EXECUTION COPY
SETTLEMENT AGREEMENT
SETTLEMENT AGREEMENT, dated as of August 12, 1998, by and between
Sunbeam Corporation, a Delaware corporation ("Sunbeam" or the "Company"), and
Coleman (Parent) Holdings Inc., a Delaware corporation ("Coleman Parent").
For the purposes of this Agreement, Sunbeam, together with each direct
or indirect parent, subsidiary, division, or affiliated corporation or entity,
and each employee, agent, attorney, representative, administrator, executor,
receiver, officer, director, or stockholder of any such corporation or entity,
and any other person, firm, corporation or entity now or hereafter affiliated in
any manner with any of them or claiming through or in the right of any of them
and all of their respective predecessors, successors, assigns, heirs, executors
and administrators (but excluding for all purposes under this Agreement, Xx.
Xxxxxx X. Xxxxxx, former Chief Executive Officer of Sunbeam, Xx. Xxxxxxx X.
Xxxxx, former Executive Vice President of Sunbeam, Xxxxxx Xxxxxxxx LLP,
Sunbeam's independent auditors, PriceWaterhouseCoopers, consultants to Sunbeam,
and any financial advisor to Sunbeam, and each employee, agent, attorney,
representative, administrator, executor, receiver, officer, director, or
stockholder of any such corporation or entity, and any other person, firm,
corporation or entity now or hereafter affiliated in any manner with any of them
or claiming through or in the right of any of them and all of their respective
predecessors, successors, assigns, heirs, executors and administrators), are
collectively hereinafter referred to as the "Sunbeam Group"; and Coleman Parent,
together with each direct or indirect parent, subsidiary, division, or
affiliated corporation or entity, and each employee, agent, attorney,
representative, administrator, executor, receiver, officer, director, or
stockholder of any such corporation or entity, and any other person, firm,
corporation or entity now or hereafter affiliated in any manner with any of them
or claiming through or in the right of any of them and all of their respective
predecessors, successors, assigns, heirs, executors and administrators, are
collectively hereinafter referred to as the "Coleman Group".
W I T N E S S E T H
WHEREAS, CLN Holdings Inc., a Delaware corporation ("CLN Holdings"),
was the indirect beneficial owner of approximately 82% of the outstanding common
stock, par value $.01 per share (the "Coleman Common Stock"), of The Xxxxxxx
Company, Inc., a Delaware corporation ("Coleman"); and
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of
February 27, 1998 (the "Holdings Merger Agreement"), by and among Sunbeam, Laser
Acquisition Corp., a Delaware corporation and, as of such date, a wholly owned
subsidiary of Sunbeam ("Laser Acquisition"), CLN Holdings, as of such date, a
wholly owned subsidiary of Coleman Parent, and Coleman Parent, CLN Holdings was
merged with and into Laser Acquisition (the "Holdings Merger"), with the
surviving corporation becoming an indirect wholly owned subsidiary of Sunbeam,
and pursuant to which Coleman Parent received certain shares of common stock,
par value $.01 per share, of Sunbeam ("Sunbeam Common Stock"); and
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of
February 27, 1998 (the "Coleman Merger Agreement"), by and among Sunbeam, Camper
Acquisition Corp., a Delaware corporation anda wholly owned subsidiary of
Sunbeam ("Camper Acquisition"), and Coleman, Camper Acquisition is to be merged
with and into Coleman (the "Coleman Merger"), with the surviving corporation
becoming an indirect wholly owned subsidiary of Sunbeam; and
WHEREAS, as a result of the Holdings Merger, Sunbeam acquired an
indirect approximately 82% interest in Coleman (the "Coleman Acquisition"); and
WHEREAS, Sunbeam and Coleman Parent are parties to a Registration
Rights Agreement, dated as of March 29, 1998 (the "Registration Rights
Agreement"), pursuant to which Sunbeam agreed to provide certain registration
rights to Coleman Parent; and
WHEREAS, following the dismissal by Sunbeam of certain of its executive
officers in mid-June 1998, Coleman Parent has made available to Sunbeam certain
senior officers employed by members of the Coleman Group to serve as senior
executive officers of Sunbeam (the "Senior Executives") and has provided certain
other management support to Sunbeam, and Sunbeam desires to continue the service
of the Senior Executives and such management support; and
WHEREAS, Coleman Parent and Sunbeam believe it is desirable that
Sunbeam put in place as promptly as possible a permanent management team to
prevent jeopardizing the ongoing operations and financial viability of Sunbeam;
and
WHEREAS, Coleman Parent believes that it possesses legal and equitable
claims against Sunbeam arising out of the Coleman Acquisition and out of what it
contends were certain breaches of contract and fraudulent and negligent or other
misrepresentations and omissions made to Coleman Parent and its representatives
in connection therewith (the "Claims"), and Sunbeam disputes such Claims; and
WHEREAS, there are also now pending or may be filed putative class
actions in which Sunbeam is named as a defendant and in which Coleman Parent is
a class member (the "Class Actions"), and Sunbeam denies liability with respect
to and intends to contest the claims that have been asserted in the Class
Actions; and
WHEREAS, the accountants who audited Sunbeam's 1997 financial
statements, assisted by another firm of accountants, are in the process of
reviewing those financial statements, and believe, as has been publicly
announced, that it will be necessary to restate those financial statements by
reflecting a variety of adjustments the magnitude of which has not yet been
determined; and
WHEREAS, Sunbeam and Coleman Parent desire to terminate the disputes
between them, and desire to assure one another that Coleman Parent will not
prosecute the Claims or any related or potential claims arising out of or
relating to the Coleman Acquisition, directly or indirectly in any capacity,
against the Sunbeam Group, so as to avoid the substantial burdens and expense of
litigation and the interference with the business and operations of Sunbeam and
with the work of its management and employees and to obtain the continued
services of certain executives and employees of the Coleman Group, and in
accordance with the terms and provisions hereof, that
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Coleman Parent and Sunbeam each forever release, waive and discharge
any and all manner of actions, causes of action, proceedings, suits, claims,
demands, liens, debts, accounts, obligations, rights, costs, contracts,
agreements, promises, controversies, judgments, expenses, demands, damages and
liabilities, of any nature whatsoever, in law or in equity, whether or not now
foreseen, known, suspected, matured, accrued or claimed, and whether or not
asserted in litigation, including court costs and attorneys' fees (each an
"Action and Liability" and collectively, "Actions and Liabilities"), which any
member of the Coleman Group controlling, controlled by or under common control
with Coleman Parent (such persons, together with Coleman Parent, the "Coleman
Controlled Group") may have against any member of the Sunbeam Group and which
any member of the Sunbeam Group controlled by Sunbeam (such persons, together
with Sunbeam, the "Sunbeam Controlled Group") may have against any member of the
Coleman Group as of the effective date hereof or prior thereto in any manner
arising out of or relating to the Coleman Acquisition, irrespective of any
present lack of knowledge on the part of either of them of any such possible
Action and Liability, but excluding any claim for breach of this Agreement or
the agreements and documents entered into or delivered pursuant hereto;
NOW, THEREFORE, in consideration of the respective covenants,
agreements and conditions hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be bound hereby, the parties hereto agree as follows:
1. Issuance of Warrants; Closing.
(a) On the basis of the representations, warranties,
covenants and agreements and subject to the satisfaction or waiver (to
the extent permitted) of the applicable conditions expressly set forth
herein, at the closing of the transactions contemplated by this Section
1 (the "Closing"):
(i) Sunbeam shall issue to Coleman Parent certain
warrants to purchase shares of Sunbeam Common Stock (the
"Warrants") by duly executing and delivering to Coleman Parent
a Warrant Agreement in the form attached as Exhibit A hereto
(the "Warrant Agreement");
(ii) Sunbeam and Coleman Parent shall enter into an
amendment to the Registration Rights Agreement, in the form
attached as Exhibit B hereto (as so amended, the "Amended
Registration Rights Agreement");
(iii) Sunbeam and Coleman Parent agree to be bound by the
releases and covenants set forth in Section 2 of this
Agreement;
(iv) Coleman Parent agrees to supply management services
of the Senior Executives, and to the covenants and provisions
of Section 3 of this Agreement; and
(v) Sunbeam and Coleman Parent agree to be bound by the
provisions regarding the restrictions on transfer on the
shares of Sunbeam Common Stock re-
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ceived by Coleman Parent in the Holdings Merger and the
Warrants set forth in Section 4 of this Agreement.
(b) The Closing shall take place on the first day when all
conditions thereto set forth herein shall be satisfied or waived or
such other date as Sunbeam and Coleman Parent may agree in writing (the
"Closing Date"), but in no event sooner than the tenth day following
the mailing of the letter to Sunbeam shareholders contemplated by
Section 7. The Closing shall take place on the Closing Date at 10:00
a.m., New York City time, at the offices of Wachtell, Lipton, Xxxxx &
Xxxx, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx and shall be deemed
effective as of the opening of business on the Closing Date.
(c) At the Closing, Sunbeam shall deliver or cause to be
delivered to Coleman Parent, in addition to the Warrant Agreement, such
other instruments or documents as Coleman Parent may reasonably
request.
