12
INDEX TO EXHIBITS
EXHIBIT
INDEX EXHIBIT
- -------- -------------------------------------------------------
2.1 Agreement and Plan of Reorganization dated as of August
25, 1995 by and among Newell Co., Philips Acquisition
Co., and Philips Industries, Inc.
2.2 Escrow Agreement dated as of August 25, 1995 by and
among Newell Co., Carl M. Philips and Firstar Trust
Company.
2.3 Escrow and Indemnity Agreement dated as of August 25,
1995 by and among Newell Co., Carl M. Philips and Firstar
Trust Company
5 Opinion of Schiff Hardin & Waite
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Schiff Hardin & Waite (contained in their
opinion filed as Exhibit 5)
24 Powers of attorney (set forth on the signature page of
this registration statement)
EXHIBIT 2.1
AGREEMENT AND PLAN OF
REORGANIZATION
BETWEEN
NEWELL CO.
PHILIPS ACQUISITION CORP.
PHILIPS INDUSTRIES, INC.
AND
CARL PHILIPS
Dated August 25, 1995
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (this "Agreement")
is made and entered into this 25th day of August, 1995 by and among
NEWELL CO., a Delaware corporation ("Newell"),
PHILIPS ACQUISITION CORP., a New York corporation ("Acquisition"),
PHILIPS INDUSTRIES, INC., a New York corporation (the "Company"), and
CARL PHILIPS (the "Shareholder").
WITNESSETH:
WHEREAS, Newell owns all of the outstanding capital stock of
Acquisition; and
WHEREAS, the Shareholder owns 100 percent of the outstanding
shares of capital stock of the Company; and
WHEREAS, the respective Boards of Directors of Newell,
Acquisition and the Company have approved the transactions provided
for by this Agreement, pursuant to which Acquisition is to be merged
into the Company in accordance with the applicable provisions of the
New York Business Corporation Law, which merger is intended to qualify
as a reorganization under Section 368 of the Internal Revenue Code of
1986, as amended (the "Code"); and
WHEREAS, Newell has agreed to provide the shares required to
convert, at the Effective Time (as hereinafter defined) of the merger,
each of the outstanding shares of Common Stock, no par value, of the
Company (collectively, the "Company Common Stock") into shares of
Common Stock, $1.00 par value, of Newell ("Newell Common Stock"),
subject to the provisions of this Agreement and the Plan of Merger
(the "Plan of Merger") attached hereto as Exhibit A, all upon the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in order to consummate the transactions set
forth above and in consideration of the mutual covenants, agreements,
representations and warranties herein contained, the parties agree as
follows:
ARTICLE I
The Merger
1.01 The Merger. Subject to the terms and conditions of this
Agreement and the Plan of Merger, Acquisition shall be merged with and
into the Company in accordance with the New York Business Corporation
Law (the "Merger"), the separate corporate existence of Acquisition
shall cease, and the Company shall be the surviving corporation.
The Plan of Merger sets forth the terms of the Merger, the mode of
carrying the same into effect, and the manner of converting the
outstanding shares of Company Common Stock into shares of Newell
Common Stock. The Merger shall be consummated after the closing
provided in Section 1.02 hereof when properly executed Certificate of
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Merger, in the form annexed hereto as Exhibit A-1, is executed and
filed with the Secretary of State of New York in accordance with the
New York Business Corporation Law (the "Effective Time").
1.02 Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") and the Plan of Merger shall take place
at the offices of Spitzer & Feldman, 405 Park Avenue, New York, NY
10022 on August 25, 1995, or at such other time and place as Newell
and the Company shall agree in accordance with the provisions hereof.
ARTICLE II
Representations and Warranties of the Company
and the Shareholder
The Company and the Shareholder hereby jointly and severally
represent and warrant to Newell and Acquisition that:
2.01 Organization and Authority. The Company is duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation with all requisite power and authority
to own, lease and operate its properties and to carry on its business
as now being conducted, and is not qualified in any other
jurisdiction. Copies of the Articles of Incorporation and By-Laws of
the Company that have been heretofore delivered to Newell are complete
and correct as of the date hereof.
2.02 Subsidiaries and Affiliates. Except for 938217 Ontario
Limited, an Ontario corporation, there are no corporations,
partnerships or other entities in which the Company has an equity
interest other than minimum positions received in settlement of claims
in reorganizations of customers.
2.03 Capitalization of the Company. The authorized capital stock
of the Company consists of 200 shares of Common Stock, no par value
per share. Of such shares, 76 shares of Common Stock are issued and
outstanding and owned by the Shareholder. All of the outstanding
shares of Company Common Stock have been issued pursuant to and in
accordance with valid exemptions from registration under the
Securities Act of 1933, as amended, and the State of New York, and
securities laws and rules and regulations under such laws, and all
such shares are free of pre-emptive rights. There are no other shares
of capital stock or other equity securities (or debt securities with
any voting rights or convertible into securities with any voting
rights) of the Company outstanding and no other outstanding options,
warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible
into, shares of capital stock of the Company.
2.04 Authorization. The Company has full power and authority to
enter into this Agreement and the Plan of Merger and to carry out its
obligations hereunder and thereunder. The execution and delivery of
this Agreement and the Plan of Merger and the consummation of the
transactions contemplated hereby and thereby have been duly authorized
by the Company's Board of Directors and Shareholder, and no other
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corporate proceedings on the part of the Company are necessary to
authorize this Agreement, the Plan of Merger and the transactions
contemplated hereby and thereby. This Agreement and the Plan of
Merger have been duly executed and delivered by the Company. This
Agreement is, and subject to approval by the Shareholder of the
Company, the Plan of Merger will be, legal, valid and binding
obligations of the Company enforceable against the Company in
accordance with their respective terms. This Agreement has been duly
executed and delivered by the Shareholder and is the legal, valid and
binding obligation of the Shareholder enforceable against the
Shareholder in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors rights generally and by principles of equity.
Neither the execution and delivery of this Agreement nor the Plan of
Merger by the Company, nor the execution and delivery of this
Agreement by the Shareholder, nor the consummation of the
transactions contemplated hereby and thereby, nor compliance by the
Company or the Shareholder with any of the provisions hereof or
thereof will (i) violate, conflict with, or result in a breach of any
provisions of, or constitute a default (or an event which, with notice
or lapse of time or both, would constitute a default) under, or result
in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration, or result in the
creation of any lien, security interest, charge or encumbrance upon
any of the material properties or assets of the Company, under any of
the terms, conditions or provisions of (x) its charter or by-laws, or
(y) except as disclosed in Schedule 2.04, any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which the Company or Shareholder is a
party, or by which any property or assets of the foregoing may be
subject, or (ii) violate any judgment, ruling, order, writ,
injunction, decree, statute, rule or regulation applicable to the
Company or Shareholder or any of its respective properties or assets.
2.05 Financial Statements. The (i) audited balance sheet as of
December 31, 1994, and the unaudited balance sheet as at July 31,
1995 (the unaudited balance sheet as of July 31, 1995 being herein
referred to as the "Company Balance Sheet" ) and (ii) the audited
statement of income, stockholders equity and cash flow for the fiscal
year ended December 31, 1994 and unaudited statement for the period
ending July 31, 1995 that have heretofore been delivered to Newell
fairly present the financial condition and results of operations of
the Company as at the respective dates and all such financial
statements have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved, other than year-end adjustments consistent with past
practice and Casero Labs, Ltd., which was sold as of 3/31/95 is not
included in the financial statements for the period ended 7/31/95.
2.06 Inventory. All inventory reflected on the Company Balance
Sheet or thereafter acquired, was acquired or manufactured in the
ordinary course of business, and is usable or saleable in the ordinary
course of business, including close-outs, consistent with past
practice.
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2.07 Receivables. All accounts, notes and other receivables of
the Company, whether reflected in the Company Balance Sheet or arising
thereafter, represent sales in the ordinary course of business, and
none of such receivables or other debts is or will be at the date of
the Closing subject to any counterclaims or set-offs, except (i)
consistent with past practice, (ii) as otherwise reflected in the
Company Balance Sheet, or (iii) as to after-arising accounts
receivable, equivalent reserves.
2.08 Absence of Certain Changes.
(a) Since July 31, 1995, the Company has conducted its business
only in the ordinary and usual course and has not experienced any
changes in its condition (financial or otherwise), assets,
liabilities, business or operations which individually or in the
aggregate had a material adverse effect. Without limiting the
generality of the foregoing sentence, since July 31, 1995, the Company
has not, except as shown on Schedule 2.08:
(i) paid, discharged or satisfied any liability or
obligation (whether accrued, absolute, contingent or otherwise)
in excess of $10,000 other than the payment, discharge or
satisfaction, in the ordinary and usual course of business, of
liabilities or obligations shown or reflected on the Company
Balance Sheet or incurred any liability or obligation in excess
of $10,000 except in the ordinary course of business since the
date of the Company Balance Sheet;
(ii) except for the Marine Loan ("Marine Loan") listed on
Schedule 2.04 in the ordinary and usual course of business,
permitted or allowed any assets (whether real, personal or mixed,
tangible or intangible) to be subjected to any mortgage, pledge,
lien, security interest, encumbrance, restriction or charge of
any kind, or sold, transferred or otherwise disposed of any of
its notes or accounts receivable;
(iii) written off as uncollectible any notes or accounts
receivable or written down the value of any inventory other than
in the ordinary and usual course of business;
(iv) cancelled or waived any claims or rights or sold,
transferred, distributed or otherwise disposed of any assets,
except assets in the ordinary and usual course of business;
(v) disposed of or permitted to lapse any rights in, to or
for the use of any patent, trademark, trade name or copyright;
(vi) granted any increase in the base compensation or other
payment to any director, officer or employee, whether now or
hereafter payable or granted (other than increases in
compensation in the ordinary course consistent in timing and
amount with past practice and/or the employment agreements listed
on Schedule 2.08) or granted any severance or termination pay
(other than for severance pay in amounts consistent with the
Company's established severance pay practices and/or such
18
employment agreements), or entered into or varied the terms of
any employment agreement with any such person;
(vii) made any capital expenditure or commitment in excess
of $10,000 for additions to property, plant or equipment, or
leased or agreed to lease any assets which, if purchased, would
be reflected in the property, plant or equipment accounts;
(viii) made any material change in any method of accounting
or keeping its books of account or accounting practices;
(ix) paid any amounts which individually exceeded $10,000
to, or sold or otherwise disposed of any assets valued
individually in excess of $10,000 to or entered into any
agreement or arrangement with, any Affiliated Person (other than
payments of compensation to employees for wages and reimbursement
of documented expenses in the ordinary course). For purposes of
this Agreement, "Affiliated Person" means any present director,
officer, shareholder or employee of the Company and any member of
such person's family and any entity in which such person or any
member of such person's family has an interest or which is
controlled, directly or indirectly, by such person or any member
of such person's family;
(x) incurred any obligation or liability, including
without limitation any liability for nonperformance or
termination of any contract, except liabilities incurred in the
ordinary and usual course of the business other than the Real
Property Lease (as defined below);
(xi) authorized for issuance, issued, delivered or sold any
debt or equity securities, or altered the terms of any
outstanding securities issued by it or in any way increased its
indebtedness for borrowed money other than draw downs on the
Marine Loan; or
(xii) declared, paid or set aside for payment any dividend
or other distribution (whether in cash, stock or property or
otherwise) in respect of any Company Common Stock, or redeemed,
purchased or otherwise acquired any Company Common Stock, any
securities convertible into or exchangeable for any Company
Common Stock or any options, warrants or other rights to purchase
or subscribe to any of the foregoing (and no dividends are or
will be owed to any holder of Company Common Stock).
