchaser true and
complete copies of, all forms, reports, schedules, statements and other
documents (other than preliminary materials) required to be filed by it under
the Exchange Act or the Securities Act of 1933 (the "SECURITIES ACT") from and
after December 31, 1997 (such forms, reports, schedules, statements and other
documents, including any financial statements or schedules included therein, are
referred to as the "COMPANY SEC DOCUMENTS"). The Company SEC Documents, at the
time filed, (a) did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and (b) complied in all material respects with the
applicable requirements of the Exchange Act and the Securities Act, as the case
may be, and the applicable rules and regulations of the SEC thereunder. The
financial statements of the Company included in the Company SEC Documents as
well as the Company's financial statements as of and for the year ended December
31, 1998 heretofore delivered to Purchaser, as of the dates thereof comply as to
form in all material respects with the published rules and regulations of the
SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Rule 10-01 of Regulation S-X promulgated
by the SEC) and fairly present (subject, in the case of the unaudited
statements, to normal adjustments, none of which will be material) the
consolidated financial position of the Company and its consolidated subsidiaries
as at the dates thereof and the consolidated results of their operations and
cash flows for the periods then ended.
SECTION 3.07. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed
in the Company SEC Documents, as contemplated by Section 6.04 or as set forth in
Section 3.07 of the Disclosure Schedule, since December 31, 1998, the Company
and its subsidiaries have conducted their respective businesses only in the
ordinary course consistent with past practice, and there has not been any
material adverse change (as defined in Section 9.03) with respect to the
Company. Except as disclosed in the Company SEC Documents, as contemplated by
Section 6.04 or as set forth in Section 3.07 of the Disclosure Schedule, since
December 31, 1998, there has not been (i) any declaration, setting aside or
payment of any dividend or other distribution with respect to the Company's
capital stock or any redemption, purchase or other acquisition of any of its
capital stock, (ii) any split, combination or reclassification of any of the
Company's capital stock or any issuance or the authorization of any issuance of
any other securities in respect of, in lieu of or in substitution for shares of
its capital stock, (iii) any material change in accounting methods, principles
or practices by the Company, (iv) (w) any granting by the Company or any of its
subsidiaries to any executive officer of the Company or any of its subsidiaries
of any increase in compensation, except in the ordinary course of business
(including in connection with promotions) consistent with past practice or as
was required under employment agreements in effect as of December 31, 1998, (x)
any granting by the Company or any of its subsidiaries to any such officer of
any increase in severance or termination pay, except as part of a
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standard employment package to any person promoted or hired, or as was required
under employment, severance or termination agreements in effect as of December
31, 1998, (y) except employment arrangements in the ordinary course of business
consistent with past practice with employees other than any executive officer of
the Company, any entry by the Company or any of its subsidiaries into any
employment, severance or termination agreement with any such employee or
executive officer, or (z) except as contemplated by Section 6.04, any increase
in or establishment of any bonus, insurance, deferred compensation, pension,
retirement, profit-sharing, stock option (including the granting of stock
options, stock appreciation rights, performance awards or restricted stock
awards or the amendment of any existing stock options, stock appreciation
rights, performance awards or restricted stock awards), stock purchase or other
employee benefit plan or agreement or arrangement, (v) any damage, destruction
or loss, whether or not covered by insurance, that has or reasonably could be
expected to have a Material Adverse Effect on the Company, (vi) any amendments
or changes in the Articles of Incorporation or Bylaws of the Company, or (vii)
any material revaluation by the Company of any of its assets, including writing
down the value of inventory or writing off notes or accounts receivable other
than in the ordinary course of business.
SECTION 3.08. NO UNDISCLOSED LIABILITIES. Except as and to the extent
set forth in the Company SEC Documents or in Section 3.08 of the Disclosure
Schedule, as of December 31, 1998, neither the Company nor any of its
subsidiaries had any liabilities or obligations of any nature, whether or not
accrued, contingent or otherwise, that would be required by generally accepted
accounting principles to be reflected on a consolidated balance sheet of the
Company and its subsidiaries (including the notes thereto). Since December 31,
1998, except as and to the extent set forth in the Company SEC Documents or in
Section 3.08 of the Disclosure Schedule and except for liabilities or
obligations incurred in the ordinary course of business consistent with past
practice, neither the Company nor any of its subsidiaries has incurred any
liabilities of any nature, whether or not accrued, contingent or otherwise, that
could be reasonably expected to have a Material Adverse Effect on the Company,
or would be required by generally accepted accounting principles to be reflected
on a consolidated balance sheet of the Company and its subsidiaries (including
the notes thereto).
SECTION 3.09. INFORMATION SUPPLIED. None of the information supplied or
to be supplied by the Company specifically for inclusion or incorporation by
reference in the Proxy Statement or Schedule 13E-3 (as hereinafter defined),
will, at the time the Proxy Statement is first mailed to the Company's
shareholders or at the time of the Shareholders Meeting (as defined in Section
6.01), contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement will comply as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations
thereunder, except that no representation or warranty is made by the Company
with respect to statements made or incorporated by reference therein based on
information supplied by Purchaser specifically for inclusion or incorporation by
reference therein.
SECTION 3.10. BENEFIT PLANS.
(a) Except as set forth in Section 3.10 of the Disclosure
Schedule, each "employee pension benefit plan" (as defined in Section 3(2) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) (a
"PENSION PLAN"), "employee welfare benefit plan" (as defined in Section 3(1) of
ERISA) (a "WELFARE PLAN") and each other plan, arrangement or policy (written or
oral) relating to stock options, stock purchases, compensation, deferred
compensation, bonuses, severance, fringe benefits or other employee benefits, in
each case maintained or contributed to, or required to be maintained or
contributed to, by the Company or its subsidiaries for the benefit of any
present or former employee, officer or director (each of the foregoing, a
"BENEFIT PLAN") has been administered in all material respects in accordance
with its terms. The Company and its subsidiaries and all the Benefit Plans are
in compliance in all material respects with the applicable provisions of ERISA,
the Internal Revenue Code of 1986, as amended (the "CODE"), all other applicable
laws and all applicable collective bargaining agreements. Section 3.10 of the
Disclosure Schedule sets forth a list of all material Benefit Plans. Except as
set forth in Section 3.10(a) of the Disclosure Schedule, none of the Welfare
Plans promises or provides retiree medical or other retiree welfare benefits to
any person. To the Best
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Knowledge (as defined below) of the Company, no fiduciary of a Benefit Plan has
breached any of the responsibilities or obligations imposed upon fiduciaries
under Title I of ERISA, which breach would reasonably be expected to result in
any material liability to the Company. Each Benefit Plan intended to qualify
under section 401(a) of the Code and each trust intended to qualify under
section 501(a) of the Code is the subject of a favorable determination letter
from the IRS, and nothing has occurred which would reasonably be expected to
impair such determination. All contributions required to be made with respect to
any Benefit Plan pursuant to the terms of the Benefit Plan or any collective
bargaining agreement, have been made on or before their due dates.
(b) None of the Pension Plans is subject to Title IV of ERISA
and none of the Company or any other person or entity that, together with the
Company, is or was treated as a single employer under Section 414 of the Code or
pursuant to Title IV of ERISA (each, including the Company, a "COMMONLY
CONTROLLED ENTITY") has any liability under Title IV of ERISA (whether actual or
contingent) with respect to a Pension Plan, or to any other employee pension
benefit plan that is or was maintained, contributed to or required to be
contributed to by a Commonly Controlled Entity (other than for contributions not
yet due) or to the Pension Benefit Guaranty Corporation (other than for payment
of premiums not yet due), which liability has not been fully paid.
(c) No Commonly Controlled Entity is required to contribute to
any "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA) or has
withdrawn from any multiemployer plan where such withdrawal has resulted or
would result in any "withdrawal liability" (within the meaning of Section 4201
of ERISA) that has not been fully paid or as to which a commonly controlled
entity would have liability pursuant to Section 4212(c) of ERISA.
(d) Each Benefit Plan that is a Welfare Plan may be amended or
terminated at any time after the Effective Time without material liability to
the Company or its subsidiaries.
SECTION 3.11. OTHER COMPENSATION ARRANGEMENTS. Except as disclosed in
the Company SEC Documents or in Section 3.11 of the Disclosure Schedule, and
except as provided in this Agreement, as of the date of this Agreement, neither
the Company nor any of its subsidiaries is a party to any oral or written (i)
consulting agreement not terminable on not more than 60 calendar days notice and
involving the payment of more than $100,000 per annum, (ii) agreement with any
executive officer or other key employee of the Company or any of its
subsidiaries (x) the benefits of which are contingent, or the terms of which are
materially altered, upon the occurrence of a transaction involving the Company
of the nature contemplated by this Agreement, or (y) providing any term of
employment or compensation guarantee extending for a period longer than two
years or the payment of more than $100,000 per year, or (iii) agreement or plan,
including any stock option plan, stock appreciation right plan, restricted stock
plan or stock purchase plan, any of the benefits of which will be increased, or
the vesting of the benefits of which will be accelerated, by the occurrence of
any of the transactions contemplated by this Agreement or the value of any of
the benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement.
