AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
THL TRANSACTION I CORP.,
A DELAWARE CORPORATION,
AND
SYRATECH CORPORATION,
A DELAWARE CORPORATION,
DATED AS OF OCTOBER 23, 1996
TABLE OF CONTENTS
PAGE
ARTICLE I
THE MERGER
SECTION 0.1 The Merger 1
SECTION 0.2 Closing 1
SECTION 0.3 Effective Time 2
SECTION 0.4 Effects of the Merger 2
SECTION 0.5 Certificate of Incorporation; By-Laws
SECTION 0.6 Directors 2
SECTION 0.7 Officers 2
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS
1.
SECTION 1.1 Effect on Capital Stock 2
SECTION 1.2 Company Common Stock Elections 4
SECTION 1.3 Proration 5
SECTION 1.4 Stock Plans 5
SECTION 1.5 Exchange of Certificates 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
2.
SECTION 2.1 Organization, Standing and Corporate Power 8
SECTION 2.2 Subsidiaries 9
SECTION 2.3 Capital Structure 9
SECTION 2.4 Authority; Noncontravention 10
SECTION 2.5 SEC Documents; Undisclosed Liabilities 11
SECTION 2.6 Information Supplied 12
SECTION 2.7 Absence of Certain Changes of Events 12
SECTION 2.8 Litigation; Labor Matters:
Compliance with Laws 12
SECTION 2.9 Employee Benefit Plans 13
SECTION 2.10 Tax Returns and Tax Payments 14
SECTION 2.11 Intentionally Omitted 15
SECTION 2.12 Material Contracts 15
SECTION 2.13 Brokers 15
SECTION 2.14 Opinion of Financial Advisor 15
SECTION 2.15 Board Recommendation 15
SECTION 2.16 Required Company Vote 16
SECTION 2.17 State Takeover Statutes 16
(i)
SECTION 2.18 Intellectual Property 16
SECTION 2.19 Related Party Transactions 16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THL I
3.
SECTION 3.1 Organization, Standing and Corporate Power 17
SECTION 3.2 Subsidiaries 17
SECTION 3.3 Capital Structure 17
SECTION 3.4 Authority; Noncontravention 17
SECTION 3.5 Brokers 18
SECTION 3.6 Financing 18
SECTION 3.7 Information Supplied 18
SECTION 3.8 Management Participation 18
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO MERGER
4.
SECTION 4.1 Conduct of Business of the Company 18
SECTION 4.2 Changes in Employment Arrangements 21
SECTION 4.3 Severance 21
SECTION 4.4 WARN 21
SECTION 4.5 Tax Elections 21
SECTION 4.6 Redemption of Rights 21
ARTICLE VI
ADDITIONAL AGREEMENTS
5.
SECTION 5.1 Preparation of Form S-4 and Proxy Statement;
Stockholder Meeting 21
SECTION 5.2 Access to Information; Confidentiality 22
SECTION 5.3 Best Efforts 23
SECTION 5.4 Indemnification 24
SECTION 5.5 Public Announcements 25
SECTION 5.6 No Solicitation 25
SECTION 5.7 Affiliates 26
ARTICLE VII
CONDITIONS PRECEDENT
6.
SECTION 6.1 Conditions to Each Party's Obligation 26
SECTION 6.2 Conditions to Obligations of THL I 27
SECTION 6.3 Conditions to Obligation of the Company 28
(ii)
Page
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
7.
SECTION 7.1 Termination 28
SECTION 7.2 Effect of Termination 29
SECTION 7.3 Amendment 29
SECTION 7.4 Extension; Waiver 29
SECTION 7.5 Procedure for Termination, Amendment
Extension or Waiver 30
ARTICLE IX
GENERAL PROVISIONS
8.
SECTION 8.1 Nonsurvival of Representations
and Warranties 30
SECTION 8.2 Fees and Expenses 30
SECTION 8.3 Notices 31
SECTION 8.4 Definitions 32
SECTION 8.5 Interpretation 32
SECTION 8.6 Counterparts 33
SECTION 8.7 Entire Agreement; No Third-Party Benefits 33
SECTION 8.8 GOVERNING LAW 33
SECTION 8.9 Assignment 33
SECTION 8.10 Enforcement 33
SECTION 8.11 Schedules 33
EXHIBIT A Amended Certificate of Incorporation of
the Company A-1
EXHIBIT B Form of Company Affiliate Letter B-1
(iii)
Page
DEFINED TERMS
SECTION PAGE
Affiliate Section 9.4(a) 33
Cash Price Section 2.1(c) 3
Certificate of Merger Section 1.3 2
Certificates Section 2.2(a) 4
Closing Section 1.1 1
Closing Date Section 1.2 1
Company Preamble 1
Company Common Stock Recitals 1
Company Plans Section 3.9(a) 10
Company Stock Options Section 2.2(a) 4
Company Stockholder Approved Recitals 1
Confidentiality Agreement Section 6.2(a) 23
Consolidated Group Section 3.10 13
Costs Section 6.4 25
DGCL Section 1.1 1
Disclosure Schedule Section 3.1 6
Dissenting Shares Section 2.1(c) 3
D&O Insurance Section 6.4 25
Effective Time Section 1.3 2
Environmental Claim Section 3.11(i) 15
Environmental Laws Section 3.11(i) 16
Environmental Permits Section 3.11(i) 15
ERISA Section 3.9(a) 10
Exchange Act Section 2.2(a) 4
Exchange Fund Section 2.3(e) 5
Exercise Period Section 2.2(a) 3
Governmental Entity Section 3.4 8
Hazardous Materials Section 3.11(i) 16
HSR Act Section 3.4 8
Indemnified Parties Section 6.4 25
Knowledge Section 9.4(b) 33
Liens Section 3.2 7
Management Section 2.1(c) 3
Management Rollover Share Section 2.1(c) 3
Material Adverse Change Section 9.4(c) 34
Material Averse Effect Person Section 9.4(c) 34
Material Contracts Section 3.11(i) 16
Merger Recitals 1
Merger Consideration Section 2.1(c) 3
Permitted Changes Section 5.1(d) 20
Person Section 9.4(d) 34
Proxy Statement Section 3.4 8
Recent SEC Documents Section 3.5 9
Rights Agreement Section 5.6 22
SEC Section 3.2 6
(iv)
SEC Documents Section 3.5 9
SEC Financial Statements Section 3.5 9
Securities Act Section 3.3 7
Silver Section 1.1 1
Stock Plans Section 2.2(a) 4
Stockholders Meeting Section 6.1(c) 22
Subsidiaries Section 3.2 6
Subsidiary Section 9.4(e) 34
Tax Return Section 3.10 14
Taxes Section 3.10 14
THL Section 6.2(a) 23
THL I Preamble 1
Transactions Proposal Section 6.6 26
WARN Section 5.4 22
(v)
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is entered into
as of this 23rd day of October, 1996 by and between THL Transaction I
Corp., a Delaware corporation ("THL I"), and Syratech Corporation, a
Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of the Company
and THL I have determined that the merger of THL I with and into the
Company (the "Merger"), upon the terms and subject to the conditions set
forth in this Agreement, would be advisable and in the best interests of their
respective companies and stockholders, and such Boards of Directors have
approved such Merger, pursuant to which holders of shares of common
stock, par value $.01 per share, of the Company ("Company Common
Stock") issued and outstanding immediately prior to the Effective Time will
be entitled to either the right (A) to retain, at their election and subject to
the terms hereof, a portion of their Company Common Stock or (B) to
receive cash, other than as set forth herein;
WHEREAS, the Merger and this Agreement require the vote of a
majority of the issued and outstanding shares of the Company Common
Stock for the approval thereof (the "Company Stockholder Approval");
WHEREAS, THL I and the Company desire to make certain
representations, warranties, covenants and agreements in connection with
the Merger and also to prescribe various conditions to the Merger; and
WHEREAS, it is intended that the Merger be recorded as a
recapitalization for financial reporting purposes;
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, the
parties agree as follows:
ARTICLE I
1.
THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the Delaware General
Corporation Law (the "DGCL"), THL I shall be merged with and into the
Company at the Effective Time. Upon the Effective Time, the separate
existence of THL I shall cease, and the Company shall continue as the
surviving corporation and shall continue under the name "Syratech Corpora-
tion."
1.2 Closing. Unless this Agreement shall have been terminated
and the transactions herein contemplated shall have been abandoned
pursuant to Section 8.1
(1)
and subject to the satisfaction or waiver of the
conditions set forth in Article VII, the closing of the Merger (the "Closing")
will take place at 10:00 a.m. on the second business day after satisfaction
or waiver of the conditions set forth in Article VII (the "Closing Date"), at
the offices of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇, unless another date, time or place is agreed to in writing by
the parties hereto.
1.3 Effective Time. On the Closing Date, the parties shall file a
certificate of merger and other appropriate documents (the "Certificate of
Merger") executed in accordance with the relevant provisions of the DGCL
and shall make all other filings or recordings required under the DGCL in
connection with the Merger. The Merger shall become effective at such
time as the Certificate of Merger is duly filed with the Secretary of State of
the State of Delaware, or at such other time as is specified in the Certificate
of Merger in accordance with the DGCL and as THL I and the Company
shall agree should be specified in the Certificate of Merger (the time the
Merger becomes effective being the "Effective Time").
1.4 Effects of the Merger. The Merger shall have the effects set
forth in the DGCL.
1.5 Certificate of Incorporation; By-Laws. (a) The Certificate
of Incorporation of the Company, as in effect immediately prior to the
Effective Time, shall be amended so as to read in its entirety in the form
set forth as Exhibit A hereto, and, as so amended, until thereafter further
amended as provided therein and under the DGCL, it shall be the
Certificate of Incorporation of the Company following the Merger.
(b) The By-laws of the Company as in effect at the Effective
Time shall be the By-laws of the Company following the Merger until
thereafter changed or amended as provided therein or by applicable law.
1.6 Directors. Those persons listed on Schedule 1.6 hereto shall
be the directors of the Company following the Merger, until the earlier of
their resignation or removal or until their respective successors are duly
elected and qualified, as the case may be.
1.7 Officers. The officers of the Company at the Effective Time
shall be the officers of the Company following the Merger, until the earlier
of their resignation or removal or until their respective successors are duly
elected and qualified, as the case may be.
2. ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS
(2)
2.1 Effect on Capital Stock. As of the Effective Time, by virtue
of the Merger and without any action on the part of the holder of any
shares of Company Common Stock or any shares of capital stock of THL I:
(a) Common Stock of THL I. The shares of common stock of
THL I issued and outstanding immediately prior to the Effective Time, shall
be converted into such aggregate number of shares of Company Common
Stock as equals 2,410,600 less the number of shares of Company Common
Stock retained, consistent with Section 2.1(c), by members of Management
of the Company other than ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("Management Rollover
Shares"). A person shall be deemed a member of "Management" if listed
as an executive officer in the Company's 1996 Proxy Statement.
(b) Cancellation of Treasury Stock. Each share of Company
Common Stock that is owned by the Company or by any wholly owned
subsidiary of the Company shall automatically be canceled and retired and
shall cease to exist, and no cash or other consideration shall be delivered or
deliverable in exchange therefor.
(c) Conversion (or Retention) of Company Common Stock.
Except as otherwise provided herein and subject to Section 2.5, each issued
and outstanding share of Company Common Stock shall be converted into
the following (the "Merger Consideration"):
(i) subject to Sections 2.2(a) and 2.3, for each share of
Company Common Stock with respect to which an election to retain
Company Common Stock has been effectively made and not revoked or
lost (all such shares other than the Management Rollover Shares are
sometimes referred to herein as the "Electing Shares"), the right to retain
one fully paid and nonassessable share of Company Common Stock (a
"Non-Cash Election Share");
(ii) for 714,400 shares of Company Common Stock held
by ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, the right to retain the same number of fully
paid and nonassessable shares of Company Common Stock ("▇▇▇▇▇▇▇▇
Rollover Shares"), and for each other share of Company Common Stock
held by ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, the right to receive in cash from the
Company following the Merger the Cash Price; and
(iii) for each share of Company Common Stock (other
than Dissenting Shares, ▇▇▇▇▇▇▇▇ Rollover Shares, Management Rollover
Shares and Electing Shares which become the right to Non-Cash Election
Shares), the right to receive in cash from the Company following the
Merger an amount equal to $32.00 (the "Cash Price").
(d) Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, shares of Company Common Stock issued and
outstanding immediately prior to the Effective Time held by a holder who
has the right to demand payment for and an appraisal of such shares in
accordance with Section 262 of the DGCL (or
(3)
any successor provision)
("Dissenting Shares") shall not be converted into the right to receive
Merger Consideration unless such holder fails to perfect or otherwise
withdraws, forfeits or loses such holder's right to such payment or
appraisal, if any. If, after the Effective Time, such holder fails to perfect
or withdraws, forfeits or loses any such right to appraisal, each share of
such holder shall be treated as a share that had been converted as of the
Effective Time into the right to receive Merger Consideration in accordance
with this Section 2.1. The Company shall give prompt notice to THL I of
any demands received by the Company for appraisal of shares of Company
Common Stock, and THL I shall have the right to participate in all
negotiations and proceedings with respect to such demands. The Company
shall not, except with the prior written consent of THL I, which consent
shall not be unreasonably withheld, make any payment with respect to, or
settle or offer to settle, any such demands.
(e) Cancellation and Retirement of Company Common Stock. As
of the Effective Time, all shares of Company Common Stock (other than
▇▇▇▇▇▇▇▇ Rollover Shares and shares referred to in Sections 2.1(c)(i) and
2.1(d)) issued and outstanding immediately prior to the Effective Time,
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 of Company Common Stock shall, to the extent such
Certificate represents such shares, cease to have any rights with respect
thereto, except the right to receive the Merger Consideration applicable
thereto, upon surrender of such Certificate in accordance with Section 2.5.
2.2 Company Common Stock Elections. (a) Each person who,
on or prior to the Election Date referred to in Section 2.2(c) below, is a
record holder of shares of Company Common Stock (other than ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇) will be entitled, with respect to up to 25% of such
holder's shares, to make an unconditional election (a "Non-Cash Election")
on or prior to such Election Date to retain Non-Cash Election Shares, on
the basis hereinafter set forth.