2. Granting of Releases and Indemnification.
(a) At the Closing, simultaneously with receipt by Coleman
Parent of the Warrants, and without any further action by any of the
parties hereto, each of the following shall be fully and legally
effective:
(i) Coleman Parent shall, on behalf of itself and on
behalf of each other member of the Coleman Controlled Group,
remise, release and forever discharge the Sunbeam Group of and
from all debts, demands, actions, causes of action, suits,
accounts, covenants, contracts, agreements, damages, and any
and all claims, demands and liabilities whatsoever of every
name and nature, both in law and in equity, against any of the
Sunbeam Group or any of their predecessors, successors or
assigns, which Coleman Parent or any other member of the
Coleman Controlled Group has or ever had from the beginning of
the world to the Closing with respect to or arising out of the
Coleman Acquisition or any alleged misrepresentations and
omissions and/or breach of contract by any member of the
Sunbeam Group and parties acting on behalf of any member of
the Sunbeam Group in connection with the Coleman Acquisition,
including with respect to the Actions and Liabilities;
provided that neither the foregoing release nor the dismissals
or withdrawals described in this Section 2(a) shall apply to
the rights of Coleman Parent and any other member of the
Coleman Controlled Group under Article IX of the Holdings
Merger Agreement, any breach or failure to comply with this
Agreement, the Warrant, the Amended Registration Rights
Agreement or the transactions contemplated hereby or thereby,
the transactions contemplated by the Coleman Merger Agreement
(including the Coleman Merger), which shall not be terminated
or amended in any respect hereby, or shall otherwise affect
Coleman Parent's right to enforce this Agreement, the Warrant
or the Amended Registration Rights Agreement in accordance
with its or their terms.
(ii) In the event any member of the Coleman Controlled
Group pursues a claim against any person(s) not released
hereby involving the matters that are the
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subject of the release set forth in Section 2(a)(i) and it is
finally judicially determined that such person(s) are entitled
directly or indirectly to indemnification or contribution from
any member of the Sunbeam Controlled Group for any amounts
they are required to pay to any member of the Coleman
Controlled Group in connection with such claims, or to
reimbursement of litigation expenses solely attributable to
such claims of any member of the Coleman Controlled Group
(each a "Sunbeam Group Indemnification Obligation"), Coleman
Parent will indemnify and hold harmless each member of the
Sunbeam Controlled Group against such Sunbeam Group
Indemnification Obligation. No member of the Sunbeam
Controlled Group will enter into any settlement of a Sunbeam
Group Indemnification Obligation without the prior written
consent of Coleman Parent, which shall not be unreasonably
withheld. Any amounts so paid by a member of the Sunbeam
Controlled Group in a settlement so consented to by Coleman
Parent shall be treated for purposes hereof as a Sunbeam Group
Indemnification Obligation.
(iii) Sunbeam, on behalf of itself and on behalf of each
other member of the Sunbeam Controlled Group, shall remise,
release and forever discharge the Coleman Group of and from
all debts, demands, actions, causes of action, suits,
accounts, covenants, contracts, agreements, damages, and any
and all claims, demands and liabilities whatsoever of every
name and nature, both in law and in equity, against any of the
Coleman Group or any of their predecessors, successors or
assigns, which Sunbeam or any member of the Sunbeam Controlled
Group has or ever had from the beginning of the world to the
Closing with respect to or arising out of the Coleman
Acquisition or any alleged misrepresentations and omissions
and/or breach of contract by any member of the Coleman Group
and parties acting on behalf of any member of the Coleman
Group in connection with the Coleman Acquisition, including
with respect to the Actions and Liabilities; provided that
neither the foregoing release nor the dismissals or
withdrawals described in this Section 2(a) shall apply to the
rights of Sunbeam and any other member of the Sunbeam
Controlled Group under Article IX of the Holdings Merger
Agreement, any breach or failure to comply with this
Agreement, the Warrant, the Amended Registration Rights
Agreement or the transactions contemplated hereby or thereby,
the transactions contemplated by the Coleman Merger Agreement
(including the Coleman Merger), which shall not be terminated
or amended in any respect hereby, or shall otherwise affect
Sunbeam's right to enforce this Agreement, the Warrant or the
Amended Registration Rights Agreement in accordance with its
or their terms.
(iv) In the event any member of the Sunbeam Controlled
Group pursues a claim against any person(s) not released
hereby involving the matters that are the subject of the
release set forth in Section 2(a)(iii) and it is finally
judicially determined that such person(s) are entitled
directly or indirectly to indemnification or contribution from
any member of the Coleman Controlled Group for any amounts
they are required to pay to any member of the Sunbeam
Controlled Group in connection with such claims, or to
reimbursement of litigation expenses solely attributable to
such claims of any member of the Sunbeam Controlled Group,
(each, a
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"Coleman Group Indemnification Obligation"), Sunbeam will
indemnify and hold harmless each member of the Coleman
Controlled Group against such Coleman Group Indemnification
Obligation. No member of the Coleman Controlled Group will
enter into any settlement of a Coleman Group Indemnification
Obligation without the prior written consent of Sunbeam, which
shall not be unreasonably withheld. Any amounts so paid by a
member of the Coleman Controlled Group in a settlement so
consented to by Sunbeam shall be treated for purposes hereof
as a Coleman Group Indemnification Obligation.
(v) Sunbeam, on behalf of itself, and on behalf of each
other member of the Sunbeam Controlled Group, and Coleman
Parent, on behalf of itself and on behalf of each other member
of the Coleman Controlled Group, agree to indemnify and hold
harmless one another from and against any and all Actions and
Liabilities arising from, or in connection with, any action or
proceeding, brought by, or prosecuted by, or on the initiative
of, either of them, or by any of their predecessors,
successors or assigns, contrary to the provisions of this
Agreement. It is further agreed that this agreement of
indemnity shall be deemed breached and a cause of action shall
be deemed to have accrued thereon immediately upon the
commencement of any action contrary to this Agreement, and
that in any such action this Agreement may be pleaded by
either of them as a defense, or either of them may assert this
Agreement by way of counterclaim or cross-claim in any such
action.
(vi) This Agreement shall inure to the benefit of and
shall be binding upon Sunbeam and Coleman Parent, and to the
benefit of and shall be binding upon each person or entity in
the Sunbeam Group and the Coleman Group.
(b) Coleman Parent agrees that it shall opt out, as to and
only as to any claims against any member of the Sunbeam Group, of any
class that may be certified in any of the Class Actions or in any other
action that may be certified as a class action with respect to or
arising out of any other matter released hereby.
3. Provision of Management Services.
(a) The parties hereto acknowledge that Coleman Parent has
caused other members of the Coleman Group to make available to Sunbeam
the services of certain employees and Senior Executives and has
encouraged such persons to continue to provide services to Sunbeam as
employees of Sunbeam.
(b) Coleman Parent agrees that it shall, and it shall use its
reasonable efforts to cause the other members of the Coleman Group to,
continue to, for a minimum period of 36 months from the date hereof,
make available to Sunbeam the services of Coleman Group's employees who
are Senior Executives, or who become Senior Executives, for so long as
they remain employees of a member of the Coleman Group and otherwise to
continue to provide advice and assistance to Sunbeam in connection with
the business and operations of Sunbeam consistent with that provided to
date; provided, however, that, other
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than pursuant to the employment arrangements currently in place between
such employees and members of the Coleman Group, no member of the
Coleman Group shall be required bear any incremental expense with
respect to any Senior Executive in order to comply with the foregoing.
(c) Sunbeam agrees to pay the compensation of any such
persons who become employees of Sunbeam in accordance with the terms of
the employment arrangements entered into by Sunbeam with such persons.
This Agreement shall not prevent any of the Senior Executives from
continuing to perform services for members of the Coleman Group to the
extent that the provision of such services does not materially
interfere with the performance of services by the Senior Executive for
Sunbeam under his employment arrangements with Sunbeam.
(d) Coleman Parent agrees to use its reasonable efforts to
cause the other members of the Coleman Group to continue, for a period
of 36 months from the date hereof, to provide assistance and support to
Sunbeam on a basis consistent with the manner in which such assistance
and support are generally provided to other companies in which members
of the Coleman Group have a substantial interest (and without the
payment of additional consideration by Sunbeam to Coleman Parent, other
than with respect to the reimbursement of out-of-pocket expenses paid
to third parties) and of a similar nature to those which have been so
provided to Sunbeam from time to time from mid-June 1998 through the
date hereof, including as to the following matters:
(i) financings, and dealings with financing sources
and the capital markets;
(ii) investor and public relations;
(iii) acquisitions, divestitures and other
extraordinary transactions;
(iv) executive benefits and compensation and other
personnel matters; and
(v) compliance, litigation, insurance, regulatory and
other legal matters.
4. Restrictions on Transfer of Securities. Coleman Parent hereby
agrees not to, directly or indirectly, for a period of three (3) years
from the date hereof, Transfer (as such term is defined in Section 7.1
of the Holdings Merger Agreement) (A) any shares of Sunbeam Common
Stock received pursuant to the terms of the Holdings Merger Agreement
or (B) any of the Warrants or the Warrant Shares (as defined in the
Warrant Agreement), in either case in whole or in part, other than to
one of its Affiliates (as such term is defined in the Holdings Merger
Agreement) who agrees in writing to be bound by the terms of this
Section 4, except that (A) the holder or holders of such shares of
Sunbeam Common Stock may at any time or from time to time Transfer so
many of such shares of Sunbeam Common Stock as represent in the
aggregate seventy-five percent (75%) of such shares of Sunbeam Common
Stock, and (B) the holder or holders of the Warrants or the Warrant
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Shares may at any time or from time to time Transfer so many of the
Warrants or the Warrant Shares as represent in the aggregate fifty
(50%) of the Warrant Shares Amount (as defined in the Warrant
Agreement). The provisions of this Section 4 shall not be applicable,
and Coleman Parent shall be free to Transfer any and all shares of
Sunbeam Common Stock, Warrants and Warrant Shares, (i) following any
change of control of Sunbeam or (ii) in connection with any transaction
in which the holders of all of the outstanding shares of Sunbeam Common
Stock have the opportunity to Transfer at least 50% of their shares of
Sunbeam Common Stock on the same terms. The provisions of this Section
4 shall supersede any and all other restrictions on Transfer that
Coleman Parent or any of its Affiliates may have agreed to with Sunbeam
or any of its Affiliates.
