Agreement And Plan Of Merger

AGREEMENT AND PLAN OF MERGER


By and Among


Arrow Electronics, Inc.


AFG Acquisition Company


and


Gates/FA Distributing, Inc.


Dated as of June 24, 1994


___________________________________________________________


Page 16 of 88 Pages 2


TABLE OF CONTENTS


Page
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ARTICLE 1

THE MERGER
1.1 Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.2 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.3 Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2


ARTICLE 2

CONVERSION OF SECURITIES
2.1 Conversion of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . 3
(a) Capital Stock of Sub . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(b) Cancellation of Treasury Stock and Parent-Owned
Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(c) Conversion Ratio for the Company Common Stock . . . . . . . . . . . . . . 3 2.2 Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Exchange Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(c) Distribution with Respect to Unexchanged Shares . . . . . . . . . . . . . 5
(d) No Further Ownership Rights in the Company
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(e) No Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(f) Termination of Exchange Fund . . . . . . . . . . . . . . . . . . . . . . . 6
(g) No Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6


ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.1 Corporate Organization and Authority of the Company . . . . . . . . . . . . . 7 3.2 Subsidiaries and Equity Investments . . . . . . . . . . . . . . . . . . . . . 8 3.3 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.4 No Violation; Consents and Approvals . . . . . . . . . . . . . . . . . . . . . 9 3.5 SEC Reports and Financial Statements of the Company . . . . . . . . . . . . . 10 3.6 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . 10 3.7 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3.8 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3.9 Title to Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11


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Page 17 of 88 Pages 3 3.10 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.11 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.12 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.13 No Material Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 3.14 Absence of Change or Event . . . . . . . . . . . . . . . . . . . . . . . . 15 3.15 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 3.16 Compliance With Law and Other Instruments . . . . . . . . . . . . . . . . . 17 3.17 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 3.18 Affiliate Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 3.19 Customers and Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . 23 3.20 Absence of Questionable Payments . . . . . . . . . . . . . . . . . . . . . 23 3.21 Information Supplied. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 3.22 Opinion of Financial Advisor. . . . . . . . . . . . . . . . . . . . . . . . 24 3.23 Vote Required. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 3.24 Accounting Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 3.25 Company Not an Interested Shareholder or a
30% Shareholder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 3.26 Section 203 of the DGCL Not Applicable . . . . . . . . . . . . . . . . . . 25 3.27 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25


ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 4.2 Corporate Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 4.3 No Violation; Consents and Approvals . . . . . . . . . . . . . . . . . . . . 26 4.4 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 4.5 SEC Reports and Financial Statements of Parent . . . . . . . . . . . . . . . 27 4.6 Information Supplied . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28


ARTICLE 5

CERTAIN COVENANTS AND AGREEMENTS
OF THE COMPANY AND PARENT
5.1 Conduct of the Company's Business Prior to the
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 5.2 Conduct of Parent's Business Prior to the Closing
Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 5.3 Preparation of S-4 and the Proxy Statement. . . . . . . . . . . . . . . . . 30 5.4 Letter of the Company's Accountants. . . . . . . . . . . . . . . . . . . . . 30 5.5 Legal Conditions to Merger. . . . . . . . . . . . . . . . . . . . . . . . . 30 5.6 Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 5.7 Stock Exchange Listing. . . . . . . . . . . . . . . . . . . . . . . . . . . 31 5.8 Stockholders' Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 5.9 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 5.10 Broker's and Finder's Fees . . . . . . . . . . . . . . . . . . . . . . . . 32 5.11 Access to Information and Confidentiality . . . . . . . . . . . . . . . . . 33 5.12 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 5.13 Additional Agreements; Best Efforts . . . . . . . . . . . . . . . . . . . . 35 5.14 No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35


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Page 18 of 88 Pages


4 5.15 Advice of Changes; SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . 35 5.16 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 5.17 Company Option Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 5.18 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37


ARTICLE 6

CONDITIONS PRECEDENT
6.1 Conditions to Each Party's Obligation to Effect
the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(a) Stockholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(b) NYSE Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(c) Other Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(d) S-4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(e) No Injunctions or Restraints . . . . . . . . . . . . . . . . . . . . . . . 38
(f) No Governmental Actions . . . . . . . . . . . . . . . . . . . . . . . . . 38
(g) Pooling Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(h) Tax Free Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . 38 6.2 Conditions to Obligations of Parent and Sub . . . . . . . . . . . . . . . . . . 38
(a) Representations and Warranties; Performance of
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(b) Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(c) No Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(d) Consents Under Agreements . . . . . . . . . . . . . . . . . . . . . . . . 39
(e) Letter from Company Affiliates . . . . . . . . . . . . . . . . . . . . . . 39
(f) Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . 39
(g) No Amendments to Resolutions . . . . . . . . . . . . . . . . . . . . . . . 39 6.3 Conditions to Obligations of the Company . . . . . . . . . . . . . . . . . . . 40
(a) Representations and Warranties; Performance of
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(b) Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(c) Consents Under Agreements . . . . . . . . . . . . . . . . . . . . . . . . 40
(d) No Amendments to Resolutions . . . . . . . . . . . . . . . . . . . . . . . 40


