AGREEMENT AND PLAN OF MERGER
AGREEMENT
AND PLAN OF MERGER (hereinafter called this " Agreement "),
dated as of February 28, 2007, among Steel Technologies Inc. (the "
Company "), a Kentucky corporation, Mitsui & Co.
(U.S.A.), Inc. (" Mitsui USA "), a New York corporation, and
Bluegrass Acquisition, Inc. (" Merger Sub "), a Kentucky
corporation and wholly owned subsidiary of Mitsui USA.
Hereinafter, the Company and Merger Sub are sometimes collectively
referred to as the " Constituent Corporations ".
RECITALS
WHEREAS,
the respective boards of directors of each of Mitsui USA, Merger
Sub and the Company have approved the merger of Merger Sub with and
into the Company (the " Merger ") upon the terms and subject
to the conditions set forth in this Agreement and have approved,
adopted and declared advisable this Agreement;
WHEREAS,
the board of directors of the Company has determined that the
Merger and the other transactions contemplated by this Agreement
are in the best interests of the Company's shareholders; and
WHEREAS,
the Company, Mitsui USA and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection
with this Agreement.
NOW,
THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained
herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1.
Certain Definitions . Defined terms in this Agreement,
which may be identified by the capitalization of the first letter
of each principal word thereof, have the meanings assigned to them
in Exhibit A.
1.2.
Construction . In this Agreement, unless the context
otherwise requires:
(a)
the table of contents and headings herein are for convenience of
reference only, do not constitute part of this Agreement and shall
not be deemed to limit or otherwise affect any of the provisions
hereof;
(b)
any reference in this Agreement to "writing" or comparable
expressions includes a reference to facsimile transmission or
comparable means of communication;
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(c)
words expressed in the singular number shall include the plural and
vice versa, words expressed in the masculine shall include the
feminine and neutral gender and vice versa;
(d)
references to Articles, Sections, Exhibits, Schedules, Preamble and
Recitals are references to articles, sections, exhibits, schedules,
preamble and recitals of this Agreement;
(e)
references to "day" or "days" are to calendar days;
(f)
references to this "Agreement" shall be construed as a reference to
this Agreement and references to any other agreement or document
shall be construed as a reference to such other agreement or
document, in each case as the same may have been, or may from time
to time be, amended, varied, novated or supplemented;
(g)
"$" and "Dollars" shall refer to lawful money of the United
States;
(h)
"include", "includes", and "including" are deemed to be followed by
"without limitation";
(i)
"hereof", "herein", "herewith" and "hereunder" and words of similar
import, shall be construed to refer to this Agreement as a whole
(including all of the Exhibits and Schedules which are incorporated
into and form part of this Agreement) and not to any particular
provision of this Agreement;
(j)
references to any statute or statutory provision include a
reference to that statute or statutory provision as amended,
consolidated or replaced from time to time (whether before or after
the date of this Agreement) and include subordinate legislation
made under the relevant statute or statutory provision;
(k)
references to any party to this Agreement or any other document or
agreement shall include its successors and permitted assigns;
and
(l)
any reference to "ordinary course" or "ordinary course of business"
shall be deemed to mean "ordinary course of business consistent
with past practice".
ARTICLE II
THE MERGER; CLOSING; EFFECTIVE TIME
2.1.
The Merger . Upon the terms and subject to the
conditions set forth in this Agreement, at the Effective Time (as
defined in Section 2.3
), Merger Sub shall be merged with and into the Company and the
separate corporate existence of Merger Sub shall thereupon
cease. The Company shall be the surviving corporation in the
Merger (sometimes hereinafter referred to as the " Surviving
Corporation "), and the separate
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corporate existence of the Company,
with all its rights, privileges, immunities, powers and franchises,
shall continue unaffected by the Merger, except as set forth in
ARTICLE III
. The Merger shall have the effects specified in the Kentucky
Business Corporation Act (KRS Chapter 271B) (the " KBCA
").
2.2.
Closing . Unless otherwise mutually agreed between the
Company and Mitsui USA, the closing for the Merger (the "
Closing ") shall take place at the offices of Sullivan &
Cromwell LLP, 125 Broad Street, New York, New York, at
9:00 A.M. on the third business day (the " Closing Date
") following the day on which the last of the conditions set forth
in ARTICLE IX
(other than those conditions that by their nature are to be
satisfied at the Closing, but subject to the fulfillment or waiver
of those conditions) shall be satisfied or waived in accordance
with this Agreement.
2.3.
Effective Time . As soon as practicable following the
Closing, the Company and Mitsui USA shall cause Articles of Merger
(the " Kentucky Articles of Merger ") to be executed,
acknowledged and filed with the Secretary of State of the
Commonwealth of Kentucky as provided in Section 271B.11-050 of
the KBCA. The Merger shall become effective upon the date and
at the time when the Kentucky Articles of Merger have been
delivered to and duly filed with the Secretary of State of the
Commonwealth of Kentucky or such later time as may be specified as
the effective time in the Kentucky Articles of Merger (the "
Effective Time ").
ARTICLE III
ARTICLES OF INCORPORATION AND BY-LAWS
OF THE SURVIVING CORPORATION
3.1.
Articles of Incorporation . At the Effective Time, the
articles of incorporation of the Company shall be amended as set
out in Exhibit B and, as so amended, such articles of incorporation
shall be the articles of incorporation of the Surviving Corporation
(the " Charter "), until thereafter amended as provided
therein or by applicable Law.
3.2.
By-Laws . The parties hereto shall take all actions
necessary so that the by-laws of the Merger Sub in effect
immediately prior to the Effective Time shall be the by-laws of the
Surviving Corporation (the " By-Laws "), until thereafter
amended as provided therein or by applicable Law.
ARTICLE IV
DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION
4.1.
Directors . The parties hereto shall take all actions
necessary so that the board of directors of Merger Sub at the
Effective Time shall, from and after the Effective Time, be the
directors of the Surviving Corporation until their successors have
been duly elected or appointed and qualified or until their earlier
death, resignation or
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removal in accordance with the Charter
and the By-Laws.
4.2.
Officers . The parties hereto shall take all actions
necessary so that the officers of the Company at the Effective Time
shall, from and after the Effective Time, be the officers of the
Surviving Corporation until their successors shall have been duly
elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the Charter and the
By-Laws.
ARTICLE V
EFFECT OF THE MERGER ON CAPITAL STOCK;
EXCHANGE OF CERTIFICATES
5.1.
Effect on Capital Stock . At the Effective Time, as a
result of the Merger and without any action on the part of the
holder of any capital stock of the Company:
(a)
Merger Consideration . Each Share issued and
outstanding immediately prior to the Effective Time other than
(i) Shares owned by Parent, Mitsui USA or its Subsidiaries and
Shares owned by the Company and its Subsidiaries, and in each case
not held on behalf of third parties, and (ii) Shares that are
owned by Dissenting Shareholders (each, an " Excluded Share
" and collectively, " Excluded Shares ") shall be converted
into the right to receive the Per Share Merger Consideration.
At the Effective Time, all the Shares shall cease to be
outstanding, shall be cancelled and shall cease to exist, and each
certificate (a " Certificate ") formerly representing any of
the Shares (other than Excluded Shares) shall thereafter represent
only the right to receive the Per Share Merger Consideration,
without interest, and each certificate formerly representing Shares
owned by Dissenting Shareholders shall thereafter represent only
the right to receive the payment to which reference is made in
Section 5.2(f)
.