5. Representations and Warranties of Sunbeam. Sunbeam hereby
represents and warrants to Coleman Parent as follows:
(a) Due Authorization. This Agreement has been duly
authorized by all necessary corporate action on the part of Sunbeam,
and no other corporate actions or proceedings on the part of Sunbeam
(including any action on the part of its stockholders) are necessary to
authorize this Agreement or the transactions contemplated hereby. This
Agreement has been duly executed by a duly authorized officer of
Sunbeam and constitutes a valid and binding agreement of Sunbeam
enforceable against it in accordance with its terms. The Audit
Committee of the Board of Directors of Sunbeam (the "Audit Committee")
has expressly approved the transactions contemplated hereby as
contemplated by Paragraph 312 ("Paragraph 312") of the New York Stock
Exchange ("NYSE") Listed Company Manual and has determined that delay
in securing shareholder approval of the transactions contemplated
hereby would seriously jeopardize the financial viability of the
Company. Upon application duly made by Sunbeam, the NYSE has advised
that it has accepted Sunbeam's reliance on the exception to the
shareholder approval policy of Paragraph 312 as contained therein in
connection with the transactions contemplated hereby (the "Exception").
(b) Due Organization. Sunbeam is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and has the requisite corporate power to enter into
and perform this Agreement and to carry on its business as it is now
being conducted.
(c) No Conflicts. No filing with, and no permit,
authorization, consent or approval of, any governmental or regulatory
authority is necessary for the consummation by Sunbeam of the
transactions contemplated hereby, other than as may be required under
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act with respect to the
exercise of the Warrants. Neither the execution and delivery of this
Agreement by Sunbeam nor the consummation by Sunbeam of the
transactions contemplated hereby, nor compliance by Sunbeam with any of
the provisions hereof, will (i) conflict with or result in any breach
of any provisions of the certificate of incorporation or by-laws of
Sunbeam; (ii) result in a violation or breach of, or constitute (with
or without due notice or lapse of time or both) a default (or give rise
to any right of termination, cancellation or acceleration) under, any
of the terms, conditions or provisions of any material contract or of
any material license, franchise,
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permit, concession, certificate of authority, order, approval,
application or registration of, from or with any governmental authority
to which Sunbeam is a party or by which it or any of its properties or
assets may be bound; or (iii) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to Sunbeam or any of its
properties or assets.
(d) Validity of Warrants and Underlying Shares. At the
Closing, the issuance of the Warrants will have been duly authorized
and, upon their issuance pursuant to the terms of this Agreement, the
Warrants will be validly issued and will not be subject to any
preemptive or similar right other than the rights and obligations under
the Warrant Agreement. All shares of Sunbeam Common Stock to be issued
upon the exercise of the Warrants, when issued, will be duly authorized
and validly issued, fully paid and nonassessable and will not be
subject to any preemptive or similar right.
(e) Capitalization. The authorized capital stock of Sunbeam
consists of 500,000,000 shares of Sunbeam Common Stock, and 2,000,000
shares of preferred stock, par value $.01 per share, of Sunbeam. As of
the date hereof, (i) 100,860,129 shares of Sunbeam Common Stock were
issued and outstanding (excluding any shares of Sunbeam Common Stock
issued upon the exercise of Sunbeam Stock Options (as defined below)
since August 6, 1998); (ii) 7,199,452 shares of Sunbeam Common Stock
were issuable upon the consummation of the Coleman Merger Agreement;
(iii) 13,242,050 shares of Sunbeam Common Stock were issuable in
accordance with the terms of the Zero Coupon Convertible Senior
Subordinated Debentures due 2018 of the Company; and (iv) no shares of
Sunbeam preferred stock were issued and outstanding. As of the date
hereof, not more than 9,000,000 shares of Sunbeam Common Stock were
issuable upon exercise of vested and unvested employee and non-employee
stock options (the "Sunbeam Stock Options") outstanding under all stock
option plans of Sunbeam or granted pursuant to employment agreements
(although Sunbeam is contesting the validity of certain of such Sunbeam
Stock Options). As of the date hereof, no shares of Sunbeam Common
Stock were held as treasury shares. All of the issued and outstanding
shares of Sunbeam Common Stock are validly issued, fully paid and
nonassessable and free of preemptive rights. As of the date hereof,
except as set forth above, there are no shares of capital stock of
Sunbeam issued or outstanding or, except as set forth above, any
options, warrants, subscriptions, calls, rights, convertible securities
or other agreements or commitments obligating Sunbeam to issue,
transfer, sell, redeem, repurchase or otherwise acquire any shares of
its capital stock or securities, or the capital stock or securities of
Sunbeam. There are no notes, bonds, debentures or other indebtedness of
Sunbeam having the right to vote (or convertible into or exchangeable
for securities having the right to vote) on any matters upon which
stockholders of Sunbeam may vote.
(f) Brokers. Other than Blackstone Financial Group, which has
acted as financial advisor to the Special Committee of the Sunbeam
Board, no broker, investment banker or other person is entitled to any
broker's, finder's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Sunbeam or any member of the
Sunbeam Group.
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6. Representations and Warranties of Xxxxxxx Parent. Xxxxxxx Parent
hereby represents and warrants to Sunbeam as follows:
(a) Due Authorization. This Agreement has been duly
authorized by all necessary corporate action on the part of Xxxxxxx
Parent, and no other corporate actions or proceedings on the part of
the Xxxxxxx Parent (including any action on the part of its
stockholders) are necessary to authorize this Agreement or the
transactions contemplated hereby. This Agreement has been duly executed
by a duly authorized officer of Xxxxxxx Parent and constitutes a valid
and binding agreement of Xxxxxxx Parent enforceable against it in
accordance with its terms.
(b) Due Organization. Xxxxxxx Parent is a corporation duly
organized, validly existing and in good standing under the laws of
State of Delaware and has the requisite corporate power to enter into
and perform this Agreement.
(c) No Conflicts. No filing with, and no permit,
authorization, consent or approval of, any governmental or regulatory
authority is necessary for the consummation by Xxxxxxx Parent of the
transactions contemplated hereby, other than as may be required under
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act with respect to the
exercise of the Warrants. Neither the execution and delivery of this
Agreement by Xxxxxxx Parent nor the consummation by Xxxxxxx Parent of
the transactions contemplated hereby, nor compliance by Xxxxxxx Parent
with any of the provisions hereof, will (i) conflict with or result in
any breach of any provisions of the certificate of incorporation or
by-laws of Xxxxxxx Parent; (ii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or
acceleration) under, any of the terms, conditions or provisions of any
material contract or of any material license, franchise, permit,
concession, certificate of authority, order, approval, application or
registration of, from or with any governmental authority to which
Xxxxxxx Parent is a party or by which it or any of its properties or
assets may be bound; or (iii) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to Xxxxxxx Parent or any
of its properties or assets.
(d) Acquisition of Warrants for Investment. Xxxxxxx Parent is
acquiring the Warrants (and will acquire any Warrant Shares upon
exercise of the Warrants) for its own account for investment purposes
only and not with a view toward or for a sale in connection with, any
distribution thereof, or with any present intention of distributing or
selling any of such in violation of federal or state securities laws.
(e) Brokers. No broker, investment banker or other person is
entitled to any broker's, finder's or other similar fee or commission
in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Xxxxxxx Parent or any
member of the Xxxxxxx Group.
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7. Covenants.
(a) Within one day following the date hereof, Sunbeam shall
cause to be mailed to all shareholders of Sunbeam a letter informing
them of the transactions contemplated hereby as contemplated and
required by Paragraph 312 of the NYSE Listed Company Manual and
indicating that the Audit Committee has expressly approved the
Exception in light of the Audit Committee's determination that delay in
securing shareholder approval of the transactions contemplated hereby
would seriously jeopardize the financial viability of the Company and
that the NYSE has accepted the Company's reliance on the Exception .
(b) The anti-dilution provisions of the Warrant shall be
given retroactive effect to the date hereof.
8. Specific Performance. The parties acknowledge that money damages
are an inadequate remedy for breach of this Agreement. Therefore, the parties
agree that each of them has the right, in addition to (and not in lieu of) any
other right they may have under this Agreement or otherwise, to specific
performance of this Agreement in the event of any breach hereof by any other
party.
9. Conditions to the Obligations of both Parties. The obligations of
each of Sunbeam and Xxxxxxx Parent to effect the transactions contemplated
hereby shall be conditioned on the non-existence of any order, decree or
injunction of a court of competent jurisdiction which restrains the consummation
of the transactions contemplated by this Agreement.
10. Termination. This Agreement may be terminated at any time prior to
the Closing:
(a) by mutual agreement of the Boards of Directors of Xxxxxxx
Parent and Sunbeam; or
(b) by Xxxxxxx Parent if the Warrants to be issued to Xxxxxxx
Parent pursuant hereto have not been issued or will not be issued at
the Closing or if there has been a material violation or breach by
Sunbeam of any agreement, representation or warranty contained in this
Agreement which has rendered the satisfaction of any condition to the
obligations of Xxxxxxx Parent impossible and such violation or breach
has not been waived by Xxxxxxx Parent; or
(c) by Sunbeam if there has been a material violation or
breach by Xxxxxxx Parent of any agreement, representation or warranty
contained in this Agreement which has rendered the satisfaction of any
condition to the obligations of Sunbeam impossible and such violation
or breach has not been waived by Sunbeam.
In the event of termination and abandonment of this Agreement by
Xxxxxxx Parent or Sunbeam or both of them pursuant to the terms of this Section
10, written notice thereof shall forthwith be given to the other party and this
Agreement shall terminate and the transactions contemplated hereby shall be
abandoned, without further action by any of the parties hereto.
11
11. Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby will be paid by the party
incurring such costs and expenses.
12. Tax Matters. Xxxxxxx Parent shall in good faith provide to Sunbeam
information concerning the tax treatment under the Internal Revenue Code of
1986, as amended (the "Code"), of the transactions contemplated hereby. Sunbeam
shall report such transactions for all tax purposes consistent with such
information and take no position with any taxing authority inconsistent
therewith. Xxxxxxx Parent and Sunbeam shall report the Holdings Merger as a
reorganization within the meaning of Code Section 368(a) for all tax purposes.
