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EXECUTION COPY
EXHIBIT 2.1
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MERGER AGREEMENT
DATED AS OF JULY 24, 1998
by and among
STAMFORD CS ACQUISITION CORP.,
▇▇▇▇▇-▇▇▇▇▇▇▇▇ HOLDINGS, INC.,
and
THE OTHER PARTIES HERETO
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.........................................................................................1
ARTICLE II THE MERGER.........................................................................................9
2.1. The Merger......................................................................................9
2.2. Effective Time of the Merger....................................................................9
2.3. Effect of Merger................................................................................9
2.4. Supplementary Action...........................................................................10
ARTICLE III THE SURVIVING CORPORATION........................................................................10
3.1. Name...........................................................................................10
3.2. Certificate of Incorporation...................................................................10
3.3. Bylaws.........................................................................................10
3.4. Directors......................................................................................10
3.5. Officers.......................................................................................10
3.6. Authorized Capitalization......................................................................10
ARTICLE IV CONVERSION OF SHARES..............................................................................11
4.1. Conversion of Shares...........................................................................11
4.2. No Further Transfers...........................................................................11
4.3. Determination of Equity Consideration; Adjustment to Equity Consideration......................11
4.4. Overpayment Escrow Fund........................................................................14
ARTICLE V PAYMENT............................................................................................14
5.1. Exchange Procedure.............................................................................14
5.2. Lost Certificates..............................................................................14
5.3. Payment of Transaction Expenses and Employee Bonuses. .........................................15
ARTICLE VI CLOSING...........................................................................................15
6.1. The Closing....................................................................................15
6.2. Actions and Deliveries at the Closing..........................................................15
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................................................17
7.1. Capitalization; Ownership of Shares............................................................17
7.2. Subsidiaries and Joint Ventures................................................................17
7.3. Organization...................................................................................18
7.4. Corporate Power and Authority; No Violations...................................................18
7.5. Financial Statements...........................................................................19
7.6. Absence of Certain Changes or Events...........................................................21
7.7. Title to Assets................................................................................21
7.8. Intellectual Property..........................................................................21
7.9. Contracts......................................................................................22
7.10. Litigation.....................................................................................23
7.11. Compliance With Laws...........................................................................23
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7.12. Environmental Matters..........................................................................23
7.13. Employee Benefit Plans.........................................................................24
7.14. Government Consents............................................................................24
7.15. Taxes..........................................................................................24
7.16. Real Property..................................................................................25
7.17. Broker's Fees..................................................................................26
7.18. Disclaimer.....................................................................................26
7.19. Change of Control..............................................................................26
7.20. Labor Relations and Employment.................................................................26
7.21. Insurance......................................................................................27
7.22. Customers and Suppliers........................................................................27
7.23. Transactions with Affiliates and Third Parties; Asset Sales....................................28
7.24. Corporate Records..............................................................................28
7.25. No Undisclosed Liabilities.....................................................................28
7.26. Year 2000 Compliance...........................................................................28
7.27. Joint Ventures.................................................................................29
ARTICLE VIII REPRESENTATIONS AND WARRANTIES OF THE BUYER.....................................................29
8.1. Organization...................................................................................29
8.2. Corporate Power and Authority; No Violations...................................................29
8.3. Brokers' Fees..................................................................................30
8.4. Litigation.....................................................................................30
8.5. Government Consents............................................................................30
8.6. Purchase for Investment........................................................................30
8.7. Adequate Funds. ...............................................................................30
ARTICLE IX REPRESENTATIONS AND WARRANTIES OF EQ..............................................................30
9.1. Organization...................................................................................30
9.2. Corporate Power and Authority; No Violations...................................................31
9.3. Financial Statements...........................................................................31
9.4. Absence of Certain Changes or Events...........................................................31
9.5. Brokers' Fees..................................................................................31
9.6. Litigation.....................................................................................32
9.7. Government Consents............................................................................32
ARTICLE X REPRESENTATIONS AND WARRANTIES OF EQUILEASE........................................................32
10.1. Organization...................................................................................32
10.2. Corporate Power and Authority; No Violations...................................................32
10.3. Ultimate Parent................................................................................32
10.4. Brokers' Fees..................................................................................33
10.5. Litigation.....................................................................................33
10.6. Government Consents............................................................................33
ARTICLE XI COVENANTS OF THE PARTIES..........................................................................33
11.1. Efforts........................................................................................33
11.2. Conduct of Business............................................................................33
11.3. Access.........................................................................................35
11.4. No Solicitation................................................................................35
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11.5. Books and Records..............................................................................36
11.6. Liabilities and Indemnification................................................................36
11.7. Insurance......................................................................................36
11.8. Litigation Support.............................................................................36
11.9. Employee Matters...............................................................................37
11.10. Other Actions..................................................................................37
11.11. Notice of Certain Events.......................................................................37
11.12. Reporting......................................................................................38
11.13. Further Assurances.............................................................................38
11.14. Buyer Restrictions.............................................................................39
11.15. Certain Stockholder Approvals..................................................................39
11.16. Tender Offers..................................................................................39
11.17. Tax Periods Ending on or Before the Closing Date. ............................................40
11.18. Buyer Escrow...................................................................................41
11.19. CS Interglas Options...........................................................................41
ARTICLE XII CONDITIONS TO THE BUYER'S OBLIGATIONS...........................................................42
12.1. Representations, Warranties and Covenants of the Company.......................................42
12.2. No Prohibition.................................................................................42
12.3. Third Party Consents...........................................................................42
12.4. Governmental Consents..........................................................................42
12.5. Document Deliveries............................................................................42
12.6. Repayment of Indebtedness to Third Parties; Termination of Security Interests..................42
12.7. Resignations...................................................................................42
12.8. Stockholder Agreements.........................................................................43
12.9. Stockholder Approval...........................................................................43
12.10. Release of Claims..............................................................................43
12.11. Tender Offer Waiting Periods and Exit Consents.................................................43
ARTICLE XIII CONDITIONS TO THE COMPANY'S OBLIGATIONS.........................................................43
13.1. Representations, Warranties and Covenants of the Buyer.........................................43
13.2. No Prohibition.................................................................................44
13.3. Governmental Consents..........................................................................44
13.4. Document Deliveries............................................................................44
ARTICLE XIV TERMINATION PRIOR TO CLOSING....................................................................44
14.1. Termination....................................................................................44
14.2. Effect of Termination..........................................................................44
ARTICLE XV MISCELLANEOUS...................................................................................45
15.1. Non-Survival of Representations and Warranties.................................................45
15.2. Entire Agreement...............................................................................45
15.3. Successors and Assigns; Third Party Beneficiaries..............................................45
15.4. EQ and Equilease Guarantees....................................................................46
15.5. Vestar Guarantee...............................................................................46
15.6. Headings.......................................................................................46
15.7. Modification and Waiver........................................................................46
15.8. Expenses.......................................................................................46
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15.9. Notices........................................................................................46
15.10. Governing Law; Forum...........................................................................47
15.11. Public Announcements...........................................................................48
15.12. Counterparts...................................................................................48
15.13. Released Parties...............................................................................48
15.14. Third Party Beneficiary........................................................................48
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EXHIBITS:
Exhibit 1.1 -- Working Capital
Exhibit 2.2 -- Form of Certificate of Merger
Exhibit 4.4 -- Form of Escrow Agreement
Exhibit 11.18 -- Buyer Escrow Agreement
Exhibit 12.10 -- Form of Stockholder Release
SCHEDULES:
Schedule 1 -- Permitted Liens
Schedule 7.1 -- Ownership of Shares
Schedule 7.2 -- Subsidiaries
Schedule 7.3 -- Organization
Schedule 7.4 -- Corporate Power and Authority; No Violations
Schedule 7.6 -- Absence of Certain Changes or Events
Schedule 7.8 -- Intellectual Property
Schedule 7.9 -- Contracts
Schedule 7.10 -- Litigation
Schedule 7.11 -- Compliance with Laws
Schedule 7.12 -- Environmental Matters
Schedule 7.13 -- Employee Benefit Plans
Schedule 7.14 -- Consents
Schedule 7.15 -- Taxes
Schedule 7.16(a) -- Owned Real Property
Schedule 7.16(b) -- Leased Real Property
Schedule 7.17 -- Broker's Fees
Schedule 7.19 -- Change of Control
Schedule 7.20 -- Labor Relations and Employment
Schedule 7.21 -- Insurance
Schedule 7.22(a) -- Major Customers
Schedule 7.22(b) -- Major Suppliers
Schedule 7.23 -- Transactions with Affiliates and Third Parties
Schedule 7.25 -- No Undisclosed Liabilities
Schedule 8.2 -- Buyer Contravention
Schedule 8.5 -- Buyer Consents
Schedule 11.2 -- Conduct of Business
Schedule 12.1 -- Representations and Warranties
Schedule 12.3 -- Required Consents
Schedule 12.4 -- Required Government Consents
Schedule 12.10 -- Release
Schedule 13.3 -- Buyer Required Government Consents
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MERGER AGREEMENT
This MERGER AGREEMENT (the "Agreement"), dated as of July 24,
1998, is made by and among ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Holdings, Inc., a Delaware corporation
(the "Company"), Stamford CS Acquisition Corp., a Delaware corporation (the
"Buyer"), only for the purposes of Section 4.3, Vestar/CS Holding Company,
L.L.C. (the "Stockholders' Representative"), only for the purpose of Section
15.5, Vestar Equity Partners, L.P. ("Vestar"), and only for purposes of Sections
11.14, 11.17, 11.18, and 15.4, EQ Corporation, a Delaware corporation ("EQ"),
and Equilease Holding Company, a Delaware corporation ("Equilease"). All
capitalized words and terms contained in this Agreement shall have the meanings
set forth in Article I hereof.
RECITALS
WHEREAS, the Board of Directors and all of the stockholders of
the Company and the Board of Directors of the Buyer deem it advisable and in the
best interests of each such corporation and its respective stockholders to cause
the merger of the Buyer with and into the Company (the "Merger") upon the terms
and conditions set forth herein and in accordance with the General Corporation
Law of the State of Delaware (the "DGCL").
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and conditions contained herein, and in
order to set forth the terms and conditions of the Merger and the mode of
carrying the same into effect, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
"Actual Working Capital" has the meaning set forth in Section
4.3(c) hereof.
"Adjusted Per Share Equity Consideration" means an amount
equal to the Per Share Equity Consideration as adjusted by increasing the Final
Equity Consideration by any interest payable to the Stockholders, or decreasing
the Final Equity Consideration by any interest payable by the Stockholders'
Representative, in each case under Section 4.3(e) hereof.
"Affiliate" means, as to any person, any other person directly
or indirectly controlling, controlled by or under common control with that
person.
"Agreement" has the meaning set forth in the preface hereof.
"ASCO" has the meaning set forth in Section 12.12 hereof.
"ASCO JV Agreements" has the meaning set forth in Section
12.12 hereof.
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"Asahi" has the meaning set forth in Section 12.12 hereof.
"Auditor" has the meaning set forth in Section 4.3(g) hereof.
"Balance Sheet" has the meaning set forth in Section 7.5 hereof.
"Baseline Working Capital" has the meaning set forth in Section 4.3(b)
hereof.
"Benefit Plan" has the meaning set forth in Section 7.13(a) hereof.
"Business Transferee" has the meaning set forth in Section 15.3
hereof.
"Buyer" has the meaning set forth in the preface hereof.
"Buyer Escrow Agent" has the meaning set forth in the Buyer Escrow
Agreement.
"Buyer Escrow Agreement" has the meaning set forth in Section 11.18
hereof.
"Buyer Escrow Amount" has the meaning set forth in Section 11.18
hereof.
"Certificate of Merger" has the meaning set forth in Section 2.2.
hereof.
"Certificates" has the meaning set forth in Section 4.1 hereof.
"Closing" has the meaning set forth in Section 6.1 hereof.
"Closing Cash" has the meaning set forth in Section 4.3(c) hereof.
"Closing Debt" has the meaning set forth in Section 4.3(c) hereof.
"Closing Statement" has the meaning set forth in Section 4.3(c)
hereof.
"Closing Balance Sheet" has the meaning set forth in Section 4.3(c)
hereof.
"Closing Date" has the meaning set forth in Section 6.1 hereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" has the meaning set forth in Section 4.1(c) hereof.
"Company" has the meaning set forth in the preface hereof.
"Company Common Stock" means the Company's common stock, par value
$.01 per share.
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"Company Material Adverse Effect" has the meaning set forth in Section
7.3 hereof.
"Company Released Parties" has the meaning set forth in Section 7.18
hereof.
"Company SEC Documents" has the meaning set forth in Section 7.5(c)
hereof.
"Competition Laws" has the meaning set forth in Section 11.13 hereof.
"Confidentiality Agreement" has the meaning set forth in Section 11.3
hereof.
"Constituent Corporations" means the Company and the Buyer.
"Contracts" has the meaning set forth in Section 7.9 hereof.
"Credit Agreement" means that certain Credit Agreement, dated as of
April 17, 1996, among ▇▇▇▇▇-S Acquisition Corporation, ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Holdings,
Inc., the financial institutions from time to time party thereto, The Chase
Manhattan Bank, as agent, collateral agent, documentation and syndication agent
for the Lenders; The Chase Manhattan Bank, as issuing bank and Bankers Trust
Company, Fleet National Bank, and NationsBank, N.A., as co-agent, as amended.
"CSI" has the meaning set forth in Section 12.12 hereof.
"C-S" has the meaning set forth in Section 11.19 hereof.
"DGCL" has the meaning set forth in the recitals hereof.
"Debt" means any liability (including without limitation accrued but
unpaid interest) in respect of (A) borrowed money, (B) capitalized lease
obligations, (C) the deferred purchase price of property or services (other than
trade payables incurred in the ordinary course of business), (D) obligations
under interest rate agreements and currency agreements and (E) guarantees of any
of the foregoing or guarantees of any Debt of the Joint Ventures (without double
counting).
"Defaulting Party" has the meaning set forth in Section 14.2 hereof.
"Disclosure Schedule" has the meaning set forth in Section 7.1 hereof.
"Effective Time" has the meaning set forth in Section 2.2 hereof.
"Employee Bonuses" means the bonuses to be paid to employees of the
Company in an aggregate amount of approximately $3.0 million at the Closing, the
actual amount of which shall be set forth in a written notice provided to the
Buyer by the Company at least 3 days prior to the Closing Date; provided, that
no individual employee of the Company shall receive or be entitled to receive a
bonus in an amount greater than $50,000; provided, further, that the Employee
Bonuses shall not include the bonuses payable to management under the 1998
Management Bonus Plan.
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"Enterprise Value" means $488,000,000 (Four Hundred Eighty Eight
Million Dollars).
"Environmental Laws" means all laws, rules, regulations, ordinances,
codes, orders, decisions, injunctions, judgments, awards and decrees of any
Governmental Entity relating to the protection of the environment or of human
health from environmental hazards, or to any emission, discharge, generation,
processing, storage, holding, abatement, existence, release, threatened release
or transportation of any chemical or substance, including, but not limited to,
(i) CERCLA, the Resource Conservation and Recovery Act, the Clean Water Act, the
Clean Air Act, the Toxic Substances Control Act, environmental property transfer
statutes or requirements and (ii) all other requirements pertaining to
reporting, licensing, permitting, investigation or remediation of Hazardous
Substances in the air, surface water, groundwater or land, or relating to the
manufacture, processing, distribution, use, sale, treatment, receipt, storage,
disposal, transport or handling of Hazardous Substances or relating to human
health or safety from exposure to Hazardous Substances.
"Environmental Lien" means a Lien, either recorded or unrecorded, in
favor of any Governmental Entity, arising under Environmental Laws.
"EQ" has the meaning set forth in the preface hereof.
"EQ Balance Sheet" has the meaning set forth in Section 9.3 hereof.
"EQ Financial Statements" has the meaning set forth in Section 9.3
hereof.
"Equilease" has the meaning set forth in the preface hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Amount" has the meaning set forth in Section 4.4 hereof.
"Escrow Agent" has the meaning given to such term in the Escrow
Agreement.
"Escrow Agreement" has the meaning set forth in Section 4.4 hereof.
"Estimated Working Capital" has the meaning set forth in Section
4.3(a) hereof.
"Estimated Working Capital Allowance" has the meaning set forth in
Section 4.3(b) hereof.
"Exchange Act" has the meaning set forth in Section 7.5(c) hereof.
