EXHIBIT 99.3
AGREEMENT AND PLAN OF MERGER
DATED AS OF
APRIL 30, 1995
AMONG
GROW GROUP, INC.,
IMPERIAL CHEMICAL INDUSTRIES PLC
AND
GDEN CORPORATION
TABLE OF CONTENTS(1)
ARTICLE I
THE OFFER
SECTION 1.01. The Offer . . . . . . . . . . . . . . . 2
SECTION 1.02. Company Action. . . . . . . . . . . . . 3
SECTION 1.03. Directors. . . . . . . . . . . . . . . . 5
ARTICLE II
THE MERGER
SECTION 2.01. The Merger. . . . . . . . . . . . . . . 6
SECTION 2.02. Conversion of Shares. . . . . . . . . . 6
SECTION 2.03. Surrender and Payment. . . . . . . . . 7
SECTION 2.04. Dissenting Shares. . . . . . . . . . . 8
SECTION 2.05. Stock Options. . . . . . . . . . . . . 9
SECTION 2.06. Merger Without Meeting of Shareholders . . 9
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.01. Certificate of Incorporation. . . . . . 10
SECTION 3.02. Bylaws. . . . . . . . . . . . . . . . . 10
SECTION 3.03. Directors and Officers. . . . . . . . . 10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
SECTION 4.01. Corporate Existence and Power. . . . . 10
SECTION 4.02. Corporate Authorization. . . . . . . . 11
SECTION 4.03. Governmental Authorization. . . . . . . 11
SECTION 4.04. Non-Contravention. . . . . . . . . . . . 11
SECTION 4.05. Capitalization. . . . . . . . . . . . . 12
SECTION 4.06. Subsidiaries. . . . . . . . . . . . . . 13
SECTION 4.07. Investments. . . . . . . . . . . . . . 14
SECTION 4.08. SEC Filings. . . . . . . . . . . . . . 14
SECTION 4.09. Financial Statements. . . . . . . . . . 14
SECTION 4.10. Disclosure Documents. . . . . . . . . . 15
SECTION 4.11. Absence of Certain Changes. . . . . . . 15
SECTION 4.12. No Undisclosed Material Liabilities. . . 17
SECTION 4.13. Litigation. . . . . . . . . . . . . . . 17
SECTION 4.14. Taxes. . . . . . . . . . . . . . . . . 17
SECTION 4.15. Employee Matters. . . . . . . . . . . . 19
SECTION 4.16. Labor Matters. . . . . . . . . . . . . 23
SECTION 4.17. Compliance with Laws. . . . . . . . . . 23
SECTION 4.18. Finders' Fees. . . . . . . . . . . . . 23
SECTION 4.19. Environmental Matters. . . . . . . . . . 23
SECTION 4.20. Property. . . . . . . . . . . . . . . . 25
SECTION 4.21. Trademarks. . . . . . . . . . . . . . . 25
SECTION 4.22. Material Contracts. . . . . . . . . . . 26
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF BUYER AND MERGER SUBSIDIARY
SECTION 5.01. Corporate Existence and Power. . . . . 26
SECTION 5.02. Corporate Authorization. . . . . . . . . 26
SECTION 5.03. Governmental Authorization. . . . . . . 27
SECTION 5.04. Non-Contravention. . . . . . . . . . . . 27
SECTION 5.05. Disclosure Documents. . . . . . . . . . 27
SECTION 5.06. Finders' Fees. . . . . . . . . . . . . . 28
SECTION 5.07. Financing. . . . . . . . . . . . . . . . 28
SECTION 5.08. Share Ownership . . . . . . . . . . . . 28
SECTION 5.09. Merger Subsidiary's Operations . . . . . 28
ARTICLE VI
COVENANTS OF THE COMPANY
SECTION 6.01. Conduct of the Company. . . . . . . . . 28
SECTION 6.02. Stockholder Meeting; Proxy Material. . 29
SECTION 6.03. Access to Information. . . . . . . . . . 30
SECTION 6.04. Other Offers. . . . . . . . . . . . . . 30
SECTION 6.05. Notices of Certain Events. . . . . . . 31
SECTION 6.06. Amendment of Rights Agreement. . . . . . 31
SECTION 6.07. Conveyance Taxes. . . . . . . . . . . . 32
ARTICLE VII
COVENANTS OF BUYER
SECTION 7.01. Obligations of Merger Subsidiary. . . . 32
SECTION 7.02. Voting of Shares. . . . . . . . . . . . 32
SECTION 7.03. Director and Officer Liability. . . . . 32
ARTICLE VIII
COVENANTS OF BUYER
AND THE COMPANY
SECTION 8.01. Best Efforts. . . . . . . . . . . . . . 33
SECTION 8.02. Certain Filings. . . . . . . . . . . . . 34
SECTION 8.03. Public Announcements. . . . . . . . . . 34
SECTION 8.04. Conveyance Taxes . . . . . . . . . . . . 34
SECTION 8.05. Further Assurances . . . . . . . . . . . 34
SECTION 8.06. Employee Matters. . . . . . . . . . . . 35
ARTICLE IX
CONDITIONS TO THE MERGER
SECTION 9.01. Conditions to the Obligations of Each
Party . . . . . . . . . . . . . . . . . 37
ARTICLE X
TERMINATION
SECTION 10.01. Termination. . . . . . . . . . . . . . 37
SECTION 10.02. Effect of Termination. . . . . . . . . 39
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices. . . . . . . . . . . . . . . . 39
SECTION 11.02. Survival of Representations and
Warranties. . . . . . . . . . . . . . . 40
SECTION 11.03. Amendments; No Waivers. . . . . . . . 40
SECTION 11.04. Expenses. . . . . . . . . . . . . . . . 41
SECTION 11.05. Successors and Assigns. . . . . . . . . 41
SECTION 11.06. Governing Law. . . . . . . . . . . . . 42
SECTION 11.07. Severability. . . . . . . . . . . . . . 42
SECTION 11.08. Third Party Beneficiaries . . . . . . . 42
SECTION 11.09. Entire Agreement . . . . . . . . . . . 42
SECTION 11.10. Counterparts; Effectiveness. . . . . . 42
SECTION 11.11. Jurisdiction . . . . . . . . . . . . . 42
ANNEX I
Schedule 4.01: Licenses
Schedule 4.03: Governmental Authorization
Schedule 4.04: Non-Contravention
Schedule 4.05: Stock Options
Schedule 4.06: Subsidiaries
Schedule 4.07: Investments
Schedule 4.11: Absence of Certain Changes
Schedule 4.12: Material Liabilities
Schedule 4.13: Litigation
Schedule 4.15: Employee Matters
Schedule 4.16: Labor Matters
Schedule 4.17: Compliance with Laws
Schedule 4.19: Environmental Matters
Schedule 4.21: Trademarks
Schedule 4.22: Material Contracts
Schedule 7.03: Director and Officer Liability
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of April 30,
1995 (this "AGREEMENT") among Grow Group, Inc., a New York
corporation (the "COMPANY"), Imperial Chemical Industries
PLC, a corporation organized under the laws of England
("BUYER"), and GDEN Corporation, a New York corporation and
an indirect wholly owned subsidiary of Buyer ("MERGER
SUBSIDIARY").
WHEREAS, the Boards of Directors of Buyer, Merger
Subsidiary and the Company have each determined that it is
in the best interests of their respective shareholders for
Buyer to acquire all of the outstanding capital stock of the
Company upon the terms and subject to the conditions set
forth herein; and
WHEREAS, in furtherance of such acquisition, it is
proposed that Buyer shall make a cash tender offer (the
"OFFER") to acquire all the issued and outstanding shares of
Common Stock, par value $.10 per share, of the Company (the
"SHARES") for $18.10 per Share net to the seller in cash,
upon the terms and subject to the conditions of this
Agreement and the Offer; and
WHEREAS, the Board of Directors of the Company has
unanimously approved the making of the Offer and resolved
and agreed to recommend that holders of Shares tender their
Shares pursuant to the Offer; and
WHEREAS, also in furtherance of such acquisition,
the Boards of Directors of Buyer, Merger Subsidiary and the
Company have each approved the merger of Merger Subsidiary
with and into the Company in accordance with the Business
Corporation Law of the State of New York ("NEW YORK LAW")
following the consummation of the Offer and upon the terms
and subject to the conditions set forth herein;
WHEREAS, in consideration of the willingness of
Buyer and Merger Subsidiary to enter into this Agreement,
Corimon Corporation, a Delaware corporation ("CORIMON
CORP.") and Corimon, S.A.C.A., a corporation organized under
the laws of Venezuela ("CORIMON"), have entered into a
Stockholders Agreement, dated as of the date hereof, with
Buyer and Merger Subsidiary (the "CORIMON OPTION
AGREEMENT"), pursuant to which Corimon Corp. has granted
Buyer an option to purchase 4,025,841 Shares (the "CORIMON
SHARES"), all upon the terms and subject to the conditions
set forth in the Corimon Option Agreement;
NOW, THEREFORE, in consideration of the foregoing
and the mutual covenants and agreements herein contained,
and intending to be legally bound hereby, Buyer, Merger
Subsidiary and the Company hereby agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01. The Offer. (a) Provided that
nothing shall have occurred that would result in a failure
to satisfy any of the conditions set forth in Annex I
hereto, Buyer shall, as promptly as practicable after the
date hereof, but in no event later than five business days
following the public announcement of the terms of this
Agreement, commence the Offer to purchase all of the
outstanding Shares at a price of $18.10 per Share (the
"OFFER PRICE"), net to the sellers in cash, subject to any
amounts required to be withheld under applicable federal,
state, local or foreign income tax regulations. The Offer
shall be subject to the condition that there shall be
validly tendered in accordance with the terms of the Offer
prior to the expiration date of the Offer and not withdrawn
a number of Shares which, together with the Corimon Shares
and any other Shares then owned by Buyer, represents at
least two-thirds of the Shares outstanding on a fully
diluted basis (the "MINIMUM CONDITION") and to the other
conditions set forth in Annex I hereto. Buyer expressly
reserves the right to waive the Minimum Condition (provided
that in no event shall Buyer be permitted to accept Shares
for payment pursuant to the Offer unless the Shares so
accepted for payment, together with the Corimon Shares and
any other Shares then owned by Buyer, represent at least a
majority of the outstanding Shares on a fully diluted basis)
or any of the other conditions to the Offer and to make any
change in the terms or conditions of the Offer; provided
that no change may be made which changes the form of
consideration to be paid or decreases the price per Share or
the number of Shares sought in the Offer or which imposes
conditions to the Offer in addition to those set forth in
Annex I or which amends any condition to the Offer in any
manner adverse to the holders of the Shares.
Notwithstanding the foregoing, Buyer shall extend the Offer
at any time up to the Outside Termination Date (as defined
in Section 10.01) for one or more periods of not more than
10 business days, if at the initial expiration date of the
Offer, or any extension thereof, the condition to the Offer
requiring the expiration or termination of any applicable
waiting periods under the HSR Act and the Exon-Florio
Provision (as such terms are defined in Section 4.03) is not
satisfied or required. In addition, the Offer Price may be
increased and the Offer may be extended to the extent
required by law in connection with such increase in each
case without the consent of the Company. Subject to the
terms and conditions of the Offer, Buyer shall pay, as
promptly as practicable after expiration of the Offer, for
all Shares validly tendered and not withdrawn.
(b) As soon as practicable on the date of
commencement of the Offer, Buyer shall file (i) with the
Securities and Exchange Commission (the "SEC"), a Tender
Offer Statement on Schedule 14D-1 with respect to the Offer
which will contain the offer to purchase and form of the
related letter of transmittal (together with any supplements
or amendments thereto, collectively, the "SEC OFFER
DOCUMENTS") and (ii) with the Attorney General of the State
of New York, a Registration Statement (together with any
supplements or amendments thereto, collectively, the "NEW
YORK DISCLOSURE DOCUMENTS") in accordance with Article 16
(the "SECURITY TAKEOVER DISCLOSURE ACT") of New York Law.
(The SEC Offer Documents and the New York Disclosure
Documents are collectively referred to herein as the "OFFER
DOCUMENTS".) Buyer and the Company each agrees promptly to
correct any information provided by it for use in the Offer
Documents if and to the extent that it shall have become
false or misleading in any material respect. Buyer agrees
to take all steps necessary to cause the Offer Documents as
so corrected to be filed with the SEC and to be disseminated
to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. The Company
and its counsel shall be given a reasonable opportunity to
review and comment on the Offer Documents prior to their
being filed with the applicable authorities.