2.09 Litigation and Other Proceedings. Except as set forth on
Schedule 2.09, neither the Company or the Shareholder are currently a
party to any pending or threatened claim, action, suit, investigation
or proceeding, or subject to any order, judgment or decree relating to
or affecting the Company or, with respect to the Shareholder, relating
to or affecting their shares of Company Common Stock or their
positions with the Company.
2.10 Compliance with Laws. The Company has previously conducted
and is conducting its business in material compliance with all
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material applicable laws, regulations, and requirements of each
jurisdiction in which such business is carried on. Schedule 2.10 lists
all material licenses, registrations and permits, and applications
with respect to the business and operations of the Company. The
Company currently has all material governmental approvals, consents,
licenses, registrations, and permits necessary to carry on its
business as presently conducted and the Company has not received
written notice of violation of any material laws or notice of any
proposed regulations or changes in the requirement of such approvals,
consents, licenses, registrations, or permits which might have a
material adverse effect on the Company's business.
2.11 Tax Returns and Audits. Complete and correct copies of all
tax returns and all amendments or modifications thereto filed or
caused to be filed by the Company for the period beginning January 1,
1991 up to and including the year ended December 31, 1993 have been
delivered to buyer. The Company has filed with the appropriate
governmental agencies all tax returns required to be filed by it and
has paid, or made provision for (or will make provision by accruals
through the Closing) the payment of, all taxes of every type and
description which have or may become due, and such returns accurately
reflect the Company's obligations to pay taxes for the periods covered
therein. The accruals and reserves for taxes reflected in the Company
Balance Sheet are adequate to pay in full all taxes that have accrued
for any period which are not yet due and payable. No examination
relating to any tax returns is currently in progress of which the
Company has received notice and no waivers of statutes of limitation
have been given or requested. For purposes of this agreement, taxes
shall mean all taxes, charges, fees, levies or other assessments,
including, without limitation, all net income, gross income, gross
receipts, sales, use, goods and services, ad valorem, transfer,
franchise, profits, license, withholding, payroll, single business,
employment, excise, severance, stamp, occupation, property or other
taxes, customs, duties, fees, assessments or charges of any kind
whatsoever, and any installments with respect thereto, together with
any interest and penalties, additions to tax or additional amounts
imposed by any taxing authority (domestic or foreign) upon the
Company. The federal income tax liabilities of the Company has not
been audited by the IRS since 1989.
2.12 Title to Properties.
(a) Schedule 2.12(a) sets forth: a true and complete list of
the real property leases ("Real Property Lease") of the Company and
all personal property leases to which the Company is a party as lessee
as of the date hereof involving an annual lease payment of more than
$10,000, including an identification of the parties, the property, the
term of the lease and the rent or lease payments thereunder. The
Company owns no real property.
(b) The Company has good and marketable title to all of its
properties and assets, real, personal and mixed, including
intangibles, free and clear of all mortgages, liens, pledges, charges
or encumbrances of any nature whatsoever, and has taken all steps
necessary or otherwise required to perfect and protect its rights in
20
and to its properties and assets, including intangibles. All
properties and assets owned and currently used by the Company in the
Company's business are in working condition and state of repair that
permits the Company to operate its business in a manner consistent
with past operations and to the best of the knowledge of the Company
and Shareholder, are not in violation of any material applicable laws,
including without limitation building and zoning laws, and no written
notice of any violation of building or other laws, statutes,
ordinances or regulations relating to such business, property or
assets has been received. All of the Company's material assets
currently used in connection with its business are located as listed
in Schedule 2.12(b).
2.13 Contracts and Commitments. Except for (i) orders from
customers for immediate delivery of goods in the ordinary course of
business; (ii) orders to contract manufacturers for immediate delivery
to the Company; (iii) such other agreements with suppliers for
build-up of inventory as described in Schedule 2.13, the Company, has
no written or oral contracts, commitments, or other agreements or
arrangements, including any notes, loan agreements, guarantees, or
other evidence of indebtedness of the Company involving an aggregate
consideration with a value in excess of $10,000, or any contracts,
commitments, or other agreements or arrangements with any Affiliated
Person. All of such contracts, commitments, or other agreements or
arrangements to which the Company is a party or by which any of its
assets or properties are bound or affected are in full force and
effect and to the best knowledge of the Company and the Shareholder no
event or condition has occurred or exists or is alleged by any of the
other parties thereto to have occurred or exist, which constitutes or
with lapse of time or giving of notice might constitute a default or
basis for acceleration under any such contract, commitment,
arrangement or other agreement. The Company has not given any
revocable or irrevocable power of attorney to any person, firm or
corporation for any purpose whatsoever except as set forth on Schedule
2.13.
2.14 Employee Relations. The Company is not a party to any
collective bargaining agreement covering or relating to any of its
employees and has not recognized, is not required to recognize and
during the past five years has not received a demand for recognition
by any collective bargaining representative or experienced any strikes
or work stoppages or slowdowns. To the best of their knowledge, the
Company is in material compliance with all applicable laws, rules or
regulations relating to employment or employment practices, including
those relating to wages, hours, collective bargaining and the
withholding and payment of taxes and contributions, and the Company is
in material compliance with the Occupational Safety and Health Act and
applicable Federal Civil Rights laws. There are no controversies
pending or, to the best of Shareholder's knowledge, threatened between
the Company and any of its employees.
2.15 Employee Benefit Plans.
(a) Definitions. For purposes of this Section 2.15:
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(i) Arrangements. The term "Arrangement" means any
personnel policy (including, but not limited to, vacation time,
holiday pay, bonus programs, moving expense reimbursement
programs, and sick leave), salary reduction agreements,
change-in-control agreements, employment agreements, consulting
agreements or any other benefit, program, agreement or contract,
whether or not written, (1) which currently or since December 31,
1989, is being or has been maintained for employees of the
Company or of any Control Group member or (2) to which the
Company or any Control Group Member makes or is required to make
or since December 31, 1989, made or was required to make,
contributions.
(ii) Plan. The term "Plan" includes each employee benefit
plan, as defined in Section 3(3) of the Employee Retirement
Income Security Act ("ERISA") (other than a Multiemployer Plan
and including terminated Plans) (1) which currently or since
December 31, 1987 is being or has been maintained for employees
of the Company or of any Control Group member or (2) to which the
Company or any Control Group member makes or is required to make,
or since December 31, 1987 made or was required to make,
contributions.
(iii) Multiemployer Plan. The term "Multiemployer Plan"
means any employee benefit plan that is a "multiemployer plan"
within the meaning of Section 3(37) of ERISA and to which the
Company or any Control Group member has or has ever had any
obligation to contribute.
(b) Plans Listed.
All Arrangements, Plans and Multiemployer Plans are set
forth on Schedule 2.15.
(c) Operations of Plans.
(i) Each Arrangement and each Plan has been administered
in all material respects in compliance with its terms and with
all filing, reporting, disclosure and other requirements of all
applicable statutes (including but not limited to ERISA, the Code
and the Consolidated Omnibus Budget Reconciliation Act of 1986),
regulations and interpretations thereunder.
(ii) All oral or written communications with respect to
each Arrangement and each Plan currently and in the past reflect
and have reflected in all material respects the documents and
operations of the Arrangement or Plan and no person has or had
any liability by reason of any such communication or any failure
to communicate with respect to any Arrangement or Plan.
(iii) Neither the Company nor any other member of the
Control Group, nor any of their respective employees or
directors, nor any fiduciary, has engaged in any transaction,
including the execution and delivery of this Agreement and other
agreements, instruments and documents for which execution and
22
delivery by the Company is contemplated herein, in violation of
Section 406(a) or (b) of ERISA or which is a "prohibited
transaction" (as defined in Section 4975(c)(1) of the Code) for
which no exemption exists under Section 408(b) of ERISA or
Section 4975(d) of the Code or for which no administrative
exemption has been granted under Section 408(a) of ERISA.
(iv) Each Qualified Plan (together with its related funding
instrument) is qualified and tax exempt under Sections 401 and
501 of the Code, except none of the Qualified Plans has yet been
amended to comply with applicable requirements of the Code, as
amended by the Tax Reform Act of 1986, the Omnibus Budget
Reconciliation Act of 1986 and subsequent legislation.
(v) No matter is pending relating to any Arrangement or
Plan before any court or governmental agency.
(vi) Every fiduciary and official of each Plan is bonded to
the extent required by Section 412 of ERISA and no civil or
criminal action with respect to any Arrangement or Plan, pursuant
to any federal or state law, has been brought, is pending or is
threatened, against the Company, any subsidiary or affiliate
thereof, any officer, director or employee thereof or any
fiduciary of any Plan.
(vii) No Plan fiduciary or any other person has, or has
had, any liability to any participant or beneficiary under any
Plan or Arrangement or to any other person under any provisions
of ERISA or any other applicable law by reason of any action or
failure to act in connection with any Plan or Arrangement,
including, but not limited to, any liability by any reason of any
payment of, or failure to pay, benefits or any other amounts or
by reason of any credit or failure to give credit for any
benefits or rights, except for benefits payable in the normal
operation of the Plan or Arrangement.
(viii) There are no Plans or Arrangements to which the
Company, or any other member of the Control Group is a party or
by which any of them is bound and under which, as a result of
this Agreement or any other particular transaction, any director,
officer, employee or other agent of the Company or any other
member of the Control Group or any other party claiming through
such a person shall or may acquire rights with respect to any
Plan or Arrangement (including, without limitation, the creation,
increase or extension of new or existing rights), become entitled
to a distribution or payment with respect to any Plan or
Arrangement at a date earlier than if this Agreement had not been
signed or such other transaction had not occurred, or otherwise
receive or become vested in rights or benefits with respect to
any Plan or Arrangement.
(d) Plan Documents and Records.
(i) Complete and correct copies of all current and prior
documents as in effect after January 1, 1990, including all
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amendments thereto, with respect to each Arrangement and Plan,
have been heretofore delivered to Newell. These documents
include, but are not limited to, the following: Plan and
Arrangement documents, trust agreements, insurance contracts,
annuity contracts, summary plan descriptions, filings with
governmental agencies, investment manager and investment adviser
contracts, actuarial reports, audit reports, financial
statements, premium reports to PBGC (Form PBGC1), Internal
Revenue Service determination letters, Internal Revenue Service
recognitions of exemption, annual reports (Form 5500) for the
most recent three plan years ending prior to the date hereof and
any other general explanation or communication distributed or
otherwise provided to participants in such Arrangement or Plan
which describes all or any relevant aspect of each Arrangement or
Plan.
(ii) At the Effective Time, the participant or beneficiary
records with respect to each Arrangement and Plan shall be in
custody of the persons listed on Schedule 2.15. All such records
accurately set forth the history of each participant and
beneficiary in connection with each Arrangement and Plan and
accurately state the benefits earned and owed to each such person
as of the date hereof.
(e) Finances.
(i) Neither the Company nor any member of its Control Group
currently maintains or has ever maintained a Title IV Plan.
(ii) All contributions payable to each Qualified Plan for
all benefits earned and other liabilities accrued through
December 31, 1992, determined in accordance with the terms and
conditions of such Qualified Plan, ERISA and the Code, have been
paid or otherwise provided for, and to the extent unpaid are
reflected in the Company Balance Sheet.