SECTION 3.12. LITIGATION. Except as disclosed in the Company SEC
Documents or Section 3.12 of the Disclosure Schedule, there is no suit, claim,
action, proceeding or investigation pending before any Governmental Entity or,
to the Best Knowledge of the Company, threatened against the Company or any of
its subsidiaries that could reasonably be expected to have a Material Adverse
Effect on the Company or prevent or materially delay the consummation of the
Merger. Except as disclosed in the Company SEC Documents or Section 3.12 of the
Disclosure Schedule, neither the Company nor any of its subsidiaries is subject
to any outstanding order, writ, injunction or decree that could reasonably be
expected to have a Material Adverse Effect on the Company or prevent or
materially delay the consummation of the Merger.
SECTION 3.13. PERMITS; COMPLIANCE WITH LAW. The Company and its
subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities necessary for the lawful conduct of their
respective businesses (the "COMPANY PERMITS"), except for failures to hold such
permits, licenses, variances, exemptions, orders and approvals that could not
reasonably be
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expected to have a Material Adverse Effect on the Company. The Company and its
subsidiaries are in compliance with the terms of the Company Permits, except
where the failure so to comply could not reasonably be expected to have a
Material Adverse Effect on the Company. Except as disclosed in the Company SEC
Documents or in the Disclosure Schedule, the businesses of the Company and its
subsidiaries are not being conducted in violation of any law, ordinance or
regulation of any Governmental Entity, except for violations that could not
reasonably be expected to have a Material Adverse Effect on the Company or
prevent or materially delay the consummation of the Merger. As of the date of
this Agreement, no investigation or review by any Governmental Entity with
respect to the Company or any of its subsidiaries is pending or, to the Best
Knowledge of the Company, threatened, nor has any Governmental Entity indicated
an intention to conduct any such investigation or review, other than, in each
case, those the outcome of which could not be reasonably expected to have a
Material Adverse Effect on the Company or prevent or materially delay the
consummation of the Merger.
SECTION 3.14. TAX MATTERS.
(a) The Company and each of its subsidiaries has filed all
Federal income tax returns and all other material tax returns and reports
required to be filed by it. All such returns are complete and correct in all
material respects (except to the extent a reserve has been established on the
Company's financial statements as of and for the year ended December 31, 1998
(the "MOST RECENT FINANCIAL STATEMENTS"). Each of the Company and each of its
subsidiaries has paid (or the Company has paid on its subsidiaries' behalf) all
taxes required to be paid by it (without regard to whether a tax return is
required or to the amount shown on any tax return), except taxes for which an
adequate reserve has been established on the Most Recent Financial Statements.
The Most Recent Financial Statements reflect an adequate reserve for all taxes
payable by the Company and its subsidiaries for all taxable periods and portions
thereof through the date of such financial statements.
(b) Except as set forth in Section 3.14 of the Disclosure
Schedule, no material tax return of the Company or any of its subsidiaries is
under audit or examination by any taxing authority, and no written or unwritten
notice of such an audit or examination has been received by the Company or any
of its subsidiaries. Each material deficiency resulting from any audit or
examination relating to taxes by any taxing authority has been paid, except for
deficiencies being contested in good faith. No material issues relating to taxes
were raised in writing by the relevant taxing authority during any presently
pending audit or examination, and no material issues relating to taxes were
raised in writing by the relevant taxing authority in any completed audit or
examination that can reasonably be expected to recur in a later taxable period.
The Federal income tax returns of the Company and each of its subsidiaries
consolidated in such returns have not been examined by and settled with the
Internal Revenue Service.
(c) There is no agreement or other document extending, or
having the effect of extending, the period of assessment or collection of any
taxes and no power of attorney with respect to any taxes has been executed or
filed with any taxing authority.
(d) No material liens for taxes exist with respect to any
assets or properties of the Company or any of its subsidiaries, except for liens
for taxes not yet due.
(e) None of the Company or any of its subsidiaries is liable
for taxes of any other person (other than taxes of the Company and its
subsidiaries) or is a party to or is bound by any tax sharing agreement, tax
indemnity obligation or similar agreement, arrangement or practice with respect
to taxes (including any advance pricing agreement, closing agreement or other
agreement relating to taxes with any taxing authority).
(f) None of the Company or any of its subsidiaries shall be
required to include in a taxable period ending after the Effective Time taxable
income attributable to income that accrued in a prior taxable period but was not
recognized in any prior taxable period as a result of the installment method of
accounting, the completed contract method of accounting, the long-term contract
method of
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accounting, the cash method of accounting or Section 481 of the Code or
comparable provisions of state, local or foreign tax law.
(g) As used in this Agreement, "TAXES" shall include all
Federal, state, local and foreign income, property, sales, excise, withholding
and other taxes, tariffs or governmental charges of any nature whatsoever,
together with all interest, penalties and additions imposed with respect to such
amounts.
(h) Neither the Company nor, to the Best Knowledge of the
Company, any of its subsidiaries has filed a consent pursuant to or agreed to
the application of Section 341(f) of the Code.
(i) Neither the Company nor any of its subsidiaries is a party
to any joint venture, partnership, or other arrangement or contract which could
reasonably be expected to be treated as a partnership for federal income tax
purposes.
(j) Except as set forth in Section 3.14 of the Disclosure
Schedule, neither the Company nor any of its subsidiaries is a party to any
agreement, contract, arrangement or plan that would result (taking into account
the transactions contemplated by this Agreement), separately or in the
aggregate, in the payment of any "excess parachute payments" within the meaning
of Section 280G of the Code.
(k) Except as set forth in Section 3.14 of the Disclosure
Schedule, neither the Company nor any of its subsidiaries has ever been a
Subchapter S corporation (as defined in Section 1361 (a)(1) of the Code).
SECTION 3.15. STATE TAKEOVER STATUTES. The Board of Directors of the
Company has approved the Merger and this Agreement and such approval is
sufficient to render inapplicable to the Merger, this Agreement and the
transactions contemplated by this Agreement, the provisions of Sections 607.0901
and 607.0902 of the Corporation Law.
SECTION 3.16. BROKERS; FEES AND EXPENSES. No broker, investment banker,
financial advisor or other person, other than Mann, Armistead, the fees and
expenses of which will be paid by the Company, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company. The Company has furnished to Purchaser true
and complete copies of all written agreements or arrangements, and reduced to
writing and furnished to Purchaser the terms of all unwritten agreements or
arrangements, providing for any such broker's, finder's financial advisor's or
similar fee or commission between the Company and Mann, Armistead.
SECTION 3.17. INTELLECTUAL PROPERTY.
(a) Except to the extent that the inaccuracy of any of the
following (or the circumstances giving rise to such inaccuracy) could not
reasonably be expected to have a Material Adverse Effect on the Company:
(1) the Company and each of its subsidiaries owns, or
is licensed or otherwise has the legally enforceable right to use (in each case,
clear of any liens or encumbrances of any kind), all Intellectual Property (as
hereinafter defined) used in or necessary for the conduct of its business as
currently conducted;
(2) no claims are pending or, to the Best Knowledge
of the Company, threatened that the Company or any of its subsidiaries is
infringing on or otherwise violating the rights of any person with regard to any
Intellectual Property used by, owned by and/or licensed to the Company or its
subsidiaries and, to the Best Knowledge of the Company, there are no valid
grounds for any such claims;
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(3) to the Best Knowledge of the Company, no person
is infringing on or otherwise violating any right of the Company or any of its
subsidiaries with respect to any Intellectual Property owned by and/or licensed
to the Company or its subsidiaries.
(4) to the Best Knowledge of the Company, there are
no valid grounds for any claim challenging the ownership or validity of any
Intellectual Property owned by the Company or any of its subsidiaries or
challenging the Company's or any of its subsidiaries' license or legally
enforceable right to use any Intellectual Property licensed by it; and
(5) to the Best Knowledge of the Company, all
patents, registered trademarks, service marks and copyrights held by the Company
and each of its subsidiaries are valid and subsisting.
(b) For purposes of this Agreement, "INTELLECTUAL PROPERTY"
means trademarks (registered or unregistered), service marks, brand names,
certification marks, trade dress, assumed names, trade names and other
indications of origin, the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdiction to
register, the foregoing, including any extension, modification or renewal of any
such registration or application; inventions, discoveries and ideas, whether
patented, patentable or not in any jurisdiction; trade secrets and confidential
information and rights in any jurisdiction to limit the use or disclosure
thereof by any person; writings and other works, whether copyrighted,
copyrightable or not in any jurisdiction; registration or applications for
registration of copyrights in any jurisdiction, and any renewals or extensions
thereof; any similar intellectual property or proprietary rights and computer
programs and software (including source code, object code and data); licenses,
immunities, covenants not to sue and the like relating to the foregoing; and any
claims or causes of action arising out of or related to any infringement or
misappropriation of any of the foregoing.
SECTION 3.18. VOTE REQUIRED. The affirmative vote of the holders of a
majority of the outstanding shares of Company Common Stock is the only vote of
the holders of any class of capital stock necessary to approve this Agreement
and the Merger.