"Final Equity Consideration" has the meaning set forth in Section
4.3(d) hereof.
"Financial Statements" has the meaning set forth in Section 7.5
hereof.
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"Former Employees "has the meaning set forth in Section 11.10 hereof.
"GAAP" means United States (unless otherwise specifically provided
herein) generally accepted accounting principles as in effect for the period for
which it is referred to herein.
"Governmental Entity" means any governmental or political subdivision
thereof, whether federal, state, local or foreign, or any agency or
instrumentality of any such government or political subdivision, or any
judicial, quasi-judicial, administrative or regulatory body, commission or
tribunal.
"Hazardous Substances" means any substance that (a) is regulated under
any Environmental Law (including, without limitation, radioactive substances,
polychlorinated-biphenyls, petroleum and petroleum derivatives and products) or
(b) requires investigation, removal or remediation under applicable
Environmental Law.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
"Indebtedness" of any person at any date means without duplication (a)
all indebtedness of such person for borrowed money or for the deferred purchase
price of property or services which, in accordance with GAAP, would be required
to be shown as a liability on the face of a balance sheet of such person on such
date (other than trade liabilities and accrued expenses and liabilities, in each
case to the extent incurred in the ordinary course of business and payable in
accordance with customary practices), (b) any other indebtedness of such person
which is evidenced by a note, bond, debenture or similar instrument, and (c) all
obligations of such person under capitalized lease obligations.
"Indemnified Party" has the meaning set forth in Section 11.6 hereof.
"Indentures" means, collectively, the Senior Debenture Indenture and
the Senior Note Indenture.
"Intellectual Property" has the meaning set forth in Section 7.8
hereof.
"Interim Closing Date" means the later to occur of (i) the Preliminary
Closing Date and (ii) the date on which the Company and its applicable
Subsidiary, as the case may be, on the one hand and the applicable trustee, on
the other hand shall have executed and delivered the Senior Debenture
Supplemental Indenture, the Senior Note Supplemental Indenture, and all
documents and certificates required by the Indentures to effect such
Supplemental Indentures as set forth in Section 11.16 shall have been duly
executed and delivered other than any payment to the holders of the Senior
Debentures or the Senior Notes. The requirements under clause (ii) relating to
documents and certificates (other than the Supplemental Indentures) shall be
deemed satisfied if the Company
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provides executed but undated copies or if practicable executed copies to be
effective on the Closing Date.
"Interim Financial Statements" means, collectively, the unaudited
consolidated balance sheet, unaudited consolidated statement of operations and
unaudited consolidated statement of cash flows of the Company and its
Subsidiaries for the period ended May 9, 1998.
"IRS" means the United States Internal Revenue Service.
"Joint Ventures" means, collectively (a) Asahi-▇▇▇▇▇▇▇▇ Co., Ltd., a
Japanese corporation, (b) CS Interglas AG, a German corporation, (c)
▇▇▇▇▇-▇▇▇▇▇▇▇▇ Tech-Fab Company, a New York partnership, (d) Asahi-▇▇▇▇▇▇▇▇
(Taiwan) Co. Ltd. and (e) Asahi-▇▇▇▇▇▇▇▇ Interglas Corp. (Philippines).
"Knowledge" means with respect to the Company, the actual knowledge of
any officer, management level employee or any Stockholder of the Company, and
with respect to the Buyer, the actual knowledge of any officer or management
level employee of the Buyer.
"Leases" has the meaning set forth in Section 7.16(b) hereof.
"Liabilities" means any liability or obligation of or arising out of
or relating to the Company or any of the Subsidiaries, or the operation or
ownership of the Company or any of the Subsidiaries (including as to
environmental matters), of whatever kind or nature (whether known or unknown,
asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated
or unliquidated, due or to become due).
"Liens" means liens, mortgages, security interests, pledges, charges
or other encumbrances.
"Litigation" has the meaning set forth in Section 7.10 hereof.
"Major Customer" has the meaning set forth in Section 7.22(a) hereof.
"Major Supplier" has the meaning set forth in Section 7.22(b) hereof.
"Overpayment" has the meaning set forth in Section 4.3(e) hereof.
"Overpayment Escrow Fund" has the meaning set forth in the Escrow
Agreement.
"Owned Real Property" has the meaning set forth in Section 7.16(a)
hereof.
"Permits" has the meaning set forth in Section 7.11 hereof.
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"Permitted Liens" means (i) Liens for Taxes or other governmental
charges or levies which are not due and payable or are being contested in good
faith and by appropriate proceedings and for which adequate reserves for such
contested amounts have been established in accordance with GAAP, (ii) those
Liens listed on Section 1 of the Disclosure Schedule and (iii) mechanic's,
worker's, materialmen's and other like Liens not yet delinquent, recorded
easements, covenants, and other restrictions, and utility easements, building
restrictions, encroachments, zoning restrictions and other encumbrances and
restrictions existing generally with respect to properties of a similar
character which, in each case, do not affect materially and adversely the use of
any property material to the conduct of the business of the Company and its
Subsidiaries.
"Per Share Equity Consideration" means the Final Equity Consideration
divided by the sum of the number of shares of Company Common Stock outstanding
at the Effective Time.
"Per Share Preliminary Equity Consideration" means the Preliminary
Equity Consideration divided by the sum of the number of shares of Company
Common Stock outstanding at the Effective Time.
"person" means any individual, firm, corporation, association,
unincorporated organization, joint stock company, general, limited or limited
liability partnership, limited liability company, trust, joint venture,
Governmental Entity or other entity.
"Preliminary Closing Date" means the later of (i) twenty-one days from
the date first written above and (ii) the date on which all of the conditions
set forth in Article XII except for the condition set forth in Section 12.11
have been satisfied; provided, that for the purpose of clause (ii) any condition
requiring that a document or certificate be delivered shall be deemed to be
satisfied if the Company provides the Buyer with an executed but undated copy of
such document or certificate on the Interim Closing Date and any condition in
respect of any action that can only be taken on the Closing Date shall be deemed
satisfied if the Company completed as much of such action as is practicable by
the Interim Closing Date and has provided reasonable assurance of its ability to
complete the required actions as of the Closing Date.
"Preliminary Closing Debt" has the meaning set forth in Section 4.3(a)
hereof.
"Preliminary Closing Cash" has the meaning set forth in Section 4.3(a)
hereof.
"Preliminary Equity Consideration" has the meaning set forth in
Section 4.3(a) hereof.
"Preliminary Statement" has the meaning set forth in Section 4.3(a)
hereof.
"Quick Return" has the meaning set forth in Section 11.17(a) hereof.
"Reference Rate" means the applicable federal rate as defined in the
Code.
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"Released Persons" has the meaning set forth in Section 15.13 hereof.
"Returns" has the meaning set forth in Section 7.15(a) hereof.
"Securities Act" has the meaning set forth in Section 7.5(a) hereof.
"Senior Debentures" means the 12 1/2% Senior Debentures due 2007 of
the Company issued pursuant to the Senior Debenture Indenture.
"Senior Notes" means the 10 1/2% Senior Notes due 2006 of
▇▇▇▇▇-▇▇▇▇▇▇▇▇, Inc. issued pursuant to the Senior Note Indenture.
"Senior Debenture Indenture" means that certain Indenture dated as of
August 14, 1997 between the Company and State Street Bank and Trust as trustee.
"Senior Note Indenture" means that certain Indenture dated April 17,
1996 among ▇▇▇▇▇-S Acquisition Corporation, CS Finance Corporation of Delaware,
the Company, the Subsidiary Guarantors (as defined therein) and Fleet National
Bank as trustee.
"Senior Debenture Solicitation" has the meaning set forth in Section
11.16 hereof.
"Senior Note Solicitation" has the meaning set forth in Section 11.16
hereof.
"Senior Debenture Supplemental Indenture" has the meaning set forth in
Section 11.16 hereof.
"Senior Note Supplemental Indenture" has the meaning set forth in
Section 11.16 hereof.
"Solicitations" has the meanings set forth in Section 11.16 hereof.
"State Return" has the meaning set forth in Section 11.17(a) hereof.
"Stockholder" has the meaning set forth in Section 4.1(a) hereof.
"Stockholders' Representative" has the meaning set forth in the
preface hereof.
"Subsidiary" means any corporation with respect to which the Company,
directly or indirectly through another Subsidiary, owns a majority of the common
stock or has the power to vote or direct the voting of sufficient securities to
elect a majority of the directors (other than a Joint Venture).
"Supplemental Indentures" has the meaning set forth in Section 11.16
hereof.
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"Surviving Corporation" means the Company, following the effectiveness
of the Merger.
"Taxes" means any and all taxes, charges, fees, levies or other
assessments, including, without limitation, income, excise, real or personal
property, sales, use, service, value added, license, net worth, transfer and
recording taxes, gross receipts, fees and charges, imposed by the IRS or any
other taxing authority or any Governmental Entity; and such term shall include
any interest, penalties or additional amounts attributable to, or imposed upon,
or with respect to, any such taxes, charges, fees, levies or other assessments.
"Transaction Expenses" means (i) all costs, fees and expenses paid or
payable by the Company or any of its Subsidiaries to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. or any
other financial advisor, (ii) all costs, fees and expenses paid or payable by
the Company or any of its Subsidiaries to Vestar Capital Partners in connection
with the consummation of the transactions contemplated by this Agreement, and
(iii) all other costs, fees (including applicable pre-payment premiums) and
expenses (including accounting, financial advisor, legal fees and expenses)
incurred by the Company or any of its Subsidiaries in connection with (a) the
transactions contemplated by this Agreement through the Closing Date and (b) the
repayment or redemption of, or the tender for, the Senior Debentures and the
Senior Notes; provided, however, that only fifty percent (50%) of all amounts in
excess of 106% of the aggregate principal amount of the Senior Debentures paid
or payable by the Company to the holders of the Senior Debentures in connection
with the redemption thereof shall be deemed to be a Transaction Expense.
"Transferee" has the meaning set forth in Section 12.12 hereof.
"Unpaid Balance" has the meaning set forth in Section 4.3(e) hereof.
"Vestar" has the meaning set forth in the other preface hereof.
"Working Capital" means the current assets of the Company and its
Subsidiaries (excluding cash, cash equivalents and short-term investments) less
the current liabilities of the Company and its Subsidiaries (excluding any
current liability for Debt, Transaction Expenses, Employee Bonuses, and income
taxes relating to the portion of the taxable year of the Company ending on the
Closing Date), all in accordance with GAAP applied on a consistent basis and
calculated consistent with Exhibit 1.1. Notwithstanding the foregoing, for
purposes of calculating current assets, (i) the LIFO reserve amount shall be
deemed to equal $0 and no asset for income tax refunds receivable shall be
recorded and (ii) for purposes of calculating current liabilities, the deferred
tax current portion shall be deemed to equal $2,370,000.
"Working Capital Principles" has the meaning set forth in Section
4.3(a) hereof.
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ARTICLE II
THE MERGER
II.1. The Merger. Upon the terms and subject to the
conditions hereof, two business days following the satisfaction or written
waiver of the conditions set forth in Articles XII and XIII hereof other than
those to be satisfied at Closing, (but in no event less than twenty-one days
from the date hereof), the Buyer shall be merged with and into the Company and
the separate existence of the Buyer shall thereupon cease, and the Company, as
the Surviving Corporation, shall continue to exist under and be governed by the
DGCL.
II.2. Effective Time of the Merger. The Merger shall become
effective when a properly executed Certificate of Merger in substantially the
form of Exhibit 2.2 attached hereto (the "Certificate of Merger") is duly filed
with the Secretary of the State of Delaware as provided in the DGCL. When used
in this Agreement, the term "Effective Time" shall mean the date and time at
which the Certificate of Merger is so filed or at such other time as Buyer and
the Company shall agree should be specified in the Certificate of Merger.
II.3. Effect of Merger. The Merger shall have the effects set
forth in the DGCL. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, except as otherwise provided herein, all the
property, rights, privileges, powers and franchises of the Buyer and the Company
shall vest in the Surviving Corporation, and all debts, liabilities and duties
of the Buyer and the Company shall become the debts, liabilities and duties of
the Surviving Corporation.
II.4. Supplementary Action. If, at any time after the
Effective Time, the Surviving Corporation shall consider or be advised that any
further assignments or assurances are necessary or desirable to vest or to
perfect or confirm of record in the Surviving Corporation the title to any
property or rights of either of the Constituent Corporations, or otherwise to
carry out the provisions of this Agreement, the officers and directors of the
Surviving Corporation are hereby authorized and empowered on behalf of the
respective Constituent Corporations, in the name of and on behalf of the
appropriate Constituent Corporation, to execute and deliver any and all things
necessary or proper to vest or to perfect or confirm title to such property or
rights in the Surviving Corporation, and otherwise to carry out the purposes and
provisions of this Agreement.
ARTICLE III
THE SURVIVING CORPORATION
III.1. Name. The name of the Surviving Corporation will be
▇▇▇▇▇-▇▇▇▇▇▇▇▇ Holdings, Inc.
III.2. Certificate of Incorporation. The Certificate of
Incorporation of the Company as amended by the Certificate of Merger shall be
the Certificate of Incorporation of the Surviving Corporation. The Certificate
of Incorporation of the Surviving Corporation thereafter may be amended in
accordance with its terms and as provided by law.
III.3. Bylaws. The Bylaws of the Buyer immediately prior to
the Effective Time shall be the Bylaws of the Surviving Corporation.
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III.4. Directors. The directors of the Buyer immediately prior
to the Effective Time shall be the directors of the Surviving Corporation until
their respective successors are duly elected and qualified in the manner
provided in the Certificate of Incorporation and Bylaws of the Surviving
Corporation, or until their earlier resignation or removal, or as otherwise
provided by law. The Company shall procure, prior to and as a condition of
Closing, the resignation of each of its Directors.
III.5. Officers. The officers of the Company immediately prior
to the Effective Time shall be the officers of the Surviving Corporation until
their successors are duly elected and qualified in the manner provided in the
Certificate of Incorporation and Bylaws of the Surviving Corporation, or until
their earlier resignation or removal, or as otherwise provided by law.
III.6. Authorized Capitalization. The authorized
capitalization of the Surviving Corporation shall be 1,000 shares of Common
Stock, par value $.01 per share. After the Effective Time, the authorized
capitalization of the Surviving Corporation may be changed as provided by the
Certificate of Incorporation and Bylaws of the Surviving Corporation.
ARTICLE IV
CONVERSION OF SHARES
IV.1. Conversion of Shares.
(a) As of the Effective Time, by virtue of the Merger and
without any action on the part of any record holder or beneficial holder
("Stockholder") of shares of the Company Common Stock ("Certificates"), each
issued and outstanding share of the Company's Common Stock, excluding any shares
held in the Company's treasury, shall be automatically converted into and shall
represent only the right to receive cash in the amount of the Adjusted Per Share
Equity Consideration payable as set forth below. After the Effective Time, no
share of Common Stock shall be deemed to be outstanding or to have any rights
other than those set forth in this Section 4.1(a).
(b) Each share of the Company Common Stock held in the
treasury of the Company shall be canceled and retired and all rights in respect
thereof shall be canceled and cease to exist and no payment shall be made in
respect thereof.
(c) Each issued and outstanding share of Buyer's Common
Stock, par value $.01 per share ("Common Stock"), shall be converted into one
share of the Surviving Corporation's Common Stock, par value $.01 per share.
IV.2. No Further Transfers. At the Effective Time, the stock
transfer books of the Company shall be closed and no transfer of Company Common
Stock shall thereafter be made.
IV.3. Determination of Equity Consideration; Adjustment to
Equity Consideration.
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(a) At least three Business Days prior to the Closing Date, the
Company shall in good faith prepare at its sole cost and expense a statement in
accordance with GAAP applied on a basis consistent with the preparation of the
Interim Financial Statements (the "Preliminary Statement"), except as otherwise
provided in the Working Capital definition and that in the case of the Closing
Balance Sheet, a physical inventory shall be taken in accordance with Section
4.3(c) (GAAP as so modified is referred to herein as the "Working Capital
Principles"), containing an estimate of (i) the consolidated Working Capital of
the Company and the Subsidiaries immediately prior to the Closing ("Estimated
Working Capital"), (ii) a schedule of total Debt of the Company and its
Subsidiaries anticipated to be outstanding immediately prior to the Closing
("Preliminary Closing Debt"), and (iii) an estimate of cash, cash equivalents
and short-term investments, in each case, that would be reflected on a
consolidated balance sheet of the Company and its Subsidiaries prepared in
accordance with Working Capital Principles immediately prior to the Closing
("Preliminary Closing Cash"). Based upon the Preliminary Statement, a
preliminary determination of the Final Equity Consideration shall be made (the
"Preliminary Equity Consideration"), which Preliminary Equity Consideration
shall be an amount equal to the Enterprise Value (A) less Preliminary Closing
Debt, (B) less Transaction Expenses, (C) less the Employee Bonuses, (D) plus
Preliminary Closing Cash, (E) less the Escrow Amount and (F) plus or minus the
Estimated Working Capital Allowance as provided pursuant to clause (b) below.