(b)
Cancellation of Shares . Each Excluded Share shall, by
virtue of the Merger and without any action on the part of the
holder of the Excluded Share, cease to be outstanding, be cancelled
without payment of any consideration therefor and shall cease to
exist, subject to any rights the holder thereof may have under
Section 5.2(f)
.
(c)
Merger Sub . At the Effective Time, each share of
common stock, par value $0.01 per share, of Merger Sub issued and
outstanding immediately prior to the Effective Time shall be
converted into one share of common stock, par value $0.01 per
share, of the Surviving Corporation.
5.2.
Exchange of Certificates .
(a)
Paying Agent . At or prior to the Closing and for the
benefit of holders of Shares, Mitsui USA shall make available or
cause to be made available to the Paying Agent immediately
available funds sufficient in the aggregate to provide all funds
necessary for the Paying Agent to make payments of the Per Share
Merger Consideration
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pursuant to Section 5.1(a)
(such cash being hereinafter referred to as the " Exchange
Fund "). The Paying Agent shall invest the Exchange Fund
as directed by Mitsui USA; provided that such investments
shall be in obligations of or guaranteed by the United States of
America, in commercial paper obligations rated A-1 or P-1 or better
by Moody's Investors Service, Inc. or Standard & Poor's
Corporation, respectively, in certificates of deposit, bank
repurchase agreements or banker's acceptances of commercial banks
with capital exceeding $1 billion, or in money market funds
having a rating in the highest investment category granted by a
recognized credit rating agency at the time of acquisition.
Any interest and other income resulting from such investment shall
become a part of the Exchange Fund, and any amounts in excess of
the amounts payable under Section 5.1(a)
shall be promptly returned to the Surviving Corporation.
(b)
Exchange Procedures . Promptly after the Effective
Time (and in any event within three business days thereafter), the
Surviving Corporation shall cause the Paying Agent to mail to each
holder of record of Shares (other than holders of Excluded Shares)
(i) a letter of transmittal in customary form specifying that
delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates (or
affidavits of loss in lieu of the Certificates as provided in
Section 5.2(e)
) to the Paying Agent, such letter of transmittal to be in such
form and to have such other provisions as Mitsui USA and the
Company may reasonably agree, and (ii) instructions for use in
effecting the surrender of the Certificates (or affidavits of loss
in lieu of the Certificates as provided in Section 5.2(e)
) in exchange for the Per Share Merger Consideration. Upon
surrender of a Certificate (or affidavit of loss in lieu of the
Certificate as provided in Section 5.2(e)
) to the Paying Agent in accordance with the terms of such letter
of transmittal, duly executed, the holder of such Certificate shall
be entitled to receive in exchange therefor a cash amount in
immediately available funds (after giving effect to any required
tax withholdings as provided in Section 5.2(g)
) equal to (x) the number of Shares represented by such Certificate
(or affidavit of loss in lieu of the Certificate as provided in
Section 5.2(e)
) multiplied by (y) the Per Share Merger Consideration, and the
Certificate so surrendered shall forthwith be cancelled. No
interest shall be paid or accrued on any amount payable upon due
surrender of the Certificates. In the event of a transfer of
ownership of Shares that is not registered in the transfer records
of the Company, a check for any cash to be exchanged upon due
surrender of the Certificate may be issued to such transferee if
the Certificate formerly representing such Shares is presented to
the Paying Agent, accompanied by all documents required to evidence
and effect such transfer and to evidence that any applicable stock
transfer taxes have been paid or are not applicable.
(c)
Transfers . From and after the Effective Time, there
shall be no transfers on the stock transfer books of the Company of
the Shares that were outstanding immediately prior to the Effective
Time. If, after the Effective Time, any Certificate is
presented to the Surviving Corporation, Mitsui USA or the Paying
Agent for transfer, it shall be cancelled and exchanged for the
cash amount in immediately available funds to which the holder of
the Certificate is entitled pursuant to this ARTICLE V
, unless such holder or any other Person already shall have
received cash in respect of such Shares
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pursuant to Section 5.2(e)
.
(d)
Termination of Exchange Fund . Any portion of the
Exchange Fund (including the proceeds of any investments of the
Exchange Fund) that remains unclaimed by the shareholders of the
Company for 180 days after the Effective Time shall be delivered to
the Surviving Corporation. Any holder of Shares (other than
Excluded Shares) who has not theretofore complied with this ARTICLE
V
shall thereafter look only to the Surviving Corporation for
payment of the Per Share Merger Consideration (after giving effect
to any required tax withholdings as provided in Section 5.2(g)
) upon due surrender of its Certificates (or affidavits of loss in
lieu of the Certificates), without any interest thereon.
Notwithstanding the foregoing, none of the Surviving Corporation,
Mitsui USA, the Paying Agent nor any other Person shall be liable
to any former holder of Shares for any amount properly delivered to
a public official pursuant to applicable abandoned property,
escheat or similar Laws.
(e)
Lost, Stolen or Destroyed Certificates . In the event
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
Mitsui USA, the posting by such Person of a bond in customary
amount and upon such terms as may be required by Mitsui USA as
indemnity against any claim that may be made against it or the
Surviving Corporation with respect to such Certificate, the Paying
Agent shall issue a check in the amount (after giving effect to any
required tax withholdings) equal to the number of Shares
represented by such lost, stolen or destroyed Certificate
multiplied by the Per Share Merger Consideration.
(f)
Dissenters' Rights . No Dissenting Shareholder shall
be entitled to receive any of the Per Share Merger Consideration
for his or her Shares unless and until the holder thereof shall
have failed to perfect or shall have effectively withdrawn or lost
such holder's right to dissent from the Merger under the KBCA, and
any Dissenting Shareholder shall be entitled to receive only the
payment as provided by Sections 271B.13-010 through 271B.13-310 of
the KBCA (the " Dissenters' Rights Statute ") with respect
to Shares owned by such Dissenting Shareholder. If any Person
who otherwise would be deemed a Dissenting Shareholder shall have
failed to perfect properly or shall have effectively withdrawn or
lost the right to dissent with respect to any Shares, such Shares
shall thereupon be treated as though such Shares had been converted
into the right to receive the Per Share Merger Consideration
pursuant to Section 5.1(a)
. The Company shall give Mitsui USA (i) prompt notice of any
written demands for payment under the Dissenters' Rights Statute,
attempted withdrawals of such demands, and any other instruments
served pursuant to applicable Law received by the Company relating
to shareholders' right to dissent or to receive payment under the
Dissenters' Rights Statute and (ii) the opportunity to direct all
negotiations and proceedings with respect to demand for payment
under the Dissenters' Rights Statute. The Company shall not,
except with the prior written consent of Mitsui USA, voluntarily
make any payment with respect to any demands for payment under the
Dissenters' Rights Statute with respect to any Shares that are
owned by Dissenting Shareholders, offer to settle or settle any
such demands or
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approve any withdrawal of any such
demands.
(g)
Withholding Rights . Each of Mitsui USA, the Surviving
Corporation, the Paying Agent and any Affiliate of Mitsui USA shall
be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of Shares, Company
Options or Company Awards such amounts as it is required to deduct
and withhold with respect to the making of such payment under the
Code or any other applicable state, local or foreign Tax Law.