SECTION 3.19. LABOR MATTERS. Except as set forth in Section 3.19 of the
Disclosure Schedule or the Company SEC Documents, (i) there is no unfair labor
practice complaint pending or, to the knowledge of the Company or any of its
subsidiaries, threatened, between the Company or any of its subsidiaries and any
of their respective employees, which have had, or could reasonably be expected
to have, a Material Adverse Effect on the Company; (ii) neither the Company nor
any of its subsidiaries is a party to any collective bargaining agreement or
other labor union contract applicable to persons employed by the Company or its
subsidiaries, nor does the Company or any of its subsidiaries know of any
activities or proceedings of any labor union to organize any such employees; and
(iii) to the Best Knowledge of the Company, there are no strikes, slowdowns,
work stoppages, lockouts, or threats thereof, by or with respect to any
employees of the Company or any of its subsidiaries which could reasonably be
expected to have a Material Adverse Effect on the Company.
SECTION 3.20. TITLE TO PROPERTY. Except as set forth in Section 3.20 of
the Disclosure Schedule or which could not reasonably be expected to have a
Material Adverse Effect on the Company, the Company and each of its subsidiaries
have good and defensible title to all of their properties and assets, free and
clear of all liens, charges and encumbrances, except liens for taxes not yet due
and payable and such liens or other imperfections of title, if any, as do not
materially detract from the value of or materially interfere with the present
use of the property affected thereby; and, to the knowledge of the Company, all
leases pursuant to which the Company or any of its subsidiaries lease from
others material amounts of real or personal property are in good standing, valid
and effective in accordance with their respective terms, and there is not, to
the knowledge of the Company, under any of such leases, any existing default or
event of default (or event which with notice or lapse of time, or both, would
constitute a default), except where the lack of such good standing, validity and
effectiveness or the existence of such default or event of default could not
reasonably be expected to have a Material Adverse Effect on the Company.
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SECTION 3.21. ENVIRONMENTAL MATTERS. Except as set forth in Section
3.21 of the Disclosure Schedule or the Company SEC Documents, and except in all
cases as have not had and could not reasonably be expected to have a Material
Adverse Effect on the Company, to the Best Knowledge of the Company, the Company
and each of its subsidiaries (i) have obtained all applicable permits, licenses
and other authorizations which are required to be obtained under all applicable
Federal, state or local laws or any regulation, code, plan, order, decree,
judgment, notice or demand letter issued, entered, promulgated or approved
thereunder ("ENVIRONMENTAL LAWS") relating to pollution or protection of the
environment, including laws relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants or hazardous or toxic material
or wastes into ambient air, surface water, ground water or land or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants or hazardous or
toxic materials or wastes by the Company or its subsidiaries (or their
respective agents); (ii) are in compliance with all terms and conditions of such
required permits, licenses and authorization, and also are in compliance with
all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in applicable
Environmental Laws; (iii) as of the date hereof, are not aware of nor have
received notice of any past or present violations of Environmental Laws or any
event, condition, circumstance, activity, practice, incident, action or plan
which is reasonably likely to interfere with or prevent continued compliance
with or which would give rise to any common law or statutory liability, or
otherwise form the basis of any claim, action, suit or proceeding against the
Company or any of its subsidiaries based on or resulting from the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
handling, emission, discharge or release into the environment of any pollutant,
contaminant, or hazardous or toxic material or waste; and (iv) have taken all
actions necessary under applicable Environmental Laws to register any products
or materials required to be registered by the Company or its subsidiaries (or
any of their respective agents) thereunder.
SECTION 3.22. ACCOUNTS RECEIVABLE. The accounts receivable of the
Company and its subsidiaries as reflected in the most recent financial
statements contained in the Company SEC Documents, to the extent uncollected on
the date hereof, and the accounts receivable reflected on the books of the
Company and its subsidiaries, are valid and existing and represent monies due,
and the Company has made reserves reasonably considered adequate for receivables
not collectible in the ordinary course of business, and (subject to the
aforesaid reserves) are subject to no refunds or other adjustments and to no
defenses, rights of setoff, assignments, restrictions, encumbrances or
conditions enforceable by third parties on or affecting any thereof, except for
such refunds, adjustments, defenses, rights of setoff, assignments,
restrictions, encumbrances or conditions as would not reasonably be expected to
have a Material Adverse Effect on the Company.
SECTION 3.23. CUSTOMERS. Section 3.23 of the Disclosure Schedule sets
forth a list of the Company's twenty five (25) largest customers (detailed, in
the case of government agencies, by separate government agency) in terms of
gross sales for the fiscal year ended December 31, 1998. Except as set forth in
Section 3.23 of the Disclosure Schedule, since December 31, 1998, there have not
been any changes in the business relationships of the Company with any of the
customers named therein that would constitute a Material Adverse Effect on the
Company.
SECTION 3.24. INTERESTED PARTY TRANSACTIONS. Except as set forth in
Section 3.24 of the Disclosure Schedule or the Company SEC Documents, since
December 31, 1997, no event has occurred that would be required to be reported
as a Certain Relationship or Related Transaction, pursuant to Item 404 of
Regulation S-K promulgated by the SEC, except for contracts with terms no less
favorable to the Company than would reasonably be expected in a similar
transaction with an unaffiliated third party.
SECTION 3.25. ABSENCE OF CERTAIN PAYMENTS. To the Best Knowledge of the
Company, neither the Company nor any of its subsidiaries or any of their
respective affiliates, officers, directors, employees or agent or other people
acting on behalf of any of them have (i) engaged in any activity prohibited by
the United States Foreign Corrupt Practices Act of 1977 or any other similar
law, regulation, decree, directive or order of any other country and (ii)
without limiting the generality of the preceding clause (i), used any corporate
or other funds for unlawful contributions, payments, gifts or entertainment, or
made any unlawful expenditures relating to political activity to government
officials or
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others, in each case except to the extent that such activities, individually or
in the aggregate, would not have a Material Adverse Effect on the Company. To
the Best Knowledge of the Company, neither the Company nor any of its
subsidiaries or any of their respective affiliates, directors, officers,
employees or agents of other persons acting on behalf of any of them, has
accepted or received any unlawful contributions, payments, gifts or expenditures
that could reasonably be expected to have a Material Adverse Effect on the
Company.
SECTION 3.26. INSURANCE. All material fire and casualty, general
liability, business interruption, product liability and sprinkler and water
damage insurance policies maintained by the Company or any of its subsidiaries
are with reputable insurance carriers, provide coverage of all normal risks
incident to the business of the Company and its subsidiaries and their
respective properties and assets, except as could not reasonably be expected to
have a Material Adverse Effect on the Company.
SECTION 3.27. PRODUCT LIABILITY AND RECALLS.
(a) Except a disclosed in Section 3.27 of the Disclosure
Schedule or the Company SEC Documents to the Best Knowledge of the Company,
there is no claim, or the basis of any claim, against the Company or any of this
subsidiaries for injury to person or property of employees or any third parties
suffered as a result of the sale of any product or performance of any service by
the Company or any of its subsidiaries, including claims arising out of any
alleged defective nature of its products or services, which could reasonably be
expected to have a Material Adverse Effect on the Company.
(b) Except as disclosed in Section 3.27 of the Disclosure
Schedule or the Company SEC Documents, there is not pending or, to the knowledge
of the Company, threatened recall or investigation of any product sold by the
Company, which recall or investigation could reasonably be expected to have a
Material Adverse Effect on the Company.
SECTION 3.28. INVENTORY. The inventories of the Company and its
subsidiaries as reflected in the most recent financial statements contained in
the Company SEC Documents, or acquired by the Company or any of its subsidiaries
after the date thereof, to the extent it does not constitute a Material Adverse
Effect on the Company, (i) are carried at an amount not in excess of the lower
of cost or net realizable value, and (ii) do not include any inventory which is
obsolete, surplus or not usable or saleable in the lawful and ordinary course of
business of the Company and its subsidiaries as heretofore conducted, in each
case net of reserves provided therefor.
SECTION 3.29. FULL DISCLOSURE. No statement contained in any
certificate or schedule furnished or to be furnished by the Company or its
subsidiaries to Purchaser in, or pursuant to the provisions of, this Agreement
contains any untrue statement of a material fact or omits to state any material
fact necessary, in the light of the circumstances under which it was made, in
order to make the statements herein or therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to the Company as follows:
SECTION 4.01. ORGANIZATION. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of Florida and has all
requisite corporate power and authority to carry on its business as now being
conducted, except where the failure to be so organized, existing and in good
standing or to have such power and authority could not be reasonably expected to
prevent or materially delay the consummation of the Merger. Purchaser is duly
qualified or licensed to do business and in good standing in each jurisdiction
in which the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification or licensing necessary, except
in such jurisdictions where the failure to be so duly qualified or licensed and
in good standing could not reasonably be
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expected to prevent or materially delay the consummation of the Merger.
Purchaser has made available to the Company complete and correct copies of its
articles of incorporation and bylaws.
SECTION 4.02. AUTHORITY. Purchaser has the requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of Purchaser
and no other corporate proceedings on the part of Purchaser are necessary to
authorize this Agreement or to consummate such transactions. No vote of
Purchaser shareholders is required to approve this Agreement or the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Purchaser and, assuming this Agreement constitutes a valid and binding
obligation of the Company, constitutes a valid and binding obligation of each of
Purchaser enforceable against it in accordance with its terms, except as limited
by applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors' rights generally.