(iii) Set forth on Schedule 2.15 is (1) the amount of the
liability for minimum contributions for the last three plan years
to any Qualified Plan, (2) the approximate amount of the minimum
contribution to any Qualified Plan for the plan year during which
the Closing Date is to occur, and (3) the annual cost of
providing coverage under any Plan that is a welfare plan as
defined in Section 3(1) of ERISA to all former employees of the
Company or any other member of the Control Group and all
dependents of a former employee.
(f) Multiemployer Plans.
Neither the Company nor any member of its Control Group is
currently, or has ever been, obligated to contribute to any
Multiemployer Plan.
2.16 Intellectual Property. Schedule 2.16 sets forth a correct
and complete list of all letters patent, patent applications,
inventions upon which patent applications have not yet been filed,
24
trade names, trademarks, service marks, trademark registrations and
applications, copyrights and copyright registrations and applications,
and all other rights with respect to intellectual property, both
domestic and foreign, presently owned, possessed, used or held by the
Company (the "Intellectual Property"), and the Company owns the entire
right, title and interest in and to the same. No representation is
made as to the validity or enforceability of any of the above.
Schedule 2.16 also sets forth a correct and complete list of all
licenses granted to the Company by others and to others by the
Company. To the best of the knowledge of the Company and Shareholder,
neither the conduct of the Company's business nor any of the products
it sells or services it provides infringes upon the rights of any
other person and the conduct of any other person's business or any of
the products it sells or services it provides does not infringe upon
any of the Company's rights and the Company has no liability for and
has not given any indemnification for patent, trademark or copyright
infringement as to any products manufactured, used or sold by it or
with respect to services rendered by it except as shown in Schedule
2.16.
2.17 Conflicting Interests. The Shareholder has no direct or
indirect interest in any competitor, customer, supplier or other
person, firm or corporation which has any current business
relationship or material transaction with the Company or which is a
party to, or has property which is the subject of, any business
arrangement with the Company.
2.18 Environmental Matters.
(a) The Company has complied with applicable federal, state and
local environmental laws and regulations, orders and directives of any
and all Governmental Agency or Agencies, the noncompliance with which
could have a material adverse effect on the Company.
(b) The Company has not been charged with, nor has the Company
received any written notice of, and no officer of the Company has
received any oral notice, that the Company is under investigation for
the failure to comply with any and all statutes, laws, ordinances,
rules, regulations, orders and directives of any and all Governmental
Agency or Agencies (as hereinafter defined) with respect to the use,
generation, storage, transportation, handling, abandoning, dumping,
releasing, leaching, escaping, burying, disposing, discharging or
emitting of any particles, materials, substances, or constituents or
components thereof that have been or may be determined by each and
every Governmental Agency or Agencies to be of a hazardous, toxic,
pollutive, or ecologically or environmentally damaging nature
("Regulated Materials" as hereinafter defined), pertaining to the
business of the Company, the assets and properties owned or leased by
the Company, or the operation, conduct or occupancy thereof.
(c) For the purpose of this Agreement, the phrase "Regulated
Materials" shall include, but shall not be limited to, those materials
or substances defined as "hazardous substances," "hazardous
materials," "hazardous waste," "toxic substances," "toxic pollutants,"
"petroleum products" or other similar designations under the
25
Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended, 42 U.S.C. Sect. 9601, et seq. ("CERCLA"), the
Resource Conservation and Recovery Act, as amended, 42 U.S.C. Sect. 6901,
et seq. ("RCRA"), the Hazardous Materials Transportation Act, 49
U.S.C. Sect. 1801, et seq., or regulations promulgated pursuant thereto.
Also for purposes of this Agreement, the phrase "Governmental Agency
or Agencies" means any federal, state, local or foreign government,
political subdivision, court, agency or other entity, body,
organization or group exercising any executive, legislative, judicial,
quasi-judicial, regulatory or administrative function of government.
(d) The Company has not received from any governmental agencies
or private party any written (i) complaint or notice asserting
potential liability, (ii) since January 1, 1990, requests for
information, or (iii) request to investigate or clean up any site
under the Clean Water Act, CERCLA, or under state or foreign law
comparable thereto.
(e) Each hazardous waste transporter and disposal facility that
has transported or disposed of any such Regulated Materials on behalf
of the Company, if any, is listed in Schedule 2.18. All manifests in
the possession of the Company pertaining to the transportation of the
Regulated Materials of the Company have been made available to Newell
within a reasonable period of time prior to the Closing. Information
regarding the disposal of solid waste at various landfills has been
provided to Newell. The manifests and information regarding disposal
practices are included in Schedule 2.18.
(f) There has not been a release, as defined by CERCLA, of
Regulated Materials at or from any facility or Real Property subject
to this transaction which could have a material adverse effect on the
Company.
(g) There are no underground storage tanks, as defined by RCRA
and applicable state law, located on any real property now owned or
any space leased by the Company, and the Company is not a transfer,
storage or disposal (TSD) facility requiring a Part B RCRA permit.
(h) The Company has made available to Newell all known written
reports issued to Governmental Agencies by or on behalf of the
Company, or by any of its representatives or consultants, with respect
to environmental matters. All environmental audits, assessments and
studies within the possession of the Company regarding real property
now owned or leased by the Company are disclosed in Schedule 2.18.
(i) Each of the foregoing representations and warranties
contained in this Section 2.18 shall be in addition to, and not in
lieu of, any other representation or warranty contained in this
Agreement.
2.19 Absence of Undisclosed Liabilities. To the best of the
knowledge of the Company and Shareholder, the Company does not have
any liabilities or obligations due or to become due, whether absolute,
accrued, contingent or otherwise, and there are no claims or causes of
action that may be asserted against the Company which arise with
26
respect to or relate to any period or periods on or prior to the date
hereof, except as, and to the extent, set forth or specifically
reserved against on the Company Balance Sheet, except for liabilities
incurred since July 31, 1995 in the ordinary course of business
consistent with past practice and except under items either listed in
the schedules to this Agreement or not required to be listed because
of their relative size and/or consequence.
2.20 Insurance. The Company has in full force and effect the
policies of insurance listed in the amounts described in Schedule 2.20
hereto, and all premiums due thereon have been paid or accrued. The
Company does not have any interest in any other insurance policy.
Schedule 2.20 accurately reflects the insurance claims experience of
the Company for the past three years.
2.21 Customers and Suppliers. Schedule 2.21 contains a list of
the Company's 20 largest customers and suppliers (measured by dollar
volume of purchases and net sales, as applicable) during 1993, 1994
and the first six months of 1995, and the percentage of the Company's
business which each such customer represented. The Company is not
presently engaged in any disputes with such customers or suppliers
other than in the ordinary course of business. No customer or
supplier has notified the Company that it is terminating or not
renewing its arrangements with the Company which would in the
aggregate have a material adverse effect on the Company. At no time
during the two years prior to the date hereof have the sales,
manufacturing or other business operations of the Company been
materially affected by shortages or availability of products or raw
materials necessary to sell or manufacture the products presently sold
by the Company, other than in the ordinary course of business.
2.22 Product Quality. The Company has no standard written
warranties, extended by the Company with respect to its products. No
claims have been made against the Company for (a) credit or refunds
with respect to products returned or returnable by customers, except
in the normal course of business, or (b) personal injury arising out
of events occurring on or prior to the date hereof based upon
defective products, any violation of express or implied product
warranties, or similar claims with respect to products delivered by
the Company to customers or distributors on or prior to the date
hereof.
2.23 Brokers and Finders. Except as described in Schedule 2.23,
neither the Company or Shareholder has employed any broker or finder
or incurred any liability for any brokerage fees, commissions or
finders' fees, and no broker or finder has acted directly or
indirectly for the Company or the Shareholder in connection with this
Agreement, the Plan of Merger or the transactions contemplated hereby
and thereby.
2.24 Disclosure. No representation, warranty or other statement
by the Company or the Shareholder herein or in the schedules hereto,
or in any other document entered into in connection with this
Agreement, contains or will contain an untrue statement of material
27
fact, or omits or will omit to state a material fact necessary to make
the statements contained herein or therein not misleading.
2.25 Securities Act Compliance. (a) The Newell Common Stock
deliverable to the Shareholder under this Agreement will be acquired
by the Shareholder for his own account for investment and not with a
view to the distribution thereof, and no part or all of said Common
Stock nor any interest therein, will be sold or otherwise disposed of
by the Shareholder except in complaince with the Securities Act of
1933, as amended, and the rules and regulations of the Securities and
Exchange Commission thereunder.
(b) Newell may affix the following legend to the Common
Stock deliverable to Shareholder under this Agreement:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, and thus may
not be transferred without registration under the Securities
Act of 1933 or other compliance with the requirements of
said Act and the rules and regulations thereunder. Such
compliance must be demonstrated to the reasonable
satisfaction of counsel for the
Company and Newell shall not be required to transfer (or
instruct its transfer agent to transfer) any of the shares
of Common Stock unless and until the Shareholder have
complied with the provisions of the Securities Act of 1933
and the rules and regulations thereunder.
(c) The Shareholder has the full power and authority,
without the consent of, or any required consultation with, any other
person, to enter into this Agreement and is not acting on behalf of
any other person or entity.
(d) The Shareholder has received copies of Rule 144, 145
and Regulation D (as adopted by the Securities and Exchange
Commission) issued under the Securities Act of 1933, and the following
information regarding Newell: 1994 Annual Report to Shareholder;
Interim Report to Shareholder for the six months ended June 30, 1995;
1994 Form 10-K; and Proxy Statement dated March 30, 1995 relating to
the Annual Meeting of Stockholders.
(e) The Shareholder believes that he has the knowledge and
experience in financial and business matters necessary for an
evaluation of the information referred to in (d) above and for making
an informed decision on his investment in Newell Common Stock.
(f) The Shareholder has met personally with representatives
of Newell and has been provided with the opportunity to ask questions
of such persons concerning the business and affairs of Newell and
verify the accuracy of the information contained in the documents
listed in (d) above.
(g) The Shareholder has the resources to bear the economic
risks incident to holding the Newell Common Stock received pursuant to
28
this Agreement for the periods necessary for compliance with the
Securities Act of 1933.
2.26 Current Plans and Intentions. There is no current plan or
intention by the Shareholder to sell, exchange, or otherwise dispose
of a number of shares of Newell Common Stock received in the Merger
that would reduce the Shareholder's ownership of Newell Common Stock
to a number of shares having a value, as of the date of the Merger, of
less than 50% of the value of all of the formerly outstanding Company
Common Stock as of the same date. For this purpose, shares of Company
Common Stock exchanged for cash or other property, or exchanged for
cash in lieu of fractional shares of Newell Common Stock shall be
treated as outstanding Company Common Stock on the date of the Merger.
Moreover, shares of Company Common Stock and shares of Newell Common
Stock held by Shareholder and otherwise sold, redeemed or disposed of,
prior or subsequent to the Merger, will be considered in making this
representation.
ARTICLE III
Representations and Warranties of Newell and Acquisition
Newell and Acquisition jointly and severally represent and
warrant to the Company and the Shareholder that:
3.01 Organization and Authority. Each of Newell and Acquisition
is duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it is organized, with power to own
its property and to carry on its business as now being conducted, and
each is qualified in each other jurisdiction in which qualification is
required for it to hold the property or conduct the business it holds
or conducts therein, except to the extent that all failures of both
such entities so to qualify in the aggregate would not have a material
adverse effect on the financial condition, business or operations of
Newell and its subsidiaries taken as a whole.
