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3 May 4,1961
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Division ad Licensing and Regulation U.S. Atomic Energy Commission gp
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Attention: Mr. Robert Lowenstein
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Gentlemen:
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or about my 31, 1961, it is proposed that the assets and business of Nuclear Development Corporation of Armerica j
Fuels Operation of Olin Mathieson Chemical Corporatioha%[e Nuclea nd the com-l mercial operations of the Nuclear Division of Mallinckrodt Chemical i
Works)will be t ransferred to United Nuclear Corporation.
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The details of the arrangements for these tramsfe~rs are sTt faith im the proxy material
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wMch is enclosed herewith and which has boom submitted to the shareholders j
of NDA, along with motice of a special NDA stockholders' meeting called for May 24,1961 (see Attachment A).
As you will note, all of the facilities and persammel of the three
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present organdsations referred to will be transferred to United Nuclear i
Corporation.
Further, the practices and procedures currently la effect, with respect to each of the three presset organisations, in areas of interest j
to your Division will remnain la effect. Arruagesments to transfer to United l
Nuclear Corporation all outstandtag contracts, subcontracts and other com-tractual obligations are being made with the cognizaat agencies and depart-j memes of the Government, and with the contractors, suppliers and other orgaminations involved.
Discussions have also been initiated with appropriate i
AEC field persommel regarding the transfer of security clearances and access permits.
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It is requested that the Byproducts Material, Source Material and Special Nuclear Materials licenses, as manended. Issued by the U.S. A.E.C.
l to NDA be trammierred or otherwise extended to United Nuclear Corporation.
See Attachment B.) The Utilisation Facility license (R-49) for NBA's i
Pawling Research Reactor is the subject of a sepasste regumet.
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It is requested that the Byproducts Material, Searco Material and i
special Nuclear Materials licenses, as amended, issued by the U.S. A.E.C.
to Olia MatWeson Chemical Corporation be transferred er otherwise extended i
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to United Nuclesr Corporation.
@ee Attachosent C.)
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May 4, 1961 i 1
It is requested that the Source Material and Special Nuclear j
Mate rials licens es, as amended, issued by the U.S. A. E. C. to Mallinckrodt Chemical Wo rks be transfe rred or othe rwise extended to United Nuclea r 4
j Co rpo ration. (See Attachment D. )
In the cases of the referenced licenses issued to NDA and Olin, j
it should be noted that all of the activities and possession of materials authorized thereby are to be transferred to United Nuclear Corporation
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and that no activities or possession of materials encompassed under these licenses are expected to be carried on or required by NDA or Olin r.s s epa rate licensees subs equent to the transfe rs to United Nuclea r Corporation on or about May 31, 1961 i
j In the case of Mallinckrodt Chemical Works, howeve r, analytical l
activities at its St. Louis plant which are now covered under Source Material i
License C-538 will be continued by Mallinckrodt. Only those activities at the Hematite, Missouri plant which are covered by this same license will j
be transferred to United Nuclear Corporation. It would be appreciated if i
you would advise promptly as to the proper steps to be taken by Mallinckrodt and/or by United Nuclear Corporation in orde r to insure that activities at i
both plants may continus without interruption and under prope r licenses, j
It should also be noted that Mallinckrodt possesses another Special Nuclear Mate rials lic' ens e, covering only the Chemical Works laboratory, the transfer i
j of which is not involved.
Each of the undersigned has now been elected a Vice President l
of United Nuclear Corporation. Accordingly, this letter may also be deemed to constitute a formal request for these transfers signed on behalf of United i
Nuclear Corporation.
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c John R. Menke, President Nuclear Development Corporation of America 5 New Street White laina, New ork
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Edwa rd Ha rts rue, Vice President, Nuclea r Fuels Olin Mathieson ChemicM Corpo ration 275 Winchester Avenue j
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Charles r agton, sident Mallinekrodt Chamical Works l
St. Louis 7, Missouri i
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Notice cf Special Meeting of Stockholders
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a h' ' Nortcz 'is'Hady Grva'N*that"CSpecial ' Meeting:'of thebStockh'olderiof : Nuclear Development at l'porationdof 'Amehilwillbheld'at'the'CMinpany's offices,! Eastiriew,'New.Yo'k'6n May 24{1 Cor i
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of meirrl : il'o:voteipppn a proposal to, approve the. transfer of,all of.the assets of. Nuclear Development l
- , Corporation.,of. An) erica to iUnited r N.udear Corporation, a. Delaware colrporation, pursuant to a
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J,a,ReorganizationiPlan and Exchange: Agreement, dated, April.27,1%1 (a. copy of which is attached 2
ma as Exhibit yo.the aspompanying Proxy Etatement), among United: Nuclear Corporation, Mallinckrodt j
. Chemical.V(orks, a Missouri corporation, Olin Mathieson Chemical Corporation, a Virginia corpora-
. tion, and Nuclear. Development Corporation of America, all as more fully described in the accompany-l
..ing Proxy Statement;.
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. f,,[2 [T[v6@,hp'6h'the Company; from " Nuclear Development Corpo' ration proposal','to amend' ArticW"First'#of the Certificate of Incorporation to j
f chan "the name "of j
~"F2s 'es LiqtiidaOng Corporation",'as more fully and'for'the r'eason.descrilied;in the: accompanying
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Proxy Statement; l
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...,'p c' W ;n m g ;3 3 Oilly stockholders'of record at the close of b6siness on April 28,1%1 will be ' entitled to vote at
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the meeting or any adjournment thereof.
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.,g By order of the' Board of Directors l
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,y re.i. i Please fill in, date and sign the enclosed proxy and return same promptly.if,you ' o not expect d
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a NUCLEAR DEVELOPMENT CORPORATION OF AMERICA Special Meeting of Stockholders PROXY STATEMENT This Proxy Statement relating to the transfer by Nuclear Development Corporation of America 1
(NDA) of its assets as described below to United Nuclear Corporation (United Nuclear) is furnished to the stockholders of NDA in connection with the Special Meeting of Stockholders of NDA to be held
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7T on May 24,1%1. A copy of the Notice of Meeting ~of NDA accompanies this Proxy Statement. The
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accompanying Proxy is solicited by and on behalf of the management of NDA for use only at a Special
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Meeting of Stockholders to be held at the offices of NDA, Eastview, New York, on May 24,1%1 at 10 A.M. or any adjournment or adjournments thereof. The cost of the solicitation of proxies will be borne by NDA and the management may use the services of its directors, officers and others to solicit proxies, personally or by telephone, and may request brokers, fiduciaries, custodians and nominees to l
send proxy statements and other materials to their principals. In addition, NDA may retain the services of proxy solicitation firms to assist in the solicitation of proxies. Each proxy executed and returned by a stockholder may be revoked any time thereafter except as to any matter or matters upon which prior to such revocation a vote shall have been cast pursuant to the authority conferred by such proxy.
The outstanding voting securities of NDA as of April 28,1%1 consisted of 239,812 shares of Common Stock and each share is entitled to one vote. So far as is known to NDA no person owns of record or beneficially 10% or more of its outstanding Common Stock, except Mr. Laurance S. Rockefeller who, as of the record date, owned 26,680 shares, representing 11.13% of the shares. By action of the Board of Directors pursuant to the By-laws, only stockholders of record at the close of business on April 28,1%1 shall be entitled to notice of and to vote at the meeting.
As of the date of this Proxy Statement the only business which the management intends to present I
and knows that others will present at the meeting is to vote upon the proposed approval of the transfer by NDA of all of its assets'to United Nuclear and, if such transfer be approved, the change of name of the Company from its present name to "Eastview Liquidating Corporation", and the voluntary dissolu-tion of NDA, as described herein. -If any other matter or matters are proper.ly brought before the meeting or any adjournments thereof, it is the intention of the persons named in the accompanying form of proxy to vote the proxy on such matters in accordance with their judgmeht.
TABLE OF CONTENTS Page Page Proposed Transaction,..................
3 The Constituent Organizations..
11 Terms of Agreement..................
3 NDA 11 Reasons for the Transaction..
6 Nuclear Division of Mallinckrodt 12 I
Effects of the Transaction on Certain Nuclear Fuels Operation of Olin.
13 Securities of NDA................
6 The New Corporation-United Nuclear Comparative Data 7
Corporation 15 Summary of Operations of NDA....
8 Exhibit I-Reorganization Plan and Ex-Summary of. Operations of Nuclear Fuels change Agreement Operation of Olin..................
9 Exhibit II-Financial Statements Summary of Operations of Nuclear Division Exhibit III-Excerpts from New York g i,,
of M allinckrod t.......................
10 Stock Corporation Law O, g.h 1. -
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, PROPOSED TRANSACTION
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On April 27,1%1, UNITro NUCLEAR CoRPoRAT1oN, a Delaware corporation (United Nuclear),
NUCLEAR DEVELOPMENT CORPORATION OF AMERICA (NDA), MAI.UNCKRoar CHEMICAL WORKS, a Missouri : corporation (Mallinckrodt), and OuN MATHIESoN CHEMICAt. CoRPoEATIoN, a Virginia corporation (Olin), entered into a Reorganization Plan and Exchange Agreement (the Agreemen by the terms'of which, as described more particularly hereinafter, NDA, Olin, and Mallinckrodt propo to transfer to United Nuclear, a newly formed corporation, the following respective assets:
-(a)1In the case of NDA, all its assets, subject to a retention of cash for certain purposes as set forth in the Agreement; fbhn 'the case of'Mallinckrodt, substantially all of the assets hf its Nuclear in the"Agr' ement)[ihdin'g' cash in an ainount not less than $250,000(and ~, ll '
e (c) In the case of Olin, substantially all of the assets of its Nudear Fuels Operation (as def in the Agreement), induding cash in an amount not less than $2,199,000.
Each of Ojin, Mallinckrodt and United Nticlear has furnished the information set forth in this Proxy Statement with respect to it.
A copy of the Agreement which has been duly executed by the respective corporations sn.d au ized by their respective Boards of Directors (or executive committees thereof) is' attached hereto as Exhibit I, to which reference is made for a complete statement of the terms and cpnditions of the pro-The statements contained herein with respect to the Agreement are qualified in posed transaction.
their entirety by the foregoing reference.
The proposed transaction further contemplates that if it is consummated, NDA will be voluntaril dissolved under the Stock Corporation Law of New York and there will be distributed to the stock-holders of NDA in full liquidation of their rights as stockholders of NDA the shares of Common Stock of United Nudear which will be received by NDA in exchange for the assets transferred. Such plan of dissolution and liqui,dation contemplates that one share of Common Stock of United Nudear will be
..It is further contem-distributedjniliquidation for each share of Common Stock of NDA outstanding.
plated that, if;the transaction is consummated, the name of.NDA will be changsd to "Eastview ly Corporation'l.in order to preserve the name of NDA to United Nuclear.
Ths'pfojidsed transfer of assets by NDA to United Nudear as'provided in the Agreenient and
- the"volunta'rf ~ dissolution of NDA will require thiMIirrhative vot' 'of the"holdeis of two-thirds'of the e
outstariding' shares"of'Comnion Stock of NDAJ ~rtid jEoposeil diluigs'of'name bf NDA ~will require t
the affirmatiVi~ vote of the' holders of a majority of the" outstanding / shares of Common Stock of NDA.
It is thshresent intention of the persons desighateEas proxies tfvote a!! proxies delii/ir'ed tb the
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In without special instructions in' favor of the proposals set forth in the Notice of Meeting and Proxy.
the event,that in the judgment of the persons named as, proxies the. expense of complying with th of stockholders for appraisal becomes unwarranted, all of the proxies,.whether.or not cont 3 ning.special i
instructions,'willinot be voted for or agsinst the. proposals, in which circumstance it is believed the The proposals (will fail of passage and there will belno, occasion for the.,right of appraisal to accrue.
number of dissenting votes which will be decmed sufficient to render. adoption of the proposals unwar-i ranted will be determined by the persons designated as proxies in the light of the circumstances existing t
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on th'e'dafe'of'ths meeting.
TERMS OF AUItEEMENT Under the Agreement NDA will receive, in exchange for the transfer of all of its assets, shares of Common Stock of United Nuclear equal to the number of shares of common. stock of.NDA f
outstanding jrior to the closing of the transaction,'less any shares held by stockholders who have i
perfected their' rights under Section 20 of the Stock Corporation Law,.
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Stock (Iyeferr,ed, Stock)! andfA075 shares of Common. Stock,o
,,e Mallinckrodtavill receive 11,185 sharesf(subject to adjustment),pf 3
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..is,4morewr icas than $2,060,000, the nettworth of such Division as reflected on its unaudited balance a
sheet as of October 31,1960; based upon its audited balance sheet as of December 31,1960, Mallinckrodt would be entitled to receive after such adjustment an aggregate of 13,784 shares of Preferred Stock.
Of the number of shares of Preferred Stock to be issued to Mallinckrodt,8,185 shares will be delivered on the closing date and the balance as soon as practicable thereafter.
Olin will receive 69,200 shares (subject to adjustment) of Preferred Stock and 582,000 shares (induding 50 shares issued in connection with the organization of United Nudear) of..Conunon Stock l
of United Nuclear.
The number of shares of Preferred Stock to be received by. Olin shall;be adjusted "to the extent that the net woith of the Nuclear Fuels Operation of Olin as transferred lto United Nudear i
on the closing date is rnore or leis tilan $12,749,900, the net worth of such' Operation as reflected on
- its tinaudited balance shtet as of Octo6er 31,1960; based upoh its audited Isalancelheet 'asl6f December
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1 31, 1960, Olin would be entitleil to receive 'after such adjustment 'an aggregats of'82,30711iares of i
Preferred Stock. Of the number of shares of Preferred Stock to be issued to Olin,49,200 shares will be del.ivered on the closing date and the balance as soon as practicable thereafter. In "a'ddition,' United Nuclear has the option to sell additional shares of Preferred Stock to'Olin at'a price of $100 a' share up to the aggregate amount of unpaid capital commitments of the Nudear Fuels Operations pf Olin
. outstanding on the closing date.
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, United Nudear will assume substantially all obligations (except certain specified obligations) of NDA, the Nudear Fuels Operation of Olin, and the Nudear Division of Mallinckrodt,induding, without limitation, the outstanding Debentures of NDA, the options under the Stock Option Plan of NDA, and the options to purchase stock of NDA heretofore granted to certain consultants. The outstanding Debentures and other subordinated obligations of NDA shall be subordinated to the same categories of creditors and liabilities of United Nudear as they are to creditors and liabilities of NDA.
The Agreement further provides that prior to the consummation of the transaction, NDA,; the Nuclear Fuels Operation of Olin, and, the Nudear Division of Mallinckrodt, shall not, with certain exceptions, incur any obligatiori other than current obligations in the ordinary course of'busines,s;' pay l
.any obligation other than current liabilities shown on its respective balance" sheet or in'the' ordinary l
course of business; subject any aisets to any ' lien 'or encumbrance; trarisfeid iriy patents or'ipatent r
application; knowingly waive any; rights of a substantial value; enter into any.transacdonsother than in the ordinary course of business; or.mak any capital expenditures or commitments therefor. amounting 9
.in the aggregate, each, to more than $200,000 for each of NDA and Mallinckrodt, or $1,000,000, for Olin, or make any, changes in employeepmpensation, othgr.than certain specified changes..,
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..,h The Board..of Directors.pf,UnitedJudearavill consist of deven; persons of whom,four baye been
. associated with each 9, Olin and. N.DA;and three have been, associated;with,Mallinckrodt.
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Each of the three transferor corporations is required to'use its best efforts'to induce the employees of the respective businesses to become employees of United Nudear, and all such employees employed on the closing date'who' are willing to Eccept' employment will be employed by United Nuclear. United Nudear is required to 'se its best efforts to the end that the fringe benefits, taken 'as a whole, received u
'by such employees shall be as,' favorable as those previously received.
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.,v, The Agreement is predicated upon the entire transaction constituting a tax-free,, reorganization as 1
to NDA and its stockholders, and a. tax-free exchange as to.,Mallinckrodt and Olin, within the meaning r
of the Internal Revenue Code of 1954,' alamended, and a favorable tax ruling by the, Internal Itevenue Service to that effect is a condition 'of consummation of the'trimsaction.
It is a further cond'ition of consummation of the Agreement that two-thirds of' the stockholders of NDA shall have votad for and approved the proposed transaction and have voted fo'r arid approved the voluntary dissolution of NDA and that the holders of at least 95% of the stock of NDA shall not have perfected their rights under Sectioti'20 of the New' York Stock Corporation La'.: The transaction w
toritemplatep&at^NDA, aftest'h'e 'ebrisu$initicri' of / he transaction,' will biliqiiidateiand the stock of t
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t United Nudear/rereived aby.;it rin;the:aforesaid transaction will be'transferr'ed to;theis.tockholders of NDArin dissolutioncand. full' liquidation on-a share-for-share basisJ Accordingly,%Il of the shares of United Nudear issued to.NDA will be received by the stockholders of NDA in the'same. proportion and in the same amount as said stockholders have interests in NDA..
The dosing of!th'e" transaction for each of the transferor corporations is subject to a number'of further conditions induding without limitation, (a) the delivery of a certificate on the dosing date from each of the other transferors that all warranties in the Agreement are true and correct and the amount M hall riot be less than:$250,000 i
of working capital and cash being transferred to United Nudea:
a wgrkin4 cap [talypduS ng,$250,000 cash, from Mallinckrodt, $330,000 wot ng capital,induding $30,000 11 ki d $2,939,000 working capital, induding $2,199,00Q cash, from Olin; (b) satisfactory cad, if
.ND gah,jh[iransferors;,has good and' mark 9 table'titid,ih'f M
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ex 9n Kni,iedyudear effectsve on the, dosing date prpysdmg'e,for,the. leasing. to,
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d foi,.the Nud arjtielhOperation,of ComMny' bgOpngi., land"and 'cir"ta$ othEr[proddrties uillize' Oliri'at New Haven,' Connecticut, on 'erms and conditions satisfactory' n United -Nuclear and each.
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of the other transferors.
The Agreement farther providea for United Nuclear to enter into separate service agreements with Mallinckrodt and with Olin providing for their furnishing, respectively, certain services to the Hematite, Stich Missouri and New Haven and Montville, Connecticut plants:tolbe acq. uired by United Nudear.
agreements are to provide for payment by United Nuclear for such services at cost. In regard to Olin, it 'is anticipated' by(Olin that such piy'ments will be' abdut $500,000 i year.;'in the ' case ~of Mallinckrodt, it is anticipate' :by Mallinckrodt that'such payments'wll! be about $156,000 a' year." The duration of d
such agreementi and'their terms and provisions'are ' subject to approval by NDA and the other parties to the Agreementc" '
The trisihferif the. assets of Olin, Mallinckrodt arid NDA is scheduled to'be effective on May' 31, It is anticipated that in view'of the technica; right of rescission reserved to each of the parties
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for a period of 60 days 'after the closing date, distributioh of United Nuclear Cornmon Stock to stock-holders :ofEDA upon its liquidation will not be made until at least 60. days after;the closing.
MrcThe;Agreeme'nt further provides that United ~ Nuclear,;whenever requested;by'any of the transferors prio'r totDecemberirli 1963?will, at'its own expensecfile with the'Secuiities and Exchange Commission t
registration statements under the Securities Act of 1933 for the registration of the' issuance of Common :
Stock and Preferred Stock to the transferors.and the sale by the transferoryo they"ublic of such Common United Nucle'ar is"furthe$refuired so tiid.it[b$t effodsLto cause 'such ShkYd"Pkefe'd' Stock.
rpgist$lidhtyn's tp ' remain in 9 ect.,until,,DecerEbef'.jllk.l19$3',hin t
ff whidt'tlleI. >n,sferorisYat.e InNtir$g't'o.C. rrilie.d Nticleaftliat'each if dh.ledits.distrib u
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,,be requested jy, the, transferors,.provihd.that.the.cgst an"d, expense,o,, such
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, borne by such transferors. Each of tly,transferors has, agreelthat it.will not sell registra'ttorg sn31 or, transfer' anQ,1 phe, Commort Stock or, Preferred S'to'lE iss'ued to it'antessi Rbgistration St c
is. ne.effe.c..tjr,cotStsel. for. United.. d. elea'r is' of the op g h in x 7.. .w. m.t u red a.d, m....the, case. trqt case; ofgg.ts. counsel. h .d,registrat,torg.not r n, of controlling persons of NDA,gs of the opmion t at sat,f comphance wit {t t.Ee;e,q i& s satisfactory instruments o 5 .= w m .s. c. . n are furnished by the controlling persons. Olin a'ri'd Nulliricknid't have"edch ban consideririPwh'ethef to' dil' tW tifijsidic'shar~Foi dEited e Nuclear Common' Stock and Preferred Stock. United Nudear has also under consideration the possible public sale of shares of its Common Stock at the same time to raise new capital. If and when any such sales are made will be dependent upon market and other relevant conditions. e.a.sUC a < Tax A,spects.pf th,e Proposed Transaction;and Accounting Tyat, ment Thereof w., e..In pie:opinionuof.. counsel for,NDA, no: taxable gain or, loss will.be., realized,for federal income, tax PurposetbyWI rnits:. stockholders upon the.consununation..of the.transactiorp ndaas.;statedchereine t n ;p So .( 7 kN 'h ,,44 ' m 7 y+ % Q; u%Q fj.n.g.g J. &y gff,QQgg ((
I I i j above, a ruling fromithe Internal Revenue Service to that effect with respect to NDA and its stock-of holders will be aicondition of the Closing.eThe assets transferred and liabilities assumed will be recorded (c, in the accounts >ohUnited Nuclear:at'the values at which they are carried on ths books of the transferor su' corporations which is consistent with the basis reflected in the pro forma financial statements of United sh Nuclear, included in the Financial Statements appearing herein as part of Exhibit II. ra ol S Rights.of Dissenting Stockholders r As provided in Sections 20 and 21 oilhe Stock Corporation Law of the State of'New York, copies of which are attached as part of Exhibit'III~ he'reof,'any holder of common stock of NDA who does not vote in favor of the transfer of assets 'of'NDA contemplated by the Agreement may at any time prior t6',the vote thereon object to 'sucli'tranAfe'.and demand payment for.his stock and thereupon such r st'ockholder or t,he ' corporation shall hAve"the right, subject to the' conditions and prdvisions of Section 21 of th', Stock Corporation' Law, to have his stock' appraised and paid for as provided in said Section. e Such objection and ' demand must be'in writing and filed with NDA. ~ U ' s. y,, - REASONS FOR THE TRANSACTION 'I'n the opinion of the Board of Directors, NDA has reached the point in its development where further growth is best accomplished by combination with other organizations engaged in related functions in the nuclear energy field. This would enable NDA to effect maximum utilization of its specialized talents for the benefit of the new organization and at the same time to benefit from the operations of the other components of the organization. Internal growth to this status would require the raising of large amounts of capital and probable substantial dilution of the interests of the NDA stockholders and would entail the entry into areas of nuclear energy already occupied by others. The Board of Directors of NDA has accordingly concluded that the company is approaching its optimum size as an independent nuclear research and development company, and that further significant growth must rest on a combination of magnified resources and joinder of related, but non-competitive, i branches of the industry. E - '. b { The proposed transa$ tion represents 'the ' outgrowth of this determination. Its consummation will j result in the creation of'an' integrated;orgahilatior devoted primarily to nuclear energy which wil! have the combined'knadhow, facilities, and 'risiiurc{es"of' the 'three constituen ] which has made1significinUonsibu'tions ',to hie' field 'of huclear energy. It would 'p'rovide a2 cess to incicased financial resources a'nd otheibenefis usually related to integration. The'new corporation'will have skills aiid ' facilities' f5r Iisclear rese'a'r'ch'fhnd'defelopment,' reactor 'systein 'desigli,'rnanufacture of nuclear fuel materials, ' reactor core fabricatiBn! fuel management, cold' scrap processing, and production of isotopes and hot radiatiori' energy sources Along with the advantages of combination there will t be' difficulties to overcom'e. "Tlie new corpora' tion will consist of a combination of th'ree organizations which'have operated'Independen~ tly of eacli'o'tlier and a full integration of their activities will require t time and expense to effectuate. ' ,The Board of Directors 9, NDA recommends that the proposed transaction be approved. f i. .m ,. c, ;.u - i .(
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EFFECTS OF TH'E TRANSACTION ON CERTAIN SECURITIES OF NDA United Nuclear will assume the obligations o'f'NDA with respect
- tol(a) the outst'anding 5%
j Subordinated Convertible Debentures, due March 31, 1967, of NDA which as of March 31,< 1%1 aggregated a principal amount of $425,000,-(b) the outstanding restricted stock options of NDA, which as of March 31,1%1! represented the right!to* purchase an' aggregate of 12,268 shares of Common Stock I. p '60 i ; i th JP i b b h! MN N" h/dkfdh. . b. ' 'I
of NDA, granted' to employees of NDA pursuant to its Employees Restricted Stock Option Plan and ~ tijteefoutstanding. options to purchase common. stock of.NDA previously granted to certain con-(c)7 f sultants"of NDA, which, as of March 31,11%1, represented the right to purchase an aggregate of 1,300 shares of common stock of NDA. If the transaction is consummated, it will not change the conversion ratio of the 5% Subordinated Convertible Debentures or the purchase price of the stock subject to said options, and United Nuclear Common Stock will be substituted therein share-for-share for Common Stock of NDA. x:,>f ' COMPARATIVE' DATA 'ThEh otiatiori of 'thekeemint represented 'an" arms-length 3ransactidn, and the amount of ~CJNirn St M, in'tNe case of'Olin and Mallinckrodt! the amount of Pr'eferred ' Stock to be received by the,transferors was based upon th'e inteirelation' of a' number 'of factors, including historical earnings, annual salesTyrid,boolfvaltie of assets, no one of which was controlling. o w Market Ptlces~ ~ For the period shown below, the high and low bid.and asked prices in the over-the-counter market ~ fitlis Common;St6ck of 1NDA as reported by National. Quotation Bureau Inc., from its National ~ o Monthly Stock Summary and the high and low bid and asked prices on April 27,1%1 were as follows: Bid Prices Asked Prices 1959 High Low High Low First Quarter................. 27 17% - 29 23 % .Second Quarter............... 35 24 % 40 26 Third Quarter................ 28 % 19 30 % 22 Fourth Quarter............... 19 % 17 22 20 1960 i First Quarter.................. 16 12 % 19 14 % Second Quarter............. 23 % 11 25' 13 iThEd_ Quarter _................. '24 - 16 ^ 26 ' 17 % .Fourtn Quarter............... 20 15 22 - 17 First Quarter.................. 44 18 45 % 20 April 27,' 1%1................ 53 50 55 53 There are no comparable market prices for the businesses of the nudear operations of Mallinckrodt or Olin proposed 7to-be ; transferred to United Nu'elear.' 6 l Pro Forma Book Values l Based upon the December 31, 1960 audited balance sheets of Olin and Mallinckrodt and the l March 31,1%1 audited balance sheet of NDA (as adjusted on the pro forma balance sheet of United Nuclear to give effect to.the Agreement) presented herein and on the basis of the shares of stock of United Nuclear to be received by Olin, Mallinckrodt, and NDA (without giving effect to any conversion of the Preferred Stock to be received by Olin and Mallinckrodt, or the issuance of additional shares of Preferred Stock which United Nuclear may at its option sell to Olin to fund its capital commitments), the pro 'orma book values per share of Common Stock of the respective businesses of Olin, Mallinckrodt and NDA were $10.02, $10.01, and $4.03 per share respectively. Based on the pro forma statement of financial position appearing herein, the pro forma book value per r. hare of Common Stock of United Nuclear after giving effect to the transaction (without giving any effect to conversion of the Preferred Stock) would be $8.47. Assuming immediate conversion of all Preferred Stock to be issued to Olin and Mallinckrodt (o'ther than the shares which may be issued to Olin to fund capital commitments) the pro forma book value per share of Common Stock of United Nuclear would be changed to $13.37. j- <. c,. oa 'g dbl MrOhh h.4 i -ihhjk8hd'9djdh;hh.*' h, d,$h
1 t E.rnings per shara.