SECTION 4.03. CONSENTS AND APPROVALS; NO VIOLATIONS. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act (including the
filing with the SEC of a Rule 13E-3 Transaction Statement on Schedule 13E-3
(together with all supplements and amendments thereto, the "SCHEDULE 13E-3"),
the HSR Act and Sections 607.1103 - 607.1105 of the Corporation Law, neither the
execution, delivery or performance of this Agreement by Purchaser nor the
consummation by Purchaser of the transactions contemplated hereby will (i)
conflict with or result in any breach of any provision of the respective
articles of incorporation or bylaws of Purchaser, (ii) require any filing with,
or permit, authorization, consent or approval of, any Governmental Entity
(except where the failure to obtain such permits, authorizations, consents or
approvals or to make such filings could not be reasonably expected to prevent or
materially delay the consummation of the Merger), (iii) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation or
acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, lease, contract, agreement or other
instrument or obligation to which Purchaser or any of its subsidiaries is a
party or by which any of them or any of their properties or assets may be bound
or (iv) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Purchaser, any of its subsidiaries or any of their properties or
assets, except in the case of clauses (iii) and (iv) for violations, breaches or
defaults which could not, individually or in the aggregate, be reasonably
expected to prevent or materially delay the consummation of the Merger.
SECTION 4.04. INFORMATION SUPPLIED. None of the information supplied or
to be supplied by Purchaser specifically for inclusion or incorporation by
reference in the Proxy Statement or the Schedule 13E-3 will, at the time the
Proxy Statement is first mailed to the Company's shareholders or at the time of
the Shareholders Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Schedule 13E-3 to be filed by Purchaser in
connection with the transactions contemplated hereby will comply as to form in
all material respects with the requirements of the Exchange Act and the rules
and regulations thereunder, except that no representation or warranty is made by
Purchaser with respect to statements made or incorporated by reference therein
based on information supplied by the Company specifically for inclusion or
incorporation by reference therein.
SECTION 4.05. PURCHASER'S FINANCING CAPABILITY. Purchaser has
heretofore provided the Company with true and correct copies of (i) a proposal
letter with respect to Purchaser's expected senior debt financing sources for
the funding (the "SENIOR DEBT FINANCING") of a portion of the Merger
Consideration, and (ii) a term sheet with respect to Purchaser's expected
subordinated debt financing sources for the funding (the "SUBORDINATED DEBT
FINANCING") of a portion of the Merger Consideration. Purchaser is reasonably
satisfied that it will have sufficient funds (including equity capital, Senior
Debt Financing and Subordinated Debt Financing) to enable it to purchase the
Shares pursuant to the Merger
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in accordance with terms hereof, pay all related fees and expenses and effect
all other transactions contemplated hereby.
SECTION 4.06. SURVIVING CORPORATION SOLVENCY. Immediately after the
Effective Time and after giving effect to any changes in the Surviving
Corporation's assets and liabilities as a result of the Merger and the financing
for the Merger Consideration, the Surviving Corporation will not (i) be
insolvent (either because its financial condition is such that the sum of its
debts is greater than the fair value of its assets or because the fair saleable
value of its assets is less than the amount required to pay its probable
liability on its existing debts as they mature), (ii) have unreasonably small
capital with which to engage in its business, or (iii) have incurred debts
beyond its ability to pay as they become due; PROVIDED, that for purposes of
making the representation and warranty set forth in this Section 4.06 Purchaser
has relied on the accuracy of (i) all information provided to them by the
Company, and (ii) all information set forth in the Company's SEC Documents.
SECTION 4.07. BROKERS. No broker, investment banker, financial advisor
or other person, other than Trivest II, Inc., the fees and expenses of which
will be paid by Purchaser, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Purchaser.
SECTION 4.08. BOARD DETERMINATION. The Board of Directors of Purchaser
at a meeting duly called and held, duly and unanimously adopted resolutions
approving this Agreement and the Merger.
SECTION 4.09. FULL DISCLOSURE. No statement contained in any
certificate or schedule furnished or to be furnished by Purchaser to the Company
in, or pursuant to the provisions of, this Agreement contains or shall contain
any untrue statement of a material fact or omits or will omit to state any
material fact necessary, in the light of the circumstances under which it was
made, in order to make the statements herein or therein not misleading.
ARTICLE V
COVENANTS
SECTION 5.01. COVENANTS OF THE COMPANY. The Company agrees as to itself
and its subsidiaries that (except as expressly contemplated or permitted by this
Agreement, as set forth in the Disclosure Schedule or to the extent that
Purchaser shall otherwise consent in advance, which consent shall not be
unreasonably withheld and shall subsequently be confirmed in writing):
(a) ORDINARY COURSE. The Company shall, and shall cause its
subsidiaries to, carry on their respective businesses in the usual, regular and
ordinary course and the Company shall, and shall cause its subsidiaries to, use
all reasonable efforts to preserve intact their present business organizations,
keep available the services of their present officers and employees and preserve
their relationships with customers, suppliers and others having business
dealings with the Company and its subsidiaries.
(b) DIVIDENDS; CHANGES IN STOCK. The Company shall not, and
shall not permit any of its subsidiaries to, (i) declare or pay any dividends on
or make other distributions in respect of any of its capital stock, except for
dividends by a direct or indirect wholly owned subsidiary of the Company to its
Purchaser, (ii) split, combine or reclassify any of its capital stock or issue
or authorize or propose the issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock, or (iii) repurchase,
redeem or otherwise acquire any shares of capital stock of the Company or its
subsidiaries or any other securities thereof.
(c) ISSUANCE OF SECURITIES. The Company shall not, and shall
not permit any of its subsidiaries to, issue, deliver, sell, pledge or encumber,
or authorize or propose the issuance, delivery,
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sale, pledge or encumbrance of, any shares of its capital stock of any class or
any securities convertible into, or any rights, warrants, calls, subscriptions
or options to acquire, any such shares or convertible securities, or any other
ownership interest (including stock appreciation rights or phantom stock) other
than (i) the issuance of shares of Company Common Stock upon the exercise of
Company Stock Options outstanding on the date of this Agreement and in
accordance with the terms of such Company Stock Options, or (ii) issuances by a
wholly-owned subsidiary of the Company of its capital stock to its Purchaser.
(d) GOVERNING DOCUMENTS. The Company shall not, and shall not
permit any of its subsidiaries to, amend or propose to amend its articles or
certificate of incorporation or bylaws (or similar organizational documents) in
any way which would be adverse to Purchaser's rights under this Agreement.
(e) NO ACQUISITIONS. The Company shall not, and shall not
permit any of its subsidiaries to, acquire or agree to acquire by merging or
consolidating with, or by purchasing any equity interest in or any substantial
assets of (other than inventory and equipment in the ordinary course consistent
with past practice, to the extent not otherwise prohibited by this Agreement),
or by any other manner, any business or any corporation, partnership, joint
venture, association or other business organization or division thereof.
(f) NO DISPOSITIONS. Other than dispositions in the ordinary
course of business consistent with past practice, the Company shall not, and
shall not permit any of its subsidiaries to, sell, lease, license, encumber or
otherwise dispose of, or agree to sell, lease, license, encumber or otherwise
dispose of, any of its assets.
(g) INDEBTEDNESS. The Company shall not, and shall not permit
any of its subsidiaries to, (i) incur any indebtedness for borrowed money or
guarantee any such indebtedness or issue or sell any debt securities or warrants
or rights to acquire any debt securities of the Company or any of its
subsidiaries, guarantee any debt securities of others, enter into any
"keep-well" or other agreement to maintain any financial statement condition of
another person or enter into any arrangement having the economic effect of any
of the foregoing, except for working capital borrowings incurred in the ordinary
course of business consistent with past practice under the Company's credit
facility existing and in effect on the date of this Agreement, or (ii) make any
loans, advances or capital contributions to, or investments in, any other
person, other than, with respect to both clause (i) and (ii) above, (A) to the
Company or any direct or indirect wholly owned subsidiary of the Company, or (B)
any advances to employees in accordance with past practice.
(h) ADVICE OF CHANGES; FILINGS. The Company shall confer with
Purchaser on a regular and frequent basis as reasonably requested by Purchaser,
report on operational matters and promptly advise Purchaser orally and, if
requested by Purchaser, in writing of any change or event to the Best Knowledge
of the Company having, or which, insofar as can reasonably be foreseen, is
likely to have, a Material Adverse Effect on the Company. The Company shall
promptly provide to Purchaser (or its counsel) copies of all filings made by the
Company with any Governmental Entity in connection with this Agreement and the
transactions contemplated hereby.
(i) ACCOUNTING CHANGES. The Company shall not make any
material change, other than in the ordinary course of business, consistent with
past practice, or as required by the SEC or law, with respect to any accounting
methods, principles or practices used by the Company (except insofar as may be
required by a change in generally accepted accounting principles).
(j) DISCHARGE OF LIABILITIES. Except for fees and expenses
related to the transactions contemplated herein, the Company shall not, and
shall not permit any of its subsidiaries to, pay, discharge, settle or satisfy
any claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge,
settlement or satisfaction, in the ordinary course of business consistent with
past practice or in accordance with their terms, of (i) liabilities
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recognized or disclosed in the Most Recent Financial Statements, or (ii)
liabilities incurred since the date of such financial statements in the ordinary
course of business consistent with past practice. The Company shall not, and
shall not permit any of its subsidiaries to, waive the benefits of, or agree to
modify in any manner, any confidentiality, standstill or similar agreement to
which the Company or any of its subsidiaries is a party.
