EXHIBIT 3
AGREEMENT AND PLAN OF MERGER
dated as of
January 20, 1998
between
THERMADYNE HOLDINGS CORPORATION
and
MERCURY ACQUISITION CORPORATION
TABLE OF CONTENTS
----------------------
PAGE
----
ARTICLE 1
THE MERGER
SECTION 1.01. The Merger...................................................2
SECTION 1.02. Conversion (or Retention) of Shares..........................3
SECTION 1.03. Elections....................................................4
SECTION 1.04. Proration of Election Price..................................5
SECTION 1.05. Surrender and Payment........................................7
SECTION 1.06. Dissenting Shares............................................9
SECTION 1.07. Stock Options................................................9
SECTION 1.08. Fractional Shares...........................................10
ARTICLE 2
THE SURVIVING CORPORATION
SECTION 2.01. Certificate of Incorporation................................10
SECTION 2.02. Bylaws .....................................................10
SECTION 2.03. Directors and Officers......................................10
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Corporate Existence and Power...............................11
SECTION 3.02. Corporate Authorization.....................................11
SECTION 3.03. Governmental Authorization..................................11
SECTION 3.04. Non-contravention...........................................12
SECTION 3.05. Capitalization..............................................12
SECTION 3.06. Subsidiaries................................................13
SECTION 3.07. SEC Filings.................................................14
SECTION 3.08. Financial Statements........................................14
SECTION 3.09. Disclosure Documents........................................15
SECTION 3.10. Absence of Certain Changes..................................16
SECTION 3.11. No Undisclosed Material Liabilities.........................17
SECTION 3.12. Litigation..................................................17
SECTION 3.13. Taxes .....................................................17
SECTION 3.14. ERISA .....................................................18
SECTION 3.15. [Intentionally Omitted].....................................22
SECTION 3.16. Labor Matters...............................................22
SECTION 3.17. Compliance with Laws and Court Orders.......................22
SECTION 3.18. Licenses and Permits........................................22
SECTION 3.19. Intellectual Property.......................................22
SECTION 3.20. Finders' Fees...............................................23
SECTION 3.21. Inapplicability of Certain Restrictions.....................23
SECTION 3.22. Rights Plan.................................................23
SECTION 3.23. Environmental Matters.......................................24
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF MERGERSUB
SECTION 4.01. Corporate Existence and Power...............................25
SECTION 4.02. Corporate Authorization.....................................25
SECTION 4.03. Governmental Authorization..................................26
SECTION 4.04. Non-contravention...........................................26
SECTION 4.05. Disclosure Documents........................................26
SECTION 4.06. Finders' Fees...............................................27
SECTION 4.07. Financing...................................................27
SECTION 4.08. Capitalization..............................................28
ARTICLE 5
COVENANTS OF THE COMPANY
SECTION 5.01. Conduct of the Company......................................28
SECTION 5.02. Stockholder Meeting; Proxy Material.........................30
SECTION 5.03. Access to Information.......................................31
SECTION 5.04. Other Offers................................................31
SECTION 5.05. Notices of Certain Events...................................34
SECTION 5.06. Resignation of Directors....................................34
SECTION 5.07. Rights Agreement............................................34
SECTION 5.08. Preferred Stock.............................................35
SECTION 5.09. Formation of Operating Co...................................35
SECTION 5.10. Outstanding Debt Securities.................................35
SECTION 5.11. Solvency Advice.............................................35
SECTION 5.12. Transfers by Affiliates.....................................35
ARTICLE 6
COVENANTS OF MERGERSUB
SECTION 6.01. SEC Filings.................................................36
SECTION 6.02. Voting of Shares............................................36
SECTION 6.03. Director and Officer Liability..............................36
SECTION 6.04. Employee Plans and Benefit Arrangements.....................37
SECTION 6.05. Financing...................................................37
SECTION 6.06. NASDAQ Listing..............................................37
ARTICLE 7
COVENANTS OF MERGERSUB AND THE COMPANY
SECTION 7.01. Best Efforts................................................38
SECTION 7.02. Certain Filings.............................................38
SECTION 7.03. Public Announcements........................................39
SECTION 7.04. Further Assurances..........................................39
ARTICLE 8
CONDITIONS TO THE MERGER
SECTION 8.01. Conditions to the Obligations of Each Party.................40
SECTION 8.02. Conditions to the Obligations of MergerSub..................40
SECTION 8.03. Conditions to the Obligation of the Company.................42
ARTICLE 9
TERMINATION
SECTION 9.01. Termination.................................................42
SECTION 9.02. Effect of Termination.......................................44
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Notices....................................................44