3.02 Capitalization. The authorized capital stock of Newell
consists of (a) 300,000,000 shares of Newell Common Stock, $1.00 par
value, of which approximately 159,000,000 shares are issued and
outstanding, and (b) 10,000,000 shares of Preferred Stock consisting
of (i) 10,000 shares without par value, of which no shares are issued
and are outstanding and (ii) 9,990,000 shares of Preferred Stock,
$1.00 par value, of which no shares are issued or outstanding. The
authorized capitalization of Acquisition consists of 1,000 shares of
Common Stock, par value $1.00 per share, of which all 1,000 shares are
issued and outstanding and owned directly by Newell. The shares to be
issued to Shareholder at Closing will be fully paid and non-assessable
and have been duly authorized for issuance to Shareholder.
3.03 Authorization. Newell and Acquisition have full power and
authority to enter into this Agreement and the Plan of Merger and to
carry out their obligations hereunder and thereunder. The
transactions contemplated hereby and thereby have been duly authorized
by their respective Boards of Directors and by Newell as the sole
shareholder of Acquisition, and no other corporate proceedings on the
29
part of Newell or Acquisition are necessary to authorize this
Agreement, the Plan of Merger and the transactions contemplated hereby
and thereby. This Agreement and the Plan of Merger are valid and
binding obligations of Newell and Acquisition enforceable against
Newell and Acquisition in accordance with their terms, except as
enforcement may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors rights generally and by
principles of equity. Neither the execution and delivery of this
Agreement nor the Plan of Merger by Newell and Acquisition, nor the
consummation of the transactions contemplated hereby and thereby, nor
compliance by Newell and Acquisition with any of the provisions hereof
or thereof will (i) violate, conflict with, or result in a breach of
any provisions of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required
by, or result in a right of termination or acceleration, or result in
the creation of any lien, security interest, charge or encumbrance
upon any of the properties or assets of Newell, under any of the
terms, conditions or provisions of (x) the charter or by-laws of
Newell or Acquisition or (y) any note, bond, mortgage, indenture, deed
of trust, license, lease, agreement or other instrument or obligation
to which Newell or Acquisition is a party, or by which either of them
is, or any of their properties or assets may be subject, or (ii)
violate any judgment, ruling, order, writ, injunction, decree,
statute, rule or regulation applicable to Newell or any of its
properties or assets. Other than in connection with or in compliance
with the provisions of the Wisconsin Business Corporation Law and the
General Corporation Law of the State of Delaware, the Securities Act,
the securities laws of the various states, no notice to, filing with,
or authorization, consent or approval of, any public body or authority
is necessary for the consummation by Newell or Acquisition of the
transactions contemplated by this Agreement and the Plan of Merger.
3.04 Brokers and Finders. Neither Newell nor any of its
subsidiaries, nor any of their officers, directors or employees has
employed any broker or finder or incurred any liability for any
financial advisory fees, brokerage fees, commission or finders' fees,
and no broker or finder has acted directly or indirectly for Newell or
any of its subsidiaries in connection with this Agreement or the Plan
of Merger or the transactions contemplated hereby and thereby.
3.05 Disclosure. No representation, warranty or other statement
by Newell or Acquisition herein or in any other document made in
connection with this Agreement, contains or will contain an untrue
statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements contained herein or
therein not misleading.
3.06 Current Plans and Intentions. It is the current plan and
intention of Newell that:
(i) Newell will not reacquire any of the Newell Common
Stock issued in the Merger to liquidate the Company with or into
any other corporation (except as contemplated by the Plan of
Merger), sell or otherwise dispose of the Company's stock (except
30
for transfers of stock to corporations controlled by Newell), or
cause the Company to sell or otherwise dispose of any of its
assets or any of the assets acquired from Acquisition (except for
sales and dispositions made in the ordinary course of business or
sales of transfers of asets to a corporation controlled by the
Company). Newell intends that the Company, after the
consummation of the Merger, continue its business. Newell does
not, directly or indirectly, own nor has it owned, directly or
indirectly, during the past five years any shares of stock of the
Company;
(ii) Immediately following the Merger, the Company will
hold at least 90% of the fair market value of its net assets and
at least 70% of the fair market value of its gross assets held
immediately prior to the Merger. For purposes of this
representation, amounts used by the Company or Acquisition to pay
reorganization expenses, and all redemptions and distributions
(except for regular, normal dividends) made by the Company will
be included as assets of the Company or Acquisition,
respectively, immediately prior to the Merger;
(iii) Immediately prior to the Merger, Newell will be in
control of Acquisition within the meaning of Section 368(c) of
the Code;
(iv) Newell will not cause the Company to issue additional
shares of the Company's stock that would result in Newell losing
control of the Company within the meaning of Section 368(c) of
the Code;
(v) Acquisition will have no liabilities assumed by the
Company, and will not transfer to the Company any assets subject
to liabilities, in the Merger;
(vi) Immediately following the Merger, the Company will
continue its historic business or use a significant portion of
its historic business assets in a business within the meaning of
Treas. Reg. Sect. 1.368-1(d);
(vii) Newell and Acquisition will pay their respective
expenses, if any, incurred in connection with the transaction;
(viii) The payment of cash in lieu of fractional shares of
Newell Common Stock is solely for the purpose of avoiding the
expense and inconvenience to Newell of issuing fractional shares
and does not represent separately bargained-for consideration.
The total cash consideration that will be paid in the Merger to
the Shareholder instead of issuing fractional shares of Newell
Common Stock will not exceed one percent of the total
consideration that will be issued in the Merger to the
Shareholder in exchange for their shares of Company Common Stock.
The fractional share interests of each Shareholder will be
aggregated, and no Shareholder will receive cash in lieu of
fractional shares in an amount equal to or greater than the value
of one full share of Newell Common Stock;
31
(ix) None of the compensation received by any shareholder
employees of the Company will be separate consideration for, or
allocable to, any of their shares of Company Common Stock; none
of the shares of Newell Common Stock received by any
shareholder-employees will be separate consideration for, or
allocable to, any employment agreement; and the compensation paid
to any shareholder-employees will be for services actually
rendered and will be commensurate with amounts paid to third
parties bargaining at arm's-length for similar services.
3.07 Investment Company Status. Neither Newell nor Acquisition
is an investment company as defined in Section 368(a)(2)(F)(iii) and
(iv) of the Code.
3.08 No Material Change. There has been no material adverse
change in the business, financial condition or prospects of Newell
since its Form 10Q for its most recent quarter.
ARTICLE IV
Conduct of Business Prior to the Effective Time
4.01 Conduct of the Company's Business Prior to the Effective
Time. During the period from the date of this Agreement to the
Effective Time, the Company shall conduct its operations according to
its ordinary and usual course of business consistent with past and
current practices and use its best efforts to maintain and preserve
its business organization, prospects, employees and advantageous
business relationships and shall not, without the prior written
consent of the Chief Executive Officer, the President or a Vice
President of Newell, take any action or permit to occur any event set
forth in Section 2.08.
4.02 Renegotiation of Building Lease.
Notwithstanding the provisions of Section 4.01, the
Shareholder shall, prior to the Effective Time, amend the Real
Property Lease to provide for termination no later than December 31,
1995.
4.03 The Employment Agreements of Carl Philips and David Schwartz
will have terminated at no cost to the Company other than as set forth
in Section 5.06 below or as otherwise accrued on the Company Balance
Sheet.
ARTICLE V
Additional Agreements
5.01 Access and Information. The Company shall afford to Newell
and to its accountants, counsel and other representatives, full access
during regular business hours and upon reasonable notice, during the
period prior to the Effective Time, to all of the properties, books,
contracts, commitments and records of the Company, and, during such
period, the Company shall furnish promptly to Newell all other
32
information concerning the business, properties and personnel of the
Company as Newell may reasonably request. The Confidentiality
Agreement previously executed by Newell and the Company remains in
full force and effect.
5.02 Miscellaneous Agreements and Consents. Subject to the terms
and conditions herein provided, each of the parties hereto shall use
all reasonable efforts to take, or cause to be taken, all action, and
to do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement and the Plan of
Merger, including, without limitation, using reasonable efforts to
satisfy the conditions contained in Article VI hereof. Neither Newell
or the Company is aware of any approvals required from any
governmental bodies. The Company and Newell will use their best
efforts to obtain consents of all third parties necessary in the
opinion of both parties, or desirable for the consummation of the
transactions contemplated by this Agreement and the Plan of Merger.
In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement and
the Plan of Merger, the proper officers and/or directors of the
Company, Newell or Acquisition, as the case may be, shall take all
such necessary action. The Shareholder shall vote in favor of the
approval and adoption of the Plan of Merger all shares of Company
Common Stock which he is then entitled to vote. Prior to the earlier
of the Effective Time or the earlier termination of this Agreement
pursuant to Article VII hereof, Shareholder shall except as set forth
on Schedule 5.03, (i) continue to own, of record and beneficially, all
right, title and interest to the shares of Company Common Stock owned
by him as of the date hereof, free and clear of all security
interests, liens, claims, pledges, escrows, options, warrants, rights
of purchase, equities, charges, encumbrances, proxies, voting trusts
and restrictions on voting rights whatsoever, and (ii) not enter into
any contract, agreement, understanding or restriction of any kind
relating to any shares of Company Common Stock. During the period
from the date of this Agreement to the Effective Time, or such earlier
termination of the Agreement pursuant to Article 7 hereof, the
Shareholder shall not and the Company shall not and shall cause its
directors, officers, agents and employees not to solicit, authorize
the solicitation of or enter into any discussion (or continue any
discussion) with any third party (including the provision of any
information to a third party regarding the Company) concerning any
offer or possible offer from any such third party (i) to purchase any
Company Common Stock, any option or warrant to purchase Company Common
Stock, or any securities convertible into Company Common Stock or any
other security of the Company, (ii) to purchase, lease or otherwise
acquire all or a substantial portion of the assets of the Company
relating to the Business or (iii) to merge, consolidate or otherwise
combine with the Company.
5.03 Interim Financial Statements. During the period prior to
the Effective Time, the Company shall deliver to Newell monthly by the
25th day of the following month, an unaudited balance sheet as at the
end of such month and the unaudited statements of income and
33
stockholders' equity of the Company for the period then ended (the
"Interim Financial Statements"). The Interim Financial Statements
shall be prepared on the same basis as set forth in Section 2.05.
5.04 Certain Notifications. At all times until the Effective
Time, each party shall promptly notify the other in writing of the
occurrence of any event which will or may result in the failure to
satisfy any of the conditions specified in Article VI.
5.05 Press Releases. The parties agree that, except in the event
of an emergency, no press release or other public announcement with
respect to this Agreement or the transactions contemplated hereby
shall be made without the prior consultation of all parties hereto.
5.06 Transactional Costs. Each party hereto shall pay or be
responsible for its or his expenses in connection with the
transactions contemplated by this Agreement except that the expenses
listed on Schedule 5.06 shall be paid by Newell by wire transfer to
the account of Spitzer & Feldman P.C. at Closing.
5.07 Confidentiality and Non-Use. If for any reason the
transactions contemplated by this Agreement are not completed, then
Newell and Acquisition agree to return to the Company (and not
thereafter use in their own businesses or otherwise or disclose the
contents thereof) all documents, data and other materials respecting
the Company's business furnished to or obtained by either Acquisition
or Newell or its representatives pursuant to the access granted
pursuant to Section 5.01 or previous thereto.