(b) If Estimated Working Capital is greater than $23,200,000 (the
"Baseline Working Capital"), the Preliminary Equity Consideration shall be
increased by the amount of such excess, and if Estimated Working Capital is less
than Baseline Working Capital, the Preliminary Equity Consideration shall be
reduced by the amount by which Estimated Working Capital is less than Baseline
Working Capital. The amount of such excess or shortfall is referred to as the
"Estimated Working Capital Allowance."
(c) As promptly as practicable following the Closing Date, but in any
event within 60 days thereafter, the Surviving Corporation shall prepare and
deliver to the Stockholders' Representative a consolidated balance sheet of the
Company and the Subsidiaries as of the Closing (the "Closing Balance Sheet") and
a statement based thereon (the "Closing Statement") setting forth (i) actual
Working Capital immediately prior to the Closing ("Actual Working Capital"),
(ii) a schedule of total Debt outstanding immediately prior to the Closing
("Closing Debt"), (iii) a calculation of cash, cash equivalents and short-term
investments on hand ("Closing Cash"), in each case, that would be reflected on a
consolidated balance sheet of the Company and its Subsidiaries prepared in
accordance with the Working Capital Principles immediately prior to the Closing
and (iv) a calculation of the Final Equity Consideration. The Closing Balance
Sheet shall be prepared in accordance with GAAP applied on a basis consistent
with the preparation of the Interim Financial Statements and the Closing
Statement shall be derived from the Closing Balance Sheet and shall be prepared
in accordance with the Working Capital Principles. For purposes of calculating
the Closing Balance Sheet, the calculation of Actual Working Capital shall be
based on the results of a physical inventory taken by the Buyer and the
Surviving Corporation, on a date mutually agreeable to the parties, and in any
event within five days prior to or five days following the Closing Date (the
"Inventory Date"), at each and every location of the
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Company, and observed by the accountants and/or representatives of the parties.
The Stockholders' Representative shall have reasonable access to the Surviving
Corporation's and the Subsidiaries' books and records and the accountants' work
papers related to the preparation of the Preliminary Statement, the Closing
Balance Sheet and the Closing Statement. The Surviving Corporation shall pay for
all costs and expenses incurred in connection with the preparation of the
Closing Balance Sheet and Closing Statement.
(d) The "Final Equity Consideration" shall be an amount equal to
Enterprise Value (A) less Closing Debt, (B) less Transaction Expenses, (C) less
the Employee Bonuses, (D) plus Closing Cash, and (E) plus the amount by which
Actual Working Capital exceeds Baseline Working Capital or minus the amount by
which Actual Working Capital is less than Baseline Working Capital, as the case
may be.
(e) If the Preliminary Equity Consideration is less than the Final
Equity Consideration (such difference being referred to herein as the "Unpaid
Balance"), then, in addition to the Preliminary Equity Consideration payable to
the Stockholders under Section 4.3(a), within five (5) Business Days after the
final determination of the Closing Statement and the Final Equity Consideration
(whether such determination is made by agreement of the Stockholders'
Representative and the Surviving Corporation or by the Auditor, as provided
herein), the Surviving Corporation shall deliver to the Stockholders'
Representative for the benefit of the Stockholders, an amount equal to the
Unpaid Balance, together with interest thereon at the Reference Rate in effect
from time to time from the Closing Date until the date of such payment, in cash
in immediately available funds by wire transfer to a bank account or accounts
designated in writing by the Stockholders prior to the Closing Date. If the
Preliminary Equity Consideration is greater than the Final Equity Consideration
(such difference being referred to herein as the "Overpayment"), then, within
five (5) Business Days after the final determination of the Closing Statement
and the Final Equity Consideration (whether such determination is made by
agreement of the Stockholders' Representative and the Surviving Corporation or
by the Auditor, as provided herein), the Stockholders' Representative shall
reimburse to the Surviving Corporation an amount equal to the Overpayment,
together with interest thereon at the Reference Rate in effect from time to time
from the Closing Date until the date of such payment, in cash in immediately
available funds by wire transfer to a bank account designated in writing by the
Buyer prior to the Closing Date less any amounts paid to the Surviving
Corporation from the Overpayment Escrow Fund.
(f) The Closing Statement and the calculation of the Final Equity
Consideration shall be binding upon the parties unless the Stockholders'
Representative gives written notice of disagreement therewith to the Surviving
Corporation within thirty (30) days after their receipt of the Closing
Statement, specifying in reasonable detail the nature and extent of such
disagreement. The Stockholders' Representative and the Surviving Corporation
shall thereafter negotiate in good faith to resolve any such disagreements. If
the Surviving Corporation and the Stockholders' Representative mutually agree
upon the Closing Statement and the calculation of the Final Equity Consideration
within thirty (30) days after Surviving Corporation's receipt of such notice,
such agreement shall be binding upon the parties. If the Stockholders'
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Representative and the Surviving Corporation are unable to resolve any
disagreements within thirty (30) days, the Stockholders' Representative and the
Surviving Corporation shall select an Auditor within 15 days after such 30 day
period to resolve the disagreements over accounting matters in accordance with
the provision of this Section 4.3.
(g) The "Auditor" shall be an independent nationally
recognized certified public accounting firm mutually selected by the
Stockholders' Representative and the Surviving Corporation, provided that if the
Stockholders' Representative and the Surviving Corporation are unable to
mutually agree upon an Auditor, the Stockholders' Representative and the
Surviving Corporation shall select one of the "big five" accounting firms by lot
after eliminating one firm designated unacceptable by the Stockholders'
Representative and one firm designated as unacceptable by the Surviving
Corporation; provided, further, that the office of the "big five" accounting
firm selected by lot shall not have done any work for the Stockholders'
Representative, the Buyer, EQ or Equilease during the eighteen (18) months
immediately preceding the Closing Date. The Auditor shall have reasonable access
to the Company's and the Subsidiaries' books and records required to resolve the
disputes, and the Auditor shall be directed to address and resolve solely the
individual disputed line items on the Closing Statement. The Stockholders'
Representative and the Surviving Corporation shall use their reasonable efforts
to cause the Auditor to resolve all disagreements over individual line items as
soon as practicable, but in any event within 30 days after the Auditor's
engagement. The resolution of such disagreements by the Auditor and the reasons
therefore shall be in writing and shall be final and binding on the
Stockholders' Representative and the Surviving Corporation absent fraud or
manifest error. The fees and expenses of the Auditor shall be paid by the party
whose position is, ruled as by the Auditor, most incorrect. The Surviving
Corporation and the Stockholders' Representative shall each be entitled to make
a presentation to the Auditor, pursuant to procedures to be agreed to among the
Stockholders' Representative, the Buyer and the Auditor, advocating the merits
regarding the differences espoused by each party. The Buyer and the
Stockholders' Representative each agree to provide the Auditor with all
information it shall reasonably require, and the Auditor will be permitted (to
the extent it considers appropriate) to base its determination on such
information and on the accounting and other records of the Surviving Corporation
and the Subsidiaries.
IV.4. Overpayment Escrow Fund. At the Closing the amount of
$5,000,000 (the "Escrow Amount") shall be remitted to the Escrow Agent to be
held and disbursed by the Escrow Agent in accordance with the terms of the
Escrow Agreement in the form of Exhibit 4.4 attached hereto (the "Escrow
Agreement").
ARTICLE V
PAYMENT
V.1. Exchange Procedure.
(a) Promptly following the Effective Time, the
Surviving Corporation shall mail or deliver to each Stockholder a letter of
transmittal and instructions for use in effecting the surrender of the
Certificates for payment therefor. Upon surrender to the Buyer of a Certificate
together with a duly executed letter of transmittal and any other required
documents, the Stockholder
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holding such Certificate shall be paid in exchange therefor the Per Share
Preliminary Equity Consideration payable in respect of such shares, and the
Certificate so surrendered shall forthwith be canceled. Such payments shall be
paid in cash at the Closing (or in respect of Certificates surrendered after the
Closing Date, on the date of such surrender) in immediately available funds by
wire transfer to a bank account designated by each Stockholder at least two days
prior to the Closing.
(b) Until surrendered as contemplated by Section 5.1, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender a pro rata portion of the
Preliminary Equity Consideration. No interest shall be paid or will accrue on
the amount payable at the Effective Time upon surrender of a Certificate. If
payment is to be made to a Stockholder other than the person in whose name the
Certificate surrendered is registered, it shall be a condition of payment that
the Certificate so surrendered shall be properly endorsed or otherwise in proper
form for transfer and that the Stockholder requesting such payment shall pay any
transfer or other taxes required by reason of the payment to a person other than
the registered holder of the Certificate surrendered or establish that such tax
has been paid or is not applicable.
V.2. Lost Certificates. In the event any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
registered holder of such lost, stolen or destroyed Certificate in form and
substance acceptable to the Buyer, the Buyer will issue in exchange for such
lost, stolen or destroyed Certificate the portion of the Preliminary Equity
Consideration due in respect thereof in the manner set forth in Section 5.1.
When authorizing such payments in exchange therefor, the Board of Directors of
the Surviving Corporation may, in its sole discretion and as a condition
precedent to the payment thereof, require the owner of such lost, stolen or
destroyed Certificate to give the Surviving Corporation a bond in the sum as it
may reasonably direct as indemnity against any claim that may be made against
the Surviving Corporation with respect to the Certificate alleged to have been
lost, stolen or destroyed.
V.3. Payment of Transaction Expenses and Employee Bonuses. At the
Closing, the Company shall pay or cause to be paid all Transaction Expenses and
the Employee Bonuses.
ARTICLE VI
CLOSING
VI.1. The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, commencing at
10:00 a.m. local time two business days after the satisfaction or written waiver
of the conditions set forth in Articles XII and XIII except those that are to be
satisfied at the Closing or at such other date, place or time as the parties may
agree (the "Closing Date").
VI.2. Actions and Deliveries at the Closing. At the Closing:
(a) The Company will deliver or cause to be delivered to the
Buyer:
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(i) a copy of resolutions of the board of directors of the Company
and the consent of the Stockholders of the Company, authorizing the execution,
delivery and performance of this Agreement and all related documents and
agreements, certified by the Secretary of the Company, as being true and correct
copies of the originals thereof subject to no modifications or amendments;
(ii) a certificate of the Secretary of the Company certifying as to
the incumbency of the officers of the Company and as to the signatures of such
officers who have executed documents delivered at the Closing on behalf of the
Company;
(iii) certificates, dated within five days of the Closing, of the
Secretary of State of Delaware establishing that the Company is validly in
existence and otherwise is in good standing to transact business; and
(iv) a certificate of the Chief Financial Officer and the President
of the Company certifying as to the fulfillment of the conditions set forth in
Section 12.1 hereof;
(v) (A) a copy of a payoff letter in customary form, which shall be
reasonably satisfactory to the Buyer, from The Chase Manhattan Bank indicating
that all Indebtedness of the Company under the Credit Agreement has been repaid
in full and all of the agreements and instruments relating to such Indebtedness
under the Credit Agreement, including all security agreements, filings and
related instruments will be terminated as of the Effective Time upon the
satisfaction of the conditions set forth in such letter, and (B) a certificate
of Vestar Capital Partners indicating that all amounts due and owing under its
Management Agreement have been paid in full and such Management Agreement has
been terminated;
(vi) the Escrow Agreement executed by the Escrow Agent and the other
parties thereto; and
(vii) a legal opinion of counsel to the Company with regard to the
capitalization of the Company, the authority of the Company to enter into this
Agreement and consummate the transactions contemplated hereby, the
enforceability of this Agreement against the Company and the validity of the
Merger, in form and substance reasonably satisfactory to the Buyer.
(b) The Buyer will deliver or cause to be delivered to the Company:
(i) a copy of resolutions of the board of directors of the Buyer
authorizing the execution, delivery and performance of this Agreement and all
related documents and agreements, each certified by the Secretary of the Buyer
as being true and correct copies of the originals thereof subject to no
modifications or amendments;
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(ii) a certificate of the Secretary of the Buyer certifying as to the
incumbency of the officers of the Buyer and as to the signatures of such
officers who have executed documents delivered at the Closing on behalf of the
Buyer;
(iii) a certificate, dated within five days of the Closing, of the
Secretary of State of Delaware establishing that the Buyer is in existence and
otherwise is in good standing to transact business;
(iv) a certificate of the Chief Financial Officer of the Buyer
certifying as to the fulfillment of the conditions set forth in Section 13.1
hereof;
(v) the Escrow Agreement executed by the Escrow Agent and the other
parties thereto; and
(vi) a legal opinion of counsel to the Buyer, EQ, and Equilease with
regard to the authority of the Buyer, EQ, and Equilease to enter into this
Agreement and consummate the transactions contemplated hereby, the
enforceability of this Agreement against the Buyer, EQ, and Equilease and the
validity of the Merger, in form and substance reasonably satisfactory to the
Company.
(c) The Company shall cause the Certificate of Merger to be filed in
accordance with the DGCL, and shall take any and all other lawful actions, and
do any other lawful things necessary to effect the Merger and to enable the
Merger to become effective.
(d) The Buyer shall make the payments described in Section 5.1 hereof.
(e) The Company shall make the payments described in section 5.3
hereof.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Buyer that
the statements contained in this Article VII are correct and complete as of the
date hereof.
VII.1. Capitalization; Ownership of Shares. The authorized
capital stock of the Company consists of (i)100,000 shares of Company Common
Stock, of which 9,000 shares are issued and outstanding and (ii) 10,000 shares
of Preferred Stock, none of which shares are issued and outstanding. All of the
shares of capital stock of the Company outstanding as of the date of this
Agreement are owned of record and beneficially by the Stockholders as set forth
in Section 7.1 of the disclosure schedule delivered by the Company to the Buyer
in connection herewith (the "Disclosure Schedule"). All of such shares are duly
authorized, validly issued, fully paid and non-assessable. Except as set forth
on Section 7.1 of the Disclosure Schedule, there are no securities
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presently outstanding, and at the Effective Time there will not be any
outstanding securities which are convertible into, exchangeable for, or carrying
the right to acquire, equity securities of the Company, or subscriptions,
warrants, options, calls, convertible securities, registration or other rights
or other arrangements or commitments obligating the Company to issue, transfer
or dispose of any of its equity securities or any ownership interest therein.
There are no outstanding stock appreciation, phantom stock, profit
participation, or similar rights with respect to the Company. Except as set
forth in Section 7.1 of the Disclosure Schedule, there are no voting trusts,
proxies, or other agreements or understandings with respect to the voting of any
capital stock of the Company. There are no bonds, debentures, notes or other
indebtedness 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 on Section 7.1 of the
Disclosure Schedule, there are not any outstanding contractual obligations (i)
of the Company or any of the Subsidiaries to repurchase, redeem or otherwise
acquire any shares of capital stock of the Company or any of the Joint Ventures,
(ii) of the Company to vote or to dispose of any shares of the capital stock of
any of the Subsidiaries or any of the Joint Ventures, or (iii) of the Company to
provide funds to, or make any material investment in, any Subsidiary, any Joint
Venture or in any other person.
VII.2. Subsidiaries and Joint Ventures. Except for the
Subsidiaries, the Joint Ventures and as set forth in Section 7.2 of the
Disclosure Schedule, the Company does not own, directly or indirectly, any
capital stock or any other equity interest in any person. The name, jurisdiction
of incorporation, capitalization and ownership of each Subsidiary and, as to the
ownership of the issued and outstanding capital stock or other equity interests,
to the Knowledge of the Company, of each Joint Venture is set forth in Section
7.2 of the Disclosure Schedule. Except as set forth on Section 7.2 of the
Disclosure Schedule, the Company owns all of the issued and outstanding shares
of capital stock of the Subsidiaries and each Joint Venture which they purport
to own, free and clear of any Liens, except for Permitted Liens, and all of such
shares are duly authorized, validly issued, fully paid and non-assessable.