SECTION 1.02. Company Action. (a) The Company
hereby consents to the Offer and represents that its Board
of Directors, at a meeting duly called and held on April 30,
1995, has (i) unanimously determined that this Agreement and
the transactions contemplated hereby, including the Offer
and the Merger (as defined in Section 2.01), are fair to and
in the best interest of the Company's stockholders, (ii)
unanimously approved this Agreement and the transactions
contemplated hereby, including the Offer and the Merger,
which approval satisfies in full the requirements of New
York Law and Section 11(c)(ii) of the Certificate of
Incorporation of the Company and (iii) unanimously resolved
to recommend acceptance of the Offer and approval and
adoption of this Agreement and the Merger by its
stockholders; provided that such recommendation may be
withdrawn, modified or amended if, in the opinion of the
Board of Directors, after consultation with independent
legal counsel, such recommendation would be inconsistent
with its fiduciary duties to the Company's shareholders
under applicable law. The parties agree that this Agreement
shall constitute the memorandum of understanding
contemplated by Section 11 of the Company's Certificate of
Incorporation setting forth the principal terms of the
Merger and related transactions.
The Company represents that all members of the
Board of Directors of the Company who are not designees of
Corimon have, in accordance with the Standstill Agreement
between the Company, Corimon and Corimon Corp., dated July
21, 1992, as amended (the "STANDSTILL AGREEMENT"), adopted a
resolution providing for a waiver of the restrictions in
Sections 3.1 and 4.1 of the Standstill Agreement to permit
Corimon and Corimon Corp. to enter into and perform its
obligations under the Corimon Option Agreement. The Company
further represents that Wertheim Schroder & Co. Inc., as
financial advisors to the Company, has delivered to the
Company's Board of Directors its written opinion that the
consideration to be paid in the Offer and the Merger is fair
to the holders of Shares (other than Corimon and Corimon
Corp.) from a financial point of view. The Company has been
advised that all of its directors and executive officers
intend to tender their Shares (other than the Corimon
Shares) pursuant to the Offer. The Company will promptly
furnish Buyer with a list of its stockholders, mailing
labels and any available listing or computer file containing
the names and addresses of all holders of record of Shares
and lists of securities positions of Shares held in stock
depositories, in each case true and correct as of the most
recent practicable date, and will provide to Buyer such
additional information (including, without limitation,
updated lists of stockholders, mailing labels and lists of
securities positions) and such other assistance as Buyer or
Merger Subsidiary may reasonably request in connection with
the Offer.
(b) As soon as practicable on the day that the
Offer is commenced the Company will file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 (the
"SCHEDULE 14D-9") which shall reflect the recommendations of
the Company's Board of Directors referred to above, but
subject to the proviso to the sentence referring to such
recommendations above. The Company, Buyer and Merger
Subsidiary each agree to correct promptly any information
provided by it for use in the Schedule 14D-9 if and to the
extent that it shall have become false or misleading in any
material respect. The Company agrees to take all steps
necessary to cause the Schedule 14D-9 as so corrected to be
filed with the SEC and to be disseminated to holders of
Shares, in each case as and to the extent required by
applicable federal securities laws. Buyer and its counsel
shall be given a reasonable opportunity to review and
comment on the Schedule 14D-9 prior to its being filed with
the SEC.
(c) References herein to the "fiduciary duties" of
the members of the Board of Directors of the Company mean
the fiduciary duties of such members to the holders of
Shares other than Corimon Corp.
SECTION 1.03. Directors. (a) Effective upon the
acceptance for payment by Buyer of any Shares, Buyer shall
be entitled to designate the number of directors, rounded up
to the next whole number, on the Company's Board of
Directors that equals the product of (i) the total number of
directors on the Company's Board of Directors (giving effect
to the election of any additional directors pursuant to this
Section) and (ii) the percentage that the number of Shares
owned by Buyer (including Shares accepted for payment and,
assuming the number of Shares owned by Buyer or accepted for
payment constitute at least a majority of the outstanding
Shares on a fully diluted basis, the Corimon Shares) bears
to the total number of Shares outstanding, and the Company
shall take all action necessary to cause Buyer's designees
to be elected or appointed to the Company's Board of
Directors, including, without limitation, increasing the
number of directors and seeking and accepting resignations
of incumbent directors. At such times, the Company will use
its best efforts to cause individuals designated by Buyer to
constitute the same percentage as such individuals represent
on the Company's Board of Directors of (x) each committee of
the Board (other than any committee of the Board established
to take action under this Agreement), (y) each board of
directors of each Subsidiary (as defined in Section 4.06)
and (z) each committee of each such board. Notwithstanding
the foregoing, until the Effective Time (as defined in
Section 2.01), the Company shall retain as members of its
Board of Directors at least two directors who are directors
of the Company on the date hereof (the "COMPANY DESIGNEES").
(b) The Company's obligations to appoint
designees to the Board of Directors shall be subject to
Section 14(f) of the Exchange Act (as defined in Section
4.03) and Rule 14f-1 promulgated thereunder. The Company
shall promptly take all actions required pursuant to Section
14(f) and Rule 14f-1 in order to fulfill its obligations
under this Section and shall include in the Schedule 14D-9
such information with respect to the Company and its
officers and directors as is required under Section 14(f)
and Rule 14f-1 to fulfill its obligations under this Section
1.03. Buyer will supply to the Company in writing and be
solely responsible for any information with respect to
itself and its nominees, officers, directors and affiliates
required by Section 14(f) and Rule 14f-1.
(c) From and after the time, if any, that Buyer's
designees constitute a majority of the Company's Board of
Directors, any amendment of this Agreement, any termination
of this Agreement by the Company, any extension of time for
performance of any of the obligations of Buyer or Merger
Subsidiary hereunder, any waiver of any condition to the
obligations of the Company or any of the Company's rights
hereunder or other action by the Company hereunder may be
effected only by the action of a majority of the directors
of the Company then in office who were directors of the
Company on the date hereof, which action shall be deemed to
constitute the action of the full Board of Directors;
provided that if there shall be no such directors, such
actions may be effected by majority vote of the entire Board
of Directors of the Company.
ARTICLE II
THE MERGER
SECTION 2.01. The Merger. (a) At the Effective
Time (as defined in Section 2.01(b)), Merger Subsidiary
shall be merged (the "MERGER") with and into the Company in
accordance with the New York Law, whereupon the separate
existence of Merger Subsidiary shall cease, and the Company
shall be the surviving corporation (the "SURVIVING
CORPORATION").
(b) As soon as practicable after satisfaction or,
to the extent permitted hereunder, waiver of all conditions
to the Merger, the Company and Merger Subsidiary will file a
certificate of merger with the Department of State of the
State of New York and make all other filings or recordings
required by New York Law in connection with the Merger. The
Merger shall become effective on such date as the
certificate of merger is duly filed with the Department of
State of the State of New York or at such later date as is
specified in the certificate of merger (the "EFFECTIVE
TIME").
(c) From and after the Effective Time, the
Surviving Corporation shall possess all the rights,
privileges, powers and franchises and be subject to all of
the restrictions, disabilities, liabilities and duties of
the Company and Merger Subsidiary, all as provided under New
York Law.
SECTION 2.02. Conversion of Shares. At the
Effective Time:
(a) each Share held by the Company as treasury
stock or owned by Buyer, Merger Subsidiary or any other
subsidiary of Buyer immediately prior to the Effective
Time shall be canceled, and no payment shall be made
with respect thereto;
(b) each share of common stock of Merger
Subsidiary outstanding immediately prior to the
Effective Time shall be converted into and become one
share of common stock of the Surviving Corporation with
the same rights, powers and privileges as the shares so
converted and shall constitute the only outstanding
shares of capital stock of the Surviving Corporation;
and
(c) each Share outstanding immediately prior to
the Effective Time shall, except as otherwise provided
in Section 2.02(a) or as provided in Section 2.04 with
respect to Shares as to which appraisal rights have
been exercised, be converted into the right to receive
$18.10 in cash or any higher price paid for each Share
in the Offer, without interest (the "MERGER
CONSIDERATION").
SECTION 2.03. Surrender and Payment. (a) Prior
to the Effective Time, Buyer shall appoint a depositary (the
"DEPOSITARY") for the purpose of exchanging certificates
representing Shares for the Merger Consideration. The
Depositary shall at all times be a commercial bank having a
combined capital and surplus of at least $100,000,000.
Buyer will pay to the Depositary immediately prior to the
Effective Time, the Merger Consideration to be paid in
respect of the Shares. For purposes of determining the
Merger Consideration to be so paid, Buyer shall assume that
no holder of Shares will perfect his right to appraisal of
his Shares. Promptly after the Effective Time, Buyer will
send, or will cause the Depositary to send, but in no event
later than three business days after the Effective Time, to
each holder of Shares at the Effective Time a letter of
transmittal for use in such exchange (which shall specify
that the delivery shall be effected, and risk of loss and
title shall pass, only upon proper delivery of the
certificates representing Shares to the Depositary).
(b) Each holder of Shares that have been
converted into a right to receive the Merger Consideration,
upon surrender to the Depositary of a certificate or
certificates properly representing such Shares, together
with a properly completed letter of transmittal covering
such Shares, will be entitled to receive the Merger
Consideration payable in respect of such Shares. Until so
surrendered, each such certificate shall, after the
Effective Time, represent for all purposes, only the right
to receive such Merger Consideration.
(c) If any portion of the Merger Consideration is
to be paid to a Person other than the registered holder of
the Shares represented by the certificate or certificates
surrendered in exchange therefor, it shall be a condition to
such payment that the certificate or certificates so
surrendered shall be properly endorsed or otherwise be in
proper form for transfer and that the Person requesting such
payment shall pay to the Depositary any transfer or other
taxes required as a result of such payment to a Person other
than the registered holder of such Shares or establish to
the satisfaction of the Depositary that such tax has been
paid or is not payable. For purposes of this Agreement,
"PERSON" means an individual, a corporation, limited
liability company, a partnership, an association, a trust or
any other entity or organization, including a government or
political subdivision or any agency or instrumentality
thereof.
(d) After the Effective Time, there shall be no
further registration of transfers of Shares. If, after the
Effective Time, certificates representing Shares are
presented to the Surviving Corporation, they shall be
canceled and exchanged for the consideration provided for,
and in accordance with the procedures set forth, in this
Article II.
(e) Any portion of the Merger Consideration paid
to the Depositary pursuant to Section 2.03(a) that remains
unclaimed by the holders of Shares one year after the
Effective Time shall be returned to Surviving Corporation,
upon demand, and any such holder who has not exchanged his
Shares for the Merger Consideration in accordance with this
Section prior to that time shall thereafter look only to
Surviving Corporation for payment of the Merger
Consideration in respect of his Shares. Notwithstanding the
foregoing, Buyer, Merger Subsidiary and the Surviving
Corporation shall not be liable to any holder of Shares for
any amount paid to a public official pursuant to applicable
abandoned property laws. Any amounts remaining unclaimed by
holders of Shares on the day immediately prior to such time
as such amounts would otherwise escheat to or become
property of any governmental entity shall, to the extent
permitted by applicable law, become the property of Buyer
free and clear of any claims or interest of any Person
previously entitled thereto.
(f) Any portion of the Merger Consideration paid
to the Depositary pursuant to Section 2.03(a) to pay for
Shares for which appraisal rights have been perfected shall
be returned to Surviving Corporation upon demand.
SECTION 2.04. Dissenting Shares. Notwithstanding
Section 2.02, Shares outstanding immediately prior to the
Effective Time and held by a holder who has not voted in
favor of the Merger or consented thereto in writing and who
has demanded appraisal for such Shares in accordance with
New York Law shall not be converted into a right to receive
the Merger Consideration, unless such holder fails to
perfect or withdraws or otherwise loses his right to
appraisal. If after the Effective Time such holder fails to
perfect or withdraws or loses his right to appraisal, such
Shares shall be treated as if they had been converted as of
the Effective Time into a right to receive the Merger
Consideration. The Company shall give Buyer prompt notice
of any demands received by the Company for appraisal of
Shares, and Buyer shall have the right to participate in all
negotiations and proceedings with respect to such demands.
