EXHIBIT 2.1
EXECUTION COPY
================================================================================
AGREEMENT AND PLAN OF MERGER
Dated as of January 9, 2006
between
THE HOME DEPOT, INC.,
and
HUGHES SUPPLY, INC.
================================================================================
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TABLE OF CONTENTS
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PAGE
ARTICLE I
THE
MERGER........................................................................2
Section 1.1
The
Merger...............................................................2
Section 1.2
Closing..................................................................2
Section 1.3
Effective
Time...........................................................2
Section 1.4
Effects of the
Merger....................................................3
Section 1.5
Articles of Incorporation and By-laws of the Surviving
Corporation.......3
Section 1.6
Directors and Officers of the Surviving
Corporation......................3
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF
CERTIFICATES; COMPANY STOCK
OPTIONS...............................................3
Section 2.1
Effect on Capital
Stock..................................................3
Section 2.2
Exchange of
Certificates.................................................4
Section 2.3
Company Stock
Awards.....................................................6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.....................................7
Section 3.1
Organization, Standing and Corporate
Power...............................7
Section 3.2
Capitalization...........................................................9
Section 3.3
Authority; Noncontravention; Voting
Requirements........................10
Section 3.4
Governmental
Approvals..................................................12
Section 3.5
Company SEC Documents; Undisclosed
Liabilities..........................12
Section 3.6
Absence of Certain
Changes..............................................14
Section 3.7
Legal
Proceedings.......................................................14
Section 3.8
Compliance With Laws;
Permits...........................................14
Section 3.9
Information
Supplied....................................................14
Section 3.10
Tax
Matters.............................................................15
Section 3.11
Employee Benefits and Labor
Matters.....................................15
Section 3.12
Environmental
Matters...................................................17
Section 3.13
Properties..............................................................18
Section 3.14
Opinion of Financial
Advisor............................................20
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 3.15
Brokers and Other
Advisors..............................................20
Section 3.16
Company Rights
Agreement................................................20
Section 3.17
State
Statutes..........................................................20
Section 3.18
Material
Contracts......................................................21
Section 3.19
Intellectual Property
Matters...........................................22
Section 3.20
Insurance...............................................................22
Section 3.21
Ethical
Practices.......................................................23
Section 3.22
Related Party
Transactions..............................................23
Section 3.23
Standstill
Agreements...................................................23
Section 3.24
No Other
Representations or
Warranties..................................23
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
PARENT.........................................23
Section 4.1
Organization;
Standing..................................................23
Section 4.2
Authority;
Noncontravention.............................................24
Section 4.3
Governmental
Approvals..................................................24
Section 4.4
Information
Supplied....................................................25
Section 4.5
Ownership and Operations of Merger
Sub..................................25
Section 4.6
Capital
Resources.......................................................25
Section 4.7
Brokers and Other
Advisors..............................................25
Section 4.8
Ownership of
Shares.....................................................25
ARTICLE V
ADDITIONAL COVENANTS AND
AGREEMENTS..............................................26
Section 5.1
Preparation of the Proxy Statement; Shareholders
Meeting................26
Section 5.2
Conduct of
Business.....................................................27
Section 5.3
No
Solicitation.........................................................30
Section 5.4
Reasonable Best
Efforts.................................................35
Section 5.5
Public
Announcements....................................................37
Section 5.6
Access to Information;
Confidentiality..................................37
Section 5.7
Notification of Certain
Matters.........................................38
Section 5.8
Indemnification and
Insurance...........................................38
Section 5.9
Fees and
Expenses.......................................................40
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TABLE OF CONTENTS
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PAGE
Section 5.10
Rule
16b-3..............................................................40
Section 5.11
Employee
Matters........................................................40
Section 5.12
Delisting...............................................................42
Section 5.13
Indebtedness............................................................42
ARTICLE VI
CONDITIONS
PRECEDENT.............................................................44
Section 6.1
Conditions to Each Party's Obligation to Effect the
Merger..............44
Section 6.2
Conditions to Obligations of
Parent.....................................44
Section 6.3
Conditions to Obligations of the
Company................................45
ARTICLE VII
TERMINATION......................................................................45
Section 7.1
Termination.............................................................45
Section 7.2
Effect of
Termination...................................................47
Section 7.3
Termination
Fee.........................................................47
Section 7.4
Remedies................................................................48
ARTICLE VIII
MISCELLANEOUS....................................................................49
Section 8.1
No Survival of Representations and
Warranties...........................49
Section 8.2
Amendment or
Supplement.................................................49
Section 8.3
Extension of Time, Waiver,
Etc..........................................49
Section 8.4
Assignment..............................................................49
Section 8.5
Counterparts............................................................49
Section 8.6
Entire Agreement; No Third-Party
Beneficiaries..........................50
Section 8.7
Governing Law; Jurisdiction; Waiver of Jury
Trial.......................50
Section 8.8
Specific
Enforcement....................................................50
Section 8.9
Notices.................................................................50
Section 8.10
Severability............................................................52
Section 8.11
Definitions.............................................................52
Section 8.12
Interpretation..........................................................55
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of January 9, 2006
(this
"Agreement"), is between The Home Depot, Inc., a Delaware
corporation
("Parent"), and Hughes Supply, Inc., a Florida corporation (the
"Company").
Certain capitalized terms used in this Agreement are used as
defined in Section
8.11.
WHEREAS, the Board of Directors of Parent and the Board of
Directors
of the Company, based on the recommendation of a special committee
thereof
formed to evaluate the Company's strategic alternatives (the
"Special
Committee"), have each unanimously approved and adopted this
Agreement and the
merger of Merger Sub with and into the Company (the "Merger") in
accordance with
the Florida Business Corporation Act (the "FBCA"), upon the terms
and subject to
the conditions set forth herein.
NOW, THEREFORE, in consideration of the representations,
warranties,
covenants and agreements contained in this Agreement, and intending
to be
legally bound hereby, Parent and the Company hereby agree as
follows:
ARTICLE I
The Merger
----------
Section 1.1 The Merger. Upon the terms and subject to the
conditions
set forth in this Agreement, and in accordance with the FBCA, at
the Effective
Time a newly formed wholly-owned subsidiary of Parent, to be
incorporated in
Florida ("Merger Sub"), shall be merged with and into the Company,
and the
separate corporate existence of Merger Sub shall thereupon cease,
and the
Company shall be the surviving corporation in the Merger (the
"Surviving
Corporation").
Section 1.2 Closing. The closing of the Merger (the "Closing")
shall
take place at 10:00 a.m. (New York City time) on a date to be
specified by the
parties (the "Closing Date"), which date shall be no later than the
second
business day after satisfaction or waiver of the conditions set
forth in Article
VI (other than those conditions that by their nature are to be
satisfied at the
Closing, but subject to the satisfaction or waiver of those
conditions at such
time), at the offices of Weil, Gotshal & Manges LLP, 767 Fifth
Avenue, New York,
New York 10153, unless another time, date or place is agreed to in
writing by
the parties hereto.
Section 1.3 Effective Time. Subject to the provisions of this
Agreement, as soon as practicable on the Closing Date the parties
shall file
with the Secretary of State of the State of Florida the articles of
merger,
executed in accordance with, and in such form as is required by,
the relevant
provisions of the FBCA (the "Articles of Merger"). The Merger shall
become
effective upon the filing of the Articles of Merger or at such
later time and
date as is agreed to by the parties hereto (the time and date at
which the
Merger becomes effective is herein referred to as the "Effective
Time").