(k) COMPENSATION OF COMPANY EMPLOYEES. Except as provided in
Section 3.07 of the Disclosure Schedule or in Sections 6.04 or 6.08, the Company
and its subsidiaries will not, without the prior written consent of Purchaser,
which shall not be unreasonably withheld, except as may be required by law, (i)
enter into, adopt, amend or terminate any Company Benefit Plan or other employee
benefit plan or any agreement, arrangement, plan or policy for the benefit of
any director, executive officer or current or former key employee, (ii) increase
in any manner the compensation or fringe benefits of, or pay any bonus to, any
director, executive officer or key employee, except as required by any Company
Benefit Plan or agreement with such employees existing on the date of this
Agreement, (iii) enter into, adopt, amend or terminate any Company Benefit Plan
or other benefit plan or agreement, arrangement, plan or policy for the benefit
of any employees who are not directors, executive offices or current or former
key employees of the Company, other than increases in the compensation of
employees made in the ordinary course of business consistent with past practice,
or (iv) pay any benefit not required by any plan or arrangement as in effect as
of the date hereof (including the granting of, acceleration of exercisability of
or vesting of stock options, stock appreciation rights or restricted stock).
(l) MATERIAL CONTRACTS. Except in the ordinary course of
business consistent with past practices, neither the Company nor any of its
subsidiaries shall (i) modify, amend or terminate any material contract or
agreement to which the Company or such subsidiary is a party, or (ii) waive,
release or assign any material rights or claims.
(m) NO DISSOLUTION, ETC. The Company shall not authorize,
recommend, propose or announce an intention to adopt a plan of complete or
partial liquidation of the Company or any of its subsidiaries.
(n) TAX ELECTION. Except as set forth in Section 3.14 of the
Disclosure Schedule, the Company shall not make any tax election or settle or
compromise any material income tax liability.
(o) GENERAL. The Company shall not, and shall not permit any
of its subsidiaries to, authorize any of, or commit or agree to take any of, the
foregoing actions described in this Section 5.01.
SECTION 5.02. NO SOLICITATION.
(a) The Company and its officers, directors, employees,
representatives and agents shall immediately cease any discussions or
negotiations with any parties that may be ongoing with respect to an Acquisition
Proposal (as hereinafter defined). From and after the date hereof until the
termination of this Agreement, the Company shall not, nor shall it permit any of
its subsidiaries to, authorize or permit any of its officers, directors or
employees or any investment banker, financial advisor, attorney, accountant or
other representative retained by it or any of its subsidiaries to, directly or
indirectly, (i) solicit, initiate or knowingly encourage (including by way of
furnishing non-public information or assistance), or knowingly take any other
action to facilitate, any inquiries or the making of any proposal which
constitutes, or may reasonably be expected to lead to, any Acquisition Proposal,
or (ii) participate in any discussions or negotiations regarding any Acquisition
Proposal; PROVIDED, HOWEVER, that if, at any time the Board of Directors of the
Company determines in good faith, based upon the opinion of independent legal
counsel (who may be the Company's regularly engaged independent counsel), that
it is necessary to do so in order to comply with its fiduciary duties to the
Company's shareholders under applicable law, the Company may, in response to an
unsolicited Superior Proposal (as hereinafter defined), and subject to
compliance with Section 5.02(c), (x) furnish information with respect to the
Company to the person making such unsolicited Superior Proposal pursuant to a
confidentiality agreement in a form approved by the Company and Purchaser (such
approval not to be unreasonably
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withheld or delayed), and (y) participate in discussions or negotiations
regarding such Superior Proposal. For purposes of this Agreement, "ACQUISITION
PROPOSAL" means any inquiry, proposal or offer from any person relating to any
direct or indirect acquisition or purchase of 20% or more of the assets of the
Company and its subsidiaries or 20% or more of any class of equity securities of
the Company or any of its subsidiaries, any tender offer or exchange offer that
if consummated would result in any person beneficially owning 20% or more of any
class of equity securities of the Company or any of its subsidiaries, any
merger, consolidation, business combination, sale of all or substantially all
the assets, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any of its subsidiaries (other than the transactions
between the parties hereto contemplated by this Agreement), or any other
transaction the consummation of which could reasonably be expected to impede,
interfere with, prevent or materially delay the Merger or which could reasonably
be expected to dilute materially the benefits to Purchaser of the transactions
contemplated hereby. For purposes of this Agreement, a "SUPERIOR PROPOSAL" means
any bona fide proposal made by a third party to acquire, directly or indirectly,
for consideration consisting of cash and/or securities, more than 50% of the
shares of Company Common Stock then outstanding or all or substantially all the
assets of the Company and otherwise on terms which the Board of Directors of the
Company reasonably determines in its good faith judgment (based on the advice of
Mann, Armistead) to be more favorable to the Company's shareholders than the
Merger.
(b) Except as set forth in this Section 5.02, neither the
Board of Directors of the Company nor any committee thereof shall (i) withdraw
or modify, or propose to withdraw or modify, in a manner adverse to Purchaser,
the approval or recommendation by such Board of Directors or committee of this
Agreement or the Merger, (ii) approve or recommend, or propose to approve or
recommend, any Acquisition Proposal, or (iii) cause the Company to enter into
any agreement with respect to any Acquisition Proposal. Notwithstanding the
foregoing, in the event that the Board of Directors of the Company determines in
good faith, based upon the opinion of independent legal counsel (who may be the
Company's regularly engaged independent counsel), that it is necessary to do so
in order to comply with its fiduciary duties to the Company's shareholders under
applicable law, the Board of Directors of the Company may (subject to the other
provisions of Section 5.02) withdraw or modify its approval or recommendation of
this Agreement and the Merger, approve or recommend a Superior Proposal, cause
the Company to enter into an agreement with respect to a Superior Proposal or
terminate this Agreement, but in each case only at a time that is after the
fifth business day following Purchaser's receipt of written notice (a "NOTICE OF
SUPERIOR PROPOSAL") advising Purchaser that the Board of Directors of the
Company has received a Superior Proposal, specifying the material terms and
conditions of such Superior Proposal and identifying the person making such
Superior Proposal. In addition, if the Company proposes to enter into an
agreement with respect to any Acquisition Proposal, it shall concurrently with
entering into such agreement pay, or cause to be paid, to Purchaser the
Termination Fee (as such term is defined in Section 6.06(b)).
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 5.02, the Company shall promptly advise
Purchaser orally and in writing of any request for information or of any
Acquisition Proposal, the material terms and conditions of such request or
Acquisition Proposal and, unless the Company is contractually prohibited from
making such disclosure (it being agreed that the Company shall use its good
faith, reasonable efforts to not be subject to such contractual prohibition).
the identity of the person making such request or Acquisition Proposal.
(d) Nothing contained in this Section 5.02 shall prohibit the
Company from taking and disclosing to its shareholders a position contemplated
by Rule 14e-2(a) promulgated under the Exchange Act or from making any
disclosure to the Company's shareholders if, in the good faith judgment of the
Board of Directors of the Company, after consultation with independent legal
counsel (who may be the Company's regularly engaged independent counsel),
failure so to disclose would be inconsistent with its fiduciary duties to the
Company's shareholders under applicable law; PROVIDED, HOWEVER, neither the
Company nor its Board of Directors nor any committee thereof shall, except as
permitted by Section 5.02(b), withdraw or modify, or propose to withdraw or
modify, its position with respect to this Agreement or the Merger or approve or
recommend, or propose to approve or recommend, an Acquisition Proposal.
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SECTION 5.03. OTHER ACTIONS.
(a) Except as contemplated by Section 5.02 or the other
provisions of this Agreement, the Company shall not, and shall not permit any of
its subsidiaries to, take any action that could reasonably be expected to result
in (i) any of the representations and warranties of the Company set forth in
this Agreement that are qualified as to materiality becoming untrue, (ii) any of
such representations and warranties that are not so qualified becoming untrue in
any material respect, or (iii) any of the conditions to the Merger set forth in
Article VII hereof not being satisfied in all material respects.
(b) Except as contemplated by Section 5.02 or the other
provisions of this Agreement, Purchaser shall not, and shall not permit any of
its subsidiaries to, take any action that could reasonably be expected to result
in (i) any of the representations and warranties of Purchaser set forth in this
Agreement that are qualified as to materiality becoming untrue, (ii) any of such
representations and warranties that are not so qualified becoming untrue in any
material respect, or (iii) any of the conditions to the Merger set forth in
Article VII hereof not being satisfied in all material respects.
SECTION 5.04. FINANCING COVENANTS OF PURCHASER AND SUB. Purchaser will
use its good faith and reasonable commercial efforts to obtain all debt and/or
equity financing reasonably expected to be required to accomplish the Merger and
the payment for Shares pursuant to this Agreement and to pay Purchaser's related
fees and expenses. Purchaser shall promptly (x) forward to the Company copies of
all written commitment letters, letters of intent and/or other agreements in
principle with respect to all debt and/or equity financing reasonably expected
to be obtained in connection with the Merger (collectively the "COMMITMENTS"),
and (y) advise the Company orally, and if requested by Company, in writing of
(i) any significant change in the status of any such financing arrangements, or
(ii) to the knowledge of Purchaser, any other event which could reasonably be
expected to materially delay or prevent the Merger. Purchaser shall promptly
provide Company with copies of any written changes or termination of the
Commitments and any written commitments for alternate financing.