To the extent that amounts are so withheld by the Surviving
Corporation, the Paying Agent, Mitsui USA or any Affiliate of
Mitsui USA, as the case may be, such withheld amounts
(i) shall be remitted by Mitsui USA, the Surviving Corporation
or the applicable Affiliate of Mitsui USA, as applicable, to the
applicable Governmental Entity, and (ii) shall be treated for
all purposes of this Agreement as having been paid to the holder of
Shares, Company Options or Company Awards in respect of which such
deduction and withholding was made by the Surviving Corporation,
Mitsui USA, or the applicable Affiliate of Mitsui USA, as the case
may be.
5.3.
Treatment of Stock Plans .
(a)
Treatment of Options . The Company shall obtain the
agreement of each holder of a Company Option that the Company
Option shall terminate if not exercised by the Effective Time, or
that the Company Option, whether vested or unvested, shall at the
Effective Time be cancelled and shall entitle the holder thereof to
receive, as soon as reasonably practicable after the Effective
Time, only an amount in cash equal to the product of (x) the total
number of Shares subject to the Company Option times (y) the
excess, if any, of the value of the Per Share Merger Consideration
over the exercise price per Share under such Company Option less
applicable Taxes required to be withheld with respect to such
payment.
(b)
Company Awards . At the Effective Time, each right of
any kind, contingent or accrued, to acquire or receive Shares or
benefits measured by the value of Shares, and each award of any
kind consisting of Shares that may be held, awarded, outstanding,
payable or reserved for issuance under the Stock Plans and any
other Compensation and Benefits Plans, other than Company Options
(the " Company Awards "), shall be cancelled and shall
entitle the holder thereof to receive only an amount in cash equal
to (x) the number of Shares subject to such Company Award
immediately prior to the Effective Time times (y) the value
of the Per Share Merger Consideration, less applicable Taxes
required to be withheld with respect to such payment.
(c)
Corporate Actions . At or prior to the Effective Time,
the Company, the board of directors of the Company and the
compensation committee of the Company, as applicable, shall adopt
any resolutions and take any actions that are necessary to
effectuate the provisions of Sections 5.3(a)
and 5.3(b)
, including obtaining the acknowledgements of all holders of
Company Options to the treatment under
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Section 5.3(a)
. The Company shall take all actions necessary to ensure that
from and after the Effective Time neither Mitsui USA nor the
Surviving Corporation shall be required to deliver Shares or other
capital stock of the Company to any Person pursuant to or in
settlement of Company Options or Company Awards after the Effective
Time.
5.4.
Adjustments to Prevent Dilution . In the event that
the Company changes the number of Shares or securities convertible
or exchangeable into or exercisable for Shares issued and
outstanding prior to the Effective Time as a result of a
reclassification, stock split (including a reverse stock split),
stock dividend or distribution, recapitalization, merger, issuer
tender or exchange offer, or other similar transaction, the Per
Share Merger Consideration shall be equitably adjusted.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except
as set forth in the corresponding sections or subsections of the
disclosure letter delivered to Mitsui USA by the Company prior to
entering into this Agreement (the " Company Disclosure
Letter ") (it being agreed that disclosure of any item in any
section or subsection of the Company Disclosure Letter shall be
deemed disclosure with respect to any other section or subsection
to which the relevance of such item is reasonably apparent), the
Company hereby represents and warrants to Mitsui USA and Merger Sub
that:
6.1.
Organization, Good Standing and Qualification . Each
of the Company and its Subsidiaries is a legal entity duly
organized, validly existing and in good standing under the Laws of
its respective jurisdiction of organization and has all requisite
corporate or similar power and authority to own, lease and operate
its properties and assets and to carry on its business as presently
conducted and is qualified to do business and is in good standing
as a foreign corporation or other legal entity in each jurisdiction
where the ownership, leasing or operation of its assets or
properties or conduct of its business requires such qualification,
except where the failure to be so organized, validly existing,
qualified or in good standing, or to have such power or authority,
individually or in the aggregate, would not reasonably be expected
to result in a Material Adverse Effect. The Company has made
available to Mitsui USA complete and correct copies of the
Company's and its Subsidiaries' articles of incorporation and
by-laws or comparable governing documents, each as amended to the
date of this Agreement, and each as so delivered is in full force
and effect. Section 6.1
of the Company Disclosure Letter contains a correct and complete
list of each jurisdiction in which the Company and its Subsidiaries
are organized and qualified to do business.
6.2.
Capital Structure .
(a)
The authorized capital stock of the Company consists of 50,000,000
Shares, of which 13,059,257 Shares were outstanding as of the close
of business on February 28, 2007, and 500,000 shares of preferred
stock (" Preferred
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Stock "), no par value per
share, of which no shares of Preferred Stock were outstanding as of
the close of business on the date hereof. All the outstanding
Shares have been duly authorized and are validly issued, fully paid
and nonassessable. Other than 329,150 Shares reserved for
issuance under the Company's 1995 Stock Option Plan, 2000 Stock
Option Plan, 2006 Restricted Stock Plan, 1997 Nonemployee Directors
Stock Plan, the 1999 Amended and Restated Nonemployee Directors
Stock Plan, and the Second Nonemployee Director Stock Plan and the
77,000 Shares subject to issuance under the 2006 Restricted Stock
Plan (the Company's 1995 Stock Option Plan, 2000 Stock Option Plan,
2006 Restricted Stock Plan, 1997 Nonemployee Directors Stock Plan,
the 1999 Amended and Restated Nonemployee Directors Stock Plan, the
Second Nonemployee Director Stock Plan and the 2006 Restricted
Stock Plan, collectively, the " Stock Plans ") and Shares
and shares of preferred stock subject to issuance under the Rights
Agreement, dated as of April 24, 1998 (the " Rights
Agreement ") between the Company and National City Bank, the
Company has no Shares subject to issuance.
Section 6.2(a)
of the Company Disclosure Letter contains a correct and complete
list of options, restricted stock, and any stock appreciation or
stock-related rights under the Stock Plans, including the holder,
date of grant, term, number of Shares and, where applicable,
exercise price and vesting schedule, including whether the vesting
shall be accelerated by the execution of this Agreement or
consummation of the Merger or by termination of employment or
change of position following consummation of the Merger. Each
of the outstanding shares of capital stock or other securities of
each of the Company's Subsidiaries is duly authorized, validly
issued, fully paid and nonassessable and owned by the Company or by
a direct or indirect wholly owned Subsidiary of the Company, free
and clear of any lien, charge, pledge, security interest, claim or
other encumbrance (each, a " Lien "). Except as set
forth above and except for the rights (the " Rights ") that
have been issued pursuant to the Rights Agreement, there are no
preemptive or other outstanding rights, options, warrants,
conversion rights, stock appreciation rights, redemption rights,
repurchase rights, agreements, arrangements, calls, commitments or
rights of any kind that obligate the Company or any of its
Subsidiaries to issue or sell any shares of capital stock or other
securities of the Company or any of its Subsidiaries or any
securities or obligations convertible or exchangeable into or
exercisable for, or giving any Person a right to subscribe for or
acquire, any securities of the Company or any of its Subsidiaries,
and no securities or obligations evidencing such rights are
authorized, issued or outstanding. Upon any issuance of any
Shares in accordance with the terms of the Stock Plans, such Shares
shall be duly authorized, validly issued, fully paid and
nonassessable and free and clear of any Liens. The Company
does not have outstanding any bonds, debentures, notes or other
obligations the holders of which have the right to vote (or
convertible into or exercisable for securities having the right to
vote) with the shareholders of the Company on any matter.