13. Best Efforts. Each of the parties hereto agrees to use its best
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement. In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and directors of each corporation which is a party to this Agreement
shall take all such necessary action.
14. Parties in Interest; Assignments. This Agreement is binding upon
and is solely for the benefit of the parties hereto, the Sunbeam Group and the
Xxxxxxx Group and their respective successors and legal representatives.
15. Entire Agreement. This Agreement and the agreements to be entered
into and delivered pursuant hereto constitutes the entire agreement between
Sunbeam and Xxxxxxx Parent with respect to the subject matter hereof, and it is
expressly understood and agreed that this Agreement may not be altered, amended,
modified, or otherwise changed in any respect or particular whatsoever, except
by a writing duly executed by authorized representatives of both Sunbeam and
Xxxxxxx Parent. No party to this Agreement has relied upon any representation or
warranty, written or oral, except as expressly included herein.
16. Amendments. This Agreement may not be modified, amended, altered
or supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
17. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy
or other standard form of telecommunication, or by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
If to Xxxxxxx Parent:
Xxxxxxx (Parent) Holdings Inc.
c/o MacAndrews & Forbes Holdings Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
12
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Sunbeam:
Sunbeam Corporation
0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxx 00000
Attention: Corporate Secretary
Facsimile: (000) 000-0000
with copies to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
and
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address as any party may have furnished to the other parties in
writing in accordance herewith.
18. Governing Law; Forum.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to its
conflict of law rules.
(b) The parties hereto irrevocably and unconditionally
consent to submit to the exclusive jurisdiction of the courts of the
State of Delaware and/or of the United States of America located in the
State of Delaware for any actions, suits or proceedings out of or
relating to this Agreement and the transactions contemplated hereby.
13
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute but one agreement.
20. Effect of Headings. The descriptive headings contained herein are
for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
21. Interpretation. When a reference is made in this Agreement to an
Article or Section, such reference shall be to an Article or Section of this
Agreement unless otherwise indicated. Whenever the words "include", "includes"
or "including" are used in this Agreement, they shall be deemed to be followed
by the words "without limitation". The words "hereof", "herein" and "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. References to a person are also to its
permitted successors and assigns and, in the case of an individual, to his heirs
and estate, as applicable.
14
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day and year first above written.
XXXXXXX (PARENT) HOLDINGS INC.
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Executive Vice President
and General Counsel
SUNBEAM CORPORATION
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Chairman of the Special Committee
EXHIBIT A
SUNBEAM CORPORATION
WARRANT FOR THE PURCHASE OF SHARES OF
COMMON STOCK OF SUNBEAM CORPORATION
ISSUE DATE: AUGUST__, 1998
WARRANT NO. W-1 23,000,000 Warrant Shares
THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASEABLE HEREUNDER
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED OR
DISPOSED OF UNLESS REGISTERED OR QUALIFIED UNDER SAID ACT AND
APPLICABLE STATE SECURITIES LAWS OR UNLESS SUCH REGISTRATION,
QUALIFICATION OR OTHER SUCH ACTIONS ARE NOT REQUIRED UNDER ANY SUCH
LAWS.
FOR VALUE RECEIVED, SUNBEAM CORPORATION, a Delaware corporation (the
"COMPANY"), hereby certifies that Xxxxxxx (Parent) Holdings Inc., its successor
or permitted assigns (the "HOLDER"), is entitled, subject to the provisions of
this Warrant, to purchase from the Company, at the times specified herein, a
number of the fully paid and non-assessable shares of Common Stock of the
Company, par value $.01 per share (the "COMMON STOCK"), equal to the Warrant
Share Amount (as hereinafter defined) at a purchase price per share equal to the
Exercise Price (as hereinafter defined).
SECTION 1. DEFINITIONS. (a) The following terms, as used herein, have
the following meanings:
"AFFILIATE" shall have the meaning given to such term in Rule 12b-2
promulgated under the Securities and Exchange Act of 1934, as amended.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York are authorized by law to close.
"CERTIFICATE OF INCORPORATION" means the Restated Certificate of
Incorporation of the Company.
"CLOSING PRICE" on any day means (1) if the shares of Common Stock then
are listed and traded on the New York Stock Exchange, Inc. ("NYSE"), the Closing
Price on such day as reported on the NYSE Composite Transactions Tape; (2) if
shares of Common Stock then are not listed and traded on the NYSE, the Closing
Price on such day as reported by the principal national securities exchange on
which the shares of Common Stock are listed and traded; (3) if the shares of
Common Stock then are not listed and traded on any such securities exchange, the
last reported sale price on such day on the National Market of The National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ");
or (4) if the shares of Common Stock then are not traded on the NASDAQ National
Market, the average of the highest reported bid and the lowest reported asked
price on such day as reported by NASDAQ.
"COMMON SHARE EQUIVALENT" means, with respect to any security of the
Company and as of a given date, a number which is, (i) in the case of a share of
Common Stock, one, (ii) in the case of all or a portion of any right, warrant or
other security which may be exercised for a share or shares of Common Stock, the
number of shares of Common Stock receivable upon exercise of such security (or
such portion of such security), and (iii) in the case of any security
convertible or exchangeable into a share or shares of Common Stock, the number
of shares of Common Stock that would be received if such security were converted
or exchanged on such date.
"COMMON STOCK" shall have the meaning set forth in the first paragraph
hereof.
"COMPANY" shall have the meaning set forth in the first paragraph
hereof.
"CONVERTIBLE SECURITIES" shall have the meaning set forth in Section
7(d).
"DETERMINATION DATE" shall have the meaning set forth in Section 7(f).
"EXERCISE PRICE" means a price per Warrant Share equal to $7.00.
"EXPIRATION DATE" means 5:00 p.m. New York City time on August __, 2003
[the fifth anniversary of the date of this Warrant].
"FAIR MARKET VALUE" as at any date of determination means, as to shares
of the Common Stock, if the Common Stock is publicly traded at such time, the
average of the daily Closing Prices of a share of Common Stock for the ten (10)
consecutive trading days ending on the most recent trading day prior to the date
of determination. If the shares of Common Stock are not publicly traded at such
time, and as to all things other than the Common Stock, Fair Market Value shall
be determined in good faith by an independent nationally recognized investment
banking firm selected by the Company and acceptable to a majority of the Holders
and which shall have no other substantial relationship with the Company.
"HOLDER" shall have the meaning set forth in the first paragraph
hereof.
"OPTIONS" shall have the meaning set forth in Section 7(d).
2
"PERSON" means an individual, partnership, corporation, limited
liability company, trust, joint stock company, association, joint venture, or
any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SUBSIDIARY" means, with respect to any Person, any corporation or
other entity of which a majority of the capital stock or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time directly
or indirectly owned by such Person.
"WARRANT SHARE AMOUNT" means 23,000,000 (Twenty Three Million) shares
of Common Stock as such number may be adjusted pursuant to Sections 7 and 8.
"WARRANT SHARES" means the shares of Common Stock deliverable upon
exercise of this Warrant, as adjusted from time to time.
SECTION 2. EXERCISE OF WARRANT. (a) The Holder is entitled to exercise
this Warrant in whole or in part at any time, or from time to time, until the
Expiration Date or, if such day is not a Business Day, then on the next
succeeding day that shall be a Business Day. To exercise this Warrant, the
Holder shall deliver to the Company this Warrant, including the Warrant Exercise
Subscription Form forming a part hereof duly executed by the Holder, together
with payment of the applicable Exercise Price. Upon such delivery and payment,
the Holder shall be deemed to be the holder of record of the number of Warrant
Shares equal to the Warrant Share Amount (or, in the case of a partial exercise
of this Warrant, a ratable number of such shares), notwithstanding that the
stock transfer books of the Company shall then be closed or that certificates
representing such shares shall not then be actually delivered to the Holder.
(b) At the option of the Holder, the Exercise Price may be paid in
cash (including by wire transfer of immediately available funds) or by certified
or official bank check or bank cashier's check payable to the order of the
Company or by any combination of such cash or check. At the option of the
Holder, the Exercise Price may in the alternative be paid in whole or in part by
reducing the number of shares of Common Stock issuable to the Holder by a number
of shares of Common Stock that have a Fair Market Value equal to the Exercise
Price which otherwise would have been paid (so that the net number of shares of
Common Stock issued in respect of such exercise shall equal the number of shares
of Common Stock that would have been issuable had the Exercise Price been paid
entirely in cash, less a number of shares of Common Stock with a Fair Market
Value equal to the portion of the Exercise Price paid in kind); provided that
this option shall be available only with respect to the exercise of this Warrant
with respect to not more than one-half of the total number of Warrant Shares.
The Company shall pay any and all documentary, or similar issue or transfer
taxes payable in respect of the issue or delivery of the Warrant Shares. The
Company shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer involved in the issue or delivery of Warrants
or Warrant Shares (or other securities or assets) in a name other than that in
which the Warrants so exercised were registered, and no such issue or delivery
shall be made unless and until the person requesting such issue has
3
paid to the Company the amount of such transfer tax or has established, to the
satisfaction of the Company, that such transfer tax has been paid.
(c) If the Holder exercises this Warrant in part, this Warrant shall
be surrendered by the Holder to the Company and a new Warrant of the same tenor
and for the unexercised number of Warrant Shares shall be executed by the
Company. The Company shall register the new Warrant in the name of the Holder or
in such name or names of its transferee pursuant to Section 6 as may be directed
in writing by the Holder and deliver the new Warrant to the Person or Persons
entitled to receive the same.