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Section 1.4 Effects of the Merger. The Merger shall have the
effects
set forth herein and in the applicable provisions of the FBCA.
Without limiting
the generality of the foregoing, and subject thereto, at the
Effective Time, all
the properties, rights, privileges, powers and franchises of the
Company and
Merger Sub shall vest in the Surviving Corporation, and all debts,
liabilities
and duties of the Company and Merger Sub shall become the debts,
liabilities and
duties of the Surviving Corporation.
Section 1.5 Articles of Incorporation and By-laws of the
Surviving
Corporation. At the Effective Time, the articles of incorporation
of the Company
shall be amended and restated in their entirety to be identical
(subject to
Section 5.8 hereof) to the articles of incorporation of Merger Sub,
as in effect
immediately prior to the Effective Time, except that the name of
the Surviving
Corporation shall remain Hughes Supply, Inc., until thereafter
amended as
provided therein or by applicable Law. The by-laws of Merger Sub in
effect
immediately prior to the Effective Time shall be the by-laws of the
Surviving
Corporation until thereafter amended as provided therein or by
applicable Law.
Section 1.6 Directors and Officers of the Surviving
Corporation.
(a) Each of the parties hereto shall take all necessary action
to
cause the directors of Merger Sub immediately prior to the
Effective Time to be
the directors of the Surviving Corporation immediately following
the Effective
Time, until their respective successors are duly elected or
appointed and
qualified or their earlier death, resignation or removal in
accordance with the
certificate of incorporation and by-laws of the Surviving
Corporation.
(b) Each
of the parties hereto shall take all necessary action to
cause the officers of the Company immediately prior to the
Effective Time to be
the officers of the Surviving Corporation until their respective
successors are
duly appointed and qualified or their earlier death, resignation or
removal in
accordance with the articles of incorporation and by-laws of the
Surviving
Corporation.
ARTICLE II
Effect of the
Merger on the Capital Stock of the Constituent Corporations;
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Exchange of Certificates; Company Stock Options
-----------------------------------------------
Section 2.1 Effect on Capital Stock. At the Effective Time, by
virtue
of the Merger and without any action on the part of Merger Sub, the
Company or
the holders of any shares of common stock, par value $1.00 per
share, of the
Company ("Company Common Stock") or any shares of capital stock of
Merger Sub:
(a) Capital Stock of Merger Sub. Each share of capital stock of
Merger Sub issued and outstanding immediately prior to the
Effective Time shall
be converted into and become one validly issued, fully paid and
nonassessable
share of common stock of the Surviving Corporation.
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(b) Cancellation of Treasury Stock and Parent-Owned Stock. Any
shares
of Company Common Stock that are owned by the Company as treasury
stock, and any
shares of Company Common Stock owned by Parent, Merger Sub or any
Subsidiary of
the Company, shall be automatically canceled and shall cease to
exist and no
consideration shall be delivered in exchange therefor.
(c) Conversion of Company Common Stock. Each share of Company
Common
Stock issued and outstanding immediately prior to the Effective
Time (other than
shares to be canceled in accordance with Section 2.1(b) and Company
Common Stock
received pursuant to Section 2.1(a)), together with the associated
Preferred
Share (as defined in the Rights Agreement) purchase rights (the
"Rights") issued
under the Rights Agreement, dated as of May 20, 1998, between the
Company and
American Stock Transfer & Trust Company, as rights agent (the
"Rights
Agreement"), shall be converted into the right to receive $46.50 in
cash,
without interest (the "Merger Consideration"). As of the Effective
Time, all
such shares of Company Common Stock shall no longer be outstanding
and shall
automatically be canceled and shall cease to exist, and each holder
of a
certificate (or evidence of shares in book-entry form) which
immediately prior
to the Effective Time represented any such shares of Company Common
Stock (each,
a "Certificate") shall cease to have any rights with respect
thereto, except the
right to receive the Merger Consideration to be paid in
consideration therefor
upon surrender of such Certificate in accordance with Section
2.2(b), without
interest.
Section 2.2 Exchange of Certificates.
(a) Paying
Agent. Prior to the Effective Time, Parent shall designate
a bank or trust company reasonably acceptable to the Company to act
as agent for
the benefit of the holders of shares of Company Common Stock in
connection with
the Merger (the "Paying Agent") to receive, on terms reasonably
acceptable to
the Company, for the benefit of holders of shares of Company Common
Stock, the
aggregate Merger Consideration to which holders of shares of
Company Common
Stock shall become entitled pursuant to Section 2.1(c). The Paying
Agent shall
also act as the agent for the Company's shareholders for the
purpose of holding
the Certificates and shall obtain no rights or interests in the
shares
represented by such Certificates. Parent shall deposit such
aggregate Merger
Consideration with the Paying Agent at or prior to the Effective
Time. Such
aggregate Merger Consideration deposited with the Paying Agent
shall, pending
its disbursement to such holders, be invested by the Paying Agent
as directed by
Parent or the Surviving Corporation; provided that Parent shall
promptly replace
any funds deposited with the Paying Agent lost through any
investment made
pursuant to this paragraph.
(b) Payment Procedures. Promptly after the Effective Time (but in
no
event more than three business days thereafter), the Surviving
Corporation shall
cause the Paying Agent to mail to each holder of record of Company
Common Stock
(i) a letter of transmittal (which shall specify that delivery
shall be
effected, and risk of loss and title to the Certificates shall
pass, only upon
delivery of the Certificates to the Paying Agent, and which shall
be in such
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form and shall have such other customary provisions (including
customary
provisions with respect to delivery of an "agent's message" with
respect to
shares held in book-entry form) as Parent may reasonably specify)
and (ii)
instructions for use in effecting the surrender of the Certificates
in exchange
for payment of the Merger Consideration. Upon surrender of a
Certificate for
cancellation to the Paying Agent, together with such letter of
transmittal, duly
completed and validly executed in accordance with the instructions
(and such
other customary documents as may reasonably be required by the
Paying Agent),
the holder of such Certificate shall be entitled to receive in
exchange therefor
the Merger Consideration, without interest, for each share of
Company Common
Stock formerly represented by such Certificate, and the Certificate
so
surrendered shall forthwith be canceled. If payment of the Merger
Consideration
is to be made to a Person other than the Person in whose name the
surrendered
Certificate is registered, it shall be a condition of payment that
(x) the
Certificate so surrendered shall be properly endorsed or shall
otherwise be in
proper form for transfer and (y) the Person requesting such payment
shall have
paid any transfer and other taxes required by reason of the payment
of the
Merger Consideration to a Person other than the registered holder
of such
Certificate surrendered or shall have established to the reasonable
satisfaction
of the Surviving Corporation that such tax either has been paid or
is not
applicable. Until surrendered as contemplated by this Section 2.2,
each
Certificate shall be deemed at any time after the Effective Time to
represent
only the right to receive the Merger Consideration as contemplated
by this
Article II, without interest, and any declared and unpaid dividends
to which the
holder of such Certificate is entitled.
(c) Transfer Books; No Further Ownership Rights in Company Stock.