SECTION 5.05. SOLVENCY. Purchaser agrees to provide to the Special
Committee any opinions (and supporting documentation) regarding the matters
referred to in Section 4.06 as are provided to any banks or other lenders in
connection with the Merger at the same time that they are provided to such banks
or other lenders.
SECTION 5.06. AMENDMENT OF MANAGEMENT AGREEMENT. Purchaser shall cause
Trivest II, Inc. ("TRIVEST") to promptly execute an amendment to its existing
Investment Services Agreement with the Company (the "MANAGEMENT AGREEMENT") in
order to provide to the effect that, (x) no Fee shall be payable to Trivest
pursuant to Section 6.3 of the Management Agreement with respect to the Merger,
(y) if the Termination Fee is paid in connection with a Superior Proposal
pursuant to the terms hereof, no fee shall be payable to Trivest pursuant to
Section 6.3 of the Management Agreement with respect to such Superior Proposal,
and (z) Trivest shall not be reimbursed pursuant to Section 4 of the Management
Agreement for any expenses related to the Merger or a Superior Proposal, which
amendment shall be in form reasonably acceptable to the Special Committee.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. SHAREHOLDER APPROVAL; PREPARATION OF PROXY STATEMENT.
(a) Subject to the receipt of the written fairness opinion of
Mann, Armistead contemplated by Section 3.04(c) hereof, the Company shall, (i)
as soon as practicable, duly call, give notice of, convene and hold a meeting of
its shareholders (the "SHAREHOLDERS MEETING") for the purpose of obtaining the
Company Shareholder Approval, (ii) through its Board of Directors, recommend to
its shareholders that the Company Shareholder Approval be given, and (iii) at
the direction of Purchaser,
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solicit from holders of Shares entitled to vote at the Shareholder Meeting
proxies in favor of the Company Shareholder Approval and shall take all other
action necessary or, in the judgment of Purchaser, helpful to secure the vote or
consent of such holders required by the Corporation Law or this Agreement to
effect the Merger.
(b) Purchaser and the Company shall, as soon as practicable,
jointly prepare and the Company shall file a preliminary Proxy Statement (or, if
requested by Purchaser and applicable, an information statement in lieu of a
proxy statement pursuant to Rule 14C under the Exchange Act, with all references
herein to the Proxy Statement being deemed to refer to such information
statement, to the extent applicable) with the SEC and shall use its best efforts
to respond to any comments of the SEC or its staff and to cause the Proxy
Statement to be mailed to the Company's shareholders as promptly as practicable
after responding to all such comments to the satisfaction of the staff. The
Company shall notify Purchaser promptly of the receipt of any comments from the
SEC or its staff and of any request by the SEC or its staff for amendments or
supplements to the Proxy Statement or for additional information and shall
supply Purchaser with copies of all correspondence between the Company or any of
its representatives, on the one hand, and the SEC or its staff, on the other
hand, with respect to the Proxy Statement or the Merger. If at any time prior to
the Shareholders Meeting there shall occur any event that should be set forth in
an amendment or supplement to the Proxy Statement, the Company shall promptly
prepare and mail to its shareholders such an amendment or supplement. The
Company shall not mail any Proxy Statement, or any amendment or supplement
thereto, to which Purchaser reasonably objects unless required by law. The
Company and its counsel shall permit Purchaser and its counsel to participate in
all communications with the SEC and its staff, including all meetings and
telephone conferences, relating to the Proxy Statement, the Merger or this
Agreement.
(c) Purchaser agrees to cause all Shares owned by Purchaser or
any subsidiary of Purchaser to be voted in favor of the Company Shareholder
Approval.
(d) The Company hereby consents to the inclusion in the Proxy
Statement of the recommendation of the Company's Board and the recommendation of
the Board's Special Committee described in Section 3.04, subject to any
modification, amendment or withdrawal thereof; provided, however, that in no
event shall the Company be required to mail the Proxy Statement to its
shareholders prior to the receipt of the written fairness opinion of Mann,
Armistead contemplated by Section 3.04(c) hereof.
(e) In connection with the Merger, the Company shall cause its
transfer agent to furnish Purchaser promptly with mailing labels containing the
names and addresses of the record holders of Shares as of a recent date and of
those persons becoming record holders subsequent to such date, together with
copies of all lists of shareholders, security position listings and computer
files and all other information in the Company's possession or control regarding
the beneficial owners of Shares, and shall furnish to Purchaser such information
and assistance (including updated lists of shareholders, security position
listings and computer files) as Purchaser may reasonably request.
SECTION 6.02. ACCESS TO INFORMATION. Upon reasonable notice and subject
to restrictions contained in confidentiality agreements to which the Company is
subject, the Company shall, and shall cause each of its subsidiaries to, afford
to Purchaser and to the officers, employees, accountants, counsel and other
representatives of Purchaser access, during normal business hours to all their
respective properties, books, contracts, commitments and records and, during
such period, the Company shall (and shall cause each of its subsidiaries to)
furnish promptly to Purchaser (a) a copy of each report, schedule, registration
statement and other document filed or received by it during such period pursuant
to SEC requirements, and (b) all other information concerning its business,
properties and personnel as Purchaser may reasonably request. Subject to the
requirements of applicable law, and except for such steps as are necessary to
disseminate the documents necessary to consummate the Merger, Purchaser and its
agents shall hold in confidence all non-public information received from the
Company, shall use such information only in connection with the Merger and, if
this Agreement shall be terminated, shall, upon request, deliver, and shall use
their best efforts to cause Its agents to deliver, to the Company all copies of
such non-public information then in their possession or control.
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SECTION 6.03. REASONABLE EFFORTS. Each of the Company and Purchaser
agrees to use its reasonable efforts to take, or cause to be taken, all actions
necessary to comply promptly with all legal requirements which may be imposed on
itself with respect to the Merger (which actions shall include furnishing all
information required under the HSR Act and in connection with approvals of or
filings with any other Governmental Entity) and shall promptly cooperate with
and furnish information to each other in connection with any such requirements
imposed upon any of them or any of their subsidiaries in connection with the
Merger. Each of the Company and Purchaser will, and shall cause its subsidiaries
to, use its reasonable efforts to take all reasonable actions necessary to
obtain (and will cooperate with each other in obtaining) any consent,
authorization, order or approval of, or any exemption by, any Governmental
Entity or other public or private third party required to be obtained or made by
Purchaser, the Company or any of their subsidiaries in connection with the
Merger or the taking of any action contemplated by this Agreement, except that
no party need waive any substantial rights or agree to any substantial
limitation on its operations or to dispose of or hold separate any material
assets.
SECTION 6.04. COMPANY STOCK OPTIONS; PLANS.
(a) Purchaser and the Company shall, effective as of the
Effective Time, (i) cause each outstanding option to purchase Company Common
Stock (a "COMPANY STOCK OPTION") issued pursuant to the Company's 1994 Stock
Option Plan, as Amended and Restated Effective January 23, 1997 (the "COMPANY
STOCK OPTION PLAN"), whether or not exercisable or vested, to become fully
exercisable and vested, (ii) cause each Company Stock Option that is outstanding
to be canceled, and (iii) in consideration of such cancellation and, except to
the extent that Purchaser and the holder of any such Company Stock Option
otherwise agree, cause the Company (or, at Purchaser's option, Purchaser) to pay
such holders of Company Stock Options an amount in respect thereof equal to the
product of (x) the excess, if any, of the Merger Consideration over the exercise
price of each such Company Stock Option, and (y) the number of shares of Company
Common Stock subject to the Company Stock Option immediately prior to its
cancellation (such payment to be net of applicable withholding taxes).
(b) Except as may otherwise be agreed by Purchaser and the
Company, the Company Stock Option Plan shall terminate as of the Effective Time,
and no holder of Company Stock Options or any participant in the Company Stock
Option Plan shall have any rights thereunder to acquire any equity securities of
the Company, the Surviving Corporation or any subsidiary thereof.
(c) Except as may otherwise be agreed by Purchaser and the
Company, all other plans, programs or arrangements providing for the issuance or
grant of any other interest in respect of the capital stock of the Company or
any of its subsidiaries shall terminate as of the Effective Time, and no
participant in any such plans, programs or arrangements shall have any rights
thereunder to acquire any equity securities of the Company, the Surviving
Corporation or any subsidiary thereof.