Except as set forth on Section 7.2 of the Disclosure Schedule, there are no
outstanding securities convertible into, exchangeable for, or carrying the right
to acquire, equity securities of any of the Subsidiaries or, to the Knowledge of
the Company, any of the Joint Ventures, or subscriptions, warrants, options,
calls, convertible securities, registration or other rights or other
arrangements or commitments obligating any Subsidiary or, to the Knowledge of
the Company, any of the Joint Ventures to issue, transfer or dispose of any of
its equity securities or any ownership interest therein. Except as set forth on
Section 7.2 of the Disclosure Schedule, there are no outstanding stock
appreciation, phantom stock, profit participation, or similar rights with
respect to any Subsidiary or, to the Knowledge of the Company, any of the Joint
Ventures. Except as set forth on Section 7.2 of the Disclosure Schedule, there
are no voting trusts, proxies, or other agreements or understandings with
respect to the voting of any capital stock of any Subsidiary or, to the
Knowledge of the Company, any of the Joint Ventures.
VII.3. Organization. The Company and each of the Subsidiaries
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation with all requisite corporate power
and authority to own, lease and operate its properties and assets and to carry
on its business as it is now being conducted, except where the failure to be
organized, existing and in good standing or to have such power and authority
would not be
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reasonably likely to have a material adverse effect on the assets, business,
operations or financial condition of the Company and the Subsidiaries taken as a
whole other than such effects attributable to general economic conditions or to
other changes generally affecting companies in the same business as the Company
(a "Company Material Adverse Effect"). The Company and each of the Subsidiaries
is duly qualified or licensed to do business and in good standing as a foreign
corporation in the jurisdictions set forth in Section 7.3 of the Disclosure
Schedule, which are all of the jurisdictions where the nature of the property
owned or leased by it, or the nature of the business conducted by it, makes such
qualification or license necessary and the absence of such qualification would
have a Company Material Adverse Effect. True and complete copies of the
certificate of incorporation and bylaws (or substantially equivalent documents)
of the Company and each of the Subsidiaries have been delivered or made
available to the Buyer.
VII.4. Corporate Power and Authority; No Violations. The
Company has full power and authority to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby. The execution,
delivery and performance by the Company of this Agreement 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, including due and
valid authorization by the board of directors and the Stockholders of the
Company and no other corporate proceedings on the part of the Company or the
Stockholders are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Company and constitutes the valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except to the extent that such enforceability (a) may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditors' rights generally, and (b) is subject to general
principles of equity. Except as set forth in Section 7.4 of the Disclosure
Schedule, neither the execution, delivery and performance by the Company of this
Agreement nor the consummation by the Company of the transactions contemplated
hereby will, with or without the giving of notice or the passage of time, or
both, (i) violate any provision of law, rule, regulation, order, judgment, writ,
injunction or decree applicable to the Company or any of the Subsidiaries, or
any of their properties or assets, (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any note, bond, mortgage, indenture, license, contract or agreement to
which the Company or any of the Subsidiaries is a party or by which the Company
or any of the Subsidiaries or any of their assets is bound or result in the
imposition of any Lien (other than Permitted Liens) upon any of the assets of
the Company or any of the Subsidiaries; or (iii) conflict with or violate any
provision of the certificate of incorporation or bylaws (or substantially
equivalent documents) of the Company or any of the Subsidiaries or require
notice to or filing with any Governmental Authority pursuant to an Environmental
Law, except, in the case of clauses (i) or (ii), for violations, conflicts,
breaches, defaults, accelerations, terminations, modifications, cancellations or
failures to give notice or Liens which in the aggregate would not be reasonably
likely to have a Company Material Adverse Effect and would not prevent or
materially delay, hinder or impair the consummation of the transactions
contemplated hereby.
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VII.5. Financial Statements.
(a) The Company has previously furnished to the Buyer true and
complete copies of its audited consolidated balance sheet, audited consolidated
statement of operations, audited consolidated statement of cash flows and
audited consolidated statement of changes in stockholders' equity, together with
notes thereto, for the fiscal year ended January 3, 1998, and the unaudited
consolidated balance sheet, unaudited consolidated statement of operations and
unaudited consolidated statement of cash flows for the period ended May 9, 1998
(collectively, the "Financial Statements"). The Financial Statements fairly
present the consolidated financial position, the consolidated results of
operations, changes in stockholders' equity (in the case of the audited
financial statements), cash flows and the other information included therein of
the Company and the Subsidiaries for the periods or as of the dates therein set
forth, in each case in accordance with GAAP consistently applied during the
periods involved, except that the unaudited Financial Statements are subject to
normal year end adjustments (which in the aggregate will not be material) and
lack footnotes and other presentation items required for full disclosure under
GAAP. The unaudited consolidated balance sheet at May 9, 1998, is sometimes
referred to herein as the "Balance Sheet." The Financial Statements have been
based upon the information contained in the Company's books and records,
represent fairly and accurately the Company's financial condition and related
results of operations as of the times and for the periods referred to therein.
The Company's books of account and financial records fairly reflect the
Company's income, expenses and liabilities.
(b) The Company has previously furnished to the Buyer true and
complete copies of the following:
(i) consolidated audited financial statements (statement of
operations, balance sheet and statement of cash flows) for Asahi-▇▇▇▇▇▇▇▇ Co.
Ltd. (which includes Asahi-▇▇▇▇▇▇▇▇ (Taiwan) since its acquisition in March of
1996) stated on a United States GAAP basis for the years ended March 31, 1998,
1997, 1996 and 1995;
(ii) consolidated audited financial statements (statement of
operations, balance sheet and statement of cash flows) for CS Interglas AG
stated on a German GAAP basis for the years ended June 30, 1997, 1996, and 1995;
(iii) monthly statements of operations from Asahi-▇▇▇▇▇▇▇▇ Co.,
Ltd. stated on a Japanese GAAP basis for the months of April and May of 1998;
(iv) monthly statements of operations from Asahi-▇▇▇▇▇▇▇▇
(Taiwan) stated on a Taiwanese GAAP basis for the months of April and May of
1998;
(v) monthly consolidated statements of operations and balance
sheets from CS Interglas AG stated on a German GAAP basis for each of the months
from July 1, 1997 thru May 30, 1998; and
(vi) unaudited financial statements (statement of operations,
balance sheet and statement of cash flows) for the years ended December 31, 1996
and
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January 3, 1998 and monthly statements of operations, balance sheets
and statements of cash flows for each of the months from January thru
April of 1998 for ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Tech-Fab Company.
To the Knowledge of the Company, the audited financials of the Joint Ventures
fairly present the consolidated financial position, consolidated results of
operations, cash flows and other information included therein, set forth in each
case in accordance with applicable GAAP set forth above. To the Knowledge of the
Company, (A) the monthly statements of operations for Asahi-▇▇▇▇▇▇▇▇ Co., Ltd.
are fairly presented in accordance with Japanese GAAP, (B) the monthly
statements of operations for Asahi-▇▇▇▇▇▇▇▇ (Taiwan) are fairly presented in
accordance with Taiwanese GAAP, and (C) the monthly statements of CS Interglas
AG are fairly presented in accordance with German GAAP. To the Knowledge of the
Company, the monthly statements of Asahi-▇▇▇▇▇▇▇▇ Co., Ltd. and CS Interglas AG
are prepared in a manner consistent with past practice based upon the books and
records of the relevant company. To the Knowledge of the Company, (1) the
unaudited financial statements for ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Tech-Fab Company fairly
present the financial position, results of operations, cash flows and other
information included therein, in accordance with GAAP and (2) the monthly
statements of ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Tech-Fab Company are fairly presented in accordance
with GAAP.
(c) The Company has filed with the SEC, and has heretofore
made available to Buyer true and complete copies of, all forms, reports,
schedules, statements and other documents required to be filed by it since
December 31, 1996, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or the Securities Act of 1933, as amended (the "Securities Act")
(such forms, reports, schedules, statements and other documents, including any
financial statements or schedules included therein, are referred to as the
"Company SEC Documents"). The Company SEC Documents, at the time filed (a) did
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading and (b) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act, as the case may be, and
the applicable rules and regulations of the SEC thereunder. The financial
statements of the Company SEC Documents comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with GAAP applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Forms 10-Q and 8-K of the SEC) and fairly
present (subject, in the case of the unaudited statements, to normal, recurring
audit adjustments) the consolidated financial position of the Company and its
consolidated subsidiaries as at the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended.
VII.6. Absence of Certain Changes or Events. Except as
permitted or contemplated by this Agreement and except as set forth on Sections
7.6, 7.9 or 7.10 of the Disclosure Schedule, since the date of the Balance Sheet
(a) there has not occurred any events or circumstances that (individually or in
the aggregate) have resulted in or would be likely to result in a Company
Material Adverse Effect, and (b) the Company, the Subsidiaries and, to the
Knowledge of the Company the
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Joint Ventures, have operated their businesses only in the ordinary course
consistent with past practice.
VII.7. Title to Assets. Each of the Company and the
Subsidiaries has good (and, in the case of real property, marketable) title (or
leasehold interest with respect to capital leases) to all of the assets and
properties held or used in the business of the Company and the Subsidiaries
taken as a whole and which they purport to own, free and clear of all Liens
except for Permitted Liens, except for assets and properties sold, consumed or
otherwise disposed of in the ordinary course of business since the date of the
Balance Sheet. The Company or one of its Subsidiaries owns, leases or otherwise
has a valid right to use all assets and properties necessary to conduct in all
material respects their respective businesses in conformity with past practices.
VII.8. Intellectual Property. Section 7.8 of the Disclosure
Schedule sets forth an accurate and complete list of all of the material:
patents, patent applications, unregistered trademarks, unregistered service
marks, trade names, trademark registrations and all applications therefor and
copyright registrations and applications therefor used in the conduct of the
Company's and the Subsidiaries' respective businesses (collectively,
"Intellectual Property"). Except as set forth in Section 7.8 of the Disclosure
Schedule, the Company and its Subsidiaries, as the case may be, own and possess
all right, title and interest in and to the Intellectual Property. Neither the
Company nor any Subsidiary has received any written notices of or have Knowledge
of any infringement or misappropriation from any third party with respect to the
Intellectual Property, and, to the Knowledge of the Company, neither the Company
nor the Subsidiaries is currently infringing on the intellectual property on any
other person, except for any such infringement which would not have a Company
Material Adverse Effect. The Company and the Subsidiaries own or possess
adequate licenses to use all Intellectual Property necessary to conduct the
business of the Company and the Subsidiaries. To the Knowledge of the Company,
no material trade secret, confidential know how, or confidential information
owned by the Company or any Subsidiary has been disclosed or authorized to be
disclosed to any third party except pursuant to a confidentiality agreement,
which protects the Company's proprietary interest in and to such information. To
the Knowledge of the Company, neither the Company nor any of its Subsidiaries
has agreed to indemnify any Person for or against any actual claim of
interference, infringement, misappropriation or other conflict with respect to
the Intellectual Property. The transactions contemplated by this Agreement will
have no Company Material Adverse Effect on the right, title and interest in and
to the Intellectual Property.
VII.9. Contracts.
(a) Section 7.9 of the Disclosure Schedule sets
forth an accurate and complete list of each written contract or agreement
(including any and all amendments thereto) to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the Subsidiaries is
bound which (i) relates to the borrowing of money or the guaranty of any
obligation to borrow money; (ii) involves revenues or expenditures in excess of
$500,000 (excluding purchase and sale orders entered into in the ordinary course
of business consistent with past practice); (iii) is a collective bargaining
agreement; (iv) obligates the Company or any Subsidiary not to compete with any
business or which otherwise restrains or prevents the Company or any of the
Subsidiaries from
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carrying on any lawful business (excluding customary restrictive covenants
contained in agreements identified pursuant to clause (i) above); (v) relates to
employment, compensation, severance, consulting or indemnification between the
Company or any Subsidiary and any of their current or former respective
officers, directors, employees or consultants who are entitled to compensation
thereunder in excess of $100,000 per annum (other ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. and
Vestar Capital Partners); (vi) is a partnership or joint venture agreement;
(vii) relates to the acquisition or disposition by the Company or any Subsidiary
of any assets or the capital stock of any Person, which acquisition or
disposition was consummated at any time within the last two years preceding the
date hereof and pursuant to which the purchase price was in excess of $500,000
other than pursuant to sale or purchase orders entered into in the ordinary
course of business consistent with past practice; or (viii) is otherwise
material to the assets, business, operations or financial condition of the
Company and the Subsidiaries taken as a whole (collectively, the "Contracts").
The Company previously has furnished or made available to the Buyer true and
correct copies of all Contracts. All of the Contracts are valid, binding and in
full force and effect and are enforceable by the Company or the Subsidiary which
is a party thereto in accordance with their terms except to the extent that such
enforceability (a) may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights generally, and
(b) is subject to general principles of equity. Except as set forth in Section
7.9 of the Disclosure Schedule, neither the Company nor any of the Subsidiaries
is in breach or default under (and no event has occurred which with notice or
the passage of time or both would constitute a breach or default under) any
agreements listed in Section 7.9 of the Disclosure Schedule nor, to the
Knowledge of the Company, is any other party to any of the agreements listed in
Section 7.9 of the Disclosure Schedule in default thereunder (and no event has
occurred which with notice or the passage of time or both would constitute a
breach or default thereunder); excluding, however, in each instance, breaches or
defaults which, individually or in the aggregate, are not likely to have a
Company Material Adverse Effect.
(b) To the Knowledge of the Company, there is no material
contract of the Joint Ventures that would have a Company Material Adverse
Effect. For purposes of this representation, none of the following shall be
deemed to have a Company Material Adverse Effect: (i) contracts entered into the
ordinary course of business consistent with past practice,(ii) collective
bargaining or similar agreements with terms typical for similar agreements in
the country of operation or which have either been in place for more than 18
months or are substantially similar to prior collective bargaining agreements,
(iii) agreements the cost and expense for which are reflected on financial
statements for such Joint Venture that have been provided to the Buyer prior to
the date hereof and any refinancing thereof, if applicable or (vi) any contracts
that have been provided to the Buyer or otherwise disclosed to the Buyer prior
to the date hereof.
VII.10. Litigation. Except as set forth on Section 7.10 of the
Disclosure Schedule, as of the date hereof, there is no claim, action, suit,
arbitration, inquiry, proceeding, or investigation by or before any Governmental
Entity ("Litigation") pending or, to the Knowledge of the Company, threatened,
involving the Company or any of the Subsidiaries which individually or in the
aggregate would have a Company Material Adverse Effect or which would have a
material adverse effect on the ability of the Company to perform its obligations
hereunder, or which seeks to enjoin or obtain damages in respect of the
consummation of the transactions contemplated hereby. Neither the
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30
Company nor any of the Subsidiaries is subject to any outstanding orders,
rulings, judgments or decrees that would have a Company Material Adverse Effect.
Section 7.10 of the Disclosure Schedule also sets forth a list of each material
outstanding order, ruling, judgment or decree to which the Company or any
Subsidiary or any of its or their assets is bound or subject.
VII.11. Compliance With Laws. Except as set forth in Section
7.11 of the Disclosure Schedule, (i) the Company and the Subsidiaries are in
compliance with all applicable laws, rules, regulations, ordinances, decrees or
orders of any Governmental Entity currently in effect, except where the failure
to comply therewith is not reasonably likely to have a Company Material Adverse
Effect and (ii) the Company and the Subsidiaries have all governmental permits,
licenses and authorizations necessary for the lawful conduct of their businesses
("Permits") and are in compliance with the terms of the Permits, except for any
non-compliance which is not likely to have a Company Material Adverse Effect. No
investigation or review by any Governmental Entity with respect to the Company
or any of the Subsidiaries is pending or, to the Knowledge of the Company,
threatened, nor has any Governmental Entity indicated any intention to conduct
any such investigation or review, other than, in each case, those the outcome of
which are not likely to have a Company Material Adverse Effect or prevent or
materially delay the consummation of the transactions contemplated hereby.