ARTICLE 7

TERMINATION AND AMENDMENT
7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 7.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 7.3 Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 7.4 Amendment and Modification . . . . . . . . . . . . . . . . . . . . . . . . . . . 43


ARTICLE 8

GENERAL PROVISIONS
8.1 Nonsurvival of Representations, Warranties and
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43


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Page 19 of 88 Pages 5 8.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 8.4 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 8.5 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 8.6 Entire Agreement; No Third Party Beneficiaries;
Rights of Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 8.7 No Remedy in Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . 45 8.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 8.9 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45


Exhibit 5.6 Affiliate Agreement


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Page 20 of 88 Pages 6


AGREEMENT AND PLAN OF MERGER


AGREEMENT AND PLAN OF MERGER, dated as of June 24, 1994, by and among Arrow Electronics, Inc., a New York corporation ("Parent"), AFG Acquisition Company, a Delaware corporation and a wholly owned subsidiary of Parent ("Sub"), and Gates/FA Distributing, Inc., a Delaware corporation (the "Company").


WHEREAS, the respective Boards of Directors of Parent, Sub and the Company deem it advisable and in the best interests of their respective stockholders to consummate, and have approved, the business combination transaction provided for herein in which Sub would merge with and into the Company and the Company would become a wholly owned subsidiary of Parent (the "Merger");


WHEREAS, for Federal income tax purposes, it is intended that the Merger qualify as a reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code");


WHEREAS, for accounting purposes, it is intended that the Merger shall be accounted for as a pooling of interests;


WHEREAS, concurrently with the execution of this Agreement and as an inducement to Parent and Sub to enter into this Agreement, (i) the Company and Parent have entered into a stock option agreement dated the date hereof (the "Option Agreement") providing for the purchase by Parent of newly-issued shares of the Company's Common Stock, (ii) each of Cheyenne Software, Inc. and Dennis Gates has on the date hereof granted to Parent an irrevocable proxy to vote the shares of the Company's Common Stock owned by such stockholders, respectively, to approve the Merger; and


WHEREAS, Parent, Sub and the Company desire to make certain representations, warranties and agreements in connection with the Merger and also to prescribe various conditions to the Merger.


Page 21 of 88 Pages 7
NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, the parties hereto agree as follows:


ARTICLE 1


THE MERGER


1.1 Effective Time of the Merger. Subject to the provisions of this Agreement, a certificate of merger (the "Certificate of Merger") shall be duly prepared, executed and acknowledged by the Surviving Corporation (as defined in Section 1.3) and thereafter delivered to the office of the Secretary of State of the State of Delaware, for filing and thereafter recorded, as provided in the Delaware General Corporation Law (the "DGCL"), as soon as practicable on or after the Closing Date (as defined in Section 1.2). The Merger shall become effective upon the filing of the Certificate of Merger with the office of the Secretary of State of the State of Delaware or at such time thereafter as is provided in the Certificate of Merger (the "Effective Time").


1.2 Closing. The closing of the Merger (the "Closing") will take place at the offices of Winthrop, Stimson, Putnam & Roberts, One Battery Park Plaza, New York, New York, at 10:00 A.M. (local time) on a date to be specified by Parent and the Company, which shall be no later than the second business day after satisfaction or waiver of the latest to occur of the conditions set forth in Article 6 (other than Sections 6.2(a)(i) and 6.3(a)(i) and the delivery of the officer's certificates referred to in Sections 6.2(a) and 6.3(a)) (the "Closing Date") or at such other place, time and date as may be agreed upon in writing by Parent and the Company.


1.3 Effects of the Merger. (a) At the Effective Time (i) the separate existence of Sub shall cease and Sub shall be merged with and into the Company (Sub and the Company are sometimes referred to herein as the "Constituent Corporations" and the Company is sometimes referred to herein as the "Surviving Corporation"), (ii) the Certificate of Incorporation of the Company as in effect immediately prior to the Effective Time shall be the Certificate of Incorporation of the Surviving Corporation and (iii) the By-laws of the Company as in effect immediately prior to the Effective Time shall be the By-laws of the Surviving Corporation.


(b) The Merger shall have the effects set forth in Sections 259 and 261 of the DGCL.


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Page 22 of 88 Pages


8
ARTICLE 2


CONVERSION OF SECURITIES


2.1 Conversion of Capital Stock. As of the Effective Time, by virtue of the Merger and without any further action on the part of the holder of any shares of Common Stock, par value $.01 per share, of the Company (the "Company Common Stock") or capital stock of Sub:


(a) Capital Stock of Sub. Each issued and outstanding share of the capital stock of Sub shall be converted into and become one fully paid and nonassessable share of Common Stock, par value $.01 per share, of the Surviving Corporation.