(b) Prior to the mailing of the Proxy Statement, the Company
shall appoint a banker or trust company reasonably acceptable to THL I to
act as exchange agent (the "Exchange Agent") for the payment of the
Merger Consideration and payments in respect of Company Stock Options
as contemplated by Section 2.4.
(c) Subject to any required clearance by the SEC, the Company
shall prepare and mail a form of election (the "Form of Election"), which
form shall be subject to the reasonable approval of THL I, with the Proxy
Statement to the record holders of Company Common Stock as of the
record date for the Stockholders Meeting, which Form of Election shall be
used by each record holder of shares of Company Common Stock who
wishes to elect to retain Non-Cash Election Shares for shares of Company
Common Stock held, subject to the provisions of Section 2.3 hereof, by
such holder. The Company will use its best efforts to make the Form of
Election and the Proxy Statement available to all persons who become
holders of Company Common Stock during the period between such record
date and the
(4)
Election Date referred to below. Any such holder's election to
retain Non-Cash Election Shares shall have been properly made only if the
Exchange Agent shall have received at its designated office, by 5:00 p.m.,
New York City time on the business day (the "Election Date") next
preceding the date of the Stockholders Meeting, a Form of Election
properly completed and signed and accompanied by Certificates for the
shares of Company Common Stock to which such Form of Election relates,
duly endorsed in blank or otherwise in form acceptable for transfer on the
books of the Company (or by an appropriate guarantee of delivery of such
certificates as set forth in such Form of Election from a firm which is a
member of a registered national securities exchange or of the National
Association of Securities Dealer, Inc. or a commercial bank or trust
company having an office or correspondent in the United States, provided
such certificates are in fact delivered to the Exchange Agent within five
NYSE trading days after the date of execution of such guarantee of
delivery).
(d) Any Form of Election may be revoked by the stockholder
submitting it to the Exchange Agent only by written notice received by the
Exchange Agent (i) prior to 5:00 p.m., New York City time on the Election
Date or (ii) after the date of the Proxy Statement, if (and to the extent that)
the Exchange Agent is legally required to permit revocations and the
Effective Time shall not have occurred prior to such date. In addition, all
Forms of Election shall automatically be revoked if the Exchange Agent is
notified in writing by THL I and the Company that the Merger has been
abandoned. If a Form of Election is revoked, the Certificate or Certificates
(or guarantees of delivery, as appropriate) for the shares of Company
Common Stock to which such Form of Election relates shall be promptly
returned to the stockholder submitting the same to the Exchange Agent.
(e) The determination of the Exchange Agent shall be binding
whether or not elections to retain Non-Cash Election Shares have been
properly made or revoked pursuant to this Section 2.2 with respect to shares
of Company Common Stock and when elections and revocations were
received by it. If the Exchange Agent determines that any election to retain
Non-Cash Election Shares was not properly made with respect to shares of
Company Common Stock, such shares shall be treated by the Exchange
Agent as shares which were not Non-Cash Election Shares at the Effective
Time, and such shares shall be exchanged in the Merger for cash pursuant
to Section 2.1(c)(iii). The Exchange Agent shall also make all
computations as to the allocation and the proration contemplated by Sec-
tion 2.3, and any such computation shall be conclusive and binding on the
holders of shares of Company Common Stock. The Exchange Agent may,
with the mutual agreement of THL I and the Company, make such rules as
are consistent with this Section 2.2 for the implementation of the elections
provided for herein as shall be necessary or desirable fully to effect such
elections.
2.3 Proration.
(a) Notwithstanding anything in this Agreement to the contrary,
the aggregate number of shares of Company Common Stock (other than
▇▇▇▇▇▇▇▇ Rollover
(5)
Shares and Management Rollover Shares) to be converted
into the right to retain Company Common Stock at the Effective Time shall
not exceed 781,250.
(b) If the number of Electing Shares exceeds 781,250, then each
Electing Share shall be converted into the right to retain Non-Cash Election
Shares or receive cash in accordance with the terms of Section 2.1(e) in the
following manner:
(i) A proration factor (the "Non-Cash Proration Factor")
shall be determined by dividing 781,250 by the total number of
Electing Shares.
(ii) The number of Electing Shares covered by each Non-Cash
Election to be converted into the right to retain Non-Cash
Election Shares shall be determined by multiplying the Non-Cash
Proration Factor by the total number of Electing Shares covered
by such Non-Cash Election, rounded down to the nearest whole
number.
(iii) All Electing Shares, other than those shares
converted into the right to receive Non-Cash Election Shares in
accordance with Section 2.3(b)(ii), shall be converted into cash
(on a consistent basis among shareholders who made the election
referred to in Section 2.1(c)(i), pro rata to the number of shares
as to which they made such election) as if such shares were not
Electing Shares in accordance with the terms of
Section 2.1(c)(iii).
(c) If the number of Electing Shares is less than 781,250, then
all Electing Shares shall be converted into the right to retain Company
Common Stock in accordance with the terms of Section 2.1(c)(i).
2.4 Stock Plans. (a) As soon as practicable following the date
of this Agreement, the Board of Directors of the Company (or, if
appropriate, the Compensation and Stock Option Committee of the Board of
Directors, which administers the 86/93 Stock Plans and the 95 Stock Plan
(each as defined below)) shall adopt such resolutions or take such other
actions as may be required to effect the following:
(i) deliver written notice at least 30 days prior to the
Effective Time to each holder of an employee stock option to
purchase shares of Company Common Stock granted under the
1986 Key Employees' Stock Option Plan and the 1993 Key
Employee's Stock Option Plan (collectively, the "86/93 Stock
Plans" and the options issued thereunder the "86/93 Options"), to
the effect that at the Effective Time each 86/93 Option that shall
remain unexercised and outstanding immediately prior to the
Effective Time shall (x) become fully vested as a consequence of
the Merger and (y) be terminated and canceled in exchange for a
payment from the Company (subject to applicable withholding
taxes) immediately following the Effective Time equal to the
product of (1) the total number of shares of Company Common
Stock subject to the 86/93 Option times
(6)
(2) the excess, if any, of
the Cash Price over the exercise price per share of Company
Common Stock subject to such 86/93 Option;
(ii) deliver written notice at least 30 days prior to the
Effective Time to each holder of an employee stock option to
purchase shares of Company Common Stock granted under the
1995 Key Employees' Stock Option Plan (the "95 Stock Plan"
and the options issued thereunder the "95 Options"), to the effect
that, at the Effective Time each 95 Option, whether or not then
vested and exercisable, that shall remain unexercised and
outstanding immediately prior to the Effective Time shall be
terminated and cancelled without consideration, unless the holder
of such 95 Stock Option consents in writing to the amendment of
such 95 Option to provide the holder thereof with the right, and
only the right, to receive in lieu of the existing right to receive
shares of Company Common Stock upon exercise and tending of
the exercise price under such 95 Option, a conditional deferred
payment from the Company (subject to applicable withholding
taxes) (the "Conditional Deferred Payment") equal to the product
of (1) the total number of shares of Company Common Stock
subject to such 95 Option times (2) the excess, if any, of the Cash
Price over the exercise price per share of the Company Common
Stock subject to such 95 Option, which Conditional Deferred pay-
ment shall be paid to such holder in equal installments on each
remaining vesting date of such 95 Option, subject to and
conditioned upon, such 95 Option holder's continued employment
with the Company on such vesting dates.
(iii) prior to the Effective Time, make any adjustments to
the terms of the 86/93 Options and 95 Options that may be
necessary to effect the transactions contemplated in Sections 2.4(i)
and 2.4(ii) above; and
(iv) except as provided herein or otherwise agreed to by
the parties, cause the 86/93 Stock Plans and 95 Stock Plan and
any other plan, program or arrangement providing for the
issuance or grant of any other interest in respect of the capital
stock of the Company or any subsidiary to terminate as of the
Effective Time.
(b) The Company hereby represents and warrants that upon
taking of the actions specified above, immediately following the Effective
Time, no holder of a Company Stock Option nor any participant in any
Stock Plan shall have the right thereunder to acquire equity securities of the
Company after the Merger.
2.5 Exchange of Certificates.
(a) Exchange Agent. As soon as reasonably practicable as of or
after the Effective Time, the Company shall deposit with the Exchange
Agent, for the benefit of the holders of shares of Company Common Stock
and holders of Company Stock Options, for exchange in accordance with
this Article II, the cash portion of the Merger Consideration, an amount of
cash sufficient to satisfy obligations to holders
(7)
of Company Stock Options
as contemplated by Section 2.4 and certificates for shares of Company
Common Stock sufficient to satisfy obligations as contemplated by
Section 2.1.
(b) Exchange Procedures. (i) Promptly after the Effective
Time, the Exchange Agent shall mail to each record holder, as of the
Effective Time, of an outstanding certificate or certificates which
immediately prior to the Effective Time represented shares of Company
Common Stock (the "Certificates") or of an outstanding Company Stock
Option, a letter of transmittal and instructions for use in effecting the
surrender of the Certificates or of outstanding Company Stock Options for
payment therefor (or such other documents as may reasonably be required
in connection with such surrender) in substantially the form to be agreed by
THL I and the Company prior thereto. Thereafter, each holder of an
outstanding Certificate or Certificates or Company Stock Option shall, upon
surrender to the Exchange Agent of such Certificate or Certificates or
Company Stock Option and acceptance thereof by the Exchange Agent, be
entitled to receive the amount of cash and/or other Merger consideration
into which such Certificate or Certificates or outstanding Company Stock
Option surrendered shall have been converted pursuant to this Agreement.
(ii) Intentionally Omitted.
(iii) After the Effective Time, there shall be no further transfer
on the records of the Company or its transfer agent of Certificates, and if
Certificates are presented to the Company for transfer, they shall be
canceled against delivery of cash or a certificate or certificates representing
▇▇▇▇▇▇▇▇ Rollover Shares, Management Rollover Shares or Non-Cash
Electing Shares, as applicable. If cash or a certificate or certificates, as
applicable, is to be remitted to a name other than that in which the
Certificate surrendered for exchange is registered, it shall be a condition of
such exchange that the Certificate so surrendered shall be properly
endorsed, with signature guaranteed, or otherwise in proper form for
transfer and that the person requesting such exchange shall pay to the Com-
pany or its transfer agent any transfer or other taxes required or establish to
the satisfaction of the Company or its transfer agent that such tax has been
paid or is not applicable. Until surrendered as contemplated by this Section
2.5(b), each Certificate shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender the Merger
Consideration applicable thereto as contemplated by Section 2.1. No
interest will be paid or will accrue on any cash payable as Merger
Consideration.
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions with respect to Company Common Stock
with a record date after the Effective Time shall be paid to the holder of
any unsurrendered Certificate until the surrender of such Certificate in
accordance with this Article II. Following surrender of any such
Certificate, there shall be paid to the holder of the Certificate the amount of
dividends or other distributions, if any, with a record date after the
Effective Time theretofore paid with respect to shares of Company
Common Stock.
(8)
(d) No Further Ownership Rights. All cash paid upon the
surrender for exchange of Certificates or Company Stock Options in
accordance with the terms of this Article II shall be deemed to have been
issued and paid in full satisfaction of all rights pertaining to such shares.
(e) Termination of Exchange Fund. Any portion of the Merger
Consideration deposited with the Exchange Agent pursuant to this Section
2.5 (the "Exchange Fund") which remains undistributed to the holders of
the Certificates or Company Stock Options for twelve months after the
Effective Time shall be delivered to the Company, upon demand, and any
holders of shares of Company Common Stock or of Company Stock
Options prior to the Merger who have not theretofore complied with this
Article II shall thereafter look only to the Company and only as general
creditors thereof for payment of their claim for the Merger Consideration
and/or cash, if any, to which such holders may be entitled.
(f) No Liability. None of THL I, the Company or the Exchange
Agent shall be liable to any person in respect of any consideration from the
Exchange Fund delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. If any Certificates or
Company Stock Options shall not have been surrendered prior to the later
of (i) one year after the Effective Time and (ii) immediately prior to such
date on which any cash, if any, in respect of such Certificate or Company
Stock Options would otherwise escheat to or become the property of any
Governmental Entity, any such cash, dividends or distributions in respect of
such Certificate or Company Stock Options shall, to the extent permitted by
applicable law, become the property of the Company, free and clear of all
claims or interest of any person previously entitled thereto.
(g) Investment of Exchange Fund. The Exchange Agent shall
invest any cash included in the Exchange Fund, as directed by the
Company, on a daily basis. Any interest and other income resulting from
such investments shall be paid to the Company.
ARTICLE III
3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to THL I as
follows (subject to such exceptions as may be disclosed in the SEC
Documents or the Disclosure Schedule delivered to THL I by the Company
within five (5) business days of the date hereof in form and substance
reasonably acceptable to THL I (the "Disclosure Schedule")):
3.1 Organization, Standing and Corporate Power. Each of the
Company and each of its Subsidiaries is duly organized, validly existing and
in good standing under the laws of the jurisdiction in which it is
incorporated and has the requisite corporate power and authority to carry on
its business as now being conducted. Each of the Company and each of its
Subsidiaries is duly qualified or licensed to do
(9)
business and is in good
standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so
qualified or licensed (individually or in the aggregate) would not have a
Material Adverse Effect with respect to the Company. The Company has
delivered to THL I complete and correct copies of the certificate of
incorporation and by-laws of the Company, as amended to the date of this
Agreement.
3.2 Subsidiaries. The only direct or indirect subsidiaries of the
Company (other than subsidiaries of the Company that would not constitute
in the aggregate a "Significant Subsidiary" within the meaning of Rule 1.02
of Regulation S-X of the Securities and Exchange Commission (the "SEC"))
are those listed in Section 3.2 of the Disclosure Schedule (the
"Subsidiaries"). All the outstanding shares of capital stock of each such
wholly owned Subsidiary have been validly issued and are fully paid and
nonassessable and are owned (of record and beneficially) by the Company,
by another wholly owned Subsidiary of the Company or by the Company
and another such wholly owned Subsidiary, free and clear of all pledges,
claims, liens, charges, encumbrances and security interests of any kind or
nature whatsoever (collectively, "Liens"). Except for the ownership
interests set forth in Section 3.2 of the Disclosure Schedule, the Company
does not own, directly or indirectly, any capital stock or other ownership
interest in any corporation, partnership, business association, joint venture
or other entity material with respect to the Company.
3.3 Capital Structure. The authorized capital stock of the
Company consists of (i) 20,000,000 shares of Company Common Stock,
par value $.01 per share, and (ii) 500,000 shares of preferred stock.