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...,.'for'NDA'for the. years ended March 31,1959,1960,'and 1%1l Earnings per share of'Conim3n'S [l w'ere $.17, $.11,' and $21,' VespectivIly. ' d s'lifipaFable earnings per share figures exist for the nuclear operations of Mallinckrodt or Olin. i
SUMMARY
OF OPERATIONS OF NDA The following Summary of Operations'has been examined by Max Rothenberg & Co., independent certified public accountants, with respect to the three years ended March 31,1%1, as set forth in their report inclu'ded herein. Thij, Summar(of Operations should be read in corijunction with the Firianc,ia ' Statements'and notes thereto of NDA'which are included herein. , ten io 1:,&tno h r.< . e.11 M .ppShnn. i ea r!i.A.- Year Ended March 31, 4.n,: l 1961 1960 1959 Gross Income.................... $4,790,104 $3,763,869 $4,'152.519 Cost of Sales and Operating Expenses b.,.......................... 4,607,283 - 3,618.091 3,930.532 Operating Pro 6t 182,821 145,778 '221,987 s., Other Income........ ........... N........................ 12,874 30,884 11.894 Other Deductions: Research and Development Expenses....... 12,357 66,066 47,312 Interest on Ilonds and Mortgages.~........... 31,578 36,781 43,126 Amortization of Debt Discount............................ 2,000 2,000 2,000 Other Interest Expenses................ 21,641 22,607 15,852 Non-Recurring Contract Settlement.. O ther........... 50,000 4 26,857 11,546 2,025 Total 94,433 139,000 160.315 Income Before Provision for Federal income Taxes.................. i 101.262 3,7,662 73,566 Provision for Federal Income Taxes 6............................... 50,163 11,086 33.456 ) r. Net Income............j.......... ;.,.... ....h 51,099:, 26.576 40,110 1 m i, i .L5 y, % P n,. y 3 G
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a '8UMMARLOP3. OPERATIONS OF NUCLEAR: FUELS' OPERATION.OF OLIN 16h The following,Summaryr of: Operations has been mmined by, Peat, Marwick,:Mitchell & Co., tr independent;certi6ed public accountants, with respect to the three years ended December 31,1960, as set forth:in their., report included herein.- The Summary of Operations should be read in conjunction with. the, Financial Statements and notes thereto of the Nuclear Fuels Operation of Olin which are - included. herein... 3' ear' Ended December 31, ~.. e. i.s.....m3 1960 .1959 1958 t Net Salso El iOperating Revenne i.......................... $27,246,390.59 -.$21,049,903.90 $ 7,117,531.49 i r ~ ^ ~ l Cost of g56dd..S. t... t.V.C.~'....................... ~. 19,682,897.08' m. ;19,086,437.98 - 7,622,211.48
- " G[Pd(Loss)]k Operations..............
7,563,493.51,',' W 1,963,465.92,,. (504,679.99) ..., expenses,...........,...... 1,191,534.55 y.; g.812,024.54 360,600.32 A " ' ' 14. " o and n ' Net', <, Loss). f, rom. operations.................. 6,371,958.96 7 ' e,1,151,441.38 (865,280.31) a m, u Other la==W=:. m 4 . '.la nm p, >& a!aiMsf.tu / Pro 6h 'M on Sales N W Capiht Asseh and ' ' ;" ' '" * i # 2,018.73 67,969.38 ereditsi not Irelated to year's ' operations................ ~ Pro 6 f Eather operations snd 1-Lam.......... -. 20,265J3,n w ..,e 31,332.22 25.936.32 ~ 20.265.73 33,350.95 93.905.70 6,392,224.69 i "' 11,184,792.33 (771,374.61) Other charsesp Loss realised on sales or other disposition of mi-ma-properties. ~................................... l...... 16,336.75 29,932.25 10.759.56 Relocation [and expansion expense..................... 1,59939 244,047.87 259,378.% i2.i8u5 w scei m....................................... 17,936.34 273.980.12 282,322.87 l Net Pro 6t (Less) before provision for Federal Taxes
- ,
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910,812.21 (1,053,697.48) ,,, on.Inco. me.........,.............................. 6.,374,288. 35 . n.; y M n' m i.)!nibi ri". WJE fulb.'s on. r .. Provision (credit).fpr Federal Taxes on Income:.,... I y p;.u... mr4 >S d Eit <! N r. g y,076,557.11JI.If. d.140,894.61 (640,435.37) 3 CurgTazespy c......, ;.... y,.................... -.... g, Deferred;M,p j, om+ ~ o. ~ m o o n.py.ma,g,.238,307.24a jjg 4332J05.60 92,330.89 n
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..,, a.cgig a u,3,314,864.35,n sid 1473,600.21J ' (548,104.48) Net' Inm w (I. mss)......................... )...... ' $ 3,059.424.00 M$ ' 437,212.00 $ (505,593.00) s ..o1- ..;.u.. .n .:d c The 1960 increase over preceding years in sales and earnings is considered to be non. recurring in that a substantial portion of the increase arose from delivery in 1960 pursuant to a firm fixed. price con-tract which was awarded in 1958. Current competitive market conditions in this industry and the state of the art appear to preclude obtaining new contracts affording comparable opportunities for profit. Based upo'n.unaudited interim financial statements, the operations of the Nuclear Fuels Operation of Olin for the three months' ended March 31," 1%1, produced net sales of $4,159,000 and a net loss L (after reduction in federal taxes on' income) of $194,000 as compared with net sales of $9,240,000 and net income of $1,170,000 for the three-month period ended March 31,' 1960! 'Such interim results include ? all adjustments (consisting only of normal recurring accruals) which, in the opinion of Olin, are l necessary to a fair statement of such results. t t E r g '4, / +1 + t .v' pi,,, - .,,. 4 9 3 p. Ih t t '9 i c N. / J' gi3 j q :p ' i... . y -... A.p.s n' S y,y i s .6 4 f.. e . y "J 1 t 1 dy ij:,. 4 gj' ,t ,q. Lbd h!hjNDhk kb"<
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SUMMARY
OF OPERATIONS OF NUCLEAR DIVISION OF MALLINCKRODT ,j - Th'e'following Summary of Operations has been examined by Price Waterhouse & Co., independent certified public accountants, with respect to the two years ended December 31, 1960, as set forth in their opinion included herein. Figures are not obtainable for the year ended December 31,1958 because of changes in accounting treatment during and following that year. Mallinckrodt has advised, however, that sales during that year. approximated $830,000. The Summary of Operations should be read in conjunction with the financial statements and notes thereto of the Nuclear Division of Mallinckrodt which are included herein. Year Ended December 31, 1960 1959 ~' ' Sales, net............ . i ;,' , Cost o f goods sold........................................ ;,.'..;' ~ 1,596,488 1,429,731 ................................. ~.T '.$1,657,065 ', ' $1,762,605 e <; o .= r.- ' G' oss' profit............... '$ 60.577 $ 332.874 r Selling, general, and administrative expenses....... $ 267,538 $ 188,741 Research and development expenses.......................... 200,569 137,830 $ 468,107 $ 326.571 l Income or (loss) from operations. ' $ (407,530) 6,303 Other income and (deductions): i Discount on purchases and miscellaneous, net............. $ 1,016 1.096 Income or (loss) before estimated federalincome taxes $ (406,514) 7,399 Estimated federal income taxes..................... (210,000) 2,220 t I, Net income or (loss) for the year................. $ (1%,514) 5,179 l 1 o I Based upon unaudited interim financial statements, the operations of 'the Nuclear Division of l i l Mallinckrodt for the three months ended March 31,1%1, produced net sales of $151,995 and a net loss (after reduction in federal taxes on income) of $40,186 as compared with net sales of $389,458 and a net loss of $114,945 for the three-month period ended March 3171960." Unfilled sales orders at March 31,1%1 and March 31, 1960~ amounted to approximately $835,000 and $928,000,' respectively. Suchiinterim results include all adjustments (consisting only of normal recurring accruals) which, in the opinion of Mallinckrodt, are necessary to a fair statement of such results. i ~ ~TT 1 l 't f I d' 7N i w,, I t e .;3. L l, I., l.l. s El e 4 ,it ..l. 1
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THE CONSTITUENT ORGANIZATIONS 1t NDA h j Organized under the laws of the State of New York in May,1948, as Nuclear Development Associates, Incorporated, NDA was engaged during its early years by both industry and Government as a nuclear consultant on scientific and engineering problems. The founders and original stockholders wer9 scientists and engineers who had been associated in the development and operation of the frst nuclear materials production ~ plants during World Wa'r.II.~ . Additional capital for expansion was obthined through limited private offerings in,1955 and 1957.. The corporate name was changed in l 1955,to, reflect the growth of theoretical and experimeigljesearch development and design engineering a,iid,' fabrica' tion... activities. related to n.udear 'reacto.rs'.ior' power, pr,op'ulsion and research. ~ .;.~,.mi "a s. < ; :o a. ,4.....m m .hi@6siness.ONDA furnishes services and products principallyito.Goyernment and also to commercial customers on both fixed-price anicost-plus-fixed-fee contractsiand,subcpntracts. -It obtains' thefervices s and. products of other comroerciatorganizations both:on, subcontract and by direct purchase. 3 NDA-also associates from time to time with other,non-competitive corporate organizations in undertaking cooperative ventures. i. r, t .r Among the principal services of NDA are theoretical.and experimental research and.deve and design engineering on nudear reactors and components., 'NDA fabricates and asse imental equipment and test units for the expeHments required in resolution of customer problems and fabricates rnd assembles nudear reactors and special test apparatus to be operated by others. The talents,' skills y and facilities related to these principal l services and products are also employed on undertakings unrelated ]- to nuclear reactors, including problems involving radioactivity, severe environmental conditions and j complex calculational techniques. a [ Representative undertakings by NDA include: design of the 50,000 kilowatt (thermal) materials' and ' engineering test reactor (BR-2) for Centre d' Etudes Nucleaires, Mol, Belgium; design and fabrica-3 tion of the Fast Burst Reactor for biomedical research at Oak Ridge National Laboratory, for the Atomic l. n Energy Commission; development of plutonium, uranium carbide nuclear fuel; design and fabrication of l-test rigs for investigation of materials prollems such as,those encountered in the use of liquid metals,in I { ? spacqpropulsion;. development of. calculational..techniquesfor <!c;termining design.of reactor shields; l-f measurement of design data for various reactor concepts using.the.Pa'wling Research Reactor and other special experimental devices; study of feasibility and design of reactors for vehicle, ship and space pro" pulsion; and examination ~ and analy' sis of Wadioactiveimaterials. Such undertakings range from investigation of fundamental scientific problemis to'coinplete engin'eering design and fabrication of complex syiWems involving radiation anil other severe'tnvironments'.' " " ".3 ti ( ' competes for its business 'with o'the' o'rdniz'atiods',[sodie"ofwhich are large organizations,; ~ ~ 'ND r engaged in similar research, development, design and fabrication. It does not compete with organiSationi engaged in related civil engineering, civil' works construction, repetitive manufacture or product distribu-tion. 4Lr , NDA is representeil in 'We' stern Eurcips tsyMDA Europe,'a c'orporate affiliate of Societe Generale Company and by Sumitomo Atomic Energy;and'for certain services and' products in Jap des Minerais, located in Brussels,- Belgium, 3 Iddhstfies, Ltd' ' .t ~ ..: s x~m.
- y. As of March 31,1961,.NDA's. backlog of unfilledyorders ba'ed on then-existing contracts was s
a tpproximately $3,994,000, as compared.on the same basis with,$1,832,000, as of March 31,.1960. ; New j orders received during the efiscal year ended March 31,1%1 totalled $7,079,000 as compared with }l $4,117,000 received during fiscal 1960. The receipt of additional orders cannot be reliably predicted y in view of the character of the industry, the intensity of competition, and the rapidly changing needs of the persons requiring its service.
- In 1959 NDA acquired substantially all of the assets (other than real estate) of Ray Proo'f Corpora-f
,tion (Ray Proof) a manufacturer of lead and lead-lined shielding materials used in hospitals, clinics and industrial radiography facilities..for. protection from.x-rays an6 radioisotopes. Ray Proof also installs shield windows'for viewing into areas'of intense radiation. c.Since,:its, acquisition, Ray Proof;; bas entered 3 1N y -j al: .~., a M h[, '. j '!..( h j hl y ,h?$3
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- I production bf radio-frequen'cy '. shielded rooms and tvilitation ! resistant. mountings, prefab These are dis-laboratories for handling radioactive materials, and other related specialty products.
tributed directly and through agents in competition with companies offering similar products th Licensing arrangements are in effect for manufacture and distribution in Canada the. United States. ~ a'nd Europe., [ Propertleb NDA and Ray Proof c'urrently ernploy approximately 300 persons at fo ~ Ad[tninistrative'hsdquarters, theoretical research.and the computing center are loca ~ $ tract of 63-acres"in an, industrial park-type area l near Ea
- L
'j west of.While Plains: REEontddsdMleased 55,000 square foot industrial type" building at 5'New Street, Wh 4 The NDA owski,2Me"PawliniLaboratories,'locsEdd E16ute 55 ' west of Pawling, N. Y ~ C Ashtely' '4d: miles north"of MVhits Plains, containit comple'te' fadlities' for' handling r i matetials*(including slutoniuni)pdmi,@tTof advancedbdeat1fueld,wperformance of criti 1-shents'6d other lavestigations essentiarto advanced reactor ifesign;*andriemote experimental Tlic Pawlingskejseaich' Reactor-is"also'iocated at'this'aite.'RayiPrdof isilocatsd at 843 Canal a Stamford, Conn., in a leased industrial-type building of approximately 38,000 square feet. laterest of' Management of_NDKla the Transaction [ ] c[, \\. [,,' Common' $tock' and 5% Subordinated Con- ,,.l.Varioulofficers and directors of NDA hold shares of veitible' Debentures of NDA. :With respect to such, holdings the officers and directors will, up consummation of the transaction, be treated on an equa(basis.w'itti all other holders of t 'i securities. John R. Menke, President of NDA is presently employed af a salary of $29,000 per a g and holds a restricted option for the purchase of 600 shaies of Common Stock of NDA at $12 p It is contemplated that Mr. Menke will serve as a Director share, which was granted on March 21,1957. h andiVice President of United Nuclear and will be. dmbloyed by United-Nuclear under a four yea chiployment cohtra'ct at a ' salary of $37,500 per annumTand:will receive, as part of h contract,'loptio~ns"to purchase an' aggregate of 5,000 shares'of-Common Stock at a purc 1 fe'st tids 85% hi th'e fair market value of such'stocl(on'tlisdatf of grant. ' Mr. Menke may at f terri,iiriate such eni)loyment and serv'e"as a part time $nstiltEnfor up' to an addition t ~ $30,000 piiTe'a'r."It is'not cohichiplafed tiiitIrisilip1ByrkeF$ntsact 'witti any other emp g J Gill ~ ~be entered'into by United
- Nuclear. "
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- n,Certain directors and officers o( NDA, other than#r.9fenke,-have options to purchase aq.
e. ofS00.' shares:,of, Common Stock,,of NDA, at. purchase,prictranges,from. $6 t l l provided in the Agreement, such options will be. assumed.by. United Nuclear.,The z im ma r - .y mx w; m. w- - of the sh, ares subject to to those options i h h i .o i th}mimi.,the number of shares subjectm,m.un..mc.or n t e n ent in NUCLE %,. gDI, VISION OF, gLLINCKRODT. 'w, ' , g_ e opt on.,, g [.'{ The Nuclear Division of Mallinckrodt to be transferred to United Nuclear w .>..r.2 c 4 Ifematite, Missouri, approximately 35 miles, south of St.. 'h.This operation is.a part of the business l ofIMallinck'r'odtf a' Missouri corporatio]r.cNiiieied is'Y88d th'h'iaMuartirs'in Si.'L'ouis. Mallinc for the atomic energy program..DEririg bed'rne the first"large-scale produidi'of uraidt{cxideM (cor6plo'ub' s foithe atomic energ l >, p World War II, it was one of the major produEers bf dramum d dnd foI"se' iiiil'yhars followirig th' Tar ~waitiie" sble'prodifer!*It is~also the contract operator o P hL e ABbic E'nergy CAmmission prde'e' skin [pl' ant' ' FWeld5hdpririgh,-' Minouri, which produ v a 'i~ inctal and urani5fn compounds;i his,'pa'rt".bf its businesbwill be retained by Mallinckrodt. t .A. t i Mallinckrodt ,,,The business of the Nuclear Divts. ion was carried on;byj a, wholly-owned subs diary,, Nuclear Corporation, from January 2,1959, until September 30,1960, at which time it,wa to_the parent company and operate,d as,. a division. , f.. duBusiniiss.t NThe Hematite 11antwas'consiruc'ted in 1956,f and has since been expanded sub dAr'its origirfAlimpacity. It rhadifactu'res uranium me'tal Erid'ccmpohnds 'for nuclear reactor 7 4ah. !J
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time from' b6th' natural and' enriched Uraniuin.- 12, f], , y l;.1, M.,.N .g m .x[ r..U 99 p fgg. ~ I 4[1.,.. %.. g., %ni,. g y-2 Ha a
- .The raw materials for producing enriched uranium compounds are obtained under lease from Govern-n ment-owned: gaseous-diffusion plants.(such as those at Oak Ridge, Tennessee) in the form of enriched
'uraniumrhexafluoride.'OtherYaw materials required for'prodhets are either furnished by the custome7 or are obtained in the commercial market. ,, The principal products of the Hematite plant are enriched uranium dioxide powder, uranium dioxide pellets 'and uranium metal.. These products are sold in competition.with other suppliers. Representative sales during.1960. included:..the largest. single procurement.of highly enriched uranium metal for the Arsonne National Laboratory in.the. history of the Laboratory which is operated by the University of Cidcag,o for the Atomic, Energy Commission; uranium dioxide. pellets for,.the Yankee Atomic Electric Company. power reactor at Rowe, Massachusetts; and fully enriched uranium dioxide powder for the Consolidated,EdisonECompany power.. reactor.atiIndian:P6 int,t New' Ydrlb Mallinckr6dt'also furnished the fuelanaterial.for the.nucleareshipnN;S.usavganahband: England'ai6rst atomiciubmarin',rH M.S.' L e Dreadnought. r n,n. v. a nt n v. . i.. mmm; siv. % v v.- a '. 1.v +. .. ' ~ oResearch and development are conducted inasupportrof the production (facilities' These efforts o resultedlin1959 in the installation of facilities *for the mansfacture ofturanium dioxide pe!! cts of fuel element qualityalong with equipment'for loading these pellets into' fuel ' ods. IA new process for~directly a r converting uranium hexafluoride into uranium tetrafluoride was developed and ~ installed. Current work Is' directed 'at: process improvements, to46duc* c6st's; decr'ase' uraniEm' losshs and ' improve product l e e l quality, to develop processes foi the manufacture of new forms of uranium dioxide, and to improve j production processes for such new fuel materials as uranium-thorium, uranium monocarbide and uranium dicarbide-thorium dicarbide, er ) A minority interest acquired by.Maliinckrodt.in two foreign companies is a part of the Commercial, i Operation. These are NUKEM (Nuklear-Chemie und Metallurgie Gesellschaft mit beschrinkter Haf-tung) at Wolfgang near Hanau, West Germany, and IT.ALATOM, S.p.A., Milan, Italy. NUKEM is actively engaged in research and in the fabrication cf fuel elements; ITALATOM is active as a study group and is competing for research and development contracts. . As. olDecember 31,.1960,. 1.. x i.. ~ theMncleamDivision;of,Mallinckrodt.had.a: backlog of > unfilled orders of approximately $415,000. During the first'three months of 1%1, it has received new. orders totalling, approximately $585,000. The receipt of additional orders cannot be reliably predicted. ".,a.mrK .t ,A,, i ~ n w.v W.. w..,'.. L..
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. n.v s. v. Properties. Production' operations.g Nuclear. Division *are conducted on a. tract of 152.5 acres located,near',Ife'm'ati,tegissougi Qhon, ~ y.(.,Fg maryjbuildhigs jaa'e(been construct'ed' t v o ce, laboratory, an 2 warp.Y.i,n, on this.,si...s..in..c.e 1 tal to , u.a.r.e .The.se.ar.e us.e. 'f.or. manufacturm.g, m u 2 3,,, pn ,,ngs us m , ematite. ogration.are. owned, ousmg.g q p by Mallinckrodt. q M;2 ' wnnr
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I l' .i % M: ni m - n i NUCLEAR FUELS OPERATION OF OLIN r- .y...,o 3,. The Nuclear Fuels' Operation of Olin was established in April,1956,.at New Haven, Connecticut, for the development of mariufacturing processes'and'tet.hniques sud the falirication of huclear fuel cores for the naval ~ react 6r' program. m.. ym p g g:w:H m/Ji e inw cLC. O.. .9 m.. '13: .i ; ,hp((r . " P [. ; 8 'h. ' E, - i Y' .. - }.,i d 'r. 0 A., e n ?