(b)
Section 6.2(b)
of the Company Disclosure Letter sets forth (x) each of the
Company's Subsidiaries and the ownership interest of the Company in
each such Subsidiary, as well as the ownership interest of any
other Person or Persons in each such Subsidiary and (y) the
Company's or its Subsidiaries' capital stock, equity interest or
other direct or indirect ownership interest in any other Person
other than securities in a
9
publicly traded company held for
investment by the Company or any of its Subsidiaries and consisting
of less than 1% of the outstanding capital stock of such
company. The Company does not own, directly or indirectly,
any voting interest in any Person that requires an additional
filing by Mitsui USA or its Affiliates under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the " HSR Act ").
(c)
Each Company Option (A) was granted in compliance with all
applicable Laws and all the terms and conditions of the Stock Plan
pursuant to which it was issued, (B) has an exercise price per
Share equal to or greater than the fair market value of a Share on
the date of such grant, (C) has a grant date identical to the
date on which the Company's board of directors or compensation
committee actually awarded such Company Option, and
(D) qualifies for the tax and accounting treatment afforded to
such Company Option in the Company's tax returns and the Company's
financial statements referred to in Section 6.5(d)
, respectively.
6.3.
Corporate Authority; Approval; Opinion of Financial Advisor
.
(a)
The Company has all requisite corporate power and authority and has
taken all corporate action necessary in order to execute, deliver
and perform its obligations under this Agreement and to consummate
the Merger, subject only to the approval of this Agreement by the
holders of a majority of the outstanding Shares entitled to vote on
such matter at a shareholders' meeting duly called and held for
such purpose (the " Company Requisite Vote "). This
Agreement has been duly executed and delivered by the Company and
constitutes a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar Laws of general
applicability relating to or affecting creditors' rights and to
general equity principles (the " Bankruptcy and Equity
Exception ").
(b)
The board of directors of the Company has (A) unanimously
determined that the Merger is fair to, and in the best interests
of, the Company and its shareholders, adopted, approved and
declared advisable this Agreement and the Merger and the other
transactions contemplated hereby and resolved to recommend adoption
and approval of this Agreement to the holders of Shares (the "
Company Recommendation "), (B) directed that this
Agreement be submitted to the holders of Shares for their adoption
and approval and (C) received the opinion of the Company's
financial advisor, CIBC World Markets Corp., to the effect that, as
of the date of such opinion, the Per Share Merger Consideration is
fair, from a financial point of view, to holders of Shares (other
than Parent, Mitsui USA, Merger Sub and their respective
Affiliates). It is agreed and understood that such opinion is
for the benefit of the Company's board of directors and may not be
relied upon by Mitsui USA or Merger Sub. The board of
directors of the Company has taken all action so that Mitsui USA,
Merger Sub and their Affiliates shall not be an "interested
shareholder" or delayed in or prohibited from entering into or
consummating a "business combination" with the Company (in each
case as such term is used in Sections 271B.12-200 through
271.12-230 of the KBCA) as a result of the
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execution of this Agreement or the
consummation of the transactions in the manner contemplated
hereby.
6.4.
Governmental Filings; No Violations; Certain Contracts .
(a)
Other than the filings and/or notices pursuant to Section 2.3
, under the HSR Act and under antitrust or other competition Law of
Canada, Mexico or other jurisdictions (the " Company
Approvals "), no notices, reports or other filings are required
to be made by the Company with, nor are any consents,
registrations, approvals, permits or authorizations required to be
obtained by the Company from, any Governmental Entity, in
connection with the execution, delivery and performance of this
Agreement by the Company and the consummation of the Merger and the
other transactions contemplated hereby, or in connection with the
continuing operation of the business of the Company and its
Subsidiaries following the Effective Time in the manner such
business was conducted on the date of this Agreement, except those
that the failure to make or obtain, individually or in the
aggregate, would not reasonably be expected to result in a Material
Adverse Effect or to prevent, materially delay or materially impair
the consummation of the transactions contemplated by this
Agreement.
(b)
The execution, delivery and performance of this Agreement by the
Company do not, and the consummation of the Merger and the other
transactions contemplated hereby shall not, constitute or result in
(A) a breach or violation of, or a default under, the articles
of incorporation or by-laws of the Company or the comparable
governing documents of any of its Subsidiaries, (B) with or
without notice, lapse of time or both, a breach or violation of, a
termination (or right of termination) or default under, the
creation or acceleration of any obligations under or the creation
of a Lien on any of the assets of the Company or any of its
Subsidiaries pursuant to, any Contract binding upon the Company or
any of its Subsidiaries or, assuming (solely with respect to
performance of this Agreement and consummation of the Merger and
the other transactions contemplated hereby) compliance with the
matters referred to in Section 6.4(a)
, under any Law to which the Company or any of its Subsidiaries is
subject, or (C) any change in the rights or obligations of any
party under any Contract binding upon the Company or any of its
Subsidiaries, except, in the case of clause (B) or (C) above,
for any such breach, violation, termination, default, creation,
acceleration or change that, individually or in the aggregate,
would not reasonably be expected to result in a Material Adverse
Effect or to prevent, materially delay or materially impair the
consummation of the transactions contemplated by this Agreement.
Section 6.4(b)
of the Company Disclosure Letter sets forth a correct and complete
list of Material Contracts pursuant to which consents or waivers
are required prior to consummation of the transactions contemplated
by this Agreement (whether or not subject to the exception set
forth with respect to clauses (B) and (C) above).
(c)
Neither the Company nor any of its Subsidiaries is a party to or
bound by any non-competition Contracts or other Contract that
purports to limit in any material respect either the type of
business in which the Company or its Subsidiaries (or,
11
after giving effect to the Merger,
Mitsui USA or its Affiliates) may engage or the manner or locations
in which any of them may so engage in any business.
(d)
The Company and its Subsidiaries are not creditors or claimants
with respect to any debtors or debtor-in-possession subject to
proceedings under chapter 11 of title 11 of the United
States Code with respect to claims that, in the aggregate,
constitute more than 25% of the gross assets of the Company and its
Subsidiaries (excluding cash and cash equivalents).
6.5.
Company Reports; Financial Statements .
(a)
The Company has filed or furnished, as applicable, on a timely
basis, all forms, statements, certifications, reports and documents
required to be filed or furnished by it with the SEC pursuant to
the Exchange Act or the Securities Act since the Applicable Date
(the forms, statements, reports and documents filed or furnished
since the Applicable Date and those filed or furnished subsequent
to the date of this Agreement, including any amendments thereto,
the " Company Reports "). Each of the Company Reports,
at the time of its filing or being furnished complied or, if not
yet filed or furnished, shall comply in all material respects with
the applicable requirements of the Securities Act, the Exchange Act
and the Sarbanes-Oxley Act, and any rules and regulations
promulgated thereunder applicable to the Company Reports. As
of their respective dates (or, if amended prior to the date of this
Agreement, as of the date of such amendment), the Company Reports
did not, and any Company Reports filed with or furnished to the SEC
subsequent to the date of this Agreement shall not (other than with
respect to any information provided by Mitsui USA and Merger Sub),
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances in which
they were made, not misleading.