(d) Upon surrender of this Warrant in conformity with the foregoing
provisions, the Company shall, subject to the expiration of any applicable
waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act, transfer
to the Holder of this Warrant appropriate evidence of ownership of the shares of
Common Stock or other securities or property (including any money) to which the
Holder is entitled, registered or otherwise placed in, or payable to the order
of, the name or names of the Holder or such transferee as may be directed in
writing by the Holder, and shall deliver such evidence of ownership and any
other securities or property (including any money) to the Person or Persons
entitled to receive the same, together with an amount in cash in lieu of any
fraction of a share as provided in Section 5, subject to any required
withholding.
SECTION 3. RESTRICTIVE LEGEND. Each certificate representing shares of
Common Stock issued pursuant to this Warrant, unless at the time of exercise
such shares are registered under the Securities Act, shall bear a legend
substantially in the form of the legend set forth on the first page of this
Warrant.
SECTION 4. RESERVATION OF SHARES. The Company hereby agrees that at
all times there shall be reserved for issuance and delivery upon exercise of
this Warrant such number of its authorized but unissued shares of Common Stock
or other securities of the Company from time to time issuable upon exercise of
this Warrant as will be sufficient to permit the exercise in full of this
Warrant. The Company hereby represents and agrees that all such shares shall be
duly authorized and, when issued upon such exercise, shall be validly issued,
fully paid and non-assessable, free and clear of all liens, security interests,
charges and other encumbrances or restrictions on sale and free and clear of all
preemptive or similar rights, except to the extent imposed by or as a result of
the status, act or omission of, the Holder.
SECTION 5. FRACTIONAL SHARES. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this Warrant
and in lieu of delivery of any such fractional share upon any exercise hereof,
the Company shall pay to the Holder an amount in cash equal to such fraction
multiplied by the Fair Market Value thereof; PROVIDED, HOWEVER, that, in the
event that the Company combines or reclassifies the outstanding shares of its
Common Stock into a smaller number of shares, it shall be required to issue
fractional shares to the Holder if the Holder exercises all or any part of its
Warrants, unless the Holder has consented in writing to such reduction and
provided the Company with a written waiver of its right to receive fractional
shares in accordance with this Section 5.
4
SECTION 6. TRANSFER, EXCHANGE OR ASSIGNMENT OF WARRANT. (a) Each taker
and holder of this Warrant by taking or holding the same, consents and agrees
that the registered holder hereof may be treated by the Company and all other
persons dealing with this Warrant as the absolute owner hereof for any purpose
and as the person entitled to exercise the rights represented hereby.
(b) Subject to the requirements of state and federal securities laws,
the Holder of this Warrant shall be entitled, without obtaining the consent of
the Company to assign and transfer this Warrant, at any time in whole or from
time to time in part, to any Person or Persons. Subject to the preceding
sentence, upon surrender of this Warrant to the Company, together with the
attached Warrant Assignment Form duly executed, the Company shall, without
charge, execute and deliver a new Warrant in the name of the assignee or
assignees named in such instrument of assignment and, if the Holder's entire
interest is not being assigned, in the name of the Holder and this Warrant shall
promptly be canceled.
(c) Upon receipt by the Company of evidence satisfactory to it (in the
exercise of its reasonable discretion) of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
indemnification or security reasonably required by the Company, and upon
surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.
(d) The Company shall pay all expenses, taxes (other than transfer
taxes) and other charges payable in connection with the preparation, issuance
and delivery of Warrants hereunder.
SECTION 7. ANTI-DILUTION PROVISIONS. So long as any Warrants are
outstanding, the Warrant Share Amount shall be subject to change or adjustment
as follows:
(a) COMMON STOCK DIVIDENDS, SUBDIVISIONS, COMBINATIONS. In case the
Company shall (i) pay or make a dividend or other distribution to all holders of
its Common Stock in shares of Common Stock, (ii) subdivide or split the
outstanding shares of its Common Stock into a larger number of shares, or (iii)
combine the outstanding shares of its Common Stock into a smaller number of
shares (which shall not in any event be done without the express written
approval of Holders of a majority of the outstanding Warrants), then in each
such case the Warrant Share Amount shall be adjusted to equal the number of such
shares to which the holder of this Warrant would have been entitled upon the
occurrence of such event had this Warrant been exercised immediately prior to
the happening of such event or, in the case of a stock dividend or other
distribution, prior to the record date for determination of shareholders
entitled thereto. An adjustment made pursuant to this Section 7(a) shall become
effective immediately after the effective date of such event retroactive to the
record date, if any, for such event.
(b) REORGANIZATION OR RECLASSIFICATION. In case of any capital
reorganization or any reclassification of the capital stock of the Company
(whether pursuant to a merger or consolidation or otherwise), or in the event of
any similar transaction, this Warrant shall thereafter be exercisable for the
number of shares of stock or other securities or property receivable upon such
capital reorganization or reclassification of capital stock or other
transaction, as the case may be, by a holder of the number of shares of Common
Stock into which this Warrant was exercisable imme-
5
diately prior to such capital reorganization or reclassification of capital
stock; and, in any case, appropriate adjustment (as determined in good faith by
the Board of Directors of the Company) shall be made for the application of the
provisions herein set forth with respect to the rights and interests thereafter
of the Holder of this Warrant to the end that the provisions set forth herein
shall thereafter be applicable, as nearly as reasonably practicable, in relation
to any shares of stock or other securities or property thereafter deliverable
upon the exercise of this Warrant. An adjustment made pursuant to this Section
7(b) shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.
(c) DISTRIBUTIONS OF ASSETS OR SECURITIES OTHER THAN COMMON STOCK. In
case the Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock shares of any class of its capital stock (other than Common
Stock), or other debt or equity securities or evidences of indebtedness of the
Company, or options, rights or warrants to purchase any of such securities, cash
or other assets, then in each such case the Warrant Share Amount shall be
adjusted by multiplying the Warrant Share Amount immediately prior to the date
of such dividend or distribution by a fraction, of which the numerator shall be
the Fair Market Value per share of Common Stock at the record date for
determining shareholders entitled to such dividend or distribution, and of which
the denominator shall be such Fair Market Value per share less the Fair Market
Value of the portion of the securities, cash, other assets or evidences of
indebtedness so distributed applicable to one share of Common Stock. An
adjustment made pursuant to this Section 7(c) shall become effective immediately
after the effective date of such event retroactive to the record date, if any,
for such event.
(d) BELOW MARKET ISSUANCES OF COMMON STOCK AND CONVERTIBLE SECURITIES.
In case the Company shall issue Common Stock (or options, rights or warrants to
purchase shares of Common Stock (collectively, "OPTIONS") or other securities
convertible into or exchangeable or exercisable for shares of Common Stock (such
other securities, collectively, "CONVERTIBLE SECURITIES")) at a price per share
(or having an effective exercise, exchange or conversion price per share
together with the purchase price thereof) less than the Fair Market Value per
share of Common Stock on the date such Common Stock (or Options or Convertible
Securities), is sold or issued (PROVIDED that no sale of securities pursuant to
an underwritten public offering shall be deemed to be for less than Fair Market
Value), then in each such case the Warrant Share Amount shall thereafter be
adjusted by multiplying the Warrant Share Amount immediately prior to the date
of issuance of such Common Stock (or Options or Convertible Securities) by a
fraction, the numerator of which shall be (x) the sum of (i) the number of
Common Share Equivalents represented by all securities outstanding immediately
prior to such issuance and (ii) the number of additional Common Share
Equivalents represented by all securities so issued multiplied by (y) the Fair
Market Value of a share of Common Stock immediately prior to the date of such
issuance, and the denominator of which shall be (x) the product of (A) the Fair
Market Value of a share of Common Stock immediately prior to the date of such
issuance and (B) the number of Common Share Equivalents represented by all
securities outstanding immediately prior to such issuance plus (y) the aggregate
consideration received by the Company for the total number of securities so
issued plus, (z) in the case of Options or Convertible Securities, the
additional consideration required to be received by the Company upon the
exercise, exchange or conversion of such securities; PROVIDED that no adjustment
shall be required in respect of issuances of Common Stock (or options to
purchase Common Stock) pursuant to stock option or other employee benefit plans
in effect on
6
the date hereof, or approved by the Board of Directors of the Company after the
date hereof. Notwithstanding anything herein to the contrary, (1) no further
adjustment to the Warrant Share Amount shall be made upon the issuance or sale
of Common Stock pursuant to (x) the exercise of any Options or (y) the
conversion or exchange of any Convertible Securities, if in each case the
adjustment in the Warrant Share Amount was made as required hereby upon the
issuance or sale of such Options or Convertible Securities or no adjustment was
required hereby at the time such Option or Convertible Security was issued, and
(2) no adjustment to the Warrant Share Amount shall be made upon the issuance or
sale of Common Stock upon the exercise of any Options existing on the original
issue date hereof, without regard to the exercise price thereof. Notwithstanding
the foregoing, no adjustment to the Warrant Share Amount shall be made pursuant
to this paragraph upon the issuance or sale of Common Stock, Options, or
Convertible Securities in a BONA FIDE arm's-length transaction to any Person or
group that, at the time of such issuance or sale, is not an Affiliate of the
Company (including any possible issuance of Common Stock, Options, or
Convertible Securities to the public stockholders of The Xxxxxxx Company, Inc.
("COLEMAN") in connection with the acquisition of their shares of Coleman common
stock pursuant to the Agreement and Plan of Merger, dated as of February 27,
1998 (the "COLEMAN MERGER AGREEMENT"), by and among Sunbeam, Camper Acquisition
Corp., a Delaware corporation and a wholly owned subsidiary of Sunbeam, and
Coleman, or otherwise). An adjustment made pursuant to this Section 7(d) shall
become effective immediately after such Common Stock, Options or Convertible
Securities are sold.