The Company shall not, except with the prior written consent
of Buyer, make any payment with respect to, or settle or
offer to settle, any such demands.
SECTION 2.05. Stock Options. (a) Immediately
prior to the Effective Time, each outstanding employee stock
option (an "OPTION") to purchase Shares granted under any
employee stock option or compensation plan or arrangement of
the Company shall be canceled, and each holder of any such
Option, whether or not then vested or exercisable, shall be
paid by the Company at the Effective Time for each such
Option an amount determined by multiplying (i) the excess,
if any, of $18.10 per Share over the applicable exercise
price of such Option by (ii) the number of Shares such
holder could have purchased (assuming full vesting of all
Options) had such holder exercised such Option in full
immediately prior to the Effective Time.
(b) Prior to the Effective Time, the Company
shall (i) use its best efforts to obtain any consents from
holders of Options and (ii) make any amendments to the terms
of such stock option or compensation plans or arrangements,
to the extent such consents or amendments are necessary to
give effect to the transactions contemplated by Section
2.05(a). Notwithstanding any other provision of this
Section, payment may be withheld in respect of any Option
until necessary consents are obtained.
SECTION 2.06. Merger Without Meeting of
Shareholders. Notwithstanding Section 6.02 hereof, in the
event that Buyer, Merger Subsidiary or any other subsidiary
of Buyer shall acquire at least 90% of the outstanding
shares of each class of capital stock of the Company,
pursuant to the Offer or otherwise, the parties hereto agree
to take all necessary and appropriate action to cause the
Merger to become effective as soon as practicable after such
acquisition, without a meeting of shareholders of the
Company, in accordance with Section 905 of the New York Law.
ARTICLE III
THE SURVIVING CORPORATION
SECTION 3.01. Certificate of Incorporation. The
certificate of incorporation of Merger Subsidiary in effect
at the Effective Time shall be the certificate of
incorporation of the Surviving Corporation until amended in
accordance with applicable law, except that the name of the
Surviving Corporation shall be "Grow Group, Inc.".
SECTION 3.02. Bylaws. The bylaws of Merger
Subsidiary in effect at the Effective Time shall be the
bylaws of the Surviving Corporation until amended in
accordance with applicable law.
SECTION 3.03. Directors and Officers. From and
after the Effective Time, until successors are duly elected
or appointed and qualified in accordance with applicable
law, the directors of Merger Subsidiary at the Effective
Time shall be the initial directors of the Surviving
Corporation and the officers of Merger Subsidiary at the
Effective Time shall be the initial officers of the
Surviving Corporation, in each case until their respective
successors are duly elected and appointed or qualified.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to Buyer and
Merger Subsidiary that:
SECTION 4.01. Corporate Existence and Power. The
Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of New
York, and except as set forth on Schedule 4.01, has all
corporate powers and all governmental licenses,
authorizations, consents and approvals (collectively,
"LICENSES") required to carry on its business as now
conducted except where the failure to have any such License
would not, individually or in the aggregate, have a Material
Adverse Effect (as defined below). The Company is duly
qualified to do business as a foreign corporation and is in
good standing in each jurisdiction where the character of
the property owned or leased by it or the nature of its
activities makes such qualification necessary, except for
those jurisdictions where the failure to be so qualified
would not, individually or in the aggregate, have a Material
Adverse Effect. As used herein, the term "MATERIAL ADVERSE
EFFECT" means a material adverse effect on the condition
(financial or otherwise), business, assets or results of
operations of the Company and its Subsidiaries (as defined
in Section 4.06) taken as a whole, that is not a result of
general changes in the economy or the industries in which
the Company and its Subsidiaries operate. The Company has
heretofore delivered to Buyer true and complete copies of
the Company's certificate of incorporation and bylaws as
currently in effect.
SECTION 4.02. Corporate Authorization. The
execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the
transactions contemplated hereby are within the Company's
corporate powers and, except for any required approval by
the Company's stockholders in connection with the
consummation of the Merger, have been duly authorized by all
necessary corporate action. This Agreement, assuming due
and valid authorization, execution and delivery by the
parties hereto, constitutes a valid and binding agreement of
the Company except that (i) enforcement may be subject to
applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws, now or hereafter in
effect, affecting creditors' rights generally, and (ii) the
remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought.
SECTION 4.03. Governmental Authorization. Except
as set forth in Schedule 4.03, the execution, delivery and
performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated
hereby require no action by or in respect of, or filing
with, any governmental body, agency, official or authority
(each, a "GOVERNMENTAL ENTITY") other than: (i) the filing
of a certificate of merger in accordance with New York Law;
(ii) compliance with any applicable requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the
"HSR ACT"); (iii) compliance with any applicable
requirements of the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder (the "EXCHANGE
ACT"); (iv) compliance with any applicable requirements of
the New Jersey Industrial Site Recovery Act ("ISRA"); (v)
compliance with any applicable requirements of the Security
Takeover Disclosure Act; and (vi) compliance with any
applicable requirements of Section 721 of the Defense
Production Act of 1950, as amended (the "EXON-FLORIO
PROVISION").
SECTION 4.04. Non-Contravention. The execution,
delivery and performance by the Company of this Agreement
and the consummation by the Company of the transactions
contemplated hereby do not and will not (i) contravene or
conflict with the Certificate of Incorporation or Bylaws of
the Company, (ii) except as set forth in Schedule 4.04 and
assuming compliance with the matters referred to in Section
4.03, contravene or conflict with or constitute a violation
of any provision of any law, regulation, judgment,
injunction, order or decree binding upon or applicable to
the Company or any Subsidiary, (iii) except as set forth in
Schedule 4.04, with or without the giving of notice or
passage of time or both, constitute a default under or give
rise to a right of termination, cancellation or acceleration
of any right or obligation of the Company or any Subsidiary
or to a loss of any benefit to which the Company or any
Subsidiary is entitled under any provision of any agreement,
contract or other instrument binding upon the Company or any
Subsidiary or any license, franchise, permit or other
similar authorization held by the Company or any Subsidiary,
or (iv) result in the creation or imposition of any Lien on
any asset of the Company or any Subsidiary excluding from
the foregoing clauses (ii), (iii) or (iv) such violations,
breaches, defaults or Liens which would not, individually or
in the aggregate, have a Material Adverse Effect on the
Company and its Subsidiaries taken as a whole, and which
will not materially impair the ability of the Company to
consummate the transactions contemplated hereby. For
purposes of this Agreement, "LIEN" means, with respect to
any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such
asset.
SECTION 4.05. Capitalization. The authorized
capital stock of the Company consists of 50,000,000 shares
of common stock, par value $0.10 per Share and 1,000,000
shares of preferred stock. As of April 29, 1995, there were
outstanding (1) 16,101,712 Shares and (2) employee stock
options to purchase an aggregate of 318,699 Shares (the
"OPTIONS") with a weighted average exercise price of $12.74
and a maximum exercise price of $18.13. Schedule 4.05
accurately sets forth information regarding the exercise
prices of the Options. All outstanding shares of capital
stock of the Company have been duly authorized and validly
issued and are fully paid and nonassessable. Except as set
forth in this Section, except as provided in the Standstill
Agreement, except for the Rights (as defined below), and
except for changes since April 29, 1995 resulting from the
exercise of employee stock options outstanding on such date,
there are outstanding (i) no shares of capital stock or
other voting securities of the Company, (ii) no securities
of the Company or of any Subsidiary convertible into or
exchangeable for shares of capital stock or voting
securities of the Company, and (iii) no options or other
rights to acquire from the Company, and no obligation of the
Company to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital
stock or voting securities of the Company (the items in
clauses (i), (ii) and (iii) being referred to collectively
as the "COMPANY SECURITIES"). There are no outstanding
obligations of the Company or any Subsidiary to repurchase,
redeem or otherwise acquire any Company Securities.
SECTION 4.06. Subsidiaries. (a) Each Subsidiary
that is actively engaged in any business or owns any
material assets (an "ACTIVE SUBSIDIARY") (i) is a
corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of
incorporation, (ii) except as set forth in Schedule 4.06,
has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to
carry on its business as now conducted and (iii) is duly
qualified to do business as a foreign corporation and is in
good standing in each jurisdiction where the character of
the property owned or leased by it or the nature of its
activities makes such qualification necessary, except in
each case to the extent the failure of this representation
and warranty to be true would not have a Material Adverse
Effect. For purposes of this Agreement, "SUBSIDIARY" means
any corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons
performing similar functions are directly or indirectly
owned by the Company. All Active Subsidiaries and their
respective jurisdictions of incorporation are either
identified in the Company's annual report on Form 10-K for
the fiscal year ended June 30, 1994 (the "COMPANY 10-K") or
in Schedule 4.06.
(b) Except to the extent the failure of the
representations and warranties set forth in this subsection
(b) would not have a Material Adverse Effect, and except
that the stock of the Active Subsidiaries is pledged under
the Loan Agreement set forth on Schedule 4.04 (the "Loan
Agreement"), which Loan Agreement restricts the sale of such
stock, all of the outstanding capital stock of, or other
ownership interests in, each Active Subsidiary, is owned by
the Company, directly or indirectly, free and clear of any
Lien and free of any other limitation or restriction
(including any restriction on the right to vote, sell or
otherwise dispose of such capital stock or other ownership
interests); there are no outstanding (i) securities of the
Company or any Subsidiary convertible into or exchangeable
for shares of capital stock or other voting securities or
ownership interests in any Subsidiary, or (ii) options or
other rights to acquire from the Company or any Subsidiary,
and no other obligation of the Company or any Subsidiary to
issue, any capital stock, voting securities or other
ownership interests in, or any securities convertible into
or exchangeable for any capital stock, voting securities or
ownership interests in, any Subsidiary (the items in clauses
(i) and (ii) being referred to collectively as the
"SUBSIDIARY SECURITIES"); and, there are no outstanding
obligations of the Company or any Subsidiary to repurchase,
redeem or otherwise acquire any outstanding Subsidiary
Securities.
SECTION 4.07. Investments. Except as disclosed
in Schedule 4.07 and except to the extent the failure of
this representation and warranty to be true would not have a
Material Adverse Effect, neither the Company nor any of its
Subsidiaries, directly or indirectly, owns any shares or has
any ownership interest in any other Person or is a partner
with any other Person.
SECTION 4.08. SEC Filings. (a) The Company has
delivered to Buyer (i) the annual reports on Form 10-K for
its fiscal years ended June 30, 1992, 1993 and 1994, (ii)
its quarterly reports on Form 10-Q for its fiscal quarters
ended September 30, 1994 and December 31, 1994 (such reports
are hereinafter referred to as the "COMPANY 10-QS"), (iii)
its proxy or information statements relating to meetings of,
or actions taken without a meeting by, the stockholders of
the Company held since October 25, 1994, and (iv) all of its
other reports, statements, schedules and registration
statements filed by the Company with the SEC since June 30,
1994. As used herein, the term "COMPANY SEC DOCUMENTS"
means, the annual report of the Company on Form 10-K for its
fiscal year ended June 30, 1994, the Company 10-Qs, the
proxy statement of the Company for the annual meeting of
shareholders on October 26, 1994 and the current reports of
the Company on Form 8-K dated February 25, 1995 and August
17, 1994 (as amended by the Form 8K/A dated October 12,
1994).
(b) As of its filing date, each such report or
statement filed pursuant to the Exchange Act did not contain
any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they
were made, not misleading.
(c) Each such registration statement, as amended
or supplemented, if applicable, filed pursuant to the
Securities Act of 1933 as of the date such statement or
amendment became effective did not contain any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading.
SECTION 4.09. Financial Statements. The audited
consolidated financial statements and unaudited consolidated
interim financial statements of the Company included in its
annual reports on Form 10-K and the Company Form 10-Qs
fairly present, in conformity with generally accepted
accounting principles applied on a consistent basis (except
as may be indicated in the notes thereto and, in the case of
the interim financial statements included in the Company
Form 10-Qs, except for the absence of certain footnotes that
would be required under GAAP), the consolidated financial
position of the Company and its consolidated subsidiaries as
of the dates thereof and their consolidated results of
operations and cash flows for the periods then ended
(subject to normal year-end adjustments in the case of any
unaudited interim financial statements). For purposes of
this Agreement, "BALANCE SHEET" means the consolidated
balance sheet of the Company as of December 31, 1994 set
forth in the Company 10-Q and "BALANCE SHEET DATE" means
December 31, 1994.