VII.12. Environmental Matters. Except as set forth on Section
7.12 of the Disclosure Schedule, or except as would not, to the Knowledge of the
Company, in the aggregate, result in a fine, penalty or cost that would have a
Company Material Adverse Effect:
(a) the Company and the Subsidiaries are in compliance with
all applicable Environmental Laws;
(b) neither the Company nor any of the Subsidiaries has
received written notice from a Governmental Entity alleging that the
Company or any Subsidiary is not in compliance with Environmental Laws;
(c) no Environmental Lien has attached to any property that
is currently owned or operated by the Company or any Subsidiary; and
(d) notwithstanding anything herein to the contrary, the
representations and warranties contained herein and the disclosure of
certain matters in Section 7.12 of the Disclosure Schedule are not
intended to impair or otherwise limit the Buyer's rights to
indemnification pursuant to that certain Agreement and Plan of Merger
dated as of February 24, 1996 by and among Springs Industries, Inc.,
Fort Mill A Inc., Vestar/CS Holding Company, L.L.C. and ▇▇▇▇▇-S
Acquisition Corporation.
VII.13. Employee Benefit Plans.
(a) Section 7.13 of the Disclosure Schedule sets forth an
accurate and complete list of each employee benefit plan (as such term is
defined in Section 3(3) of ERISA), and
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any other bonus, deferred compensation, incentive compensation, stock, severance
or other plan or arrangement, other than a non-material fringe benefit plan
(each of the foregoing, a "Benefit Plan"), currently maintained or contributed
to by the Company or any Subsidiary. With respect to each Benefit Plan, the
Company previously has furnished to the Buyer a true and correct copy of, where
applicable, (i) the most recent annual report (Form 5500) filed with the IRS,
(ii) the plan document, (iii) each trust agreement and group annuity contract,
if any, relating to such Benefit Plan, (iv) the most recent summary plan
description and (v) the most recent determination letter issued by the IRS.
(b) Neither the Company nor any Subsidiary has an obligation
to contribute to any multiemployer plan (as defined in Section 3(37) of ERISA),
and no Benefit Plan is or was subject to Title IV of ERISA. Except as set forth
in Section 7.13 of the Disclosure Schedule, with respect to the Benefit Plans,
all required contributions (i) to date have been made or properly accrued by the
Company and (ii) as of the Closing Date will have been made or properly accrued
by the Company on or prior to the Closing Date.
(c) Each of the Benefit Plans has been administered in
accordance with its terms in all material respects and is in compliance in all
material respects with applicable laws and regulations.
(d) Except as set forth in Section 7.13 of the Disclosure
Schedule, each of the Benefit Plans which is intended to be a qualified plan
within the meaning of Section 401(a) of the Code has been determined by the IRS
to be so qualified and to the Knowledge of the Company nothing has occurred to
cause the loss of such qualified status, excepting circumstances that are
reasonably regarded as correctable under one or more of the procedures provided
by the Employee Plans Compliance Resolution System.
(e) Except as set forth in Section 7.13 of the Disclosure
Schedule, no Benefit Plan provides health, medical or life insurance benefits
with respect to current or former employees of the Company or any Subsidiary
beyond their retirement or other termination of service other than (i) coverage
mandated by applicable law, or (ii) benefits the full cost of which are borne by
the current or former employee (or his or her beneficiary).
VII.14. Government Consents. Except as set forth in Section 7.14 of
the Disclosure Schedule, no consent, approval or authorization of, or exemption
by, or filing with, any Governmental Entity (other than pursuant to the HSR Act)
is required in connection with the execution, delivery and performance by the
Company of this Agreement or the taking of any other action contemplated hereby,
excluding, however, consents, approvals, authorizations, exemptions and filings,
if any, which the Buyer is required to obtain or make and consents or
authorizations which, if not obtained, are not reasonably likely to have a
Company Material Adverse Effect.
VII.15. Taxes. Except in each case as set forth in Section 7.15 of
the Disclosure Schedule:
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(a) Each of the Company, the Subsidiaries, and any affiliated
group (within the meaning of Code ss.1504) of which the Company (or any combined
or unitary group of which the Company or a Subsidiary) was the common parent
have: (a) timely filed with the appropriate Tax authority and in all material
respects correctly and accurately prepared all returns, declarations, reports,
estimates, forms, information returns and statements ("Returns") required to be
filed or sent by or with respect to it in respect of any Taxes; (b) properly
paid all Taxes that are shown due and payable on such Returns; (c) established
on its books and records and in the Financial Statements reserves in accordance
with GAAP for the payment of all accrued Taxes not yet due and payable; and (d)
complied in all material respects with all applicable laws, rules and
regulations relating to the payment and withholding of Taxes from employees and
other persons.
(b) There are no Liens for Taxes upon the assets of the
Company or any of the Subsidiaries, except Permitted Liens.
(c) No written claim or deficiency for any Taxes in excess of
$25,000 has been asserted and the Company has no Knowledge of any such claim or
deficiency that could be asserted against the Company or any of the Subsidiaries
which has not been resolved and paid in full.
(d) There are no outstanding waivers or comparable consents
given by the Company or any of the Subsidiaries regarding the application of the
statute of limitations with respect to any Taxes or Returns.
(e) No audits or proceedings before any Governmental Entity
are presently pending with regard to any Taxes or Returns and the Company and
the Subsidiaries have not received any written notices of any such audits or
proceedings.
(f) Except as set forth in Section 7.15 of the Disclosure
Schedule, neither the Company nor any Subsidiary has entered into any
compensatory agreement (whether written or oral) with respect to the performance
of service for which payment thereunder would result in a nondeductible expense
to the Company or the Surviving Corporation pursuant to Section 280G of the
Code.
(g) With respect to the Company and the Subsidiaries, there
are (i) no outstanding requests for rulings, powers of attorney, or tax sharing
agreements; (ii) no "check-the-box" elections have been made; and (iii) no
consents or elections under Section 341(f) of the Code have been filed.
VII.16. Real Property.
(a) Section 7.16(a) of the Disclosure Schedule is a true,
correct and complete list of all of the real property owned by the Company or
any Subsidiary (the "Owned Real Property"). The Company or a Subsidiary, as
applicable, has good and marketable fee simple title to all of the Owned Real
Property. All Owned Real Property, material structures and other material
buildings and material equipment of each of the Company and the Subsidiaries are
in satisfactory operating condition and repair for the requirements of the
business as presently conducted. Section
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7.16(a) of the Disclosure Schedule contains a complete and accurate legal
description of each parcel of Owned Real Property. The Company is not a party to
any contract or option pursuant to which any person has a future right to
purchase or lease any of the Owned Real Property.
(b) Section 7.16(b) of the Disclosure Schedule is a true,
correct and complete list of all of the leases (the "Leases") for real property
to which the Company or any Subsidiary is a party that provide for payments in
excess of $100,000 per year. Each Lease is valid, binding and in full force and
effect. No notice of default or termination under any lease is outstanding and
no termination event or condition exists to the Knowledge of the Company under
any lease, and the Company holds each leasehold interest in each lease free and
clear of all Liens other than Permitted Liens. The Company has previously
delivered to the Buyer true and complete copies of all of the Leases. To the
Knowledge of the Company, no disagreement or dispute exists with any of the
lessors under the Leases, nor does any other reason exist, which is likely to
cause any such lessor to refuse any consent to the transactions contemplated
hereby that may be required under the Leases. Except as set forth on Section
7.16(b) of the Disclosure Schedule, there are no leases, licenses or agreements
with respect to the occupancy of the Owned Real Property of any kind of nature,
whether or not of record.
VII.17. Broker's Fees. Section 7.17 of the Disclosure Schedule
lists all liabilities on the part of the Company, any Subsidiary or any
Affiliate or representative of the Company or any Subsidiary, to pay any fees or
commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement. None of such fees or commissions shall be borne
by the Buyer or the Surviving Corporation.
VII.18. Disclaimer. Except as set forth in this Agreement,
none of the Company, any Subsidiary or any officer, director, employee, agent,
stockholder, or Affiliate of the Company or any Subsidiary (such officers,
directors, employees, agents, stockholders and Affiliates being collectively
referred to herein as the "Company Released Parties") makes any representation
or warranty, express or implied, at law or in equity, in respect of the Company,
the Subsidiaries or any of their respective assets, Liabilities or operations,
including, without limitation, with respect to merchantability or fitness for
any particular purpose, and any such other representations or warranties are
hereby expressly disclaimed.
VII.19. Change of Control. Except as set forth on Section 7.19
of the Disclosure Schedule, the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated by this Agreement
will not constitute a "change of control" under, require the consent from, or
the giving of notice to, any third party pursuant to, permit a third party to
terminate or accelerate vesting, repayment or repurchase rights, or create any
other detriment under the terms, conditions or provisions of any Contract,
except individually or in the aggregate as is not likely to have a Company
Material Adverse Effect.
VII.20. Labor Relations and Employment. Except as set forth on
Section 7.20 of the Disclosure Schedule, (i) neither the Company nor any of the
Subsidiaries is a party to or bound by any collective bargaining or similar
agreement with any labor organization or labor union; (ii) no
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34
union claims to represent the employees of the Company or any of the
Subsidiaries and the Company does not have any Knowledge of any union organizing
activities among the Company or any of the Subsidiaries; (iii) there is no labor
strike, dispute, slowdown, stoppage or lockout actually pending, or, to the
Knowledge of the Company, threatened against the Company or any of the
Subsidiaries, and during the past three years there has not been any such
action; (iv) the Company and the Subsidiaries are, and have at all times been,
in material compliance with all applicable laws respecting employment and
employment practices, terms and conditions of employment, wages, hours of work
and occupational safety and health, and are not engaged in any unfair labor
practices as defined in the National Labor Relations Act or other applicable
law, ordinance or regulation; (v) there is no unfair labor practice charge or
complaint against the Company or any of the Subsidiaries pending or, to the
Knowledge of the Company, threatened before the National Labor Relations Board
or any similar state or foreign agency; (vi) no charges respect to or relating
to the Company or any of the Subsidiaries are pending before the Equal
Employment Opportunity Commission or any other agency responsible for the
prevention of unlawful employment practices; (vii) neither the Company nor any
of the Subsidiaries has received notice of the intent of any federal, state,
local or foreign agency responsible for the enforcement of labor or employment
laws to conduct an investigation with respect to or relating to the Company or
any of the Subsidiaries and no such investigation is in progress; and (viii)
there are no complaints, lawsuits or other proceedings pending or to the
Knowledge of the Company threatened in any forum by or on behalf of any present
or former employee of the Company or any of the Subsidiaries alleging breach of
any express or implied contract of employment, any law or regulation governing
employment or the termination thereof or other discriminatory, wrongful or
tortious conduct in connection with the employment relationship.
VII.21. Insurance. Section 7.21 of the Disclosure Schedule
accurately identifies each material insurance policy (including policies
providing property, casualty, environmental, liability, liability, malpractice
and workers compensation insurance) and all other material types of insurance of
the Company and the Subsidiaries, together with carriers and liability limits
for each such policy. Each such policy is duly in force and no notice has been
received by the Company or any of the Subsidiaries from any insurance carrier
purporting to cancel or reduce coverage under any such policy. The Company and
the Subsidiaries are current in all premiums or other payments due thereunder
and no notice has been received by the Company or any of the Subsidiaries from
any insurance carrier purporting to increase any such premiums in any material
respect. All insurance coverage held for the benefit of the Company or the
Subsidiaries is adequate to cover risks customarily insured against by similar
companies in their industry.
VII.22. Customers and Suppliers.
(a) Section 7.22(a)(i) of the Disclosure Schedule sets
forth a true and complete list of the ten largest customers (the "Major
Customers") of the Company as of July 4, 1998. Except as set forth on Section
7.22(a)(ii) of the Disclosure Schedule, since July 4, 1998 neither the Company
nor any of the Subsidiaries has experienced the loss of any of its Major
Customers, nor received any notice of the intention of any Major Customer to
terminate its relationship with the Company or any of the Subsidiaries, nor to
the Knowledge of the Company has any Major Customer
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35
otherwise indicated that it intends to terminate or materially alter its
relationship with the Company or any of the Subsidiaries.
(b) Section 7.22(b)(i) of the Disclosure Schedule sets forth a
true and complete list of the ten largest suppliers (the "Major Suppliers") of
the Company as of July 4, 1998. Except as set forth on Section 7.22(b)(ii) of
the Disclosure Schedule, since July 4, 1998 neither the Company nor any of the
Subsidiaries has experienced the loss of any of its Major Suppliers, nor
received any notice of the intention of any Major Supplier to terminate its
relationship with the Company or any of the Subsidiaries, nor to the Knowledge
of the Company has any Major Supplier otherwise indicated that it intends to
terminate or materially alter its relationship with the Company or any of the
Subsidiaries.
VII.23. Transactions with Affiliates and Third Parties; Asset
Sales.
(a) Section 7.23 of the Disclosure Schedule sets forth a true
and complete list and summary of all transactions or series of transactions
involving amounts, in each case, in excess of $100,000 within the past two
years, or currently existing between or relating to the Company and any
Affiliate of the Company (other than Subsidiaries).
(b) Except as set forth on Section 7.23 of the Disclosure
Schedule, since January 1, 1996 there have been no transfers or other
dispositions of any assets (including, without limitation Intellectual Property,
property, plants or equipment) relating to the business of the Company other
than the disposition of inventory in the ordinary course of business or
properties or assets which were replaced by equivalent or superior properties or
assets in the ordinary course of business.
VII.24. Corporate Records. The minute books of the Company and each
Subsidiary previously made available to Buyer contain complete and accurate
records of all meetings and accurately reflect all other corporate action of the
stockholders and boards of directors (including committees thereof) of the
Company and its Subsidiaries. The stock certificate books and stock transfer
ledgers of the Company and its Subsidiaries previously made available to Buyer
are true, and correct and complete. All stock transfer taxes levied or payable
with respect to all transfers of shares of the Company and its Subsidiaries
prior to the date hereof have been paid and appropriate transfer tax stamps
affixed.
VII.25. No Undisclosed Liabilities. As of the date of the
Balance Sheet, except as set forth on the Balance Sheet and Section 7.25 of the
Disclosure Schedules, neither the Company nor any of the Subsidiaries has any
liability or obligations of any nature, whether or not accrued, contingent or
otherwise, that would be required by GAAP to be reflected on a consolidated
balance sheet of the Company and the Subsidiaries (including the notes thereto).
Since the date of the Balance Sheet, neither the Company nor any of its
Subsidiaries has incurred any material liabilities of any nature, whether or not
accrued or contingent other than (a) liabilities incurred in the ordinary course
of business; (b) liabilities which are disclosed on any Disclosure Schedule; and
(c) liabilities
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(other than those described in clause (a) or (b) above) which individually or in
the aggregate do not exceed $1,000,000 or would not have a Company Material
Adverse Effect.
VII.26. Year 2000 Compliance. The Company has initiated a plan
to prepare the Company's computer systems and applications for the year 2000. At
January 3, 1998, the Company had made substantial progress in programming its
business systems for year 2000 compliance. The Company estimates that all
computer systems and applications will be year 2000 compliant prior to that
date. The Company expects to incur primarily internal staff costs related to
infrastructure and facilities enhancements necessary to prepare the systems for
the year 2000. Testing and conversion of system applications is expected to cost
approximately $1.7 million over the next three years. This estimate includes the
cost to purchase and install two software systems to replace systems which are
currently not year 2000 compliant.
VII.27. Joint Ventures.
(a) Except as set forth on Section 7.27 of the Disclosure
Schedule, since January 3, 1998, the Company has not authorized or approved (a)
the issuance (whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise) of any stock of any
class or any other securities or equity equivalents (including without
limitation, stock appreciation rights), or amendment in any respect of any of
the terms of any such securities or equity equivalents outstanding on the date
hereof, of any of the Joint Ventures or (b) any actions over which the Company
has approval or veto rights on the part of any of the Joint Ventures.
(b) To the Knowledge of the Company as of the date hereof,
the annual report distributed to the shareholders of CS Interglas AG in
compliance with the laws of Germany for the most recently completed fiscal year
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants to the Company that
the statements contained in this Article VIII are correct and complete as of the
date hereof.
VIII.1. Organization. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
VIII.2. Corporate Power and Authority; No Violations. The
Buyer has full power and authority to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby. The execution,
delivery and performance by the Buyer of this Agreement and the consummation by
the Buyer of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of the Buyer, including due and valid
authorization by
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the board of directors and the stockholders of the Buyer and no other corporate
proceedings on the part of the Buyer are necessary to authorize this Agreement
or to consummate the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by the Buyer and constitutes the valid
and binding obligation of the Buyer, enforceable against the Buyer in accordance
with its terms, except to the extent that such enforceability (a) may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditors' rights generally, and (b) is subject to general
principles of equity. Except as set forth in Section 8.2 of the Disclosure
Schedule, neither the execution, delivery and performance by the Buyer of this
Agreement nor the consummation by the Buyer of the transactions contemplated
hereby will, with or without the giving of notice or the passage of time, or
both, (i) violate any provision of law, rule, regulation, order, judgment, writ,
injunction or decree applicable to the Buyer, or (ii) conflict with or violate
any provision of the certificate of incorporation or bylaws (or substantially
equivalent documents) of the Buyer, except, in the case of clause (i), for
violations which in the aggregate would not prevent or materially delay, hinder
or impair the consummation of the transactions contemplated hereby.