(b)
The Company is in compliance in all material respects with the
applicable listing and corporate governance rules and regulations
of NASDAQ. Except as permitted by the Exchange Act or the
rules of the SEC, since the enactment of the Sarbanes-Oxley Act,
neither the Company nor any of its Affiliates has made, arranged or
modified (in any material way) any extensions of credit in the form
of a personal loan to any executive officer or director of the
Company.
(c)
The Company maintains disclosure controls and procedures required
by Rule 13a-15 or 15d-15 under the Exchange Act. Such
disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Company is recorded and
reported on a timely basis to the individuals responsible for the
preparation of the Company's filings with the SEC and other public
disclosure documents. The Company maintains internal control
over financial reporting (as defined in Rule 13a-15 or 15d-15,
as applicable, under the Exchange Act). Such internal control
over financial reporting is effective in providing reasonable
assurance regarding the reliability of financial reporting and the
preparation of financial statements for external
12
purposes in accordance with GAAP and
includes policies and procedures that (i) pertain to the
maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of
the Company, (ii) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of
financial statements in accordance with GAAP, and that receipts and
expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company, and
(iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition of
the Company's assets that could have a material effect on its
financial statements. The Company has disclosed, based on the
most recent evaluation of its chief executive officer and its chief
financial officer prior to the date of this Agreement, to the
Company's auditors and the audit committee of the Company's board
of directors (A) any significant deficiencies in the design or
operation of its internal controls over financial reporting that
are reasonably likely to affect adversely the Company's ability to
record, process, summarize and report financial information and has
identified for the Company's auditors and audit committee of the
Company's board of directors any material weaknesses in internal
control over financial reporting and (B) any fraud, whether or
not material, that involves management or other employees who have
a significant role in the Company's internal control over financial
reporting. The Company has made available to Mitsui USA
(i) a summary of any such disclosure made by management to the
Company's auditors and audit committee since the Applicable Date
and (ii) any material communication since the Applicable Date
made by management or the Company's auditors to the audit committee
required or contemplated by listing standards of NASDAQ, the audit
committee's charter or professional standards of the Public Company
Accounting Oversight Board. Since the Applicable Date, no
material complaints from any source regarding accounting, internal
accounting controls or auditing matters, and no concerns from
Company employees regarding questionable accounting or auditing
matters, have been received by the Company. The Company has
made available to Mitsui USA a summary of all complaints or
concerns relating to other matters made since the Applicable Date
through the Company's whistleblower hot line or equivalent system
for receipt of employee concerns regarding possible violations of
Law. No attorney representing the Company or any of its
Subsidiaries, whether or not employed by the Company or any of its
Subsidiaries, has reported evidence of a violation of securities
laws, breach of fiduciary duty or similar violation by the Company
or any of its officers, directors, employees or agents to the
Company's chief legal officer, audit committee (or other committee
designated for the purpose) of the board of directors or the board
of directors pursuant to the rules adopted pursuant to
Section 307 of the Sarbanes-Oxley Act or any Company policy
contemplating such reporting, including in instances not required
by those rules.
(d)
Each of the consolidated balance sheets included in or incorporated
by reference into the Company Reports (including the related notes
and schedules) fairly presents in all material respects, or, in the
case of Company Reports filed after the date of this Agreement,
shall fairly present in all material respects the consolidated
financial position of the Company and its consolidated Subsidiaries
as of its date and each of the consolidated statements of income,
shareholders' equity and cash flows included in or
13
incorporated by reference into the
Company Reports (including any related notes and schedules) fairly
presents in all material respects, or in the case of Company
Reports filed after the date of this Agreement, shall fairly
present in all material respects the results of operations,
retained earnings (loss) and changes in financial position, as the
case may be, such companies for the periods set forth therein
(subject, in the case of unaudited statements, to notes and normal
year-end audit adjustments that shall not be material in amount or
effect), in each case in accordance with GAAP consistently applied
during the periods involved, except as may be noted therein.
6.6.
Absence of Certain Changes . Since September 30,
2006, except as disclosed in filings by the Company with the SEC
between September 30, 2006 and February 16, 2007, the
Company and its Subsidiaries have conducted their respective
businesses only in, and have not engaged in any material
transaction other than in accordance with, the ordinary course of
such businesses consistent with past practices and there has not
been:
(a)
any change in the financial condition, properties, assets,
liabilities, business, prospects or results of operations or any
circumstance, occurrence or development (including any material
adverse change with respect to any circumstance, occurrence or
development existing on or prior to September 30, 2006) of which
management of the Company has knowledge that, individually or in
the aggregate, would reasonably be expected to result in a Material
Adverse Effect;
(b)
any material damage, destruction or other casualty loss with
respect to any material asset or property owned, leased or
otherwise used by the Company or any of its Subsidiaries, whether
or not covered by insurance;
(c)
other than regular semiannual dividends on Shares of $0.15 per
Share, any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of
the Company or any of its Subsidiaries (except for dividends or
other distributions by any direct or indirect wholly owned
Subsidiary to the Company or to any wholly owned Subsidiary of the
Company), or any repurchase, redemption or other acquisition by the
Company or any of its Subsidiaries of any outstanding shares of
capital stock or other securities of the Company or any of its
Subsidiaries;
(d)
any material change in any method of accounting or accounting
practice by the Company or any of its Subsidiaries;
(e)
(A) any increase in the base, incentive or other compensation
payable or to become payable to its officers or employees (except
for increases in the ordinary course of business and consistent
with past practice) or (B) any establishment, adoption, entry
into or amendment of any collective bargaining, bonus, profit
sharing, thrift, compensation, employment, termination, severance
or other plan, agreement, trust, fund, policy or arrangement for
the benefit of any director, officer or employee, except for
required changes due to changes in the law or increases permitted
under 6.6(e)(A); or
14
(f)
the entry into any Contract to do any of the foregoing.
6.7.
Litigation and Liabilities . There are no
(i) civil, criminal or administrative actions, suits, claims,
hearings, arbitrations, investigations or other proceedings pending
or, to the knowledge of the Company, threatened against the Company
or any of its Subsidiaries or (ii) obligations or liabilities
of the Company or any of its Subsidiaries, whether or not accrued,
contingent or otherwise and whether or not required to be
disclosed, or any other facts or circumstances of which the
executive officers of the Company have knowledge that would
reasonably be expected to result in any claims against, or
obligations or liabilities of, the Company or any of its
Subsidiaries, including those relating to environmental and
occupational safety and health matters, except, in the case of
subsections (i) and (ii) above, to the extent set forth in the
Company's consolidated balance sheets (included in the Company
Reports) for the year ended September 30, 2006 and the quarter
ended December 31, 2006 and those that, individually or in the
aggregate, would not reasonably be expected to result in a Material
Adverse Effect or to prevent, materially delay or materially impair
the consummation of the transactions contemplated by this
Agreement. Neither the Company nor any of its Subsidiaries is
a party to or subject to the provisions of any material judgment,
order, writ, injunction, decree or award of any Governmental Entity
other than with respect to monetary judgments that have been paid
in full.
6.8.
Employee Benefits .