Construction of the first buildings' was completed and initiation of work on the first production contract with.the Atomic Energy Commission was begun in 1957. In addition to plant expansions at New Haven, a nuclear fuel core assembly plant was completed in '1958 at Montville, Connecticut, approximately 50 miles northeast of New Haven. Business. The Nuclear Fuels Operation furnishes products and services principally to the govern-ment on both fixed-price and cost-plus fixed-fee contracts and subcontracts. It obtains the products and services of other commercial organizations both on subcontract and by direct purchase. The Nuclear Fuels Operation has also associated from time to time with other non-competitive corporate organizations making cooperative proposals to potential goyernment and commercial customers. The principal products ofctheJuclear.. Fuels.. Operation are reactor cores and related assemblies. The principal services consist af orpsedr,ch,and sdevelopment related to improved reactor' cores. d 't The Nuclear Fuels Operation has devoted itself primarily to a single segment of the nuclear EnEr'gy field: tl e production of reactor cores.and related assemblies, principally for the United States Navy. From April,1956 through December,1960, Olin has invested more than $11,000,000 in new facilities and in the improvement of existing facilities. The capacity of Olin's production facilities are among the largest for the production of nudear cores in the United States, and:Olin has now completed and shipped approximately 307o of the total volume of naval reactor cores produced by commercial manu-facturers. Also, Olin is now producing replacement reactor cores for Army Packaged Power Reactors which are used to produce electricity in remote areas and is conducting research programs on new fuels for the Atomic Energy Commission. Research and development is an important part of the business of the Nudear Fuels Operation. Maintenance of this technical proficiency is necessary to qualify as a producer of reactor cores but involves substantial overhead expense unless a satisfactory volume of development work can be obtained. The Nuclear Fuels Operation competes for its business with other producers of reactor cores. Profitability is currently anticipated to be reduced-over past years and is not expected,to return to the earlier higher levels even with possible increased gross demand by principal customers. The Nudear Fuels Operation does not design or fabricate complete nuclear reactor systems'or power' con-L<a ( -. i c h. i.e e '. ; version machinery. ~ 'e. At December 31, 1960, the Nudear Fuels Operation of Olin had a backlog based on then-existing contracts of approximately $9,500,000 compared with about $33,000,000 a year ca.rlier. Since December 31,1960, it has receive' new orders tdt' llihf approximately $7,500,000. Tlie receipt of allditio'naforders d ~ a cannot be accurately predicted. ' Other producers of reactor cores indude' Balicock"&'.WilcofCom'pany; Westinghouse Electric Corporation, Tixas Instrufnents Incorporated and Combustion Engineering,'Inc. Competition iin the' irid'ustry isNuis intensa,'and' prices have fallen tiirinO1960.'C ' *? < .th m b n The r:cently published defense budget of the President of the United States provides for a sub-stantial increase over the previous budget in spending for naval reactor., cores. Olin belic es that the naval reactor core business, while significaiit','iffers at the present time a relatiheff;inin$y$pErtuhity for profitable activity in future years.vOlin:also believes that the largest potential development in the reactor core business in,the long run.,will,be for use in large commercial power, stations.;.. Although;the general technology of nuclear fuel fabrication is similar for all classes of nuclear cores, significant improve-ment appears likely to come through the use of uranium carbide and uranium. oxide: fuels.eOlin.and other concerns are doing research and development work in this advanced field under. contracts with the Atomic Energy Commission. Properties. The 950 employees of the Nudear Fuels Operation are engaged at two sites. The New Haven facilities consist of 12 buildings with a total floor space of 250,000 square feet which contain extensive modern equipment, much of which has been custom designed and built for the specialized requirements of. the nuclear industry... The.Montville plant, located an a 235 acre site.on the Thames River approximately 50 miles northeast of New Haven, has a temperature and. humidity _ controlled arca-141
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I of 14,000 square feet. This modern, specially designed and constructed facility'is'used for the assembly ,of nuclear.reactoricores.:. All land and facilities used at New. Haven and Montville are owned by Olin. Interest of Management of Olla la the Transaction { Four of the executives of Olin, who will become directors of United Nuclear, own'in the aggregate l an insubstantial fraction of the outstanding stock of Olin, and as such will have an indirect interest in' the" shares of Common Stock and Preferred Stock to be issued by United Nuclear to Olin. .t." j r q,. THE NEW. CORPORATION-UNITED. NUCLEAR CORPORATION ] The new corporation will be United Nuclear and its business Will be the same as is presently carried f on by NDA, the Nuclear Fuels Operation of Olin and the Commercial. Operations of the Nuclear Division 'oper&ds.#af I # y, however, extend its operations into furthF 2+ivitle's Yelited t of Mallinckrodt. It ma M'il' N m W2 ' *i- ' , r kl ' H. I:- ,,forp i- ,J i J .,. ;, United Nuclear will receive title to all land,. buildings and eqty ient owned by N,DA, all land, H . buildings and equipment. owned by Mallinckrodt at Hematite and eleven buildings and related equipment y , apew Haven,and, all land, buildings and equipment at. Montville owned by Olin. United Nuclear a qwill.assum9.all NDA leases, will lease from Olin several.small buildings, portions of two. major buildings ,and. a!! land,involv3 at New Haven in the Nuclear Fuels Operation and will lease from Mallinckrodt d offices occupied by the Nuclear Division at St. Ieuis. ,It:should be noted that United Nuclear will lack some of the facilities and services which the i independent transferor corporations were able.to furnish toJ.;he constituent organizations. As referred I to previously, Olin.and Mallinckrodt will each enter into service agreements.with United Nuclear to provide.such services at cost. Furthermore,'the prospects of the atomic energy industry:and therefore of United Nuclear are not predictable with certainty especially in the earlier years. It should' be furth$r noted that tlie Department of Justic[has requested'information as to the anti-trust aspects of ihe proposed transaction. s',
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.r. ., i. l N1 E sCapitellzat' on A m l >c The capitalization.of United Nuclear, giving,effect,to dr elm -h.e. proposed. transaction is given in th'e
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'N'" table that follo#U I"" ? 2f < J rn %o< w x a!ipic, .i -Amount Authorized I ,m ; n -. To Be Outstanding l c,.x .a,a (as of March 31,1961)* _ a n:v,_.g',- ! y. '! w J3032 n. d e at !,Lono,Trau DrnT: ' ra ie r e' S !. V! 5% Convertible Subordinated.. Debentures...?..Y1................ ' $425,000 Suliordiiuifed 1 Notes Payable,l. /. !........ U..fW.............. 384,500
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Real ' Estate ' Mortgages Payi,l,b,l5 t........,...'..,.,., a. .'............... 126,000 ~ .u CAirrA.t.. Stocx: .,.,, Authorized Outstanding c
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. R.. :.$110,000 80,385t Common S tock.............................. 3,000,000 i908,140**'
- In addition United Nuclear will have material obligations under its leases of property at 5 New Street, White Plains, New York, and at New Haven and Stamford, Connecticut.
" Without giving effect to (a) any exercise by NDA stockholders of their rights of appraisal (b) any exercase of options to purchase stock of NDA subsequent to September.',0,1%1, or (c) any conversion of the Debentures of NDA subsequent to September 30,1%1. l t Without gi
- g effect to any (adjustments in the munber of shares of Preferred Stock hwhich may hmade to reflect: a).the Closing Net Worth of:Olin or Mallinckrodt or b)
'any addiuonal.. shares of Preferred Stock which may be issued to.Olin at $100,per. sh(are' ' " 7' in connection"with capital' commitments 'of its Nuclear Fuels ' Operation..
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[p 1 Charter and By-Laws u The Certificate of Incorporation of United Nuclear is similar in many respects to the Certificate of NDA, the primary difference being that the Certificate of United Nuclear authorizes the issuance of t 110,000 shares of Preferred Stock in addition to 3,000,000 shares of Common Stock; it also contains l provisions for indemnification of officers and directors in certain circumstances similar to the provision for indemnification now contained in the Certificate of Incorporation of NDA.. Insofar as the con-stituent enterprises are aware, no actions, suits, or proceedings which might result in such indemnification are presently pending or threatened against any of their repective officers or directors. As a result of-consummation of the transaction, the rights of stockholderi of NDA, presently governed by New York law, will be governed by Delaware law. c.a m , _ l j. s, ',,,, [, Description of Prefer l red'Stockj,, The Preferred Stock to be issued to Olin and Mallinckrodt will have'the following rights and privileges,: each share will be entitled to preferred dividends at the rate of 3 % per annum, cumulative only to the extent earned from Ju' e 1,1%1 (or the later date of first issuance)'until July 1,1966 and n cumulative without regard to earnings thereafter. The Preferred Stock has'5' votes per share as to all matters ' submitted to stockholders, including the election of directors, and, in addition, the Preferred Stock has, the' right, as a class, to vote upon certain corporate actions, including 'the issuance of additional preferred; stock and the authorization of any merger or other similar transactioh', and certain voting rights specifically conferrel ' statute. In the distribution of assets as part of any distribution or winding up, after payment of all debts of United Nudear, each share of Preferred Stock shall be entitled to receive $100 together with dividends accrued thereon, before any distribution is made to the holder of the Common' Stock. Shares of Preferred Stock shall be convertible at the option of the holder (prior to redemption) into I four shares of Common Stock if converted on or before July 1,1964; if converted'thereafter and on or l before July 1,1%7, into three and one-third shares of Common Stock; andtif. converted thereafter into two and six-sevenths shares of Common Stock. The conversion price will be subject to adjustment from time to time upon the happening of certain events including stock splits 'and s,tock'. dividends. ' no ne United Nuclear will have the right, at its option, to redeem the Preferred' Stock at the time out-standing, as a whole at any time, or in part from time to time, by paying $105 per share,plus dividends accrued to the date fixed for such redemption. .M,.i !?: a'..
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The shares.of Preferred Stock will not be entitled to the benefits of any sinking fund.j,; g ' Shares of Preferred Stock shall not be subject to any further calls or to aisessment.' , a u.e Description of Co'mmon Stock Each holder of the Common Stock of United Nudear is entitled to oiie%ti'with fe'spect to each share held;- there is _ no. provision for cumulative voting. The shares :of:CommonsStock of United Nuclear to be issued to Mallinckrodt, Olin and NDA (which shares received-byyDA are to be distributed to the stockholders of'NDA in comple'e liquidation) arej, art,M the 'or,iginally authorized t capitalization of United ' Nuclear. The Certificate of Incorporatioti'oT1]nited NucleO provides that there shall be no preemptive rights. Holders of the Common Stock are entitled to dividends when, as, and if. declared by the' Board' of Directors out of funds legally available'tliWsfoy."Thi shares of ~ Common Stock have equal rights'on liquidation. Each share of Common Stock is fully paid, not subject to further call, and non assessable. ( 4,e n rq.Q At the present time, management of United Nuclear does not foresee the payment of cash dividends on its Common Stock; in this regard, it should be noted that NDA has not paid any cash dividends on its Common Stock. ~ w, m. u Transfer Agent and Registrar United. Nuclear proposes!to appoint. Bankers Trust Company ~ as' transferingent,and The Chase Manhattan' Bank as' registrar forjts'Co'mmod; Stock.1 United Nucleayi(o~ ysstg"a(ajihs own transfer l p g agent and registrar for its Priferred Stock. . j 1 +N . g ,7 f L,t.. w t .i q .g 8 y. _ w r, .~ y e h C,, f2 / .,5.! h* S h, ,$$l?hl]{ $N, '. ' i d,c.hk b h t "q a ,L 'hf Y f, u
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w 4 o ee ...,1:. There are set forth below the names of the' persons who have been selected by the several parties as the' directors of United Nuclear until the next annual meeting of stockholders: 1 'Commo a Stock 'Present Ownership of Principal United Nuclear i Name Occupation (Shares) Harold A. Brinner Vice President and Treasurer, Vice President,'Olin' Mallinckr.od.t '. D.'J. Carroll Copps t William C. Foster Director, Vice President and Senior - aj 2 "f1dvisor,;OlinlAID M/disTI. t 6, : pia,rjes ;D. Harri gton s.,Vice. President, Mallincigodt a gy.g g a.x, 9 j Edward Hartshorne Divisional Vice President, Olin., .q. James T. Hill, Jr. Partner, William A. M. Burden & Co.;
- tt Director, NDA James McCormack Vice-President,. ' Massachusetts Insti-tute of Technology; Directcr, NDA John R. Menke President and Director, NDA 7,800*t j
W. F. O'Connell Vice President, Olin Harold E. Thayer President, Mallinckrodt p T. F. Walkowicz Associate of Laurance S. Rockefeller; 975*ttt f Director, NDA t
- Based upon the number of shares of NDA owned by said persons as of March 31,1%1.
t In aridition, (a) Mr. Menke's wife owns 8,400 shares of NDA, in which Mr. Menke disclaims any beneficial interest, (b) each of Mr. Menke's two children own bene 6cially $2,500 principal amount of Convertible Debentures of NDA l which are held of record by Mr. Menke, (c) Mr. Menke has an option to acquire 275 shares of NDA at $15 per share from an independent party, as well as a restricted stock option for 600 shares of NDA at $12 per share and (d) Mr. Menke will receive a restricted stock option from United Nuclear for 5,000 shares. ~ tt Mr. Hill is a partner of William A. M. Burden & Co. which' owns 1,620 sha'res of NDA. 1
- Mr. McCormack had an option as of March 31,1%1 to acquire 500 shares of NDA at $18 per share.
ttt Mr.1.aurance S. Rockefeller, with whom Mr. Walkowicz is asso:iated, owns 26,680 shares of NDA. At or prior to the closing, Mr. Foster will resign as an officer and director of Olin and Messrs. Hartshorne and Harrington will resign as executives'of Olin and Mallinclirodt,'respectively, ~ i 1 ., u It is anticipated.that United Nuclear willradopt a restricted stock option plan pursuant to which options for, not more than 60,000 shares of its.Corrunon. Stock may.be, granted to officers and other key employees at prices of not less than 85% of'the value of such' Common Stock on the dates such ~ options are granted. It is contemplated that the following officers of United Nuclear will receive during the first full year of United Nuclear compensation in excess of $30,000 as follows Capacities la which r~nuneration > Aggregate Name is to be. received Remuneration 4 l g ,,g e g William C. Foster President and Director $50,000 Charles D. Harrington Vice President and Director 37,E00 l Edward Hartshorne Vice President and Director 37,500 John R. Menke 'Vice Piesident and 15irector 37,500 In addition, each of said persons will be accorded benefits under a, proposed retirement plan, the aggregate benefits of which during the next year'is estimated to approximge 6% of the above aggregate remuneration.,. ~ ..pn f ;'.. !,.u.% ' a a y. lk f ' '..i "L. p l !. > > q! i '. 'l '(Ql. .y M k?p?
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G ',~ eREORGANIZATION,. PLAN AND3 EXCHANGE AGREEMENT (heiein' called the Agiee-7 ment) dated. April.27,- 1%1, among.MALLINCKRoDT CHEMICAL Woaxs,' a Missouri c'orporation (herein calledxMallinckrodt), NoC1. EAR. DEVELoPMENTkCoRPG.. 'IoMi oFL AMEP.ICA/ a New York' corporation (hmh calledyNDA),,Or.tN MATHIESoN. CHEMI. W *.IRPoRATIoF,55 Virgitila corporation (herein called,Olin),(NDA, Mallinckrodt, and Olin being s n n collectively referred to as the Sellers), and ~ UNITro, NUCLEAR;CoRPoRAT1oN,.a Delaware corporation :(herein ~calledithe'Co' pany). m 'd"ThNC$MN5y'ide' sires'to acquire' i.8d NDA desired to MINfb 't'd 'h'e^C'obpEif,albthe assets, 2 t properties? business and good will of NDA, ucept cash not in excess of $200,000 to meef certain i EXPS98C8 R.fjMAdnie5 change;for the issuance.andndeliycry!byficaGotripany.<to;NDAiofishares of m CpgmoQt9cly ppr valug.,$l.00rper share i(hereinicalled Cpmmqn,jtods),<of stheCornpany,:All:tipdn i 3 th,e gehnsg[.p,rovisjons;and,,subjeg to the.wnditi.ons igreinaf,terasetifor,th,ib:$ v.* n and'Ma'11incOt de'iiWtB t'finikfi$ 'tYthfCo'hydny,51i.the < Th6 Cdrfij afif also' desires to hEquire,U a s assetil$roEerties 'and tsusineds' df 'the ' Nuclear Divisi$ii"'of' MaliiricNr;6dP, (ss i ' in i dxch'asige'fo&th'e"istuaned !andodelivery(by the"CompaYt6 Malli8cki;odi.df i't$ prein ( au'tlioriz' ell 3%e/fConvertibl6 Psefdtre'd Stock of the bdinp*iif"(heieinYlldd thE'Piefer a i sh5res'Of Commdn' Stock /all upon'the ' terms'and' provisions aiid s' b['det'to tiiiconditions'hheinafter^ u set'fbrtl V cit" ii ' ' ' ' 'I N'T h' ~ b N. .m- .Jc L
- The. Company,, also; desires.ta. acquire, and Olin Jesires
- to;. transfer Jto the. Company, all the H
assets, properties and business of the Nuclear Fuels. Operation. of Olin (as. hereinafter: defined) in o h exchange for the issuance and delivery.by the Company to Olin of shares.of Preferred: Stock and shares of Common Stock, all upon the terms and provisions and subject.to the conditi.ons hereinafter set forth. "The parties' intend thit the forsgoing described 'e'xching'e'of ' assets,' properties,i business' and good i i will"for: Common ' Stock and' Preferred Rock 'shall be'for the, pur[iosh'of 'darrying out' a tax-free reorganization hs 'to NDA and as to the stockholders of NDA uponlthe! distribution in liquidation to such'stockholderstof shares of Common Stock, and a taxifr'e exchange as"io4Mallinckrodt and Olin, e withindthedineaning'of.the Internal Revenue Code of 1954, Jai"amendedT N '- ornenD 3 ,ot Q L,.. <. vnc;im C _..,nmW of p:darm w b3nrnfii>)x to ud.h w:n f..h -. mglygtn consideration oi the.feregoing and..,o[the agrpernents pereinafter'. contained,.the n j s,,,,Magyee,,as foUows n,, P c, (iv i,!uir
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On,the terms and.p'ro.u".UUK uf Ew vf wn ibi.I, . IM m.M Ia wod a wbdM n -* hg%rrcts FE'rika.._.. Aa nge. visions,and - sul [hfy,~hkn] ject.,toghe conditions herein set IkhdtihnOl 3nhver',fo]Ee 'Com'pany, and mpgg;,yecygand;og,in.will,each coupeyeptas g(einafteyypyg,gd,pegoy i f j vaA(a)dnJtlie. case.of:NDA', alktherassdtskproperties)-busideM andNdod4 vill ofrNDA,"s'ubj6ct to,the-specificsexceptions : hereinafter set:iforth,,of every.:kindvand7desci-iption,::uherever;1oca'ted,"includinti,; without ;1 imitation /,all' property, tangibichor intangiblenrealapersonal orimixed,. accounts receivable'l 1 banksaccounts,: cash,istock, securities,.chim and. tights uriderccontractstofmNDAp rights to.use the name 3"Muclent. Development Corporation bf: America"inthe! tridemarkdLNDA",'.:and titleother mames or slogans used by NDA in connectior0with:its businesstroproducts and.alleobics' arid records ~of.NDA' l relating to its business, all as the same shall exist at the Clcsing-Date. conv'ef6d,C rsisferred,9assignid'addYeliYersd'by'NDA9to"thFC5$ipiibf.The assets and proper orf the Dlo'hihg Dite'as h'erein l t 1 provided'shull,4 tith'out'liinita'tidd, ideluds~all'assetsidid $1'opeNfof;NDAFiidWd'66'its'Addited'lialaneci s sheet as at 'Maicho31,' 1961' do~be*f86iished ~pursu'aht"to?Ariicld 7(b)J(if suc l iior' to th' Oosing'Date, except property thereafter' acquired by NDA j'spo' sed of prior'to tlie'Cosing'Dite'in the' o e s property of NDA"aimay have been'di q business orti'n)paynientrand discha'rge of liabilities?on 8r before the O' sing Date as hereiniftct provided, ~l o (ii) such' of those' assets and, property 'of ND,A as may hive':been otherwise: disposed of prior to thE Cosing Date with the consent in writing of Mallinckrodt'and Dlin, (ilp cash ii6tiin" excess of $2')0,000 j to be retainddroyay the* expenses of NDA irl?cdhnectiori4ith'this1Apeelnent eiidth' ' transaction's' con-l e j ten 1plitehrh6r6by,'>intfuairitTnquired.paym6nd toobj6cting st6ckhnidid,d '6vided that th6run'used : I pi ii h amount of such cash shall be paid over to the Company before the expiration of one year after the Cosing Date,.(iv) any securities of NDA held by it in its treasury, (v) the stock record books, cor-1 i r i A 5-NI N , qi. n' k'. ' I i s" i u
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l porate seals.nd minute books and.other. books and records relating to the corporate organir.ation of k NDA which shall, however, be availablTat all times for inspection and copying by the Company and shall.4 ct!beksedsof unlesethhyitre.firstiteside'ed7 o thh Company without cost and refused, 3 r tr and (vi) the stock owned by NDA in NDA Europe to the extent that NDA is not free to transfer j such stock to the Company, provided;however; that NDA will take steps citer as well as before the i i Cosing Date. toy. ave the beneficial. rights in respect of such stock accrue to the Company and will pay i over to the Company.all. amounts received by.NDA in respect of such stock, all subject, however, to j the Agreement, dated Mayil,-1957 betweenrNDA and Societe Generale Des Minerais, a corporation incorporated under the laws of Belgium, having its principal office at 31 rue de Marsis, Brussels, Belgim S 'i'- " "~ ~ ' 5;3:
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a u - (b)Jn thecise'of.Mallinckrodt,v H ioi'the' assets, properties and business of the# Nuclear Division of Mallinckrodt,-isbject to.th'e'sp9cllie3;id#ptio'ns3hereinafteriset forthl of every;kirid aind desc'ription, i wherever located, includinjp'withodt4iniitEtidnFuil property, tangil$le'or'intangibisFreal,'persodal'6r mixed, accountsyeceivable bank accoimts,l cash,;stockt of Mallinckrodthritkrespe','t 'tolaid IfiEsionYnd[afcomp, securities, and daims;and ripts u lete set of the books and records of Mallinckrodt c applisable to did; Division, ali.as)tlE dieEall exist at the Oosing Date. The term " Nuclear Division of Mallinckrodt", aguyd jng thisMyngat shall mean, all' thel usiness and; operations conducted by b M,stlinQ.a q therewidi.' The@ assets and properties to be conveyed, transferr on the Oosing Date as hereinafter provided, shall, without limitation, indude all assets and property of i the Nuclear Division of Mallinckrodt showrf on the audited balance sheet of said Division as at Decem-j ber 31,'1960 (to be furnished pursuant:to' Article 7(b) hereof), and all assets and property thereaftei i acquired by said Division prior to the'Gosing Date, except (i) such of those assets and property as may have been disposed'of prior to the Oosing-Date in the ordinary course of btisiness o'r in payment and discharge of liabilities on or before the,Oosing Date.as hereinafter provided, (ii). such of those assets and property as may have been otherwise, disposed of prior to the Closing Date with the consent in writing of NDA and Olin, (iii).any trademarks trade. names and copyrights, (iv) any refund or benefit of any n kind accrued or accruing to,Mallinckrodt,from.the operations of such Division during any period prior to the Closing Date in regard, to Fed.eral,, state or local income. taxes or,any other taxes, measured,by income, (v) any claim or set-off accrued or accruing to Mallinckrodt for,any, period prior to.the Closing Da'te in respect bfhisifeg6tiati6n 6f GOe'rfinYe'nt e6:itracts anEl/dr sub-c66trsets'usier 'th'e'R'hegotia-P e tion Act of 1951, as amended and extended, (vi) one-half of Mallindcrodt'ishafe in'ITAEATOMl S.pl., Milan, Italy, which may be sold to, NUKEM, Nuklear-Chemie und Metallurgie Gesellschaft mit L beschrankterliaftiiris, W61fg'arigsi$ir HEiiaRWesfGermany, pursuant f6'a pre-existing comr'nisnent and
- j (vii)'anyp acconnts%d6siviible"r'efaIiisd in*aEi6'rdisce'with paragraph' '(d) 'of tliis"Aiticle. 'Sh'iild o
Mallinckrodt be unable despitFthfexcisse oMWVesreff6rt' to 4ffect tiid transfer on or'sfte'r'ths Cidsis'g i i j Date2mf>its'tinvestr6entilsvNUKEMr Nukleai-Ghemicound:.Metalldrgie Ge'iellschaft:mitubeich'rinkter HaftungdWolfgangincarxHanau,1WestbGermahy', land /or its remaining investment:inxITALATOM, u i' S.p.A.pMilan, Italy,.Mallinckrodt will by: December 31,1%I, or by such earlier-date:atLwhich it is determined that. such'lidvestment.cannottbe tra'asferred to the. Company, pay toi he Corr,any: the t amount shown.for,such inyestment.on!the hahns rsheet used to. compute the Closing Net 1 Worth"of the e i Nuclear. Division 6f Mallinckfo:Ittprovidedfor.in Artide'14 hereof # ~' ' kr u G .A wiicO W1 M C. a. 9 subfe.(chn -,th,e,casgh.aa cgjri allgfMgassgs p50perties.and, busin o .. el u .t .A m n to ct,tgthe;sjfegificyggs he(einafgry fp,rt}},. of,eyery.. kind and. description;pherever Jocated, 2 includjng,3without,limiptqtion,pil property,etangible or intangible, real, personal or mixed, accounts y receivable, bank accounts, cash and securities;and, claims and rights.under contracts of Olin with respect to such Operation and ac o,mplete set 4 the(books and' records of.Olin applicable.to said Operation, c all as,the same shall exist at; the,,Clof Date.;.The term " Nuclear Fuels Operation of Olin" as used in this Agreement.shall:mean all the iy ass anfoperations conducted byOlii 2.t Montville, Connecticut, and all the assets and properties of Olin there, located,:and the business and. operations relating primarily to nuclear iuels, conducted:bynOlin atEpy,y,Hayen,. Cpunecticut, and the, assets,and properties.,of.Olin. Pegtaining;pringrilyAsuch,busine,sq3agd gpgappnsa The assets,antprpperty._to be. conveyed,,trans u , Mm x:o b s:4.Equ &.cs.sI gasqmo3 w a m 41 A 'n . nr ,t/Xs'i[O /Fi $*,A 9@ (VI g(1th W U EN nh h (d IE ' U I
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2 cf fe' red, assigned'and ' delivered by Olin to the Company on the Closing Date as herein provided shall, r and without limitation,il' clude all assets and property of such Nuclear Fuels Operation of Olin shown on n
- sed, the audited balance sheet of such Operation as at December 31,1960 (to be furnished pursuant to sf:r Article 7(b) hereof), and all assets and property thereafter acquired by such Operation prior to the the Oosing Date, except (i) such of those assets and property as may have been disposed of prior to the any Closing Date in the ordirary course of business or in payment and discharge of liabilities on or before t) the Oosing Date as heninafter provided, (ii) such of those assets and property as may have been ion otherwise disposed of prbr to the Oosing Date eith the consent in writing of NDA and Mallinckrodt, ds, (iii) any trademarks, tnde names and copyrigha, (iv) the land and certain other properties utilized 6r such Operation in N w Haven, Connecticut, (v) any refund or benefit of any kind accrued or accruing to O_lin, from the coerations of such Operation during any period prior to the Oosing Date j
g in regard toTc'deral,' state'or Jocal income taxes or any other taxes measured by income, (vi) any claim j y' or set-off a'cerued M accruing to Olin for any period prior to the Closing Date in respect of the renego-y tiation of' Government contracts and/or sub-contracts under the. Renegotiation Act of 1951, as amended ~ ts and extended,' and '(vii) any accounts rect.ivable retained in accordance with paragraph (d) of this j h Article. .n Y I "(d) If the amount of working capital (current assets minus current liabilities on a basis consistent Y with the balance sheet furnished by such Seller pursuant to Article 7(a) hereof) which would otherwise be transferred to the Company by Olin or Mallinckrodt 'on the Closing Date exceeds $2,939,000 or I $250,000, respectively, and if such Seller elects not to transfer such excess, or if the Company elects t } not to receive such excess, such Seller shall retain accounts receivable in an amount equal to such excess arid the number of shares of Preferred Stock which it shall receive shall be adjusted as provided in i. Article 14 hereof. The individual accounts receivable to be so retained shall be agreed upon by l the Company and such Seller or, if they are unable to agree, such retention shall be in alphabetical order, beginning with account debtors whose name starts with the letter "A". A rtictx 2. Basis of Exchangr. (a) On the terms and provi.,io ; and subject to the conditions herein set forth, the Company shall issue and deliver: (1) on the Closing Date, to NDA, definitive stock certificates (in such authorized denominations and registered in the name of NDA or its nominee or such other names all as NDA shall specify in writing at least three days before the Oosing Date) for a number of shares of NDA Common Stock, par.value _$1 per share (herein called NDA Common Stock), equal to 232,065 plus (x) the numb-r.of; shares of NDA Common Stock ;(without adjustment for any stock dividend, stock split, recapitalization.or other change occurring subsequent to September 30, 1960) which have been or niayb'e issued between September 30 1960,,and three days prior to the Oosing Date i g (i) upon exercise of (ertain employee stock options (herein called the Stock Option Plan Options) granted by NDA under its Stock Option Plan covering an aggregate of 18,781 shares of NDA Common Stock, (ii) upon conversions of the NDA 5% Subordinated Convertible Debentures, .due March 31,1%7 (herein called the NDA. Debentures), and (iii) upon exercise of any one or more of the,three options (herein called the Consultant Options) for an aggregate of 1,300 . shares of NDA, Common Stock heretofore granted to certain consultants, less (y) one share.of Common Stock for.cach share of NDA Common Stock held by; shareholders of NDA who as of d three, days before the Closing Date shall have taken all steps required by New York law to preserve ( their rights as objecting stockholders under Section 20 of the Ne.w York Stock Corporation Law; i (2) to Mallinckrodt,11,185 shares of Preferred Stock, subject to adjustment pursuant to Article 14 hereof, and 94,075 shares of Common Stock; definitive stock certificates for an aggregate of 8,185 shares of Preferred Stock and 94,075' shares of Common Stock, in each case in such authorized denominations and registered in ;the name of Mallinckrodt or its nominee all as Mallinckrodt shall specify in writing, shall be issued and delivered to Mallinckrodt on the Oosing Date; and i he balance, if any, of shares of' Preferred Stock shall be issued and delivered to t a Mallinckrodt on the Secord Cosing Date; andh':'" j, 3 p E 4 h 4;.