VIII.3. Brokers' Fees. Neither the Buyer nor any Affiliate or
representative of the Buyer has any Liability to pay any fees or commissions to
any broker, finder or agent with respect to the transactions contemplated by
this Agreement for which the Company could become liable or obligated.
VIII.4. Litigation. No Litigation against the Buyer is pending
or, to the Knowledge of the Buyer, is threatened which seeks to delay, prevent,
adversely affect or restrict the consummation of the transactions contemplated
hereby.
VIII.5. Government Consents. Except as set forth in Section
8.5 of the Disclosure Schedule, no consent, approval or authorization of, or
exemption by, or filing with, any Governmental Entity (other than pursuant to
the HSR Act) is required in connection with the execution, delivery and
performance by the Buyer of this Agreement or the taking of any other action
contemplated hereby, excluding, however, consents, approvals, authorizations,
exemptions and filings, if any, which the Buyer is required to obtain or make
and consents or authorizations which, if not obtained, would not prevent or
materially delay, hinder or impair the consummation of the transactions
contemplated hereby.
VIII.6. Purchase for Investment. The Buyer is acquiring the
Company for investment and not with a view to any public resale or other
distribution thereof in violation of the Securities Act of 1933, as amended, or
any applicable state securities laws.
VIII.7. Adequate Funds. Prior to the date hereof, the Buyer
has delivered to the Company written commitments from Bank of America National
Trust and Savings Association which contain the general terms and conditions
upon which such bank has agreed to make loans to the Buyer, the proceeds of
which loans will be sufficient to enable the Buyer to consummate the transaction
contemplated in this Agreement.
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ARTICLE IX
REPRESENTATIONS AND WARRANTIES OF EQ
EQ hereby represents and warrants to the Company that the
statements contained in this Article IX are correct and complete as of the date
hereof.
IX.1. Organization. EQ is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation.
IX.2. Corporate Power and Authority; No Violations. EQ has
full power and authority to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance by EQ of this Agreement and the consummation by EQ of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of EQ, including due and valid authorization by the
board of directors of EQ and no other corporate proceedings on the part of EQ
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by EQ and constitutes the valid and binding obligation of EQ,
enforceable against EQ in accordance with its terms, except to the extent that
such enforceability (a) may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors' rights
generally, and (b) is subject to general principles of equity. Neither the
execution, delivery and performance by EQ of this Agreement nor the consummation
by EQ of the transactions contemplated hereby will, with or without the giving
of notice or the passage of time, or both, (i) violate any provision of law,
rule, regulation, order, judgment, writ, injunction or decree applicable to EQ,
or (ii) conflict with or violate any provision of the certificate of
incorporation or bylaws (or substantially equivalent documents) of EQ, except,
in the case of clause (i), for violations which in the aggregate would not
prevent or materially delay, hinder or impair the consummation of the
transactions contemplated hereby.
IX.3. Financial Statements. EQ has previously furnished to the
Company true and complete copies of its audited consolidated balance sheet,
audited consolidated statement of operations, audited consolidated statement of
cash flows and audited consolidated statement of changes in stockholders'
equity, together with notes thereto, for the fiscal years ended December 31,
1997 and 1996 (collectively, the "EQ Financial Statements"). The EQ Financial
Statements fairly present the consolidated financial position, the consolidated
results of operations, changes in stockholders' equity, cash flows and the other
information included therein of EQ and its subsidiaries for the periods or as of
the dates therein set forth, in each case in accordance with GAAP consistently
applied during the periods involved. The audited consolidated balance sheet at
December 31, 1997, is sometimes referred to herein as the "EQ Balance Sheet."
The EQ Financial Statements have been based upon the information contained in
the EQ's books and records, represent fairly and accurately the EQ's financial
condition and related results of operations as of the times and for the periods
referred to therein. EQ's books of account and financial records fairly reflect
EQ's income, expenses and liabilities.
IX.4. Absence of Certain Changes or Events. Since the date of
the EQ Balance Sheet (a) there has not occurred any events or circumstances that
(individually or in the aggregate)
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have resulted in or would be reasonably likely to have a material adverse effect
on the assets, business, operations or financial condition of EQ and its
subsidiaries taken as a whole, (b) EQ and its subsidiaries have operated their
businesses only in the ordinary course consistent with past practice, and (c) EQ
has not taken any of the actions described in Section 11.14.
IX.5. Brokers' Fees. Neither EQ nor any Affiliate or
representative of EQ has any Liability to pay any fees or commissions to any
broker, finder or agent with respect to the transactions contemplated by this
Agreement for which the Company could become liable or obligated.
IX.6. Litigation. No Litigation against EQ is pending or, to
the Knowledge of EQ, is threatened which seeks to delay, prevent, materially
adversely affect or restrict the consummation of the transactions contemplated
hereby.
IX.7. Government Consents. No consent, approval or
authorization of, or exemption by, or filing with, any Governmental Entity
(other than pursuant to the HSR Act) is required in connection with the
execution, delivery and performance by EQ of this Agreement or the taking of any
other action contemplated hereby, excluding, however, consents, approvals,
authorizations, exemptions and filings, if any, which EQ is required to obtain
or make and consents or authorizations which, if not obtained, would not prevent
or materially delay, hinder or impair the consummation of the transactions
contemplated hereby.
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF EQUILEASE
Equilease hereby represents and warrants to the Company that
the statements contained in this Article X are correct and complete as of the
date hereof.
X.1. Organization. Equilease is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation.
X.2. Corporate Power and Authority; No Violations. Equilease
has full power and authority to execute, deliver and perform this Agreement and
to consummate the transactions contemplated hereby. The execution, delivery and
performance by Equilease of this Agreement and the consummation by Equilease of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Equilease, including due and valid authorization
by the board of directors of Equilease and no other corporate proceedings on the
part of Equilease are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Equilease and constitutes the valid and binding
obligation of Equilease, enforceable against Equilease in accordance with its
terms, except to the extent that such enforceability (a) may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditors' rights generally, and (b) is subject to general
principles of equity. Neither the execution, delivery and performance by
Equilease of this Agreement nor the consummation by Equilease of the
transactions contemplated hereby will,
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with or without the giving of notice or the passage of time, or both, (i)
violate any provision of law, rule, regulation, order, judgment, writ,
injunction or decree applicable to Equilease, or (ii) conflict with or violate
any provision of the certificate of incorporation or bylaws (or substantially
equivalent documents) of Equilease, except, in the case of clause (i), for
violations which in the aggregate would not prevent or materially delay, hinder
or impair the consummation of the transactions contemplated hereby.
X.3. Ultimate Parent. Equilease is a subchapter "C"
corporation (as defined by the Code) and no corporation which owns any of the
issued and outstanding capital stock of Equilease includes Equilease in its
consolidated federal income tax return. Equilease owns, directly or indirectly,
all of the issued and outstanding capital stock of EQ.
X.4. Brokers' Fees. Neither Equilease nor any Affiliate or
representative of Equilease has any Liability to pay any fees or commissions to
any broker, finder or agent with respect to the transactions contemplated by
this Agreement for which the Company could become liable or obligated.
X.5. Litigation. No Litigation against Equilease is pending
or, to the Knowledge of Equilease, is threatened which seeks to delay, prevent,
materially adversely affect or restrict the consummation of the transactions
contemplated hereby.
X.6. Government Consents. No consent, approval or
authorization of, or exemption by, or filing with, any Governmental Entity
(other than pursuant to the HSR Act) is required in connection with the
execution, delivery and performance by Equilease of this Agreement or the taking
of any other action contemplated hereby, excluding, however, consents,
approvals, authorizations, exemptions and filings, if any, which Equilease is
required to obtain or make and consents or authorizations which, if not
obtained, would not prevent or materially delay, hinder or impair the
consummation of the transactions contemplated hereby.
ARTICLE XI
COVENANTS OF THE PARTIES
XI.1. Efforts. Subject to the terms and conditions herein
provided and applicable law, each of the parties hereto agrees to use its
commercially reasonable efforts to take, or cause to be taken, all action, and
to do, or cause to be done, all things necessary, proper or advisable to
consummate and effect the transactions contemplated by this Agreement on the
first business day on which the tender offers described in the Solicitations may
be consummated, including, without limitation, obtaining all required consents
and approvals, making all required filings and applications and complying with
or responding to any requests by Governmental Entities. The Buyer and the
Company shall make all filings required under the HSR Act no later than the
first business day following the day on which the Company mails the Senior
Debenture Solicitation and the Senior Note Solicitation. The Buyer and the
Company shall use commercially reasonable efforts to obtain "early termination"
under the HSR Act.
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XI.2. Conduct of Business.
(a) Except as may be otherwise contemplated by this Agreement
or Section 11.2 of the Disclosure Schedule or required by law or any Contracts
or other agreements or arrangements disclosed in the Disclosure Schedule or as
the Buyer may otherwise expressly consent to in writing, from the date hereof
and prior to the Closing, the Company will, and will use its best efforts to
cause each of the Subsidiaries and use its commercially reasonable efforts to
cause each of the Joint Ventures, to operate its business only in the ordinary
and usual course consistent with past practice.
(b) Without limiting the generality of the foregoing, except
as may be otherwise contemplated by this Agreement or Section 11.2 of the
Disclosure Schedule or required by law or as the Buyer may otherwise expressly
consent to in writing from the date hereof and prior to the Closing, neither the
Company nor any of the Subsidiaries will:
(i) (A) declare, set aside or pay any dividend or other
actual or deemed distribution (whether in cash, stock or property or
any combination thereof) in respect of any of its capital stock; (B)
split, combine or reclassify any of its capital stock or issue or
authorize or propose the issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock or
(C) amend the terms of, repurchase, redeem or otherwise acquire, or
permit any Subsidiary to repurchase, redeem or otherwise acquire or
make any payments in respect of, any of its securities or any
securities of the Subsidiaries, or propose to do any of the foregoing;
(ii) authorize for issuance, issue, sell, deliver or agree
or commit to issue, sell or deliver (whether through the issuance or
granting of options, warrants, commitments, subscriptions, rights to
purchase or otherwise) any of its stock of any class or any other
securities (including Indebtedness having the right to vote) or equity
equivalents (including, without limitation, stock appreciation rights),
or amend in any respect any of the terms of any such securities or
equity equivalents outstanding on the date hereof;
(iii) amend or propose to amend its certificate of
incorporation or bylaws or equivalent documents or adopt a plan of
complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Company
or any of its Subsidiaries;
(iv) acquire, sell, lease, encumber, transfer or dispose of
any assets (except that the Company and the Subsidiaries may sell
inventory in the ordinary course of business consistent with past
practice) or make any capital expenditures aggregating over $500,000,
except in each case pursuant to Contracts in effect on the date hereof
or pursuant to the Company's Capital Expenditure Budget; modify or
amend any Contracts (including any relating to Indebtedness) outside of
the ordinary course of business; enter into any material contract,
commitment or transaction outside the ordinary course of business;
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(v) except for revolving credit loans obtained under the
Credit Agreement or Debt under the Indentures, incur or assume any
Indebtedness or issue or sell any debt securities or warrants or rights
to acquire any debt securities of the Company or any of the
Subsidiaries or guarantee (or become Liable for) any Indebtedness of
others or mortgage, pledge or otherwise encumber any assets or
consensually create any Lien thereupon other than Permitted Liens;
(vi) make any loans, advances or capital contributions
outside of the ordinary course of business, except to wholly-owned
Subsidiaries;
(vii) except as may otherwise be required by GAAP or the
Financial Accounting Standards Board, change any of the financial or
tax accounting principles or practices used by it, other than an
accounting method change for accounts receivable discount deductions
under ▇▇▇▇-to-market accounting rules for dealers in securities;
(viii) make any Tax election except in the ordinary course
of business consistent with past practice or settle or compromise any
material tax liability;
(ix) (1) enter into, adopt, amend or terminate any
Benefit Plan or any agreement, arrangement, plan or policy between
itself and one or more of its directors or executive officers or key
employees or (2) increase in any manner the compensation bonus or
fringe benefits of any director, officer or employee or pay any benefit
not required by any plan or arrangement as in effect as of the date
hereof, except in the case of officers and employees for normal
increases in compensation and normal year-end bonuses in the ordinary
course of business and consistent with past practice; or enter into any
contract, agreement, commitment or arrangement to do any of the
foregoing;
(x) except in the ordinary course of business, settle or
compromise any pending or threatened suit, action or claim with a cost
of $250,000 or more;
(xi) acquire (by merger, consolidation or acquisition of
stock or assets) any corporation, partnership or other business
organization or division thereof or any equity interest therein;
(xii) materially amend, modify, supplement or extend any
material Contract; or
(xiii) agree to take any of the foregoing actions or
authorize or approve any Joint Venture taking any of the foregoing
actions.
(c) Neither the Company nor any Subsidiaries will take any
action or otherwise authorize or consent to any action by any Joint
Ventures described in clauses (i), (ii) or (iii) of Section 11.2(b),
except for dividends payable by CS Interglas AG according to the terms
and
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conditions of the Heads of Agreement, dated as of March 31, 1998, by and between
▇▇▇▇▇-▇▇▇▇▇▇▇▇ International, Inc. and ▇▇▇▇▇▇▇▇ Group.
XI.3. Access. From the date hereof and prior to the Closing,
the Company shall provide the Buyer with such information as the Buyer may from
time to time reasonably request with respect to the Company, the Subsidiaries
and, to the extent permitted by applicable Contracts, the Joint Ventures and
their assets and properties and the transactions contemplated by this Agreement,
and with respect to the Joint Ventures shall use all commercially reasonable
efforts to, provide the Buyer and its representatives, including among others,
environmental consultants and other consultants, counsel and auditors,
reasonable access during regular business hours and upon reasonable notice to
the personnel, representatives, facilities properties, books and records of the
Company, the Subsidiaries and the Joint Ventures as the Buyer may from time to
time reasonably request. Any disclosure whatsoever during such investigation by
the Buyer shall not constitute any enlargement or additional representations or
warranties of the Company or any of its Affiliates beyond those specifically set
forth in this Agreement. All such information and access shall be subject to the
terms and conditions of the Confidentiality Agreement, dated May 19, 1998,
executed by the Buyer (the "Confidentiality Agreement").
XI.4. No Solicitation. From and after the date hereof until
the earlier to occur of the Closing Date and any termination of this Agreement
as provided in Article XIV hereof, the Company and its Subsidiaries shall not,
and shall not permit any Affiliates, officers, directors, employees,
representatives or agents, to directly or indirectly, encourage, solicit,
participate in, initiate or continue discussions or negotiations with, or
provide any information to, any person (other than the Buyer and its Affiliates
and representatives) concerning any merger, sale of assets, sale of shares of
capital stock or similar transactions involving the Company or any Subsidiary or
division of the Company and any existing discussions or negotiations with third
persons relating thereto shall be terminated immediately.
XI.5. Books and Records. For a period of five (5) years from
the Closing, the Surviving Corporation shall, and shall cause the Subsidiaries
to, provide to the Stockholders' Representative, for any purpose relating to
liabilities for taxes or under securities laws or in defense of any claims
against, or claims made by, the Stockholders, reasonable access to the books and
records of the Surviving Corporation upon reasonable advance written notice
during regular business hours for the sole purpose of obtaining information for
use as aforesaid and will permit such Stockholder to make such extracts and
copies thereof as may be necessary. Such Stockholder shall reimburse the
Surviving Corporation or the Subsidiary for the reasonable out-of-pocket
expenses incurred by any of them in performing the covenants contained in this
Section 11.5.