SECTION 4.10. Disclosure Documents. (a) Each
document required to be filed by the Company with the SEC in
connection with the transactions contemplated by this
Agreement (the "COMPANY DISCLOSURE DOCUMENTS"), including,
without limitation, the Schedule 14D-9 will, when filed,
comply as to form in all material respects with the
applicable requirements of all applicable law, including
without limitation, the Exchange Act.
(b) The information with respect to the Company
or any Subsidiary that the Company furnishes to Buyer in
writing specifically for use in the Offer Documents will
not, at the time of the filing thereof, at the time of any
distribution thereof and at the time of the consummation of
the Offer, 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 made
therein, in the light of the circumstances under which they
were made, not misleading.
SECTION 4.11. Absence of Certain Changes. Since
the Balance Sheet Date, and except as set forth in Schedule
4.11 or as contemplated by this Agreement, the Company and
Subsidiaries have conducted their business in the ordinary
course consistent with past practice and there has not been:
(a) any event, occurrence or facts which has had
or reasonably could be expected to have a Material
Adverse Effect;
(b) any declaration, setting aside or payment of
any dividend (other than regular quarterly dividends
not to exceed $.07 per Share per quarter) or other
distribution with respect to any shares of capital
stock of the Company, or any repurchase, redemption or
other acquisition by the Company or any Subsidiary of
any outstanding shares of capital stock or other
securities of, or other ownership interests in, the
Company or any Subsidiary;
(c) any amendment of any material term of any
outstanding security of the Company or any Subsidiary;
(d) any incurrence, assumption or guarantee by
the Company or any Subsidiary of any indebtedness for
borrowed money other than in the ordinary course of
business and in amounts and on terms consistent with
past practices;
(e) any creation or assumption by the Company or
any Subsidiary of any Lien on any asset other than in
the ordinary course of business consistent with past
practices and other than Liens which, individually or
in the aggregate, do not have and could not reasonably
be expected to have a Material Adverse Effect;
(f) any making of any loan, advance or capital
contributions to or investment in any Person other than
advances to employees in the ordinary course of
business consistent with past practice and loans,
advances or capital contributions to or investments in
wholly owned Subsidiaries made in the ordinary course
of business consistent with past practices;
(g) any damage, destruction or other casualty
loss (whether or not covered by insurance) affecting
the business or assets of the Company or any Subsidiary
which, individually or in the aggregate, has had or
could reasonably be expected to have a Material Adverse
Effect;
(h) any transaction or commitment made, or any
contract or agreement entered into, by the Company or
any Subsidiary relating to its assets or business
(including the acquisition or disposition of any
assets) or any relinquishment by the Company or any
Subsidiary of any contract or other right, in either
case, that, individually or in the aggregate, have had
or could reasonably be expected to have a Material
Adverse Effect, other than transactions and commitments
in the ordinary course of business consistent with past
practice and those contemplated by this Agreement;
(i) any material change in any method of
accounting or accounting practice by the Company or any
Subsidiary, except for any such change required by
reason of a concurrent change in generally accepted
accounting principles; or
(j) any (i) grant of any severance or termination
pay to any director, officer or employee of the Company
or any Subsidiary, (ii) entering into of any
employment, deferred compensation or other similar
agreement (or any amendment to any such existing
agreement) with any director, officer or employee of
the Company or any Subsidiary, (iii) increase in
benefits payable under any existing severance or
termination pay policies or employment agreements or
(iv) increase in compensation, bonus or other benefits
payable to directors, officers or employees of the
Company or any Subsidiary, in each case, other than in
the ordinary course of business consistent with past
practice.
SECTION 4.12. No Undisclosed Material
Liabilities. Except as set forth in Schedule 4.12, there
are no liabilities of the Company or any Subsidiary of any
kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, and there is no
existing condition or fact which could reasonably be
expected to result in such a liability, other than:
(a) liabilities disclosed or provided for in the
Balance Sheet;
(b) other liabilities the presence of which,
individually or in the aggregate, do not have and could not
reasonably be expected to have a Material Adverse Effect;
(c) liabilities incurred in the ordinary course
of business consistent with past practice since the Balance
Sheet Date; and
(d) liabilities under this Agreement or in
connection with this Agreement or disclosed hereunder.
SECTION 4.13. Litigation. Except as set forth in
the Company 10-K or in Schedule 4.13, there is no action,
suit, investigation or proceeding pending against, or to the
knowledge of the Company threatened against, the Company or
any Subsidiary or any of their respective properties before
any court or arbitrator or any governmental body, agency or
official which, if determined or resolved adversely to the
Company or any Subsidiary in accordance with the plaintiff's
demands, could reasonably be expected to have a Material
Adverse Effect.
SECTION 4.14. Taxes. (a) (i) all income and
other material Tax returns, statements, reports and forms
(including estimated Tax returns and reports and information
returns and reports) required to be filed with any taxing
authority with respect to any Pre-Closing Tax Period by or
on behalf of the Company or any subsidiary of the Company
(collectively, the "RETURNS") were filed when due (including
any applicable extension periods) in accordance with all
applicable laws; (ii) as of the time of filing, such Returns
correctly reflected in all material respects the facts
regarding the income, business, assets, operations,
activities and status of the Company, its Subsidiaries and
any other information required to be shown therein; (iii)
the Company and its Subsidiaries have timely paid, or
withheld and remitted to the appropriate taxing authority,
all Taxes shown as due and payable on the Returns that have
been filed; (iv) the charges, accruals and reserves for
taxes with respect to the Company and any Subsidiary for any
Pre-Closing Tax Period (including any Pre-Closing Tax Period
for which no Return has yet been filed) reflected on the
books of the Company and its Subsidiaries (excluding any
provision for deferred income taxes) are adequate (in
accordance with GAAP) to cover such Taxes; (v) neither the
Company nor any Subsidiary of the Company has been a member
of an affiliated group (as defined in Section 1504 of the
Internal Revenue Code of 1986, as amended (the "CODE"))
other than one of which the Company was the common parent,
or filed or been included in a combined, consolidated or
unitary Return other than one filed by the Company; (vi) the
Company is not and has not been within five years of the
date hereof a "United States real property holding
corporation" as defined in Section 897 of the Code;
(vii) neither the Company nor any Subsidiary owns (excluding
any leasehold interest) any interest in real property in the
State of New York; and (viii) there is no claim, action,
suit or proceeding now pending or threatened in writing
against or in respect of any Tax or "tax asset" of the
Company or any Subsidiary the resolution of which would as
proposed, or audit or investigation now pending or
threatened in writing against or in respect of any Tax or
"tax asset" of the Company or any Subsidiary the resolution
of which the Company believes would (taking into account any
changes, accruals and reserves referred to in clause (iv)
above), individually or in the aggregate, have a material
adverse effect on the financial position of the Company and
its Subsidiaries taken as a whole. (The term "TAX ASSET"
means any net operating loss, net capital loss, investment
tax credit, foreign tax credit, charitable deduction or any
other credit or tax attribute which could reduce Taxes).
(b) As used in this Section 4.14, "TAXES" mean
(i) all Federal, state, local and foreign income, franchise,
alternative or add-on minimum tax, gross receipts, transfer,
withholding on amounts paid to or by the Company or any of
its Subsidiaries, payroll, employment, license, property,
sales, use, excise and other taxes, tariffs or governmental
charges of any nature whatsoever, together with any
interest, penalty or additional tax attributable to such
taxes; (ii) liability of the Company or any Subsidiary for
the payment of any amounts of the type described in clause
(i) of this paragraph as a result of being a member of an
affiliated, consolidated, combined or unitary group, or
being a party to any agreement or arrangement whereby
liability of the Company or any Subsidiary for payments of
such amounts was determined or taken into account with
reference to the liability of any other person; and (iii)
liability of the Company or any Subsidiary for the payment
of any amounts as a result of being party to any tax sharing
agreement or with respect to the payment of any amounts of
the type described in clauses (i) or (ii) of this paragraph
as a result of any express or implied obligation to
indemnify any other person.
"PRE-CLOSING TAX PERIOD" means any Tax period (or
portion thereof) ending on or before the close of business
on the Closing Date.
SECTION 4.15. Employee Matters. (a) For
purposes of this Section, the following terms shall have the
meanings set forth below:
(A) "BENEFIT ARRANGEMENT" means any contract
(other than the Employee Agreements), arrangement or
policy, or any plan or arrangement (whether or not
written) providing for severance benefits, insurance
coverage (including any self-insured arrangements),
workers' compensation, disability benefits,
supplemental unemployment benefits, vacation benefits,
retirement benefits, deferred compensation,
profit-sharing, bonuses, stock options, stock
appreciation rights or other forms of incentive
compensation or post-retirement insurance, compensation
or benefits that (i) is not an Employee Plan, (ii) is
entered into or maintained, as the case may be, by the
Company or any of its affiliates and (iii) covers any
employee or former employee of the Company or any of
its Subsidiaries.
(B) "EMPLOYEE AGREEMENT" means all written
employment agreements and severance agreements with
employees of the Company or any of its Subsidiaries
(C) "EMPLOYEE PLAN" means any "employee benefit
plan", as defined in Section 3(3) of ERISA, that (i) is
subject to any provision of ERISA, (ii) is maintained,
administered or contributed to by the Company, any
Subsidiary or any of their ERISA Affiliates for
employees or former employees of the Company or any of
its Subsidiaries and (iii) covers any employee or
former employee of the Company or any of its
Subsidiaries.
(D) "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, and any successor
statute thereto, and the rules and regulations
promulgated thereunder.
(E) "ERISA AFFILIATE" of any entity means any
other entity which, together with such entity, would be
treated as a single employer under Section 4001(b)(1)
of ERISA.
(F) "MULTIEMPLOYER PLAN" means each Employee Plan
that is a multiemployer plan, as defined in Section
3(37) of ERISA.
(G) "TITLE IV PLAN" means an Employee Plan, other
than any Multiemployer Plan, subject to Title IV of
ERISA.
(b) Schedule 4.15 identifies each Employee Plan.
The Company has furnished or made available to Buyer copies
of the Employee Plans (and, if applicable, related trust
agreements) and all amendments thereto and written
interpretations thereof together with (i) the three most
recent annual reports prepared in connection with any
material Employee Plan (Form 5500 including, if applicable,
Schedule B thereto) and (ii) the most recent actuarial
valuation report prepared in connection with any Employee
Plan. No Employee Plan is (i) except as set forth in
Schedule 4.15, a Multiemployer Plan, (ii) a Title IV Plan or
(iii) maintained in connection with any trust described in
Section 501(c)(9) of the Code. Except for the Supplemental
Retirement and Death Benefit Agreements with the employees
or former employees of the Company or its Subsidiaries who
are identified on Schedule 4.15, no Employee Plan is a plan
described in Section 401(a)(1) of ERISA.
(c) With respect to each Employee Plan, except as
disclosed in Section 4.15: (i) no "prohibited transaction",
as defined in Section 406 of ERISA or Section 4975 of the
Code, has, to the knowledge of the officers of the Company,
occurred with respect to any Employee Plan, excluding
transactions effected pursuant to a statutory or
administrative exemption; (ii) neither (A) disputes in the
ordinary course of the operation of an Employee Plan that
might reasonably be expected to have a Material Adverse
Effect nor (B) disputes outside the ordinary course of the
operation of an Employee Plan, are pending, or to the
knowledge of the Company, threatened; and (iii) all
contributions required to be made to each Employee Plan as
of the date hereof (taking into account any extensions
permitted by the Code or the IRS) have been made in full.
(d) No liability under Title IV of ERISA has been
incurred by the Company or any ERISA Affiliate that has not
been satisfied in full and except as disclosed in Schedule
4.15, to the knowledge of officers of the Company, no
condition exists that presents a material risk to the
Company or its ERISA Affiliates of incurring any liability
to the PBGC, Department of Labor, or the plan participants.
No Employee Plan has incurred an accumulated funding
deficiency, as defined in Section 302 of ERISA or Section
312 of the Code, whether or not waived.