Subject to any Permitted Changes there are, as of September 30, 1996: (i)
8,676,631 shares of Company Common Stock issued and outstanding; (ii)
218 shares of Company Common Stock held in the treasury of the
Company; (iii) 606,000 shares of Company Common Stock reserved for
issuance upon exercise of authorized but unissued Company Stock Options
pursuant to the Stock Plans; (iv) 348,100 shares of Company Common
Stock issuable upon exercise of outstanding Company Stock Options and
(v) shares of preferred stock reserved for issuance in connection with the
Rights Agreement. Section 3.3 of the Disclosure Schedule sets forth the
exercise price for the outstanding Company Stock Options. Except as set
forth above, as of September 30, 1996, no shares of capital stock or other
equity securities of the Company are issued, reserved for issuance or
outstanding. All outstanding shares of capital stock of the Company are,
and all shares which may be issued pursuant to the Stock Plans will be,
when issued, duly authorized, validly issued, fully paid and nonassessable
and not subject to preemptive rights. There are no outstanding bonds,
debentures, notes or other indebtedness or other securities of the Company
having the right to vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which stockholders of the
Company may vote. Except as set forth above, there are no outstanding
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Company or any of
its Subsidiaries is a party or by which any of them is bound obligating the
Company or any of its Subsidiaries to issue, deliver or sell, or cause
(10)
to be
issued, delivered or sold, additional shares of capital stock or other equity
or voting securities of the Company or any of its subsidiaries or obligating
the Company or any of its subsidiaries to issue, grant, extend or enter into
any such security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. Other than with respect to indebtedness
disclosed in the most recent balance sheet of the Company included in the
SEC Documents, no indebtedness for borrowed money of the Company or
its subsidiaries contains any restriction upon the incurrence of indebtedness
for borrowed money by the Company or any of its subsidiaries or restricts
the ability of the Company or any of its subsidiaries to grant any Liens on
its properties or assets. Other than the Company Stock Options and other
than as disclosed in Section 3.3 of the Disclosure Schedule, (i) there are no
outstanding contractual obligations, commitments, understandings or
arrangements of the Company or any of its subsidiaries to repurchase,
redeem or otherwise acquire or make any payment in respect of any shares
of capital stock of the Company or any of its subsidiaries and (ii) to the
knowledge of the Company, there are no irrevocable proxies with respect to
shares of capital stock of the Company or any subsidiary of the Company.
Section 3.3 of the Disclosure Schedule sets forth the record and, to the
knowledge of the Company, beneficial ownership of, and voting power in
respect of, the capital stock of the Company held by the Company's
directors, officers and stockholders owning five percent or more of the
Company's outstanding common stock. Except as set forth above, there are
no agreements or arrangements pursuant to which the Company is or could
be required to register shares of Company Common Stock or other
securities under the Securities Act of 1933, as amended (the "Securities
Act"), or other agreements or arrangements with or among any security
holders of the Company with respect to securities of the Company.
3.4 Authority; Noncontravention. The Company has the requisite
corporate and other power and authority to enter into this Agreement and,
subject to the Company Stockholder Approval, to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject to the Company
Stockholder Approval. This Agreement has been duly executed and
delivered by the Company and constitutes a valid and binding obligation of
the Company, enforceable against the Company in accordance with its
terms, except as may be limited by (1) any bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights, (2) general equity principles, (3) the law of
fraudulent conveyance, (4) public policy, (5) applicable law relating to
fiduciary duties and (6) judicial imposition of any implied covenant of good
faith and fair dealing. Except as disclosed in Section 3.4 of the Disclosure
Schedule, the execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated by this Agreement and
compliance with the provisions hereof will not, conflict with, or result in
any breach or violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination, cancellation or
acceleration of or "put" right with respect to any obligation or to loss of a
material benefit under, or result in the
(11)
creation of any Lien upon any of the
properties or assets of the Company or any of its subsidiaries under, (i) the
Certificate of Incorporation, as amended, or By-laws, as amended, of the
Company or the comparable organizational documents of any of its
subsidiaries, (ii) any loan or credit agreement, note, note purchase
agreement, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to the
Company or any of its subsidiaries or their respective properties or assets
or (iii) subject to the governmental filings and other matters referred to in
the following sentence, any judgment, order, decree, statute, law,
ordinance, rule, regulation or arbitration award applicable to the Company
or any of its subsidiaries or their respective properties or assets, other than,
in the case of clauses (i), (ii) and (iii), any such conflicts, breaches,
violations, defaults, rights, losses or Liens that individually or in the
aggregate would not have a Material Adverse Effect with respect to the
Company or would not prevent, hinder or materially delay the ability of the
Company to consummate the transactions contemplated by this Agreement if
not cured or waived by the Closing Date. No consent, approval, order or
authorization of, or registration, declaration or filing with, or notice to,
any Federal, state or local government or any court, administrative agency
or commission or other governmental authority or agency, domestic or
foreign (a "Governmental Entity"), is required by or with respect to the
Company or any of its subsidiaries in connection with the execution and
delivery of this Agreement by the Company or the consummation by the
Company of the transactions contemplated hereby, except for (i) the filing
of a pre-merger notification and report form by the Company under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), (ii) the filing with the SEC of (x) a proxy statement relating to
the Company Stockholder Approval (such proxy statement as amended or
supplemented from time to time, the "Proxy Statement"), (y) the
registration statement on Form S-4 to be filed with the SEC by the
Company in connection with the retention of Company Common Stock of
the Company in the Merger pursuant to Article II (the "Form S-4") and (z)
such reports under the Exchange Act as may be required in connection with
this Agreement and the transactions contemplated by this Agreement, (iii)
the filing of the Certificate of Merger with the Secretary of State of the
State of Delaware and appropriate documents with the relevant authorities
of other states in which the Company is qualified to do business and (iv)
such other consents, approvals, orders, authorizations, registrations,
declarations, filings or notices as are set forth in Schedule 3.4 of the
Disclosure Schedule.
3.5 SEC Documents; Undisclosed Liabilities. The Company has
filed all required reports, schedules, forms, statements and other documents
with the SEC since December 16, 1992 (collectively, and in each case
including all exhibits and schedules thereto and documents incorporated by
references therein, and as amended, the "SEC Documents"). As of their
respective dates, the SEC Documents complied in all material respects with
the requirements of the Securities Act, or the Exchange Act, as the case
may be, and the rules and regulations of the SEC promulgated thereunder
applicable to such SEC Documents, and none of the SEC Documents
(including any and all financial statements included therein) as of such dates
contained any untrue statement of a material fact or omitted to state a
material
(12)
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The consolidated financial statements of the
Company included in all SEC Documents filed since January 1, 1996 (the
"SEC Financial Statements") comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with
generally accepted accounting principles (except, in the case of unaudited
consolidated quarterly statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods involved, except as may be
indicated in the notes thereto) and fairly present the consolidated financial
position of the Company and its consolidated subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for
the periods then ended (subject, in the case of unaudited quarterly
statements, to normal year-end audit adjustments). Except as set forth in
the SEC Documents and except as disclosed in Section 3.5 of the Disclosure
Schedule, at the date of the most recent audited financial statements of the
Company included in the SEC Documents, neither the Company nor any of
its subsidiaries had, and since such date neither the Company nor any of
such subsidiaries has incurred, any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) which, individually or
in the aggregate, would be required to be disclosed in a balance sheet
prepared in accordance with generally accepted accounted principles and
would reasonably be expected to have a Material Adverse Effect with
respect to the Company except liabilities incurred in the ordinary and usual
course of business and consistent with past practice and liabilities incurred
in connection with the transactions contemplated by this Agreement.
3.6 Information Supplied. None of the information supplied or
to be supplied by the Company for inclusion or incorporation by reference
in (i) the Form S-4 will, at the time the Form S-4 is filed with the SEC,
and at any time it is amended or supplemented or at the time it becomes
effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and (ii) the
Proxy Statement will, at the date it is first mailed to the Company's
stockholders or at the time of the Stockholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading,
except that no representations or warranty is made by the Company with
respect to information supplied by THL I or any affiliate of THL I for
inclusion in the Proxy Statement. The Form S-4 will, as of its effective
date, and the prospectus contained therein will, as of its date, comply as to
form in all material respects with the requirements of the Securities Act and
the rules and regulations promulgated thereunder. The Proxy Statement
will comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations promulgated thereunder.
3.7 Absence of Certain Changes or Events. Except as disclosed
in the SEC Documents, since the date of the most recent financial
statements included in
(13)
such SEC Documents, the Company has conducted
its business only in the ordinary course consistent with past practice, and
there is not and has not been: (i) any Material Adverse Change with
respect to the Company; (ii) any condition, event or occurrence which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect or give rise to a Material Adverse Change with
respect to the Company; (iii) any event which, if it had taken place
following the execution of this Agreement, would not have been permitted
by Section 5.1 without the prior consent of THL I; or (iv) any condition,
event or occurrence which would reasonably be expected to prevent, hinder
or materially delay the ability of the Company to consummate the
transactions contemplated by this Agreement.
3.8 Litigation; Labor Matters: Compliance with Laws. (a)
Except as disclosed in Section 3.8 of the Disclosure Schedule or in the SEC
Documents, there is (i) no suit, action or proceeding or investigation
pending and, (ii) to the knowledge of the Company, no suit, action or
proceeding or investigation threatened against or affecting the Company or
any of its subsidiaries that, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect with respect to
the Company or prevent, hinder or materially delay the ability of the
Company to consummate the transactions contemplated by this Agreement
nor is there any judgment, decree, injunction, rule or order or any Govern-
mental Entity or arbitrator outstanding against the Company or any of its
Subsidiaries having, or which in the future could have, any such effect.
(b) Except as disclosed in Section 3.8 of the Disclosure
Schedule, (i) neither the Company nor any of its Subsidiaries is a party to,
or bound by, any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization; (ii)
there is no strike, work stoppage or other labor dispute involving it or any
of its subsidiaries pending or, to its knowledge, threatened; and (iii) the
Company is not liable for any severance pay or other payments to any
employee or former employee arising from the termination of employment
under any benefit or severance policy, practice, agreement, plan, or
program of the Company, nor will the Company have any liability which
exists or arises, or may be deemed to exist or arise, under any applicable
law or otherwise, as a result of or in connection with the transactions
contemplated hereunder or as a result of the termination by the Company of
any persons employed by the Company or any of its subsidiaries on or prior
to the Effective Time.
(c) The conduct of the business of each of the Company and each
of its subsidiaries complies with all statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees or arbitration awards applicable thereto,
except for violations or failures so to comply, if any, that, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect with respect to the Company.
3.9 Employee Benefit Plans.
(14)
(a) General. Except as listed on Section 3.9 of the Disclosure
Schedule, neither the Company nor any of its "ERISA Affiliates" (as
defined in the Internal Revenue Code of 1986, as amended) is a party to,
participates in, contributes to or has any liability or contingent liability
with respect to:
(i) any "employe welfare benefit plan" or "employee pension
benefit plan" as those terms are respectively defined in
sections 3(1) and 3(2) of ERISA, or
(ii) any retirement or deferred compensation plan, incentive
compensation plan, stock plan, unemployment
compensation plan, vacation pay, severance pay, bonus or
benefit arrangement, medical insurance or hospitalization
program or any other fringe benefit arrangements for any
current or former employee, director, consultant or agent,
whether pursuant to contract, arrangement, custom or
informal understanding, which does not constitute an
"employee benefit plan" (as defined in section 3(3) of
ERISA).
(b) Plan Documents and Reports. A true and correct copy of
each of the plans, arrangements, and agreements listed on Section 3.9 of the
Disclosure Schedule, (referred to collectively hereinafter in this Agreement
as the "Employee Benefit Plans"), each as in effect on the date hereof, has
been supplied or made available to THL I. A true and correct copy of the
most recent annual report, summary plan description, and Internal Revenue
Service determination letter with respect to each Employee Benefit Plan, to
the extent applicable, has been supplied or made available to THL I, and
there has been no material changes in the financial condition in the
respective plan from that stated in the annual reports supplied.
(c) Compliance With Laws; Liabilities. As to all Employe
Benefit Plans:
(i) All Employee Benefit Plans that are employee pension
benefit plan (as defined in section 3(2) of ERISA) comply
in form and in operation with all applicable requirements
of section 401(a) and 501(a) of the Code; there have been
no amendments to such plans which are not the subject of
a determination letter issued with respect thereto by the
Internal Revenue Service or for which application for such
letter has not been, or will not be, timely filed with the
Internal Revenue Service; and no event has occurred
which would likely give rise to disqualification of any such
plan under such sections or to a tax under section 511 of
the Code.
(ii) There have been no non-exempt "prohibited transactions"
(as described in section 406 of ERISA or section 4975 of
the Code) with respect to any Employee Benefit Plan for
which the Company or any of its Subsidiaries may be
liable.
(15)
(iii) None of the payments contemplated by the Employee
Benefit Plans would, in the aggregate, constitute non-deductible
excess parachute payments as defined in section
280G of the Code.
(iv) No Employee Benefit plan is subject to Title IV of ERISA
and no plan is a multiemployer plan (as defined in Section
3(37) of ERISA).
(v) Each Employee Benefit Plan which constitutes a "group
health plan" (as defined in section 607(1) of ERISA of
section 4980(g)(2) of the Code), including any plans of
current and former Affiliates which must be taken into
account under sections 4980B and 414(t) of the Code or
section 601 of ERISA, has been operated in material
compliance with applicable la, including coverage
requirements of section 4980B of the Code and section 601
of ERISA to the extent such requirements are applicable.
(vi) Except as reflected in the SEC Financial Statements,
neither the Company nor any ERISA Affiliate has any
liability or contingent liability for providing, under any
Employee Benefit Plan or otherwise, any post-retirement
medical or life insurance benefits, other than Statutory
liability for providing group health plan continuation
coverage under Part 6 of Title I of ERISA and section
4980B of the Code.
(vii) Accruals in an amount determined by the Seller's actuaries
for all obligations under the Employee Benefit Plans,
arrangements and agreements are reflected in the SEC
Financial Statements.
(viii) Except as set forth on Section 3.9 of the Disclosure
Schedule, there has been no act or omission that would
impair the ability of the Company (or any successor
thereto) unilaterally to amend or terminate any Employee
Benefit Plan.