SECTION 6.05. CONFIDENTIALITY. Prior to the Closing, Purchaser shall,
and shall cause its Affiliates and its and their employees, agents, accountants,
legal counsel and other representatives and advisers to, hold in strict
confidence all, and not divulge or disclose any information of any kind
concerning the Company and its business; provided, however, that the foregoing
obligation of confidence shall not apply to (i) information that is or becomes
generally available to the public other than as a result of a disclosure by
Purchaser, any of its Affiliates or any of their respective employees, agents,
accountants, legal counsel or other representatives or advisers, (ii)
information that is or becomes available to Purchaser, any of its Affiliates or
any of their respective employees, agents, accountants, legal counsel or other
representatives or advisers on a nonconfidential basis, and (iii) information
that is required to be disclosed by Purchaser, any of its Affiliates or any of
their respective employees, agents, accountants, legal counsel or other
representatives or advisers as a result of any applicable law, rule or
regulation of any Governmental Authority; and provided further that Purchaser
promptly shall notify the Company of any disclosure pursuant to clause (iii) of
this Section 6.05. Promptly after any termination of this Agreement, Purchaser
and its representatives shall return to the Company or destroy all copies of
documentation with respect to the Company that were supplied by or on behalf of
the Company pursuant to this Agreement, without retaining any copy thereof, and
destroy any notes or analyses Purchaser and/or its representatives may have
prepared containing information derived from such materials.
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SECTION 6.06. FEES AND EXPENSES.
(a) Except as provided below in this Section 6.06, all fees
and expenses incurred in connection with the Merger, this Agreement and the
transactions contemplated by this Agreement shall be paid by the party incurring
such fees or expenses, whether or not the Merger is consummated. Notwithstanding
the foregoing, the Purchaser shall pay all filing fees required under the HSR
Act in connection with the Merger and the transactions contemplated hereby.
(b) If (i) Purchaser terminates this Agreement under Section
8.01(d) or Section 8.01(e), or (ii) the Company terminates this Agreement
pursuant to Section 8.01(f), the Company shall assume and pay to Purchaser, or
cause to be paid, a termination fee in an amount equal to the sum of (i) all
expenses incurred by Purchaser in connection with the transactions contemplated
hereby, up to a maximum total of $1,500,000, PLUS (ii) $10,000,000 (such sum is
referred to herein as the "TERMINATION FEE").
SECTION 6.07. INDEMNIFICATION; INSURANCE.
(a) Purchaser agrees that all rights to indemnification for
acts or omissions occurring prior to the Effective Time now existing in favor of
the current or former directors or officers (the "INDEMNIFIED PARTIES") of the
Company and its subsidiaries as provided in their respective certificates or
articles of incorporation or bylaws (or similar organizational documents) or
existing indemnification contracts shall survive the Merger and shall continue
in full force and effect in accordance with their terms.
(b) In addition, Purchaser will provide, or cause the
Surviving Corporation to provide, for a period of not less than two years after
the Effective Time, the Company's current directors and officers an insurance
and indemnification policy that provides coverage for events occurring at or
prior to the Effective Time (the "D&O INSURANCE") that is no less favorable than
the Company's existing D&O Insurance policy or, if substantially equivalent
insurance coverage is unavailable, the best available coverage; provided,
however, that Purchaser and the Surviving Corporation shall not be required to
pay an annual premium for the D&O Insurance in excess of 200% of the annual
premium currently paid by the Company for such insurance, but in such case shall
purchase as much such coverage as possible for such amount.
(c) This Section 6.07 shall survive the consummation of the
Merger at the Effective Time, is intended to benefit the Company, Purchaser, the
Surviving Corporation and the Indemnified Parties and their respective heirs,
personal representatives, successors and assigns, and shall be binding on all
successors and assigns of Purchaser and the Surviving Corporation.
SECTION 6.08. EMPLOYMENT AND BENEFIT ARRANGEMENTS.
(a) From and after the Effective Time, Purchaser shall cause
the Surviving Corporation to honor all employment, severance, termination and
retirement agreements to which the Company is a party, as such agreements are in
effect on the date hereof.
(b) For a one-year period following the Effective Time,
Purchaser shall cause the Surviving Corporation to provide those employees who
are employees of the Surviving Corporation at the Effective Time with benefits
that are, in the aggregate, no less favorable to such employees as are the
benefits of the Company available to such employees immediately prior to the
Effective Time.
(c) The provisions of this Section 6.08 are not intended to
create rights of third party beneficiaries.
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ARTICLE VII
CONDITIONS
SECTION 7.01. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligation of each party to effect the Merger shall be
subject to the satisfaction prior to the Closing Date of the following
conditions:
(a) This Agreement and the Merger shall have been approved and
adopted by the affirmative vote or consent of the holders of at least a majority
of the outstanding shares of Company Common Stock;
(b) All consents, authorizations, orders and approvals of (or
filings or registrations with) any Governmental Authority or other regulatory
body required in connection with the execution, delivery and performance of this
Agreement, the failure to obtain which would prevent the consummation of the
Merger or have a Material Adverse Effect on the Company, shall have been
obtained without the imposition of any condition having a Material Adverse
Effect on the Company;
(c) Early termination shall have been granted or applicable
waiting periods shall have expired under the HSR Act, if applicable;
(d) No Governmental Authority or other regulatory body
(including any court of competent jurisdiction) shall have enacted, issued,
promulgated, enforced or entered any law, rule, regulation, executive order,
decree, injunction or other order (whether temporary, preliminary or permanent)
which is then in effect and has the effect of, and there shall be no action,
suit or proceeding pending which could reasonably be expected to have the effect
of, making illegal, materially restricting or in any way preventing or
prohibiting the Merger or the transactions contemplated by this Agreement, or
imposing damages or penalties in connection therewith which are material to any
of the Company, Purchaser or any of their respective affiliates;
(e) All authorizations, consents, waivers and approvals from
parties to contracts or other agreements to which any of the Company or its
subsidiaries is a party, or by which any of them is bound, as may be required to
be obtained by them in connection with the performance of this Agreement, the
failure to obtain which would prevent the consummation of the Merger or have,
individually or in the aggregate, a Material Adverse Effect on Company, shall
have been obtained; and
(f) The Company shall have received the written fairness
opinion of Mann, Armistead contemplated by Section 3.04(c) hereof.
SECTION 7.02. CONDITIONS TO OBLIGATIONS OF PURCHASER TO EFFECT THE
MERGER. The obligations of Purchaser to effect the Merger are further subject to
satisfaction or waiver at or prior to the Effective Time of the following
conditions.
(a) There shall not have occurred any change, condition, event
or development that has resulted in, or could reasonably be expected to result
in, a Material Adverse Effect on the Company;
(b) The representations and warranties of the Company in this
Agreement that are qualified by materiality shall be true and correct in all
respects as of the date of this Agreement and as of the Effective Time;
(c) the representations and warranties of the Company in this
Agreement that are not qualified by materiality shall be true and correct in all
material respects as of the date of this Agreement and as of the Effective Time;
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(d) the Company shall have performed in all material respects
all obligations required to be performed by it under this Agreement;
(e) an officer of the Company shall have delivered to
Purchaser a certificate to the effect that each of the conditions specified in
Sections 7.02(b), (c) and (d) is satisfied in all respects; and
(f) Purchaser shall have received an opinion, dated the
Effective Time, of Balch & Bingham L.L.P., counsel to the Company, in form and
substance reasonably satisfactory to Purchaser, with respect to the matters set
forth in Sections 3.01, 3.02, 3.03, 3.04 and 3.05 hereof.
SECTION 7.03. CONDITIONS TO OBLIGATIONS OF THE COMPANY TO EFFECT THE
MERGER. The obligations of the Company to effect the Merger are further subject
to satisfaction or waiver at or prior to the Effective Time of the following
conditions:
(a) The representations and warranties of Purchaser in this
Agreement that are qualified by materiality shall be true and correct in all
respects as of the date of this Agreement and as of the Effective Time;
(b) The representations and warranties of the Purchaser in
this Agreement that are not qualified by materiality shall be true and correct
in all material respects as of the date of this Agreement and as of the
Effective Time;
(c) Purchaser shall have performed in all material respects
all obligations required to be performed by it under this Agreement;
(d) Purchaser shall have delivered to the Company a
certificate to the effect that each of the conditions specified in Sections
7.03(a), (b) and (c) is satisfied in all respects;
(e) The Company shall have received an opinion, dated the
Effective Time, of Greenberg Traurig, P.A., counsel to Purchaser, in form
reasonably satisfactory to the Company, with respect to the matters set forth in
Sections 4.01, 4.02 and 4.03 hereof; and
(f) Purchaser shall have executed definitive documentation in
connection with their financing of the Merger Consideration and shall have
sufficient funds available to consummate the Merger, to pay all related expenses
and to refinance the Company's existing indebtedness to Heller Financial, Inc.
ARTICLE VIII
TERMINATION AND AMENDMENT
SECTION 8.01. TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval of the terms of
this Agreement by the shareholders of the Company:
(a) by mutual written consent of Purchaser and the Company;
(b) by either Purchaser or the Company if any Governmental
Entity shall have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the acceptance for
payment of, or payment for, shares of Company Common Stock pursuant to the
Merger and such order, decree or ruling or other action shall have become final
and nonappealable; PROVIDED, HOWEVER, that the right to terminate this Agreement
pursuant to this Section 8.01(b) shall not be available to any party that has
failed to perform its obligations under Section 6.03;
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(c) by either Purchaser or the Company if the Effective Time
shall not have occurred on or before July 15, 1999, unless extended by agreement
of the parties.