. t. (3).to Olin,69,200 shares of PreferredJ,tock, subject to tdjustment pursuant to Artiels 14 . hereof, and 581,950 shares.of CommonjStock;7 efinitive stock certificates for an aggregate of d 49,200 sharesi olPreferred Stock.and,581350,sshares,of. Common Stock, in each case in such j authorized denominations and registered in the name of Olin or its cominee all as Olin shall specify in writing, shall be issued and delivered;to.Olin:on the Oosing Date; and the balance, if any, of shares.of Preferred Stock shall be issued and delivered to Olin on the Second Closing Date. (b) After the Oosing Date and prior to the' dissolution of NDA, the Company will promptly from' time to time deliver stock ' certificates.to"NDA,' rejifesenting the number of shares of Common Stock equal to the number of shares of NDA Common Stock (without adjustment for any stock dividend, rtock split,, recapitalization or. other"ch' ng(e(6dcuriing'G l:f.Lsubsequent to September 30, a ,1,1 :
- 3? il' -
n(1), held by..the aforesaid ob'jecting,s.tpchhpl ers in; respect of which shares of Common Stock j t . have not been deSyered on the> Closing 3 ?aty@iwhich Jhe holder t I t; ate of one share of Common Stock for each . share of.-NDA Common Stock withJrespeS$1o. I above, set forth-but later shall have: failed.to9 perfect his, right to objection in accordance with.New York law,'or, with the consent of NDA and the Company, shall have rescinded his objection; and (2) held iq respect of Stock, Option Plan Qptions,. Consultant Options.or NDA Debentures as.to, which the holder had prior.tojhe Oosingyate irrevocably taken all action necessary to have ) .been taken by him to exercise suchloptions or.gngrt such Debentures and as to wliich NDA did not receive shares of Common Stock of tisetornpany,on the Oosing Date. (c) Subject to the conditions herein set forth, the Company agrees to assume and to pay, perform and discharge from time to time all debts, obligations,. contracts, commitments and liabilities;induding product liabilities whether arising before or after the Oosing-Date, 'A (i) of NDA induding, without limitation, the.NDA Debentures, the Stock Option Plan Options and the Consultant Options (the obligations of each of the foregoing as to the issuance of NDA Common Stock to be on the basis of one share of Common Stock for one share of NDA Common Stock, both as presently cons'tituted)' outstanding on the Cosing Dats t.nd the obligations, if any, of NDA to make severance payments t6'its ' employees, c seTof;it' (ii) of Ma!!inckrodt in res*p!wducio tmrmon en ", !PNd'I5idivision, and c / W. a n: (iii) of Olin in, respect:of its Nuclear;.FjielsaOperation,. o.- e l absolute or contingeht:and whethei or;noPaichaiEed"ahthe Closing Date, in each case resulting from f operations prior to'the' Closing' Dste'(h'srelii%11e' 'tha*Assdined Liabilities); providedihowever,'that d i the Comp'any does ndt a'gr'ee to 'p'ay"andBih11115btMFusiiFof' lie liable in respect of-(i) a'ny Federal, state or local income t'ax' liabilities,"of diabilitiesN aEy3thEtaxe3 measured by income, or ady clainis by the' Goverriment fdPreco' ery ofi ke'$ss' j@6fiff byte'asoh%fi hi'fenegotiation di GoVeinm' nt co'ritracts i ! ~ v c t e and/or sub<ontra'ets Elder 'thelReisegBtiali$n?A'et 'of[i951Fs's' amended and extended, resultin[from operations of said Nudear Divistori;or said Nudear Fdels Operation prior to the Closing Date,-(ii) any obligations or liabilities of the Selldrs tions or liabilities of NDA in~connectiori4,'nising solch by*feason of this Agreement,-(iii) a l 1th"its liiiuidation hnd ' dissolution widthei'to its stockholders or otherwise induding, without limita0oli,Hidiy oblijalibri^of'NDA to its stockholders wh'o 'take all' steps ~ required by New York law td preserveithelt rigliGTas"b6)$cting stockholders under'Section'204f the f ~ k l I New York' Stock -Corp ~ ration law'arviidy bbligatiohHiif NDA"to distribute'to"itsstoddioldirs or o objecting stockholders the Co'mm6ti Sbck' Sesifeuifjltidisuant hereto, (iv)lany oblii, ado $s or t r liabilities of.any Seller. incident to,the preparation of;this Agreement or resulting from the consumma-tion of the transactions contemplated hereby;for expenses,,, fees, transfer taxes,. income taxes or other charges, or (v) any obligation or liability pf,.NDA under,,the, Securities Act of 1933 or otherwise in s respect of any sales of any,NDA,sq9urjties.iwhetherfbyjN,,DA,orLoth.ers..The,Gompany shall uncondi-F tionally assume the.NDA. Debenturesjand other subordinated, indebtedness of NDA but they shall be b n subordinated under, comparable conditions,andJo the;same3ategories of creditors and liabilities of the Company as they are to creditors and liabilities.of WDAMi %.n.. , r h m' u n m.' . b. i M an. bl c 1 .n u a,, l h. [ b.4 g, i j
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- (d)iThe Compan~y agrees:to indemnify, defend and hold harmless each of the Sellers and their respective Directorsgofficers.and; shareholders, and the successors and representatives of said. Directors, i
cfficers and shareholders.(herein collectively called the Indemnitees), from and against any and all liability, loss, damage or expense, including counsel fees, which any of said persons may incur or sustain by reason of the failure of the. Company to pay, perform and discharge fully the Assumed Liabilities, including, without limitation, any failure of the Company to pay any NDA subordinated obligations by reason.of.the subordination of such obligations pursuant to Article 2(c) hereof. In the event that any L person'shall assert h claim'against any of the Indemnitees, which claim shall be the subject of any of j the Assumed Liabilities, such Indemnitee promptly shall send written notice to the Company setting forth the1clain3 asserted and a brief statement of the basis of the claim..The Company thereupon shall sen( pfo@ppyyu%indeinnifee a writteri notic'e' either (1) approViny siich'claSi ahd. statin'g that the with respect to,th,e Cfmpany,; , pay l,to . clair { ant the amount thereof, or.(ii). undertaking g, defend,iIfifteen.(15) da In the event that tlie Company does not,.withi ( facts out,of. hichyg . arose. afteF the"mallfrig' by sucli'I'ndemnitee of the notice'to the Companj referred lo'abofe, eithhr approve I such claim or undertake to defend with respect thereto, as set forth herein, then such Indemnitee shall haYe'the'rightloja,kelslich steps as it in its sole' discretion shall deem appropriate with respect to'such claim,' inclu' ding witliout" limitation, a defanse against the state of facts asserted, or any settlement, co'iprorhise 'or ag'deriient rSlatirig thereto; and in such event the indeinrihy of the Company contained n r t h'eietr't shalfbe appli$ tile to all'arisunts paid and costs and expenses (including attorneys' fees) incurred by sucli Indemnitee in connection therewith, t s(e) Upon the liquidation of NDA, after distribution to its stockholders of one share of Common i Stock (and no more)1for each share of NDA Common Stock (as now constituted)-then outstanding, NDA shall on or before one year after the Closing Date promptly pay and deliver to the. Company any cash and otheriproperty not used to meet certain of its expenses as hereinbefore provided. Such cash and other property shall be accompanied by a statement of account certified by the chief financial officer of NDA who shall therein reconcile the application of the shares of Common Stock delivered to, and cash retained by, NDA. l Aarreta 3 (a) The conveyance, transfer, assignment and delivery of assetian.Fpr~o7N. Transfer of Business. tie ^s fo the^ Company as herein p'rovided endorse 6ients'," drafts,' checks 'and other instruments'of transfer and conveyance in :such form as the Company may' reasonably refuest, in proper form 'for filing' and recordird, if a'ppfopriate, together with-docuriienfarfdainfevidencing'the payment of'all applicable' transfei 'tkiei. VAll deeds of'real-estate iGl x shall'contain'a 7. p,'as to acts of the grantor but need contain no 6thers.'.,m, g..' a AovEiiaht 1. ,v ,. m,f m .,7 ,, e 3, m ;9(b) %Ihe, assumption,yaritagreement, by7the, Company,as therein,.provided,to,,pagperformat3d dis, f ) ~ charge the debts, obligations,! contracts, commitments and liabilities,of each} Seller, respectifely,;shall) be effected by such appropriate instrument or instruments in writing, executed by the Company, as each 4 such Seller may reasonably request., ,g, (c)! The books;and records of Mallinckrodt'siNuclear Division.andaof Olin's Nuclear Fuels 'i e l Operation which shall be delivered to the Company as' herein provided:shall be available-for reasonable inspection by the party delivering the same and such paity.shAll be permitted.to'make extracts therefrom j or copies.thereof an4 the Company shall not dispose of such: books an,d ecords.unless they are first t 4 tendered 4. sue) partygith'out cost and: refused.,'Th'ejCdmfany 1 i66vidh such informati.on lwhich sEall Ay all expenses and make available.such records of original entry asOlin uid Malline t of the Company reasonably thereby incurred) may reasonably request. ' ~' (d) Each of the Sellers agrees that, at its own ' xpense,-it.will, at any time and from time to time e after: the Closing Dater upon request of the Company,' do,' execute,. acknowledge and. deliver, or -will j j cause to.be done,' executed, acknowledged and delivered, all such further acts, deeds, assignments, transfers, conveyances, powers of attorney and assurances as may be required for the assigning, trans-ferring, granting,Monireyin& assuring and confirming tolthe Corupany.or~to the, successors and assigns of the Cornpany,.and for aiding and assisting in collecting and reduciiigitspossession, any or all of a 53 l ); ll b ( j' ).].k. .t. l I M
i l t ths 'cssets or property to be. assigned.td thef6mpany.bf it sas:herein provided. The books and records retained'by Olin and Mallinckrodt whh respect:to%ecNucleitaFuels. Operation:and Nuclear Division, fespectivelys shall. be ' vailable' foWreasonable inspection,byithe> Company.which :shall.be permitted to a j make extracts therefrom or copies thereof:and Olin hnd:Mallinckrodt.shall notsdispose.of such books t i and records unless they.hre first tendered to the Company yithout cost.and refused. 'Each of the Sellers agrees that'it.will..at any timeland.from; time to time >afterithe ClosingaDate',: exercise its best efforts torfurnish to the Company (which shall pay.all. expenses.of such Seller ^ reasonably thereby incurred) any record of original entry and any2ccounting, financial, anti other information which may be reasonably l necessaryiwith respect to the' business transferred. pursuant hereto.- m /. f,([The #Com;ianf,3gre[s tha't,#htits3w'd# "' se,'ii will,3at any 'tidie pifil from time to time n Cdh[ipd5y 4drEurEle'f{'uiefudIdWeNediIfter' the ' Clo rejuir'e'd'i8'dischsge 'the ' obligations ind liabilitierof' the n si% 'y9 thilE11eis';do,' execute,'actinowledg'e and' deliver all 0 iticl in's{rthder'ts An docuElehts'as m EIsuMhi6fPb'y'the 'Compain 6f .uqu.o ent m mnn,,a m c n ~i. !.. ltli,'e Msufribd Liabilities. " If rc-a m.wn m u i n, m A$tiu d.,$E/e/f Y$ Na'Els[ NoheEAsfc8hoEff.^.'FroNan'd affefthe dat'ehreof"ad'until n 1 tfie Cissifig Diie; at allVEGaYild; timed, ND'A7h5iNfford iSthe office's and.a'ccr'editei!' representatives r di Mallinckrodi, Ojin 'aMihE Company,'dhcreditdd fep'r'Eshntatives of'NDA ~ i ISekf5di'dE!Fafford 'Ythd"oSchis and free $cYsEt[tlielr'8p$ tid [' lid Mdo"idiof'itsTu'ciEar"Divisi6d IanTOlin 'shall"affo'rd to the' officers E and accredited representatives of NDA, Mallinckrodt and thE Corin;'Any,'fIee' 'EccEss"t7th"elro' e' rties p and rec 6rds of the Nuclear > Fuels Operation oftOlinfin each case in: order thht the giarties' afforded such access:may have full opportunity to make 'such investightion as they mdy reasonably desire of.the affairs of:NDA, the Nuclear Division of Mallinckrodt ort the; Nuclear Ftiels Operation of'Olin,.as the case niay be, it being understood'and agreed-that eachiof the. Sellers shall, upon request of another, furnish to such other.'such informationias the latter may reasonably require in connection with such-investi-gation.o Whether or not the transactions.contemplatedsby;this Agreement are consummated, all infor-mation exchanged by the Sellers or obtained by any of them or the Company pursuant to this Agreement shall be kept confidential. m W. i'. * .. < *nn * !T.... J. Aarzct.g 5,. Thr,ClosingvDats.,,.Unless;the pa,rtiegshall,otheryiseagree,in 3vriting,,ti e. closing o l under this; Agreement shall,.takerplace, upondhegepg.a%conditihnsgmd subject,to thj gegisions of n c this. Agreement,.at;5 :00y 1%, NewJork;, City,.lInspe on igay 3h,1%1, a(the office of NDA,.at, Eqstview, n Westchester County, New Yor.k, provided. that,(Lth l tax consequences of this trans,actigg Js.npt.r;epeiyd,ging.by,the Internal RevenugSe i p,rjprgo.May. 21 19(1,eth,e ciosmg,shall;take. place, .{ j r c m upon the terms and conditions and subject to the provisions of this Agree.utt, ten business days I a(tef Eceip.t'of 10ch'-ijlilig'.dThffidi'e';ah"d,(datskif lace is hireidJealled I! Lin to ev. nca bcr. ififflvhich4hd'cidsin'?shhlFtakepb pihb n n+ g 4e tif;ing'l) Aid a m : t einerntrmmo; at>r.u:m;.>rrarpi.. ,1 rv en,p.m: O ~' 'dIhttop.5:hiw ni Un%disknf d :nmitnuni n.& wy bui'vy c..in. [ ARTicu 6. Assignment to Company..(a).ho the extent that"tliE"sssigmsehilf7ariy" contract, j lease,4 license, certificate' off: necessity,. commitment,isales order..or.rpurchase order,. to; be.; assigned to LI the' Company:.as provided!,herein',1.shall..regtlirpthe pogent of.anqther party thereto,,this.Agre.ement n shall not constitute a warranty.ofiassignability;w{timtespect thereto.m ::f r # .,: f< y tE.fb) Eac i of the 'SeliEl sl311?t se' itiall of its stSli cbritAEth;T$fsEd',"If %olobtain theNei uired ' consent of 76thef' parties l i i d l i or'dirN dthkr dobiun'dEtsTr Eiglih t}6 the "5sighEleM tlici'Eofto'th'd IColiips ~ If suchi6ssenUis'not t obtained, such Seller will cooperate'Witfi' TNT Hi'IEy iifhrlf risich' bid 3rtangemerit'designsd'foirovide' Y a for 'the Company the benefitspmder any'such. contracts, leases, licenses certificates of necessity, com-n mitments, sales orders or purchase. orders, or othecdocuments or rights,' including enforcement, at the cost and for:the benefit of the Companyi.of,ar3y,and,allu jghts obuchjeper: agai,ns(the,other, parties. r thereto arising out of tlie! breach.or 'cancellationJ11ereotby such other patties or otherwi,se, oIn regard to all-of the foregoing, the-Company,will cooperatehwith. the Sellers,to, enable,them to. discharge all obligations not delegableitp the Company.e 3 piru!!o,.ni pein.m. bar, pb n M hm; ovngnro - e68
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- .I I
(c) The Company shall have the right and the authority to collect, for its own account, all'receiv-ables 'andeother items %hich shallLbe transferred to the Company.as provided herein,'and to endorse with the name of any of thh Sellers, as the case may be', any checks received on account of such' receivables or other items. Each of the Sellers will transfer and deliver to the Company any cash or other property i that it may receive in respect of such receivables or other items. The Company shall also have the right j to compromise, settle and release all claims and liabilities transferred to it in accordance with this s; Agreement and, from and after the Oosing Date, to open all mail and packages and receive all communica-tions and deliveries addresWd to any of the Sellers at any of the locations to be transferred to the Company. ,, s AancrIY.N[dancial Statsmann. (a) Contemporaneously with th'e execution and delivery of this Agreement,' Olin"hastwith. respect to its ; Nuclear Fuels Operation delivered to:NDA, Mallinckrodt and the: Company >its unauditedpro forma balance sheet (which has been adjusted to: reflect the depreciation policy in effect on the:date hereof) as:at October 31p1960,scertified to by the.chiefi 'ccounting officer of 4 a Olin; Mallinckrodt has with' respect to its Nudear Division' delivered to NDA,~ Olin and the Company its unaudited balance sheet as at October 31,1960,' certified'to by the chief. accounting officer of Mallinckrodt; and NDA has. delivered to'Olin, Mallinckrodt'and the Company its balance sheet as at September 3031960, certified to by'its chief accounting officei. ' n 1 .Tb) Un or prior'io April 28,1961,'Olin shall with respect to its Nudear Fuels Operation deliver 4 Q to NDA, Mallinckrodt and the Company its balance sheet'as at December 31,1960, certified to by Feat, p Marwick, Mitchell & Co.; Mallinckrodt shall with respect to its Nuclear Division deliver to NDA, Olin y and the Company'its'balarice sheet as at December 31, 1960, certified to by Price Waterhouse & Co.; r and NDA shall deliver to Olin, Mallinckrodt and the Company its balance sheet as at March 31,1%1, i certified to by Max Rothenberg & Company. (c) Olin and Mal'linckrodt will provide to NDA such financial statements or financial information as NDA may reasonably request for use in its proxy statement to its stockholders in regard to this Agreement. Each of,the Sellers will provide to the Company such information induding financial statements as the.Coinpany may reasonably request for use in any registration statement filed by it pur-suant to the Securitie's Act of 1933. ,,., ;,a, Operation deliver"ptly as: practical after..the.Cosing Date, Olin shall with respe _.,(d) As proni tb DA, Mallinckrodiind the Company its balance sheet as at, the dose of business on the Oosing Dath ertified.to by Peat', Marwick,.Mitchell.' ICo.;.Mallinckrodt,shall with respect to its Nuclear'Didsion' eliver to NDA, Olin'and th'e Company itibalance sheet"as.dt 'the..close of business ~ on the Oosing Date certified to by Price Waterhouse & Co.; and NDA shall dellie'rWOlin, Mallinckrodt and the:Companylitsbalanceslieet as at the close of ebusiness:on the.Cosirig Date certified to by Max o Roth'entierg & Compa'nyle'Ench 'such 1dlance' sheet shall be pripsed ori'a basis consistent'with the respec-i tive balance sheets furnished pursuant to Artide 7(a). .i e 1: .w b.- . ?~ .n .7. Aancts 8. cCgtificates Relating to Businesses. On May,5,1961, each of the Sellers shall deliver to a3 V the other parties a true and_ correct certificate or certificatesi ated as of /pril 1,1%1, and d s nude ce iti behalf by the principal operating officer of the business to be transferred by such Seller (whhh ce tificate or-certificates shall apply in the case of Olin only to its Nuclear Fuels Operation and in the cass of:Mallindkro'dt only to~.its; Nuclear Division);c' rtifying'thht such Seller: e (1) has'gM1 aEl rErketab![titfe'in ' fee sid1ple"tobES real' estate olvnddk it, as described ~ in an exhibit tiie'rets,"oi has such title'as;is described in' an atta'ched title report, and owns outright all machinery and equipment locakd thereat and all other / properties and assets reflected in its ~ balance sheet to be ' furnished pursuant to 'Artide 7 b)"h'ereof, in.each case Wee and dear of all mortgages, liens,' Mnditional" sales ' cont' ~ acts',"enhu'(br'aEEe's 'or ' charges 'df "ad r n except as set forth in an exhibit thereto;.
- (2) hi theJt:sseio! NDA',r laimssthe right;tosuse' all patents, patent applications, trademarks, j
c trade names and copyrights now used in the conduct cf its bu'siness)'has not received any notice t 78 I .n. J.y i.a s..e. .,Wo..'