3.10 Tax Returns and Tax Payments. Except as disclosed in
Section 3.10 of the Disclosure Schedule, the Company and each of its
subsidiaries, and any consolidated, combined, unitary or aggregate group
for Tax purposes of which the Company or any of its subsidiaries is or has
been a member (a "Consolidated Group") (i) has timely filed all Tax
Returns required to be filed by it on or before the date hereof, other than
any filings which the failure to make in a timely manner would not have a
Material Adverse Effect on the Company and (ii) has paid all Taxes shown
thereon to be due and has provided adequate reserves in its financial
statements for any Taxes that have not been paid, whether or not shown as
being due on any returns. To the knowledge of Company, all such Tax
Returns are correct and complete in all materials respects. As used herein,
"Taxes" shall mean all taxes of any kind, including, without limitation,
those on or measured by or referred to as income, gross receipts, sales,
use, ad valorem, franchise, profits,
(16)
license, withholding, back-up
withholding, payroll, employment, excise, severance, stamp, occupation,
premium, value added, property or windfall profits taxes, customs, duties
or similar fees, assessments or charges of any kind whatsoever, together
with any interest and any penalties, additions to tax or additional amounts
imposed by any governmental authority, domestic or foreign. As used
herein, "Tax Return" shall mean any return, report or statement required to
be filed with any governmental authority with respect to Taxes.
3.11 Intentionally Omitted.
3.12 Material Contracts. The Company has provided or made
available to THL I (i) true and complete copies of all written contracts,
agreements (including, but not limited to, distribution agreements and
licensing agreements), commitments, arrangements, leases (including with
respect to personal property), policies and other instruments to which it or
any of its Subsidiaries is a party or by which it or any such Subsidiary is
bound which (A) require payments to be made in excess of $250,000 per
year for goods and/or services, or (B) do not by their terms expire and are
not subject to termination within six months from the date of the execution
and delivery thereof and require payments to be made in excess of
$250,000 ("Material Contracts"), or (ii), with respect to such Material
Contracts that have not been reduced to writing, a written description
thereof, each of which is listed on Section 3.12 of the Disclosure Schedule.
Neither the Company nor any of its Subsidiaries is, or has received any
notice or has any knowledge that any other party is, in default in any
respect under any such Material Contract, except for those defaults which
would not reasonably be likely either individually or in the aggregate, to
have a Material Adverse Effect with respect to the Company; and there has
not occurred any event that with the lapse of time or the giving of notice or
both would constitute such a material default.
3.13 Brokers. No broker, investment banker, financial advisor
or other person, other ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., the fees and expenses of
which will be paid by the Company (pursuant to a fee agreement, a copy of
which has been provided to THL I), is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with
the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company.
3.14 Opinion of Financial Advisor. The Company has received
the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., as of October 22, 1996, to the effect
that the consideration to be received in the Merger by the Company's
stockholders (other than as contemplated by Sections 2.1(b), 2.1(c)(ii) and
2.1(d)) is fair to the holders of the Company Common Stock from a
financial point of view.
3.15 Board Recommendation. The Board of Directors of the
Company, at a meeting duly called and held, has (a) determined that this
Agreement and the transactions contemplated hereby, taken together, are
advisable and in the best interests of the Company and its stockholders, and
(b) subject to the other provisions hereof, resolved to recommend that the
holders of the shares of Company Common
(17)
Stock approve this Agreement
and the transactions contemplated hereby, including the Merger.
3.16 Required Company Vote. The Company Stockholder
Approval, being the affirmative vote of a majority of the shares of the
Company Common Stock, is the only vote of the holders of any class or
series of the Company's securities necessary to approve this Agreement, the
Merger and the other transactions contemplated hereby.
3.17 State Takeover Statutes. The Board of Directors has taken
such action so that no state takeover statute or similar statute or regulation
of the State of Delaware (and, to the knowledge of the Company after due
inquiry, of any other state or jurisdiction) applies to this Agreement, the
Merger, or any of the other transactions contemplated hereby. Except as
set forth in Section 3.17 of the Disclosure Schedule, neither the Company
nor any of its subsidiaries has any rights plan, preferred stock or similar
arrangement which have any of the aforementioned consequences in respect
of the transactions contemplated hereby.
3.18 Intellectual Property. The Company and its subsidiaries
own or possess adequate licenses or other rights to use, all patents,
trademarks, trade names, service marks, copyrights, licenses and product
licenses or registrations (including applications for any of the foregoing), as
are used or useful in connection with its business the lack of which would
reasonably be expected to have a Material Adverse Effect with respect to
the Company; and none of the Company or any of its subsidiaries has (i)
received any written notice asserting that its patents, trademarks, trade
names, service marks, copyrights, or licenses violate the rights of others,
(ii) any knowledge of any conflict with the proprietary intellectual property
rights of any of the Company or its subsidiary therein or (iii) any knowl-
edge of any conflict by the Company or its subsidiary with the rights of
others therein which, in the case of any of the items described in clause (i),
(ii) or (iii) would have a Material Adverse Effect with respect to the
Company.
3.19 Related Party Transactions. Except as set forth in Section
3.19 of the Disclosure Schedule hereto, no director, officer, partner,
employee, "affiliate" or "associate" (as such terms are defined in Rule
12b-2 under the Exchange Act) or the Company or any of its Subsidiaries
(i) has borrowed any monies from or has outstanding any indebtedness or
other similar obligations to the Company or any of its Subsidiaries; (ii)
owns any direct or indirect interest of any kind in, or is a director, officer,
employee, partner, affiliate or associate of, or consultant or lender to, or
borrower from, or has the right to participate in the management,
operations or profits of, any person or entity which is (1) a competitor,
supplier, customer, distributor, lessor, tenant, creditor or debtor of the
Company or any of its Subsidiaries, (2) engaged in a business related to the
business of the Company or any of its Subsidiaries, (3) participating in any
transaction to which the Company or any of its Subsidiaries is a party or
(iii) is otherwise a party to any contract, arrangement or understanding with
the Company or any of its Subsidiaries.
(18)
ARTICLE IV
4.
REPRESENTATIONS AND WARRANTIES OF THL I
THL I hereby represents and warrants to the Company as
follows:
4.1 Organization, Standing and Corporate Power. THL I is a
corporation duly organized, validly incorporated and in good standing in the
State of Delaware and has the requisite corporate power and authority to
carry on its business as now being conducted. THL I is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties makes
such qualification or licensing necessary. THL I has delivered to the
Company complete and correct copies of its certificate of incorporation (or
other organizational documents) and by-laws.
4.2 Subsidiaries. THL I has no direct or indirect subsidiaries.
4.3 Capital Structure. The authorized capital stock of THL I
consists solely of shares of common stock, par value $.01 per share, all of
which have been validly issued, are fully paid and nonassessable. The
commitment letters attached hereto as Schedule 7.2(e) contemplate that the
Company will issue warrants to acquire, for nominal consideration, 6% of
the fully diluted equity of the Company following the Merger upon the
terms and to the parties set forth therein. Other than the common stock and
the warrant contemplated by the previous sentence, there are no outstanding
securities, rights or other agreements with respect to the capital stock of
THL I.
4.4 Authority; Noncontravention. THL I has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement by THL I and the consummation
by THL I of the transactions contemplated by this Agreement have been
duly authorized by all necessary corporate action on the part of THL I.
This Agreement has been duly executed and delivered by and constitutes a
valid and binding obligation of THL I, enforceable against THL I in
accordance with its terms. The execution and delivery of this Agreement
do not, and the consummation of the transactions contemplated by this
Agreement and compliance with the provisions of this Agreement will not,
conflict with, or result in any breach or violation of, or default (with or
without notice or lapse of time, or both) under or give rise to a right of
termination, cancellation or acceleration of or "put" right with respect to
any obligations or to loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or assets of THL I under,
(i) the certificate of incorporation or by-laws of THL I, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or license applicable
to THL I or its properties or assets or (iii) subject to the governmental
filings and other matters referred to in the following sentence, any
judgment, order, decree, statute, law, ordinance, rule, regulation or
arbitration award applicable to THL I or its properties or assets, other than,
in the
(19)
case of clauses (ii) and (iii), any such conflicts, breaches, violations,
defaults, rights, losses or Liens that individually or in the aggregate could
not have a material adverse effect with respect to THL I or could not
prevent, hinder or materially delay the ability of THL I to consummate the
transactions contemplated by this Agreement. No consent, approval, order
or authorization of, or registration, declaration or filing with, or notice to,
any Governmental Entity is required by or with respect to THL I in
connection with the execution and delivery of this Agreement by THL I or
the consummation by THL I of any of the transactions contemplated by this
Agreement, except for (i) the filing of a premerger notification and report
form under the HSR Act, (ii) the filing with the SEC of (y) the Proxy
Statement and the Form S-4 and (z) such reports under the Exchange Act as
may be required in connection with this Agreement and the transactions
contemplated hereby, (iii) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware and appropriate documents with
the relevant authorities of other states in which the Company is qualified to
do business and (iv) such other consents, approvals, orders, authorizations,
registrations, declarations, filings or notices as may be required under the
"takeover" or "blue sky" laws of various states.
4.5 Brokers. No broker, investment banker, financial advisor or
other person, other than ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. the fees and expenses of
which will be paid by THL I, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made
by or on behalf of THL I to its affiliates.
4.6 Financing. Schedule 7.2(e) attached hereto sets forth true
and complete copies of written documentation from third parties which
provides for financing in amounts sufficient to consummate the transactions
contemplated hereby as contemplated by Section 7.2(e). The terms and
conditions of such documentation are satisfactory to THL I.
4.7 Information Supplied. None of the information supplied or
to be supplied by THL I or its affiliates for inclusion or incorporation by
reference in (i) the Form S-4 will, at the time the Form S-4 is filed with the
SEC, and at any time it is amended or supplemented or at the time it
becomes effective under the Securities Act, contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and (ii)
the Proxy Statement will, at the time the Proxy Statement is first mailed to
the Company's stockholders or at the time of the Stockholders Meeting,
contain any untrue statement or a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading.
4.8 Management Participation. Schedule 4.8 hereto sets forth a
true and complete summary of all written arrangements, agreements and
understandings regarding the interests of and the terms of the participation
of Management in the transactions contemplated hereby including, without
limitation, with respect to the voting of shares of Company Common Stock
beneficially owned by Management
(20)
and the economic benefits which may
inure to Management as a result of the transactions contemplated hereby.
Except as set forth in Schedule 4.8, there is no material arrangement,
agreement or understanding regarding such interests or participation.
ARTICLE V
5.
COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO
MERGER
5.1 Conduct of Business of the Company. Except as set forth in
the Disclosure Schedule, during the period from the date of this Agreement
to the Effective Time (except as otherwise specifically required by the terms
of this Agreement), the Company shall, and shall cause its subsidiaries to,
act and carry on their respective businesses in the usual, regular and
ordinary course of business consistent with past practice and use its and
their respective reasonable best efforts to preserve intact their current
business organizations, keep available the services of their current officers
and employees and preserve their relationships with customers, suppliers,
licensors, licensees, advertisers, distributors and others having business
dealings with them and to preserve goodwill. Without limiting the
generality of the foregoing, except as set forth in the Disclosure Schedule
or otherwise contemplated by this Agreement, during the period from the
date of this Agreement to the Effective Time, the Company shall not, and
shall not permit any of its subsidiaries to, without the prior consent of
THL I, which shall not be unreasonably withheld:
(a) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, other than dividends and
distributions by a direct or indirect wholly owned subsidiary of the
Company to its parent;
(b) split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock (except pursuant to the Company's
Rights Agreement);
(c) purchase, redeem or otherwise acquire any shares of capital
stock of the Company or any of its subsidiaries or any other securities
thereof or any rights, warrants or options to acquire any such shares or
other securities, except for the acquisition of shares of Company Common
Stock from holders of Company Stock Options in full or partial payment of
the exercise price payable by such holder upon exercise of Company Stock
Options outstanding on the date of this Agreement (except pursuant to the
Company's Rights Agreement);
(d) authorize for issuance, issue, deliver, sell, pledge or
otherwise encumber any shares of its capital stock (except pursuant to the
Company's Rights Agreement) or the capital stock of any of its
subsidiaries, any other voting securities
(21)
or any securities convertible into,
or any rights, warrants or options to acquire, any such shares, voting
securities or convertible securities or any other securities or equity
equivalents (including without limitation stock appreciation rights) (other
than the issuance of Company Common Stock upon the exercise of
Company Stock Options outstanding on the date of this Agreement and in
accordance with their represent terms (such issuances, together with the
acquisitions of shares of Company Common Stock permitted under clause
(c) above, being referred to herein as "Permitted Changes");
(e) in the case of the Company, amend its articles of
organization, by-laws or other comparable charter or organizational
documents;
(f) acquire or agree to acquire by merging or consolidating with,
or by purchasing a substantial portion of the stock or assets of, or by any
other manner, any business or any corporation, partnership, joint venture,
association or other business organization or division thereof material to the
Company.
(g) other than as specifically permitted by Section 5.1 of the
Disclosure Schedule, sell, lease, license, mortgage or otherwise encumber
or subject to any Lien or otherwise dispose of any of its properties or assets
other than any such properties or assets the value of which do not exceed
$500,000 individually and $4,000,000 in the aggregate, except for (i)
transactions in the ordinary course of business consistent with past practice,
(ii) sales of inventory and entering into leases for showrooms and (iii) sales
or dispositions of buildings no longer usable by the Company in its
operations;
(h) incur any indebtedness for borrowed money or guarantee any
such indebtedness of another person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of the Company of
any of its subsidiaries, guarantee any debt securities of another person,
enter into any "keep well" or other agreement to maintain any financial
statement condition of another person or enter into any arrangement having
the economic effect of any of the foregoing, except for short-term
borrowings and for lease obligations, in each case incurred in the ordinary
course of business consistent with past practice;
(i) make any material loans, advances or capital contributions to,
or investments in, any other person, other than to the Company or any
direct or indirect wholly owned subsidiary of the Company;
(j) acquire or agree to acquire any assets that are material,
individually or in the aggregate, to the Company and its subsidiaries taken
as a whole, or make or agree to make any capital expenditures except
capital expenditures which, individually or in the aggregate, do not exceed
the amount budgeted therefor in the Company's annual capital expenditures
budget for 1996 and 1997 previously provided to THL I;
(22)
(k) pay, discharge or satisfy any claims (including claims of
stockholders), liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), except for the payment, discharge or
satisfaction, (a) of liabilities or obligations in the ordinary course of
business consistent with past practice or in accordance with their terms as in
effect on the date hereof or (b) claims settled or compromised to the extent
permitted by Section 5.1(o), or waive, release, grant, or transfer any rights
of material value or modify or change in any material respect any existing
license, lease, contract or other document, other than in the ordinary course
of business consistent with past practice;
(l) adopt a plan of complete or partial liquidation or resolutions
providing for or authorizing such a liquidation or a dissolution, merger,
consolidation, restructuring, recapitalization or reorganization;
(m) enter into any new collective bargaining agreement or any
successor collective bargaining agreement to any collective bargaining
agreement disclosed in Section 3.8(b) of the Disclosure Schedule except in
the ordinary course of business;
(n) change any material accounting principle used by it;
(o) settle or compromise any litigation (whether or not
commenced prior to the date of this Agreement) other than settlements or
compromises of litigation where the amount paid (after giving effect to
insurance proceeds actually received) in settlement or compromise is not
material to the Company; or
(p) authorize any of, or commit or agree to take any of, the
foregoing actions.