(d) by Purchaser, if
(i) (A) the representations and warranties of the
Company in Section 3.03 shall not have been true and correct in all material
respects when made, or (B) any other representation or warranty of the Company
shall not have been true and correct in all material respects when made, except
in any case where such failure to be true and correct would not, in the
aggregate, (x) have a Material Adverse Effect on the Company, or (y) prevent or
materially delay consummation of the Merger;
(ii) the Company shall have failed to comply in any
material respect with any of its material obligations or covenants contained
herein, except in any case where such failure would not, in the aggregate, (x)
have a Material Adverse Effect on the Company, or (y) prevent or materially
delay consummation of the Merger; or
(iii) there shall have been a Material Adverse Change
with respect to the Company; provided that the Company shall, if curable, have a
reasonable period in which to cure any failure described in clause (i), (ii) or
(iii) above.
(e) by Purchaser, if
(i) the Board of Directors of the Company or the
Special Committee shall have failed to approve and recommend or shall have
withdrawn or modified in a manner adverse to Purchaser its approval or
recommendation of the Merger or this Agreement, or approved or recommended any
Acquisition Proposal;
(ii) the Company shall have entered into any
agreement with respect to any Superior Proposal in accordance with Section
5.02(b); or
(iii) the Board of Directors of the Company or the
Special Committee shall have resolved to take any of the foregoing actions;
(f) by the Company in connection with entering into a
definitive agreement in accordance with Section 5.02(b), provided it has
complied with all provisions thereof, including the notice provisions therein
and the payment of the Termination Fee, and provided that the Company shall not
have breached in any material respect the provisions of Section 5.02(a); or
(g) by the Company, if
(i) any representation or warranty of Purchaser shall
not have been true and correct in all material respects when made or shall have
ceased at any later date to be true and correct in all material respects as if
made at such later date; or
(ii) Purchaser fails to comply in any material
respect with any of its material obligations or covenants contained herein;
provided that Purchaser shall, if curable, have a reasonable period in which to
cure any failure described in clause (i) or (ii) above.
SECTION 8.02. EFFECT OF TERMINATION. In the event of a termination of
this Agreement by either the Company or Purchaser as provided in Section 8.01,
this Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Purchaser, the Company or their respective
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officers, directors, shareholders or affiliates, except with respect to Section
3.16, Section 4.06, Section 6.05, Section 6.06, this Section 8.02 and Article
IX; PROVIDED, HOWEVER, that nothing herein shall relieve any party for liability
for any breach hereof.
SECTION 8.03. AMENDMENT. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
at any time before or after obtaining the Company Shareholder Approval, but,
after any such approval, no amendment shall be made which by law requires
further approval by such shareholders (or which reduces the amount or changes
the Merger Consideration to be delivered to such shareholders) without obtaining
such further approval. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties hereto.
SECTION 8.04. EXTENSION; WAIVER. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their respective
Boards of Directors, may, to the extent legally allowed, (i) extend the time for
the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto or (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in a written instrument signed on behalf of such party.
The failure of any party to this Agreement to assert any of its rights under
this Agreement or otherwise shall not constitute a waiver of those rights.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time or, in the
case of the Company, shall survive the acceptance for payment of, and payment
for, Shares pursuant to the Merger.
SECTION 9.02. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed), sent by overnight courier (providing proof of
delivery) or mailed by registered or certified mail (return receipt requested)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to Purchaser, to
Trivest Furniture Corporation
2655 South Bayshore Drive, Suite 800
Miami, Florida 33131
Attn: General Counsel
Telecopy No.: (305) 858-1629
Confirm No.: (305) 858-2200
with a copy to:
Greenberg Traurig, P.A.
1221 Brickell Avenue
Miami, Florida 33131
Attention: Bruce E. Macdonough, Esq.
Telecopy No.: (305) 579-0717
Confirm No.: (305) 579-0500
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and
(b) if to the Company, to
WinsLoew Furniture, Inc.
160 Village Street
Birmingham, Alabama 35242
Attn: James S. Smith
Telecopy No.: (205) 408-7028
Confirm No.: (205) 408-7600
with a copy to:
Balch & Bingham, LLP
1901 Sixth Avenue North
Suite 2600
Birmingham, Alabama 35203
Attn: James F. Hughey, Jr.
Telecopy No.: (205) 226-8799
Confirm No.: (205) 226-3469
SECTION 9.03. INTERPRETATION. (i) When a reference is made in this
Agreement to an Article or a Section, such reference shall be to an Article or a
Section of this Agreement unless otherwise indicated. The table of contents and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Whenever
the words "INCLUDE", "INCLUDES" or "INCLUDING" are used in this Agreement, they
shall be deemed to be followed by the words "WITHOUT LIMITATION". The phrase
"MADE AVAILABLE" in this Agreement shall mean that the information referred to
has been made available if requested by the party to whom such information is to
be made available. As used in this Agreement, the term "SUBSIDIARY" of any
person means another person, an amount of the voting securities, other voting
ownership or voting partnership interests of which is sufficient to elect at
least a majority of its Board of Directors or other governing body (or, if there
are no such voting interests, 50% or more of the equity interests of which) is
owned directly or indirectly by such first person, and the term "AFFILIATE"
shall have the meaning set forth in Rule 12b-2 promulgated under the Exchange
Act. As used in this Agreement, "MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE
EFFECT" means, when used in connection with the Company, any change or effect,
except those relating to general economic conditions or the furniture industry
generally (or any development that, insofar as can reasonably be foreseen, is
likely to result in any change or effect) that, individually or in the aggregate
with any such other changes or effects, is materially adverse to the business,
prospects, assets (including intangible assets), financial condition or results
of operations of the Company and its subsidiaries taken as a whole; and (ii)
"BEST KNOWLEDGE" of the Company or any of its Subsidiaries shall be limited to
the knowledge of the following designated officers: Earl W. Powell, Vincent A.
Tortorici, Jr., Bobby Tesney and Stephen C. Hess. An individual shall be deemed
to have "knowledge" of or to have "known" a particular fact or other matter if
(i) such individual is actually aware of such fact or other matter, or (ii) a
prudent individual should have known such fact or other matter in the course of
performing the responsibilities of his or her job position.
SECTION 9.04. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.
SECTION 9.05. ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This
Agreement (including the documents and the instruments referred to herein) (a)
constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject
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matter hereof, and (b) except as provided in Section 6.07 and Section 6.08, are
not intended to confer upon any person other than the parties hereto any rights
or remedies hereunder.
SECTION 9.06. GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the State of Florida and, to the extent
provided herein, the Corporation Law, without regard to any applicable conflicts
of law.
SECTION 9.07. PUBLICITY. Except as otherwise required by law or the
rules of the Nasdaq National Market, for so long as this Agreement is in effect,
neither the Company nor Purchaser shall, or shall permit any of its subsidiaries
to, issue or cause the publication of any press release or other public
announcement with respect to the transactions contemplated by this Agreement
without the consent of the other party, which consent shall not be unreasonably
withheld or delayed.
SECTION 9.08. ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties, except that Purchaser may assign, in its sole
discretion, any or all of its rights, interests and obligations hereunder to any
direct or indirect wholly owned subsidiary of Purchaser. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by the parties and their respective successors and assigns.
SECTION 9.09. ENFORCEMENT. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement. In addition, each of the parties
hereto (i) consents to submit such party to the personal jurisdiction of any
Federal court located in the State of Florida in the event any dispute arises
out of this Agreement or any of the transactions contemplated hereby, (ii)
agrees that such party will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, and (iii)
agrees that such party will not bring any action relating to this Agreement or
any of the transactions contemplated hereby in any court other than a Federal
court sitting in the State of Florida.
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IN WITNESS WHEREOF, Purchaser and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized as
of the date first written above.
TRIVEST FURNITURE CORPORATION
By: /s/ William F. Kaczynski, Jr.
--------------------------------------
William F. Kaczynski, Jr.
Vice President
WINSLOEW FURNITURE, INC.
By: /s/ Bobby Tesney
--------------------------------------
Bobby Tesney
President and Chief Executive Officer
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Exhibit 99.1
FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION:
Vincent A. Tortorici, Jr.
Chief Financial Officer
205-408-7600
TRIVEST ACQUISITION GROUP INCREASES
PER SHARE CASH PURCHASE PRICE FOR WINSLOEW
BIRMINGHAM, AL - (March 31, 1999) WinsLoew Furniture, Inc. (NASDAQ/NM:WLFI)
today announced that it has amended its Agreement and Plan of Merger with
Trivest Furniture Corporation, a newly formed company controlled by Earl W.
Powell of Trivest, Inc., who is also the Chairman of WinsLoew's board of
directors, to increase the per share cash purchase price from $30.00 per share
to $33.00 per share. The amendment to the Agreement and Plan of Merger was
approved by WinsLoew's board of directors, as well as the Special Committee of
the Board appointed to evaluate the initial Trivest proposal and possible
strategic alternatives.
Pursuant to the amended agreement, the proposed merger is subject, among other
things, to (i) shareholder approval and (ii) compliance with all applicable
regulatory and governmental requirements. Accordingly, there can be no assurance
that the Trivest merger will be consummated.
WinsLoew Furniture, Inc. designs, manufactures, and distributes aluminum casual
(porch and patio) furniture and contract seating for the hospitality and office
furniture markets.
Additional information is available on the Internet at
http://www.cfonews.com/wlfi.
###