(e) BELOW MARKET DISTRIBUTIONS OR ISSUANCES OF PREFERRED STOCK OR
OTHER SECURITIES. In case the Company shall issue non-convertible and
non-exchangeable preferred stock (or other debt or equity securities or
evidences of indebtedness of the Company (other than Common Stock or Options or
Convertible Securities) or options, rights or warrants to purchase any of such
securities) at a price per share (or other similar unit) less than the Fair
Market Value per share (or other similar unit) of such preferred stock (or other
security) on the date such preferred stock (or other security) is sold (PROVIDED
that no sale of preferred stock or other security pursuant to an underwritten
public offering shall be deemed to be for less than its fair market value), then
in each such case the Warrant Share Amount shall thereafter be adjusted by
multiplying the Warrant Share Amount immediately prior to the date of issuance
of such preferred stock (or other security) by a fraction, the numerator of
which shall be the product of (i) the number of Common Share Equivalents
represented by all securities outstanding immediately prior to such issuance and
(ii) the Fair Market Value of a share of Common Stock immediately prior to the
date of such issuance, and the denominator of which shall be (x) the product of
(A) the number of Common Share Equivalents represented by all securities
outstanding immediately prior to such issuance and (B) the Fair Market Value of
a share of the Common Stock immediately prior to the date of such issuance minus
(y) the difference between (1) the aggregate Fair Market Value of such preferred
stock (or other security) and (2) the aggregate consideration received by the
Company for such preferred stock (or other security). Notwithstanding the
foregoing, no adjustment to the Warrant Share Amount shall be made pursuant to
this paragraph upon the issuance or sale of preferred stock (or other securities
of the Company other than common Stock or Options or Convertible Securities) in
a BONA FIDE arm's-length transaction to any Person or group that, at the time of
such issuance or sale, is not an Affiliate of the Company (including any
possible issuance of preferred stock (or other securities of the Company other
than common Stock or Options or Convertible
7
Securities) to the public stockholders of Coleman in connection with the
acquisition of their shares of Coleman common stock pursuant to the Coleman
Merger Agreement, or otherwise). An adjustment made pursuant to this Section
7(e) shall become effective immediately after such preferred stock (or other
security) is sold.
(f) ABOVE MARKET REPURCHASES OF COMMON STOCK. If at any time or from
time to time the Company or any Subsidiary thereof shall repurchase, by
self-tender offer or otherwise, any shares of Common Stock of the Company (or
any Options or Convertible Securities) at a purchase price in excess of the Fair
Market Value thereof, on the Business Day immediately prior to the earliest of
(i) the date of such repurchase, (ii) the commencement of an offer to
repurchase, or (iii) the public announcement of either (such date being referred
to as the "DETERMINATION DATE"), the Warrant Share Amount shall be determined by
multiplying the Warrant Share Amount immediately prior to such Determination
Date by a fraction, the numerator of which shall be the product of (1) the
number of Common Share Equivalents represented by all securities outstanding
immediately prior to such Determination Date minus the number of Common Share
Equivalents represented by the securities repurchased or to be purchased by the
Company or any Subsidiary thereof in such repurchase and (2) the Fair Market
Value of a share of Common Stock immediately prior to such Determination Date,
and the denominator of which shall be (x) the product of (A) the number of
Common Share Equivalents represented by all securities outstanding immediately
prior to the Determination Date and (B) the Fair Market Value of a share of
Common Stock immediately prior to such Determination Date minus (y) the sum of
(1) the aggregate consideration paid by the Company in connection with such
repurchase and (2) in the case of Options or Convertible Securities, the
additional consideration required to be received by the Company upon the
exercise, exchange or conversion of such securities. Notwithstanding the
foregoing, no adjustment to the Warrant Share Amount shall be made pursuant to
this paragraph upon the repurchase, by self-tender offer or otherwise, of Common
Stock (or any Options or Convertible Security) in a BONA FIDE arm's-length
transaction from any Person or group that, at the time of such repurchase, is
not an Affiliate of the Company.
(g) ABOVE MARKET REPURCHASES OF PREFERRED STOCK OR OTHER SECURITIES.
If at any time or from time to time the Company or any Subsidiary thereof shall
repurchase, by self-tender offer or otherwise, any shares of non-convertible and
non-exchangeable preferred stock (or other debt or equity securities or
evidences of indebtedness of the Company (other than Common Stock or Options or
Convertible Securities) or options, rights or warrants to purchase any of such
securities), at a purchase price in excess of the Fair Market Value thereof, on
the Business Day immediately prior to the Determination Date, the Warrant Share
Amount shall be determined by multiplying the Warrant Share Amount immediately
prior to the Determination Date by a fraction, the numerator of which shall be
the product of (i) the number of Common Share Equivalents represented by all
securities outstanding immediately prior to such Determination Date and (ii) the
Fair Market Value of a share of Common Stock immediately prior to such
Determination Date, and the denominator of which shall be (x) the product of (A)
the number of Common Share Equivalents represented by all securities outstanding
immediately prior to such Determination Date and (B) the Fair Market Value of a
share of Common Stock immediately prior to such Determination Date minus (y) the
difference between (1) the aggregate consideration paid by the Company in
connection with such repurchase and (2) the aggregate Fair Market Value of such
preferred stock (or other security). Notwithstanding the foregoing, no
adjustment to the Warrant Share Amount
8
shall be made pursuant to this paragraph upon the repurchase, by self-tender
offer or otherwise, of non-convertible and non-exchangeable preferred stock (or
other securities of the Company other than Common Stock or Options or
Convertible Securities) in a BONA FIDE arm's-length transaction from any Person
or group that, at the time of such repurchase, is not an Affiliate of the
Company.
(h) READJUSTMENT OF WARRANT SHARE AMOUNT. If (i) the purchase price
provided for in any Option or the additional consideration, if any, payable upon
the conversion or exchange of any Convertible Securities or the rate at which
any Convertible Securities, in each case as referred to in paragraphs (b) and
(f) above, are convertible into or exchangeable for Common Stock shall change at
any time (other than under or by reason of provisions designed to protect
against dilution upon an event which results in a related adjustment pursuant to
this Section 7), or (ii) any of such Options or Convertible Securities shall
have irrevocably terminated, lapsed or expired, the Warrant Share Amount then in
effect shall forthwith be readjusted (effective only with respect to any
exercise of this Warrant after such readjustment) to the Warrant Share Amount
which would then be in effect had the adjustment made upon the issuance, sale,
distribution or grant of such Options or Convertible Securities been made based
upon such changed purchase price, additional consideration or conversion rate,
as the case may be (in the case of any event referred to in clause (i) of this
paragraph (h)) or had such adjustment not been made (in the case of any event
referred to in clause (ii) of this paragraph (h)).
(i) EXERCISE PRICE ADJUSTMENT. Upon each adjustment of the Warrant
Share Amount pursuant to this Section 7, the Exercise Price of each Warrant
outstanding immediately prior to such adjustment shall thereafter be equal to an
adjusted Exercise Price per Share determined (to the nearest cent) by
multiplying the Exercise Price for the Warrant immediately prior to such
adjustment by a fraction, the numerator of which shall be the Warrant Share
Amount in effect immediately prior to such adjustment and the denominator of
which shall be the Warrant Share Amount in effect immediately after such
adjustment.
(j) CONSIDERATION. If any shares of Common Stock, Options or
Convertible Securities shall be issued, sold or distributed for cash, the
consideration received in respect thereof shall be deemed to be the amount
received by the Company therefor, before deduction therefrom of any reasonable,
customary and adequately documented expenses incurred in connection therewith.
If any shares of Common Stock, Options or Convertible Securities shall be
issued, sold or distributed for a consideration other than cash, the amount of
the consideration other than cash received by the Company shall be deemed to be
the Fair Market Value of such consideration, before deduction of any reasonable,
customary and adequately documented expenses incurred in connection therewith.
If any shares of Common Stock, Options or Convertible Securities shall be issued
in connection with any merger in which the Company is the surviving corporation,
the amount of consideration therefor shall be deemed to be the Fair Market Value
of such portion of the assets and business of the non-surviving corporation as
shall be attributable to such Common Stock, Options or Convertible Securities,
as the case may be. If any Options shall be issued in connection with the
issuance and sale of other securities of the Company, together comprising one
integral transaction in which no specific consideration is allocated to such
Options by the parties thereto, such Options shall be deemed to have been issued
without consideration.
9
(k) NO IMPAIRMENT. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying out of all the provisions of this
Section 7 and in the taking of all such action as may be necessary or
appropriate in order to protect the conversion rights of the Holder against
impairment. Without limiting the generality of the foregoing, the Company will
not increase the par value of any shares of Common Stock receivable on the
exercise of the Warrants above the amount payable therefor on such exercise.
(l) CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the Warrant Share Amount pursuant to this Section
7, the Company at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to the Holder a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. The Company
shall, upon the written request at any time of the Holder, furnish or cause to
be furnished to Holder a like certificate setting forth (1) such adjustments and
readjustments and (2) the number of shares of Common Stock and the amount, if
any, of other property which at the time would be received upon the exercise of
this Warrant.
(m) PROCEEDINGS PRIOR TO ANY ACTION REQUIRING ADJUSTMENT. As a
condition precedent to the taking of any action which would require an
adjustment pursuant to this Section 7, the Company shall take any action which
may be necessary, including obtaining regulatory approvals or exemptions, in
order that the Company may thereafter validly and legally issue as fully paid
and nonassessable all shares of Common Stock which the Holders are entitled to
receive upon exercise thereof.
(n) NOTICE OF ADJUSTMENT. Upon the record date or effective date, as
the case may be, of any action which requires or might require an adjustment or
readjustment pursuant to this Section 7, the Company shall forthwith file in the
custody of its Secretary or an Assistant Secretary at its principal executive
office and with its stock transfer agent or its warrant agent, if any, an
officers' certificate showing the adjusted number of Warrant Shares determined
as herein provided, setting forth in reasonable detail the facts requiring such
adjustment and the manner of computing such adjustment. Each such officers'
certificate shall be signed by the chairman, president or chief financial
officer of the Company and by the secretary or any assistant secretary of the
Company. Each such officers' certificate shall be made available at all
reasonable times for inspection by the Holder or any Holder of a Warrant
executed and delivered pursuant to Section 6(b) and the Company shall, forthwith
after each such adjustment, mail a copy, by first-class mail, of such
certificate to the Holder or any such holder.