5.2 Changes in Employment Arrangements. Neither the
Company nor any of its subsidiaries shall adopt or amend (except as may be
required by law) any bonus, profit sharing, compensation, stock option,
pension, retirement, deferred compensation, employment or other employee
benefit plan, agreement, trust, fund or other arrangement (including any
Company Plan) for the benefit or welfare of any employee, director or
former director or employee, other than increases for individuals other than
officers and directors) in the ordinary course of business consistent with
past practice or increase the compensation or fringe benefits of any director,
employee or former director or employee or pay any benefit not required by
any existing plan, arrangement or agreement.
5.3 Severance. Neither the Company nor any of its subsidiaries
shall grant any new or modified severance or termination arrangement or
increase or accelerate any benefits payable under its severance or
termination pay policies in effect on the date hereof.
5.4 WARN. Neither the Company nor any of its subsidiaries
shall effectuate a "plant closing" or "mass layoff", as those terms are
defined in the Worker Adjustment and Retraining Notification Act of 1988
("WARN"), affecting in
(23)
whole or in part any site of employment, facility,
operating unit or employee of the Company or any subsidiary, without
notifying THL I or its affiliates in advance and without complying with the
notice requirements and other provisions of WARN.
5.5 Tax Elections. Except in the ordinary course of business
and consistent with past practice, neither the Company nor any of its
subsidiaries shall make any tax election or settle or compromise any
material federal, state, local or foreign Tax liability.
5.6 Redemption of Rights. Within ten (10) calendar days of the
date of this Agreement, the Company shall have redeemed all rights under,
or otherwise terminated without adverse consequences to the Company,
THL I or the consummation or the transactions contemplated hereby, the
Rights Agreement between the Company and State Street Bank and Trust
Company, dated as of October 26, 1992, as amended to date (the "Rights
Agreement").
ARTICLE VI
6.
ADDITIONAL AGREEMENTS
6.1 Preparation of Form S-4 and Proxy Statement; Stockholder
Meeting.
(a) Promptly following the date of this Agreement, with the
cooperation of THL I, the Company shall prepare the Proxy Statement, and
the Company shall prepare and file with the SEC the Form S-4, in which
the Proxy Statement will be included. The Company shall use its best
efforts as promptly as practicable to have the Form S-4 declared effective
under the Securities Act as promptly as practicable after such filing. The
Company will use its best efforts to cause the Proxy Statement to be mailed
to the Company's stockholders as promptly as practicable after the Form
S-4 is declared effective under the Securities Act. The Company shall also
take all reasonable action required to be taken under any applicable state
securities laws in connection with the registration and qualification in con-
nection with the Merger of Company Common Stock following the Merger.
The information provided and to be provided by THL I, and the Company,
respectively, for use in the Form S-4 shall, at the time the Form S-4
becomes effective and on the date of the Stockholders Meeting referred to
below, be true and correct in all material respects and shall not omit to state
any material fact required to be stated therein or necessary in order to make
such information not misleading, and the Company and THL I each agree
to correct any information provided by it for use in the Form S-4 which
shall have become false or misleading.
(b) The Company will immediately notify THL I and its affiliates
of (i) the effectiveness of the Form S-4, (ii) the receipt of any comments
from the SEC regarding the S-4 and (iii) any request by the SEC for any
amendment to the Form S-4 or for additional information. THL I shall be
given a reasonable opportunity to review and comment on all filings with
the SEC, including the Form S-4 and any amendments thereto, and all
mailings to the Company's stockholders in connection
(24)
with the Merger,
including the Proxy Statement, prior to the filing or mailing thereof, and
the Company shall use its best efforts to reflect all such reasonable
comments.
(c) The Company will, as promptly as practicable following the
date of this Agreement and in consultation with THL I, duly call, give
notice of, convene and hold a meeting of its stockholders (the "Stockholders
Meeting") for the purpose of approving this Agreement and the transactions
contemplated by this Agreement. The Company will, through its Board of
Directors, recommend to its stockholders approval of the foregoing matters,
as set forth in Section 3.15; provided, however, that the obligations
contained herein shall be subject to the provisions of Section 6.6 of this
Agreement. Subject to the foregoing, such recommendation, together with
a copy of the opinion referred to in Section 3.14, shall be included in the
Proxy Statement. The Company will use its best efforts to hold such
meeting as soon as practicable after the date hereof.
(d) The Company will cause its transfer agent to make stock
transfer records relating to the Company available to the extent reasonably
necessary to effectuate the intent of this Agreement.
6.2 Access to Information; Confidentiality.
(a) The Company shall, and shall cause its subsidiaries, officers,
employees, counsel, financial advisors and other representatives to, afford
to THL I and its representatives and to potential financing sources
reasonable access during normal business hours, in a manner initially
coordinated with the chief executive officer of the Company, and thereafter
coordinated with those persons designated by the chief executive officer,
during the period prior to the Effective Time to its properties, books,
contracts, commitments, personnel and records and, during such period, the
Company shall, and shall cause its subsidiaries, officers, employees and
representatives to, furnish promptly to THL I (i) a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of Federal or state securities laws and
(ii) all other information concerning its business, properties, financial
condition, operations and personnel as THL I may from time to time
reasonably request. Except as required by law, each of the Company and
THL I will hold, and will cause its respective directors, officers,
employees, accountants, counsel, financial advisors and other
representatives and affiliates to hold, any nonpublic information in
confidence to the extent required by, and in accordance with, the provisions
of the letter dated July 11, 1996, between ▇▇▇▇▇▇ ▇. ▇▇▇ Company
("THL") and the Company (the "Confidentiality Agreement").
(b) No investigation pursuant to this Section 6.2 shall affect any
representations or warranties of the parties herein or the conditions to the
obligations of the parties hereto.
6.3 Best Efforts.
(25)
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use its best efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary, proper
or advisable to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions contemplated by
this Agrement. THL I and the Company will use their best efforts and
cooperate with one another (i) in promptly determining whether any filings
are required to be made or consents, approvals, waivers, licenses, permits
or authorizations are required to be obtained (or, which if not obtained,
would result in an event of default, termination or acceleration of any
agreement or any put right under any agreement) under any applicable law
or regulation or from any governmental authorities or third parties,
including parties to loan agreements or other debt instruments, in
connection with the transactions contemplated by this Agreement, including
the Merger and (ii) in promptly making any such filings, in furnishing
information required in connection therewith and in timely seeking to obtain
any such consents, approvals, permits or authorizations.
(b) The Company shall make, subject to the condition that the
transactions contemplated herein actually occur, any undertakings (including
undertakings to make divestitures, provided, in any case, that such
undertakings divestitures need not themselves be effective or made until
after the transactions contemplated hereby actually occur) required in order
to comply with the antitrust requirements or laws of any governmental
entity, including the HSR Act, in connection with the transactions
contemplated by this Agreement; provided that no such divestiture or
undertaking shall be made unless reasonably acceptable to THL I.
(c) The Company shall cooperate with any reasonable requests of
THL I or the SEC related to the recording of the Merger as a
recapitalization for financial reporting purposes, including, without
limitation, to assist THL I and its affiliates with any presentation to the
SEC with regard go such recording and to include appropriate disclosure
with regard to such recording in all filings with the SEC and all mailings to
stockholders made in connection with the Merger. In furtherance of the
foregoing, the Company shall provide to THL I for the prior review of
THL I's advisors any description of the transactions contemplated by this
Agreement which is meant to be disseminated.
(d) Each of the parties agrees to cooperate with each other in
taking, or causing to be taken, all actions necessary to delist the Company
Common Stock from NYSE, provided that such delisting shall not be
effective until after the Effective Time. The parties also acknowledge that
it is THL I's intent that the Company Common Stock following the Merger
will not be quoted on NYSE, NASDAQ or listed on any national securities
exchange.
(e) The Company agrees to provide, and will cause its
subsidiaries and its and their respective officers and employees to provide,
all reasonable cooperation in connection with the arrangement of any
financing contemplated by Section 7.2(e), including without limitation, the
execution and delivery of any commitment letters,
(26)
underwriting or
placement agreements, loan, pledge and security documents, other definitive
financing documents, or other requested certificates or documents,
including a certificate of the chief financial officer of the Company with
respect to solvency matters, as may be reasonably requested by THL I.
The parties acknowledge that any obligations (including the payment of any
fees and expenses) on behalf of the Company in connection with any
commitment letters or other financings or refinancings contemplated hereby
shall be subject to the occurrence of the Closing. In addition, in
conjunction with the obtaining of any such financing, the Company agrees,
at the request of THL I, to call for prepayment or redemption, or to
prepay, redeem and/or renegotiate, as the case may be, any then existing
indebtedness of the Company; provided that no such prepayment or
redemption shall themselves actually be made or be required until at or after
the Effective Time.
(f) (i) THL I hereby agrees to use its best commercial
efforts, subject to normal conditions, to arrange and consummate the
financing described in Section 7.2(e) hereof in respect of the transactions
contemplated by this Agreement, including, subject to normal conditions,
using its best commercial efforts (A) to assist the Company in the nego-
tiation of definitive agreements with respect thereto, (B) to satisfy all
conditions applicable to THL I in such definitive agreements and (C) to
negotiate such modifications to the financing described in Section 7.2(e) as
may be necessary to reflect any change in market conditions which occurs
after the date of execution of this Agreement.
(ii) Subject to the Company having received the
proceeds of the financing described in Section 7.2(e) on terms satisfactory
to THL I, THL I at closing will be capitalized with an equity contribution
of $77,139,200 less the product of (x) $32.00 and (y) the aggregate number
of value of the Management Rollover Shares. THL I will be under no
obligation pursuant to the preceding sentence unless and until the Company
receives the proceeds of the financing described in Section 7.2(e), or such
other financings as may be contemplated by Section 7.2(e), on terms
consistent with the commitment letters referenced in Section 7.2(e). In
addition, THL I will be under no obligation under any circumstances to be
capitalized with equity of more than $77,139,200. In no event shall it be
required that THL I be capitalized with such amounts of equity prior to the
Closing.
6.4 Indemnification. For six years after the Effective Time, the
Company shall indemnify all present and former directors or officers of the
Company and its subsidiaries ("Indemnified Parties") against any liability,
costs or expenses (including reasonable attorneys' fees), judgments, fines,
losses, claims, damages or liabilities (collectively, "Costs") incurred in
connection with any claim, action, suit, proceeding or investigation,
whether civil, criminal, administrative or investigative, arising out of or
pertaining to matters existing or occurring at or prior to the Effective Time,
whether asserted or claimed prior to, at or after the Effective Time, to the
fullest extent as would have been permitted in their respective articles of
organization or by-laws as in effect on the date hereof consistent with
applicable law, to the extent such Costs have not been paid for by insurance
and shall, in connection with defending against any action for which
indemnification is available
(27)
hereunder, advance such officers and directors,
from time to time upon receipt of reasonable and sufficient supporting
documentation, the full amount of any costs and expenses reasonably
incurred by such officers or directors; provided that the advance of such
advances shall be conditioned upon such officer's or director's agreement
promptly to return such amounts to the Company if a court of competent
jurisdiction shall ultimately determine by a final judgment not subject to
appeal that indemnification of such officer or director is prohibited by
applicable law. The Company will maintain for a period of not less than
six years from the Effective Time, the Company's current directors' and
officers' insurance and indemnification policy to the extent that it provides
coverage for events occurring prior to the Effective Time (the "D&O
Insurance") for all persons who are directors and officers of the Company
on the date of this Agreement; provided that the Company shall not be
required to spend as an annual premium for such D&O Insurance an
amount in excess of 200% of the annual premium paid for directors' and
officers' insurance in effect prior to the date of this Agreement; and
provided further that the Company shall nevertheless be obligated to pro-
vide such coverage as may be obtained for such amount. The provisions of
this Section are intended for the benefit of, and shall be enforceable by,
each Indemnified Party and his or her heirs and representatives.
6.5 Public Announcements. Neither THL I, on the one hand,
nor the Company, on the other hand, will issue any press release or public
statement with respect to the transactions contemplated by this Agreement,
including the Merger, without the other party's prior consent (which shall
not be unreasonably withheld), except as may be required by applicable
law, court process or by obligations pursuant to any listing agreement with
NYSE. In addition to the foregoing, THL I and the Company will consult
with each other before issuing, and provide each other the opportunity to
review and comment upon, any such press release or other public
statements with respect to such transactions. The parties agree that the
initial press release or releases to be issued with respect to the transactions
contemplated by this Agreement shall be mutually agreed upon prior to the
issuance thereof.