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1 ',. M@M M S.,. h-3' Witk '!,J >
.cf conflict with the esserted rights of others, cnd owns specified registrations or other official docu-ments with respect to such rights, each of which is described in an exhibit thereto which also describes all, license agreements to which NDA is a party, either as licensor or licensee, except as to all of the foregoing as set forth in an exhibit thereto; (3) in the case of Olin and Mallinckrodt, respectively, claims the right to use all patents and patent applications now used in the conduct of its business and has not received any notice of conflict with the asserted rights of others and owns specified registrations or other official documents with respect to such rights, each of which is described in an exhibit thereto which also describes all license agreements to which Olin and Mallinckrodt, respectively, is a party, either as licensor or licensee, except as to all of the foregoing as set forth in an exhibit thereto; j . (4) is not a party to any written or, to its knowledge, any oral (i) contract to be assumed by the Company for hiring of any officer, consultant or individual employee; (ii) cont act with any labor union; (iii) continuing contract providing for aggregate future payments by such Seller in J excess of $50,000 for.the future purchase of. materials, supplies, equipment or service; (iv) con-tinuing contract providing for aggregate future payments to such Seller in excess of $50,000 for the future sale of its products or services; (v) distributor or sales agency contract or advertising j contract; (vi) lease under which it is lessor; (vii) pension, bonus, profit-sharing, retirement, stock option or stock purchase plan in effect with respect to its employees or others; or (viii) contract providing for payment of more than $2,500, or of a material nature, not made in the ordinary s course of business; except in each case as described in an exhibit thereto, provided that such description may be incomplete to the extent necessary to comply with applicable national security restrictions; (5) has no actions, suits, proceedings or investigations, pending or, to its knowledge, threatened, against it or affecting it, at law or in equity, or in admiralty, or before or by a federal, state, 3 municipal or other governmental department, commission, board, bureau, agency or instrumentality, j domestic or foreign, which might adversely affect it or result in any material or adverse change in its business, operations, properties or assets, except litigation fully covered by insurance and except as described in an exhibit thereto, which exhibit shall include all known product liability claims whether or not fully covered by insurance; (6) is not, to its knowledge,.in default' in any material respect with regard to any order, writ, injunction or decree, of, any court, or federal, state, municipal, or other governmental depart-ment, commission, board, bureau, agency o'r instrumentality, domestic or foreign, except as described in an exhibit thereto; (7) to the best of its know! edge, information and belief, is not in violation.of any. laws, regulations or orders applicable to its business so as to prohibit it from carrying on such business as now conducted; and a. (8) believes that the assets and business to be transferred by such Seller to the Company may be owned and operated ty the Company, subject to the receipt of certain governmental administrative consents which such Seller anticipates will be given. Antictx 9. Conduct of Bunnesses of Sellers to Closing Date. (a) Each of the Sellers (but as to Olin and Mallinckrodt, only with respect to their.l Nuclear Fuels Operation and Nuc respectively, and properties utilized therefor'and they shall not be limited by this Article in any respect in the conduct of their other busine'sM)'w,arran'ts and' covenants that, between the date of its ' balance sheet furnished pursuant to Article 7(a) hereof and the Closing Date, it has not and agrees that it will not, without the prior written consent of the other Sellers and the Company: (1) incur any obligation or liability (absolute or contingent) except current liabilities incurred, l and obligations under contracts entered into, in the ordinary course of business, and except obliga-tions expressly permitted by the terms hereof, J 1 8 f 1, ~Bl2 .hqW w.igw- ,,Y MV M < M M wee
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- (2) discharge orisatisfy any tien or encumbrance or pay any obligation or liability (absolute or contingent) other than (i) current liabilities shown on its unaudited balance sheet to be furnished pursuant to Article 7(a) hereof and current liabilities incurred since the date of such balance sheet, or (ii) in the ordinary course of business; { (3) except in each case in the ordinary course of business, mortgage, pledge or subject to lien, l charge or any other encumbrance any of its assets, tangible or intangible, or sell or transfer any of its tangible assets or cancel any debts or claims ; (4) sell, assign or transfer any patents or patent applications; j (5)' knowingly waive any rights of any substantial value;
- (6)genter intq any; transactions other,than.in.the ordinary course of business, or make any m
. capital expenditures, amounting in the aggregate to more than $200,000 for each of NDA and 5 , Mallinckrodt or $1,000,000 for Olin, or make any commitment for capital expenditures unpaid on , the Closing Date amounting in the aggregate to more than $200,000 for each of NDA and Mallinck-rodt or $1,000,000 for.Olin; '(7fmake any changes in employee or officer compensation or pay or become obligated to pay I' any bonuses or other remuneration in excess of fixed salary or wage rates in effect en December 31, 1960, 'as increased by merit.or longevity raises in the aggregate consistent with prior practice, except that (i) Mallinckrodt may raise the compensation of its union employees in accordance g with its union contracts effective as of January 1,1%1, and may make corresponding increases in the compensation of any other employee whose annual base salary is less than $12,000 a year, t j (ii)-Olin may on or about April 1,1%1, raise by not more than 2H% the compensation of j salaried employees whose compensation is not more than $15,000 a year, and on or about May 22, j 1%1, raise by not more than 3% the compensation of hourly paid employees, and (iii) NDA may give effect to the action taken on January 27,1%1, by the Compensation Committee of its Board of Directors providing for an increase in the salary of certam employees and may provide for the payment of bonuses in an aggregate amount not in excess of $5,000 for all NDA employees, as a group;. (b)INEalso warrbs and covenants that, between September 30, 1960, and the Closing Date, it has not!and,' agrees that it will not, except with the prior written consent of;the o,ther. Sellers and the Company: J , :(1), issue or sell any: stock, bonds, or other securities or,rightsiwith respect thereto, or grant j any.. options, other than,(i)dssue NDA Common Stock upon..the, exercise of Stock Option Plan Options and Consultant Options and upon the conversion of NDA Debentures,' and '(ii) ' issue or renew promissory notes made by NDA to one or more banks or trust companies for an aggregate t of not more 'than $300,000; . (b), declare or pay any dividends, or make any other payment or distribution to. its stockholders, as stockholders, provided, however, that NDA may take corporate action with respect to distribution by it in liquidation of the Common Stock to be received by NDA ptirsuant to this Agreement: ), ;,.. ,~ (3' ' purchase or redeem any shares of NDA Common' Stock; q l (4), sell, assign or tran'sfer any trademarks, trade names and copyrights ; (c) Each of the Sellers warrants and covenants that between the date of its balance sheet referred to in Section 7(a) hereof and the Closing Date, it has and agrees that it will, unless the other parties 1 hereto otherwise consent in writing, diligently conduct the business to be transferred by it pursuant hereto and make payment of its liabilities in accordance with its normal practice, provided that NDA shall not call the NDA Debentures or make any payments in respect thereof except' interest. t 9 a .,~i.. l ~ s a, I f, !,,4 1' 77
1 I . Atticts 10 i Conditions as to AllSellers and the Company. The obligation of each o t e Sellers i \\ fh and the: Company;.to make the exchange provided for in this Agreement are, at its option, subject to the following conditions: (a) On or before May 24,1%1, the stockholders of NDA at a meeting duly called on at least 21 days notice and held for such purpose shall have duly authorized (i) the conveyance, assignment, trans-fer and delivery of all the assets, properties, business and good will of NDA to the Company upon the i terms and conditions provided herein, (ii) an amendment of the Certificate of Incorporation of NDA to j change its name to Eastview Liquidating Corporation, and (iii) the voluntary dissolution of NDA ; and the holders of at least 95% (or such greater per cent as NDA may deem advisable) of the stock entitled to vote at such meeting shall not have perfected their rights under Section 20 of the New York Stock Cor-poration Law. l
- v. t (ti) The Board of Directors or iExecutive'Condiitteethefeof:of each of the Sellers, respectively, j
shall have approved the transfer to)the Company.of the9 assets ljroperties, business and good.will of j NDA in the case of NDA, and of the assets, properties and business of the-Nudear Fuels Operation in the case of Olin and of the Nuclear Division in the case of:Mallinckrodt, all as provided in this Agree- ) ment; and the Board of Directors of the Company shall have approved the issue of Common Stock and l Preferred Stock for the assets, properties and business to be received by it, all as provided in this Agree-ment. (c) On the Closing Date, each of th'e Sellers shall certify to the other Sellers and the Company in a true and correct certificate dated the Oosing Date made oriits behalf by the principal operating officer of the business to be transferred by such Seller pursuant hereto that (i) all warranties made and docu-ments delivered by it herein or hereunder are true and correct as of the Closing Date except as stated in such certificate, (ii) the amount of working capital (current assets minus current liabilities on a basis consistent with the balance sheet of such Seller furnished pursuant to Article 7(a)) hereof and the amount of cash being transferred by it on the Oosing Date to the Company are not less than $250,000 working capital including $250,000 cash by Mallinckrodt, $330,000 working capital including $30,000 cash by NDA and $2,939,000 working capital including $2,199,000 cash by Olin, and (iii) all conditions and covenants to be fulfilled and performed by it;have been. satisfied. (d) All actions, proceedings, instruments and documents required to carry out this Agreement, or incidental thereto, and any other related legal matters, shall have been approved on or before the Oosing 4 Dat'e by its courisel (Messrs. Stroock'& 'St"rdo6k'"&illv6T the (case of NDA; Messrs. Shepley, j Kro'eger; Fisse & Shepley in'the caFoi Mallincl#odWMehrs? Cra'vath, Swaine & Moore in the case of Olin, and in the case of the Company, such counsci as it may designate). ( ) (e)' Each of the1 Sellers shall'itave dell'vifed tolh'e other' Sellers and the Company an opinion dated a J ~ the Closing'Date of such counsel forliichiSelier,"ih~fo6n ad's'ubstahce satisfactory to such'other coun-i i n sel, to the effect that: ~ , h,. : ..a1 - i (1) such Seller is a corporation duly organized and existing and in good standing under the laws of its state of incorporation and is entitled to own or lease its properties and to carry on } its business as and in the places where'such ~ properties are 'now owned, leased or operated,-(it being ) understood that (i) with respect'toiMallini:krodt and Olin the opinions required by this clause will . 3 relate only 'to Mallinckrodt's' NuMarDivisi6rrand Olin's" Nuclear' Fuels Operation and (ii) as to i cach Seller, counsel may rely upon.an appropriat.e officer's certificate as to the location of its prop- ^ ~"' ' erties) ; (2) such Seller has: full corporate pows and corporate' authority to convey, assign, transfer and deliver the assets, properties, business and good will to be conveyed, assigned and transferred by such Seller to the Company as herein provided; (3) all corporate proceedings required to be taken by or on the part of such Seller to authorize it to, carry out this Agreement.and to convey,; assign, transfer and deliver said assets properties, na t , business and good will have, beer [ duly and_prpperly,taken; and m, .a ;; l 10, 1 %.,., s.. .m, s. t u-c f, 4 at d i ,p .4 3
1 e i e or,,(4) thisa Agreement 3has tbeengdtilyr authorizedi: executed and delivered by:such Seller.and is j a valid and binding agreement upon such Seller in accordance with its terms.; ,i " - J i j
- (f) Each of the' Sellers shall have receive'd a' satisfactory opinion dated the Closing Date from its counsel as td the tax-free status of the e' chang'e'pr6vided for in this Agreement and,. in the case of NDA, x
{ such opiniori shall ilso cover the tax-free status'of such liquidation to its stockholders; and a ruling satis-factory to each.SelleP shall'have been received from the Internal Revenue. Service covering such'thatters. Each' Seller shall hsW also" received!a satisfactory opinion'frurri'its tax counsel as to such other tax matters as it miy'l request'- u m o.una '.m ar u. a:... J.i., .>a. o 6.m ra w.t..W. a r, 3 (g),Eachgf f;y.m.nhua mi.mtv.a t<.ipf.Selleruhall,have delivered,to.the other Sellers and the Compa 1/KalPpipipn,,date,d,h Qqingh4tg.p.f r,gput,ablgounsel, sin form and spbstance-satisfactomto2sugh diep eqigsel, goyering;its;gopd(a.p4irppricetalylqi.titiqin,. fee simple intargLto the real.. properties toibe.co,nveygd s ord. ease 43 y,.jt to :the, Corr;pany as he. rein.provided'ror.(B) title,insursance policies'in favor of the.Com3 b g pany in form and substance satisfactory.toguch,other; counsel.and issued by a reputable title compan,y,. provided that in either case, however, such real property shall be free and clear of all mortgages, liens, cha'rges drleridtmibraticEdof(any')siature'whitsoever'except'is s'ated in the applicable >e'xhibit 'to the o t r certificatha'liveredd nStihiit to> Article 8(1)" hereof, Land (ii) a IFgal'6 pinion' dated thelClosing Date of ~ e p reput' blE' cduhsel>'* I m form arid"substanc6 satisfa'c'tdry to such dher 'sounsel,0(A)rcovsringMe due f J t a ~ i authofization,VxeEtitioh'ahd delisryfligalleffectivene'ss in accordahee with their respective term's, and sufficiency, fdr pur~ oses'of re'cordation oFfilingfif, appropriate, of the instruments;of conveyance, transfer ] o p j and assignnient'(s6bject t6 minprixceptions) from such Seller to the Company of the assets,' properties, business andl:if appro'priate, g6od wili'td be coriv' eyed, transferred, leased and assigned to the Company ]b c as herein provided, and (B) to the effect that the execution and deliv'e'ry'of this' Agreement and consum-1 mation of,thg.pugghase,and sale,provided. fog herein does not conflict.with, violate or const,itute a default 6nder, any agreemenI,IrUdenditedofinstrunicht to..which'stich'Selief,[,toftn knowledge of su'h. counsel, ~ c is a party. h) Tete htisiriissj'pr' Efed"hr!d*finiricili' con'dition of eacii of'the other S41iers to' be conveyed, trAns(ferr[ed,'and'a$sl ed,y v. E.>m '*M aiEiErEin pr.ovided sha iW to to o matertg wav.~ n pu r c> m 2. ~. u, in.s,v:.>. 8 - wa. uo. ~ u ~, .:2. a worm Nwr. al houw..M b >.m m9 io n w;... >.nebr u.ru y
- .c.
. l.. 1 >. s w : w q ru'>v <Nh(1) It3shall:be, satisfied;thhttitchas;hhdiftee access to the propertiesland> records!of.:the otherparties and:basabe6n,.flirnishedutheeinformatiori reqtfested,by it, pursuant:to Article 4; hereof >and;thatzsuch investigation:ori inforniationMndatheanuditedabalanceisheets furnished pursuant to'Articlev7.: hereof-and l the certificates ariduexhibitsrfumishedqtolitipdrsuant<to Article-8 hereof and'the'informhtion. furnished ) in connectiQn with oppring ist the pgxy statement of NDA with resp $bIiNNb[stintial adverse ect to its n eeting.of stock-hbN12rUrihS r'i$(fffe't[$ l$ve. reybded Yaferial Ecl Or 'cNc' k'ristNce Th'i u vEiiinEfESr'n'$uc Ne pYth'eNtWie liirdfdtM or enTed"bfan%nur',isry, or (ii)"wiiich,'in th' "g'$offai i j$igmentifTuF$ciE5Whas affect'EEliEs@y a t d the properties, business.or (mancial condition M'irif of the oth'e7 pdies.*
- (j).Qlin shall,hayegntered;into af easp ordcases with the, Company
- effective on;the, Closing,Date l
Providing for ths,leaMn,g,to,ti.ie;C9mpanyrbyc,Qlin,of the land ahd,certain.other properties. refer: red to in and to each oktheJgilersg prpyi,degijhat,Olin. shall;.rctain fcertainptransmis clause (iv) pf parggrgpbdp);p{ Mielejl,.hgrgpicon terms:and condi.tions, satis (actory toJie y 3 st
- lines,; fuelj o
lines.and othgr relatgipdncidgn.taljrjghts?cv r. f a ' r. " '. - J/. w % b:ravi.l. Im: ;mrmo o (k) Olin and Mallinckrodt shall have entered into service agreements-with thE Co'mpaiiy ' effective- ~ on the Closing Date providing ^for.their furnishing of certain accounting,, management,. utility and other services in' regard.to,its C8nnchti' ut.and Misi$uri locations; such service agreements'(i) shall. provide c 4 for [the^ Cdmpany"to lia/ foY Eich"sedvice"iNdsElfi Y r"naniser' co'nsistddt' witli"the"alloca' tion'liasid ' Ew' n used by Olin and Mallinck$dt' rdshictively, smd,(ii) shall have sdchy tlier teims and provisioris :is may be appropi. late and'acce..ptab.le t' 'th,u;C, d.mpahy"and the Se,_llers.,, t wils u 'o ae.. ..u -. a p .w. or. e .a. o.m c.. i a. (.; m,. a.h,v t y (1) the Closing Date shall be a.date'not later than September 30,,1%1c H:9 r:,i.y o w. h a n. .0 113 X4 .hh . a> O_ W dn q Wm. s a. m
lh S d
- W!*
\\ n m(m).Each of the other parties hereto shall be ready, willing and able to consummate the exchang j a ~ l provided for in this Agreement. .,, ArrIct.z 11. /fdditional Conditions. (a) The obligations of Mallinckrodt, Olin and the Comp j to make the exchange provided for in this Agreement are, at their respective options, subject to the I additional conditions that on the Closing Date, each of them shall have received an opinion of counsel for NDA, dated the Closing Date, in form and. substance satisfactory to each of them, respectively, to the effect that (i) the vote of the; stockholders.of NDA taken at,the meeting provided for in Article 10(a) hereof operates (together with necessary action which has been taken by the Board of Dire i of NDA) so far as NDA is concerned, to authorize the conveyaace, transfer, assignment and delive of'all the assets, properties, business and ' good'will'of'NDA't'o the' Company in exchange for sha' Common" Stock upon the terms and'conditio'ns'providedcherein and'to' bind all stockholders of ND o thereto7exc'ept forthe rights of'stockholdersi.asr bjectofs'%n~ der'Section 20 of the'New York Stoc o ' Corp 3 ration Law,.and (li) the holders'of'it Ifast'95goitthdistock' of NDA have not' perfected th rights'under Section 20 of th'e NeMYork Stock'Cor'poration'Lawl (b) The obligations of each of,the Sellers to 'make the exchange provided for in this Agreement, are, at,their respective options, subject to the additional condition that on or prior to the Oosing D i; shall.have received an opinion dated the Gosing Date,of its own counsel or of counsel to th pany, in form and substance satisfactory to such Seller, to the effect that (i) the Company is a cor tion duly organized and existing and in good standing under the laws of Delaware, is entitled to ow or lease the properties and carry on the business to be conducted by it as herein contemplated an the shares of Common Stock to be issued to it as herein provided are duly and validly authorized and issued, fully paid and nonassessable. (c) The obligations of Mallinckrodt and Olin to make the exchange provided for in this Agreement are, at their respective options, subject to the additional conditions that: (1) On the Gosing Date, each of them shall have. received an opinion dated the Closing Date of its.own counsel or of counsel to the Company,,in_ form and substance satisfactory to Olin and Mallinckrodt, respectively, to 'th'e effect that (i)' ths sh'a'res of Preferred Stock being issued to them as herein provided, including any: additional shares of
- Preferred Stock' issued in accordance with
.: Articles'14 and 15 here'of,:have been'ddlytauthorized,ia6d upon. delivery by the Company of duly executed certificates therefor will.be validly isshe',Mully paid and nonassessable; and (ii),the shares d F : of Common Stock into which the shares of Preferred.St6ck are convertible, will upon issuance thereof d on conversion of the Preferred Sfock,',be'validlytissueditfully paid ~ and nonassessable. a ~.m. 3 term mdebtedness oPOlin'and Mallinckrodt h (2)Nn$fer'quir'ed cons,nts of'the holders of longm,;c w., o,, m,,a 1 g, m..... -7 'All re e of their' f$pective asM51id' h'es 'as'bSteisplatdd herein and 'to the' perform-i thTt 'a' de of akty. other oblihtioiS lEreliuYAr'sQl liWeMn'o' iaided '(and'MalliSckEodt n'iYd 'Olin ea b ag ees to use its best efforts"to obtain s'uch'$oh$5)., n <s-
- n. s.,
- (d) The obligations of the' Company, NDA and Olin to make the exchange provided for in this f l ~~ Agreement are subject to the addi_tio'nal condition that each;of them shall have received an opinion da thPCosing Date of counsel for'Mallinckrodt?in; form and' substance satisfactory to it, to the effect that' the" service' agreement made"b* tiden sfillihekEddt AEd the; Company: has been duly authorized, i i e executed and delivered on behalf of Mallinckrodt'and is a valid an'd binding' obligation ~ 'of MilFnckrodt i / in accordance with its terms. p.- (e) The obligations of the Company, NDA'and Mallinckrodt to make the purchase and sale pro-j vided for in this Agreement are subject to the additional condition that each of them shall have received an" opinion dated the Cositig Dde' ~of ' counsel ^for.Olin,# n' form and substance satisfactory to it to the i effect that the' service agreement and lease or leases'rnadibetween the Company and Olin have been duly authorized, executed and delivered on behalf of Olin and are valid and binding obligations of O i.:?,- b P 4t" a
- 1. 4 o: 73 -
i.d. in accordance with their tesiis. ? s Ei j 6h l J 12 1. sM l J f '/ e.. i.' s i i, N% Q. ' M MW s ellm 2tb
- . MdMe lNw-
? 1
l 'Aarsct.r.12. "Mariasement. (a) Until 'the first meeting of stockholders of the Company, the Boaril of Directors of the Comphn'y shall consist of its present memliers unless any of them shall resign or be unable to serve. (b) Each of NDA, Mallinckrodt and Olin will use its best efforts to induce its employees (as to Mallinckrodt, its Nuclear Division employees 'and, as to Olin, its Nuclear Fuels Operation employees) to become employees of the Company, and all such employees employed on the Closing Date who are willing to accept employment shall be employed by the Company as of the Closing Date. No employee ~ of 'any Seller wh'o'shall be so femployed as of the Closing Date by the Company shall be entitled to severance pay 'as"a. result of such transfer of employment. The Company will use its best efforts to the end that_the fringe benefits,[take{as a whole, received by such employees shall be as,favdrable, as those Premusly receqed ,p ,, r,,,, g, (c) The Company will; maintain adequate books and records and will cause IIaskins. &: Sells (or other independent public qcpun'tants satisfactory to the Sellers) to review and comment upon a combined lialance sheet'of the ' ompa$y as at'immediately after'the Oosing Date based upon the balance C sheets of the' Sellers furnished"to 'the Company pursuant to Article,7(d) hereof, and such balance sheet of the Company shall contain' a reserve for deferred Federal income' taxes in an amount equa1 to the' rescrGe fo'r' deferred Federal income taxes as at the close of bu'siness on'the' Gosing Date,of the Nuclear Fuels Operation of Olin. AnncLE 13.. Bulk Sales, Laws. Each party hereto consents and agrees that no action need be taken by the'other parties pursuant to any bulk sales law or similar statute with respect to the convey-ance, assignment, transfer and delivery of assets, properties, business and good will as herein contemplated. AnncLE 14.- Post Oosing Adjustment of Preferred Stock. (a)_ The total number of shares of Preferred Stock to be received by Mallinckrodt and Olin as provided in Artide 2 of this Agreement shall, respectively, be ~ increased or decreased on a dollar-for-dollar basis (valuing the Preferred Stock at $100 per share for such purpose) by the difference (to the last whole $100) between: -(1) As to Mallinckrodt, (i) the Oosing Net Worth of the Nuclear Division of Mallinckrodt, and (ii) $2,060,000, the netlworth of said Nuclear Division as shown on its unaudited balance sheet aslo( O. cto.6,eE.31,)960ddrEi,sh.~ed to the other parties hereto pursuant toirtide 7(a).of'.this.A, gree- ~ . ~.. . ;g y mv t. ,4 t 7 -(2):As to Olin, (i).;the:Gosing Net Worth of the Nudear Fuels Operation of Olincand (ii) $12,749,900,- the: net worth $o'f,said:Nudear Fuels. Operation as shown on.its pro forma. balance sheet as of October 31,1960; furnished to.the other parties hereto pursuantnto Artide 7(a) of this Agree-i
- E n
y t. ep " n ment.,. r, t <.Lwjh' The CIBsirig NSt Wofthhh@N'tE}edDivisich'lif' Mallinckfodt nd{tSfG3 sin [NePWdthif the l i Nudear Fusis"dperation ofdlI5$liall be tlie netyoEth of such DivisilinInd Dperation,'r'espectively, set forth in i Statement of Odsirig' Net Worth' reviewed by Haskins & Sellfbaed upon the a'udite'd balance s sheets to-be fuidished to'the Cailifny in accordahce with Artide 7(d) hireof and determitie' in n'ecord-l d ance with gdner' ally accepte'd%!dirhting principles applied on a basis con'i,ste'nt. with the' balance sheets s with ressi et'to such'Divisios$d' Operation furnished'to the Company pu'rsuant to Artide 7(a) hereof, provided, however/ that such H.etrworth 'shall be (i)-decreased by the amount of the accounts receivable J 2 not transferre'd to' the Compisiflikce6tdance with the adjtistment provided'for in ' Article 1(d) herdof, and (ii) increased by the amount of'th'e liabilities nbt ' assumed by the Company' but reflected on such audited 1 ^;' 1 ^# balance sheets td be"furnishYdyur'shant' to ' ection 7(d)' hereof. S m-o w (b) The Company shall iss'ue and deliver on the Second Closing Date: (1) To Mallinckrodt, definitive. stock. certificates.(in such authorized denominations and registered in the name of Mallinckrodt or its nominee all as Mallinckrodt shall specify in writing) for a number of shares of Preferred Stock equal to (x) the total number of shares of Preferred . Stock to be received.byiMallinckrodt:as.provided in, Article,2,of othis; Agreement as adjusted by - the post-closing adjustment 'provided for in paragraph (a)iof this:; Article 14 less (y) 8,185 shares. 1 13: e i h dEfI b Wediu bhh: J W- \\ 4