(e) If a "complete withdrawal" by the Company,
all its Subsidiaries and all of their ERISA Affiliates were
to occur as of the Closing Date with respect to all
Multiemployer Plans, to the knowledge of the officers of the
Company, based on information received by such officers as
of the date hereof, none of the Company, any of its
Subsidiaries nor any of their ERISA Affiliates would incur
any material withdrawal liability under Title IV of ERISA.
(f) Each Employee Plan that is intended to be
qualified under Section 401(a) of the Code has been
determined by the Internal Revenue Service to be so
qualified and no event has occurred since the date of such
determination that, to the knowledge of the officers of the
Company, would adversely affect such qualification, and each
trust created under any such Employee Plan has been
determined by the Internal Revenue Service to be exempt from
tax under Section 501(a) of the Code and no event has
occurred since the date of such determination that, to the
knowledge of the officers of the Company, would adversely
affect such exemption. The Company has provided Buyer with
the most recent determination letter of the Internal Revenue
Service relating to each such Employee Plan. Each Employee
Plan has been maintained in substantial compliance (to
include timely, complete and substantially correct filing of
Form 5500 and any attachments) with its terms and with the
requirements prescribed by any and all applicable statutes,
orders, rules and regulations, including but not limited to
ERISA and the Code. Except as disclosed on Schedule 4.15,
no Employee Plan is or has been audited or is or has been
under investigation by the Department of Labor or the
Internal Revenue Service.
(g) Schedule 4.15 identifies each material
Benefit Arrangement. The Company has furnished or made
available to Buyer copies or descriptions of each material
Benefit Arrangement. Each such Benefit Arrangement has been
maintained in substantial compliance with its terms and with
the requirements prescribed by any and all applicable
statutes, orders, rules and regulations.
(h) Schedule 4.15 identifies by name all Employee
Agreements in effect or committed to be put in effect as of
the date hereof and provides the following information with
respect to each Employee Agreement:
(1) 1995 compensation rate used in determining
change of control severance payment;
(2) 1994, 1993, and 1992 bonuses, if any, used to
calculate change of control severance
payment;
(3) Period used to calculate change of control
severance payment; and
(4) Good faith estimate of total severance
payment due each employee with an Employee
Agreement; provided that in no event will the
estimate have more than a 5% margin of error.
No changes have been made to any Employee Agreement on or
after January 1, 1995 and no new Employee Agreements will be
entered into by the Company after May 1, 1995 and before the
Effective Time, the effect of which is not disclosed on
Schedule 4.15.
(i) Except as disclosed on Schedule 4.15, neither
the Company nor any of its ERISA Affiliates has any current
or projected liability in respect of post-employment or
post-retirement health or medical or life insurance benefits
for retired or former employees of the Company, except as
required to avoid excise tax under Section 4980B of the
Code.
(j) Except as disclosed in Schedule 4.15, there
has been no amendment or announcement by the Company or any
of its ERISA Affiliates relating to, or change in benefits,
employee participation or coverage under, any Employee Plan
or Benefit Arrangement, that would increase materially the
expense of maintaining such Employee Plan or Benefit
Arrangement above the level of the expense incurred in
respect thereof for the fiscal year ended prior to the date
hereof.
(k) Except as set forth in Schedule 4.15, the
Company is not aware of any Employee Agreement or other
contract, agreement, plan or arrangement covering any
employee or former employee of the Company that,
individually or collectively, could give rise to the payment
of any amount that would not be deductible pursuant to the
terms of Section 280G of the Code.
(l) Except as disclosed in Schedule 4.15, no
excise tax under Section 4980B or other provision of the
Code has been incurred by the Company or an ERISA Affiliate
in respect of any Employee Plan.
(m) Schedule 4.15 lists by policy number and
issuer all corporate owned life insurance policies owned by
the Company or an ERISA Affiliate and with respect to each
such policy lists the (1) current cash surrender value, net
of any loan, (2) name of insured and (3) the face amount.
Each policy so identified is a life insurance contract
within the meaning of Code Section 7702.
(n) The Supplemental Retirement and Death Benefit
Agreements identified in Schedule 4.15 do not permit any
employee or former employee of the Company or an ERISA
Affiliate who is over age 65 to receive an undiscounted lump
sum payment of any installment payments due under said
agreements.
SECTION 4.16. Labor Matters. Except as set forth
in Schedule 4.16 and except to the extent the failure of
this representation and warranty to be true would not have a
Material Adverse Effect, (i) there are no controversies
pending or, to the best knowledge of the Company, threatened
between the Company or any Subsidiary and any of their
respective employees; and (ii) neither the Company nor any
Subsidiary is a party to any collective bargaining agreement
or other labor union contract applicable to persons employed
by the Company or any Subsidiary (any such agreement or
contract a "CBA"), nor, to the knowledge of the Company, are
there any activities or proceedings of any labor union to
organize any such employees. The Company has furnished or
made available, to Buyer true and complete copies of all
CBAs.
SECTION 4.17. Compliance with Laws. Except as
set forth in Schedule 4.17, neither the Company nor any
Subsidiary is in violation of, or has violated, any
applicable provisions of any laws, statutes, ordinances or
regulations except where such violations would not have a
Material Adverse Effect or a material adverse effect on the
reputation of the Company and any of its Subsidiaries taken
as a whole.
SECTION 4.18. Finders' Fees. Except for Wertheim
Schroder & Co. Inc., a true copy of whose engagement
agreement has been provided to Buyer, there is no investment
banker, broker, finder or other intermediary which has been
retained by or is authorized to act on behalf, of the
Company or any Subsidiary who would be entitled to any fee
or commission from the Company, any Subsidiary, Buyer or any
of its affiliates upon consummation of the transactions
contemplated by this Agreement.
SECTION 4.19. Environmental Matters. (a) Except
as set forth in the Company SEC Documents or in Schedule
4.19:
(i) since June 30, 1994, the Company has not
received any written communication from any person or entity
(including any Governmental Entity) stating that it or its
Subsidiaries may be a potentially responsible party under
Environmental Law (as defined in (c) below) with respect to
any actual or alleged environmental contamination; neither
the Company nor its Subsidiaries nor, to the Company's
knowledge, any Governmental Entity is conducting or has
conducted any environmental remediation or environmental
investigation which could reasonably be expected to result
in liability for the Company or its Subsidiaries under
Environmental Law; and the Company and its Subsidiaries have
not received any request for information under Environmental
Law from any Governmental Entity with respect to any actual
or alleged environmental contamination, except, in each
case, for communications, environmental remediation and
investigations and requests for information which would not,
individually or in the aggregate, have a Material Adverse
Effect;
(ii) since June 30, 1994, the Company and its
Subsidiaries have not received any written communication
from any person or entity (including any Governmental
Entity) stating or alleging that the Company or its
Subsidiaries may have violated any Environmental Law, or
that the Company or its Subsidiaries has caused or
contributed to any environmental contamination that has
caused any property damage or personal injury under
Environmental Law, except, in each case, for statements and
allegations of violations and statements and allegations of
responsibility for property damage and personal injury which
would not, individually or in the aggregate, have a Material
Adverse Effect;
(iii) all underground storage tanks ("UST'S") on
property currently owned or leased by the Company comply
with applicable Environmental Law, except for failures to
comply which would not, individually or in the aggregate,
have a Material Adverse Effect.
(iv) with respect to UST's other than those
covered by section 4.19(a)(iii), to the Company's knowledge,
all obligations for which the Company and its Subsidiaries
have retained liability either contractually or by operation
of law would not have a Material Adverse Effect; and
(v) to the Company's knowledge, the Company and
its Subsidiaries have no liabilities under Environmental Law
that, individually or in the aggregate, have had or may
reasonably be expected to result in a Material Adverse
Effect.
(b) (i) The Company has not knowingly withheld
from Buyer any material environmental investigation, study,
audit, test, review and other analysis in the possession of
the Company or its Subsidiaries conducted in relation to the
business of the Company or any property or facility now or
previously owned, operated or leased by the Company or any
Subsidiary; and (ii) the Company has not knowingly withheld
from Buyer any consent decree, consent order or similar
document in force and to which it is a party relating to any
property currently owned, leased or operated by the Company
or its Subsidiaries.
(c) For purposes of this Section 4.19,
"ENVIRONMENTAL LAW" means all applicable state, federal and
local laws, regulations and rules, including common law,
judgments, decrees and orders relating to pollution, the
preservation of the environment, and the release of material
into the environment.
SECTION 4.20. Property. The Company and the
Subsidiaries have good and marketable title to, or in the
case of leased property, have valid leasehold interests in
all properties and assets necessary to conduct the business
of the Company as currently conducted except to the extent
the failure of this representation and warranty to be true
would not have a Material Adverse Effect. There are no
developments affecting any of such properties or assets
pending or, to the knowledge of Seller threatened, which,
individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
SECTION 4.21. Trademarks. (a) The Company and
the Subsidiaries own or possess adequate licenses or other
valid rights to use all trademarks, trademark rights, trade
names and trade name rights which are material to the
Company's business and operations (collectively, "MATERIAL
TRADEMARKS") used or held for use in connection with the
business of the Company and the Subsidiaries as currently
conducted in all material respects. All Material Trademarks
are validly registered or registrations have been applied
for.
(b) The Company, except as set forth in Schedule
4.21, is unaware of any assertion or claim challenging the
validity of any Material Trademark. Except as set forth in
Schedule 4.21, the conduct of the business of the Company
and the Subsidiaries as currently conducted does not
conflict with any trademark, trademark right, trade name or
trade name right of any third party in a manner that could
reasonably be expected to have a Material Adverse Effect.
To the best knowledge of the Company, there are no material
infringements of any Material Trademarks.
SECTION 4.22. Material Contracts. (a) Except as
set forth in Schedule 4.22, the Company 10-K lists each
material contract or agreement (including, but not limited
to, all material leases, licensing agreements,
manufacturing, production or distribution contracts and any
material contracts or agreements pursuant to which the
Company or any Subsidiary has licensed intellectual property
to a third party) (collectively, the "MATERIAL CONTRACTS")
to which the Company or any of its Subsidiaries is a party.
(b) To the knowledge of the Company, each Material
Contract is in full force and effect and is enforceable in
all material respects against the parties thereto (other
than the Company and the Subsidiaries) in accordance with
its terms and no condition or state of facts exist that,
with notice or the passage or time, or both, would
constitute a material default by the Company or any
Subsidiary or, to the best knowledge of the Company, any
third party under any Material Contract.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF BUYER AND MERGER SUBSIDIARY
Buyer and Merger Subsidiary represent and warrant
to the Company that:
SECTION 5.01. Corporate Existence and Power.
Each of Buyer and Merger Subsidiary is a corporation duly
incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation. Since the
date of its incorporation, Merger Subsidiary has not engaged
in any activities other than in connection with or as
contemplated by this Agreement.
SECTION 5.02. Corporate Authorization. The
execution, delivery and performance by Buyer and Merger
Subsidiary of this Agreement and the consummation by Buyer
and Merger Subsidiary of the transactions contemplated
hereby are within the corporate powers of Buyer and Merger
Subsidiary and have been duly authorized by all necessary
corporate action. This Agreement, assuming due and valid
authorization, execution and delivery by the other parties
hereto, constitutes a valid and binding agreement of each of
Buyer and Merger Subsidiary except that (i) enforcement may
be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or
hereafter in effect, affecting creditors' rights generally,
and (ii) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
SECTION 5.03. Governmental Authorization. The
execution, delivery and performance by Buyer and Merger
Subsidiary of this Agreement and the consummation by Buyer
and Merger Subsidiary of the transactions contemplated by
this Agreement require no action by or in respect of, or
filing with, any governmental body, agency, official or
authority other than (i) the filing of a certificate of
merger in accordance with New York Law; (ii) compliance with
any applicable requirements of the HSR Act; (iii) compliance
with any applicable requirements of the Exchange Act; (iv)
compliance with any applicable requirements of ISRA; (v)
compliance with any applicable requirements of the Security
Takeover Disclosure Act; and (vi) compliance with any
applicable requirements of the Exon-Florio Provision.