6.6 No Solicitation. From and after the date hereof until the
termination of this Agreement neither the Company or any of its
Subsidiaries, nor any of their respective officers, directors, employees,
representatives, agents or affiliates (including, without limitation, any
investment banker, attorney or accountant retained by the Company or any
of its Subsidiaries) will directly or indirectly initiate, solicit or knowingly
encourage (including by way of furnishing non-public information or
assistance), or take any other action to facilitate knowingly, any inquiries or
the making of any proposal that constitutes, or may reasonably be expected
to lead to any Transaction Proposal, or enter into or maintain or continue
discussions or negotiate with any person or entity in furtherance of such
inquiries or to obtain a Transaction Proposal or agree to or endorse any
Transaction Proposal or authorize or permit any of its officers, directors or
employees or any of its Subsidiaries or any investment banker, financial
advisor, attorney, accountant or other representative retained by any of its
Subsidiaries to take any such action; provided, however, that nothing
contained in this Agreement shall prohibit the Board of Directors of the
Company (or, if applicable, the Special Committee) from (i)
(28)
furnishing
information to or entering into discussions or negotiations with, any person
or entity that makes an unsolicited written, bona fide proposal, to acquire
the Company and/or its Subsidiaries pursuant to a merger, consolidation,
share exchange, business combination, tender or exchange offer or other
similar transaction if, and only to the extent that (A) the Board of Directors
of the Company (or the Special Committee), after consultation with and
based upon the advice of independent legal counsel (who may be the
Company's regularly engaged independent legal counsel) determines in good
faith that such action is necessary for the Board of Directors of the
Company to comply with its fiduciary duties to stockholders under
applicable law and (B) prior to taking such action the Company (x) provides
reasonable notice to THL I to the effect that it is taking such action and (y)
receives from such person or entity an executed confidentiality agreement in
reasonably customary form, (ii) failing to make or withdrawing or
modifying its recommendation referred to in Section 3.15 if the Board of
Directors of the Company, after consultation with and based upon the
advice of independent legal counsel (who may be the Company's regularly
engaged independent counsel), determines in good faith that such action is
necessary for the Board of Directors of the Company to comply with its
fiduciary duties to stockholders under applicable law or (iii) making to the
Company's stockholders any recommendation and related filing with the
SEC as required by Rule 14e-2 and 14d-9 under the Exchange Act, with
respect to any tender offer, or taking any other legally required action
(including, without limitation, the making of public disclosures as may be
necessary or advisable under applicable securities laws); and provided
further, however, that, in the event of an exercise of the Company's or it's
Board of Director's (or the Special Committee's) rights under clause (i), (ii)
or (iii) above, notwithstanding anything contained in this Agreement to the
contrary, such failure shall not constitute a breach of this Agreement by the
Company. For purposes of this Agreement, "Transaction Proposal" shall
mean any of the following (other than the transactions between the
Company and THL I) involving the Company and its subsidiaries: (i) any
merger, consolidation, share exchange, recapitalization, business
combination, or other similar transaction involving 40% or more of the
assets of the Company; (ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition of 40% or more of the assets of the Company
and its subsidiaries, taken as a whole, in a single transaction or series of
transactions; (iii) any tender offer or exchange offer for 40% or more of the
outstanding shares of capital stock of the Company or the filing of a
registration statement under the Securities Act in connection therewith; or
(iv) any public announcement of a proposal, plan or intention to do any of
the foregoing or any agreement to engage in any of the foregoing.
6.7 Affiliates. Prior to the Closing Date, the Company shall
deliver to THL I a letter identifying all persons who are, at the time this
Agreement is submitted for approval to the stockholders of the Company,
"affiliates" of the Company for purposes of Rule 145 under the Securities
Act. The Company shall use its reasonable best efforts to cause each such
person to deliver to THL I on or prior to the Closing Date a written agree-
ment substantially in the form attached as Exhibit B hereto.
(29)
ARTICLE VII
CONDITIONS PRECEDENT
7.
7.1 Conditions to Each Party's Obligation. The respective
obligation of each party to effect the Merger is subject to the Satisfaction or
waiver on or prior to the Closing Date of the following conditions:
(a) Company Stockholder Approval. The Company Stockholder
Approval shall have been obtained, and not more than 10% of the
outstanding shares of Company Common Stock shall be Dissenting Shares.
(b) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or
shall have expired.
(c) Form S-4. The Form S-4 shall have become effective under
the Securities Act and shall not be the subject of any stop order or
proceedings seeking a stop order, and any material "blue sky" and other
state securities laws applicable to the registration and qualification of
Company Common Stock to be retained in the Merger shall have been
complied with.
(d) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by any
court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the merger shall be in effect; provided,
however, that the parties hereto shall use their best efforts to have any such
injunction, order, restraint or prohibition vacated.
7.2 Conditions to Obligations of THL I. The obligations of THL
I to effect the Merger are further subject to the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement and those statements
made on Schedule 7.2(a) hereto shall be true and correct in all material
respects in each case as of the date of this Agreement and as of the Closing
Date as though made on and as of the Closing Date; provided, however,
that, for purposes of this Section 7.2(a), such representations and warranties
and statements shall be deemed to be true and correct in all material
respects unless the failure or failures of such representations and warranties
and statements to be so true and correct, individually or in the aggregate,
would result in a Material Adverse Effect with respect to the Company.
THL I shall have received a certificate signed on behalf of the Company by
the chief executive officer and the chief financial officer of the Company to
the effect set forth in this paragraph.
(30)
(b) Performance of Obligations of the Company. The Company
shall have performed the obligations required to be performed by it under
this Agreement at or prior to the Closing Date, including but not limited to
its obligations pursuant to Section 5.6 hereof, except for such failures to
perform as have not had or would not individually or in the aggregate, have
a Material Adverse Effect with respect to the Company or materially
adversely affect the ability of the Company to consummate the transactions
contemplated hereby.
(c) Consents, etc. THL I shall have received evidence, in form
and substance reasonably satisfactory to it, that all licenses, permits,
consents, approvals, authorizations, qualifications and orders of
governmental authorities and other third parties necessary to consummate
the transactions contemplated hereby shall have been obtained, unless the
failure to so obtain would not have a Material Adverse Effect on the
Company.
(d) No Litigation. There shall not be pending or threatened by
any Governmental Entity any suit, action or proceeding (or by any other
person any suit, action or preceding which has a reasonable likelihood of
success), (i) challenging or seeking to restrain or prohibit the consummation
of the Merger or any of the other transactions contemplated by this
Agreement or seeking to obtain from THL I or any of their affiliates any
damages that are material to any such party, (ii) seeking to prohibit or limit
the ownership or operation by the Company or any of its subsidiaries of any
material portion of the business or assets of the Company or any of its
subsidiaries, to dispose of or hold separate any material portion of the
business or assets of the Company or any of its subsidiaries, as a result of
the Merger or any of the other transaction contemplated by this Agreement
or (iii) seeking to impose limitations on the ability of THL I (or any
designee of THL I), to acquire or hold, or exercise full rights of ownership
of, any shares of Company Common Stock, including, without limitation,
the right to vote the Company Common Stock on all matters properly
presented to the stockholders of the Company.
(e) Financing. The Company shall have received the proceeds of
financing pursuant to the commitment letters set forth on Schedule 7.2(e)
hereto on terms and conditions set forth therein (or on such other terms and
conditions, or involving such other financing sources, as THL I and the
Company shall reasonably agree and are not materially more onerous) in
amounts sufficient to consummate the transactions contemplated by this
Agreement, including, without limitation (i) to pay, with respect to all
shares of Company Common Stock in the Merger, the cash portion of the
Merger Consideration pursuant to Section 2.1(c)(ii), (ii) to refinance the
outstanding indebtedness of the Company, (iii) to pay any fees and expenses
in connection with the transactions contemplated by this Agreement or the
financing thereof and (iv) to provide for the working capital needs of the
Company following the Merger, including, without limitation, if applicable,
letters of credit.
(f) Affiliate Letters. THL I shall have received the agreements
referred to in Section 6.7.
(31)
7.3 Conditions to Obligation of the Company. The obligation of
the Company to effect the Merger is further subject to the following
conditions:
(a) Representations and Warranties. The representations and
warranties of THL I set forth in this Agreement shall be true and correct in
all material respects, in each case as of the date of this Agreement and as of
the Closing Date as though made on and as of the Closing Date. The
Company shall have received a certificate signed on behalf of THL I, by an
authorized officer of THL I to the effect set forth in this paragraph.
(b) Performance of Obligations of THL I. THL I shall have
performed the obligations required to be performed by them under this
Agreement at or prior to the Closing Date (except for such failures to
perform as have not had or could not reasonably be expected, either
individually or in the aggregate, to have a Material adverse Effect with
respect to THL I or adversely affect the ability of THL I to consummate the
transactions herein contemplated or perform its obligations hereunder).
(c) No Litigation. There shall not be pending or threatened by
any party any suit, action or proceeding challenging or seeking to restrain
or prohibit the consummation of the Merger or any of the other transactions
contemplated by this Agreement or seeking to obtain from the Company (or
any of its Directors) any significant damages.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.
8.1 Termination. This Agreement may be terminated and
abandoned at any time prior to the Effective Time, whether before or after
approval of matters presented in connection with the Merger by the
stockholders of the Company;
(a) by mutual written consent of THL I and the Company; or
(b) by either THL I or the Company if any Governmental Entity
shall have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the Merger and
such order, decree, ruling or other action shall have become final and
nonappealable; or
(c) by either THL I or the Company if the Merger shall not have
been consummated on or before April 30, 1997 (other than due to the
failure of the party seeking to terminate this Agreement to perform its
obligations under this Agreement required to be performed at or prior to the
Effective Time); or
(32)
(d) by either THL I or the Company, if any required approval of
the stockholders of the Company shall not have been obtained by reason of
the failure to obtain the required vote upon a vote held at a duly held
meeting of stockholders or at any adjournment thereof; or
(e) by THL I, if the Company shall have (1) withdrawn,
modified or amended in any respect adverse to THL I its approval or
recommendation of this Agreement or any of the transactions contemplated
herein, (2) failed to include such recommendation in the Proxy Statement
mailed to the Company's stockholders, (3) recommended any Transaction
Proposal from a person other than THL I or any of its affiliates or (4)
resolved to do any of the foregoing; or
(f) by either THL I or the Company, if the Company shall enter
into any agreement with a third party with respect to a Transaction
Proposal.
8.2 Effect of Termination. In the event of termination of this
Agreement by either the Company of THL I as provided in Section 8.1, this
Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of THL I or the Company, other than the
provisions of Section 3.13, Section 4.5, the last sentence of Section 6.2(a),
this Section 8.2, Section 9.2 and Section 9.7. Nothing contained in this
Section shall relieve any party for any breach of the representations,
warranties, covenants or agreements set forth in this Agreement.
8.3 Amendment. This Agreement way be amended by the
parties at any time before or after any required approval of matters
presented in connection with the merger by the stockholders of the
Company; provided, however, that after any such approval, there shall be
made no amendment that by law requires further approval by such
stockholders without the further approval of such stockholders. This
Agreement may not be amended except by an instrument in writing signed
on behalf of each of the parties.
8.4 Extension; Waiver. At any time prior to the Effective Time,
the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement or (c) subject to the proviso
of Section 8.3, waive compliance with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a party to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise
shall not constitute a waiver of such rights.
8.5 Procedure for Termination, Amendment, Extension or
Waiver. A termination of this Agreement pursuant to Section 8.1, an
amendment of this Agreement pursuant to Section 8.3 or an extension or
waiver pursuant to Section 8.4 shall, in order to be effective, be in writing
and require in the case of THL I
(33)
or the Company, action by its Board of
Directors or the duly authorized designee of its Board of Directors.
ARTICLE IX
GENERAL PROVISIONS
9.
9.1 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time and
all such representations and warranties will be extinguished on
consummation of the Merger and neither the Company nor any officer,
director or employee or shareholder shall be under any liability whatsoever
with respect to any such representation or warranty after such time. This
Section 9.1 shall not limit any covenant or agreement of the parties which
by its terms contemplates performance after the Effective Time.
9.2 Fees and Expenses.
(a) In addition to any other amounts which may be payable or
become payable pursuant to any other paragraph of this Section 9.2, the
Company shall (provided that THL I is not then in material breach of its
obligations under this Agreement) promptly, but in no event later than one
business day after the termination of this Agreement pursuant to Section
8.1(e) or 8.1(f) or from time to time after Closing, reimburse THL for all
out-of-pocket expenses and fees, up to an aggregate amount not to exceed
$2.25 million, (including, without limitation, fees payable to all banks,
investment banking firms and other financial institutions, and their
respective agents and counsel, and all fees of counsel, accountants, financial
printers, experts and consultants to THL I and its affiliates), whether
incurred prior to, on or after the date hereof, in connection with the Merger
and the consummation of all transactions contemplated by this Agreement,
and the financing thereof.
(b) If any Person (other than THL I or any of its affiliates) shall
have made, or proposed, communicated or disclosed in a manner which is
or otherwise becomes public a Transaction Proposal and this Agreement is
terminated pursuant to Section 8.1(e) or Section 8.1(f), then the Company
shall, promptly, but in no event later than one business day after the
termination of this Agreement, pay THL I a fee of $6.75 million in cash,
which amount shall be payable in same day funds. No termination of this
Agreement at a time when a fee is reasonably expected to be payable
pursuant to this Section 9.2(b) following termination of this Agreement shall
be effective until such fee is paid. Only one fee in the aggregate of
$6.75 million shall be payable pursuant to this Section 9.2(b). No amount
payable pursuant to any of the other provisions of this Section 9.2 shall
reduce the amount of the fee payable pursuant to this paragraph (b).
(34)
(c) Except as provided otherwise in paragraph (a) above, all
costs and expenses incurred in connection with this Agreement, and the
transactions contemplated hereby shall be paid to the party incurring such
expenses, except that the Company shall pay all costs and expenses (i) in
connection with printing and mailing the Proxy Statement, as well as all
SEC filing fees relating to the transactions contemplated herein and (ii) of
obtaining any consents of any third party.
9.3 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be
deemed given if delivered by facsimile transmission (with electronic
confirmation), personally or sent by overnight courier providing proof of
delivery) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
(a) if to THL I, to
c/o ▇▇▇▇▇▇ ▇. ▇▇▇ Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Company, to
Syratech Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
General Counsel
Syratech Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(35)
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
9.4 Definitions. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under control with, such first person;
(b) "knowledge", with respect to the Company means the actual
knowledge of the following officers and employees (as well as any of their
successors) of the Company and its subsidiaries: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, E.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and, without
duplication, the employees in charge of environmental, tax, labor, employee
benefits and real estate matters of any of the foregoing, in each case after
reasonable investigation and inquiry.