The
Merger Consideration paid in respect of shares of Company Common
Stock upon the
surrender for exchange of Certificates in accordance with the terms
of this
Article II shall be deemed to have been paid in full satisfaction
of all rights
pertaining to the shares of Company Common Stock previously
represented by such
Certificates, and at the Effective Time, the stock transfer books
of the Company
shall be closed and thereafter there shall be no further
registration of
transfers on the stock transfer books of the Surviving Corporation
of the shares
of Company Common Stock that were outstanding immediately prior to
the Effective
Time. From and after the Effective Time, the holders of
Certificates that
evidenced ownership of shares of Company Common Stock outstanding
immediately
prior to the Effective Time shall cease to have any rights with
respect to such
shares of Company Common Stock, except as otherwise provided for
herein or by
applicable Law. Subject to the last sentence of Section 2.2(e), if,
at any time
after the Effective Time, Certificates are presented to the
Surviving
Corporation for any reason, they shall be canceled and exchanged as
provided in
this Article II.
Lost, Stolen or Destroyed Certificates. If any Certificate shall
have
been lost, stolen or destroyed, upon the making of an affidavit of
that fact by
the Person claiming such Certificate to be lost, stolen or
destroyed and, if
required by the Surviving Corporation, the posting by such Person
of a bond, in
such reasonable amount as Parent may direct, as indemnity against
any claim that
may be made against it with respect to such Certificate, the Paying
Agent will
pay, in exchange for such lost, stolen or destroyed Certificate,
the applicable
Merger Consideration to be paid in respect of the shares of Company
Common Stock
formerly represented by such Certificate, as contemplated by this
Article II.
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(e) Termination of Fund. At any time following the first
anniversary
of the Closing Date, the Surviving Corporation shall be entitled to
require the
Paying Agent to deliver to it any funds (including any interest
received with
respect thereto) that had been made available to the Paying Agent
and which have
not been disbursed to holders of Certificates, and thereafter such
holders shall
be entitled to look only to Parent or the Surviving Corporation
(subject to
abandoned property, escheat or other similar Laws) as general
creditors thereof
with respect to the payment of any Merger Consideration that may be
payable upon
surrender of any Certificates held by such holders, as determined
pursuant to
this Agreement, without any interest thereon. Any amounts remaining
unclaimed by
such holders at such time at which such amounts would otherwise
escheat to or
become property of any Governmental Authority shall become, to the
extent
permitted by applicable Law, the property of Parent, free and clear
of all
claims or interest of any Person previously entitled thereto.
(f) No Liability. Notwithstanding any provision of this Agreement
to
the contrary, none of the parties hereto, the Surviving Corporation
or the
Paying Agent shall be liable to any Person for Merger Consideration
delivered to
a public official pursuant to any applicable abandoned property,
escheat or
similar Law.
(g) Withholding Taxes. Parent, the Surviving Corporation and
the
Paying Agent shall be entitled to deduct and withhold from the
consideration
otherwise payable to any Person who was a holder of shares of
Company Common
Stock pursuant to this Agreement such amounts as may be required to
be deducted
and withheld with respect to the making of such payment under the
Internal
Revenue Code of 1986, as amended, and the rules and regulations
promulgated
thereunder (the "Code"), or under any provision of state, local or
foreign tax
Law. To the extent amounts are so withheld and paid over to the
appropriate
Governmental Authority, the withheld amounts shall be treated for
all purposes
of this Agreement as having been paid to the Person in respect of
which such
deduction and withholding was made.
Section 2.3 Company Stock Awards. Prior to the Effective Time,
the
Company shall take all actions necessary to provide that each
option that
represents the right to acquire shares of Company Common Stock
granted under the
Company Stock Plans (each, an "Option") outstanding immediately
prior to the
Effective Time (whether or not then vested or exercisable) shall be
cancelled
and terminated and converted at the Effective Time into the right
to receive a
cash amount equal to the Option Consideration (as defined below)
for each share
of Company Common Stock then subject to the Option. The Option
Consideration
shall be paid as soon after the Closing Date as shall be
practicable.
Notwithstanding the foregoing, Parent and the Company shall be
entitled to
deduct and withhold from the Option Consideration otherwise payable
such amounts
as may be required to be deducted and withheld with respect to the
making of
such payment under the Code, or any provision of state, local or
foreign tax
law. For purposes of this Agreement, "Option Consideration" means,
with respect
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to any share of Company Common Stock issuable under a particular
Option, an
amount equal to the excess, if any, of (i) the Merger Consideration
per share of
Company Common Stock over (ii) the exercise price payable in
respect of such
share of Company Common Stock issuable under such Option. All
shares of Company
Common Stock that are restricted shares pursuant to Company Stock
Plans
(including performance based restricted shares) ("Restricted
Company Common
Stock") outstanding immediately prior to the Effective Time shall
vest at the
Effective Time. As of the Effective Time, such Restricted Company
Common Stock
shall be converted into the right to receive the Merger
Consideration in
accordance with Section 2.1(c). For purposes of this Agreement,
"Company Stock
Plans" means the Hughes Supply, Inc. Directors' Stock Option Plan,
the Hughes
Supply, Inc. 1988 Stock Option Plan, the Hughes Supply, Inc. 1997
Executive
Stock Plan and the Hughes Supply, Inc. 2005 Executive Stock Plan,
each as
amended.
SECTION 2.4 Adjustments. Notwithstanding any provision of this
Article
II to the contrary, if between the date of this Agreement and the
Effective Time
the outstanding shares of Company Common Stock or any of the Rights
shall have
been changed into a different number of shares or a different class
by reason of
the occurrence or record date of any stock dividend,
subdivision,
reclassification, recapitalization, split, combination, exchange of
shares or
similar transaction, the Merger Consideration shall be
appropriately adjusted to
reflect such stock dividend, subdivision, reclassification,
recapitalization,
split, combination, exchange of shares or similar transaction.
ARTICLE III
Representations and Warranties of the Company
---------------------------------------------
The Company represents and warrants to Parent that except as
set
forth in the disclosure schedule delivered by the Company to Parent
immediately
prior to the execution of this Agreement (the "Company Disclosure
Schedule")
(any matter set forth under any particular section or subsection of
the Company
Disclosure Schedule shall also be deemed disclosed with respect to
any other
section or subsection of Article III or to Section 5.2 of this
Agreement, in
each case to the extent the relevance of such matter to such
section or
subsection is reasonably apparent from the text of such disclosure)
or the
consolidated financial statements, including any footnotes thereto,
of the
Company included in the Company SEC Documents (as hereinafter
defined) filed
prior to the date of this Agreement (the "Filed Company SEC
Documents"):
Section 3.1 Organization, Standing and Corporate Power.
(a) The Company is a corporation duly organized, validly existing
and
in good standing under the Laws of the State of Florida and has all
requisite
corporate power and authority necessary to own or lease all of its
properties
and assets and to carry on its business as it is now being
conducted. The
Company is duly licensed or qualified to do business and is in good
standing in
each jurisdiction in which the nature of the business conducted by
it or the
character or location of the properties and assets owned or leased
by it makes
such licensing or qualification necessary, except where the failure
to be so
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licensed, qualified or in good standing (or equivalent status),
individually or
in the aggregate, has not had and would not reasonably be expected
to have a
Material Adverse Effect (as defined below) on the Company ("Company
Material
Adverse Effect"). For purposes of this Agreement, "Material Adverse
Effect"
shall mean, with respect to any party, any change, event,
development or
occurrence that is materially adverse to (A) the ability of such
party to timely
consummate the Transactions or (B) the results of operations,
financial
condition or assets of such party and its Subsidiaries taken as a
whole, other
than changes, events, developments or occurrences arising out of,
resulting from
or attributable to (i) changes in conditions in the United States
or the global
economy or the capital or financial or markets generally, including
changes in
interest or exchange rates, fluctuating commodity prices and
unexpected product
shortages, (ii) changes in general legal, regulatory, political,
economic or
business conditions or changes in GAAP that, in each case,
generally affect
industries in which such party and its Subsidiaries conduct
business, (iii) the
negotiation and announcement of this Agreement and the identity of
Parent and
its Affiliates, including the impact thereof on relationships,
contractual or
otherwise, with customers, suppliers, distributors, partners or
employees, (iv)
acts of war, sabotage or terrorism, or any escalation or worsening
of any such
acts of war, sabotage or terrorism or (v) hurricanes, floods,
earthquakes or
other natural disasters (in the case of unexpected product
shortages referred to
in clause (i) and each of clauses (ii), (iv) and (v), other than to
the extent
any change, event, development or occurrence has had or would
reasonably be
expected to have a disproportionately adverse effect on such party
and its
Subsidiaries as generally compared to other participants in the
industries in
which such party and its Subsidiaries conduct business).