SECTION 5.04. Non-Contravention. The execution,
delivery and performance by Buyer and Merger Subsidiary of
this Agreement and the consummation by Buyer and Merger
Subsidiary of the transactions contemplated hereby do not
and will not (i) contravene or conflict with the certificate
of incorporation or bylaws of Merger Subsidiary or the
charter documents of Buyer, (ii) assuming compliance with
the matters referred to in Section 5.03, contravene or
conflict with any provision of law, regulation, judgment,
order or decree binding upon Buyer or Merger Subsidiary, or
(iii) constitute a default under or give rise to any right
of termination, cancellation or acceleration of any right or
obligation of Buyer or Merger Subsidiary or to a loss of any
benefit to which Buyer or Merger Subsidiary is entitled
under any agreement, contract or other instrument binding
upon Buyer or Merger Subsidiary, except in the case of
clauses (ii) and (iii) as would not materially impair the
consummation of the Offer or the Merger.
SECTION 5.05. Disclosure Documents. (a) The
information with respect to Buyer and its subsidiaries and
Merger Subsidiary that Buyer and Merger Subsidiary furnish
to the Company in writing specifically for use in any
Company Disclosure Document will not contain, any untrue
statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were
made, not misleading (i) in the case of the Company Proxy
Statement at the time the Company Proxy Statement or any
amendment or supplement thereto is first mailed to
stockholders of the Company, at the time the stockholders
vote on adoption of this Agreement and at the Effective
Time, and (ii) in the case of any Company Disclosure
Document other than the Company Proxy Statement, at the time
of the filing thereof and at the time of any distribution
thereof.
(b) The SEC Offer Documents, when filed, will
comply as to form in all material respects with the
applicable requirements of the Exchange Act and the New York
Disclosure Documents, when filed, will comply as to form in
all material respects with the applicable requirements of
the New York Disclosure Act. The Offer Documents will not
at the time of the filing thereof, at the time of any
distribution thereof or at the time of consummation of the
Offer, contain any untrue statement of a material fact or
omit to state any material fact necessary to make the
statements made therein, in the light of the circumstances
under which they were made, not misleading; provided that
this representation and warranty will not apply to
statements or omissions in the Offer Documents based upon
information furnished to Buyer or Merger Subsidiary in
writing by the Company specifically for use therein.
SECTION 5.06. Finders' Fees. Except for Goldman,
Sachs & Co., whose fees will be paid by Buyer, there is no
investment banker, broker, finder or other intermediary who
might be entitled to any fee or commission from the Company
or any of its affiliates upon consummation of the
transactions contemplated by this Agreement.
SECTION 5.07. Financing. Buyer has or will have,
prior to the expiration of the Offer, sufficient funds
available to purchase all of the Shares outstanding on a
fully diluted basis and to pay all related fees and expenses
pursuant to the Offer and this Agreement.
SECTION 5.08. Share Ownership. As of the date
hereof, Buyer and Merger Subsidiary do not beneficially own
any Shares.
SECTION 5.09. Merger Subsidiary's Operations.
Merger Subsidiary was formed solely for the purpose of
engaging in the transactions contemplated hereby and has not
engaged in any business activities or conducted any
operations other than in connection with the transactions
contemplated hereby.
ARTICLE VI
COVENANTS OF THE COMPANY
The Company agrees that:
SECTION 6.01. Conduct of the Company. From the
date hereof until the Effective Time, the Company and the
Subsidiaries shall conduct their business in the ordinary
course consistent with past practice and shall use their
best efforts to preserve intact their business organizations
and relationships with third parties and to keep available
the services of their present officers and employees.
Without limiting the generality of the foregoing, from the
date hereof until the Effective Time:
(a) the Company will not adopt or propose any
change in its certificate of incorporation or bylaws;
(b) except for the Merger, the Company will not,
and will not permit any Subsidiary to, merge or
consolidate with any other Person or acquire a material
amount of assets of any other Person;
(c) the Company will not, and will not permit any
Subsidiary to, sell, lease, license or otherwise
dispose of any material assets or property except (i)
pursuant to existing contracts or commitments and (ii)
inventory in the ordinary course consistent with past
practice;
(d) the Company will not, and will not permit any
Subsidiary to, agree or commit to do any of the
foregoing; or
(e) the Company will not, and will not permit any
Subsidiary to, willfully and knowingly (i) take or
agree or commit to take any action that would make any
representation and warranty of the Company hereunder
inaccurate in any material respect at, or as of any
time prior to, the Effective Time or (ii) omit, or
agree or commit to omit, to take any action necessary
to prevent any such representation or warranty from
being inaccurate in any material respect at any such
time.
SECTION 6.02. Stockholder Meeting; Proxy
Material. The Company shall cause a meeting of its
stockholders (the "COMPANY STOCKHOLDER MEETING") to be duly
called and held as soon as reasonably practicable for the
purpose of voting on the approval and adoption of this
Agreement and the Merger unless a vote of stockholders of
the Company is not required by New York Law. The Directors
of the Company shall, subject to their fiduciary duties as
advised by counsel, recommend approval and adoption of this
Agreement and the Merger by the Company's stockholders. In
connection with such meeting, the Company (i) will promptly,
after the consummation of the Offer, prepare and file with
the SEC, will use its best efforts to have cleared by the
SEC and will thereafter mail to its stockholders as promptly
as practicable the Company Proxy Statement and all other
proxy materials for such meeting, (ii) will use its best
efforts to obtain the necessary approvals by its
stockholders of this Agreement and the transactions
contemplated hereby and (iii) will otherwise comply with all
legal requirements applicable to such meeting.
SECTION 6.03. Access to Information. From the
date hereof until the Effective Time, the Company will give
Buyer, its counsel, financial advisors, auditors and other
authorized representatives reasonable access during normal
business hours to the offices, properties, books and records
of the Company and the Subsidiaries, will furnish to Buyer,
its counsel, financial advisors, auditors and other
authorized representatives such financial and operating data
and other information as such Persons may reasonably request
and will instruct the Company's employees, counsel and
financial advisors to cooperate with Buyer in its
investigation of the business of the Company and the
Subsidiaries; provided that all requests for information, to
visit plants or facilities or to interview the Company's
employees or agents should be directed to and coordinated
with an executive officer of the Company or one of the five
general managers of the Company's operations; and provided
further that no investigation pursuant to this Section shall
affect any representation or warranty given by the Company
to Buyer hereunder and any information received by Buyer or
its representatives shall remain subject to the
Confidentiality Agreement dated December 1, 1994 between
Buyer and the Company (the "CONFIDENTIALITY AGREEMENT").
SECTION 6.04. Other Offers. From the date hereof
until the termination hereof, the Company and the
Subsidiaries and the officers, directors, employees or other
agents of the Company and the Subsidiaries will not,
directly or indirectly, (i) take any action to solicit,
initiate or encourage any Acquisition Proposal or (ii)
subject to the fiduciary duties of the Board of Directors
under applicable law as advised by counsel, engage in
negotiations with, or disclose any nonpublic information
relating to the Company or any Subsidiary or afford access
to the properties, books or records of the Company or any
Subsidiary to, any Person that may be considering making, or
has made, an Acquisition Proposal. The Company will
promptly notify Buyer after receipt of any Acquisition
Proposal or any indication that any Person is considering
making an Acquisition Proposal or any request for nonpublic
information relating to the Company or any Subsidiary or for
access to the properties, books or records of the Company or
any Subsidiary by any Person that may be considering making,
or has made, an Acquisition Proposal and will keep Buyer
fully informed of the status and details of any such
Acquisition Proposal, indication or request. For purposes
of this Agreement, "ACQUISITION PROPOSAL" means any offer or
proposal for, or any indication of interest in, a merger or
other business combination involving the Company or any
Subsidiary or the acquisition of any equity interest in, or
a substantial portion of the assets of, the Company or any
Subsidiary, other than the transactions contemplated by this
Agreement. Furthermore, nothing contained in this Section
6.04 shall prohibit the Company or its Board of Directors
from taking and disclosing to the Company's shareholders a
position with respect to a tender or exchange offer by a
third party pursuant to Rules 14d-9 and 14e-2(a) promulgated
under the Exchange Act or from making such disclosure to the
Company's shareholders or otherwise which, in the judgment
of the Board of Directors with the advice of independent
legal counsel, may be required under applicable law or rules
of any stock exchange.
SECTION 6.05. Notices of Certain Events. The
Company shall promptly notify Buyer of:
(i) any notice or other communication from any
Person alleging that the consent of such Person is or
may be required in connection with the transactions
contemplated by this Agreement;
(ii) any notice or other communication from any
governmental or regulatory agency or authority in
connection with the transactions contemplated by this
Agreement; and
(iii) any actions, suits, claims, investigations or
proceedings commenced or, to the best of its knowledge
threatened against, relating to or involving or
otherwise affecting the Company or any Subsidiary
which, if pending on the date of this Agreement, would
have been required to have been disclosed pursuant to
Section 4.13 or which relate to the consummation of the
transactions contemplated by this Agreement.
SECTION 6.06. Amendment of Rights Agreement. The
Company agrees that promptly after the date hereof, and in
any event within five days of the date hereof, it will
amend, to the extent necessary, its Amended and Restated
Shareholder Rights Agreement, dated as of August 7, 1992,
between the Company and the Bank of New York, as Rights
Agent (the "RIGHTS AGREEMENT"), to permit the commencement
and closing of the Offer and the consummation of the Merger
without any such event or the passage of time resulting in
the occurrence of the Distribution Date (as defined in the
Rights Agreement), and upon the written request of Buyer,
will redeem, in accordance with the terms of the Rights
Agreement all outstanding rights issued pursuant to the
Rights Agreement (the "RIGHTS") at a redemption price of
$.01 per Right. Except as set forth above, the Company
shall not redeem the Rights other than in connection with a
merger, consolidation, business combination, acquisition of
Shares or sale of assets or similar transaction that a
majority of the Board of Directors of the Company (excluding
directors who are designees of the Buyer or who are
employees of the Company) determines in the exercise of its
fiduciary responsibilities is more favorable to the
Company's stockholders than the transactions contemplated
hereby.
SECTION 6.07. Conveyance Taxes. The Company
shall timely pay any real property transfer or gains, sales,
use, transfer, value added, stock transfer and stamp taxes,
any transfer, recording, registration and other fees, and
any similar taxes which become payable prior to the
Effective Time in connection with the transactions
contemplated hereunder that are required to be paid in
connection therewith.
ARTICLE VII
COVENANTS OF BUYER
Buyer agrees that:
SECTION 7.01. Obligations of Merger Subsidiary.
Buyer will take all action necessary to cause Merger
Subsidiary to perform its obligations under this Agreement
and to consummate the Merger on the terms and conditions set
forth in this Agreement.
SECTION 7.02. Voting of Shares. Buyer agrees to
vote all Shares beneficially owned by it or by its
Subsidiaries in favor of adoption of this Agreement at the
Company Stockholder Meeting.
SECTION 7.03. Director and Officer Liability.
For six years after the Effective Time, Buyer will, and will
cause the Surviving Corporation to, (i) indemnify and hold
harmless the present and former officers, directors,
employees and agents of the Company in respect of acts or
omissions occurring prior to the Effective Time (including,
without limitation, in respect of acts or omissions in
connection with this Agreement and the transactions
contemplated hereby) and (ii) advance to such Persons
expenses incurred in defending any action or suit with
respect to such matters, in each case to the extent such
Persons are entitled to indemnification or advancement of
expenses under the Company's or any Subsidiary's certificate
of incorporation and bylaws in effect on the date hereof and
subject to the terms of such certificates of incorporation
and bylaws. In the event any claim or claims are asserted
or made within such six year period, all rights to
indemnification in respect of any such claim or claims shall
continue until disposition of any and all such claims.
Buyer and the Company agree that all rights to
indemnification and all limitations on liability existing in
favor of any such officer, director, employee or agent as
provided in the Company's Certificate of Incorporation and
By-laws as in effect as of the date hereof shall survive the
Merger and shall continue in full force and effect. Any
determination required to be made with respect to whether
any of the foregoing Persons is entitled to indemnification
as set forth above shall be made by independent legal
counsel selected mutually by such Person and Buyer. For six
years after the Effective Time, Buyer will cause the
Surviving Corporation to use its best efforts to provide
officers' and directors' liability insurance in respect of
acts or omissions occurring prior to the Effective Time
covering each such Person currently covered by the Company's
officers' and directors' liability insurance policy on terms
with respect to coverage and amount no less favorable than
those of such policy in effect on the date hereof; provided
that in satisfying its obligation under this Section, Buyer
shall not be obligated to cause the Surviving Corporation to
pay premiums in excess of $400,000 per annum; provided
further that if the premiums would exceed $400,000 in a
given year, the Surviving Corporation shall use its best
efforts to purchase coverage that in the opinion of the
Surviving Corporation is the best available for $400,000 per
year. Buyer shall cause the Surviving Corporation to
continue to indemnify in accordance with the Company's past
practices each of the employees listed on Schedule 7.03 in
respect of the lawsuit set forth opposite such employee's
name on Schedule 7.03.