5.08 Demand Registration. Newell agrees that the Shareholder
shall have the registration rights described in this Section with
respect to Newell Common Stock issued to the Shareholder pursuant to
this Agreement (together with any securities or property issued in
exchange for or in replacement or pursuant to a reclassification or
recapitalization of such securities, the "Registrable Securities"):
(a) Promptly after the Closing (but in no event more than ten
business days), Newell shall file a "shelf" registration statement on
Form S-3 (or any successor form thereto or other appropriate form)
under the Act covering all of the Shareholder's Registrable
Securities. Newell will use its best efforts to have such
registration statement declared effective by the Securities and
Exchange Commission at the earliest practicable time and to maintain
the effectiveness thereof at least through the second anniversary of
the date of Closing.
(b) In connection with any registration of Registrable
Securities under the Act pursuant to this Agreement, Newell will
furnish Shareholder whose Registrable Securities are registered
thereunder with a copy of the registration statement and all
amendments thereto and will supply Shareholder with copies of any
prospectus included therein (including a preliminary prospectus and
all amendments are supplements thereto), in such quantities as may be
reasonably necessary for the purposes of the proposed sale or
distribution covered by such registration.
34
(c) All expenses, disbursements, and fees incurred by Newell in
connection with carrying out its obligations under this Section 5.08
shall be borne by Newell, other than the expense of Shareholder's
consultant, if any.
(d) It shall be a condition of Shareholder's rights hereunder to
have Registrable Securities owned by such Shareholder registered that:
(i) such Shareholder shall cooperate with Newell by
supplying information and executing documents relating to
Shareholder or the securities of Newell owned by Shareholder in
connection with such registration;
(ii) Shareholder shall enter into any undertakings and take
such other action relating to the conduct of the proposed
offering which Newell or any underwriter may reasonably request
as being necessary to insure compliance with federal and state
securities laws and the rules or other requirements of the
National Association of Securities Dealers Inc. to effectuate the
offering; and
(iii) Shareholder agrees to indemnify and hold harmless
Newell, each of its directors, each of its officers who has
signed the registration statement, any underwriter (as defined in
the Act), and each person, if any, who controls Newell or such
underwriter within the meaning of the Act, against such losses,
claims, damages or liabilities (including reimbursement for legal
and other expenses) to which Newell or any such director,
officer, underwriter or controlling person may become subject
under the Act or otherwise, in such manner as is customary for
registrations of the type then proposed and, in any event,
equivalent in scope to indemnities given by Newell in connection
with such registration, but only with respect to information
furnished by Shareholder in writing in connection with such
registration (and provided further that the foregoing indemnities
shall be limited to the aggregate amount of proceeds received by
Shareholder pursuant to the sale of shares in such registration).
(e) In the event of any registration under the Act of any
Registrable Securities pursuant to this Section 5.08, Newell hereby
agrees to indemnify and hold harmless Shareholder disposing of such
Registrable Securities against such losses, claims, damages or
liabilities (including reimbursement for legal and other expenses) to
which such Shareholder may become subject under the Act or otherwise,
in such manner as is customary for registrations of the type then
proposed, but not with respect to information furnished by Shareholder
in writing in connection with such registration.
(f) Listing. The shares of Common Stock of Newell to be issued
in the Plan of Merger will be approved concurrent with the
effectiveness of the Registration Statement for listing on the New
York Stock Exchange and the Chicago Stock Exchange subject to notice
of issuance.
35
ARTICLE VI
Conditions
6.01 Conditions to Each Party's Obligations to Consummate the
Merger. The respective obligations of each party to consummate the
Merger shall be subject to the fulfillment at or prior to the
Effective Time of the following conditions:
(a) Authorization. The Plan of Merger shall have been approved
and adopted by the requisite vote of the holders of the outstanding
shares of the Company's Common Stock.
(b) Proceedings. At the Effective Time there shall be no action
or proceeding initiated by any governmental agency or any third party
pending which seeks to restrain, prohibit or invalidate any material
transaction contemplated by this Agreement or the Plan of Merger or to
recover substantial damages or other substantial relief with respect
thereto and no injunction or restraining order shall have been issued
by any court restraining, prohibiting or invalidating any such
material transaction.
6.02 Conditions to Obligations of the Company to Consummate the
Merger. The obligations of the Company and the Shareholder to
consummate the Merger shall be subject to the fulfillment (or waiver
by the Company and the Shareholder) at or prior to the Effective Time
of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Newell and Acquisition set forth in Article III hereof
shall be true and correct as of the date of this Agreement and as of
the Effective Time as though made on and as of the Effective Time,
except as otherwise contemplated by this Agreement, and the Company
shall have received a certificate signed by the Chief Executive
Officer, the President or a Vice President of Newell to that effect.
(b) Performance of Obligations. Newell shall have performed all
obligations required to be performed by it under this Agreement prior
to the Effective Time, and the Company shall have received a
certificate signed by the Chairman of the Board, the President or a
Vice President of Newell to that effect.
(c) Intentionally omitted.
(d) Opinion of Associate General Counsel. Richard H. Wolff,
Associate General Counsel for Newell, shall have furnished his opinion
to the Company as at the Effective Time in the form and to the effect
set forth in Exhibit C hereto.
(e) Consulting Agreement. The Company shall have executed a
Consulting Agreement with Carl Philips in substantially the form of
Exhibit E hereto.
(f) Lease Amendment. The amendment to the Real Property Lease
described in section 4.02 shall in effective upon Closing.
36
(g) Newell Obligations. At Closing, Newell shall (i) pay off
the loans listed on Schedule 6.02(g) as well as the outstanding
balance of the Marine Loan, (ii) provide to Marine Midland Bank
substitute collateral to have Carl Philips released from his
guarantees of outstanding letters of credit and any future letters of
credit, and (iii) wire transfer the Transactional Costs to Spitzer &
Feldman's trust account as set forth in Section 5.06 above.
6.03 Conditions to Obligations of Newell and Acquisition to
Consummate the Merger. The obligations of Newell and Acquisition to
consummate the Merger shall be subject to the fulfillment (or waiver
by Newell and Acquisition) at or prior to the Effective Time of the
following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company and the Shareholder set forth in Article II
hereof shall be true and correct as of the date of this Agreement and
as of the Effective Time as though made on and as of the Effective
Time, except as otherwise contemplated by this Agreement, and Newell
shall have received a certificate signed by the Shareholder and by the
President of the Company to that effect.
(b) Performance of Obligations. The Company and the Shareholder
shall have performed all obligations required to be performed by it or
them under this Agreement prior to the Effective Time, and Newell
shall have received a certificate signed by the Shareholder and by the
President of the Company to that effect.
(c) Permits, Authorizations, Etc. The Company shall have
obtained any and all consents or waivers from other parties to
contracts other than the Marine Loan material to the Company's
business for the lawful consummation of the Merger.
(d) Intentionally omitted.
(e) Financial Statements. Newell and Acquisition shall have
received the Interim Financial Statements.
(f) Opinion of Counsel. Spitzer & Feldman, P.C., counsel for
the Company, shall have furnished to Newell its opinion as of the
Closing in the form and to the effect set forth in Exhibit D hereto.
(g) Escrow Agreement The Shareholder shall have entered into
an escrow agreement in form of Exhibit E (the "Escrow Agreement").
(h) Consulting Agreement. Carl Philips shall have executed
Consulting Agreement with the Company in substantially the form of
Exhibit C hereto.
(i) Lease Amendment. The amendment to the Real Property Lease
described in section 4.02 shall be in effect upon Closing.
ARTICLE VII
Termination, Amendment
37
7.01 Termination.
(a) This Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval by the Shareholder
(i) by mutual consent of the Company and Newell;
(ii) by either the Company or Newell if the Merger has not
taken place by September 30, 1995 unless the failure of the
Merger to take place by that date is the result of a breach of
any provision of this Agreement by the party seeking to
terminate;
(iii) by Newell if any of the conditions contained in
Sections 6.01 and 6.03 have not been satisfied prior to the
Closing;
(iv) by the Company if any of the conditions contained in
Sections 6.01 or 6.02 have not been satisfied prior to the
Closing.
(b) In the event this Agreement is terminated pursuant to
Section 7.01, such termination shall be without any liability or
further obligation of any party to another and the obligations and
agreements in this Agreement shall terminate and have no further
effect except for liabilities and obligations based on any intentional
failure to perform or comply with any covenant or agreement herein or
for any intentional misrepresentation or material breach of any
warranty herein (and such termination shall not constitute a waiver of
any claim with respect thereto).
7.02 Amendment. Subject to applicable law, this Agreement may be
amended, modified or supplemented only by written agreement of the
parties hereto duly authorized by the respective Board of Directors at
any time prior to the Effective Time; provided, however, that, after
the approval and adoption of the Plan of Merger by the Shareholder, no
such amendment, modification or supplement shall change the amount or
the form of the consideration to be delivered to the Shareholder as
contemplated by this Agreement and the Plan of Merger.
ARTICLE VIII
Survival of Representations and Warranties
The representations, warranties, covenants and agreements of
the parties to this Agreement shall survive the execution and delivery
of this Agreement and the consummation of the Merger for a period of
one year notwithstanding any investigations made by any party hereto
or, except any actual knowledge which any party may have regarding a
breach of a representation or warranty by any other party; provided,
however, that any covenant, agreement, representation or warranty that
becomes the subject of a claim under the Escrow Agreement shall
survive, as to such claim, until resolution of such claim.
38
ARTICLE IX
Limitation of Liability
The parties hereto understand and agree that the Escrow
Agreement and the procedures relating thereto as set forth in the
Escrow Agreement have been established as the sole means and method of
providing a remedy to Newell for breach of any of the representations,
warranties, covenants and agreements of the Company or the Shareholder
hereunder after the Merger has become effective. Notwithstanding
anything contained in this Agreement to the contrary, Newell agrees
that, except to the extent provision has been made therefor under the
Escrow Agreement, the Company and the Shareholder shall have no
liability with respect to any claim, cause of action, obligation of
indemnity, breach of representation or warranty or other matter of any
nature or character whatsoever arising under or in connection with
this Agreement after the Merger has become effective. Newell agrees
that after the Merger has become effective its exclusive remedy for
any such claim, cause of action, obligation of indemnity, breach of
representation or warranty, or other matter shall be its rights
against the Escrow Property (as defined in the Escrow Agreement).
ARTICLE X
General Provisions
10.01 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given (i) when
delivered personally; (ii) the second business day after being
deposited in the United States mail registered or certified (return
receipt requested); (iii) the first business day after being deposited
with Federal Express or any other recognized national overnight
courier service or (iv) on the business day on which it is sent and
received by facsimile, in each case to the parties at the following
addresses (or at such other address for a party as shall be specified
by like notice):
(a) If to Newell or Acquisition:
Newell Co.
One Millington Road
Post Office Box 117
Beloit, Wisconsin 53511
Facsimile: (608) 365-8290
Attention: William T. Alldredge
With copies to:
Mr. Richard H. Wolff
Associate General Counsel
Newell Co.
4000 Auburn Street
Rockford, Illinois 61101
Facsimile: (815) 969-6106
39
(b) If to the Company or the Shareholder:
Carl Philips
1 W. 64 Street, Apt. 3B
New York, New York 10023
Facsimile: 212/362-5599
with copies to:
Kenneth Gliedman
SPITZER & FELDMAN, P.C.