(c) "Material Adverse Change" or "Material Adverse Effect"
means, when used in connection with the Company, any change or effect
that either individually or in the aggregate with all other such changes or
effects is materially adverse to the business, financial condition or results of
operations of the Company and its subsidiaries taken as a whole and the
terms "material" and "materially" shall have correlative meanings;
(d) "person" means an individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or other entity; and
(e) a "subsidiary" of any person means another person, an
amount of the voting securities, other voting ownership or voting
partnership interests of which is sufficient to elect at least a majority of its
Board of Directors (or other governing
(36)
body) or, if there are no such voting
interests, 50% or more of the equity interests of which is owned directly or
indirectly by such first person.
9.5 Interpretation. When a reference is made in this
Agreement to a Section, Exhibit or Schedule, such reference shall be to a
section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement. Whenever the words "include", "in-
cludes" or "including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation."
9.6 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other parties.
9.7 Entire Agreement; No Third-Party Benefits. This
Agreement and the other agreements referred to herein constitute the entire
agreement, and supersede all Prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter of this
Agreement. This Agreement, other than Sections 6.4 and 9.2, is not
intended to confer upon any Person other than the parties any rights or
remedies.
9.8 GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF DELAWARE, REGARDLESS OF THE
LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE
PRINCIPLES OF CONFLICTS OF LAWS.
9.9 Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties
without the prior written consent of the other parties. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the
benefit of, and be enforceable by, the parties and their respective successors
and assigns.
9.10 Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached, and it is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement.
9.11 Schedules. The parties agree that any schedules
referenced herein shall be delivered in form and substance reasonably
acceptable to both parties within five (5) business days of the date hereof.
(37)
[Remainder of Page Intentionally Left Blank]
(38)
IN WITNESS WHEREOF, the parties below have caused this
Agreement to be duly executed by persons duly authorized, all as of the
date first written above.
THL TRANSACTION I CORP.
By: /s/
Name:
Title:
SYRATECH CORPORATION
By: /s/
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President and
General Counsel
EXECUTED BY THE UNDERSIGNED
SOLELY FOR THE PURPOSES OF AFFIRMING HIS OBLIGATION
UNDER
SECTION 2.1(c)(ii)
/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(39)
EXHIBIT A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF
SYRATECH CORPORATION
The undersigned, in order to form a corporation for the purpose
hereinafter stated, under and pursuant to the provisions of the Delaware
General Corporation Law, hereby certifies that:
FIRST: The name of the Corporation is Syratech Corporation.
SECOND: The registered office and registered agent of the
Corporation is [_________________________________].
THIRD: The purpose of the Corporation is to engage in any lawful
act or activity for which corporations may be organized under the Delaware
General Corporation Law.
FOURTH: The total number of shares of stock that the Corporation is
authorized to issue is _________ shares of Common Stock, $0.01 par value
per share and _______ shares of preferred stock, $0.01 par value per share
(hereinafter referred to as "Preferred Stock"). The Preferred Stock may be
issued from time to time in one or more series with such distinctive
designations as may be stated in the resolution or resolutions providing for
the issue of the Preferred Stock by the Board of Directors or a duly
authorized committee thereof. The resolution or resolutions providing for
the issue of shares of a particular series shall fix, subject to applicable laws
and the provisions of this Article FOURTH, for each such series the
number of shares constituting such series and the designations and powers,
preferences and relative participating, optional or other special rights and
qualifications, limitations or restrictions thereof, including, without limiting
the generality of the foregoing, such provisions as may be desired concern-
ing voting, redemption, dividends, dissolution or the distribution of assets,
conversion or exchange, and such other subjects or matters as may be fixed
by resolution or resolutions of the Board of Directors or a duly authorized
committee thereof under the Delaware General Corporation Law. The
number of authorized shares or any class or classes of stock may be
increased or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority of the
Common Stock of the Corporation irrespective of the provisions of Section
242(b)(2) of the Delaware General Corporation Law or any corresponding
provision hereinafter enacted.
A-1
FIFTH: The Board of Directors of the Corporation, acting by
majority vote, may alter, amend or repeal the By-Laws of the Corporation.
SIXTH: Except as otherwise provided by the Delaware General
Corporation Law as the same exists or may hereafter be amended, no
director of the Corporation shall be personally liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director. Any repeal or modification of this Article SIXTH by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such
repeal or modification.
SEVENTH: A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty by such director as a director, except for liability as a
director (A) for any breach for the director's duty of loyalty to the
Corporation or its stockholders; (B) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law; (C)
under Section 174 of the Delaware General Corporation Law; or (D) for
any transaction from which the director derived an improper personal
benefit. If the Delaware General Corporation Law is amended after this
Certificate of Incorporation becomes effective to authorize corporate action
further eliminating or limiting the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the Delaware General Corporation law, as so
amended.
EIGHTH: INDEMNIFICATION.
8.1 Certain Definitions. As used in this Article, the term:
(a) "Corporation" includes any domestic or foreign
predecessor entity of this Corporation in a merger or other
transaction consummation of the transaction.
(b) "Change in Control" shall have occurred if, during any
period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors
of the Corporation cease for any reason to constitute at
least a majority thereof, unless the election of each new
director was approved in advance by a vote of at least a
majority of the directors then still in office who were
directors at the beginning of the period.
(c) "Director" means an individual who is or was a director of
the Corporation or an individual who, while a director of
the Corporation, is or was serving at the Corporation's
request as a director, officer, partner, trustee, employee,
or agent of another foreign or domestic corporation,
partnership, joint venture, trust,
A-2
employee benefit plan, or
other enterprise. A director is considered to be serving an
employee benefit plan at the Corporation's request if his
duties to the Corporation also impose duties on, or
otherwise involve services by, him to the plan or to
participants in or beneficiaries of the plan. "Director"
includes, unless the context requires otherwise, the estate
or personal representative of a director.
(d) "Expenses" includes attorney's fees.
(e) "Liability" means the obligation to pay a judgment,
settlement, penalty, fine (including an excise tax assessed
with respect to an employee benefit plan), or reasonably
expenses incurred with respect to a proceeding.
(f) "Officer" means an individual who is or was an officer of
the Corporation or an individual who, while an officer of
the Corporation, is or was serving at the Corporation's
request as a director, officer, partner, trustee, employee,
or agent of another foreign or domestic corporation,
partnership, joint venture, trust employee benefit plan, or
other enterprise. An officer is considered to be serving an
employee benefit plan at the Corporation's request if his
duties to the Corporation also impose duties on, or
otherwise involve services by, him to the plan or to
participants in or beneficiaries of the plan. "Officer"
includes, unless the context requires otherwise, the estate
or personal representative of an officer.
(g) "Party" includes an individual who was, is, or is
threatened to be made a named defendant or respondent in
a proceeding.
(h) "Proceeding" means any threatened, pending, or
completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative and whether
formal or informal.
(i) "Reviewing Party" shall mean the person or persons
making the entitlement determination pursuant to Section
8.4 of this Article, and shall not include a court making
any determination under this Article or otherwise.
8.2 Basic Indemnification Arrangement.
(a) Except as provided in subsections 8.2(d), 8.2(e) and 8.2(f)
below, the Corporation shall indemnify an individual who
is made a
A-3
party to a proceeding because he is or was a
director or officer against liability incurred by him in the
proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best
interests of the Corporation and, in the case of any
criminal proceeding, he had no reasonable cause to believe
his conduct was unlawful.
(b) A person's conduct with respect to an employee benefit
plan for a purpose he believed in good faith to be in the
interests of the participants in and beneficiaries of the plan
is conduct that satisfies the requirement of subsection
8.2(a).
(c) The termination of a proceeding by judgment, order,
settlement, or conviction, or upon a plea of nolo
contendere or its equivalent shall not, of itself, be
determinative that the proposed indemnitee did not meet
the standard of conduct set forth in subsection 8.2(a).
(d) The Corporation shall not indemnify a person under this
Article in connection with a proceeding by or in the right
of the Corporation in which such person was adjudged
liable to the Corporation, unless, and then only to the
extent that, the Reviewing Party, or a court of competent
jurisdiction acting pursuant to Section 8.5 of this Article,
determines that, in view of the circumstances of the case,
the indemnitee is fairly and reasonably entitled to
indemnification.
(e) Indemnification permitted under this Article in connection
with a proceeding by or in the right of the Corporation
shall include reasonable expenses, penalties, fines
(including an excise tax assessed with respect to an
employee benefit plan) and amounts paid in settlement
(provided that such settlement and the amounts paid in
connection therewith are not unreasonable, as determined
by the Reviewing Party responsible for making the
determination that indemnification is permissible as
described in Section 8.4(b) below) in connection with the
proceeding, but, unless ordered by a court, shall not
include judgments.
(f) Notwithstanding any other provision of this Article, no
person shall be entitled to indemnification or advancement
of expense hereunder with respect to any proceeding or
claim brought or made by him against the Corporation,
other than a proceeding or claim seeking or defending
such person's right to indemnification or advancement of
expense pursuant to Section 8.5 hereof or otherwise.
A-4
(g) If any person is entitled under any provision of this Article
to indemnification by the Corporation for some portion of
liability incurred by him, but not the total amount thereof,
the Corporation shall indemnify such person for the
portion of such liability to which he is entitled.
(h) The Corporation shall indemnify a director or officer to
the extent that he has been successful, on the merits or
otherwise, in the defense of any proceeding to which he
was a party, or in defense of any claim, issue or matter
therein, because he is or was a director or officer, against
reasonable expenses incurred by him in connection with
the proceeding.
8.3 Advances for Expenses.
(a) The Corporation shall pay for or reimburse the reasonable
expenses incurred by a director or officer as a party to a
proceeding in advance of final disposition of the
proceeding if:
(i) Such person furnishes the Corporation a written
affirmation of good faith belief that he has met the
standard of conduct set forth in subsection 8.2(a)
above, and
(ii) Such person furnishes the Corporation a written
undertaking (meeting the qualifications set forth
below in subsection 8.3(b)); executed personally or
on his behalf, to repay any advances if it is
ultimately determined that he is not entitled to
indemnification under this Article or otherwise.
(b) The undertaking required by subsection 8.3(a)(ii) above
must be an unlimited general obligation of the proposed
indemnitee but need not be secured and shall be accepted
without reference to financial ability to make repayment.
If a director or officer seeks to enforce his rights to
indemnification in a court pursuant to Section 8.5, such
undertaking to repay shall not be applicable or enforceable
unless and until there is a final court determination that he
is not entitled to indemnification, as to which all rights of
appeal have been exhausted or have expired.
8.4 Authorization of And Determination of Entitlement to
Indemnification.
(a) The Corporation acknowledges that indemnification of a
director or officer under Section 8.2 has been pro-authorized by
the Corporation in the manner described in
subsection 8.4(b) below. Nevertheless, the Corporation
shall not indemnify a director or
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officer under Section 8.2
unless a separate determination has been made in the
specific case that indemnification of such person is
permissible in the circumstances because he has met the
standard of conduct set forth in subsection 8.2(a);
provided, however, that no such entitlement decision need
be made prior to the advancement of expenses and that,
regardless of the result or absence of any such
determination, the Corporation shall make any
indemnification mandated by Section 8.2(b) above.
(b) The determination referred to in subsection 8.4(a) above
shall be made, at the election of the Board of Directors
(unless a Change in Control shall have occurred, in which
case the proposed indemnitee director or officer shall be
entitled to designate that the determination shall be made
by special legal counsel selected by him);
(i) by the Board of Directors of the Corporation by
majority vote of a quorum consisting of directors
not at the time parties to the proceeding;
(ii) if a quorum cannot be obtained under subdivision
(i), by majority vote of a committee duly
designated by the Board of Directors (in which
designation directors who are parties may
participate), consisting solely of two or more
directors not at the time parties to the proceeding;
(iii) by special legal counsel:
(1) selected by the Board of Directors or its
committee in the manner prescribed in
subdivision (i) or (ii); or
(2) if a quorum of the Board of Directors
cannot be obtained under subdivision (i) and
a committee cannot be designated under
subdivision (ii), selected by a majority vote
of the full Board of Directors (in which
selection directors who are parties may
participate); or
(iv) by the stockholders; provided that shares owned by
or voted under the control of directors or officers
who are at the time parties to the proceeding may
not be voted on the determination.
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(c) As acknowledged above, the Corporation has pre-authorized the
indemnification of directors and officers
hereunder, subject to a case-by-case determination that the
proposed indemnitee met the applicable standard of
conduct under subsection 8.2(a). Consequently, no further
decision need or shall be made on a case-by-case basis as
to the authorization of the Corporation's indemnification
of, or advancement of expenses to, directors and officers
hereunder. Nevertheless, except as set forth in subsection
8.4(d) below, evaluation as to reasonableness of expenses
of a director or officer in the specific case shall be made
in the same manner as the determination that
indemnification is permissible, as described in subsection
8.4(d) above, except that if the determination is made by
special legal counsel, evaluation as to reasonableness of
expenses shall be made by those entitled under subsection
8.4(b)(iii) to select counsel.
(d) Notwithstanding the requirement under subsection 8.4(c)
that the Reviewing Party evaluate the reasonableness of
expenses claimed by the proposed indemnitee, any
expenses claimed by the proposed indemnitee shall be
deemed reasonable if the Reviewing Party fails to make
the evaluation required by subsection 8.4(c) within thirty
(30) days following the proposed indemnitee's written
request for indemnification for, or advancement of,
expenses.
(e) The Reviewing Party, however chosen, shall make the
requested determination as promptly as reasonably
practical after a request for indemnification is presented.