ARTICLE VIII
COVENANTS OF BUYER
AND THE COMPANY
The parties hereto agree that:
SECTION 8.01. Best Efforts. Subject to the terms
and conditions of this Agreement, each party will use its
best efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement;
provided that Buyer and its affiliates shall not be required
to agree to any consent decree or order in connection with
any objections of the Department of Justice or Federal Trade
Commission (each an "HSR AUTHORITY") to the transactions
contemplated by this Agreement or in connection with any
objections of any governmental authority in respect of the
Exon-Florio Provision to the transactions contemplated by
this Agreement.
SECTION 8.02. Certain Filings. The Company and
Buyer shall cooperate with one another (a) in connection
with the preparation of the Company Disclosure Documents and
the Offer Documents, and (b) in determining whether any
action by or in respect of, or filing with, any governmental
body, agency or official, or authority is required, or any
actions, consents, approvals or waivers are required to be
obtained from parties to any material contracts, in
connection with the consummation of the transactions
contemplated by this Agreement and (c) in seeking any such
actions, consents, approvals or waivers or making any such
filings, furnishing information required in connection
therewith or with the Company Disclosure Documents or the
Offer Documents and seeking timely to obtain any such
actions, consents, approvals or waivers.
SECTION 8.03. Public Announcements. Buyer and
the Company will consult with each other before issuing any
press release or making any public statement with respect to
this Agreement and the transactions contemplated hereby and,
except as may be required by applicable law or any listing
agreement with any national securities exchange or foreign
securities exchange, will not issue any such press release
or make any such public statement prior to such
consultation.
SECTION 8.04. Conveyance Taxes. Buyer and the
Company shall cooperate in the preparation, execution and
filing of all returns, questionnaires, applications, or
other documents regarding any real property transfer or
gains, sales, use, transfer, value added, stock transfer and
stamp taxes, any transfer, recording, registration and other
fees, and any similar taxes which become payable in
connection with the transactions contemplated hereunder that
are required or permitted to be filed on or before the
Effective Time.
SECTION 8.05. Further Assurances. At and after
the Effective Time, the officers and directors of the
Surviving Corporation will be authorized to execute and
deliver, in the name and on behalf of the Company or Merger
Subsidiary, any deeds, bills of sale, assignments or
assurances and to take and do, in the name and on behalf of
the Company or Merger Subsidiary, any other actions and
things to vest, perfect or confirm of record or otherwise in
the Surviving Corporation any and all right, title and
interest in, to and under any of the rights, properties or
assets of the Company acquired or to be acquired by the
Surviving Corporation as a result of, or in connection with,
the Merger.
SECTION 8.06. Employee Matters. (a) Except as
provided in (c), Buyer and Merger Subsidiary agree that,
effective as of the Effective Time and for a six month
period following the Effective Time, the Surviving
Corporation and its Subsidiaries and successors shall
continue for those persons who, immediately prior to the
Effective Time, were employees of the Company or its
Subsidiaries ("RETAINED EMPLOYEES") the Employee Plans and
material Benefit Arrangements or provide benefits that are
not less favorable in the aggregate to such Employee Plans
and Benefit Arrangements. With respect to such benefits,
service accrued by such Retained Employees during employment
with the Company and its Subsidiaries prior to the Effective
Time shall be recognized to the extent and for the purposes
such service was recognized prior to the Effective Time by
the applicable Employee Plan or Benefit Arrangements.
Nothing contained in the foregoing is intended to preclude
the Surviving Corporation from terminating the employment of
any Retained Employee after the Effective Time. Further,
none of Buyer, the Merger Subsidiary or the Surviving
Corporation shall be required to recognize service with the
Company or its Subsidiaries prior to the Effective Time
after the end of such six month period except as required by
law; provided that with respect to Retained Employees who
are participants in a nonunion Employee Plan, the Buyer and
the Merger Subsidiary agree to cause its nonunion employee
benefit plans ("BENEFIT PLANS") to recognize, for purposes
of vesting and eligibility to participate only, service
which is recognized for such purposes by the comparable
Employee Plan with respect to Retained Employees who
otherwise become eligible to participate in a Benefit Plan.
(b) Buyer and Merger Subsidiary agree to honor,
and cause the Surviving Corporation to honor, without
modification, the Employee Agreements on the same terms as
disclosed in Schedule 4.15 hereof (whether or not executed
as of the date hereof), and all Supplemental Retirement and
Death Benefit Agreements, as amended through December 31,
1994, between the Company and certain officers
(collectively, "Retirement Agreements") which Employee
Agreements and Retirement Agreements are listed on Schedule
4.15 hereto. Buyer and Merger Subsidiary acknowledge that
the consummation of the Offer shall constitute a "change in
control" for purposes of the Employee Agreements and
Retirement Agreements.
(c) For the fiscal year of the Company ending
June 30, 1995, the Company shall determine the bonus pools
for the short term bonus arrangements of the Company using
the same objective criteria that were used to determine such
bonus pools for the fiscal year of the Company ended June
30, 1994. The Buyer shall, to the extent said bonus
arrangements call for a discretionary allocation of the
bonus pool, allocate the entire bonus pool and consult with
Messrs. Banks, Frank, and Keane to ascertain their views
with respect to the appropriate allocation of said bonus
pool.
(d) As of the Effective Time, all participants in
the Company's Employee Stock Ownership and Savings Plan
("ESOP") shall become fully vested in their account balances
under the ESOP. Buyer and Merger Subsidiary acknowledge
that, prior to the consummation of the Offer, the Company
may make such contribution to the ESOP as may be necessary
to permit the ESOP to repay any remaining debt of the ESOP
and may allocate, as of the Effective Time (as if the
Effective Time were the last day of the ESOP's plan year),
the remainder of its Shares to the ESOP accounts of ESOP
participants in accordance with the provisions of the ESOP,
Buyer and Merger Subsidiary agree that the Company may cause
the ESOP to be terminated as of the Effective Time and may
take such steps as may be necessary (including amending the
ESOP and its related trust) to cause the trustee of the ESOP
to offer each ESOP participant the opportunity to receive
his or her account balance under the ESOP in a lump sum
distribution as soon as practicable after the date the
amounts described herein have been allocated or to have such
account balance transferred to an individual retirement
account.
(e) Buyer and Merger Subsidiary agree to honor,
and cause the Surviving Corporation to honor, without
modification, for such directors and/or former directors and
in such amounts as are set forth in Schedule 4.15, the
Company's Non-Employee Director Fee Continuation Plan and
the individual fee continuation agreement set forth on such
Schedule 4.15, which provides certain benefits to non-
employee directors, and agrees and acknowledges that
consummation of the Offer shall constitute a "Change in
Control" for purposes of such Plan.
(f) In the event Buyer or Merger Subsidiary or
the Surviving Corporation or any of their successors or
assigns (i) consolidates with or merges into any other
person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger, or
(ii) transfers or conveys all substantially all of its
properties and assets to any person, then, and in each such
case, to the extent necessary to effectuate the purposes of
this Section 8.05, proper provision shall be made so that
the successors and assigns of Buyer, Merger Subsidiary or
the Surviving Corporation, as the case may be, assume the
obligations set forth in this Section 8.05 and none of the
actions described in clauses (i) and (ii) shall be taken
until such provision is made.
ARTICLE IX
CONDITIONS TO THE MERGER
SECTION 9.01. Conditions to the Obligations of
Each Party. The obligations of the Company, Buyer and
Merger Subsidiary to consummate the Merger are subject to
the satisfaction of the following conditions:
(i) if required by New York Law, this Agreement
shall have been adopted by the stockholders of the
Company in accordance with such Law;
(ii) any applicable waiting period under the HSR
Act relating to the Merger shall have expired;
(iii) no provision of any applicable law or
regulation and no judgment, injunction, order or decree
shall prohibit the consummation of the Merger;
(iv) Buyer shall have purchased Shares pursuant to
the Offer;
(v) any applicable waiting period under the Exon-
Florio Provision relating to the Merger shall have
expired; and
(vi) Buyer shall have received or be reasonably
satisfied that it will receive all consents and
approvals contemplated by Section 4.04 or other
material consents necessary in connection with the
consummation of the Merger or to enable the Surviving
Corporation to continue to carry on the business of the
Company and the Subsidiaries as presently conducted in
all material respects.
ARTICLE X
TERMINATION
SECTION 10.01. Termination. This Agreement may
be terminated and the Merger may be abandoned at any time
prior to the Effective Time (notwithstanding any approval of
this Agreement by the stockholders of the Company):
(i) by mutual written consent of the Company and
Buyer;
(ii) by either the Company or Buyer if the Offer
has not been consummated by August 31, 1995 (as such
date may be extended pursuant to the proviso to this
sentence, the "OUTSIDE TERMINATION DATE"); provided
that if an HSR Authority shall have requested
additional information from any of the parties hereto
or any of their affiliates pursuant to 15 U.S.C.
SECTION 18a(e)(1) or the rules and regulations thereunder on
or prior to August 31, 1995, Buyer may elect to change
the Outside Termination Date to a date not later than
October 31, 1995 if this Agreement has not been
terminated by the Company pursuant to the terms of this
Agreement prior to the date of such election; provided,
however, that the right to terminate this Agreement
under this paragraph shall not be available to any
party whose failure to fulfill any obligation under
this Agreement has been the cause of, or resulted in,
the failure to meet the date requirements of this
paragraph;
(iii) by either the Company or Buyer, if there
shall be any law or regulation that makes consummation
of the Merger illegal or if any judgment, injunction,
order or decree enjoining Buyer or the Company from
consummating the Merger is entered and such judgment,
injunction, order or decree shall become final and
nonappealable;
(iv) by Buyer, upon the occurrence of any Trigger
Event described in Section 11.04(b);
(v) by the Company, upon the occurrence of the
Trigger Event described in clause (i) or (ii) of
Section 11.04(b);
(vi) by the Company if Buyer or Merger Subsidiary
breaches or fails in any material respect to perform or
comply with any of its material covenants and
agreements contained herein or breaches its
representations and warranties in any material respect;
or
(vii) by Buyer, if Buyer shall have received any
communication from an HSR Authority (which
communication shall be confirmed to the other parties
by the HSR Authority) that causes such party to
reasonably believe that any HSR Authority has
authorized the institution of litigation challenging
the transactions contemplated by this Agreement under
the U.S. antitrust laws, which litigation will include
a motion seeking an order or injunction prohibiting the
consummation of any of the transactions contemplated by
this Agreement.
The party desiring to terminate this Agreement pursuant to
clauses (ii), (iii), (iv), (v), (vi) or (vii) shall give
written notice of such termination to the other party.
SECTION 10.02. Effect of Termination. If this
Agreement is terminated pursuant to Section 10.01, this
Agreement shall become void and of no effect with no
liability on the part of any party hereto, except that the
agreements contained in Section 11.04 and the
Confidentiality Agreement shall survive the termination
hereof.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices. All notices, requests
and other communications to any party hereunder shall be in
writing (including telecopy or similar writing) and shall be
given,
if to Buyer or Merger Subsidiary, to:
Imperial Chemical Industries PLC
9 Millbank
London SW1P 3JF
England
Telecopy: (071) 798-5878
Attention: Company Secretary
with a copy to:
Paul R. Kingsley, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopy: (212) 450-4800
if to the Company, to:
Grow Group, Inc.
Metropolitan Life Building
200 Park Avenue
New York, NY 10166
Telecopy: (212) 286-0940
Attention: Mr. Russell Banks, President and
Chief Executive Officer
with a copy to:
Parker Chapin Flattau & Klimpl
1211 Avenue of the Americas
New York, New York 10036
Telecopy: (212) 704-6288
Attention: Lloyd Frank, Esq.
and a copy to:
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Telecopy: (212) 735-2000
Attention: Daniel E. Stoller, Esq.
or such other address or telecopy number as such party may
hereafter specify for the purpose by notice to the other
parties hereto. Each such notice, request or other
communication shall be effective (i) if given by telecopy,
when such telecopy is transmitted to the telecopy number
specified in this Section and the appropriate telecopy
confirmation is received or (ii) if given by any other
means, when delivered at the address specified in this
Section.