(b) Exhibit 21.1 of the Company's Annual Report on Form 10-K for
the
fiscal year ended January 31, 2005, together with Schedule 3.1(b)
of the Company
Disclosure Schedule, sets forth a true and complete list of each of
the
Company's Subsidiaries, as of the date hereof. Each of the
Company's
Subsidiaries is duly organized, validly existing and in good
standing under the
laws of the jurisdiction of its organization and has all requisite
corporate or
other power and authority necessary to own or lease all of its
properties and
assets and to carry on its business as it is now being conducted,
except as,
individually or in the aggregate, has not had and would not
reasonably be
expected to have a Company Material Adverse Effect. Each of the
Company's
Subsidiaries is duly licensed or qualified to do business and is in
good
standing in each jurisdiction in which the nature of the business
conducted by
it or the character or location of the properties and assets owned
or leased by
it makes such licensing or qualification necessary, except where
the failure to
be so licensed, qualified or in good standing (or equivalent
status),
individually or in the aggregate, has not had and would not
reasonably be
8
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expected to have a Company Material Adverse Effect. All the
outstanding shares
of capital stock of, or other equity interests in, each such
Subsidiary (except
for directors' qualifying shares or the like) are owned directly or
indirectly
by the Company free and clear of liens, pledges, security interests
and transfer
restrictions or other encumbrances ("Liens"), except for such
transfer
restrictions of general applicability as may be provided under the
Securities
Act of 1933, as amended, and the rules and regulations promulgated
thereunder
(the "Securities Act"), and other applicable securities Laws. The
Company does
not own of record or beneficially (within the meaning of Rule 13d-3
of the
Exchange Act), any material equity or similar interest in, or any
material
interest convertible into or exchangeable or exercisable for any
equity or
similar interest in, any other Person.
(c) The Company has made available to Parent prior to the date
hereof
(i) complete and correct copies of the articles of incorporation
and by-laws of
the Company and each of its Subsidiaries, as amended to the date of
this
Agreement (the "Company Charter Documents") and (ii) the minutes
(or, in the
case of draft minutes, the most recent drafts thereof) of all
meetings of the
Company's stockholders, Board of Directors and each committee of
the Board of
Directors (other than the Special Committee) held since February 1,
2002 through
the date hereof.
Section 3.2 Capitalization.
(a) The authorized capital stock of the Company consists of
200,000,000 shares of Company Common Stock par value $1.00 per
share and
10,000,000 shares of preferred stock, no par value ("Company
Preferred Stock").
At the close of business on December 31, 2005, (i) 66,877,913
shares of Company
Common Stock were issued and outstanding, which includes 2,079,423
shares
subject to outstanding grants of Restricted Company Common Stock
and 850,462
shares held by the Hughes Supply, Inc. Cash or Deferred Profit
Sharing Plan and
Trust, (ii) no shares of Company Common Stock were held by the
Company in its
treasury, (iii) 4,622,214 shares of Company Common Stock were
reserved for
issuance under the Company Stock Plans (of which 2,676,081 shares
were subject
to outstanding Options granted under the Company Stock Plans) and
(iv) no shares
of Company Preferred Stock were issued or outstanding. All
outstanding shares of
Company Common Stock and all outstanding shares of capital stock or
other equity
interests of each of the Company's Subsidiaries have been duly
authorized and
validly issued and are fully paid, nonassessable and free of
preemptive and
similar rights in favor of third parties. Since December 31, 2005,
the Company
has not issued, or entered into any agreement or arrangement to
issue, any
shares of its capital stock, or entered into any agreement or
arrangement to
issue securities convertible into or exchangeable or exercisable
for any shares
of its capital stock, other than or pursuant to Options referred to
above that
are outstanding as of the date of this Agreement or are hereafter
issued without
violation of Section 5.2 hereof. All dividends on the Company
Common Stock that
have been declared or have accrued prior to the date hereof have
been paid in
full to the Company's paying agent.
9
<PAGE>
(b) Schedule 3.2(b) of the Company Disclosure Schedule contains
a
true, accurate and complete list, as of December 31, 2005, of the
number of
outstanding Options, the grant date of each such Option, the number
of shares of
Company Common Stock that holders of such Options are entitled to
receive upon
the exercise of the Options, the corresponding exercise price, and
the
expiration date of such Option. Except for the Options set forth in
such
Schedule and the shares of Restricted Company Common Stock
referenced in Section
3.2(a)(i), there are no outstanding (i) securities of the Company
or any of its
Subsidiaries convertible into or exchangeable for shares of capital
stock or
other voting securities or ownership interests in the Company or
any of its
Subsidiaries, (ii) options, restricted stock, warrants, rights or
other
agreements or commitments to acquire from the Company or any of
its
Subsidiaries, or obligations of the Company or any of its
Subsidiaries to issue
or transfer, any capital stock, voting securities or other
ownership interests
(or securities convertible into or exchangeable for capital stock
or voting
securities or other ownership interests) in the Company or any of
its
Subsidiaries, (iii) obligations of the Company or any of its
Subsidiaries to
grant, extend or enter into any subscription, warrant, right,
convertible or
exchangeable security or other similar agreement or commitment
relating to any
capital stock, voting securities or other ownership interests in
the Company or
any of its Subsidiaries or (iv) obligations of the Company or any
of its
Subsidiaries to make any payment based on the market price or value
of any
securities of the Company or any of its Subsidiaries. There are no
(i)
outstanding obligations of the Company or any of its Subsidiaries
to purchase,
redeem or otherwise acquire any outstanding securities of the
Company or any of
its Subsidiaries or (ii) voting trusts or other agreements or
understandings to
which the Company or any of its Subsidiaries is a party with
respect to the
voting of capital stock of the Company or any of its Subsidiaries.
Neither the
Company nor any of its Subsidiaries has any obligation or
commitment to provide
financing to or make any debt or equity investment in any entity
other than
wholly-owned Subsidiaries of the Company.
Section 3.3 Authority; Noncontravention; Voting Requirements.
(a) The Company has all necessary corporate power and authority
to
execute and deliver this Agreement and to perform its obligations
hereunder and
to consummate the Transactions, subject in the case of the
consummation of the
Merger to obtaining the Company Shareholder Approval. The
execution, delivery
and performance by the Company of this Agreement, and the
consummation by it of
the Transactions, have been duly authorized by all necessary
corporate action
and no other corporate action on the part of the Company is
necessary to
authorize the execution, delivery and performance by the Company of
this
Agreement and the consummation by it of the Transactions, subject
in the case of
the consummation of the Merger to obtaining the Company Shareholder
Approval.