(a)
(i) All benefit and compensation plans, contracts, policies or
arrangements including "employee benefit plans" within the meaning
of Section 3(3) of ERISA and any pension, retirement, welfare,
medical, deferred compensation, severance, stock option, stock
purchase, stock appreciation rights, stock based, incentive and
bonus plans and employment and change in control plans and
agreements, (A) covering Employees or current or former directors
of the Company or (B) pursuant to which the Company or any of its
Subsidiaries would have any liability (" Compensation and
Benefit Plans "), other than Non-U.S. Benefit Plans, are listed
on Section 6.8(a)
of the Company Disclosure Letter, and (ii) each Compensation and
Benefit Plan which has received a favorable opinion letter from the
Internal Revenue Service National Office, including any master or
prototype plan, has been separately identified. True and
complete copies of all Compensation and Benefit Plans, including,
but not limited to, any trust instruments, insurance contracts and,
with respect to any employee stock ownership plan, loan agreements
forming a part of any Compensation and Benefit Plan, and all
amendments thereto have been provided to Mitsui USA.
(b)
All U.S. Benefit Plans are in substantial compliance with ERISA,
the Code and other applicable laws. Each U.S. Benefit Plan
which is subject to ERISA (an " ERISA Plan ") that is a
Pension Plan intended to be qualified under Section 401(a) of the
Code, has received a favorable determination letter from the
Internal Revenue Service covering all tax law changes prior to the
Economic Growth and Tax Relief Reconciliation Act of 2001 or has
applied to the IRS for such favorable determination letter within
the
15
applicable remedial amendment period
under Section 401(b) of the Code, and the Company is not aware of
any circumstances likely to result in the loss of the qualification
of any such Plan under Section 401(a) of the Code. Any
voluntary employees' beneficiary association within the meaning of
Section 501(c)(9) of the Code which provides benefits under a U.S.
Benefit Plan has (i) received an opinion letter from the IRS
recognizing its exempt status under Section 501(c)(9) of the Code
and (ii) filed a timely notice with the IRS pursuant to Section
505(c) of the Code, and the Company is not aware of circumstances
likely to result in the loss of such exempt status under Section
501(c)(9) of the Code. Neither the Company nor any of its
Affiliates has engaged in a transaction with respect to any ERISA
Plan that, assuming the taxable period of such transaction expired
as of the date hereof, would subject the Company or any Subsidiary
of the Company to a tax or penalty imposed by either Section 4975
of the Code or Section 502(i) of ERISA in an amount which would be
material. Neither the Company nor any of its Subsidiaries has
incurred or would reasonably be expected to incur a material tax or
penalty imposed by Section 4980 of the Code or Section 502 of ERISA
or any material liability under Section 4071 of ERISA.
(c)
Each Compensation and Benefit Plan which is a nonqualified deferred
compensation plan within the meaning of Section 409A of the Code
has been operated and maintained in a good faith effort to comply
in all material respects according to the applicable requirements
of Section 409A of the Code.
(d)
No liability under Subtitle C or D of Title IV of ERISA has been or
is expected to be incurred by the Company or any of its
Subsidiaries with respect to any ongoing, frozen or terminated
"single-employer plan", within the meaning of Section 4001(a)(15)
of ERISA, currently or formerly maintained by any of them, or the
single-employer plan of any entity which is considered one employer
with the Company under Section 4001 of ERISA or Section 414 of the
Code (an " ERISA Affiliate "). The Company and its
Subsidiaries have not incurred and do not expect to incur any
withdrawal liability with respect to a Multiemployer Plan under
Subtitle E of Title IV of ERISA (regardless of whether based on
contributions of an ERISA Affiliate). No notice of a
"reportable event", within the meaning of Section 4043 of ERISA for
which the reporting requirement has not been waived or extended,
other than pursuant to Pension Benefit Guaranty Corporation ("
PBGC ") Reg. Section 4043.33 or 4043.66, has been required
to be filed for any Pension Plan or by any ERISA Affiliate within
the 12-month period ending on the date hereof or shall be required
to be filed in connection with the transaction contemplated by this
Agreement. No notices have been required to be sent to
participants and beneficiaries or the PBGC under Section 302 or
4011 of ERISA or Section 412 of the Code.
(e)
All contributions required to be made under each Compensation and
Benefit Plan, as of the date hereof, have been timely made and all
obligations in respect of each Compensation and Benefit Plan have
been properly accrued and reflected in the financial statements
referred to in Section 6.5(d)
of this Agreement. Neither any Pension Plan nor any
single-employer plan of an ERISA Affiliate has an "accumulated
16
funding deficiency" (whether or not
waived) within the meaning of Section 412 of the Code or Section
302 of ERISA and no ERISA Affiliate has an outstanding funding
waiver. Neither any Pension Plan nor any single-employer plan
of an ERISA Affiliate has been required to file information
pursuant to Section 4010 of ERISA for the current or most recently
completed plan year. It is not reasonably anticipated that
required minimum contributions to any Pension Plan under Section
412 of the Code shall be materially increased by application of
Section 412(l) of the Code. Neither the Company nor any of
its Subsidiaries has provided, or is required to provide, security
to any Pension Plan or to any single-employer plan of an ERISA
Affiliate pursuant to Section 401(a)(29) of the Code.
(f)
Under each Pension Plan which is a single-employer plan, as of the
last day of the most recent plan year ended prior to the date
hereof, the actuarially determined present value of all "benefit
liabilities", within the meaning of Section 4001(a)(16) of ERISA
(as determined on the basis of the actuarial assumptions contained
in such Pension Plan's most recent actuarial valuation), did not
exceed the then current value of the assets of such Pension Plan,
and there has been no material change in the financial condition,
whether or not as a result of a change in the funding method, of
such Pension Plan since the last day of the most recent plan
year.
(g)
There is no material pending or, to the knowledge of the Company,
threatened litigation relating to the Compensation and Benefit
Plans. Neither the Company nor any of its Subsidiaries has
any obligations for retiree health and life benefits under any
ERISA Plan or collective bargaining agreement. The Company or
its Subsidiaries may amend or terminate any such plan at any time
without incurring any liability thereunder other than in respect of
claims incurred prior to such amendment or termination.
(h)
There has been no amendment to, announcement by the Company or any
of its Affiliates relating to, or change in employee participation
or coverage under, any Compensation and Benefit Plan which would
increase materially the expense of maintaining such plan above the
level of the expense incurred therefor for the most recent fiscal
year. Neither the execution of this Agreement, shareholder
approval of this Agreement nor the consummation of the transactions
contemplated hereby shall, except as otherwise provided in
Section 5.3
, (w) entitle any employees of the Company or any of its
Subsidiaries to severance pay or any increase in severance pay upon
any termination of employment after the date hereof, (x) accelerate
the time of payment or vesting or result in any payment or funding
(through a grantor trust or otherwise) of compensation or benefits
under, increase the amount payable or result in any other
material obligation pursuant to, any of the Compensation and
Benefit Plans, (y) limit or restrict the right of the Company or,
after the consummation of the transactions contemplated hereby,
Mitsui USA or any of its Affiliates to merge, amend or terminate
any of the Compensation and Benefit Plans or (z) result in payments
under any of the Compensation and Benefit Plans which would not be
deductible under Section 162(m) or Section 280G of the Code.
17
(i)
All Non-U.S. Benefit Plans comply in all material respects with
applicable local law. All Non-U.S. Benefit Plans are listed
on Section 6.8(i)
of the Company Disclosure Letter. The Company and its
Subsidiaries have no material unfunded liabilities with respect to
any such Non-U.S. Benefit Plan. As of the date hereof, there
is no pending or, to the knowledge of the Company, threatened
material litigation relating to Non-U.S. Benefit Plans.