8.5 Ccourt-ordered Indemnification And Advances For Expenses. A
director or officer who is a party to a proceeding may apply for
indemnification or advances for expenses to the court conducting the
proceeding or to another court of competent jurisdiction. For purposes of
this Article, the Corporation hereby consents to personal jurisdiction and
venue in any court in which is pending a proceeding to which a director or
officer is a party. Regardless of any determination by the Reviewing Party
that the proposed indemnitee is not entitled to indemnification or
advancement of expenses or as to the reasonableness of expenses, and
regardless of any failure by the Reviewing Party to make a determination as
to such entitlement or the reasonableness of expenses, such court's review
shall be a DE NOVO review. In application, the court, after giving any
notice it considers necessary, may order indemnification or advancement of
expenses if it determines that:
(i) The applicant is entitled to mandatory indemnification
under Section 8.2(b) above (in which case the Corporation
shall pay the indemnitee's reasonable expenses incurred to
obtain court-ordered indemnification);
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(ii) The applicant is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances,
whether or not he met the standard of conduct set forth in
subsection 8.2(a) above or was adjudged liable as
described in subsection 8.2(d) above (in which case any
court-ordered indemnification need not be limited to
reasonable expenses incurred by the indemnitee but may
include expenses, penalties, fines, judgments, amounts
paid in settlement and any other amounts ordered by the
court to be indemnified, and, whether or not so ordered,
the Corporation shall pay the applicant's reasonable ex-
penses incurred to obtain court-ordered indemnification);
or
(iii) In the case of advances for advances, the applicant is
entitled pursuant to this Restated Certificate of
Incorporation, Amended and Restated Bylaws or
applicable resolution or agreement to payment for or ▇▇▇▇-
bursement of this reasonable expenses incurred as a party
to a proceeding in advance of final disposition of the
proceeding (in which case the Corporation shall pay the
applicant's reasonable expenses incurred to obtain court-ordered
advancement of expenses); or
(iv) The applicant is otherwise entitled to enforcement of his
rights hereunder (in which case the Corporation shall pay
the indemnitee's reasonable expenses incurred to obtain
such enforcement).
8.6 Indemnification of Employees and Agents. The Corporation may,
subject to authorization in the specific case, indemnify and advance
expenses under this Article to an employee or agent of the Corporation who
is not a director or officer, to the same extent as to a director or to any
lesser extent (or greater extent if permitted by law) determined by the Board
of Directors.
8.7 Liability Insurance. The Corporation may purchase and maintain
insurance on behalf of a director or officer or an individual who is or was
an employee or agent of the Corporation or who, while a director, officer,
employee or agent of the Corporation, is or was serving at the request of
the Corporation as a director, officer, partner, trustee, employee or agent of
another foreign or domestic corporation, partnership, joint venture, trust,
employee benefit plan, or other enterprise against liability asserted against
or incurred by him in that capacity or arising from his status as a director,
officer, employee, or agent, whether or not the Corporation would have
power to indemnify him against the same liability under Section 8.2,
Section 8.3 or Section 8.4 above.
8.8 Witness Fees. Nothing in this Article shall limit the
Corporation's power to pay or reimburse expenses incurred by a person in
connection with his appearance
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as a witness in a proceeding at a time when
he has not been made a named defendant or respondent in this proceeding.
8.9 Report to Stockholders. If the Corporation indemnifies or
advances expenses to a director or officer in connection with a proceeding
by or in the right of the Corporation, to the extent required by law the
Corporation shall report the indemnification or advance, in writing, to the
stockholders with or before the notice of the next stockholder's meeting.
8.10 Security for Indemnification Obligations. The Corporation may
at any time and in any manner, at the discretion of the Board of Directors,
secure the Corporation's obligations to indemnify or advance expenses to a
person pursuant to this Article.
8.11 No Duplication of Payments. The Corporation shall not be liable
under this Article to make any payment to a person hereunder to the extent
such person has otherwise actually received payment (under any insurance
policy, agreement or otherwise) of the amounts otherwise payable
hereunder.
8.12 Subrogation. In the event of payment under this Article, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of the indemnitee, who shall execute all papers required
and shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the
Corporation effectively to bring suit to enforce such rights.
8.13 Contract Rights. The rights to indemnification and advancement
of expenses conferred hereunder to directors and officers shall be contract
right and shall not be affected adversely to any director or officer by any
amendment of this Restated Certificate of Incorporation with respect to any
action or inaction occurring prior to such amendment; provided, however,
that this provision shall not confer upon any indemnitee or potential indem-
▇▇▇▇▇ (in his capacity as such) the right to consent or object to any
subsequent amendment of this Restated Certificate of Incorporation.
8.14 Specific Performance. In any proceeding brought by or on behalf
of an officer or director to specifically enforce the provisions of this
Article, the Corporation hereby waives the claim or defense therein that the
plaintiff or claimant has an adequate remedy at law, and the Corporation
shall not urge in any such proceeding the claim or defense that such remedy
at law exists. The provisions of this Section 8.14, however, shall not
prevent the officer or director from seeking a remedy at law in connection
with any breach of the provisions of this Article.
8.15 Non-exclusivity, Etc. The rights of a director or officer
hereunder shall be in addition to any other rights with respect to
indemnification, advancement
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of expenses or otherwise that he may have
under contract or the General Corporation Law of the State of Delaware or
otherwise.
8.16 Amendments. It is the intent of the Corporation to indemnify and
advance expenses to its directors and officers to the full extent permitted by
the Delaware General Corporation Law, as amended from time to time. To
the extent that the Delaware General Corporation Law is hereafter amended
to permit a Delaware business corporation to provide its directors greater
rights to indemnification or advancement of expenses than those specifically
set forth hereinabove, this Article shall be construed to require such greater
indemnification or more liberal advancement of expenses to the
Corporation's directors and officers, in each case consistent with the
Delaware General Corporation Law as so amended from time to time. No
amendment modification or rescission of this Article, or any provision
hereof, the effect of which would diminish the rights to indemnification or
advancement of expenses as set forth herein shall be effective as to any
person with respect to any action taken or omitted by such person prior to
such amendment, modification or rescission.
8.17 Severability. To the extent that the provisions of this Article are
held to be inconsistent with the provisions of Section 145 of the Delaware
General Corporation Law (including subsection (f) thereof), such provisions
of such statute shall govern. In the event that any of the provisions of this
Article (including any provision within a single section, subsection, division
or sentence) is held by a court of competent jurisdiction to be invalid, void
or otherwise unenforceable, the remaining provisions of this Article shall
remain enforceable to the fullest extent permitted by law.
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EXHIBIT B
FORM OF COMPANY AFFILIATE LETTER
Gentlemen:
The undersigned, a holder of shares of common stock, par value $.01
per share ("Company Stock"), of Syratech Corporation, a Delaware
corporation (the "Company"), is entitled to retain, in connection with the
merger (the "Merger") of the Company with THL Transaction I Corp., a
Delaware corporation, securities (the "Securities") of the Company. The
undersigned acknowledges that the undersigned may be deemed an
"affiliate" of the Company within the meaning of Rule 145 ("Rule 145")
promulgated under the Securities Act of 1933, as amended (the "Act"),
although nothing contained herein should be construed as an admission of
such fact.
If in fact the undersigned were an affiliate under the Act, the
undersigned's ability to sell, assign or transfer the Securities retained by the
undersigned pursuant to the Merger may be restricted unless such
transaction is registered under the Act or an exemption from such
registration is available. The undersigned understands that such exemptions
are limited and the undersigned has obtained advice of counsel as to the
nature and conditions of such exemptions, including information with
respect to the applicability to the sale of such securities of Rules 144 and
145(d) promulgated under the Act.
The undersigned hereby represents to and covenants with the Company
that the undersigned will not sell, assign or transfer any of the Securities
retained by the undersigned pursuant to the Merger except (i) pursuant to an
effective registration statement under the Act, (ii) in conformity with the
volume and other limitations of Rule 145 or (iii) in a transaction which, in
the opinion of independent counsel reasonably satisfactory to the Company
or as described in a "no-action" or interpretive letter from the Staff of the
Securities and Exchange Commission (the "SEC"), is not required to be
registered under the Act.
In the event of a sale or other disposition by the undersigned of
securities pursuant to Rule 145, the undersigned will supply the Company
with evidence of compliance with such Rule in the form of a letter in the
form of Annex I hereto. The undersigned understands that the Company
may instruct its transfer agent to withhold the transfer of any Securities
disposed of by the undersigned, but that upon receipt of such evidence of
compliance the transfer agent shall effectuate the transfer of the Securities
sold as indicated in the letter.
The undersigned acknowledges and agrees that appropriate legends will
be placed on certificates representing Securities retained by the undersigned
in the Merger or held by a transferee thereof, which legends will be
removed by delivery of substitute certificates upon receipt of an opinion in
form and substance reasonably satisfactory
B-1
to the Company from
independent counsel reasonably satisfactory to the Company to the effect
that such legends are no longer required for purposes of the Act.
The undersigned acknowledges that (i) the undersigned has carefully read
this letter and understands the requirements hereof and the limitations
imposed upon the distribution, sale, transfer or other disposition of
Securities and (ii) the receipt by THL I of this letter is an inducement and a
condition to THL I's obligations to consummate the Merger.
Very truly yours,
Dated:
ANNEX I TO EXHIBIT B
(DATE)
(NAME)
On the undersigned sold the securities of the Company
(the "Company") described below in the space provided for that purpose
(the "Securities"). The Securities were retained by the undersigned in
connection with the merger of THL Transaction I Corp. with and into
Syratech Corporation.
Based upon the most recent report or statement filed by the Company
with the Securities and Exchange Commission, the Securities sold by the
undersigned were within the prescribed limitations set forth in paragraph (e)
of Rule 144 promulgated under the Securities Act of 1933, as amended (the
"Act").
The undersigned hereby represents that the Securities were sold in
"brokers' transactions" within the meaning of Section 4(4) of the Act or in
transactions directly with a "market maker" as that term is defined in
Section 3(a)(38) of the Securities Exchange Act of 1934, as amended. The
undersigned further represents that the undersigned has not solicited or
arranged for the solicitation of orders to buy the Securities, and that the
undersigned has not made any payment in connection with the offer or sale
of the Securities to any person other than to the broker who executed the
order in respect of such sale.
Very truly yours,
(space to be provided for description of securities)
Schedule 7.2(a)
Environmental Matters. Except as disclosed in Section 3.11 of the
Disclosure Schedule, which disclosed items of non-compliance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect with respect to the Company;
(a) The Company and its subsidiaries hold and formerly held,
and, to the knowledge of the Company, are, and have been, in compliance
with, all Environmental Permits, and the Company and its subsidiaries are,
and have been, otherwise in compliance with all applicable Environmental
Laws, except where the failure to have such Environmental Permits or be in
such compliance would not have a Material Adverse Effect with respect to
the Company;
(b) None of the Company or its subsidiaries has received any
Environmental Claim, and none if the Company or its subsidiaries is aware
after inquiry, of any threatened material Environmental Claim or of any
circumstances, conditions or events that could reasonably be expected to
give rise to a material Environmental Claim, against the Company or any of
its subsidiaries, except where such claim could not reasonably be expected
to have a Material Adverse Effect with respect to the Company;
(c) There are no (i) underground storage tanks, (ii)
polychlorinated biphenyls, (iii) asbestos or asbestos-containing materials,
(iv) urea-formaldehyde insulation, (v) sumps, (vi) surface impoundments,
(vii) landfills, (viii) sewers or septic systems or (ix) Hazardous Materials
present at any facility currently or formerly owned, leased, operated or
otherwise used by the Company or any of its subsidiaries that could
reasonably be expected to give rise to liability of the Company or any of its
subsidiaries under any Environmental Laws, which liability could have a
Material Adverse Effect on the Company;
(d) There are no past (including, without limitation, with respect
to assets or businesses formerly owned, leased or operated by the Company
or any of its subsidiaries) or present actions, activities, events, conditions
or circumstances, including without limitation the release, threatened release,
emission, discharge, generation, treatment, storage or disposal of
Hazardous Materials, that could reasonably be expected to give rise to
liability of the Company or any of its subsidiaries under any Environmental
Laws or any contract or agreement, which liability could reasonably be
expected to have a Material Adverse Effect on the Company;
(e) No modification, revocation, reissuance, alteration, transfer,
or amendment of the Environmental Permits, or any review by, or approval
of, any third party of the Environmental Permits is required in connection
with the execution or delivery of this Agreement or the consummation of
the transactions contemplated hereby or the continuation of the business of
the Company or its subsidiaries following such consummation;
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(f) Hazardous Materials have not been generated, transported,
treated, stored, disposed of, released or threatened to be released at, on,
from or under any of the properties or facilities currently or formerly
owned, leased or otherwise used, including without limitation for receipt of
the Company's wastes, by the Company or any of its subsidiaries, in
violation of or in a manner or to a location that could give rise to liability
under any Environmental Laws, which liability could reasonably be
expected to have a Material Adverse Effect on the Company;
(g) The Company and its subsidiaries have not assumed,
contractually or by operation of law, any liabilities or obligations under any
Environmental Laws;
(h) The Company and its subsidiaries have accrued or otherwise
provided, in accordance with generally accepted accounting principles, for
all damages, liabilities, penalties or costs that they may incur in connection
with any claim pending or threatened against them, or any requirement that
is or may be applicable to them, under any Environmental Laws, and such
accrual or other provision is reflected in the Company's most recent
consolidated financial statements.
(i) For purposes of this Agreement, the following terms shall
have the following meanings:
"Environmental Claim" means any written or oral notice, claim,
demand, action, quit, complaint, proceeding, request for information or
other communication by any person alleging liability or potential liability
(including without limitation liability or potential liability for investigatory
costs, cleanup costs, governmental response costs, natural resource
damages, property damage, personal injury, fines or penalties) arising out
of, relating to, based on or resulting from (i) the presence, discharge,
emission, release or threatened release of any Hazardous Materials at any
location, whether or not owned, leased or operated by the Company or any
of its subsidiaries or (ii) circumstances forming the basis of any violation or
alleged violation of any Environmental Law or Environmental Permit or
(iii) otherwise relating to obligations or liabilities under any Environmental
Laws.
"Environmental Permits" means all permits, licenses, registrations
and other governmental authorizations required for the Company and the
operations of the Company's and its subsidiaries, facilities and otherwise to
conduct its business under Environmental Laws.
"Environmental Laws" means all applicable federal, state and
local statutes, rules, regulations, ordinances, orders, decrees and common
law relating in any matter to contamination, pollution or protection of
human health or the environment, including without limitation the
Comprehensive Environmental Response, Compensation and Liability Act,
the Solid Waste Disposal Act, the Clean Air Act, the Clean Water Act, the
Toxic Substances Control Act, the Occupational Safety and Health Act, the
Emergency Planning and Community-Right-to-Know Act, the Safe Drinking
Water Act, all as amended, and similar state laws.
"Hazardous Materials" means all hazardous or toxic substances,
wastes, materials or chemicals, petroleum (including crude oil or any
fraction thereof) and petroleum products, asbestos and asbestos-containing
materials, pollutants, contaminants and all other materials, substances and
forces, including but not limited
to electromagnetic fields, regulated
pursuant to, or that could form the basis of liability under, any
Environmental Law.
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