This Agreement has been duly executed and delivered by the Company
and, assuming
due authorization, execution and delivery hereof by Parent,
constitutes a legal,
valid and binding obligation of the Company, enforceable against
the Company in
accordance with its terms, except that such enforceability (i) may
be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and
other similar Laws of general application affecting or relating to
the
enforcement of creditors' rights generally and (ii) is subject to
general
principles of equity, whether considered in a proceeding at Law or
in equity
(the "Bankruptcy and Equity Exception").
10
<PAGE>
(b) The Special Committee, at a meeting duly held and called,
has
unanimously recommended the approval and adoption of this Agreement
by the
Company's Board of Directors. The Company's Board of Directors,
based upon the
recommendation of the Special Committee, at a meeting duly called
and held, has
unanimously (i) approved and adopted this Agreement and approved
the
Transactions, including the Merger, (ii) determined that the Merger
is advisable
and fair to and in the best interests of, the shareholders of the
Company, (iii)
consented to this Agreement and the transactions contemplated
hereby in
accordance with the terms and provisions of the Confidentiality
Agreement, dated
as of October 28, 2005, between Parent and the Company (as it may
be amended
from time to time, the "Confidentiality Agreement") and (iv)
resolved to submit
this Agreement to the shareholders of the Company for approval,
file the Proxy
Statement with the SEC and, subject to Section 5.3 hereof,
recommend that the
shareholders of the Company approve this Agreement.
(c) Neither the execution, delivery and performance of this
Agreement
by the Company nor the consummation by the Company of the
Transactions, nor
compliance by the Company with any of the terms or provisions
hereof, will (i)
conflict with or violate any provision of the Company Charter
Documents or (ii)
assuming that the authorizations, consents and approvals referred
to in Section
3.4 (and, in the case of the consummation of the Merger, the
Company Shareholder
Approval) are obtained and the filings referred to in Section 3.4
are made, (x)
violate any Law, judgment, writ or injunction of any Governmental
Authority
applicable to the Company or any of its Subsidiaries or any of
their respective
assets, properties or rights, (y) violate or constitute a default
(or an event
which with notice or lapse of time or both would become a default)
or give rise
to any right of termination, cancellation, modification or
acceleration under
any of the terms, conditions or provisions of any loan or credit
agreement,
debenture, note, bond, mortgage, indenture, deed of trust, lease,
license,
contract or other instrument or agreement (each, a "Contract") to
which the
Company or any of its Subsidiaries is a party or by which any of
their assets,
properties or rights are bound or (z) result in the creation of any
Lien upon
any of the assets, properties or rights of the Company or any of
its
Subsidiaries other than Permitted Liens, except, in the case of
clause (ii), for
such violations, defaults, rights or Liens, as, individually or in
the
aggregate, have not had and would not reasonably be expected to
have a Company
Material Adverse Effect.
(d) The affirmative vote (in person or by proxy) of the holders of
at
least a majority of the outstanding shares of Company Common Stock
at the
Company Shareholders Meeting, or any adjournment or postponement
thereof, in
favor of the adoption of this Agreement (the "Company Shareholder
Approval") is
the only vote or approval of the holders of any class or series of
capital stock
of the Company or any of its Subsidiaries which is necessary to
adopt this
Agreement and approve the Merger.
11
<PAGE>
Section 3.4 Governmental Approvals. Except for (i) the filing
with
the SEC of a proxy statement relating to the Company Shareholders
Meeting (as
amended or supplemented from time to time, the "Proxy Statement"),
and other
filings required under, and compliance with other applicable
requirements of,
the Securities Exchange Act of 1934, as amended, and the rules and
regulations
promulgated thereunder (the "Exchange Act"), and the rules of the
NYSE, (ii) the
filing of the Articles of Merger with the Secretary of State of the
State of
Florida pursuant to the FBCA and (iii) filings required under, and
compliance
with other applicable requirements of, the HSR Act and any other
applicable
Antitrust Law, no consents or approvals of, or filings,
declarations or
registrations with, any Governmental Authority are necessary for
the execution,
delivery and performance of this Agreement by the Company and the
consummation
by the Company of the Transactions, other than such other consents,
approvals,
filings, declarations or registrations that, if not obtained, made
or given,
individually or in the aggregate, have not had and would not
reasonably be
expected to have a Company Material Adverse Effect.
Section 3.5 Company SEC Documents; Undisclosed Liabilities.
(a) The Company and each of its Subsidiaries have timely filed
all
required registration statements, reports, schedules, forms,
certifications and
other documents with the Securities and Exchange Commission (the
"SEC") since
February 1, 2004 (collectively, and in each case including all
exhibits and
schedules thereto and documents incorporated by reference therein,
the "Company
SEC Documents"). As of their respective filing dates, the Company
SEC Documents
complied as to form in all material respects with the requirements
of the
Exchange Act and the Securities Act and all other federal
securities Laws
applicable to such Company SEC Documents, and none of the Company
SEC Documents
as of such respective dates contained any untrue statement of a
material fact or
omitted to state a material fact required to be stated therein or
necessary in
order to make the statements therein, in light of the circumstances
under which
they were made, not misleading. The Company has made available to
Parent prior
to the date hereof copies of all correspondence between the SEC and
the Company
or any Company Subsidiary, since February 1, 2004 until the date
hereof.
(b) The consolidated financial statements of the Company included
in
the Company SEC Documents have been prepared in accordance with
GAAP (except, in
the case of unaudited interim statements, as indicated in the notes
thereto)
applied on a consistent basis during the periods involved (except
as may be
indicated in the notes thereto) and fairly present in all material
respects the
consolidated financial position of the Company and its consolidated
Subsidiaries
as of the dates thereof and the consolidated results of their
operations, cash
flows and shareholders' equity (when required to be included in any
such Company
SEC Document) for the periods then ended (subject, in the case of
unaudited
interim statements, to normal year-end audit adjustments).
12
<PAGE>
(c) Neither the Company nor any of its Subsidiaries has any
liabilities, whether accrued, absolute, fixed, contingent or
otherwise, whether
due or to become due, whether or not known, and whether or not
required to be
reflected or reserved against on a consolidated balance sheet of
the Company
prepared in accordance with GAAP or the notes thereto, except
liabilities (i)
reflected or reserved against on the balance sheet of the Company
and its
Subsidiaries as of October 31, 2005 (the "Balance Sheet Date")
(including the
notes thereto) included in the Filed Company SEC Documents, (ii)
incurred after
the Balance Sheet Date in the ordinary course of business
consistent with past
practice, (iii) as expressly contemplated by this Agreement or set
forth in the
Company Disclosure Schedules or (iv) as, individually or in the
aggregate, have
not had and would not reasonably be expected to have a Company
Material Adverse
Effect.