6.9.
Compliance with Laws; Licenses . The businesses of
each of the Company and its Subsidiaries have not been, and are not
being, conducted in violation of any Laws, except for violations
that, individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect or to prevent,
materially delay or materially impair the consummation of the
transactions contemplated by this Agreement. Except with
respect to regulatory matters covered by Section 8.5
, no investigation or review by any Governmental Entity with
respect to the Company or any of its Subsidiaries is pending or, to
the knowledge of the Company, threatened, nor has any Governmental
Entity indicated an intention to conduct the same, except for such
investigations or reviews the outcome of which, individually or in
the aggregate, would not reasonably be expected to result in a
Material Adverse Effect or to prevent, materially delay or
materially impair the consummation of the transactions contemplated
by this Agreement. The Company has not received any notice or
communication of any material noncompliance with any such Laws that
has not been cured as of the date of this Agreement. The
Company and its Subsidiaries each has obtained and is in compliance
with Licenses necessary to conduct its business as presently
conducted, except those the absence of which, individually or in
the aggregate, would not reasonably be expected to result in a
Material Adverse Effect or to prevent, materially delay or
materially impair the consummation of the transactions contemplated
by this Agreement.
6.10.
Material Contracts and Government Contracts .
(a)
As of the date of this Agreement, neither the Company nor any of
its Subsidiaries is a party to or bound by:
(i)
any lease of real or personal property providing for annual rentals
of $200,000 or more;
(ii)
other than Contracts relating to the purchase of raw materials or
the sale of products, in either case in the ordinary course of
business, any Contract that is reasonably likely to require either
(x) annual payments to or from the Company and its Subsidiaries of
more than $300,000 or (y) aggregate payments to or from the Company
and its Subsidiaries of more than $700,000;
(iii)
any Contract relating to the purchase of raw materials or the sale
of products, in either case in the ordinary course of business,
that is reasonably likely to require either (x) annual payments to
or from the Company and its Subsidiaries of more than $20,000,000
or (y) aggregate payments to or from the Company and its
Subsidiaries of more than $20,000,000;
18
(iv)
other than with respect to any partnership that is wholly owned by
the Company or any wholly owned Subsidiary of the Company, any
partnership, joint venture or other similar agreement or
arrangement relating to the formation, creation, operation,
management or control of any partnership or joint venture material
to the Company or any of its Subsidiaries or in which the Company
owns more than a 15% voting or economic interest, or any interest
valued at more than $400,000 without regard to percentage voting or
economic interest;
(v)
any Contract (other than Contracts among direct or indirect wholly
owned Subsidiaries of the Company) pursuant to which the Company or
any of its Subsidiaries incurs indebtedness for borrowed money
(whether incurred, assumed, guaranteed or secured by any asset) in
excess of $400,000;
(vi)
any Contract required to be filed as an exhibit to the Company's
Annual Report on Form 10-K pursuant to Item 601(b)(10) of
Regulation S-K under the Securities Act;
(vii)
any Contract that (A) purports to limit in any material
respect either the type of business in which the Company or its
Subsidiaries (or, after the Effective Time, Mitsui USA or its
Affiliates) may engage or the manner or locations in which any of
them may so engage in any business, (B) requires or would
reasonably be expected to require the disposition of any material
assets (other than products sold in the ordinary course of
business) or line of business of the Company or its Subsidiaries
or, after the Effective Time, Mitsui USA or its Affiliates,
(C) grants "most favored nation" status that, following the
Merger, would apply to Mitsui USA and its Affiliates, including the
Company and its Subsidiaries, (D) prohibits or limits the
right of the Company or any of its Subsidiaries to make, sell or
distribute any products or services or use, transfer, license,
distribute or enforce any of their respective Intellectual Property
rights or (E) grants any Person exclusive or similar rights in
respect of any services in any line of business or any geographic
area with respect to or affecting the Company or its Subsidiaries
(or, after the Effective Time, Mitsui USA or its Affiliates);
(viii)
any Contract to which the Company or any of its Subsidiaries is a
party containing a standstill or similar agreement pursuant to
which the Company or any of its Subsidiaries has agreed not to
acquire assets or securities of any other Person;
(ix)
except as set forth in or incorporated by reference in the Company
Reports filed prior to February 16, 2007, any Contract between
the Company or any of its Subsidiaries and any director or officer
of the Company or any Person beneficially owning 5% or more of the
outstanding Shares;
(x)
any Contract providing for indemnification by the Company or any of
its Subsidiaries of any Person, except for any such Contract that
is (x) not material to the Company or any of its Subsidiaries
and (y) entered into in the
19
ordinary course of business; and
(xi)
any Contract that contains a put, call or similar right pursuant to
which the Company or any of its Subsidiaries could be required to
purchase or sell, as applicable, any equity interests of any Person
or assets that have a fair market value or purchase price of more
than $250,000 (the Contracts described in clauses (i)
-- (xi)
, together with all exhibits and schedules to such Contracts, the "
Material Contracts ").
(b)
(i) A copy of each Material Contract has been made available to
Mitsui USA and (ii) each such Contract is a valid and binding
agreement of the Company or one of its Subsidiaries, as the case
may be, and is in full force and effect, and neither the Company
nor any of its Subsidiaries nor, to the knowledge of the Company,
any other party thereto is in default or breach in any respect
under the terms of any such Contract except for such defaults or
breaches as would not reasonably be expected to have a Material
Adverse Effect.
(c)
(i) With respect to each Government Contract,
except as, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect, (x) all
representations and certifications executed, acknowledged or set
forth in or pertaining to such Government Contract were complete
and correct in all material respects as of their effective date,
and the Company and each of its Subsidiaries have complied in all
material respects with all such representations and certifications;
(y) neither the United States government nor any prime
contractor, subcontractor or other Person has notified the Company
or any of its Subsidiaries that the Company or any such Subsidiary
has breached or has violated any material certification,
representation, clause, provision or requirement, pertaining to
such Government Contract; and (z) no termination for
convenience, termination for default, cure notice or show cause
notice is in effect as of the date of this Agreement pertaining to
any Government Contract.
(ii)
Except as would not reasonably be expected to have a Material
Adverse Effect, (x) to the knowledge of the Company, neither
the Company nor any of its Subsidiaries nor any of their respective
personnel is or has been under administrative, civil, or criminal
investigation, or indictment or audit by any Governmental Entity
with respect to any alleged irregularity, misstatement or omission
arising under or relating to any Government Contract;
(y) neither the Company nor any of its Subsidiaries has
conducted or initiated any internal investigation or made a
voluntary disclosure to the United States government with respect
to any alleged irregularity, misstatement or omission arising under
or relating to a Government Contract; and (z) neither the
Company nor any of its Subsidiaries nor, to the knowledge of the
Company, any of their respective personnel has been suspended or
debarred from doing business with the United States government or
is, or at any time has been, the subject of a finding of
non-responsibility or ineligibility for United States government
contracting.
20
6.11.
Real Property .
(a)
Except in any such case as, individually or in the aggregate, would
not reasonably be expected to result in a Material Adverse Effect,
with respect to the Owned Real Property, (i) the Company or
one of its Subsidiaries, as applicable, has good and marketable
title to the Owned Real Property, free and clear of any
Encumbrance, and (ii) there are no outstanding options or
rights of first refusal to purchase the Owned Real Property, or any
portion of the Owned Real Property or interest therein.