(o) PAYMENTS IN LIEU OF ADJUSTMENT. The Holder shall, at its option,
be entitled to receive, in lieu of the adjustment pursuant to Section 7(c)
otherwise required thereof, on (but not prior to) the date of exercise of the
Warrants, the evidences of indebtedness, other securities, cash, property or
other assets which such Holder would have been entitled to receive if it had
exercised its Warrants for shares of Common Stock immediately prior to the
record date with respect to such distribution. The Holder may exercise its
option under this Section 7(o) by deliver-
10
ing to the Company a written notice of such exercise simultaneously with its
notice of exercise of this Warrant.
SECTION 8. CONSOLIDATION, MERGER OR SALE OF ASSETS. In case of any
consolidation of the Company with, or merger of the Company into, any other
Person, any merger of another Person into the Company (other than a merger which
does not result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock) or any sale or transfer of all or
substantially all of the assets of the Company to the Person formed by such
consolidation or resulting from such merger or which acquires such assets, as
the case may be, the Holder shall have the right thereafter to exercise this
Warrant for the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by a holder of the
number of shares of Common Stock for which this Warrant may have been exercised
immediately prior to such consolidation, merger, sale or transfer. Adjustments
for events subsequent to the effective date of such a consolidation, merger,
sale or transfer of assets shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Warrant. In any such event, effective
provisions shall be made in the certificate or articles of incorporation of the
resulting or surviving corporation, in any contract of sale, merger, conveyance,
lease, transfer or otherwise so that the provisions set forth herein for the
protection of the rights of the Holder shall thereafter continue to be
applicable; and any such resulting or surviving corporation shall expressly
assume the obligation to deliver, upon exercise, such shares of stock, other
securities, cash and property. The provisions of this Section 8 shall similarly
apply to successive consolidations, mergers, sales, leases or transfers.
SECTION 9. WARRANT AGENT. At the written request of the Holders of a
majority of the outstanding Warrants, the Company shall as soon as is reasonably
practicable:
(i) appoint a warrant agent to act as agent for the Company in
connection with the issuance, transfer and exchange of the
Warrants and shall enter into an agreement with such warrant
agent reflecting the terms and conditions of such appointment,
which terms and conditions shall be customary for such
appointments, and such other matters as are customarily included
in such agreements so as to facilitate the transfer and
registration of the Warrants; and
(ii) use its reasonable best efforts to cause the Warrants to be
eligible to be publicly traded, including, without limitation,
amending this Warrant to provide terms and conditions necessary
and appropriate for the Warrants to be publicly traded.
SECTION 10. NOTICES. Any notice, demand or delivery authorized by this
Warrant shall be in writing and shall be given to the Holder or to the Company,
as the case may be, at its address (or facsimile number) set forth below, or
such other address (or facsimile number) as shall have been furnished to the
party giving or making such notice, demand or delivery:
11
If to the Company: Sunbeam Corporation
0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxx 00000
Attention: Corporate Secretary
Facsimile: (000) 000-0000
with copies to: Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
and to: Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
If to the Holder: Coleman (Parent) Holdings Inc.
c/o MacAndrews & Forbes Holdings Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
with copies to: Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
Each such notice, demand or delivery shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified
herein and the intended recipient confirms the receipt of such telecopy, or (ii)
if given by any other means, when received at the address specified herein.
SECTION 11. RIGHTS OF THE HOLDER. Prior to the exercise of any
Warrant, the Holder shall not, by virtue hereof, be entitled to any rights of a
shareholder of the Company, including, without limitation, the right to vote, to
receive dividends or other distributions, to exercise any preemptive right or to
receive any notice of meetings of shareholders or any notice of any proceedings
of the Company except as may be specifically provided for herein.
SECTION 12. GOVERNING LAW. THIS WARRANT AND ALL RIGHTS ARISING
HEREUNDER SHALL BE CONSTRUED AND DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF DELAWARE,
12
AND THE PERFORMANCE THEREOF SHALL BE GOVERNED AND ENFORCED IN ACCORDANCE WITH
SUCH LAWS.
SECTION 13. AMENDMENTS; WAIVERS. Any provision of this Warrant may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by the Holder and the Company, or in the
case of a waiver, by the party against whom the waiver is to be effective. No
failure or delay by either party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 14. INTERPRETATION. When a reference is made in this Warrant
to a Section such reference shall be to a Section of this Warrant unless
otherwise indicated. Whenever the words "include", "includes" or "including" are
used in this Warrant, they shall be deemed to be followed by the words "without
limitation". The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Warrant shall refer to this Warrant as a whole and not
to any particular provision of this Warrant. The definitions contained in this
Warrant are applicable to the singular as well as the plural forms of such terms
and to the masculine as well as to the feminine and neuter genders of such term.
References to a person are also to its permitted successors and assigns and, in
the case of an individual, to his heirs and estate, as applicable.
13
IN WITNESS WHEREOF, the Company has duly caused this Warrant to be
signed by its duly authorized officer and to be dated as of the date first above
written.
SUNBEAM CORPORATION
By:_________________
Name:
Title:
ATTEST:
By: __________________
Name:
Title:
ACKNOWLEDGED AND AGREED:
COLEMAN (PARENT) HOLDINGS INC.
By: __________________
Name:
Title:
14
WARRANT EXERCISE SUBSCRIPTION FORM
(To be executed only upon exercise of the Warrant
after delivery of the Warrant Exercise Notice)
To: Sunbeam Corporation
The undersigned irrevocably exercises the Warrant for the purchase of
__________ shares (the "SHARES") of Common Stock, par value $.01 per share, of
Sunbeam Corporation (the "COMPANY") ("COMMON STOCK") at an exercise price of
$_______ per Share and herewith makes payment of $__________ (such payment being
made in cash or by certified or official bank or bank cashier's check payable to
the order of the Company or by any permitted combination of such cash or check
or by the reduction of the number of shares of Common Stock that otherwise would
be issued upon this exercise by the number of shares of Common Stock that have a
value equal to such exercise price), all on the terms and conditions specified
in this Warrant, surrenders this Warrant and all right, title and interest
therein to the Company and directs that the Shares deliverable upon the exercise
of this Warrant be registered or placed in the name and at the address specified
below and delivered thereto.
Date: _______ __, ____.
_________________________
(Name - Please Print)
_________________________
(Signature of Owner)
_________________________
(Xxxxxx Xxxxxxx)
_________________________
(City) (State) (Zip Code)
15
Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
Any unexercised portion of the Warrant evidenced by the
within Warrant to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
16
WARRANT ASSIGNMENT FORM
Dated ___________ __, ____
FOR VALUE RECEIVED, _______________________ hereby sells, assigns and transfers
unto ______________________________________________ (the "Assignee"),
(please type or print in block letters)
_______________________________________________________________________________
(insert address)
its right to purchase up to _____ shares of Common Stock represented by this
Warrant and does hereby irrevocably constitute and appoint
_________________________ Attorney, to transfer the same on the books of the
Company, with full power of substitution in the premises.
Signature:_______________________
17
EXHIBIT B
AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
AMENDMENT, dated as of August ___, 1998 (this "Amendment"), to the
REGISTRATION RIGHTS AGREEMENT, dated as of March 29, 1998 (the "Registration
Rights Agreement"), by and among SUNBEAM CORPORATION, a Delaware corporation
("Laser" or "Sunbeam"), and COLEMAN (PARENT) HOLDINGS INC., a Delaware
corporation ("Parent Holdings"). Capitalized terms used in this Amendment have
the meanings ascribed to them in the Registration Rights Agreement unless
otherwise defined herein. References to Articles and Sections shall, unless
otherwise stated, be to the Articles and Sections of the Registration Rights
Agreement. In all respects not inconsistent with the terms and provisions of
this Amendment, the Registration Rights Agreement shall continue to be in full
force and effect in accordance with the terms and conditions thereof, and is
hereby ratified, adopted, approved and confirmed. From and after the date
hereof, each reference to the Registration Rights Agreement therein or in any
other instrument or document shall be deemed a reference to the Registration
Rights Agreement as amended hereby, unless the context otherwise requires, and
this Amendment and the Registration Rights Agreement shall for all purposes and
matters be considered as one agreement, including that all of the ministerial
and miscellaneous provisions of the Registration Rights Agreement shall apply
equally thereto as so amended and to this Amendment.
WHEREAS, pursuant to the Holdings Merger Agreement, by and among
Sunbeam, a subsidiary of Sunbeam, CLN HOLDINGS INC., a Delaware corporation and
wholly owned subsidiary of Parent Holdings ("Holdings"), and Parent Holdings,
the Holdings Merger was consummated on March 30, 1998 and Holdings became an
indirect wholly owned subsidiary of Sunbeam; and
WHEREAS, following consummation of the Holdings Merger, the shares of
Holdings Common Stock issued and outstanding immediately prior to the effective
time of the Holdings Merger were converted into an aggregate of (A) 14,099,749
fully paid and nonassessable shares of common stock, par value $.01 per share,
of Sunbeam ("Laser Common Stock") and (B) $159,956,756 in cash, without interest
thereon; and
WHEREAS, following the dismissal by Sunbeam of certain of its
executive officers in mid-June 1998, Sunbeam retained certain senior officers
employed by Affiliates of Parent Holdings as executive officers of Sunbeam; and
WHEREAS, Sunbeam and Parent Holdings have entered into a
Settlement Agreement (the "Settlement Agreement") pursuant to which Sunbeam will
issue to Parent Holdings certain warrants to purchase shares of Laser Common
Stock (the "Warrants") and has agreed to enter into this Agreement; and
WHEREAS, in order to induce Parent Holdings to enter into the
Settlement Agreement, Sunbeam has agreed to amend the Registration Rights
Agreement and modify the registration rights with respect to the shares of Laser
Common Stock issued to Parent Hold-
ings in the Holdings Merger and to provide for registration rights with respect
to the Warrants and Laser Common Stock issuable upon exercise of the Warrants.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 is amended with respect to certain of the definitions
therein as follows:
The definition of the term "Agreement" is amended and restated
in its entirety to mean the Registration Rights Agreement as amended by this
Amendment.