(d) The Company has established and maintains effective
internal
control over financial reporting (and since February 1, 2004 has
had no material
weaknesses with respect to its internal control over financial
reporting) and
disclosure controls and procedures (as such terms are defined in
Rule 13a-15 and
Rule 15d-15 under the Exchange Act) sufficient to provide
reasonable assurances
regarding the reliability of financial reporting and the
preparation of
financial statements in accordance with GAAP; such disclosure
controls and
procedures are designed to ensure that material information
relating to the
Company, including its consolidated Subsidiaries, required to be
disclosed by
the Company in the reports that it files or submits under the
Exchange Act is
accumulated and communicated to the Company's principal executive
officer and
its principal financial officer by others within those entities to
allow timely
decisions regarding required disclosure; and such disclosure
controls and
procedures are effective to ensure that information required to be
disclosed by
the Company in the reports that it files or submits under the
Exchange Act is
recorded, processed, summarized and reported within the time
periods specified
in SEC rules and forms. The Company's principal executive officer
and its
principal financial officer have disclosed, based on their most
recent
evaluation, to the Company's outside auditors and the audit
committee of the
Board of Directors of the Company (x) all significant deficiencies
in the design
or operation of internal controls which could adversely affect the
Company's
ability to record, process, summarize and report financial data and
have
identified for the Company's outside auditors any material
weaknesses in
internal controls and (y) any fraud, whether or not material, that
involves
management or other employees who have a significant role in the
Company's
internal controls. The principal executive officer and the
principal financial
officer of the Company have made all certifications required by
the
Sarbanes-Oxley Act, the Exchange Act and any related rules and
regulations
promulgated by the SEC with respect to the Company SEC Documents,
and the
statements contained in such certifications are complete and
correct. Any
written notifications the Company has received of a "reportable
condition" or
"material weakness" (each as defined in the Statement of Auditing
Standards No.
60, as in effect on the date hereof) in the Company's internal
controls have
been made available to Parent prior to the date hereof.
13
<PAGE>
Section 3.6 Absence of Certain Changes. Since the Balance Sheet
Date,
(a) the Company, together with its Subsidiaries, has carried on and
operated its
businesses in all material respects in the ordinary course of
business
consistent with past practice, (b) there have not been any events,
changes,
conditions, developments or occurrences that, individually or in
the aggregate,
have had or would be reasonably be expected to have a Company
Material Adverse
Effect and (c) neither the Company nor any of its Subsidiaries have
taken any
action that, if taken after the date hereof, would constitute a
breach of
Section 5.2(b)(ii), (iii), (iv), (v), (vi), (vii), (x), (xi),
(xiii) or (xiv)
(or Section 5.2(b)(xvi) with respect to any such clauses)
hereof.
Section 3.7 Legal Proceedings. There is no pending or, to the
Knowledge of the Company, threatened, legal or administrative
proceeding, claim,
suit, action or, to the Knowledge of the Company, is there any
pending
investigation against or relating to the Company or any of its
Subsidiaries (or
any of their respective assets or properties), nor is there any
injunction,
order, writ, judgment, ruling or decree imposed upon the Company or
any of its
Subsidiaries, in each case, by or before any Governmental Authority
that,
individually or in the aggregate, has had or would reasonably be
expected to
have a Company Material Adverse Effect or, as of the date hereof,
that
challenges or relates to the proposed sale of the Company, this
Agreement or any
of the Transactions.
Section 3.8 Compliance With Laws; Permits. The Company and its
Subsidiaries are in compliance with all laws, statutes, ordinances,
codes,
rules, regulations, decrees and orders of Governmental
Authorities
(collectively, "Laws") applicable to the Company or any of its
Subsidiaries or
any of their respective properties and assets, except for such
non-compliance
as, individually or in the aggregate, has not had and would not
reasonably be
expected to have a Company Material Adverse Effect. The Company and
each of its
Subsidiaries hold all licenses, franchises, permits, certificates,
approvals and
authorizations from Governmental Authorities necessary for the
lawful conduct of
their respective businesses (collectively, "Permits"), except where
the failure
to hold the same, individually or in the aggregate, has not had and
would not
reasonably be expected to have a Company Material Adverse Effect.
The Company
and its Subsidiaries are in compliance with the terms of all
Permits, except for
such non-compliance as, individually or in the aggregate, has not
had and would
not reasonably be expected to have a Company Material Adverse
Effect. The
Company and its Subsidiaries are in compliance in all material
respects with all
applicable listing and corporate governance rules and regulations
of the NYSE.
Section 3.9 Information Supplied. The Proxy Statement will not,
on
the date it is first mailed to shareholders of the Company and at
the time of
the Company Shareholders Meeting, contain any untrue statement of a
material
fact or omit to state any material fact required to be stated
therein or
necessary in order to make the statements therein, in light of the
circumstances
under which they are made, not misleading. The Proxy Statement will
comply as to
form in all material respects with the applicable requirements of
the Exchange
Act. Notwithstanding the foregoing, the Company makes no
representation or
warranty with respect to information supplied by or on behalf of
Parent or
Merger Sub expressly for inclusion or incorporation by reference in
the Proxy
Statement.
14
<PAGE>
Section
3.10 Tax Matters. Except for those matters that would not
reasonably be expected to have a Company Material Adverse Effect:
(i) each of
the Company and its Subsidiaries has timely filed, or has caused to
be timely
filed on its behalf (taking into account any extension of time
within which to
file), all Tax Returns required to be filed by it, and all such
filed Tax
Returns are correct and complete in all respects; (ii) all Taxes
shown to be due
on such Tax Returns have been timely paid and all Taxes payable
(whether or not
actually shown on such Tax Returns) have, to the Knowledge of the
Company, been
adequately reserved for in the Company SEC Documents; (iii) no
deficiency with
respect to Taxes has been proposed, asserted or assessed against
the Company or
any of its Subsidiaries, which has not been fully paid or
adequately reserved in
the Filed Company SEC Documents; (iv) no audit or other
administrative or court
proceedings are pending with any Governmental Authority with
respect to Taxes of
the Company or any of its Subsidiaries, and no written notice of
threatened or
proposed audit or proceeding has been received; (v) there are no
Liens for Taxes
other than Permitted Liens upon any assets of the Company or any of
its
Subsidiaries and (vi) since the Balance Sheet Date, neither the
Company nor any
of its Subsidiaries has incurred any liability for Taxes other than
in the
ordinary course of business.
Section 3.11 Employee Benefits and Labor Matters.
(a) Schedule 3.11(a) of the Company Disclosure Schedule lists
(i)
each "employee benefit plan" (as defined in Section 3(3) of the
Employee
Retirement Income Security Act of 1974, as amended ("ERISA")),
whether or not
subject to ERISA, and (ii) all employment, consulting, and
severance plans and
agreements and all bonus or other incentive compensation, stock
purchase, equity
or equity-based compensation, deferred compensation, change in
control,
vacation, salary continuation, profit-sharing, fringe benefit, life
insurance
and other similar plans, programs, and agreements with respect to
which the
Company or any of its Subsidiaries has any obligation or liability,
contingent
or otherwise ((i) and (ii) collectively, the "Company Plans").
(b) The Company has made available to Parent prior to the date
hereof, with respect to each Company Plan (if applicable), a
correct and
complete copy of the most recent (i) document constituting the
Company Plan or,
with respect to any such Company Plan that is not in writing, a
written
description thereof, and any modifications thereto, (ii) annual
report on Form
5500, including all schedules thereto, (iii) summary plan
description for each
Company Plan and any modifications thereto, (iv) trust agreement
and insurance
or group annuity contract, (v) annual report, financial statement
and/or
actuarial report, and (vi) determination letter from the Internal
Revenue
Service.