405 Park Avenue
New York, New York 10022
Facsimile: 212/838-7472
10.02 Miscellaneous. This Agreement (including the exhibits,
documents and instruments referred to herein or therein):
(i) constitutes the entire agreement, and supersedes all
other prior agreements and understandings, both written and oral,
among the parties, or any of them, with respect to the subject
matter hereof;
(ii) is not intended to confer upon any other person any
rights or remedies hereunder;
(iii) shall not be assigned by operation of law or
otherwise; and
(iv) may be executed in two or more counterparts which
together shall constitute a single agreement.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, heirs, next of kin,
distributees, executors, administrators and personal representatives.
10.03 Waiver; Remedies. No delay or failure on the part of any
party hereto to exercise any right, power, or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of
any party hereto of any right, power, or privilege hereunder operate
as a waiver of any other right, power, or privilege hereunder, nor
shall any single or partial exercise of any right, power, or privilege
hereunder preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege hereunder.
10.04 Severability. If any provision of this Agreement shall be
held by any court of competent jurisdiction to be illegal, invalid or
unenforceable, such provision shall be construed and enforced as if it
had been more narrowly drawn so as not to be illegal, invalid or
unenforceable, and such illegality, invalidity or unenforceability
shall have no effect upon and shall not impair the enforceability of
any other provision of this Agreement.
10.05 Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York (without regard to
40
principles of conflicts of laws) applicable to contracts made and to
be performed within such State.
10.06 Attorney's Fees. If any party to this Agreement must
bring an action to enforce its terms, the prevailing party in such
action shall be entitled to receive its reasonable out-of-pocket fees
and expenses in connection with action from the non-prevailing party
or parties.
IN WITNESS WHEREOF, Newell, Acquisition, the Shareholder and
the Company have caused this Agreement to be signed by their
respective officers thereunto duly authorized and their respective
corporate seals to be affixed hereto, and the Shareholder has executed
this Agreement, all as of the date first written above.
NEWELL CO.
By: /s/ Richard H. Wolff
---------------------
Richard H. Wolff
PHILIPS ACQUISITION CO.
By: /s/ Carl Philips
---------------------
Carl Philips
PHILIPS INDUSTRIES, INC.
By: /s/ Carl Philips
---------------------
Carl Philips
/s/ Carl Philips
--------------------------
Carl Philips
EXHIBIT 2.2
ESCROW AGREEMENT
This Escrow Agreement ("Agreement") is made and entered into as
of August 25, 1995, by and between Newell Co., a Delaware corporation
("Newell"), and Carl Philips, (the "Shareholder") and Firstar Trust
Company, (the "Escrow Agent").
WHEREAS, Newell, Philips Acquisition Co., a New York
corporation ("Acquisition"), Philips Industries, Inc., a New York
corporation ("Company"), and the Shareholder have entered into an
Agreement and Plan of Reorganization dated August 25, 1995 (the
"Reorganization Agreement"), providing for the merger of Acquisition
with and into Company (the "Merger") and the conversion of the issued
and outstanding shares of common stock of Company into shares of
common stock of Newell (the "Newell Common Stock") pursuant to the
Plan of Merger dated August 25, 1995 between Acquisition and Company
(the "Plan of Merger");
WHEREAS, Newell has relied upon the representations and
warranties of Company and the Shareholder contained in the
Reorganization Agreement and in agreements, schedules, exhibits,
certificates and other documents delivered pursuant to the
Reorganization Agreement (collectively, the "Related Documents");
WHEREAS, one of the conditions precedent to the obligation
of Newell to consummate the Merger is the execution and delivery of
this Agreement, pursuant to which the Shareholders agree to indemnify
and hold Newell harmless against and in respect of certain matters
more particularly described herein; and this Agreement is being made
to induce Newell to consummate the Merger.
NOW, THEREFORE, in consideration of the mutual covenants,
agreements, representations and warranties herein contained, the
parties agree as follows:
ARTICLE I
The Escrow
1.01 Deposit in Escrow. At the Closing (as defined in the
Reorganization Agreement), the Shareholder shall deposit with the
Escrow Agent, to be held in escrow on the terms hereinafter set forth,
certificates representing the number of shares of Newell Common Stock
set forth opposite the Shareholder's signature hereto (the "Escrow
Shares") which certificates shall be accompanied by duly executed
stock powers endorsed in blank. Such shares of Newell Common Stock
will constitute the Escrow Shares.
1.02 Escrow Property. The Escrow Shares deposited in accordance
with the terms hereof together with all dividends and other
distributions, including cash dividends (the "Escrow Property"), shall
be held by the Escrow Agent on the terms hereinafter set forth. The
Escrow Agent shall cause all cash representing the Escrow Property to
be invested in the Portico U.S. Treasury Money Market Fund. The
42
Escrow Agent shall not be responsible for any interest or income on
such cash except as actually received.
1.03 Distributions on Escrow Property. All dividends and other
distributions paid or made with respect to the Escrow Shares, whether
in the form of cash, Newell Common Stock or other securities or
property, and such dividends and other distributions shall constitute
part of the Escrow Property.
1.04 Taxes and Charges on Escrow Property. The Shareholder shall
be responsible for and shall pay and discharge all taxes, assessments
and governmental charges imposed on or with respect to the Escrow
Property. The Escrow Agent shall report to the Internal Revenue
Service the amount of cash dividends received by it with respect to
the Escrow Shares as having been received by Shareholder.
1.05 Voting Rights. Escrow Shares held by the Escrow Agent
hereunder shall remain registered in the name of the Shareholder, and
the Shareholder shall be entitled to exercise all voting rights with
respect thereto.
ARTICLE II
[ Intentionally Left Blank ]
ARTICLE III
Indemnification and Other Payments
3.01 Indemnification. Notwithstanding any investigation at any
time made by or on behalf of Newell or any information which Newell
may have in respect of the business and assets of the Company, except
where Newell had actual (not constructive) knowledge prior to Closing
under the Agreement, the Shareholder agrees to indemnify and hold
Newell and its subsidiaries (including Company) and affiliates
(sometimes collectively referred to as "Newell") harmless from and
against any and all claims, demands, liabilities, actions or causes of
action, losses and damages, including but not limited to reasonable
attorneys' fees, witness fees, and other reasonable out-of-pocket
expenses and all fines, penalties, assessments, judgments and amounts
paid in settlement (collectively, "Damages"), suffered or incurred by
Newell arising out of, resulting from or in respect of the following:
(i) any inaccuracy in any representation or breach of any
warranty made by or on behalf of Company or the Shareholder in or
pursuant to the Reorganization Agreement or in any of the Related
Documents;
(ii) any failure of Company or the Shareholder duly to
perform or observe any term, provision, covenant, agreement or
43
condition in the Reorganization Agreement or any of the Related
Documents.
(iii) any amount in excess of $25,000 for legal fees and
expenses incurred after the date hereof, or required to be paid
to Shelton Leigh Palmer & Co. as a result of (x) a settlement
approved by Shareholder of the litigation known as Shelton Leigh
Palmer & Co. v. Philips Industries, Inc., New York Supreme Court,
Queens County, Index 109120/94 or (y) a final unappealable
judgment entered therein. Such litigation shall be under the
supervision of Shareholder who shall have the right, in his
absolute discretion, as to how to proceed and/or settle such
litigation.
Each of the above shall be subject to the limitation on survival set
forth in Article VIII of the Reorganization Agreement.
3.02 Determination of Damages. The aggregate liability of the
Shareholder for Damages incurred pursuant to Sections 3.01(a)(i), (ii)
and (iii) of this Agreement, shall be limited to the amount by which
such Damages exceed $100,000.
3.03 Limitation of Liability. The parties hereto understand and
agree that the Escrow Agreement and the procedures relating thereto as
set forth in the Escrow Agreement have been established as the sole
means and method of providing for compliance by the Company and the
Shareholder with the obligations of the Company and the Shareholder
under the Reorganization Agreement and this Agreement after the Merger
has become effective, including the obligations of indemnity set forth
in the Reorganization Agreement. The parties hereto understand and
agree that and the procedures as set forth in this Agreement have been
established as the sole means and method of providing a remedy to
Newell for breach of any of the representations , warranties,
covenants and agreements of the Company or the Shareholder under the
Reorganization Agreement after the Merger has become effective.
Notwithstanding anything contained in this Agreement or the
Reorganization Agreement to the contrary, Newell agrees that, except
to the extent provision has been made therefor under this Agreement,
the Company and the Shareholder shall have no liability with respect
to any claim, cause of action, obligation of indemnity, breach of
representation or warranty or other matter of any nature or character
whatsoever arising under or in connection with the Reorganization
Agreement after the Merger has become effective. Newell agrees that
after the Merger has become effective its exclusive remedy for any
such claim, cause of action, obligation of indemnity, breach of
representation or warranty, or other matter shall be its rights
against the Escrow Property.
3.04 Indemnification Notice. Newell will give written notice
(the "Indemnification Notice") to the Escrow Agent and the
Shareholder's Agent of any claim which Newell discovers or of which it
receives notice which might give rise to a claim against the Escrow
Property under Section 3.01 hereof (a "Claim"). Newell's right to
indemnification from the Escrow Property shall apply only to those
Claims of which Newell shall have given an Indemnification Notice to
44
the Escrow Agent and the Shareholder's Agent not later than the first
anniversary of the Effective Time. Any covenant, agreement,
representation or warranty which is the subject of a Claim shall
continue to survive, as to such Claim, until such Claim is finally
determined as herein provided.
3.05 Claims against the Shareholder. The Shareholder shall have
a period of 30 days from the date the Indemnification Notice is given
to provide written notice ("Object" or an "Objection") to Newell and
the Escrow Agent of an objection to the Claim identified in the
Indemnification Notice. Such Objection shall be to the merits or the
amount of the Claim or to both the merits and the amount of the Claim.
If the Shareholder fails to Object within such 30 day period, the
Shareholder shall be conclusively presumed to have agreed to indemnify
and hold Newell harmless with respect thereto and Newell shall be
entitled to be indemnified for all Damages with respect to such Claim.
Newell and the Shareholder shall discuss any Claim as to which the
Shareholder objects and attempt to agree upon the amount which is to
be paid to Newell with respect to such Claim. To the extent that
Newell and the Shareholder agree that Newell is entitled to be
indemnified for Damages with respect to any such Claim and the amount
of such Damages, they shall give joint written notice to the Escrow
Agent to that effect. If Newell and the Shareholder have not agreed
as to whether Newell is entitled to indemnification for Damages with
respect to any such Claim and/or the amount of such Damages to which
Newell is to be paid with respect to any such Claim within 30 days
(which period may be extended upon the written agreement of Newell and
the Shareholder and notice thereof given to the Escrow Agent) after
the date the notice of Objection is given to Newell and the Escrow
Agent, either party may thereafter institute an appropriate
arbitration proceeding under the auspices of the American Arbitration
Association in New York City, with respect to the matters which have
not been agreed upon. Each of the parties hereto agrees that a final
arbitration ruling in any such proceeding shall be conclusive and
binding on such party.