SECTION 11.02. Survival of Representations and
Warranties. The representations and warranties contained
herein and in any certificate or other writing delivered
pursuant hereto shall not survive the Effective Time or the
termination of this Agreement. All covenants and agreements
contained herein which by their terms are to be performed in
whole or in part subsequent to the Effective Time shall
survive the Merger in accordance with their terms. Nothing
contained in this Section 11.02 shall relieve any party from
liability for any willful breach of this Agreement.
SECTION 11.03. Amendments; No Waivers. (a) Any
provision of this Agreement may be amended or waived prior
to the Effective Time if, and only if, such amendment or
waiver is in writing and signed, in the case of an
amendment, by the Company, Buyer and Merger Subsidiary or in
the case of a waiver, by the party against whom the waiver
is to be effective; provided that after the adoption of this
Agreement by the stockholders of the Company, no such
amendment or waiver shall, without the further approval of
such stockholders, alter or change (i) the amount or kind of
consideration to be received in exchange for any shares of
capital stock of the Company or (ii) any of the terms or
conditions of this Agreement if such alteration or change
could adversely affect the holders of any shares of capital
stock of the Company.
(b) No failure or delay by any party in
exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 11.04. Expenses. (a) Except as
otherwise provided in this Section, all costs and expenses
incurred in connection with this Agreement shall be paid by
the party incurring such cost or expense.
(b) The Company agrees to pay Buyer in respect of
its expenses an amount in immediately available funds equal
to $8,000,000 promptly, but in no event later than two
business days, after the occurrence of any of the events set
forth below (a "TRIGGER EVENT"):
(i) the Company shall have entered into, or
shall have publicly announced its intention to
enter into, an agreement or an agreement in
principle with respect to any Acquisition Proposal
other than the transactions contemplated by this
Agreement;
(ii) the Board of Directors of the Company
shall have withdrawn or materially modified its
approval or recommendation of the Offer or this
Agreement other than as a result of Buyer's breach
of this Agreement; or
(iii) any person or group (as defined in Section
13(d)(3) of the Exchange Act) (other than Buyer or any
of its affiliates) shall have become the beneficial
owner (as defined in Rule 13d-3 promulgated under the
Exchange Act) of at least 25% of any class or series of
capital stock of the Company (including the Shares), or
shall have acquired, directly or indirectly, at least
25% of the assets of the Company other than
acquisitions of securities for bona fide arbitrage
purposes only and other than Corimon or its affiliates;
or Corimon and its affiliates shall beneficially own
more than 28% of the Shares.
SECTION 11.05. Successors and Assigns. The
provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns, provided that no party may assign,
delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of the
other parties hereto except that Buyer may transfer or
assign, in whole or from time to time in part, to one or
more of its direct or indirect wholly owned subsidiaries,
the right to purchase Shares pursuant to the Offer, but any
such transfer or assignment will not relieve Buyer of its
obligations under the Offer or prejudice the rights of
tendering stockholders to receive payment for Shares validly
tendered and accepted for payment pursuant to the Offer.
SECTION 11.06. Governing Law. This Agreement
shall be construed in accordance with and governed by the
law of the State of New York without regard to conflicts of
laws.
SECTION 11.07. Severability. If any term or
other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the
transactions contemplated herein is not affected in any
manner materially adverse to any party hereto. Upon such
determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as
possible in a mutually acceptable manner.
SECTION 11.08. Third Party Beneficiaries. No
provision of this Agreement other than Sections 7.03 and
8.05 is intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder.
SECTION 11.09. Entire Agreement. This Agreement,
including any exhibits or schedules hereto and the
Confidentiality Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter
hereof and supersede all other prior agreements or
undertaking with respect thereto, both written and oral.
SECTION 11.10. Counterparts; Effectiveness. This
Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each
party hereto shall have received counterparts hereof signed
by all of the other parties hereto.
SECTION 11.11. Jurisdiction. Any legal action or
proceeding with respect to this Agreement or any matters
arising out of or in connection with this Agreement, and any
action for enforcement of any judgment in respect thereof
shall be brought exclusively in the courts of the State of
New York or of the United States of America for the Southern
District of New York, and, by execution and delivery of this
Agreement, the Company, Buyer and Merger Subsidiary each
hereby accepts for itself and in respect of its property,
generally and unconditionally, the exclusive jurisdiction of
the aforesaid courts and appellate courts thereof. The
Company, Buyer and Merger Subsidiary irrevocably consent to
service of process out of any of the aforementioned courts
in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, or
by recognized international express carrier or delivery
service, to the Company, Buyer or Merger Subsidiary at their
respective addresses referred to in Section 11.01 hereof.
In addition, each of Buyer and Merger Subsidiary hereby
designates ICI American Holdings Inc. ("AGENT"), Olympic
Towers, 645 Fifth Avenue, 12th Floor, New York, New York
10022 as its respective agent for service of process, and
service upon Buyer or Merger Subsidiary shall be deemed to
be effective upon service of Agent as aforesaid or of its
successor designated in accordance with the following
sentence. If Agent changes its address, Buyer will provide
the Company with not less than 30 days advance notice of
such change. Buyer and Merger Subsidiary shall maintain an
agent for service of process in the Borough of Manhattan.
Buyer or Merger subsidiary may designate another corporate
agent or law firm reasonably acceptable to the Company and
located in the Borough of Manhattan, in the City of New
York, as successor agent for service of process upon 30-days
prior written notice to the Company. The Company, Buyer and
Merger Subsidiary each hereby irrevocably waives any
objection which it may now or hereafter have to the laying
of venue of any of the aforesaid actions or proceedings
arising out of or in connection with this Agreement or
otherwise brought in the courts referred to above and hereby
further irrevocably waives and agrees, to the extent
permitted by applicable law, not to plead or claim in any
such court that any such action or proceedings brought in
any such court has been brought in an inconvenient forum.
Nothing herein shall affect the right of any party hereto to
serve process in any other manner permitted by law.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective
authorized officers as of the day and year first above
written.
GROW GROUP, INC.
By: s/Russell Banks
Name: Russell Banks
Title: President
IMPERIAL CHEMICAL INDUSTRIES PLC
By: s/John Thompson
Name: John Thompson
Title: Attorney-in-Fact
GDEN CORPORATION
By: s/John Danzeisen
Name: John Danzeisen
Title: Attorney-in-Fact
ANNEX I
CONDITIONS TO THE OFFER
Notwithstanding any other provisions of the Offer,
and in addition to (and not in limitation of) Buyer's rights
to extend and amend the Offer at any time in its sole
discretion (subject to the provisions of the Merger
Agreement), Buyer shall not be required to accept for
payment or, subject to any applicable rules and regulations
of the SEC, including Rule 14e-1(c) under the Exchange Act
(relating to the Buyer's obligation to pay for or return
tendered Shares promptly after termination or withdrawal of
the Offer), pay for, and may delay the acceptance for
payment of or, subject to the restriction referred to above,
the payment for, any tendered Shares, and may terminate the
Offer if (i) any applicable waiting period under the HSR Act
or Exon-Florio Provision has not expired or terminated prior
to the expiration of the Offer, (ii) the Minimum Condition
has not been satisfied, (iii) the Rights under the Rights
Agreement shall have become exercisable, or (iv) at any time
on or after April 30, 1995 and before the time of acceptance
of Shares for payment pursuant to the Offer, any of the
following conditions shall exist:
(a) there shall be instituted and pending by
any domestic or foreign federal or state governmental
regulatory or administrative agency or authority or court or
legislative body or commission ("Governmental Entity") (or
the staff of any HSR Authority shall have recommended the
commencement of) any action or proceeding which (1) seeks to
prohibit, or impose any material limitations on, Buyer's or
Merger Subsidiary's ownership or operation of all or a
material portion of the businesses or assets of the Company
and its Subsidiaries, taken as a whole, or to compel Buyer
or any of its subsidiaries or affiliates to dispose of or
hold separate all or any material portion of the business or
assets of the Company and its Subsidiaries, taken as a
whole, or of Buyer or its subsidiaries, (2) seeks to
prohibit, or make illegal, the acceptance for payment,
payment for or purchase of Shares or the consummation of the
Offer or the Merger, (3) challenges or seeks to make
illegal, to delay materially or to restrain or prohibit, the
making of the Offer, or seeks to restrain or limit the
ability of Buyer, or renders Buyer unable, to accept for
payment, pay for or purchase some or all of the Shares, or
to consummate the Merger, or seeks material damages relating
to the transactions contemplated by the Offer or the Merger
or (4) imposes material limitations on the ability of Merger
Subsidiary or Buyer effectively to exercise full rights of
ownership of the Shares, including without limitation, the
right to vote the Shares purchased by it on all matters
properly presented to the Company's shareholders;
(b) there shall have been any action taken,
or any statute, rule, regulation, judgment, order or
injunction promulgated, entered, enforced, enacted, issued
or applicable to the Offer or the Merger by any Governmental
Entity that results in any of the consequences referred to
in clauses (1) through (4) of paragraph (a) above;
(c) unless the Shares properly tendered
constitute not less than two-thirds of the outstanding
Shares on a fully diluted basis, any event or action shall
have occurred that shall materially impair, restrain or
prohibit or to materially delay the acquisition by Buyer of
the Corimon Shares in accordance with the terms of the
Corimon Option Agreement;
(d) the representations and warranties of
the Company set forth in the Merger Agreement (without
giving effect to any qualification as to materiality or
Material Adverse Effect contained therein) shall not be true
and correct as of the date of consummation of the Offer as
though made on or as of such date or the Company shall have
breached or failed to perform or comply with any obligation,
agreement or covenant required by the Merger Agreement to be
performed or complied with by it except, in each case, (i)
for changes specifically permitted by the Merger Agreement
and (ii) (A) those representations and warranties that
address matters only as of a particular date which are true
and correct as of such date or (B) where the failure of such
representations and warranties to be true and correct, or
the performance or compliance with such obligations,
agreements or covenants, individually or in the aggregate,
do not have, and could not reasonably be expected to have, a
Material Adverse Effect or a material adverse effect on the
ability of Buyer to consummate the Offer or the Merger;
(e) the Merger Agreement shall have been
terminated in accordance with its terms;
(f) any person, entity or "group" (as
defined in Section 13(d)(3) of the Exchange Act), shall have
acquired beneficial ownership (determined pursuant to Rule
13d-3 promulgated under the Exchange Act) of more than 25%
of any class or series of capital stock of the Company
(including the Shares), through the acquisition of stock,
the formation of a group or otherwise, other than Corimon or
its affiliates; or Corimon and its affiliates shall have
acquired beneficial ownership of more than 28% of the
outstanding Shares or (ii) the Company shall have entered
into a definitive agreement or agreement in principle with
any person with respect to an Acquisition Proposal or
similar business combination with the Company;
(g) the Company's Board of Directors shall
have withdrawn, or modified or changed in a manner adverse
to Buyer or Merger Subsidiary (including by amendment of the
Schedule 14D-9) its recommendation of the Offer, the Merger
Agreement, or the Merger, or recommended another proposal or
offer, or shall have resolved to do any of the foregoing; or
(h) Buyer shall not have received and shall
not be satisfied that it will receive the consents and
approvals required under ISRA or the Credit Agreement in
connection with the consummation of the Offer or the Merger;
which in the sole judgment of Buyer or Merger Subsidiary, in
any such case, and regardless of the circumstances giving
rise to such condition, makes it inadvisable to proceed with
the Offer and/or with such acceptance for payment or
payments.
The foregoing conditions are for the sole benefit
of Merger Subsidiary and Buyer and may be waived by Buyer or
Merger Subsidiary, in whole or in part at any time and from
time to time in the sole discretion of Buyer or Merger
Subsidiary. The failure by Buyer at any time to exercise
any of the foregoing rights shall not be deemed a waiver of
any such right; the waiver of any such right with respect to
particular facts and other circumstances shall not be deemed
a waiver with respect to any other facts and circumstances;
and each such right shall be deemed an ongoing right that
may be asserted at any time and from time to time.