15
<PAGE>
(c) Each Company Plan has been maintained in all respects in
accordance with its terms and in compliance with the applicable
provisions of
ERISA, the Code and all other applicable Laws and, to the Knowledge
of the
Company, the terms of each Company Plan are in compliance with all
such
applicable Laws, except in each case for any instances of
noncompliance that,
individually or in the aggregate, have not had and would not
reasonably be
expected to have a Company Material Adverse Effect.
(d) All contributions, premiums and benefit payments under or
in
connection with the Company Plans that are required to have been
made as of the
date hereof in accordance with the terms of the Company Plans have
been timely
made. Other than routine claims for benefits, there are no actions
pending, or
to the Knowledge of the Company, threatened with respect to any
Company Plan
that, individually or in the aggregate, have had or would
reasonably be expected
to have a Company Material Adverse Effect.
(e) Each Company Plan that is intended to qualify under Section
401
and/or 409 of the Code (i) has received a favorable determination
letter to such
effect and (ii) no facts, circumstances or events have occurred
since the date
of the most recent determination letter or application therefor
relating to any
such Company Plan that, individually or in the aggregate, have
caused or would
reasonably be expected to cause the loss of such qualification
which has had or
would reasonably be likely to result in a Company Material Adverse
Effect.
(f) None of the Company Plans is subject to Title IV of ERISA or is
a
multi-employer plan or a multiple employer plan described in
Section 3(37) or
Section 4063/4064, respectively, of ERISA, and neither the Company
nor any of
its Subsidiaries to its and their Knowledge has any obligation to
contribute to
any such multi-employer plan or has any withdrawal liability
associated with any
such multi-employer plan. There have been no non-exempt
"prohibited
transactions" (as such term is defined in Section 406 of ERISA or
Section 4975
of the Code) with respect to any Company Plan that, individually or
in the
aggregate, have had or would reasonably be expected to have a
Company Material
Adverse Effect.
(g) There are no strikes, work slowdowns, work stoppages,
lockouts,
arbitrations, grievances, unfair labor practice charges or
complaints pending
or, to the Knowledge of the Company, threatened with respect to the
Company or
any of its Subsidiaries, and neither the Company nor any of its
Subsidiaries has
experienced any such strikes, slowdowns, work stoppages, lockouts,
arbitrations,
grievances, unfair labor practice charges or complaints within the
past three
years, that, individually or in the aggregate, have had or would
reasonably be
expected to have a Company Material Adverse Effect. Each of the
Company and its
Subsidiaries is in compliance with all applicable Laws relating to
labor,
employment, termination of employment or similar matters and has
not engaged in
any unfair labor practices or similar prohibited practices except
in each case
for any instances of noncompliance that, individually or in the
aggregate, have
not had and would not reasonably be expected to have a Company
Material Adverse
Effect.
16
<PAGE>
(h) Neither the Company nor any of the Subsidiaries is a party to
or
is bound by any labor or collective bargaining agreement, and, as
of the date
hereof and to the Knowledge of the Company, there is no
organizational
campaigns, petitions or other unionization activities seeking
recognition of a
collective bargaining unit with respect to, or otherwise attempting
to
represent, any of the employees of the Company or any of its
Subsidiaries.
(i) Neither the execution and delivery of this Agreement nor
the
consummation of the Transactions will, either alone or in
conjunction with any
other event, (i) result in any payment becoming due, or increase
the amount of
any compensation due, to any current or former director, individual
who is an
independent contractor or employee of the Company or its
Subsidiaries, (ii)
increase the amount or value of any benefits or compensation
otherwise payable
under any Company Plan or (iii) result in the acceleration of the
time of
payment, vesting or funding of any such compensation or
benefits.
Section 3.12 Environmental Matters.
(a) Except for those matters that, individually or in the
aggregate,
have not had and would not reasonably be expected to have a Company
Material
Adverse Effect, (i) each of the Company and its Subsidiaries is and
has been in
compliance with all applicable Environmental Laws (as defined
below), (ii) there
is no notice of violation in writing, investigation, suit, claim,
action or
proceeding relating to or arising under Environmental Laws that is
pending or,
to the Knowledge of the Company, threatened against the Company or
any of its
Subsidiaries or any real property currently or, to the Knowledge of
the Company,
formerly owned, operated or leased by the Company or any of its
Subsidiaries,
(iii) neither the Company nor any of its Subsidiaries has received
any notice
of, or entered into, any order, settlement, judgment, injunction or
decree (or,
to the Knowledge of the Company, has agreed to perform or entered
into any
contractual obligation with a reasonable likelihood of requiring a
material
payment) involving uncompleted, outstanding or unresolved
obligations,
liabilities or requirements relating to or arising under
Environmental Laws; and
(iv) to the Knowledge of the Company, no Hazardous Materials have
been released
at, on, above, under or from any properties currently or formerly
owned, leased
or operated by the Company or any of its Subsidiaries, nor are
there any
conditions or circumstances at any properties currently or formerly
owned,
leased or operated by the Company that have or would reasonably be
expected to
give rise to material liability for the Company or any of its
Subsidiaries under
any Environmental Law.
(b) To the Knowledge of the Company, copies of all material
environmental and health and safety reports or assessments or other
material
communications or documentation concerning environmental, health
and safety
matters in the Company's possession, as of the date hereof,
relating to the
Company and any of its Subsidiaries and any real property owned,
operated or
leased by the Company or any of its Subsidiaries, have been made
available to
Parent prior to the date hereof, to the extent any of the issues
identified in
any such reports, assessments or other communications or
documentation would
reasonably be expected to result in a material liability to the
Company or any
of its Subsidiaries.
17
<PAGE>
(c) For purposes of this Agreement, "Environmental Laws" shall
mean
all applicable Laws relating to (i) the protection or remediation
of the
environment, including soil and subsurface soil, surface water,
groundwater,
drinking water, indoor and ambient air, and natural resources, (ii)
human health
and safety as affected by exposure to Hazardous Materials, or (iii)
the
presence, use, management, assessment, remediation, transportation,
treatment,
storage, disposal or recycling of any Hazardous Materials.
(d) For purposes of this Agreement, "Hazardous Materials" shall
mean
any material, substance, or waste defined or regulated as
hazardous, toxic, a
pollutant, a contaminant or words of similar meaning, including
without
limitation, petroleum and petroleum byproducts and any fraction
thereof,
asbestos and asbestos containing material, mold of the
concentrations and levels
that would reasonably be likely to adversely affect human health,
radon or
polychlorinated biphenyls, in non-utility owned electrical
equipment.
Section 3.13 Properties.
(a)
Schedule 3.13(a) of the Company Disclosure Schedule contains a
true and complete list of (i) all real property owned by the
Company or any of
its Subsidiaries where revenues attributable to each such real
property site
exceeded $20,000,000 in the Company's last completed fiscal year
and (ii) all
Material Real Property owned by the Company (collectively, the
"Owned Real
Property") and for each parcel of Owned Real Property, identifies
the correct
street address and current use (including business unit, if
applicable) of such
Owned Real Property. Neither the Company nor any of its
Subsidiaries has
received any notice of any, and to the Knowledge of the Company
there is no,
default under any restrictive covenants, restrictions and
conditions affecting
the Owned Real Property and there has not occurred any event that
with the lapse
of time or the giving of notice or both would constitute such a
default under
any such restrictive covenants, restrictions or conditions, except
as,
individually or in the aggregate, has not had and would not
reasonably be
expected to have a Company Material Adverse Effect.