XI.6. Liabilities and Indemnification. The Buyer agrees that
all rights to indemnification for acts or omissions occurring prior to the
Closing (other than any act or omission relating to the transactions
contemplated by this Agreement) now existing in favor of the current or former
directors or officers (the "Indemnified Parties") of the Company and the
Subsidiaries as provided in their respective certificates of incorporation or
by-laws (or similar organizational documents) or the existing indemnification
contracts disclosed on Section 7.9 to the Disclosure
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Schedule shall survive the Merger and shall continue in full force and effect in
accordance with their terms. This Section 11.6 shall survive the consummation of
the Merger at the Effective Time, is intended to be for the benefit of and shall
be enforceable by each of the Indemnified Parties, and shall be binding on all
successors and assigns of the Buyer and the Surviving Corporation.
XI.7. Insurance. The Company and the Subsidiaries shall
maintain, and the Buyer shall cause the Surviving Corporation and the
Subsidiaries to maintain, the Company's and the Subsidiaries' existing officers'
and directors' liability insurance, if available, for a period of not less than
four (4) years after the Closing; provided, that the Surviving Corporation, the
Company and the Subsidiaries may substitute therefor policies of insurers with
at least equal rating with at least the same coverage containing terms and
conditions which are no less advantageous to the beneficiaries thereof,
provided, further, that in no event shall the Surviving Corporation be required
to expend in any one year an amount in excess of one hundred and fifty percent
(150%) of the annual premiums of such insurance as of the date hereof (it being
understood that if the annual premiums of such insurance exceed such amount, the
Surviving Corporation shall be obligated only to obtain a policy with the
greatest coverage available for a cost not exceeding such amount); provided,
further, that the Buyer shall cause the Surviving Corporation and the
Subsidiaries to maintain, the Company's and the Subsidiaries' existing officers'
and directors' liability insurance, if available, for up to an additional three
(3) years after the fourth anniversary of the Closing Date if the Stockholders
agree to pay the premium therefor and all other costs and expenses related
thereto.
XI.8. Litigation Support. In the event and for so long as any
party actively is contesting or defending against any Litigation in connection
with (a) any transaction contemplated under this Agreement, or (b) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act or transaction on or prior
to the Closing Date involving any of the Company and the Subsidiaries, each of
the other parties shall cooperate with the defending or contesting party and its
counsel in the defense or contest, all at the sole cost and expense of the
defending or contesting party (unless the defending or contesting party is
otherwise entitled to indemnification from the other party).
XI.9. Employee Matters.
(a) From and after the Closing Date, the Surviving
Corporation and the Subsidiaries shall adopt or provide for persons formerly
employed by the Company, or any Subsidiary or their predecessors (collectively,
"Former Employees"), such plans, programs, policies, arrangements or agreements
that will provide such Former Employees with benefits that are in the aggregate
comparable to the benefits provided to such Former Employees under the Benefit
Plans on the date hereof, and the Surviving Corporation and its Subsidiaries
shall continue such Benefit Plans for at least two years following the Closing
Date.
(b) From and after the Closing Date, the Surviving
Corporation shall and its Subsidiaries shall adopt or provide for current
employees such plans, programs, policies, arrangements or agreements that will
provide such employees with benefits that are in the aggregate comparable to the
benefits provided to such employees under the Benefit Plans on the date hereof,
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and the Surviving Corporation and the Subsidiaries shall continue such Benefit
Plans in effect for at least two years following the Closing Date.
XI.10. Other Actions.
(a) The Company shall not, and shall not permit any
of the Subsidiaries to, take any action that would, or that could reasonably be
expected to, result in (i) any of the representations and warranties of the
Company set forth in this Agreement that are qualified as to materiality
becoming untrue, (ii) any of such representations and warranties that are not so
qualified becoming untrue in any manner which is material to the Company or
(iii) any of the conditions to Buyer's obligations as set forth in Article XII
hereof not being satisfied. In addition, the Company shall use all commercially
reasonable efforts, at its sole cost and expense, to obtain the waivers,
consents and/or amendments described in Section 12.12.
(b) The Buyer shall not take any action that would,
or that could reasonably be expected to, result in (i) any of the
representations and warranties of the Buyer set forth in this Agreement becoming
untrue in any material respect or (ii) any of the conditions to the Company's
obligations as set forth in Article XIII hereof not being satisfied.
XI.11. Notice of Certain Events. The Company and the
Buyer shall promptly notify in writing each other of:
(i) any notice or other communication from any
person alleging that the consent of such person is or may be required
in connection with the transactions contemplated by this Agreement;
(ii) any notice or other communication from any
Government Entity in connection with the transactions contemplated by
this Agreement;
(iii) any action, suits, claims, investigations or
proceedings commenced or, to the Knowledge of the executive officers of
the notifying party, threatened against, relating to or involving or
otherwise affecting such party or any of its subsidiaries which would
reasonably be expected to cause the conditions in Articles XII and XIII
not to be satisfied;
(iv) any administrative or other order or
notification relating to any material violation or claimed material
violation of law;
(v) the occurrence or non-occurrence of any event
or the discovery of any fact or circumstance of which the Company or
the Buyer has Knowledge, the occurrence or non-occurrence of which
would cause any representation or warranty contained in this Agreement
to be untrue or inaccurate in any respect material to the Company and
its Subsidiaries taken as a whole at or prior to the Interim Closing
Date;
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(vi) any material failure of any party to comply
with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it hereunder;
(vii) any proposal or inquiry by any third party
regarding a merger, consolidation, business combination, purchase or
distribution of any amount of the assets or capital stock or other
equity interest in the Company or any Subsidiary; and
(viii) any notice or other communication from any
Joint Venture in connection with the transactions contemplated by this
Agreement or with regard to matters otherwise material to the operation
of such Joint Venture.
;provided, however, that the delivery of any notice pursuant to this Section
11.11 shall not limit or otherwise affect the remedies available hereunder to
the party receiving such notice.
XI.12. Reporting. During the period from the date of this
Agreement through the Effective Time, (i) as requested by Buyer, the Company
shall confer on a regular basis with one or more representatives of Buyer with
respect to material operational matters; and (ii) the Company shall, within 30
days following each fiscal month, deliver to Buyer financial statements,
including an income statement and balance sheet for such month;
XI.13. Further Assurances. The Buyer and the Company shall
take or cause to be taken all commercially reasonable actions necessary, proper
or advisable to obtain any consent, waiver, approval or authorization relating
to any statute, rule, regulation, order, decree, administrative and judicial
doctrine, and other Laws which are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
trade ("Competition Laws") that is required for the consummation of the
transactions contemplated hereby; provided however, the agreement of the parties
contained herein shall not require the Buyer to take any action that would (i)
require divestiture by Buyer of any of its existing business operations or of a
not insubstantial portion of the business operations to be acquired pursuant to
this Agreement, or (ii) impose a commercially unreasonable burden on, or
restriction upon, Buyer's existing business operations or the business
operations to be acquired pursuant to this Agreement.
XI.14. Buyer Restrictions.
(a) Except as may be required by law or as the
Company may otherwise expressly consent to in writing, from the date hereof and
prior to the Closing, each of the Buyer, EQ and Equilease will operate each of
their respective businesses only in the ordinary and usual course consistent
with past practice.
(b) Without limiting the generality of the foregoing,
except as may be required by law or as the Company may otherwise expressly
consent to in writing from the date hereof and prior to the Closing, EQ will not
(i) declare, set aside or pay any dividend or other actual or deemed
distribution (whether in cash, stock or property or any combination thereof) in
respect of any of its capital stock; (ii) split, combine or reclassify any of
its capital stock or issue or authorize
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or propose the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock; (iii) amend the terms of,
repurchase, redeem or otherwise acquire any of its securities; or (iv) adopt a
plan of complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization.
XI.15. Certain Stockholder Approvals. The Company shall have
obtained written consent in accordance with the shareholder approval
requirements of Section 280G(b)(5) of the Code with respect to all Benefit
Plans, Contracts and any other contract, plan, policy or arrangement that
without such consent would or could constitute "parachute payments" (within the
meaning of Section 280G of the Code).
XI.16. Tender Offers. As soon as practicable after the date
hereof (a) the Company will make a written offer to repurchase all of the Senior
Debentures and request the consent of the holders of a majority in principal
amount of the Senior Debentures then outstanding to the deletion in their
entirety of certain covenants set forth in the Senior Debenture Indenture as
well as the events of default related solely to such covenants as more fully
described in that certain Senior Debenture Offer to Repurchase and Consent
Statement (the "Senior Debenture Solicitation"), and (b) the Company will cause
▇▇▇▇▇-▇▇▇▇▇▇▇▇, Inc. to make a written offer to repurchase all of the Senior
Notes and request the consent of the holders of a majority in principal amount
of the Senior Notes then outstanding to the deletion in their entirety of
certain covenants set forth in the Senior Note Indenture as well as the events
of default related solely to such covenants as more fully described in the
Senior Note Offer to Repurchase and Consent Statement (the "Senior Note
Solicitation;" and together with the Senior Debenture Solicitation, the
"Solicitations"). The Solicitations, including any amendments or supplements
thereto, shall be prepared by the Company in accordance and compliance with
applicable law, and shall be prepared in consultation with and be subject to
reasonable approval by the Buyer and its counsel (including, without limitation,
selection of the covenants and events of defaults to be deleted in connection
with such solicitation); provided, however, that the terms of the pricing of the
tender offers described in the solicitations shall be within the reasonable
discretion of the Company and shall be based upon the advice of the dealer
manager designated in the Solicitations as to what pricing is required to
complete such tender offers without having to extend the initial term of such
tender offers. The Buyer agrees to provide the Company and its counsel with all
information concerning the Buyer necessary to prepare the Solicitations. In
connection with and in furtherance of the foregoing, the Company agrees to enter
into and deliver or cause to be delivered as soon as practicable after the
relevant Consent Date (as defined in the Solicitations) (i) a supplemental
indenture executed by State Street Bank and Trust Company, as trustee, which
shall become effective upon consummation of the tender offer described in the
Senior Debenture Solicitation (the "Senior Debenture Supplemental Indenture")
and all other documents and certificates required by the Senior Debenture
Indenture, applicable law or reasonably requested by the trustee in order to
effect the amendment of such indenture, and (ii) a supplemental indenture
executed by State Street Bank and Trust Company, as trustee, which shall become
effective upon consummation of the tender offer described in the Senior Note
Solicitation (the "Senior Note Supplemental Indenture," and together with the
Senior Debenture Supplemental Indenture, the "Supplemental Indentures") and all
other documents and certificates required by the Senior Note Indenture,
applicable law or reasonably requested by the trustee in order to effect the
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amendment of such indenture, all in form and substance reasonably satisfactory
to the Buyer. The Company agrees that after the Supplemental Indentures have
been executed and delivered by the Company and ▇▇▇▇▇-▇▇▇▇▇▇▇▇, Inc. and executed
by the relevant Trustee it will not, and will cause ▇▇▇▇▇-▇▇▇▇▇▇▇▇, Inc. not to,
terminate, modify or otherwise supplement the tender offers described in the
Solicitations without the consent of the Buyer except as may be required by
applicable law. After the execution thereof, the Company agrees not to amend,
modify or otherwise supplement the terms of either of the Supplemental
Indentures without the prior written consent of the Buyer except as may be
required by applicable law. Each of the Company and the Buyer agree to take, or
cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable to consummate and effect the transactions
contemplated by this Section 11.16. At the mailing date thereof, neither the
Senior Debenture Solicitation nor the Senior Note Solicitation will include any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the foregoing shall not apply to the extent that any such untrue statement
of material fact or omission to state a material fact was made by the Company in
reliance upon and in conformity with written information concerning the Buyer or
any of its Affiliates furnished to the Company by the Buyer specifically for use
in the Senior Debenture Solicitation and the Senior Note Solicitation.
XI.17. Tax Periods Ending on or Before the Closing Date.
(a) The Company shall prepare or cause to be prepared and
file or cause to be filed a tax return on "Form 4466 - Corporation Application
for Quick Refund of Overpayment of Estimated Tax" (the "Quick Return") for the
Company in order to obtain a refund of all estimated federal taxes paid by the
Company prior to the Closing Date for the 1998 tax year. The Company shall also
prepare and file as soon as practicable its income tax returns for each state
government in respect of which an income tax return is required to be filed (the
"State Returns"). The Company shall permit the Stockholders' Representative to
review the State Returns prior to filing and to review the Quick Return on or
before January 6, 1999 and shall file such Quick Return within three (3)
business days after the Stockholders' Representative completes its review of the
Quick Return. The State Returns shall be filed as soon as practicable. The
Company shall pay to the Stockholders' Representative any refund of estimated
taxes paid by the Company prior to the Closing Date for the 1998 tax year (the
"1998 Estimated Taxes") received by the Company pursuant to the Quick Return and
the State Returns within five (5) days of the receipt of such refund. If the
request for refund on the Quick Return is rejected for any reason, the Company
shall file its Federal income tax return as soon as practicable in the normal
course requesting the same amount of refund as was reflected on the Quick Return
except to the extent otherwise required by law. Within five days of receipt of
any refund pursuant to such return, the Company shall pay the amount of such
refund to the Stockholders' Representative. The Buyer agrees that it shall not,
and shall cause the Company and its Subsidiaries not to, take any action or to
permit the taking of any action, that will have the effect of prohibiting the
Company from seeking a full refund of the amount of the 1998 Estimated Taxes. In
no event shall the amount payable to the Stockholders' Representative exceed the
amount of the 1998 Estimated Taxes.
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(b) The Company agrees to pay to the Stockholders'
Representative the amount of the actual refund, which amount shall not exceed
$500,000, received by the Company pursuant to the Company's 1997 federal income
tax return to be filed in September 1998. The amount of any such refund shall be
paid to the Stockholders' Representative within five (5) days of the receipt of
such refund. The Company acknowledges and agrees that such 1997 federal income
tax return will (i) be prepared in the ordinary course of business; (ii) not
include any carryback of deductions or losses incurred in 1998 or otherwise seek
a cash refund in excess of $500,000; and (iii) be subject to the Buyer's review
and approval (which approval shall not be reasonably withheld).
XI.18. Buyer Escrow. As soon as practicable after the date
hereof, the Buyer will remit the amount of $5,000,000 (the "Buyer Escrow
Amount") to the Buyer Escrow Agent to be held and disbursed by the Buyer Escrow
Agent in accordance with the terms of the Buyer Escrow Agreement substantially
in the form of Exhibit 11.18 attached hereto (the "Buyer Escrow Agreement") with
such changes as the Buyer Escrow Agent reasonably requests (which changes shall
not materially effect the economic rights of the Buyer or the Company);
provided, however, that the Buyer shall remit the Buyer Escrow Amount to the
Buyer Escrow Agent no later than the date on which the Buyer Escrow Agent
executes the Buyer Escrow Agreement unless the Buyer Escrow Agent executes the
Buyer Escrow Agreement after 2:00 p.m. New York City time, in which case the
Buyer shall remit the Buyer Escrow Amount to the Buyer Escrow Agent on the next
succeeding business day.
XI.19. CS Interglas Options. Upon the written request by the
Buyer at least two business days prior to the Closing, and to the extent
permitted by applicable law, the Company shall cause ▇▇▇▇▇-▇▇▇▇▇▇▇▇
International, Inc. ("C-S") to give notice, immediately prior to the Closing, to
▇▇▇▇▇▇▇▇-Group of the exercise of the option under Section 6.1 of that certain
Heads of Agreement by and among ▇▇▇▇▇▇▇▇-Group, ▇▇▇▇▇-▇▇▇▇▇▇▇▇, Inc. and C-S
dated March 30, 1998, provided that Buyer agrees in writing to pay all costs and
expense of exercising such option and provides the cash needed to exercise such
option immediately prior to the Closing.
ARTICLE XII
CONDITIONS TO THE BUYER'S OBLIGATIONS
The obligation of the Buyer to consummate the transactions
contemplated hereby shall be subject to the satisfaction (or waiver) at or prior
to the Closing of all of the following conditions:
XII.1. Representations, Warranties and Covenants of the
Company.
(a) The Company shall have performed and complied in
all material respects with all of its respective agreements, obligations and
covenants contained herein and required to be performed at or prior to the
Closing Date.
(b) The representations and warranties of the Company
contained herein shall be true and correct on the date hereof and as of the
Interim Closing Date, except for
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representations and warranties that speak as of a specific date or time other
than the Interim Closing Date, which shall be true as of such date or time. This
condition shall be deemed satisfied unless the failure of the representations
and warranties of the Company to be true and correct, in the aggregate, is
material and adverse to the business of the Company and its Subsidiaries taken
as a whole. For purpose of determining whether a representation or warranty is
true or correct, and except as provided on Section 12.1 of the Disclosure
Schedule, all requirements that a fact or event be or not be material or have or
not have a Company Material Adverse Effect shall be ignored.