3.06 Third Party Claims. In the event the Indemnification Notice
relates to a Claim asserted against Newell by a third party, Newell
shall use its reasonable efforts to give notice to the Shareholder
within ten (10) days of its receipt of service of any suit or
proceeding which may be the subject of a Claim. Newell shall have the
right to undertake and control the defense of such Claim and shall
have the right to pay, compromise or settle any such Claim without the
consent of the Shareholder; provided, however, that if within 20 days
after the date the Indemnification Notice has been given, the
Shareholder acknowledges in writing without qualification or condition
the obligation of the Shareholder to indemnify Newell with respect to
such Claim, the Shareholder shall have the right to control the
defense of such Claim and Newell shall be required to seek the consent
of the Shareholder to any payment, compromise or settlement of such
Claim, which consent shall not be unreasonably withheld. If such
acknowledgment is given, or upon a final determination that Newell is
entitled to indemnification hereunder, all Damages incurred in respect
of any such Claim shall be paid from the Escrow Property.
45
3.07 Payment of Claims. The Escrow Agent shall continue to hold
the Escrow Property pending the occurrence of any of the following:
(a) receipt by the Escrow Agent of a written Indemnification Notice
from Newell referred to in Section 3.03 hereof setting forth the
amount of the Damages, the amount owed to Newell pursuant to Section
3.01 hereof, in each case as to which the Shareholder fails to Object
on a timely basis; (b) receipt by the Escrow Agent of written notice
from Newell and the Shareholder referred to in Section 3.03 hereof
setting forth the amount of the Damages, or the amount owed to Newell
pursuant to Sections 3.01 hereof, (c) receipt by the Escrow Agent of
an acknowledgment from the Shareholder referred to in Section 3.04
hereof of the obligation of the Shareholder to indemnify Newell and a
notice from Newell setting forth the amounts paid to settle a claim
with Shareholder approval or amounts paid in satisfaction of a
judgment relating to such claim and all Damages in connection
therewith; or (d) receipt by the Escrow Agent of a true copy,
certified by a court of competent jurisdiction, of a final
unappealable order, judgment or decree establishing Newell's claim to
indemnification. Upon receipt of any of the foregoing, the Escrow
Agent shall deliver to Newell such portion of the Escrow Property as
shall equal the amount of the Damages or claim which is to be paid to
Newell. For this purpose, the Escrow Shares shall be valued at
$25.8625 per share. Escrow Shares shall be paid to Newell prior to
payment to Newell of any other portion of the Escrow Property except
to the extent required to pay less than $25.8625.
3.08 In the event of any dispute hereunder, the prevailing party
shall be entitled to reimbursement of its reasonable legal fees and
expenses in connection with such dispute.
ARTICLE IV
Termination
4.01 Termination Date. The escrow created by this Agreement
shall terminate on the first anniversary of the Effective Time or, if
at that time a Claim or Claims made pursuant to Article III hereof is
or are pending, upon the final resolution of the last such Claim (the
"Termination Date").
4.02 Partial Release of Escrow Property. The number of shares of
Newell Common Stock held by the Escrow Agent shall be reduced promptly
after the first anniversary of the Effective Date to that number of
shares which, when multiplied by $25.8625 shall equal 125% of the
aggregate amount of any claims which are then pending (as such claims
and related expenses are reasonably estimated by Newell). The shares,
if any, released from escrow as a result of such reduction shall be
distributed to the Shareholder. As Claims are settled or otherwise
disposed of, the retained Escrow Property shall be reduced
accordingly.
4.03 Distribution of Escrow Property. On the Termination Date,
any remaining Escrow Property shall be distributed to Shareholder.
46
4.04 Fractional Interests. No fractional share of Newell Common
Stock shall be distributed and the Escrow Agent is authorized and
directed to sell shares of Newell Common Stock in order to avoid
distribution of fractional interests and to deliver the cash
equivalent thereof to the extent cash is not then available therefor.
ARTICLE V
The Escrow Agent
5.01 Rights and Obligations. The Escrow Agent, its officers,
directors, employees, and agents (a) shall not be liable for any
error of judgment, any mistake of fact or law or any act done or
omitted by it in good faith, unless as the result of its gross
negligence or willful misconduct; (b) shall be entitled to treat as
genuine any letter or other document furnished to it by Newell, the
Company or the Shareholder's Agent and believed by it to be genuine
and to have been signed and presented by the proper party or parties;
and (c) shall be paid by Newell for its services at its customary
rates as in effect from time to time and its out-of-pocket expenses
(including but not limited to the reasonable attorneys' fees and
disbursements of its counsel); (d) shall be entitled to consult with
counsel of its own choosing with respect to any matter that arises
hereunder and shall not be liable for action taken or omitted to be
taken by it in good faith, and in accordance with the advice of such
counsel; (e) shall be entitled to resign and be discharged from its
duties hereunder by giving written notice of such resignation to
Newell and Shareholder specifying a date not less than 30 business
days following the date of such notice when such resignation shall
take effect, at which time the successor escrow agent selected by
Newell with the prior written approval of Shareholder shall accept
such appointment and the Escrow Property held hereunder; and (f) shall
be indemnified and held harmless by Newell and Shareholder, jointly
and severally, against any and all costs, expenses, damages and
liabilities incurred by it hereunder except for those incurred by it
as a result of its own willful misconduct or negligence. Any
successor Escrow Agent shall execute a copy hereof, acknowledging its
agreement to the terms hereof.
ARTICLE VI
Miscellaneous
6.01 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given (a) when
delivered in person, (b) one business day after deposit with a
nationally recognized overnight courier service, (c) two business days
after being deposited in the United States mail, postage prepaid,
first class, registered or certified mail, or (d) the business day on
which it is sent and received by facsimile, as follows:
47
If to the Escrow Agent:
Firstar Trust Company
615 East Michigan Street
Milwaukee, WI 53202
Attention: William Caruso
If to Newell:
Newell Co.
29 East Stephenson Street
Freeport, Illinois 61032
Attention: William T. Alldredge
Facsimile: (608) 365-8290
and
Mr. Richard H. Wolff
Associate General Counsel
Newell Co.
4000 Auburn Street
Rockford, Illinois 61125-7018
Facsimile: (815) 969-6106
If to Shareholder:
to the address set forth
on the signature page hereto
With a copy to: Kenneth Gliedman
SPITZER & FELDMAN, P.C.
405 Park Avenue
New York, N Y 10022
Facsimile: (212) 838-7472
6.02 Headings and Definitions. The section and subsection
headings in this Agreement are inserted for convenience only and shall
not affect in any way the meaning or interpretation of this Agreement.
6.03 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York .
6.04 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
6.05 Fees. All fees and charges of Escrow Agent for its
services hereunder, including disbursements, will be paid by Newell.
48
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
NEWELL CO.
Number of Newell Shares
Deposited /s/ Richard H. Wolff
- ----------------------- -----------------------
By: Richard H. Wolff
Title:Secretary
30,159 /s/ Carl Philips
-----------------------
CARL PHILIPS
1 W. 64th Street, Apt. 3B
New York, New York 10023
FIRSTAR TRUST COMPANY, as Escrow Agent
Attest:
/s/Charles F. Pedersen /s/ William Caruso
- ---------------------- -------------------
Charles F. Pedersen By: William Caruso
Assistant Secretary Title:Assistant Vice President
EXHIBIT 2.3
ESCROW AND INDEMNITY AGREEMENT
This Escrow and Indemnity Agreement ("Agreement") is made
and entered into as of August 25, 1995, by and between Newell Co., a
Delaware corporation ("Newell"), and Carl Philips (the "Shareholder")
and Firstar Trust Company (the "Escrow Agent").
WHEREAS, Newell, Philips Acquisition Co., a New York
corporation ("Acquisition"), Philips Industries, Inc., a New York
corporation ("Company"), and the Shareholder have entered into an
Agreement and Plan of Reorganization dated August 25, 1995 (the
"Reorganization Agreement"), providing for the merger of Acquisition
with and into Company (the "Merger") and the conversion of the issued
and outstanding shares of common stock of Company into shares of
commons stock of Newell (the "Newell Common Stock") pursuant to the
Plan of Merger dated August 25, 1995 between Acquisition and Company
(the "Plan of Merger");
WHEREAS, the Company has thusfar been unable to agree to
terms for the termination of the Real Property Lease (as defined in
the Reorganization Agreement) under Section 6.0 of the Reorganization
Agreement and the parties have determined to close, notwithstanding
the non-occurrence of such condition to Closing.
NOW, THEREFORE, in consideration of the mutual covenants,
agreements, representations and warranties herein contained, the
parties agree as follows:
ARTICLE I
THE ESCROW
1.01 DEPOSIT IN ESCROW. At the Closing (as defined in the
Reorganization Agreement), the Shareholder shall deposit with the
Escrow Agent to be held in escrow (the "Escrow") on the terms
hereinafter set forth, certificates representing the number of shares
of Newell common stock set forth opposite the Shareholder's signature
hereto (the "Escrow Shares") which certificates shall be accompanied
by duly executed stock powers endorsed in blank. Such shares of
Newell common stock will constitute the Escrow Shares.
1.02 ESCROW SHARES. The Escrow Shares and stock powers
deposited in accordance with the terms hereof (the "Escrow Shares"),
shall be held by the Escrow Agent on the terms hereinafter set forth.
1.03 DISTRIBUTIONS ON ESCROW SHARES. All dividends and
other distributions paid or made with respect to the Escrow Shares,
whether in the form of cash, Newell common stock (other than stock
splits) or other securities or property, and such dividends and other
distributions shall not constitute part of the Escrow Shares and shall
be paid directly to Shareholder.
1.04 TAXES AND CHARGES ON ESCROW SHARES. The Shareholder
shall be responsible for and shall pay and discharge all taxes,
50
assessments and governmental charges imposed on or with respect to the
Escrow Shares.
1.05 VOTING RIGHTS. Escrow Shares held by the Escrow Agent
hereunder shall remain registered in the name of the Shareholder, and
the Shareholder shall be entitled to exercise all voting rights with
respect thereto.
ARTICLE II
Intentionally Left Blank
ARTICLE III
Indemnification and Other Payments
3.01 INDEMNIFICATION. Newell agrees to cause the Company to
pay timely to the landlord ("Landlord") under the Real Property Lease
all amounts due under the Real Property Lease and otherwise comply
with the terms and conditions of the Real Property Lease; however,
Newell will cause Company to vacate the Property effective on or
before December 31, 1995 ("Vacancy Date"). In the event the Real
Property Lease is not terminated by the Vacancy Date, Shareholder will
indemnify, defend and hold harmless Newell and the Company for (x) all
rent and other payments (other than amounts caused by the default of
the Company thereunder) and termination payments agreed to by
Shareholder due under the Real Property Lease for any period after the
Vacancy Date, less all amounts collected by the Company from any
sublessee or assignee of the Real Property Lease, plus (y) any
brokerage commission and tenant improvement costs payable by Company
in connection with any such sublets or assignments.
3.02 DETERMINATION OF DAMAGES. The aggregate liability of
Shareholder hereunder shall be 60% of the amount set forth in Section
3.01 above, which is deemed for purposes hereof to be the amount set
forth in Section 3.01 net of the aggregate federal, state and local
taxes calculated at the marginal tax rates (collectively, "Taxes") on
such amount which would have been payable by Newell (such amount being
hereinafter defined as "Damages").
3.03 SUBLETTING AND ASSIGNMENT. Newell agrees that
Shareholder shall have the absolute right, on behalf of the Company,
to sublet all or portions of the property ("Property") leased under
the Real Property Lease for a period or periods with occupancy
commencing after the Vacancy Date and/or to cause the Company to
assign the Real Property Lease as determined by Shareholder with
occupancy effective at any time after the Vacancy Date and to retain
brokers in connection therewith. Newell will cause the Company to
execute the appropriate documents in connection therewith and submit
to the Landlord all documentation necessary to obtain its consent.