(b) Schedule 3.13(b) of the Company Disclosure Schedule contains
a
true and complete list of (i) all real property leased, subleased,
licensed or
otherwise used or occupied (whether as a tenant, subtenant or
pursuant to other
occupancy arrangements) by the Company or any of its Subsidiaries
or which the
Company or any of its Subsidiaries has the right to use or occupy
where revenues
attributable to each such real property site exceeded $20,000,000
in the
Company's last completed fiscal year and (ii) all Material Real
Property leased,
subleased, licensed or otherwise used or occupied (whether as a
tenant,
subtenant or pursuant to other occupancy arrangements) by the
Company or any of
its Subsidiaries or which the Company or any of its Subsidiaries
has the right
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to use or occupy (collectively, including the improvements thereon,
the "Leased
Real Property"), and for each Leased Real Property, identifies the
correct
street address and current use (including business unit, if
applicable) of such
Leased Real Property. True and complete copies of all agreements
(including all
material written modifications, amendments, supplements, waivers
and side
letters thereto) under which the Company or any Subsidiary is the
landlord,
sublandlord, tenant, subtenant, or occupant (each a "Real Property
Lease") that
have not been terminated or expired as of the date of this
Agreement have been
made available to Parent prior to the date hereof.
(c) Except as, individually or in the aggregate, has not had
and
would not reasonably be expected to have a Company Material Adverse
Effect, the
Company and/or its Subsidiaries have good and marketable fee simple
title to all
Owned Real Property and valid leasehold estates in all Leased Real
Property free
and clear, in each case, of all Liens other than Permitted
Liens.
(d) Except as, individually or in the aggregate, has not had
and
would not reasonably be expected to have a Company Material Adverse
Effect,
other than the Real Property Leases, none of the Owned Real
Property or the
Leased Real Property is subject to any lease, sublease, license or
other
agreement granting to any other Person any right to the use,
occupancy or
enjoyment of such Owned Real Property or Leased Real Property or
any part
thereof.
(e) Except as, individually or in the aggregate, has not had
and,
would not reasonably be expected to have a Company Material Adverse
Effect, each
Real Property Lease is in full force and effect and constitutes the
valid and
legally binding obligation of the Company or its Subsidiaries,
enforceable in
accordance with its terms (subject to the Bankruptcy and Equity
Exception), and
there is no material default under any Real Property Lease either
by the Company
or its Subsidiaries party thereto or, to the Knowledge of the
Company, by any
other party thereto.
(f) Except as, individually or in the aggregate, has not had
and,
would not reasonably be expected to have a Company Material Adverse
Effect,
there does not exist any violations of building codes or pending
condemnation or
eminent domain proceedings that affect any Owned Real Property or,
to the
Knowledge of the Company, any such proceedings that affect any
Leased Real
Property or, to the Knowledge of the Company, any threatened
condemnation or
eminent domain proceedings that affect any Owned Real Property or
Leased Real
Property, and neither the Company nor its Subsidiaries have
received any written
notice of the intention of any Governmental Authority or other
Person to take or
use any Owned Real Property or Leased Real Property.
(g) Except as, individually or in the aggregate, has not had
and
would not reasonably be expected to have a Company Material Adverse
Effect, the
buildings and improvements on the Owned Real Property and the
Leased Real
Property are in good condition and in a state of good and working
maintenance
and repair, ordinary wear and tear excepted.
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(h) Except as, individually or in the aggregate, has not had
and
would not reasonably be expected to have a Company Material Adverse
Effect, the
Company and each of its Subsidiaries are in possession of and have
good title
to, or have valid leasehold interests in, all tangible personal
property used in
the business of the Company and each of its Subsidiaries,
respectively, and all
such tangible personal property is owned by the Company or any of
its
Subsidiaries, free and clear of all Liens other than Permitted
Liens, or is
leased under a valid and subsisting lease, and in any case, is in
good working
order and condition, ordinary wear and tear excepted.
Section 3.14 Opinion of Financial Advisor. The Board of Directors
of
the Company has received the opinion of Lehman Brothers Inc., dated
the date of
this Agreement, to the effect that, as of such date, and subject to
the various
assumptions and qualifications set forth therein, the consideration
to be
received in the Merger by holders of the Company Common Stock is
fair from a
financial point of view to holders of such shares.
Section 3.15 Brokers and Other Advisors. Except for Lehman
Brothers
Inc., the fees and expenses of which will be paid by the Company
and a true and
correct copy of whose engagement letter has been made available to
Parent prior
to the date hereof, no broker, investment banker, financial advisor
or other
Person is entitled to any broker's, finder's, financial advisor's
or other
similar fee or commission, or the reimbursement of expenses, in
connection with
the Transactions based upon arrangements made by or on behalf of
the Company or
any of its Subsidiaries.
Section 3.16 Company Rights Agreement. The Company has taken
all
actions necessary (subject only to execution by the Rights Agent,
which the
Company shall cause to take place as soon as reasonably practicable
on the date
hereof) to (a) render the Rights Agreement inapplicable to this
Agreement and
the Transactions, (b) ensure that (i) none of Parent, Merger Sub or
any other
Subsidiary of Parent is or may be reasonably expected to become an
Acquiring
Person (as defined in the Rights Agreement) pursuant to the Rights
Agreement as
a result of this Agreement or the transactions contemplated hereby
and (ii) a
Distribution Date, a Triggering Event or a Share Acquisition Date
(as such terms
are defined in the Rights Agreement) does not occur, in the case of
clauses (i)
and (ii), by reason of the execution of this Agreement or the
consummation of
the Transactions, and (c) provide that the Final Expiration Date
(as defined in
the Rights Agreement) shall occur immediately prior to the
Effective Time
without any payment being made in respect thereof. The Company has
made
available to Parent prior to the date hereof a true and correct
copy of the
Rights Agreement and all amendments thereto and exemptions,
redemptions and
waivers thereunder.
Section 3.17 State Statutes. Assuming the representations and
warranties of Parent set forth in Section 4.8 of this Agreement are
true and
correct in all respects, Section 607.0901 (Affiliated Transactions)
and Section
607.0902 (Control-Share Acquisitions) of the FBCA are not
applicable to the
Merger, this Agreement and the transactions contemplated hereby
either because
20
<PAGE>
(i) such statutes are not applicable by their terms or (ii) all
actions
necessary to exempt the Company, Parent, Merger Sub, their
Affiliates, the
Merger, this Agreement and the transactions contemplated hereby
from such
statutes have been taken. To the Knowledge of the Company, no other
state
takeover, "moratorium," "fair price," "affiliate transaction" or
similar statute
or regulation under any applicable Law applies or purports to apply
to any of
the Transactions.
Section 3.18 Material Contracts. Schedule 3.18 of the Company
Disclosure Schedule contains a true and complete list of all active
Contracts
(other than purchase orders and invoices) to which the Company or
any of its
Subsidiaries is a party (a) which is a joint venture, partnership
or other
similar agreement involving co-investment with a third party; (b)
except for any
Contract which has been filed as an exhibit to any Company SEC
Document, under
which the Company or any of its Subsidiaries has created, incurred,
assumed or
guaranteed indebtedness for borrowed money, or any capitalized
lease obligation,
or any agreement under which it has granted a Lien on any of its
assets,
tangible or intangible (but with a value in excess of $5,000,000),
or any
currency or interest rate swap, collar or hedge agreement; (c)
whereby the
Company or any of its Subsidiaries has an obligation to make an
investment in or
loan to any Person in excess of $5,000,000; (d) that contains a
minimum purchase
requirement for the Company and its