.h, ] .',l. l .ges(2);To Olin,,definitivo, stock certificates.(jngch authorizedgienominations registered.in the I c g nam,e of Olin.or its nominee all as Olin shall specify in wri,tipg)lfor g, number of shares of P. referred j i Stock equal to (x) the total number of shares of Preferred Stocli to be received by Olin as provided in Article 2 of this Agreement as adjusted by the post-closing adjustment t rovided for in para-i graph -(a) of this Article.14 less (y) 49,200 sharef.' (c) If. the total' number off shares, as adjusted pursuant to paragraph (a) of this Article, of Preferred Stock to be received by either Mallinckrodt or Olin'is less than that received by such party fin the Cosing Date, such giarty 'sliall on the Second Cosing Date redeliver fo the Company' stock certificates,d duly. endorsed in blank 'or' accompanied byjroper slSk'trarbfer, powers' duly ~ blank, for' nuniber of shareV6f'hele'ied Stock'equ'al to 'such diHerence,~and the Company shall, cancel r and not reissue any shares so redelivered and shall file an appropriate. corporate certificate reflecting ss'chuincella'tioh'. ".m' d d 'h i 114 E d il7m e o mi n :wb meMir.ru IM. p im-MEW l 1 i ;.o(d)d' m 53:e issue an e J i d. 4 drif.. ,,. wm.Kidru y, ri xm M ,, ; n,, m e v.ery,, or redehv....ery, as tite case.may be, of Preferred. Stock pursuan,t,to this Ahicle 14's!' tall'Ile made atith'e^olfi.c,es of Olin at 460 Parlavenue,'New York',.N. Y., at.10:00 A.M., New' York Cit / Time, on tQtJkb$iness day after the date of r'eceip,t;b[Mallinckrodi,, gompany"o) ths, respective'St' temeht' yf ' Closing Net Wortit regred to time and date bemg referred to$erem as the Second Cosmg Dats). h'e(cdhsh a s i g j,g ,,. ;., gg Aancts 15. Purchares of. Preferred Stock. To provide funds for the Company to pay for capital commitments of the Nuclear Fuel,s Operation of Olin,'Olin will, at the option of the Company, purchase additional shares of Preferred Stock at a price of $100 a share in an aggr.egate amount up to the-total'of the amount of unpaid Capital Approt riation Requests of the' Nu'elcar ' Fuels Op' ration of 'Olin as they i ~ e shall exist on the Closing Date. Such Capital Appropriation Requests haye. received. corpora.te approval by Olin and are composed of (i), unconditional commitments (herein; called the.TJaconditiopal, Capital m Commitments) and (ii) commitments co'ntingent upon,the; receipt of ' specific contracts.th.e performance of which requires additional capital, expenditures (herein. called the Contingent. Capital.. Commitments).. As soon as possible after the Oosing Date, Olin shall, prepare aitd deliver to the Company a list of such Capital Appropriation Requests.7Within ten business ifi a'ffe~r',re'ceipt'of 'such list by,the(Company, the Company shall.give written'ndtice'to'Olin Ef disl u$b[eMiqPslid n l ths Company elects (such'eledti6rftPUs 96$bidWifyl#M HM c6nsEitWOlili)'Ito sd!"td'OlirFaf'4100 t a share in an aggregate amount not in excess of the amountiof.the. Unconditional Capital Comnift? Tents; the option of the Company.'to sell Preferrdd Stock ts0116 inYespect;of the.Uriconditional Capital Commit-ments shall lapse.to the extent motice is nottso rfceivedIErbmWihie tottime afterthe"Go' sing D'ats', but notilater.than December-31p1961;ttheiCompiny.iwiti;intt'en thsiness;aays AfteRr'eceipt.of a entract in respect of which there is a Contingent Capital Commitment. shall. deliver a written notice to Olinwon- ,l t g jC$$tmgent,jipt Q( " " ' }(]i)}tment, (stajaggo,f,t )1 taining, Company,(i). satisfa,ctogpviderg expectsjo,expen'd.,to, p a, statement oh g mmi number of shares of P'r'eferred St pghich the' Cgmp e, cts,(such election to be.revocabl.e o,, ) with the consent.of,Olin) to sell,to[Imyg100 a, shy,gigaggregat'e, amount;not in excess.of;tl e, 3 r,elevant Contingent, Capital,Conunitmg,t pr tf.e amoun,t.,i,typ,ectgo,expendyto. fulfill such commitmen.t,; n witichever is less; provide;13 hah tijegp,tjop g the6Compju3ygodellfreferred. Stock. to O.lin in, respect; g dI each Contingent Capital Ccggjtmpflalljap,sgtghggtenghat,poticejis; pot so, received. Wnless-I 1 the partles:otherwise;,agrce inpyritingyegch;.purchasegr}d, sale,pf Preferred:, Stock pursuant.to.thisi a y ,Mticl, e 15 shall be made,at_the officesjof,Olin 4 460 Pa3.Agn,ue; RTew,Yojk,,N.aY. ;tt 10:00 A.Mi; I k g New York City Time, on the seventh,bbsitiess. day'aftey. tlIhlate'.of receipt by.Olin of a notice fr. ors the Company stating the number of shares the Company elec,ts, to sell pursuant hereto. mx m. Annetz 16.MecuritievAct ' Registration.m.i(a)cWherieveriso:iequested.by:imy of the; Sellers (or I >.1 by any transferee receiving'frors ariPS~eller 5,000 shares or more of such class) prior to December 1,^1%3, the Company, at its own cost and expense, will promptly prepire and file'with the Securities and Exchange Co'mmission (i).a registratiohistate'medthunder thedSecuriticiectro'f:19333fo'r-thetregistratidrMTnder I .said cAct7of 'thetissuahce of$cinuidriiStock ofithe:Com;iany tolthe, Sellers 1pur'suant hiretorand the
- }
i
- 14. :
1 r, I f [ 1. g. e h *'.. { h k hYl% f 'I j ^ I ^ 'b'
[9 4 sale bycthe Sellers including controlling stockholders (at the time of such sale) of NDA to the public of such. Common Stock on and after the effective slate of_ such registration statement and (ii) a registration statement under the Securities Act of 1933 for the registration under said Act of the issuance of the Preferred Stock (and if appropriate, the related Common Stock) of the Company to Olin and Mallinc-krodt pursuant hereto, and the sale by Olin and Mallinckrodt to the public of the Preferred Stock (and if appropriate, the related Common Stock) on and after the effective date of such registration statement. When such request is made, any of the other Sellers including such controlling stockholders of NDA shall have the right,' subject to making its.own marketing arrangements, to sell under such registration statement any shares of Common Stock or. Preferred Stock which it elects to so sell; the Company shall not be required'to prepare 4and file under this paragraph 2nore than one registration statement pursuant to.each of clauses.(l) ands (ii).of.the.first sentence of this paragraph. The Company hereby agrees toluse its-best efforts rto gdu'seyshchuregistration statementsoto become' effective ns soon as possible and,if any stop ordertshallliedssued bythe Securities and Exchange Commission in connection therewith, to obtain the.. removal of'such order. The Company further agrees to use its best efforts.to,cause r such registration statements to remain in:effect until December 31,1963 (or until such earlier date on which the Sellers state in writing to the Company that each of the has completed its distribution), and from time to time to file such supplements or post effective amendments to said registration state-ments as may be necessary in order that the Prospectus included therein shall comply with.the require-ments of Section 10(a)(3) of.tiie' Securities Act and shall not contain an untrue statemern o,f a material fact'or omit to' state a material fact necessary in order to make the statements therein in the light of the circumstances then existing not misleading. The Company will furnish the Sellers copies of summary prospectuses, preliminary prospectuses, final prospectuses and other documents necessary or incidental to such offering in such quantities as the Sellers may reasonably request. The Sellers agree to cooperate in all respects with the Company in effecting the foregoing. (b) If at any time and from time to time, any of the Sellers shall notify the Company of its desire to sell any of the, Common Stock or the Preferred Stock and in the opinion of counsel for such Seller or for the Company, registration under the Securities Act of 1933 is required in connection with such sale, the Company will use;its best efforts to effect registration under the Securities Act of 1933 with respect to,such sale, provjdpi the cost and expense of such registration (other.than,within para-graph (a) of this Article) shall be paid by such Seller, but if any other Se11erter the< Company snakes sales at approximately the same'tirhe covered by such registration statement (or a substantially similar registration statement) such parties,shall allocate such cost and expense among themselves on the basis of the aggregategoffering price,iofith< Common Stock and Preferred Stock: offered by them..,, q - (c)' Norie 6f'the' Sell'eisMiPsE11'or"thansfer any'of 'the Common St'o$i hor pee ~ferre'd'S't5clPunless 1 (i) a registratioh statenicitt"Lisilf'tlie"Securilies Aci of 1933 shall be in'effe'dt'withlesgther'eto and rovisions of said statute and all applicable regulations issued pursuant such Seller.shall comply with the p'm$dify'sitall be' of 'the opinion that regist[ation'endei su i ? ~ thereto,' or' (ii)"cbsiisel fof 'th'e"Co not require'd)*Notwithstandirig't}Ie" foregoing, NDA may transfer Cornmon Siock to its stocklioiders in accordance with'thi Securitie3p'c'tif 1933, provided thht prior to such saifsfer NDA shall ' provide the Company with a'satisfac'ory'opiWn ofcounsel for NDA with respect'to the Sjeurities Act of'1933 and t each transferee who is a controlling stockholder of NDA shall agree notTo transfer Common St'ock o without complying with the Securities Act of 1933.. t j .i e 3 '(d) In 'corin'ection9iih'aF'%g!bation statement file'd by the Compaiiy pursuant to" this Article, ~ ) the Company 'wili the' its"best orts"toiegister or igualify* the securities' eMered' by suelf.r^egistration statement under such securitle's'!aWs 6r' blue sky laws' of such' jurisdictions is ea'ch Sclier shall request', L and do any and all other acts and things which may be necessary or advisable to enable such Seller to consummate the public sale or other disposition in such jurisdictions of the securities owned by such 1 Seller. The cost and expense so incurred by,the Company shall be paid by,the, party or parties required to pay the cost and expense of the' corresponding registration statement. s(e) In regard to any. registration of.its securities under the. Securities Act of.1933 pursuant to this m Article, the Company covenants and agrees'to indemnify and hold harmless each Seller and each.other 15. 4 d M h- . 1 ~ 4, 'y hsr so. .a ?'
QI j w!i'l d person, if any, who controls such Seller within the"m'eaning of the Securities Act of 1933, against any
- [
losses,Jclaims, damages or liabilities, joint or several,1t'o whicN such Seller or controlling person may j become subject un' der the Securities Act or otherwise, in so'far' as such losses, claims, damages or lia-bilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained, on the effective date thereof, in any registration state-ment under which such securities were registered under the Securities Act, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein o'r-necessary to make the statements therein not misleading; at,d will reimburse such Seller and each j such controlling person for any legal or any other expenses reasonably incurred.by such Seller or such d controlling person in connection with-investigating,' defending and settling any such loss, claini, damage, y liability, or. action; provided; however,tthats.the Company.willsnot -be liable 1in any such case to -the .0
- extentithat tany such loss, claim, damage oreliability arises 6utiof ter is based spon an untrue. statement or : alleged > untrue statement or omissionior. alleged omiision'inade in such registration statement,t said prelimiriary prospectus or said prospectus or said amendment'or. supplement in reliance upon and in conformity with written information furnished to the Company in an instrument duly executed by 'such Seller specifically for use in the preparation thereof.
i " (f) Whenever so requested-by"anyIof the. Sellers prior'to June 30,1964, tiie; Company' jvill' exer'cise its best efIorts to cause the Common Stock and Preferred Stock to be listed on stich national securities' exchanges as shall be designated in such request. All listing fees and other expenses incident to such listing shall be paid by the Company. i (g) The rights of any of the Sellers under this Article may, with the consent of such Seller, be -also exercised by any transferee or sub-transferee of Common Stock or Preferred Stock from such I Seller. ARTicts 17. Er/'enses. Each party hereto shall pay its own expenses incident to the performance by it of its obligations under this Agreement, including all fees of its counsel and accountants, up to and including the Closing Date. If the transactions contemplated in this Agreement are not consummated, Olin shall pay two-thirds and each.of the other Sellers one-sixth of the expenses ' incurred ~by the..Com ' if] pany up to the Closing Date. WW. : M %W -'IuM. -- ) ) W Aim A' _ a rwl ;m -.Q Q yn p ':
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l Anrict.z 18. Brokerage. Each party hereto shall indeiimify,' defend and hold harmless each'of ' he t -h1 other parties against and in respect 'of tariy 41 aims, ebligations and liabilities for. brokerage or other com: /}' missions or. fees relating to this Agr.cemejit or. to,the transactions contemplated herein based in any#way o.n. agreem..ent.s, arrangements or.unders.m$nding's, riiade.%.r.al.le.l..e.'d..to itaves,been.m'a'd.e 6y it with'an ^ ....n m -. m.. @i:nv avv4 (a 'Thple remedy' of,the.mp& &:.6 &,nt,, w,ful failure.o any, e Mwi b - f w Aar. n.rct.z 19.. +Reme' dies. parties hiereto for the svrong $f the othet parties ~ to fulfill its o lig'dtton"t7consummatithlexchange provided.for herein shall bEto' recover out-of-pocket expenses, includinfaN6rneys' fees,'acedustants' fees, printinkcofts and the amdun~t o' its liability for any costs and eicpen%ilic'urr d 5 4 cred from any Seller shall not exceed.$50,060. jd by the Co ipany, provided that t f i e, e. (b) The Company and eachtof the Sellers agree that-with respect to the Sellers and their respective successors none of the representations l,yarran. ties, covenantstor. obligations. contained in this Agreement ?' oTin any certificate or other documents tSbE'delivleEdytirstiant' hereto 'nor'any lial{ility therefor, shall' survive the Closing Date; provided, h5Ne'v'er, $ hat thelorchinbsitall not affe'et:~ f1 (1) any rights of rescission which any party hereto may have, provided such rights are exer-cised within 60 days after the Closing-Date; (2) any represen'atidns,m,, w warranties, coven.,., liabilities or obligations, under. deeds', bills o'f
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~ t sale, instruments of conveyance and assignment or any other instrument of transfer, including the y . leases and service agreements referred to in Article 10(j) and (k) hereof, of any of the; Sellers in d.. m y - .g-v', ,. favor of the Company;, i i. e 1
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o. I (3) the obligations of.NDA pursuant to Article 1 (a) (iii), (v) and (vi) and Artide 2: (4) the obligations of Nallindkrodt with respect to NUKEM and ITALATOM pursuant to Article 1 (b) ; (5) the obligations of each of the Sellers pursuant to Article 3 (d) and the last sentence of Artide 4; (6) the obligations of each of the Sellers pursuant to Artide 6 (b) and (c); (7) the obligations of each of the Sellers pursuant to the last sentence of Article 7 (c) and pur-suant to Artide 7 (d); (8) the obligations of each of the Sellers under Article 12 (a) and (b)'; (9) the obligations of Olin and Mallinckrodt under Article 14; (10) the obligations of Olin under Article 15; and (11) the obligations of each of the Sellers under Articles 16,17,18 and 19. Amricts. 20. Miscellaneous. (a) This Agreement shall not be assignable by any party, except with the written consents of the other parties hereto. Nothing in this Agreement, express or implied, other than Article 16(g) hereof, is intended to confer on any person, other than the parties hereto and their successors and permitted assigns, any rights or remedies under or by reason of this Agreement. (b) Any notice, request, instruction or other document to be given hereunder by any party hereto to any other, shall be in writing and delivered personally or sent by registered or certified mail, postage prepaid, if to Mallinckrodt, addressed to Harold E. Thayer, President, Mallinckrodt Chemical Works, 3600 North Second Street, St. Louis 7, Missouri; if to NDA, before the Closing Date addressed to J. R. Menke, President, Nudear Development Corporation of America, 5 New Street, White Plains, New York, and if after the Closing Date, addressed to J. R. Menke, United Nudear Corporation, 5 New Street,-White Plains, New-York; if to Olin, addressed to Olin Mathieson Chemical Corporation, Attention of Vice President-Finance [460 Park Avenue, New York 22, New York, and if to the Com-pany, addressed to William C. Foster, President, United Nuclear Corporation,365 Winchester Avenue, New Haven, Connecticut, and shall be deemed given when delivered, or, if mailed, when placed in the mails, provided that any notice'of a change of address shall not be deemed given;until delivered or received. (c) This Agreement may be executed in counterparts and shall become effective when each of the parties has signed at least one copy and has so notified the other parties. i (d) This Agreement shall be governed by the internallaw of the State of New York. (e) The headings of eachtof the Articles hereof are merely for identification and shall not be con-strued to be a part of this Agreement. (f) This Agreement contains the entire agreement between the parties hereto and cannot be orally j changed, modified or released. 1 In WITNESS WH EREoF, Mallinckrodt Chemical Works, Nuclear Development Corporation of America, Olin Mathieson Chemical Corporation and United Nudear Corporation, have caused this Reorganization Plan and Exchange Agreement to be executed, in their respective corporate names by their respective Presidents or one of their respective Vice Presidents thereunto duly authorized, and their l 17-4O f.7M; MS,.t., MI. s j
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t respective. corporate seals to be herrunto affixed Cnd attested by:their' respective Secretaries Or One of their respective Assistant Secretaries, all On the day and year first above written. v un.m m : c:. - .MALuNCKRODT CHEMICAL WORKS, HAROLD F TnAvaR By Fresident Attest:
- i VICTOR H. KNOOP '
., s e,:1;d a ' i s ; Secretary -l N JI.C.T E ITIIIC M f t TI! U " [CORPORATESEAL)1
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, NUCLEAR Dr..vELOeMENT CORPORATIO.N OF AMERICA, JOHN R. MENKE By r Attest: ALEXANDER L. KEvEs Secretary [CORPORATESEAL} OuN.MATHIESON CHEMICAL CORPORATION, I ' Z :By'.IO c2 M,, WALTER.F. O'CONNELL .:t > .:yr un 0,-a m,-.,u,; y;,,p,,,;g,,, j 2 ' 4 " E '
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v'1 i. t.=, e i [ CORPORATE SEAL).I 'lb..i t q : : t f :9.::i b : ;.W.. I !si 'i i ~iu-r . :.UNrrED NUCLEAR CORPORATION, .WrLuAM C. FOSTER -By '. - ;... c President Attest: - o.. ui t, n. u. ... v. : ALEXANDER b. KEYES Secretary .[ CORPORATE SEAL). '.
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EXHIBIT II ' ~y"~ ~ ' INDEX' TO'T/ i 'F WFINANCIAL STATsM$NTS c. 3., a r. e m e i i 1 1 Page "; w '
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NUCLEAR DEvEuaruENT ConroaATrow or AMERICA: i j Accountants' Report................ F-2 i Consolidated Balance Sheet at March 31,1%1............... . F-3 o.,;.f..t.a. teme.n.t.of I.nc. osme.,.and.Ea.rned:.Surp.l.u.s.for.the Three Y. ears Ended March 31,1%1 F-4 .~ 2"Nbt'es t6 Finincial 'S6temeh6 ".... '........... F-5 .i ,,,...,,.-i, s 's 3,-, L NUCLEAR'FUEr.s d.rEuTron or Otin h. meson CHEMICAL CoRPoaATIoN: ~xo umc s.:.r.
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- Accoun tan ts'a Report. e........................................................
F-9 Balance Sheet at December 31, 1960......... F-10 ' Stateinent'of Inedme and' Net 5Vorth for the Three Years Ended December 31,1960... F-11 Notes to Financial State ents........ F-12 { NUCLEAR Dmsron or MALUNCKRODr CHEMICAL WoaKs: Accountants' Report... F-14 l Statement of Assets and fiabilities at'Dicember 31,1960 F-15 Statement of Income for the Two Years Ended December 31,1960................. F-16 Notes to Financial ~ Statements................................................. - F-17 Pao FoauA FINANCIAL ST TEMENTS oF UnrTED NUCt. EAR CORPORATION: .i. J Condensed Balance Sheets by Constituents and Pro Forma Combined............... F-18 j Notes to Pro Forma Combined Bala'nce Sheet F-19 i 4 7 t 4 ,il FE14 I s ',Q , n- .) a l ^fI .e,l. ) 4 f.' a I 'hl 'y -u ~,
'ja .f FINANCIAL STATEMENTS OF NUCLEAR DEVELOPMENT CORPORATION OF AMERICA { ) ACCOUNTANTS' REPORT To the Board of Directors Nudear Development Corporation of America White Plains, New York We have exarnined the consolidated ' balance sh'eet'of N'uclear Deve'opment Corporation of'Ainerica and its subsidiary Ray Proof Corporation as of March 31,1%1, and the related statements of: income and earned surplus for the three years then ended for Nuclear Development Corporation of America (including Ray Proof Corporation on a consolidated basis from November 2,1959, date of inception). Our examination was made in accordance with generally accepted auditing standards and accordingly I included such tests o' the accounting records and such other auditing procedures as we considered necessary in the circumstances. ' j In our opinion, the accompanying consolidated financial statements, together with the notes to fmancial statements present fairly the fimancial position of Nuclear Development Corporation of America and subsidiary Ray Proof Corporation at March 31,1%1 and the results of operations for the three g fiscal years then ended, in conformity with generally accepted accounting principles applied on a con-l sistent basis. 1 l i MAX ROTHENBERG & COMPANY l New York, N. Y. April 28,1%1
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NUCLEAR. DEVELOPMENT CORPORATION OF AMERICA.
- CONSOLIDATED BALANCE SHEET
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March 31,1961 ASSETS Cash in Banks'and on Hand $ 473.215 1 Accounts Receivable-U. S. Government (Note 12)........................... 650,425
- Accounts Receivable-Othe rs.........................................
202,065 Unbilled Costs' and Fixed Fees................................................ ' 629.948 a Merchandise Inventory and Material Supplies on Hand (Note 6).................. 122,131 Unexpired Insurance.......................................................... 26,167 u Other Current deceivables '.................................................... 18,607 TerAL CUaEINT Assets.......................................... $2.122.5 58 Fix5 Assus -(No'te 2): Land........................................................................ $ 277,937 Buildings. Property and Leasehold Improvernents............................... 744.191 ' Machinery and -Equipment.................................................... 744,598 n Fu rniture and. Fixtu res........................................................ 180.297 ' ' Cornpany Assetrunder Construction........................................... 106,932 TOTAL Ftxzo Assers...................................... $2,053,95 5 a Reserve for Depreciation................
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776,875 ~ rr Fixro AsszTs... $1,277,080 Giura Assers: '~ Prepaid Costs and Deferred Expenses........................................ $ 38,922 Trademarks and Patent Development Costs (at Cost)............................ 23,683 Deposits Receivable and Other Advances...... 19,581 O rganization Ex pense.................................................... 2,469 1,100 Investment (at. Cost) Goodwill (at Cost)................... 50,000 TOTA!, OrHER Assers. $ 135,755 ToTAr. Assrrs $3,535,393 LIABILITIES AND CAPITAL CUunzNT LtAsuntzs: A ccoun ts Payable............................................................. $ 819,878 Pa yroll Paya ble.............................................................. 140,839 Notes and Mortgages Payable ( Note 3).......... 204.750 Withholding and Payroll Taxes Payable........................................ 120,560 Othe r Tax es Payable....................................................... ', :50,163 Federal Income Taxes Payable................................................ 13.299 Accrued Vacr
- ion Wages Payable...............................................
. 47.944 Advances f rom Customers and Other Current Liabilities........................ 78.527 Tota!. CUnaENT LIABILrrrtS.......... $1,475,960 Loxo Trau LtAsuntzs (Note 3): Subordinated Notes Payable. Due af ter one year........................... $ 329.750 Subordinated 5% Convertible Debentures Payable. Due March 31,1%7....... 425.000 Real Estate Mortgages Payable, Due af ter one year........................... 78.000 total IANo Tzau LtABILrrtta................................. $ 832,750 Otan LtABuntr3 Reserve for Severance Wages Payable.......................................... $.74,565 CAPITALI Capital Stock (Notes 4 and 5) Authorized 400,000 shares with a par value of $1.00 per share S ha res I s s ued............................................................. 238.813 Less: Shares in Treasury................................................. 2.700 Shares Outstandin ce........................................................ 236,113 j Ca pital Surplus ( Note 11 )................................................. 701,370 Ear ttad S urplus........................................................ 214,635 TOTAL CAPIrAL........... $1.152.118 TOTAL LtAaltnIEs AND CAFrr A!.................................. $3,535,393 See notes to financial statements. F-3. i d s1 .: t; { *, ng 4*s W.k f. -e . -.!d ' i .. v.