(b) Cancellation of Treasury Stock and Parent-Owned Stock. All shares of the Company Common Stock that are owned by the Company as treasury stock and any shares of the Company Common Stock owned by Parent, Sub or any wholly owned Subsidiary of the Company or Parent shall be canceled and retired and shall cease to exist and no stock of Parent or other consideration shall be delivered in exchange therefor. All shares of Common Stock, par value $1.00 per share, of Parent (the "Parent Common Stock"), if any, owned by the Company shall remain unaffected by the Merger. As used in this Agreement, the word "Subsidiary" means, with respect to any party, any corporation or other organization, whether incorporated or unincorporated, of which (i) such party or any other Subsidiary of such party is a general partner (excluding partnerships, the general partnership interests of which held by such party or any Subsidiary of such party do not have a majority of the voting interest in such partnership) or (ii) at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the Board of Directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such party or by any one or more of its Subsidiaries, or by such party and one or more of its Subsidiaries.


(c) Conversion Ratio for the Company Common Stock. Subject to Section 2.2(e), each issued and outstanding share of the Company Common Stock (other than shares to be canceled in accordance with Section 2.1(b)) shall be converted into the right to receive the number (the "Conversion Ratio") of shares of Parent Common Stock equal to a fraction the numerator of which is $22.50 and the denominator of which is the average closing price on the New York Stock Exchange, Inc. (the "NYSE") of one share of Parent Common Stock over the twenty-day trading period ending two trading days before the Closing Date (the "Parent Stock Price"). Each share of the Parent Common Stock issued pursuant to the Merger shall entitle the holder thereof to the corresponding number of rights (the "Parent Rights") to purchase shares of Participating Preferred Stock of Parent pursuant to the Rights Agreement dated as of March 2, 1988, as amended, between Parent


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Page 23 of 88 Pages 9 and Chemical Bank (formerly Manufacturers Hanover Trust Company), as Rights Agent (the "Parent Rights Agreement"). All references in this Agreement to the Parent Common Stock to be received pursuant to the Merger shall be deemed to include the Parent Rights. All such shares of the Company Common Stock, when so converted, shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and each holder of a certificate representing any such shares shall cease to have any rights with respect thereto, except the right to receive the shares of the Parent Common Stock and any cash in lieu of fractional shares of the Parent Common Stock to be issued or paid in consideration therefor upon the surrender of such certificate in accordance with Section 2.2, without interest.


2.2 Exchange of Certificates.


(a) Exchange Agent. As of the Effective Time, Parent shall deposit with Chemical Bank or such other bank or trust company designated by Parent (and reasonably acceptable to the Company) (the "Exchange Agent"), for the benefit of the holders of shares of the Company Common Stock, for exchange in accordance with this Article 2, through the Exchange Agent, certificates representing the shares of the Parent Common Stock (such shares of the Parent Common Stock, together with any dividends or distributions with respect thereto, being hereinafter referred to as the "Exchange Fund") issuable pursuant to Section 2.1 in exchange for outstanding shares of the Company Common Stock.


(b) Exchange Procedures. As soon as reasonably practicable after the Effective Time, the Exchange Agent shall mail to each holder of record of a certificate or certificates which immediately prior to the Effective Time represented outstanding shares of the Company Common Stock (the "Certificates") whose shares where converted pursuant to Section 2.1 into the right to receive shares of the Parent Common Stock (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent and shall be in such form and have such other provisions as Parent and the Company may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for certificates representing shares of the Parent Common Stock. Upon surrender of a Certificate for cancellation to the Exchange Agent or to such other agent or agents as may be appointed by Parent and Sub, together with such letter of transmittal, duly executed, the holder of such Certificate shall be entitled to receive in exchange therefor a certificate representing that number of whole shares of the Parent Common Stock which such holder has the right to receive pursuant to the provisions of this Article 2 (and the dividends or distributions and cash in lieu of fractional shares as contemplated by Sections 2.2(c) and 2.2(e), respectively), and the Certificate so surrendered shall forthwith be canceled. In the event of a transfer of ownership of the Company Common Stock


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Page 24 of 88 Pages 10 which is not registered in the transfer records of the Company, a certificate representing the proper number of shares of the Parent Common Stock may be issued to a transferee if the Certificate representing the Company Common Stock is presented to the Exchange Agent, accompanied by all documents required to evidence and effect such transfer and by evidence that any applicable stock transfer taxes have been paid. Until surrendered as contemplated by this Section 2.2, each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the certificate representing shares of the Parent Common Stock and cash in lieu of any fractional shares of the Parent Common Stock as contemplated by this Section 2.2.


(c) Distribution with Respect to Unexchanged Shares. No dividends or other distributions declared or made after the Effective Time with respect to the Parent Common Stock with a record date after the Effective Time shall be paid to the holder of any unsurrendered Certificate with respect to the shares of the Parent Common Stock represented thereby and no cash payment in lieu of fractional shares shall be paid to any such holder pursuant to Sec ...