The definition of the term "Registrable Securities" is amended and
restated in its entirety to mean (i) the Holdings Merger Stock, (ii) the
Warrants, and (iii) any shares of Laser Common Stock issued pursuant to the
Warrants, and, in each case, any other securities issued or issuable upon or in
respect of such securities by way of conversion, exchange, dividend, split or
combination, recapitalization, merger, consolidation, other reorganization or
otherwise. As to any particular Registrable Securities, such securities shall
cease to be Registrable Securities when such securities have been sold or
otherwise transferred by Parent Holdings pursuant to the Shelf Registration
Statement or pursuant to Rule 144 under the Securities Act.
The following defined term shall be added to the list of definitions
in their respective alphabetically ordered positions:
The term "Holdings Merger Stock" shall mean the shares of Laser Common
Stock issued to Parent Holdings in the Holdings Merger.
The term "Warrants" shall mean the warrants to purchase 23,000,000
(Twenty-Three Million) shares of Laser Common Stock issued to Parent Holdings
pursuant to Warrant No. W-1 dated August ___, 1998.
2
ARTICLE II
REQUIRED REGISTRATION
Sections 2.1, 2.2 and 2.3 of Article II are amended and restated to
read in their entirety as follows:
Section 2.1 Required Registration.
(a) Form S-3. Promptly following a demand to such effect from any
holder of Registrable Securities, Laser shall prepare and file with the SEC a
registration statement (the "Shelf Registration Statement") on an appropriate
form permitting registration of the Registrable Securities so as to permit the
resale of the Registrable Securities pursuant to an offering on a delayed or
continuous basis under the Securities Act and shall use reasonable best efforts
to (i) cause the Shelf Registration Statement to be declared effective by the
SEC as promptly as practicable thereafter and (ii) permit the Shelf Registration
Statement to be used by Affiliates of Camper for resales of shares of Laser
Common Stock held by such Affiliates ; provided, however, that any such
Affiliate using the Shelf Registration Statement shall agree in writing to be
bound by all of the restrictions, limitations and obligations of Parent Holdings
contained in this Agreement.
(b) Effectiveness. Laser shall use reasonable best efforts to keep the
Shelf Registration Statement continuously effective under the Securities Act
until the date that is the earliest to occur of (i) the date by which all
Registrable Securities have been sold and (ii) the date by which all Registrable
Securities are eligible for immediate sale to the public without registration
under Rule 144 under the Securities Act, with such sale not being limited by the
volume restrictions thereunder or otherwise.
(c) Amendments/Supplements. Laser shall amend and supplement the Shelf
Registration Statement and the prospectus contained therein if required by the
rules, regulations or instructions applicable to the registration form used by
Laser for such Shelf Registration Statement, if required by the Securities Act.
(d) Offerings. At any time from and after the date on which the Shelf
Registration Statement is declared effective by the SEC (the "Effective Date"),
Parent Holdings, subject to the restrictions and conditions contained herein and
in the Merger Agreement and the Warrants to the extent applicable, and subject
further to compliance with all applicable state and federal securities laws,
shall have the right to dispose of all or any portion of the Registrable
Securities.
Section 2.2 Holdback Agreement.
From and after the Effective Date, upon the request of Laser, Parent
Holdings shall not effect any public sale or distribution (including sales
pursuant to Rule 144) of Registrable Securities that are equity securities of
Laser, or any securities convertible into or ex-
3
changeable or exercisable for such securities, including the Warrants, (other
than any such sale or distribution of such securities pursuant to registration
of such securities on Form S-8 or any successor form) during the period
commencing on the date on which Laser commences a Laser Offering through the
sixty (60)-day period immediately following the closing date of such Laser
Offering; provided, however, that Parent Holdings shall not be obligated to
comply with this Section 2.2 on more than two (2) occasions in any twelve
(12)-month period; and provided, further, that notwithstanding anything to the
contrary in this Section 2.2 or Section 2.3, in no event shall Parent Holdings
be disabled from effecting offers or sales of Registrable Securities for more
than one-hundred-and-twenty (120) days during any twelve (12)-month period.
Section 2.3 Blackout Provisions.
In the event that, at any time while the Shelf Registration
Statement remains effective, Laser determines in its reasonable judgment and in
good faith that the sale of Registrable Securities would require disclosure of
material information which Laser has a bona fide business purpose for preserving
as confidential, Parent Holdings shall, upon receiving written notice from Laser
of such good faith determination, suspend sales of the Registrable Securities
for a period beginning on the date of receipt of such notice and expiring on the
earlier of (i) the date upon which such material information is disclosed to the
public or ceases to be material or (ii) forty-five (45) days after the receipt
of such notice from Laser; provided, however, that Parent Holdings shall not be
obligated to comply with this Section 2.3 on more than two (2) occasions in any
twelve (12) month period; and provided, further, that notwithstanding anything
to the contrary in this Section 2.3 or Section 2.2, in no event shall Parent
Holdings be disabled from effecting offers or sales of Registrable Securities
for more than one-hundred-and-twenty (120) days during any twelve (12)-month
period.
* * *
Section 2.4(a) of Article II is hereby amended by deleting the word
"and" from the end of paragraph (12) thereof, replacing the period at the end of
paragraph (13) thereof with "; and" and adding the following additional
paragraph:
(14) will enter into customary agreements (including an underwriting
agreement in customary form) and take such actions as are reasonably required in
order to expedite or facilitate the sale of such Registrable Securities,
including, without limitation, cooperation, and causing its officers, employees
and advisors to cooperate, with the sellers of such Registrable Securities and
the underwriter(s), if any, including participation in meetings and road shows
held in connection with such sale.
4
ARTICLE III
TRANSFERS OF REGISTRABLE SECURITIES
Sections 3.1 and 3.2 of Article III are amended and restated to read
in their entirety as follows:
Section 3.1 Transferability of Registrable Securities.
(a) Parent Holdings may not Transfer the Registrable Securities,
other than
(1) pursuant to Rule 144;
(2) pursuant to the Shelf Registration Statement; or
(3) in any other Transfer exempt from registration under the
Securities Act, and as to which Laser has received an opinion of
counsel, reasonably satisfactory to Laser, that such Transfer is so
exempt;
and shall in no event Transfer any Registrable Securities in violation of the
Settlement Agreement.
Section 3.2 Restrictive Legends.
Parent Holdings hereby acknowledges and agrees that, during the term
of this Agreement, all of the Registrable Securities shall include the legend
set forth in Section 7.2 of the Holdings Merger Agreement, the legend set forth
on the Warrants or as provided in the Warrants or as may otherwise be reasonably
appropriate to reflect the fact that such Registrable Securities have not been
issued in transactions registered under the Securities Act, unless at the time
such Registrable Securities have been registered under the Securities Act.
ARTICLE IV
MISCELLANEOUS
Sections 4.5 and 4.11 of Article IV are amended and restated in their
entirety to read as follows:
Section 4.5 Binding Effect; Assignment.
This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
executors, successors and permitted assigns, but, except as expressly
contemplated herein, neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned, directly or indirectly, by Laser or
Parent Holdings without the prior written consent of the other (except in the
case of any
5
assignment in whole or in part by Parent Holdings to any Affiliate,
as to which no such consent shall be required); provided, that in connection
with a bona fide pledge of any Registrable Securities to secure indebtedness or
other obligations, Parent Holdings may assign its rights, interests and
obligations hereunder to the beneficiary of such pledge in whole or in part.
Upon any permitted assignment (other than in connection with any such bona fide
pledge), this Agreement shall be amended to substitute or add the assignee as a
party hereto in a writing reasonably acceptable to the other party.
Section 4.11 Termination; Restrictive Legend.
This Agreement shall terminate only following such time as Sunbeam
shall have no further obligation under Section 2.1(b) to use its reasonable best
efforts to keep the Shelf Registration Statement effective; provided, however,
that the provisions of Section 2.6 hereof shall survive termination of this
Agreement. It is understood and agreed that any restrictive legends set forth on
any Registrable Securities shall be removed by delivery of substitute
certificates without such legends and such Registrable Securities shall no
longer be subject to the terms of this Agreement or upon the resale of such
Registrable Securities in accordance with the terms of this Agreement.
ARTICLE V
OTHER
The following provisions shall also apply to this Amendment:
Section 5.1 Effectiveness of this Amendment. The provisions of this
Amendment shall be effective as of the date hereof.
Section 5.2 Counterparts. This Amendment may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 5.3 Governing Law. This Amendment shall be governed by the
laws of the State of New York, without regard to the principles of conflicts of
law thereof.
Section 5.4 No Waiver. The execution, delivery and performance of this
Amendment shall not operate as a waiver of any condition, power, remedy or right
exercisable in accordance with the Registration Rights Agreement, and shall not
constitute a waiver of any provision of the Registration Rights Agreement,
except as expressly provided herein.
Section 5.5 Descriptive Headings. The article and section headings
contained in this Amendment are solely for the purpose of reference, are not
part of the agreement of the parties and shall not in any way affect the meaning
or interpretation of this Amendment.
6
IN WITNESS WHEREOF, the undersigned hereby agree to be bound by the
terms and provisions of this Amendment as of the date first above written.
SUNBEAM CORPORATION
By:____________________
Name:
Title:
XXXXXXX (PARENT) HOLDINGS INC.
By:____________________
Name:
Title:
7