(b)
With respect to the Leased Real Property, the lease or sublease for
such property is valid, legally binding, enforceable and in full
force and effect, and none of the Company nor any of its
Subsidiaries is in breach of or default under such lease or
sublease, and no event has occurred that, with notice, lapse of
time or both, would constitute a breach or default by any of the
Company or its Subsidiaries, to permit termination, modification or
acceleration by any third party thereunder, or to prevent,
materially delay or materially impair the consummation of the
transactions contemplated by this Agreement except in each case,
for such invalidity, failure to be binding, unenforceability,
ineffectiveness, breaches, defaults, terminations, modifications,
accelerations or repudiations that, individually or in the
aggregate, would not reasonably be expected to result in a Material
Adverse Effect.
(c)
Section 6.11(c)
of the Company Disclosure Letter contains a true and complete list
of all Owned Real Property. Section 6.11(c)
of the Company Disclosure Letter sets forth a correct street
address or such other information as is reasonably necessary to
identify each parcel of Owned Real Property. To the knowledge
of the Company, each facility included in the Owned Real Property
(including all buildings, structures, and improvements) (i) is, in
all material respects, in good operating condition and repair,
subject to ordinary wear and tear and (ii) does not require repairs
or alterations that are material in nature or cost for its current
use. There are no pending or, to the knowledge of the
Company, threatened material appropriation, condemnation, eminent
domain or like proceedings relating to the Owned Real Property.
(d)
For purposes of this Section 6.11
only, " Encumbrance " means any mortgage, lien, pledge,
charge, security interest, easement, covenant, or other restriction
or title matter or encumbrance of any kind in respect of such asset
but specifically excludes (a) specified encumbrances described
in Section 6.11(d)
of the Company Disclosure Letter; (b) encumbrances for
current Taxes or other governmental charges not yet due and payable
or the validity of which is being contested in good faith by
appropriate proceedings; (c) mechanics', carriers', workmen's,
repairmen's or other like encumbrances arising or incurred in the
ordinary course of business consistent with past practice relating
to obligations as to which there is no default on the part of
Company; (d) other encumbrances that do not, individually or
in the aggregate, materially impair the continued use, operation,
value or marketability of the specific parcel of Owned Real
Property to which they relate or the conduct of the business of the
Company and its Subsidiaries as presently conducted;
(e) easements, rights of way or other similar matters
21
or restrictions or exclusions that
would be shown by a current title report or other similar report;
and (f) any condition or other matter, if any, that may be
shown or disclosed by a current and accurate survey or physical
inspection.
6.12.
Takeover Statutes . No Takeover Statute or any
anti-takeover provision in the Company's articles of incorporation
or by-laws is applicable to Mitsui USA, Merger Sub, the Company,
the Shares, the Merger or the other transactions contemplated by
this Agreement.
6.13.
Environmental Matters . Except for such matters that,
alone or in the aggregate, would not reasonably be expected to
result in a Material Adverse Effect: (a) the Company and
its Subsidiaries have complied at all times with all applicable
Environmental Laws; (b) no property (including soils,
groundwater, surface features, buildings and structures) currently
or formerly owned or operated by the Company or any of its
Subsidiaries is contaminated with any Hazardous Substance in
quantities or conditions that would reasonably be expected to
result in liability or any corrective or remedial obligations
pursuant to any Environmental Law; (c) to the knowledge of the
Company, neither the Company nor any of its Subsidiaries is subject
to liability for any Hazardous Substance disposal or contamination
on any formerly owned or operated property or third party property;
(d) neither the Company nor any of its Subsidiaries has
received any written notice, demand, letter, claim or request for
information alleging that the Company or any of its Subsidiaries
may be in violation of or subject to liability under any
Environmental Law; (e) neither the Company nor any of its
Subsidiaries is subject to any order, decree, injunction, agreement
with, or to the knowledge of the Company, investigation by, any
Governmental Entity or any indemnity or other agreement with any
third party concerning any obligations or liability arising under
or relating to any Environmental Law; (f) there are no other
circumstances or conditions involving the Company or any of its
Subsidiaries that would reasonably be expected to result in any
claim, liability, investigation, or cost of or against the Company,
or any restriction on the ownership, use, or transfer of any
property owned or operated by the Company, pursuant to any
Environmental Law; and (g) the Company has made
available to Mitsui USA copies of all environmental reports,
studies, assessments, sampling data and other environmental
documents in its possession relating to Company or its Subsidiaries
or their respective current and former properties or
operations.
6.14.
Taxes .
(a)
all material Tax Returns that are required to be filed on or before
the Closing Date by or with respect to the Company and any of its
Subsidiaries (taking into account any extension of time to file),
have been or shall be prepared in good faith and timely filed on or
before the Closing Date, and all such Tax Returns are or shall be
true and complete in all material respects. Other than Taxes
incurred in the ordinary course of business, the Company and its
Subsidiaries have no liability for unpaid Taxes accruing after the
date of the Company's or its Subsidiaries' (respectively) latest
Tax Returns, other than those which have been accrued on the
Company's or any Subsidiary's
22
financial statements as of
December 31, 2006.
(b)
all Taxes shown to be due on the material Tax Returns referred to
in clause (a) have been or shall be timely paid in full;
(c)
all Specified Tax Returns have been examined by the Internal
Revenue Service or the appropriate state, local or foreign taxing
authority or the period for assessment of the Taxes in respect of
which such Tax Returns were required to be filed has expired.
For purposes of this clause (c), "Specified Tax Returns" mean
only the following material Tax Returns referred to in clause (a)
(but excluding all Non-Controlled Subsidiaries Tax Returns): U.S.
federal income Tax Returns, Indiana, Ohio Tennessee and Michigan
income and franchise Tax Returns, Mexican single federal annual Tax
Returns, and any Tax Return showing a tax due of more than
$750,000. There are no material audits, examinations,
investigations, or other proceedings in respect of Taxes or Tax
matters of the Company or any of its Subsidiaries that are pending.
Copies of all material Tax Returns of the Company or any of
its Subsidiaries have been provided to Mitsui USA;
(d)
all deficiencies asserted or assessments made as a result of any
examinations of Tax Returns have been paid in full;
(e)
no issues that have been raised by the relevant taxing authority in
connection with the examination of any of the Tax Returns referred
to in clause (a)
are currently pending;
(f)
no waivers of statutes of limitation have been given by or
requested with respect to any material Taxes of the Company or any
of its Subsidiaries;
(g)
the Company or any of its Subsidiaries shall not be required, as a
result of (A) a change in accounting method for a Tax period
beginning on or before the Closing, to include any adjustment under
Section 481(c) of the Code (or any similar provision of state,
local or foreign law) in taxable income for any Tax period
beginning on or after the Closing Date, or (B) any "closing
agreement" as described in Section 7121 of the Code (or any similar
provision of state, local or foreign Tax law), to include any item
of income in or exclude any item of deduction from any Tax period
beginning on or after the Closing;
(h)
there are no Liens on any of the assets of the Company or any of
its Subsidiaries that arose in connection with any failure (or
alleged failure) to pay any Tax (other than for Taxes not yet due
and payable);
(i) &nb