Il Nf:,i' ?: j j i ill .'.i! NUCLEAR DEVELOPMENT. CORPORATION OF AMERICA STATEMENT OF ' INCOME AND' EARNED' SURPLUS Year Ended March 31, 1961 1960 1959 Gross Income............ $4,790.1M $3,763,869 $4,152,519 Cost of Sales and Operating Expenses... 4,607,283 3,618,091-3,930,532 Operating ProSt......... 182.821 145,778 221,987 i Other I ncome........................................ 12,874 30,8M 11,894 [l ' 195,695 176,662 233,881 . i : 6.. 'p' Other Deductions: i: Research and Development Expenses.......... 12.357 66.066 47,312 Interest on Bonds and Mortgages 31,578 36,781 43,126 Amortization of Debt Discount..... 2,000 2,000 2,000 Other Interest Expenses............ 21,M1 22,607 15,852 Non-Recurring Contract Settlement (Note 7).. 50.000 Other 26,857 11,546 2,025 Tota!....................... 94,433 139.000 160,315 Income Before Provision for Federal Income Taxes. 101,262 37,662 73,566 Provision for Federal Income Taxes.. 50,163 11,086 33,456 N et I ncome............................... 51,099 26,576 40,110 Earned Surplus at Beginning of Period 163.536 136,960 %,850 Earned Surplus at End of Period $ 214,635 $ 163.536 $ 136,960 ) See notes to financial statements. f f e a ;i, I
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NUCLEAR. DEVELOPMENT. CORPORATION OF AMERICA NOTES TO FINANCIAL STATEMENTS Note 1. During the fiscal year ended March 31, 1958 NDA acquired an interest in NDA. Europe, a Belgium corporation I jointly with Societe Generale des Minerais. The cost of this investment is payable only from NDA's proportionate share f of future earnings of NDA Europe. To the present time no profits have accrued and no distributions have been made. On November 2,1959' Ray Proof Corporation, a wholly owned subsidiary, acquired certa:n assets subject to certain liabilities of a rompany engaged in the manufacture of nuclear shielding and x-ray protective materials for a net purchase price of $295,945. An agreement with the principal of the company whose assets were acquired calls for total payments to him of $55,1M at the rate of $13,726 per year, beginning December 1,1959 in consideration for an agreement not to compete. Note 2. --~ Property and equipment areItated at cost less accumulated depreciation. Equipment having a cost of $198,000 has been pledged as co!!ateral on a Chatte! Mortgage. Unpaid balance on the Chattel Mortgage.at March 31,i1%1 was $12,000. Provision is made for depr'eciation o'ver the following estimated useful lives of the property and equipment, using the straight line method, and using the declining balance method in minor instances: Buildings, Property.............................. 20 to 25 years Machinery and Equipment..................... 5 to 10 years Furniture and Fixtures.............................. 10 years leasehold improvements are' amortized over 'he terms of the leases or over the estimated useful lives of the t improvements, whichever is shorter. Maintenance and repairs are charged to expenses and major renewals and betterments are capitalized. Upon dispo-sition of property and equipment costs and accumulated depreciation are removed from the accounts and any gain or loss is included in income. Depreciation and amortization of fixed assets reflected in Statement of Incane was as follows: Fiscal year ended March 31,1%1.......... $194,267 ; Fiscal year ended March 31, 1960............. 186,842 Fiscal year ended March 31, 1959........... 175,581 Note 3. '..'o.....,7... rt : 2 lenggTerm, Debt. and Notes, and.sMortgages payable at March 31, 1960 and March 31,1%1 consisted of the i following: March 31,1961 March 31,1960 J a Due Within'. Due After Due Within Due After J . m " w en .W o., m, .c. 'One Year ' One Year ' ' One Year One Year 4 Unsecured Shor't. Term Notes t'lBankii o i
- Vari 6us hifer.eh (ste.s'i.nd ~mahirities '...'....'....... ! )..W$2,00,000 " " $ *..r F I, m
.,r, $ 90,000" ~ $ ;- .',y,. d .e. Subordinated Notes, Payable: Sabarn Corporation (Principal includes interest) due in semi-annual instalbnents of $9,375 each to April 1964 18,750 56,250 18,750 37,500 Stockholders: 4%' notes due March 31,1%1.............. 36,000 i 4M% notes due in annual installments of $36,000 berm' - 1 ning March 31,1962 until March,31,1963 and a final. 328,250 36,000 292,250 payment of $956,250 on August 20, 1966........... rtible Debentures due March ' 5% Sulbrdinated Conyy/.V.b....d.i.. 5 467,500 425,000 . 31, 1%7..........t... Real Estate' Mortgages:.- ' ' Ii. 4M% interest, due in varying se'rnt-imnual installments to December 1, 1966........... '...... 8,000 56,000 8,000 48,000 5% interest, due in quarterly installments of $10,000 each 4 until November 1%2................................ 40,000 70,000 40,000 30,000 Chattel Mortgage on Equipment: 5% interest, due in monthly installments of $3,000 each. 36,000, 12.000 12,000 until J uly 31, 1%l.....................,............., .. c. Totals..................... 4..... e....... wi $338,750 > $990,000.,.. $2N,750 _ $832,750 iY il. F-51 ,"i: i, s i I.. I; [1., h 'bia. 2%N ,,M '
c q ) NUCLEAR.DEVELOPMENTnCORPORATION,OF; AMERICA i NOTES TO FINANCIAL STATEMENTS-(Continued) i The naturities by fiscal years on the long-term obligations at March 31, 1961 were as follows: l p. Year ending March,31, 1902......... q.............. y .$ 56,750 .2 . Year endmg March 31, 1963,.....a... ;,................, 62,750 Year ending March.31, 1964...,.r.e................ 8,000 e m ,. Year ending March 31, 1%5.....u o................. 10.000 270,250 m 9. t v., - ' Year cending March 31 A966 n. m t.D. ).. '............. Year endmg ifarch dl,"1%7%.J.TCT... E.....'.../. 5 425.000 - ~ '8-w $832,750 j s ] ~ I,:cm ret Note 4. There had been reserved a tolal of 25,000 shares of: common: stock for issuance in the event of exercise of cmversion privilege by the holders of 5% subordinated convertible debentures. The conversion' rate is one share for each $20.00 face amount of debenture..gThrough.Marph,31,1961,3,7,50, shares were issued for debentures converted.in the amount m,,m of $75,000. Note 5. ,i The Company under'th'e ' provisions of the Conorstion's Stock Optionilan.'has ' option contracts outstanding at ,j March 31,1%1 with certain employees and officers for the sale of.12.268 shares at prices ranging from $6.00 to $22.00 per share for a total option amount of $186,853. During the period June 25, 1956 to March 31,1%1 options on 12,112 shares became exercisable which had option c prices from $6.00 to $22.00 per sharenor a total ofi$149,695m;Th6 anarket value of such options at the date exercisable i 3 was $12.50 to $44.25 per share, or a total of $291,146. During the period June'25,1956io March"31',$1[ options"were exercised on 4,788 shares. The option prices f ranged from $6.00 to $22.00 per share for a total of $45,475.'.The market values at the dates exercised were from $12.50 to $44.25 a share, or a total of $136,752. " M.!L am as 95 %............ O i,ii, u.~.of the fair market value of the shares at the dates of the contracts an4po The sales price of the shares w.M im charge was made against income because of these contracts. The options were granted between June 25,1956 andTFa'rEi 25,'1960.' 'All options were exercisabtfid60-qdrth"pMrtioniyeirly, began.ng one year after the granting of the options ~ " "' and expiring five years,from the date of the, grant.M ,1 !. W.1 !. :tyrr l I ~ 'In ad@ tion tg thg above the Corppany hasgption contracts outstanding at March 31,1%l with certain consultants i'oh'e iale of'1,300"shnes oQ;tskM18'kshag6r a total option amount of $23.400. Options were grante 116.-1959-and-800$ hares-on October 21,109. They are, exercisable,og,various. dates,to.J0ctober, 500-shares-on October 21,1965.,; At March,t },1%1 options were gegi. sable ca.900.. shares et thei,op, tion pnceaf, $18, per share;pr a 3 r totsi of $16,200. None were exercised at March 31, 1961. The sales price for these 1,300 shares at the dates,of the contracts was approximately the fait market value of the shares at those dates, and no'chfr'ge%as made 'agairtsf i (" d inepme because of these contracts., q j g ~. 010 5. Note' 6. ,, g,. Liventories have been calculated at the lower of cost brrmarket.on a first in first out basis.. w c l' ' " Tliiopening ahd Oosing invEo#!e#r s which have been tised.in comp $ ting # cost'f 6f'sa}es wiirhki follM ~ ' " 'Ye'ar Y$did NEli31[ ' # M
- e. w 1959 1960 1961.. -
,o Beginning of, Period......;., $10.997 ' $ 14,774 $117,34'5 ' End of Period.............'...... 14,774 .,117,345 122,131 +#
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.mu at Note 7. G n-During the fiscal, year ende4, March 31,19{9JucleaDev'eloptnent Corporation of AmericNaitre'ed to: pay $ r in full settlement of E dispute in conEection with the' sale of TedrEp'u'ter'sNt'em made in a prior year,"and 'the expense is i 'k~ reflected in the statemedt'of inec*n'e' fo'r the fiscTy' emended March 31,1959. 1 3.6.1 L s f ,, ;., j- {y4 .i
NUCLEAR DEVELOPMENT CORPORATION OF AMERICA NOTES 'TO FINANCIAL STATEMENTSWContinued) Note 8. Real property owned by Nuclear Developrsent Corporation of America in White Plains. New York,'was sold during the fiscal year ended March.31,31960,, subject to a leaseback, and is reflected in the financial statements for that and in the statement of inco'ne,pp, income tp NDA -arising from such sale amounted to $13,827, which amount is i subsequent periodsc The t 'for the 6 scal yiar ended March 31,1960. e IMi bMf P.e! Notn 9. ? ? Supplementary Pro 6t and loss laformation is shown below. ) TE '5~ Charged , Charged m.e; to Cost to of Sales Research and and Operating Development Expenses Expenses Total Year Ended March 31,1959: Depreciation of fixed assets................. $173.456 $ 2.125 $175,581 Taxes, other than Income................... 32,088 393-e 32,481 Rents....................................... 64,058 785-64,843 Maintenance and Repairs.................... 89,499 1,096 "90,595 Year Ended March 31,1960: Depreciation of fixed assets.................. 182,956 3,886 186,842 Taxes, other than Inecme..................... 35.713 759 36,472 i 4 i Rents........................................ 51,425 1,092 52,517 f Maintenance and Repairs..................... 53,809 1,143 54,952 i t. Year Ended March 31,1%1: Depreciation of 6xed assets............... 193,451 816 194,267 Taxes, other than Income..................... 50,949 215 51,164 Rents 81.491 344 81,835 Maintenance and Repairs................. 81.499 344 81,843 There were no minarement or service contract fees paid or accrued during the periods indicated. Note 10. The company and its subsidiary has a lease for real property in Stamford, Comt for which the minimum rental payable is $'2.500 per year and the total rental payab'e from April 1.1961 to the end of the lease term in November 1964 is approximately $87,775. The company also has a long-term lease ou certain real properties in White Plains, New York expiring in 1988. The yearly rentals payable amount to $56,150 and total aggregate rentals payable to 1988 approximate $1,305,000. Rental income, frcm certain of these properties, presently subleased to others is approximately $14,000 for fiscal year 1962 t F E7I J-
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hhh h, NUCLEAR DEVELOPMENT: CORPORATION OF AMERICA NOTES TO FINANCIAL STATEMENTS--(Continued) Note 11. Additions to the Capital Surplus Account represent paid-in capital. to the extent that the sales or conversion price exceeded the par value of common stock. CapitalSurplus Account Year Ended March 31, 1959 1960 1961 Balance, Beginning of Period............................. $589,520 $392.785 $635,368 From Exercise of Options................................ 3.265 11.708 25.627 From Conversion of Bonds............................... C 30.875 40.3/5 Balance. End of Period................'................ $592,785 ~$635,368 $701,370 Note 12. '"g Accounts receivable from the United States Government were not confirmed as it was not practicable. We have I ^ satisfied ourselves as to such accounts by 'other auditing procedures. Note 13. The accompanying financial statements are subject to final determination of Federal and State taxes. to final determination of cost-plus-fixed-fee contracts and cost allowances. However, the liability thereunder. if any, is not expected to affect the accounts materially. I t , i. j b4 s +:. j t, ,,i i ' I i
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.I I l Q 1 FINANCIAL STATEMENTS OF l:j i Io NUCLEAR FUE13 OPERATION OF OLIN MATHIESON li! CHEMICAL CORPORATION f i l' I
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ACCOUNTANTS' REPORT -l
- i To the Board of Directors ij Olin Mathieson Chemical Corporation
) We have examined the balance sheet of Nuclear Fuels Operation of Olin Mathieson Chemical . 4 l5 Corporation as of December 31,1960 and the related statement of income and net worth for the three years then ended. Our examination was made in accordance with generally accepted auditing standards, and j accordingly included such tests of the accounting records and such other auditing procedures as we con-j sidered necessary in the circumstances. It was not practicable to confirm accounts receivable from the 1 United States Government but we have satisfied ourselves as to such accounts by other auditing procedures. - j In our opinion, the accompanying balance sheet and statement of income and net worth present fairly [' the nuancial position of Nuclear Fuels Operation of Olin Mathiewn Chemical Corporation at December 31,1%0 and the results of its operations for the three years then ended, in conformity with generally i accepted accounting principles applied on a consistent basis. PEAT, MARWICK, MITCHELL & CO. i February 27,1%1 4 l ~ h O: 9 i t i e .i. k P F-9 l b l- .b)
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( j - 4, p ;p) e u a fi$ NUCLEAR FUELS OPERATION b;I.:i < , OLIN,MATHIESON CHEMICAL CORPORATION 3 ,x BALANCE SHEET December 31, 1960 ASSETS Current Assets: Receivables: United States Government (Note 1).................................. $ 3,003,205.57 Other............................................................... 55,779.20 i' Due from division of Olin Mathleson Chemical Corporation............ 371.41 3,059,356.18 Inventories (Note 2): + L " Work in process.......'.........................'.................... $ 372,030.39 Raw materials and supplies !......................................... 185,720.00 557,750.39 Total current assets.....................................'.... 3,617,106.57 Retainage on U. S. Government Contracts.................................... 1,27J,666.21 Property, plant and equipment, at cost: Land......................,............................................. 220,647.51 Land improvements....................................... $ 59,714.78 Buildings and building equipment.......................... 4,045,006.86 Machiner,r and equipment................................. 6,771,065.59 Construction in procesc.................................. 499,763.82 11,375.551.05 11,596,198.56 Less accumulated depreciation and amortization........................... 2,350,308.19 9,245,890 37 Prepaid expenses and defered charges: Insurtnce premiums 1,651.95 Tra vel ad vances........................................................ 6,835.00 Other.... 100.00 8,586.95 $14.145.250.10 LIABILITIES AND NET WORTH N Current Liabilities: ,,j Accounts Payable-trade................................................ $ 422.023.32 i !d Due to divisions of Olin Mathieson Chetnical Corporation.................. 296,675.73 i Accrued liabilities: ?= i Contributions to pension f und........................................ 0 14,478.82 ii Taxes, other than Federal taxes on income........ -................. 50,156.55 De f erred sales..................................................... 299,994.35 Miscellaneous reserves: Contract ;-ice reductions under negotiations...... $ 145,234.50 Scrap allom aces................................ 71,863.00 CPFF contract disallowances..................... 20,000.00 237,097.50 Other............................................................... 16,044.05 617,771.27 Total current liabilities....................................... 1,336,470.32 Werred Federal taxes on Income........................................... 948,112.35 t u Worth ( Note 7)...................................................... 11.860,667.43 $14,145,250.10 See notes to financial statem-uts. .ij flh
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o NUCLEAR FUELS OPERATION! OLIN t M ATHIESON 'CHEMIC AITCORPORATION - 1 1 STATEMENT OF INCOME AND NET WORTH For the Thee '.' ears ended December 31, 1950 1960 1959 1958 Net sales and operating revenue.... $27,246,390.59 $21,M9,903.90 $7,117,531.49 4 Cost of goods sold 19,682,897.08 19,086,437.98 7,622,211.48 l m 3: : Gross pro 6e (loss)' from operations..:...... 7,563,493.51 1,963,465.92 (504,679.99) Administrative, selling <and gen.eral expens.e. s.......... 1,191,534.55 812,024.54 360.600.32 , n.., m. . Net, pro 6t '(loss) -irom operations.. j., p.s.......... 6,371,958. % 1,151,441.38 (865,280.31) g Other incczne: ? Pro 6ts realized on sales. of sundry capital assets and credits not related to year's operations................................. 2,018.73 67,969.38 ) . Pro 6t from other operations,and miweb-n 20,265.73 31,332.22 25,936.32 j '4 20,265.73 33,350.95 93,905.70 ( i \\ 6,392,224.69 1,184,792.33 (771,374.61) Other charges: .t loss realized on sales or o15er disposition of misce!!aneous 16,336.75 29.932.25 10,759.56 properties 1,599.59 244,M7.87 259,378.% Relocation and expansion expense... 12.15t4.35 Misce!!aneous..... 17,936.34 273.980.12 282,322.87 i Net pront (loss) before provision for Federal taxes on income 6,374,288.35 910,812.21 (1,053,697.48) Provision (credit) for Federal taxes on income: l Current taxes...... 3,076,557.11 140,8M.61.. (640,435.3,7,) .. c Deferred taxes 238,30724 ~ 332.705.60 ' " 92,330.89 i [,, 3,314,864.35 473,600.21 ~ (548,1M.48) l .......... '. w.:c. w! 3,059,424.00 437,212.00 (505,593.00) Net income (loss) Net worth at beginning of year............ 11,447,093.58 - 7,126,289.01 2,787,495.98 3 14,506,517.58 7,563,501.01 2,281,902.98 Transfers. Clin Mathieson Chemical Corporation " (2,645,850.15) '3,883,592.57' '4,84D86.03 l ...m;y,,-,. .n -no Net worth at end of year (Note 7)......... .. '. y..,'.M $11,860,667.43 ' $11,447,093.58 $7,126,289.01 See notes to fmancial statements. t P i. q, 4 g d i F-11 5 g. j ,, t 3.t. i. 1, ,., ; g 3,.,,
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ki$ ' f l NUCI' EAR.' FUELS' OPERATION: QLINIMATHIESONf. CHEMICAL ~ CORPORATION ' - I'HOTES.TO JINANCIAL STATEMENTS (1) Receivables: 1.. o "-... Receivables-United States Government at December 31, 1960, include accumulated but unbilled costs an thereon'of $1,622,953 on' Government contlacts. <n. e ;y (2).Inyf.ntories:h s.m a ~ Nt i A"Thetopening andicloting. inventories,(valued at.the lower of. cost or,marlict)uwbich have been used in cosM sal,es werepsfo,11 ws: 9 w,,a;g y,.y 9 g. Year, Ended Dec, ember. 31, (ll..CCIO) 2LI4,nlJ
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...1958 1959 1960 cni 'Beginning Lof period.................. $ 130,552.74 $3,437,419.09 $3,358,351.83 i End of period.................. s.... ' as 3,437,419.09 fu.. 3,358,351.83 - 557,750.39a .~,i (,Ul0 !: .a., im hM3ccli$e inhhhing,inventMy dEygar end 1960 results in part;from a change in accounting yearf under which :costUincurred are transferred to cost of sales and billings applicable thereto are transferred to unbilled accounts receivable c61 current basis-~ (3) Pederal taxes on incomer r ;. 3m .,,,3 The operating 'results of the Nuclear Fuels Operation ar 'uded in the Federal income tax return 61ed by Olin Mathieson:Chemien!. Corporation. In its financial statements, s Operation computes the provision for depreciation by the " straight-line" method over the estimated useful lives. For Federal income tax purposes, the Operation has elec to.amortiwthe certiEed portion of facilities covered by certi6 cates 'of iiecessity over a five-na' period and"wh ~ to other1 facilities hequired,_the provision. for depreciation is computed by the accelerated deprec:ation meth r excess of tax amortization and depreciation over normalrdepheiation: approximated.$457,/00 for.1960,1 $642,600 f 1959 and $177,600: foe 1958, und antamountbf approximately 52% (the estimated future tax.effect) of such exce has been charged to income and credited to a reserve for deferred Federal income taxes. The reserve will be rest to income in future years when non.al depreciation will be unavailablegtax,deductiog.g j nlin, U lb W ', itT (4) U A..# Pens on and etirement plans:.,ifA. ..s,. 1 e.
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l s.CJ.e ,;Underghe non; contributory pension an& retirement plans,of Olin Mathieson Chemical Corporation, the annual contributlims. covering". current service'.only.'ch' rged to inconie'by Nuclear Fuels Operat;on of Olin Mathieson a Co'rpoMtioMounl4d fi$232,429.521f.1960,t$199,321.62.in.1959 and $106,868.89.in,1958!.No allocatio .I-liability.tE Qlin divisions,is arallable.ntk0 N. !! (5)l, e."WlAtton..a. ' W... e.. a, ei r j ^ ie i < c.. I t s s ce rede erm.,..,c,! 4 M-ci..~J 1-M.n 0 i i negot .an. on: ..m.42.mm i tem. .c+ . g u.< redeterminat[b;n orl1Mth. HoWeverftb2 liibility thereunder,'If any, is n! r 4.w ~ O.: (6) Revision of depreciation policy
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l I u At Deember 31, 1960, the Nuclear Fuels Operation retroactively adjusted depreciation to a ten-year period on certain fixed aidets which had previously been depreciated over a five-year period by the." straight-line" method. l aggregate amount.of this adjustment was $1,516,17121 gross and $727,723.63 net of applicable Federal Income Taxes. The financial stat.e,ments for the years affected have been recast to reflect these adjustments as tabulated below: ,, i,, t Depreciation and Pederal Amortization Income Tax Net (Addition Adjustment Adiustment to Net Income) Prior to 1958............................ $ 132,963.16 $ 69,139.92 5 63,823.24 1958.................................... 242,679.82 126,195.52 116,484.30 i 1959................................... 543,003 28 282,400.21 266,605.07 1960.................................... 597,522.95 310,711.93 286,811.02 l .I. j $1,516,17121 $788,447.58 $727,723.63 i e ,A } l
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s l r i I NUCLTlAICEUELS2 OPERATION
- g.,..J. 7c0LIN, MATH,IESON, CH..EMIC,.Aps,CORPO..RA,} ION.
I m. ...u s. us v. .s. s s > v. v.. u an a., .A 1 NOTES TO FINANCIAL STATEMENTS-(Continued) (7) Income tax liability: In accordance with the terms of the Reorganization Plan and Exchange Agreement dated April 27,1%1, i $1,065,378.79 and $25,136.00 accrued Federal income taxes-current and State.incomepui.,franch1will not he'assiim'ed by Uni'ted' 3ctaxes am respectively at December 31, 1960, statements, this liability has been transferred to Olin and the net worth of Nuclear Fuels Operation at December 31,1960 has been correspondingly increased. r (s) Cash and-workiris capital requirements under Reorganization Plan and Exchange Agreementt ,3 Cash balances han not been retained by the Operation and, therefore, no cash appears.in.the accompanying balarice sheet. Under the Agreement, Olin agrees *. hat the assets transferred at the clocing dite will bicl'ude cash in an amount ~ not less than $2,199,000 and working capital not less than $2,939,000. ~ ,,.,;a L;.,r;col. r.;Liirenco wi'.o .e<,.. } <ac t h: : C.4 ' .I.
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[n(:% . t. ' FINANCIALJSTATEMENTS ' OF,. r, NUCLEAR DIMINIbN 'dF MSNLINCKRODT CHEMICAL WORKS \\ ' ACCOUNTANTS' REPORT . s., t.a,> t . ' c,-...iirk.d. . March 23,1%1 . @.....~ c : n 1,.., x To:the Boar 4WDirEctors 'of "'Mauisekrodt Chemical Worlds .{, [, ' 7 We have made examinations of the consolidated financial statements of Mallinckrodt Chemic Works and its subsidiary for the year 1959 and the financial statements of Mallinckrodt Chemical Works for the year 1960. These examinations were made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records and such other auditing pro-cedures as we considered necessary in the circumstances. We have reviewed the accompanying statement of assets and liabilities of the Nuclear Division, Commercial Operations, of Mallinckrodt Chemical Works at December 31, 1960 and the statements of income of the Division (and its predecessor corporation, a wholly owned subsidiary of Mallinckrodt Chemical Works) for the years 1959 and 1960. In our opinion, based upon our annual examinations, supplemented by such additional auditing procedures as we considered necessary, the accompanying statements present fairly the assets and liabilities of the Nuclear Division, Commercial Operations, of Mallinckrodt Chemical Works at December 31,1960.and the stesults of operations of the Division and predecessor corporation for the years 1959 and 1960.in accordance with generally accepted accounting principles applied on a consistent basis throughout the period. m' PRICE WATERHOUSE & CO. i i t e e. [ j F-14 l l i.. I, i. s t f l ddh_e l .'V - [ ,}_ .J .y ~ J
\\ 5, 4 NUCLEARIDIVISION-COMMERCIAL OPERATIONS M' 'LI3INCKRODTICHEMICAL WORKS l 1 A r e STATEMENT OF ASSETS AND LIABILITIES December 31, 1960 i ASSETS 5 CuanzNt Assrrs: 100 Cash ( Note 1 )............ r,................. Accounts receivable--. -(
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6,321 i ~ ............'.'.9.......................:....................../.'......'... 437,475 Othe 1 .w lw Inventor es, at the lower of cost-or snarket (Note 2)- i. 2 , e ;,, - 12,614 Raw materials and packaging supplies.............. 12,503 Wor lc in process.............................. 12,828 Finished p rod uct s........................................................................ 11,755 Mechanical, laboratory and other supplies, at cost........................................... i 203 P repaid insurance.......................................................................... $ 493,799 $ 93,331 j I NMSTM ENTs, at cost ( Note 3 ).................................................................... Paortattts, at costt $2,108,266 Buildings, machinery, and equ'pment............................................. 425,692 Less-Depreciation and amortization............. $1,582,574 32,337 Land 59,739 Construction in progress...................... $1,774.650 $2,361.780 I i t a f i LIABILITIES .i CuanzwT L Anamzs: $ 66,727 Accounts payable............................................................................ 4,767 Stlaries and wages............................................................. 1 212,202 Other current and accr ued liabilities.................................. $ 283,6% $2.05,084 Hows Omca Accx>unT....................................................................... $2,361,780 I 1 l !a !.l".J ' 'ttF< F;15 i m1i.
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U, j NUCLEARrDIVISIQR=C.OMMERCIAL OPERATIONS MALLINCKRODTICHEMICAL WORKS l ~ STATEMENT. 0F INCou'E Year ended December 31 1 1960 1959 ,l j Sales, net................................................. $1,657,065 $1J62,605 H Cost o f goods. sold..................................... 1,596,488 1,429J31 4 1 Gross profit................................... $ 60,577 $ 332,874 ' i >n $ 267,538 $ 188,741 Selling, general, and administrative expenses................. i, 1,., Research and development exposes........... E.....,....,.....200,569., 137,830., i $ 326.571 1 $ 468,107, i ' ' Income or doss')~ 'irom operations............... $ (407,530) ' $ 6,303 ,;A' Other.lacome. and.(deductions) :
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. Discount on purchases and miscellaneous, net............. $ :.1,016 - 1,096 t I . Income or. (loss) before estimated federal income taxes........................................ $ (406,514) $ 7,399 i Estimated federal income taxes (Note 4).................. (210,000) 'C,220 Net income or (lass) for the year $ (1%,514) .5,179 o f y l' o , 1, 8' l n,4 : .g., j, '.. !Y *k b[.$. i lJ l '.n 'i., - e >l .c t 1 4 { t' 4 ] ., d j' F 16 e f s l Y t f 4 4 l 'l .I lj l 3 . I.I ( 's fN"> -.' 1. '. 'F'g(' I l i, ' %..i. r .1. l :.,b. i .'!.';Ip'j 1',,. m..s, 9. [d 3 I,'i l,(' ,. Q 4.,.. k;. 'l r m I
f ( u L . 2 4 NU C LEAR. DIVISIO N=C O MMER CI ALI OPER ATIO N S a 1 MALLINCKRODT CHEMICAL WORKS ..,,y. . -.........,,f g,..,f,m.., 2 NOTES TO FINANCIAL STATEMENTS NOTE 1 1 Cash shown on the balance sheet representsipetty 'cashffand located at the Hematite plant. Cash requirements I ~ for operations have been provided through the ge.n. era.l c.orporate accounts of Malhnckrode Chemical Works. i .r ...^ 'M' NOTE 2: ) Inventories do not include uranium containing materialspwned by the Atomic Energy Commission..and held for EC'inWapproxi nate amount of $4,500,000 at December ~31, 1960. } l processinga These materials were valued by the [%e appropriatetilovisioris 'for processing losses and lease chargesj l Included in other' current and accrued liabilities 1 applicable to these AEC owned materials. ~ u,, ~, ;,'^, ,1 e n s.