Upon execution of any such sublet or assignment and approval thereof
by Landlord, provided Newell is satisfied, in its sole discretion with
the creditworthiness of the subtenant or assignee, the Shareholder and
Newell shall mutually determine the maximum then remaining Damages
which may be incurred by the Company for the remainder of the term of
the Real Property Lease, assuming that all such creditworthy
subtenants and/or assignees make timely payment of all amounts due
from them under their subleases and assignments. To the extent that
51
the value of the Escrow Shares exceeds such amount, and Newell has so
satisfied itself as to creditworthiness, a number of Escrow Shares
representing such excess shall be released from Escrow by the Escrow
Agent to Shareholder promptly after such calculation. Notwithstanding
the release of the Escrow Shares, Shareholder shall remain personally
liable for any Damages, including Damages caused by a default by any
sublessee or assignee of the Property. In the event, however, of any
such default, the Company agrees that Shareholder shall have the
right, in the name of and on behalf of the Company, at his sole cost
and expense, to pursue all remedies which the Company may have against
such defaulting entity and that any amount received from such
defaulting entity, net of Taxes thereon, shall reduce the Damages as
calculated pursuant to Sections 3.01 and 3.02 above. Newell agrees
promptly to notify Shareholder of any default by any subtenant or
assignee.
3.04 TERMINATION OF LEASE. In addition to the sublet and
assignment rights which Shareholder has been granted pursuant to
Section 3.03 above, Shareholder shall have the absolute right to
negotiate and Newell shall cause the Company to execute a termination
of the Real Property Lease effective at any time after the Vacancy
Date, provided that the value of the Escrow Shares together with any
amounts contemporaneously therewith paid by the Shareholder to the
Company at least equals 60% of the amount required to be paid by the
Company to the Landlord in connection with such termination.
3.05 CLAIM AGAINST SHAREHOLDER. Newell will give written
notice (the "Indemnification Notice") to the Escrow Agent and the
Shareholder semi-annually commencing June 30, 1996 for any claim
hereunder for Damages for the preceding six months (a "Claim").
3.06 CLAIMS AGAINST THE SHAREHOLDER. The Shareholder shall
have a period of 30 days from the date the Indemnification Notice is
given to provide written notice ("Objection") to Newell and the Escrow
Agent of an Objection to the Claim identified in the Indemnification
Notice. Such Objection shall be to the merits or the amount of the
Claim or to both the merits and the amount of the Claim. If the
Shareholder fails to object within such 30-day period, the Escrow
Agent shall make payment of the amount of the Claim in accordance with
Section 3.07 below. If the Shareholder objects to indemnification for
Damages with respect to any such Claim and/or the amount of such
Damages within 30 days (which period may be extended upon the written
agreement of Newell and the Shareholder and notice thereof given to
the Escrow Agent) after the date the notice of Objection is given to
Newell and the Escrow Agent, either party may thereafter institute an
appropriate arbitration proceeding under the auspices of the American
Arbitration Association in New York City, with respect to the matters
which have not been agreed upon. Each of the parties hereto agrees
that a final arbitration ruling in any such proceeding shall be
conclusive and binding on such party.
3.07 PAYMENT OF CLAIMS. The Escrow Agent shall continue to
hold the Escrow Shares pending the occurrence of any of the
following: (a) receipt by the Escrow Agent of a written
Indemnification Notice from Newell referred to in Section 3.05 hereof
52
setting forth the amount of the Damages, the amount owed to Newell
pursuant to Section 3.01 hereof, in each case as to which the
Shareholder fails to give an Objection notice on a timely basis; (b)
receipt by the Escrow Agent of written notice from Newell and the
Shareholder referred to in Section 3.03 hereof setting forth the
amount of the Damages, or the amount owed to Newell pursuant to
Sections 3.01 hereof and/or the amount owed Shareholder under Section
3.03 and/or 3.08; (c) receipt by the Escrow Agent of a copy of the
determination of the arbitrator pursuant to Section 3.06 above. Upon
receipt of any of the foregoing, the Escrow Agent shall deliver to:
(i) Newell such portion of the Escrow Shares as shall equal the amount
of the Damages which is to be paid to Newell; or Shareholder such
portion of the Escrow Shares as shall equal the amount to be released
to Shareholder pursuant to Section 3.03 and 3.08. For all purposes
hereunder, the Escrow Shares shall be valued at $25.8625 per share
plus an imputed interest rate thereon at 6.27% per annum until
released from escrow hereunder. To the extent less than the then
value of a share is required for full payment of any amount, an
additional Escrow Share shall be delivered to the party entitled
thereto and the difference will be adjusted on the next delivery to
such party.
3.08 SUCCESSIVE RELEASE OF ESCROW SHARES. Semi-annually
commencing July 1, 1996, a portion of Escrow Shares shall be released
from escrow to the extent set forth in Exhibit A annexed hereto.
3.09 PAYMENT OF CASH. To the extent that, at any time, the
amount of a Claim for which Newell is entitled to payment pursuant to
the terms hereof exceeds the remaining Escrow Shares, Shareholder
shall deliver to Newell, within fifteen (15) days after notice from
Newell, a check, subject to collection, in the amount of the
shortfall.
3.10 LEGAL FEES. In the event of any dispute hereunder, the
prevailing party shall be entitled to reimbursement of its reasonable
legal fees and expenses in connection with such dispute.
ARTICLE IV
TERMINATION
4.01 TERMINATION DATE. The Escrow shall terminate upon the
earlier of the release of the last Escrow Shares hereunder or the
expiration or earlier termination of the Real Property Lease in
accordance with its terms ("Termination Date").
4.02 DISTRIBUTION OF ESCROW SHARES. On the Termination
Date, any remaining Escrow Shares shall be distributed to Shareholder.
ARTICLE V
The Escrow Agent
5.01 RIGHTS AND OBLIGATIONS. The Escrow Agent, its
officers, directors, employees and agents (a) shall not be liable for
any error of judgment, any mistake of act or law or any act done or
omitted by it in good faith, unless as the result of its gross
negligence or willful misconduct; (b) shall be entitled to treat as
genuine any letter or other document furnished to it by Newell, the
53
Company or the shareholder's Agent and believed by it to be genuine
and to have been signed and presented by the proper party or parties;
and (c) shall be paid by Newell for its services at its customary
rates as in effect from time to time and its out-of-pocket expenses
(including but not limited to the reasonable attorneys' fees and
disbursements of its counsel); (d) shall be entitled to consult with
counsel of its own choosing with respect to any matter that arises
hereunder and shall not be liable for action taken or omitted to be
taken by it in good faith, and in accordance with the advice of such
counsel (e) shall be entitled to resign and be discharged from its
duties hereunder by giving written notice of such resignation to
Newell and Shareholder specifying a date not less than 30 business
days following the date of such notice when such resignation shall
take effect, at which time the successor escrow agent selected by
Newell with the prior written approval of Shareholder shall accept
such appointment and the Escrow Shares held hereunder; and (f) shall
be indemnified and hold harmless by Newell and Shareholder, jointly
and severally, against any and all costs, expenses, damages and
liabilities incurred by it hereunder except for those incurred by it
as a result of its own willful misconduct or negligence. Any
successor Escrow Agent shall execute a copy hereof, acknowledging its
agreement to the terms hereof.
ARTICLE VI
Miscellaneous
6.01 NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to have been given
(a) when delivered in person, (b) one business day after deposit with
a nationally recognized overnight courier service, (c) two business
days after being deposited in the Untied States mail, postage prepaid,
first class, registered or certified mail, or (d) the business day on
which it is sent and received by facsimile, as follows:
If to the Escrow Agent:
Firstar Trust Company
615 East Michigan Street
Milwaukee, WI 53202
Attention: William Caruso
If to Newell:
Newell Co.
29 East Stephenson Street
Freeport, Illinois 61032
Attention: William T. Alldredge
Facsimile: (608) 365-8290
and
Mr. Richard H. Wolff
Associate General Counsel
Newell Co.
4000 Auburn Street
Rockford, Illinois 61125-7018
Facsimile: (815) 969-6106
54
If to Shareholder:
To the address set forth
on the signature page hereto
With a copy to:
Kenneth Gliedman, Esq.
Spitzer & Feldman P.C.
405 Park Avenue
New York, New York 10022
Facsimile: (212) 838-7472
6.02 HEADINGS AND DEFINITIONS. The section and subsection
headings in this Agreement are inserted for convenience only and shall
not affect in any way the meaning or interpretation of this Agreement.
6.03 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
6.04 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
6.05 FEES. All fees and charges of Escrow Agent for its
services hereunder, including disbursements, will be paid by Newell.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
Number of Newell Shares
Deposited: 29,196 NEWELL CO.
------------
By: /s/ Richard H. Wolff
--------------------------
Title: Secretary
-----------------------
/s/ Carl Philips
------------------------------
Carl Philips
Address:
Attest: Firstar Trust Company,
as Escrow Agent
_________________________________ By:___________________________
Title:________________________
55
EXHIBIT A
CALCULATION DATE MINIMUM AMOUNT
January 1, 1996 $ 756,555
July 1, 1996 715,227
January 1, 1997 672,604
July 1, 1997 628,645
January 1, 1998 583,308
July 1, 1998 518,025
January 1, 1999 450,695
July 1, 1999 381,254
January 1, 2000 309,637
July 1, 2000 235,774
January 1, 2001 159,596
July 1, 2001 81,030
January 1, 2002 -0-
To the extent that on any Calculation Date the value of the
Escrow Shares exceeds the value shown in the Minimum Amount column,
the Escrow shares reflecting such excess shall be released from escrow
and delivered to Shareholder.
EXHIBIT 5
SCHIFF HARDIN & WAITE
7300 Sears Tower
Chicago, Illinois 60606
(312) 876-1000
- ------------------------
September 6, 1995
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549-1004
Re: Newell Co.
Registration Statement on Form S-3
Ladies and Gentlemen:
We are acting as counsel for Newell Co., a Delaware corporation
(the "Company"), in connection with the Company's filing of a
Registration Statement on Form S-3 (the "Registration Statement") with
the Securities and Exchange Commission covering the registration of
247,946 shares of common stock, par value $1.00 per share, of the
Company and the related Preferred Stock Purchase Rights attached
thereto (collectively the "Shares") which are being offered for the
account of a certain selling stockholder of the Company.
In this connection we have examined such documents and have made
such factual and legal investigations as we have deemed necessary or
appropriate for the purpose of this opinion.
Based upon the foregoing, it is our opinion that the Shares have
been validly authorized and are legally issued, fully paid and non-
assessable. We draw to your attention, however, that the Wisconsin
Supreme Court has held that the provisions of a predecessor of Section
180.0622 of the Wisconsin Business Corporation Law relating to
shareholders' liability for employee wages are applicable to foreign
corporations qualified to do business in the State of Wisconsin, such
as the Company.
We hereby consent to the filing of this opinion as Exhibit 5 to
the Registration Statement and to the reference to us under the
caption "Legal Opinion" in the Registration Statement.
Very truly yours,
SCHIFF HARDIN & WAITE
By: /s/ Linda J. Wight
---------------------------
Linda J. Wight
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our
report January 28, 1995 included in Newell Co.'s Form 10-K for the
year ended December 31, 1994 and to all references to our Firm
included in this registration statement.
By: /s/ Arthur Andersen LLP
----------------------------
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
September 6, 1995