XII.2. No Prohibition. (i) No order, judgment, ruling,
charge, decree or injunction of any Governmental Entity shall be in effect which
prohibits the consummation of the transactions contemplated hereby or (ii) no
proceeding therefor shall have been threatened or commenced by any Governmental
Agency which seeks to prohibit, restrain or delay the consummation of the
transactions contemplated by this Agreement.
XII.3. Third Party Consents. The consents listed on Section
12.3 of the Disclosure Schedule shall not have been revoked and shall be valid
and enforceable as of the Closing Date.
XII.4. Governmental Consents. The applicable waiting period
(and any extensions thereof) under the HSR Act shall have expired or been
terminated.
XII.5. Document Deliveries. The Buyer shall have received
from the Company the documents listed in Section 6.2(a) hereof.
XII.6. Repayment of Indebtedness to Third Parties;
Termination of Security Interests. All Indebtedness of the Company under the
Credit Agreement will be contemporaneously repaid in full and canceled and the
Buyer shall have received a copy of the Payoff Letter described in Section
6.2(a)(v)(A).
XII.7. Resignations. All directors of the Company and its
Subsidiaries specified by the Buyer prior to the Closing Date shall have
resigned such directorships.
XII.8. Stockholder Agreements. All agreements, restrictions,
encumbrances or other arrangements governing the capital stock of the Company
and the Subsidiaries as set forth on Section 7.1 of the Disclosure Schedule
shall have terminated and be of no further force and effect.
XII.9. Stockholder Approval. The Stockholders of the Company
shall have unanimously consented to the transactions contemplated hereby.
XII.10. Release of Claims. Each Stockholder shall have
executed a release in the form attached hereto as Exhibit 12.10.
XII.11. Tender Offer Waiting Periods and Exit Consents. The
waiting periods (and any extensions thereof) under applicable law for the tender
offers described in the Solicitations shall have expired and all conditions
necessary for the Company or its Subsidiary, as applicable, to complete such
tender offer on the Closing Date shall have been fulfilled (other than making
the
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payments to the holders of the Senior Debentures and the Senior Notes) and
all actions required pursuant to Section 11.16 in order to make the Senior
Debenture Supplemental Indenture and the Senior Note Supplemental Indenture
effective upon consummation of the tender offers described in the solicitations
shall have been completed.
XII.12. ASCO Consent. In the event that within five days of
the date hereof the Buyer executes an agreement with any Person (the
"Transferee") pursuant to which the Transferee or an affiliate of the Transferee
shall become a Business Transferee, the Company shall receive all consents and
waivers from Asahi Chemical Industry Co., Ltd. ("Asahi") or amendments executed
by Asahi, applicable, with respect to the Joint Venture Agreement, dated as of
September 18, 1970, by and among ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Fiber Glass Corporation, Asahi
Chemical Industry Co., Ltd. and Fukui Seiren co., Ltd, as amended and all
related agreements (collectively, the "ASCO JV Agreements"), in form and
substance reasonably satisfactory to Buyer and the Transferee which consents and
waivers or amendment are necessary to permit and/or effect a sale, assignment or
transfer to a Qualified Transferee of (i) all shares of the common voting stock
in Asahi-▇▇▇▇▇▇▇▇ Co., Ltd. ("ASCO") held by ▇▇▇▇▇-▇▇▇▇▇▇▇▇ International, Inc.
("CSI") and (ii) all of CSI's rights under the ASCO JV Agreements without
triggering any rights of Asahi thereunder. A "Qualified Transferee" shall mean a
corporation wholly owned by the Transferee which either has the name ▇▇▇▇▇
▇▇▇▇▇▇▇▇ Corporation or a different name which is acceptable to Asahi.
ARTICLE XIII
CONDITIONS TO THE COMPANY'S OBLIGATIONS
The obligations of the Company to consummate the transactions
contemplated hereby shall be subject to the satisfaction (or waiver) at or prior
to the Closing of all of the following conditions:
XIII.1. Representations, Warranties and Covenants of the
Buyer.
(a) The Buyer shall have performed and complied
in all material respects with its agreements and covenants contained herein on,
prior to or as of the Closing Date.
(b) The representations and warranties of the
Buyer contained herein shall be true and correct as of the Closing Date, except
for representations and warranties that speak as of a specific date or time
other than the Closing Date, which shall be true as of such date or time.
XIII.2. No Prohibition. No order, judgment, ruling, charge,
decree or injunction of any Governmental Entity shall be in effect which
prohibits the consummation of the transactions contemplated hereby.
XIII.3. Governmental Consents. The applicable waiting period
(and any extensions thereof) under the HSR Act shall have expired or been
terminated and the consents, approvals, authorizations, exemptions and waivers
from Governmental Entities listed on Section 13.3 of the Disclosure Schedule,
which consents shall be required in order to enable the Company to consummate
the transactions contemplated hereby (except for such consents, approvals,
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authorizations, exemptions and waivers, the absence of which would not prohibit
consummation of such transactions or render such consummation illegal).
XIII.4. Document Deliveries. The Company shall have received
from Buyer the documents listed in Section 6.2(b) hereof.
ARTICLE XIV
TERMINATION PRIOR TO CLOSING
XIV.1. Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) By the mutual written consent of the Company and
the Buyer;
(b) By either the Company or the Buyer in writing,
without liability to the terminating party on account of such termination
(except as otherwise provided in Section 14.2), if the Closing shall not have
occurred on or before September 15, 1998;
(c) By either the Company or the Buyer if there shall
have been a material breach of any of the representations, warranties or
covenants in this Agreement on the part of the other party, which breach is not
cured within 30 days following written notice to the party committing such
breach, or which breach, by its nature, cannot be cured prior to the Closing, in
each case which breach prevents the satisfaction of any condition contained
herein (provided, that the terminating party is not then in material breach of
any of the representations, warranties or covenants in this Agreement); or
(d) By the Company if the Buyer has not remitted the
Buyer Escrow Amount to the Buyer Escrow Agent as required pursuant to Section
11.18.
XIV.2. Effect of Termination. Termination of this Agreement
pursuant to this Article XII shall terminate all obligations of the parties
hereunder, except for the obligations under Sections 15.8, 15.10 and 15.11
hereof and the Confidentiality Agreement, provided, however, that nothing in
this Section 14.2 shall relieve or limit the Liability hereunder of any party
(the "Defaulting Party") to the other party or parties on account of (i) a
wilful breach of a representation or warranty, or (ii) breach of a covenant
contained herein by the Defaulting Party. In the case of such a breach, in
addition to any damages for which the Defaulting Party may be liable, the
Defaulting Party shall reimburse the other party or parties for any expenses
incurred by such party or parties in order to enforce its or their rights under
this Agreement (including reasonable attorney's fees and expenses).
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ARTICLE XV
MISCELLANEOUS
XV.1. Non-Survival of Representations and Warranties. None of
the covenants, representations and warranties in this Agreement or any
certificate delivered pursuant to this Agreement shall survive the Closing
except for covenants which, by their terms, are to be performed after the
Closing.
XV.2. Entire Agreement. This Agreement (including the
Disclosure Schedule and all Exhibits hereto), the Escrow Agreement and the
Confidentiality Agreement constitute the sole understanding of the parties with
respect to the subject matter hereof and shall not be deemed to contemplate any
other material transaction involving the Company and its Subsidiaries (including
the exercise of the option described in Section 11.19) other than the Merger.
XV.3. Successors and Assigns; Third Party Beneficiaries.
(a) The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties hereto; provided, however, that this Agreement may not be
assigned by any party without the prior written consent of the other parties ,
provided, further, that the Buyer may assign this Agreement and the Company and
the Stockholders hereby consent thereto, in whole or in part, (i) to any
wholly-owned subsidiary of the Buyer, (ii) to any lender to the Buyer, any
subsidiary or Affiliate thereof or any agent on behalf thereof as security for
obligations to such lender in respect of its financing arrangements and any
refinancing, extension, refunding or renewals thereof and (iii) on or after the
Closing, to any successor of the Surviving Corporation in the event of a merger,
consolidation or sale of stock or to any purchaser of all or substantially all
of the assets of the Surviving Corporation, and to any transferee or lessee of
all or a substantial part of any of the Surviving Corporation's assets or
business and any such transferee shall be entitled to enforce the Surviving
Corporation's rights on an individual basis. The Buyer agrees to cause the
purchaser or the lessee of substantially all of the assets or all of the capital
stock of ▇▇▇▇▇-▇▇▇▇▇▇▇▇, Inc. or the Company (the "Business Transferee") to
assume the obligations of the Buyer and the Surviving Corporation under Sections
4.3, 11.6, 11.7 and 11.9 of this Agreement. No assignment of this Agreement to a
Business Transferee shall be permitted unless such Business Transferee assumes
the obligations of the Buyer and the Surviving Corporation as set forth in the
preceding sentence. The assignment of this Agreement shall not relieve the Buyer
from the obligations assumed by such Business Transferee. For the purpose of
this Section 15.3, all members of an affiliated group that purchase or lease
assets of ▇▇▇▇▇-▇▇▇▇▇▇▇▇, Inc. or the Company shall be deemed to be the same
"Business Transferee."
XV.4. EQ and Equilease Guarantees. Each of EQ and Equilease
hereby irrevocably agree to be liable and responsible for the obligations of the
Buyer and the Surviving Corporation hereunder as if they were the Buyer.
XV.5. Vestar Guarantee. Vestar hereby irrevocably agrees
to be liable and responsible for the obligations of the Stockholders'
Representative pursuant to Section 4.3 hereunder as if it were the Stockholders'
Representative.
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XV.6. Headings. The headings of the articles, sections
and paragraphs of this Agreement are inserted for convenience only and shall not
be deemed to constitute part of this Agreement or to affect the construction
hereof.
XV.7. Modification and Waiver. No amendment, modification or
alteration of the terms or provisions of this Agreement shall be binding unless
the same shall be in writing and duly executed by the parties hereto, except
that any of the terms or provisions of this Agreement may be waived in writing
at any time by the party which is entitled to the benefits of such waived terms
or provisions. No waiver of any of the provisions of this Agreement shall be
deemed to or shall constitute a waiver of any other provision hereof (whether or
not similar). No delay on the part of any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof.
XV.8. Expenses. Except as otherwise provided herein, the
Company on the one hand and the Buyer on the other hand shall each pay all costs
and expenses incurred by it or on its behalf in connection with this Agreement
and the transactions contemplated hereby including, without limiting the
generality of the foregoing, fees and expenses of its own financial consultants,
accountants and counsel.
XV.9. Notices. Any notice, request, instruction or other
document to be given hereunder by any party hereto to any other party shall be
in writing and shall be given (and will be deemed to have been duly given upon
receipt) by delivery in person, by electronic facsimile transmission, by
overnight courier or by registered or certified mail, postage prepaid,
if to the Company, to:
▇▇▇▇▇-▇▇▇▇▇▇▇▇ Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Vestar Capital Partners
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Sander ▇. ▇▇▇▇
Managing Director
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
and a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
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▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
if to the Buyer, to:
Stamford CS Acquisition Corp.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
XV.10. Governing Law; Forum. This Agreement shall be
construed in accordance with and governed by the laws of the State of New York
without giving effect to any choice or conflict of law provision or rule
(whether of the State of New York or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of New
York. Except as explicitly provided otherwise herein, each of the parties hereto
hereby irrevocably and unconditionally waives any objection to the laying of
venue of any litigation arising out of this Agreement or the transactions
contemplated hereby in the courts of the State of New York or the United States
of America, in each case located in County of New York, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such litigation brought in any such court has been brought
in an inconvenient forum.
XV.11. Public Announcements. None of the parties shall make
any public statements, including, without limitation, any press releases, with
respect to this Agreement and the transactions contemplated hereby without the
prior written consent of the other parties except as such party in good faith
believes may be required by applicable law or pursuant to any Contract (in which
case the disclosing party will use its reasonable best efforts to consult with
the other party in advance as to the contents and timing thereof).
XV.12. Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall for all purposes be deemed to be an
original and all of which shall constitute the same instrument.
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XV.13. Released Parties. The Buyer, the Company and its
Subsidiaries for themselves and their past, present and future Affiliates,
hereby release and forever discharge the persons listed on Section 15.14 of the
Disclosure Schedule (the "Released Persons") from any and all Claims incurred by
any of them which are related directly or indirectly to events or circumstances
occurring prior to Closing in connection with any such Released Person's acting
as an officer, director or stockholder of the Company, any of its Subsidiaries
or any Joint Venture except to the extent arising out of (i) fraud,
misappropriation or similar acts, (ii) contractual obligations and (iii) any
loans or advances owed to the Company or its Subsidiaries. For the purpose of
this Section 15.14, the term Claim shall mean and include all past, present and
future disputes, claims, controversies, demands, rights, obligations,
liabilities, actions and causes of action of every kind and nature, including:
(i) any unknown, unsuspected or undisclosed claim; and (ii) any claim, right or
cause of action based upon any breach of any express, implied, oral or written
contract or agreement.
XV.14. Third Party Beneficiary. It is the intention and the
agreement of the parties hereto that the Stockholders and all present and former
officers and directors of the Company or any Subsidiary shall have the full
rights of a third party beneficiary with respect to the obligations of the Buyer
and the Surviving Corporation under Sections 11.6, 11.7, 11.8 and 11.17 of the
Merger Agreement, and the obligations of EQ and Equilease under Section 15.4,
including, without limitation, the obligation of the Buyer, the Surviving
Corporation, EQ and Equilease to provide the benefits, take the actions or make
the payments required under such provisions of the Merger Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf as of the date first above written.
▇▇▇▇▇-▇▇▇▇▇▇▇▇ HOLDINGS, INC.
By:
--------------------------------------
Name:
Title:
VESTAR/CS HOLDING COMPANY, L.L.C.
By:
--------------------------------------
Name:
Title:
VESTAR EQUITY PARTNERS, L.P.
By: Vestar Associates, L.P.,
Its: General Partner
By: Vestar Associates Corporation,
Its: General Partner
By:
--------------------------------------
Name:
Title:
STAMFORD CS ACQUISITION CORP.
By:
--------------------------------------
Name:
Title:
EQ CORPORATION
By:
--------------------------------------
Name:
Title:
58
EQUILEASE HOLDING COMPANY
By:
---------------------------------
Name:
Title:
59
EXHIBIT 2.2
CERTIFICATE OF MERGER
OF
STAMFORD CS ACQUISITION CORP.
(a Delaware corporation)
INTO
▇▇▇▇▇-▇▇▇▇▇▇▇▇ HOLDINGS, INC.
(a Delaware corporation)
The undersigned corporation does hereby certify:
FIRST: The name, form of entity and state of organization
of each of the constituent entities of the merger are as follows:
Name Form Of Entity State Of Organization
---- -------------- ---------------------
Stamford CS
Acquisition Corp. corporation Delaware
▇▇▇▇▇-▇▇▇▇▇▇▇▇
Holdings, Inc. corporation Delaware
SECOND: The Merger Agreement, dated as of July 24, 1998, by
and between ▇▇▇▇▇-▇▇▇▇▇▇▇▇ Holdings, Inc., a Delaware corporation, Stamford CS
Acquisition Corp., a Delaware corporation and the other parties thereto (the
"Merger Agreement"), has been approved, adopted, certified, executed and
acknowledged by each of the constituent entities in accordance with Sections 251
and 228 of the General Corporation Law of the State of Delaware.
THIRD: The name of the entity surviving the merger is
▇▇▇▇▇-▇▇▇▇▇▇▇▇ Holdings, Inc. (the "Surviving Corporation").
FOURTH: The certificate of incorporation of ▇▇▇▇▇-▇▇▇▇▇▇▇▇
Holdings, Inc. shall be amended and restated in the form attached hereto as
Exhibit A. [FORM TO BE ATTACHED]
FIFTH: The executed Merger Agreement is on file at the
principal place of business of the Surviving Corporation. The address of said
principal place of business is ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
SIXTH: A copy of the Merger Agreement will be furnished upon
request and without cost to any stockholder or member, as applicable, of any
constituent entity.
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IN WITNESS WHEREOF, the undersigned has executed this
Certificate of Merger this __ day of August, 1998.
▇▇▇▇▇-▇▇▇▇▇▇▇▇ HOLDINGS, INC.,
a Delaware corporation
By:
---------------------------------
Name:
Title:
[Signature Page to Certificate of Merger]