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~s-I', ' ' d ' ' I l ' ~' i NOTE 3: 'In$estments represent a 10% interest' in a West' German c'ompany and a.16H% interest in an Italian. company 4 (50% cf which was sold at cost of $8,033 to the &rnian. company.in;1%I),^both of which are engaged in nuclear q The companies are in the developmenCitage' and have sustained losses. However,'in,the opinion'of manage.- activities. t' ? 5 i ment, the future prospects for the companies remain sound. NOTE 4 Estimated federal income taxes for'1960 represents the estimated reduction in income taxes payable of Ma!!inckrodt } Chemical Works by reason of the loss from commercia!. operations of the Nuclear Division durir.g that year. f NOTE 5: - For the period January 1,1959 through September 30,1960, the income statement' reflects the results of operations of Mallinckrodt Nuclear Corporation (a wholly owned subsidiary of Mallinckrodt Chemical Works). At September 30, l 1960 this subsidiary was liquidated into the parent and its operations continued ~ar the Nuclear Division, Commercial t Operations, of Ma!!inckrodt Oiemical. Works. f " /, E,J n.J; q,; ^) >,d 'd! J...a J i C" //I : { s 222,.. i a [' 7 "I EJ
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o-JL~ ^ UNITED NUCLEAR CORPORATION 1 ~ f' h CONDENSED BALANCE SHEETS BY CONSTITUENTS ' AND PRO FORMA COMBINED [ m Nuclear Nuclear Divielen-f . Devenupment Commercial Nuclear Fuels Corporation of Ceperatione of Operaties of America and millackred4 Ohm m t h eon i Conealidated Chemical Chmical Subeldiary Works Corporation Pro Forma Wrch 31 December 31 December 31 Adjustments Pro Forma 1 lidt 1940 1960 add (deduct) Combined ^ Current Asseti: ASSE. TS ; N I weG n m .. e...h u k Na. ., jwi"1m * : *,; " *m. " " " " " * $. 3,215,, $,,a.),00,it 1.G1 b.r r r. i $ 2,449,9001 $ 2,723,215 (200,000)J r Accounts receivable: ,g,g, United States Gov' rnment '............ 650,425 6,321 $ 3,003,206 3,659,952 e Other.............................. 202,065 437.475 56,151 ' 695,691 Unbilled costs, etc.-United States Govern-ment contracts....................... 629,948 629,948 i Inventories...u.6.................. 122,131 37,MS.; 557.750 m 717,826 !t r . O the r................... 18,607 11.755 30,362 ) ..,,, Total, current, assets.. 2,096,391 493,596 ; 3,617,107 2,249,900 8,456,994 Retainage on United States Government 1,273,666 Contracts................. 1,273,666 Investments-st cost.... 1,100 93.331 (8,033) 86,398 Property, Plant and Equipment-at cost: Land ../...u..... 277,937. 32,337 220,647 530,921 I,, Buildings, improvements, machinery and h equi pment........................... 1,669,086 2,108,266 10,875,787 14,653,139 / Less.-eccumulated depreciation and amor-y tization.. (776,875) (425,692) (2,350,308) (3,552,875) i Construction in progress................ 106,932 59,739 499,764 666,435 (' Property,' plant and equipment-net 1 277,080 1,774,650-9,245,890 12,297,620 Prepaid Expenses, etc...... 87,139 203 8,587 95,929 Goodwill, Trademarks ind Patents....... 73.683 73,683 Tota! 53.535,393 $2,361,780 $14,145,250 - $ 2,241,867 $22,284 290 F t
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LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: f Notes payable and current maturities on long term debt.................... $ 2M,750 $ 2M,750 Accounts payable--trade................ 819,878 $ 66,727 $ 718,699 1,605.3M Federal income taxes.................. 50,163 50.163 ' Accrued liabilities, etc............... 401,169 216,969 617,771 1,235,909 Total current liabilities........... 1,475.960 283,696 1,336,470 3,096,126 Deferred Federal Taxes on Income..... 948,112 M8,112 Lang Term Debt (exclusive of current d maturities): 5% convertible subordinated debentures due March 31, 1%7......... 425,000 425,000 Subordinated notes payable........... 329,750 329,750 i Real estate mortgages payable........ 78,000 78.000 V' Total long term debt &32.750 832,750 Other Liabilities-Reserve For Severance i.l Wages Payable. 74 565 74,565 i Stockholders' Equity: Capital Stock: (l, 3fa% Convertible preferred.... 9,609,100 9,609,1(X) i 4 Lommon,.............. 912,188 912,188 NDA capital stock 236,113 (236,113) Contributed surplus.... 701,370 (701,370)l 6,811.449 ( 6,811,449 Earned surplus 214,635 (214,635) ' i Other 2,078,084 11,860,668 (13.938,752) { Total stockholders' equity....... 1.152,118 2,078,084 11.860,665' _ 2,241,867 17,332.737 To tal...................... $3.535,393 $2,361,780 $14,145.250 $ 2,241,867 $22,284,290 l ;: See accompanying Notes to Pro-Forma Combined Balance Sheet F-18 ! [ 'i ' I, g B. i i .'r n ki.. a 1 i o L.U., .u., L, ( I' 'h ( It' h !i 4 ,jh p h. .f i
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o i + t UNITED NUCLEAR CORPORATION f } NOTES TO PRO FORMA COMBINED BALANCE SHEET The accompanying C=h-d Pro Forma Combined Balance Sheet has been prepared from and should be con. i sidered in conjunction with the balance sheets of the Nuclear Developutent Corporation of America as of March 31, 1961 and of the Nuclear Fuels Operations of Olin Mathieson Chemical Corporation as of December 31. 1960 and the statement of assets and liabilities of the Nuclear Division--Commercial Operation of Mallinckrodt Chemical Works as cf December 31, 1960, and the related notes to financial statements, appearing elsewhere in this Proxy Statement. The accompanying Condensed Pro Forma Combined Balance Sheet reficcts the following proposed transactions: I Nuclear Nuclear Divisten-- Deveispensat N-clal Nuclear Feels I America na Cum atheon Consolidated Chemilcal Chemical 4 Subsidiary Works Corporation Total J Proposed Contributions To United Nuclear Corporation: i Stockholders
- equities as shown by balance sheets of
} l constituents : Capital stock.................................. $ 236,113 $ 236,113 j Contributed surplus........................... 701,370 701,370 l Earned surplus................................ 214,635 214,635 $ 2,078,0M $11,860,668 13,938 752 Other.................................... Total................................ 1,152,118 2,078,084 11,860,668 15,090,870 Additional cash to be contributed by Mallinckrodt and Olin............................. 249,900 2.200,000 2,449,900 Total............................... 1.152.118 2,327,984 14,060,668 17,540,770 ) Less assets to be withheld: Cash by N D A.................................. 200,000 200,000 Investment by Mallinckrodt.............. 8,033 - 8,033 Total................................ 200,000 8,033 208,033 Net proposed contrihition......... $ 952.118 $ 2,319,951 $14,060,668 $17,3'12,737 i Abwe Proposed Contribution To Be Represented By j Following Stockholders
- Equity in United Nuclear j
Corporation: C:pital stock: 3H % convertible preferred-$100 par............. $ 1,378,400 $ 8,230,700 $ 9,609,100 j Ccmmon-$ 1 par................................. $ 236,113 94,075 582,000 912,188 Cont ibuted surplus................................ 716,005 847.476 5,247.968 6,811.449 l Total................................ $ 952,118 $ 2,319,951 $14,060,668 $17,332,737 The $200,000 of cash to be withheld by NDA, to the extent that it is not required for the payment of expenses, is to be ultimately transferred to United Nuclear Corporation. United Nuclear Corporation may,.at its option, sell additional shares of preferred stock at a price of $100 a share to Olin Mathieson Chemical Corporation in an aggregate amount up to the total of the amount of capital appropriation ~ requests (commitments for plant additions) of.the Nuclear Fuels Operation of Olin Mathieson Chemical Corporation unpaid on the closing date. The Agreement relating to the proposed combination provides that if the amour.ts of the working capital to be [ transttrred by Olin Mathieson Chemical Corporation and/or Mallinckrodt Chemical Works exceed $2,939,000 and t $250.000 respectively, accounts receivable equal to the amounts of such excess working capital may be retained t,y [ those companies either at their option or at the option of United Nuclear Corporation and a corresponding reduc-l tion will be made in the amounts of the 3%% convertible preferred stock to be issued to such companies. The accom-i panying pro forma combined 1.alance sheet does not give effect to the exercise of such options. R ference should be made to page 16 of this Proxy Statement for a description of the converthility provisions (f the 3H% convertiNc preferred stock to be issued. F-19
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,3 ,., u rdn!r.4 #, a '.o 4 EXHlBIT III L yn.,. ,a Excerpts from New York Stock Co ition Law Sec. 20. Voluntary sale, lease or exchange of property, rights, privileges and franchises arid r/ghts of objecting stockholders. A stock corporation, except as otherwise provided by law or ibyJits' certificate of incorporation or other certificate filed pursuant to law,' may voluntarily sell, lease or . exchange its property, rights, privileges and franchises, or any interest therein or any part thereof; pro-tyfded; howeve'r,:that if sucli sale, lease or exchange is not made in the regular course of business of the teorporatiorvandlinvolves a!! or substantially all of its property, rights, privileges and franchises, or an lintbgralvp'.rt 'thereof.essentialitb :the conduct of the business' of nthe! corporation, such sale, lease or .exchaitge: sh'all.n%t:be tnade'without the consent of either the holders of> record of all of its outstanding f Ish' ares / entitled:to' vote' thereon given'in writing without a meeting'or'the' holders of record of two-thirds of its outstEnding~ shares entitled to vote thereon obtained at a meeting of the stockholders called pulsuant'to'shtion forty-five. Franchises within the ' state may be sold only 'to a domestic corporation. w.m n +ys-g,,If [be.p!p, lease or excht.nge may not be made, without the consent of stockholders and such . consent is obtained2t a stockholders' meeting, any stockholder entitled.to. vote thereon and not voting c ,in favor,of. such ' proposed sale, lease or exchange may at any time prior to the vote thereon-or if l , notice. of.the, meeting. was not mailed to him at least twenty days prior to the taking of such vote, then within twenty days after the mailing of such notice-object to such sa~e, lease or exchange and demand payment for his stock, and thereupon such stockholder or the corporation shall have the right, subject to. the: conditions and provisions of section. twenty-one, to.have such stock appraised and paid for as provided in said section. Such objection and demand must be in writing and filed with the corporation. The provisions of this section shall not apply to a railroad corporation. Sec. 21. Determination of value of stock of objecting stockholder. 1. In the event that
- th'e, stockhloklW,a corporatior; have taken action pursuant,to,sectionsgtirteen,. twenty, eighty-five, I
.,eighty-six or;ninety-one or pursuant to article four and if;,any stockho,lde'rg as pbjected to such action h
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- dernanded, payment for his stock as provided in section fourteen, section twenty, subdivision, seven P. sptiogeigh,ty-fivp,, section eighty-seven, section ninettone. or,subiliy'n, eleven of section thirty-f
,eight, as thetcymay.be the corporation, within; ten, days after the 'ast; dga.on,which a demand for r l , payment.might have been made,4shall mail by registered mail to suchfobje9tmg stockholder orideliver ( a -lysonalJy,tp,hirn,gwritteg offer to; pay for such stocl{ in cash.at a pricejl,eemed by the;corpo.ation. to g E i.beghe value thereof;.and.an offer so made.to.any, such,. objecting stockho,1, der shall also be made on g p the same terms and conditions and at the same price per share to all such objecting holders of shares of the same class of stock. If mailed, such offer shall be directed to such stockholder at his address as it appears.on.the stockbook unless he shall have filed with. the secretary,of the corporation a written f . request that, notices intended:for him be mailed to some,other address,in.which case it shall be mailed .to.the address. designated in such notice. Such offer shall be accompanied by a balance sheet of the . corporation,as of a date not more;than six months prior to the making of such, offer and a profit and iloss statement:forithe.. twelve months' period ended on the date of. such l balance sheet; provided,
- that if it.iseimprauicable to furnish a balance sheet -as of. a.date.within.such,six months' period, a s
balance - heet as of such earlier date as shall be practicable,gbut not earlier than the end of the corpo-s ration's preceding fiscal year, shall be furnished, in which event the profit and loss statement shall be for the twelve months' period ended on the date of such balance sheet. 2. The corporation may apply to the purchase of stock pursuant to an offer made as provided in ' subdivision or,e hereof, such of its assets as are lawfully available for the purchase of shares of its stock, tnd aa amount of its capital not, exceeding the spital. represented by the; shares so purchased; provided, y 3 that the effect of anycsuch purchase:and application.of capital-thereto.shalbygtybe.to reduce the' actual
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hhh H-g value of the assets of the corporation to an amount less than the total amount of its debts and liabilities, l3' plus the amount of its capital reduced by the amount of capital so applied. The use of capital to such "e extent for such purpose shall not be deemed to be the declaration or payment of a dividend or a distri-bution of assets within the meaning of section fifty-eight of the stock corporation law, or constitute a violation of section six hundred sixty-four of the penal law. The shares of stock so purchased may b held or disposed of by the corporation; provided, that the corporation, by resolu directors, may retire any shares so purchased, and shall retire any Aereof purchased through the applica-tion of capital, by filing a certificate entitled " Certificate of reduction of capital of (name of corpor: Mon) pursuant to section twenty-one of the stock corporation law". Such certificate shall contain the s f prescribed in'section thirty-six for certificates under subdivision two and subdivision four of section th,irty-five to effect a reduction pf: capital and the elimination of previously authorized shares,. j &y. reduction of capital stock in conformity therewith. Such certificate shall be subscribed and acknowledge 1 by the president or a vice-president and the secretary or an assistant secretary who shall make and anne 'S an affidavit that they have been authorized to execute and file such certificate by resolution o directors, adopted at a directors' meeting duly called and held on a date specified in such affidavit. There 4 shall be annexed to such certificate an' affidavit of the president or a vice-president and also an affidavit of the treasurer or a majority of the directors stating that the actual value of the assets of the corporation is not less than thelotal amount of the debts and liabilities of the corporation plus the proposed amount of its capital. Such" certificate'shall be filed as provided in section thirty-eight'in' respect' of certificates under section thirty-six. Upon the filing of such certificate the shares so purchased shall be eliminated from the authorized capital stock or number of shares of the corporation, and the capital of the corporation shall be reduced by an amount equal to the amount of capital represented by the shares so retired. The capital of the corporation represented by any shares of stock purchased or otherwise acquired by it pursuant to any provision of this section shall be determined as provided in subdivision two of section twenty-nine. If the corpo:ation shall fail to make an offer within the time specified in subdivision one hereof, 3. or if the objecting stockholder shall fail to accept an offer from the corporation within twenty days after the mailing or delivery thereof, either such stockholder or the corporation may petition the supreme court, at any special. term thereof held in the judicial district in which the principal office of the corporation is 9 situated, to determine the'value of such stock. Such petition shall be made on five days' notice,'and shall be made returnabletiri sEch court +on"tMfiftieth day after' the last day on which:the demand of 4he ~ i i objecting stockholddfo'r payment liilght ha've been made, or,if the rules or practice of suclicoitrt do'not i !' y{! permit such petitioh to be' risaile ie't'drnable on such fiftieth day, then it shall be made returnable on, the first succeeding day'pfrmitted by snch'rdles'or practice. If more than one such proceeding'shall have been ~
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instituted, the cotiri, in itidis'cretion, niay,' dr on motiori of the corporation shall,: enter'an'oider directing i' i >rn ,'hI h the consolidation of all'pr'oceedings hnd making stich directions with respect to the conduct of the~consoli- ' dated proceeding 'as'.it shall'dee'rn'prohEDTwo or more objecting l I d e any such proceedin'g" 4. The court shall determine which of the objecting stockholders have complied with the provisions of section fourteen?section twenty, subdivision eleven of section thirty-eight, subdivision seven of section eighty-five, s,ectiori%ight'y-seven or subdivision seven of section ninety-one, whicheve shall be applicable, and thereby bedomI8ntitled to have'the"value of their stock determined. If the court shall find that any of the objecting stockholders are sointitled, it shall proceed to determine the value'of ch'eir stock, or shall l( appoint an' appraiser'to"determitie such valuel and may make such directions in regard to'the proceeding ~ i as it shall deem proper. If the court shall determine such value without appointing an appraiser, judgment shall be entered against the corporation and in favor of each objecting stockholder party to the proceeding for the value of his stock so determined.' If an appraiser shall be appointed, he shall be duly sworn honestly and faithfully to discharge his duties and thereupon shall proceed to determine the value of such stock, considering all relevant legal evidence which may be produced, and shall cause a stenographic transcript of the testimony to be taken. For all the purposes of this section, such value shall be determined IL as of the close of; business on'th@ day before the:taking of the stockholders' vote on the action to which p, ( 3 ]" objection' was made, excluding any apIsreciation or depreciation-directly or indirectly consequent upon b ,3 d 2 q .y[ i. L! i d..}Zy Mh, ,i [ 4 g 0 3 bhbh 4L ' . hh yo (, eg. [ggg
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- .t il such action or the proposal thrreof. The gpprtiser may require any person to attend before him as a
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e conferred upon ^!{ witness, and shall have the same powers with respect to all proceedings before him as ar. e person authorized by la,w to hear, try or determine a matter in relation to which proof may be taken. j The cppraiser's report shall state his conclusion as to the value of the stock and his reasons therefor, and he shall file such report, together with the transcript of testimony and all exhibits' which shall have been offered, with the court within sixty days after his appointment, or within such later period as the { court may direct, and shall serve one copy of the report by mail on each party to the proceeding. The court shall consider the report in the light of all the relevant legal evidence and, on motion of any party t; the proceeding, shall enter an order confirming, modifying or rejecting the same and, if confirming or modifying, directing the time within which payment shall be made. If.the appraiser's determination of j value be confirmed or modified by such order, judgment shall be entered thereon against the corporation 2 d and in favor of each objecting stockholder party to the proceeding for the value of his stock so determined. If,the appraiser's determination of value be rejected, the court in its discretion (a) may determine the 1 value of the stock.to.the; objecting stockholders in the light of a!! the relevant legal evidence, in which 1 ) , event judgment shallibe(entered on such deterrnination as in the case of judgment entered upon an order [ a confirming an appraiser's' determination of value, or (b) may remit the proceeding to the appraiser, making such directior.s with respect to further proceedings as may be deemed proper. Any judgment for kj the value of stock entered under this subdivision shall include interest from the date of the stock vot3 on the action to which. objection was made; provided, that if, taking into consideration the price which the corporation may1have offered to pay for such stock, the financial statements furnished to the stockholder, and such other circumstances as the court may deem ralevant, the court shall find that the 3 action of the stockholder in failing to accept such offer was arbitrary and vexatious or not in good faith, { no interest shall be allowed. The payment of any such judgment shall not be deemed to be the declaration or payment of a dividend or a distribution of assets within the meaning of section fifty-eight of the stock corporttion law, nor consti.tute a violation of section six hundred sixty-four of the penal law. j j j 5. The costs and expenses of the proceeding shall be determined by the court and shall be assessed t agiinst the corporation; provided, that all or any part of such costs and expenses may be apportioned j and assessed as the court may deem equitable against any or all of the objecting stockholder parties I to the proceeding to whom the corporation shall have made an offer to pay for the stock if, taking j into consideration the value of the etock as determined in the proceeding, the; financial statements fur- ] j nished.to such stockholders,-and such other circumstances as the court may, deem relevant, the court shall find that thel action {of 'sucli~ stockholders in failing to accept such offer was arbitrary and vexa-tious cr~ not in good (faith,.; Such expenses shall include reasonable compensation.to and the reasonable expenses of the : appraiser; but shall exclude the fees and expenses of counsel and of ' xperts retained j by rny party; pr,ovided,]haj,if the.value of the stock as determined in the proceeding;shall mater e ' exceed whatever amount;the corporation may have offered to pay therefor, or.if no offer shall have ,.been made, thEcourQinlts[ discretion, may award to any stockholder party to the proceeding such ~ as the court may 'dete'rmine to' be reasonable compensation to any expert or experts retained b I stockholder in the proceeding if the court shall find the retaining of such expert or experts to have been reasonably necessary, i 6. Any stockholder demanding payment for his stock shall have no right to receive any dividends i or distributions! payable to holders of such stock of record after the close of business on the day preceding the date of the stockholders' vote in favor of the action to which such objection was made and upon such. vote shall cease to have any other rights of a stockholder of the corporation w to such stock, except ;the' right to receive payment for the value thereof as in! this section provided: cnd no such.demarid may be withdrawn unless the corporation shall co nsent thereto. If, however, such demand shall have been withdrawn upon such consent, or if no petition for the appointment an appraiser to determine the value of the stock of such stockholder shall have been made within the time herein provided, or if a court of competent jurisdiction shall determine that such stockhold ' made shall be abandoned or rescinded, the status of such stockho er is ration thereupon shall be restored, without prejudice, however, to any corperate proceedings whic corpo- @7 n,j '4 3 g a: : t L; 4 7 u$pr ii cf f]I ( J m, 46%k k 1
m 4* h5 I I f '* may have.beenitaken during the, interim; provided, that..such stockholder shall thereupon be entitled to receive 'any dividends, distributions or other rights -to which he.would. have been or twould have become entitled had he not demanded payment for his stock.
- 7. The corporation shall not be; required to make payment for the stock of any objecting stock-holder as in this section provided unless, simultaneously, the certificate or. certificates representing such stock.shall be surrendered to it, duly indorsed in blank and in proper form'for transfer, accompanied by evidence of payment of all requisite stock transfer:itaxes; and any. judgment ~ entered pursuant to s
Upon receipt,of such payment, the objecting stockholder'shall cease to this section shall!so provide. a c have,acy; interest.in the corporation or,its assets by; reason;of his o*nershipio!.the stock'so pai.d 'for, and,such: stock may be held or tiisposedAf;by the corporation;,providedbthatrif. payment.for the st6ck p of an,objectingi:stockholderashallthave beenademanded irpconsequenc' 'of gefionif ak6n oh a<mirgsr or e t iq consolidation'> pursuant to sections eighty-five, eighty+six<or-nindtywine,othersharesfor*otlierasecuritiis of:the resultingior ' surviving corporation'into,which the shares of the: objecting.dtockholder vlodid have i t { been converted,had no objection been made shall,1unless the' certificate.ofumstgerior consolidation shall otherwise provide, be deemed to have. beeti dulycissued in:accordance 'with the'termscof suchicer-tificaterand reacquired by,the resulting,or surviving corporation) and:may beiheldro'r: disposed,cf.by it freenof: any. preemptive rights of: stockholderse iThe corpotution, by!res61ution of its board 'of diiectors, i} may: retire.any shares of stock acquired by.itiupon the! payment ofiaejtidgm6nt for the;valu'e thereof, by filing a certificate as provided in subdivision two hereof for the' retirement of shares purchasediursdant to.an offer; except, that the affidavits of the president'or a<vice president and of the treastiier or a I majority of the board of directors, specified in the said subdivisionttWo;irelative it' 'the astual 'value o of the assets of the corporation, shall not be required. vUpon the filing 6f such 'certifiEati the shares so acquired shall be eliminated from the authorized capital stock di number'df shires of the ' corpora-t 1 tion, and the capital of the corporation shall be'. reduced by.ari~ainount' equal to the amodnt of capital r,epresented,by. the shares so retired. ,t.,, , 8l'Within twenty days after the last day olivihich a'. demand 'forMy. ment'might'have been made; 1 each' stockholder demanding payment,'unle'ss the offef'of jhe corporatio'n 'o$a[thirefor shall have been' t sub' it his stock certificafe"oFe'ertific'at'es' t'o 'th2'"' fi fqt; not;ition therein of'ths hede~piedd shalli m fiel 6f ticli'dem'aNd ; arid any stockholdirTrh6'sks1Ffair'stts%11 Be%Wt#Ee"rell'ef'by 'this i - sectibtfp'rovided dhlidicourt of coni) Etch"t jd'iisi;lidtiohTforYd41.' il flicidtit"ca$s'eMown',sliall othirl i i [ wise di'rfet.'Upon hny subsequent trarisfeis'of su'ch'hiogk' on the b'dok's'o 'ifli corjorftfoijirior to payment ~ de'd,'the"fihWE Mtb or' certificates'issuEl therefor! b/tlie"doFpor'atidifoithe'value thereof,"afhirsiti$fopdf 4hEki'ginal i jectik'li61Ee"r %f 7Edh"s5ck, and,' 4 slidl' be'afhihillkr hbtatios,'tbg'etlier With"ths"nairie l r alitii46 clip'afmeht"shall have been,made,:hoirais@fereE'of any'su'cif'st'ddk sha i 6haiac'te/ whatsoever by' reason there6f'ex'!cg'>tIili tights'of'the'8rIk.rliifobj5clinisl6Ekliolder; E I r ~.e, me+ - 'wcv a - .n. ..e .am
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- 9. ' In any case where the action witti i;espect' to which'ob'jEftloit was made shall'have been taken f
~ i d' ]' with',~or authorized by, the consent of stockholders without a meciin$ the actual'date upon which the 4 written consent to such action is first obtained from the requisite numbe' of stockholdeis', or, in case such r action shall have been taken pursuant to section eighty-five of the' stock l corporation law, the date of filing , j th,'ejertificate of o,wnership as in such,sec' tion;provided,Ishall _for all iurposes he deemed to e.the date of t b the stock'hol,ders' vote referred to in subdipsions four andsix 6f this section.. ( , ;.18 1
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