SECTION 10.02. Survival of Representations and Warranties.................45
SECTION 10.03. Amendments; No Waivers.....................................45
SECTION 10.04. Expenses...................................................46
SECTION 10.05. Successors and Assigns.....................................46
SECTION 10.06. Governing Law..............................................46
SECTION 10.07. Counterparts; Effectiveness................................46
--------
1 The Table of Contents is not a part of this Agreement.
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of January
20, 1998 between Thermadyne Holdings Corporation, a Delaware corporation (the
"Company") and Mercury Acquisition Corporation, a Delaware corporation
("MergerSub").
W I T N E S S E T H:
WHEREAS, as of the date of execution of this Agreement, all of the
outstanding capital stock of, or other ownership interest in, MergerSub is
owned, in the aggregate, by DLJ Merchant Banking Partners II, L.P., DLJ Merchant
Banking Partners II - A, L.P., DLJ Offshore Partners II, X.X., XXX Xxxxxxxxxxx
Xxxxxxxx, X.X., XXX Diversified Partners - A, L.P., DLJ Millennium Partners,
L.P., DLJ Millennium Partners - A, L.P., DLJMB Funding II, Inc., UK Investment
Plan 1997 Partners, DLJ EAB Partners, L.P., DLJ ESC II, L.P. and DLJ First ESC,
L.P.;
WHEREAS, MergerSub is unwilling to enter into this Agreement unless,
contemporaneously with the execution and delivery of this Agreement, certain
beneficial and record stockholders of the Company have entered into a Voting
Agreement providing for certain actions relating to certain of the shares of
common stock of the Company owned by them;
WHEREAS, MergerSub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger (as defined in Section 1.01) and also to prescribe certain conditions to
the Merger;
WHEREAS, it is intended that the Merger be recorded as a
recapitalization for financial reporting purposes;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
ARTICLE 1
THE MERGER
SECTION 1.01. The Merger. (a) At the Effective Time, MergerSub shall be
merged (the "Merger") with and into the Company in accordance with the Delaware
Law (as defined in Section 1.01(d)), and in accordance with the terms and
conditions hereof, whereupon the separate existence of MergerSub shall
cease, and the Company shall be the surviving corporation (the "Surviving
Corporation").
(b) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, the Company and
MergerSub will file a certificate of merger with the Secretary of State of the
State of Delaware and make all other filings or recordings required by the
Delaware Law in connection with the Merger. The Merger shall become effective at
such time as the certificate of merger is duly filed with the Secretary of State
of the State of Delaware or at such later time as is specified in the
certificate of merger (the "Effective Time").
(c) From and after the Effective Time, the Surviving Corporation shall
possess all the rights, privileges, powers and franchises and be subject to all
of the restrictions, disabilities and duties of the Company and MergerSub, all
as provided under Delaware Law.
(d) The Company hereby represents that its Board of Directors, at a
meeting duly called and held and acting on the unanimous recommendation of the
Board of Directors of the Company, other than Company management directors, has
(i) unanimously determined that this Agreement and the transactions contemplated
hereby, including the Merger, are fair to and in the best interest of the
Company's stockholders, (ii) unanimously approved this Agreement and the
transactions contemplated hereby, including the Merger, which approval satisfies
in full the requirements of the General Corporation Law of the State of Delaware
(the "Delaware Law"), and (iii) unanimously resolved to recommend approval and
adoption of this Agreement and the Merger to its stockholders. The Company
further represents that Gleacher NatWest & Co. has delivered to the Company's
Board of Directors its written opinion that the consideration to be paid in the
Merger is fair to the holders of shares (each, a "Share") of common stock of the
Company, par value $0.01 per share ("Common Stock") from a financial point of
view.
SECTION 1.02. Conversion (or Retention) of Shares. At the Effective
Time:
(a) each Share held by the Company as treasury stock or owned by
MergerSub immediately prior to the Effective Time shall be canceled, and no
payment shall be made with respect thereto;
(b) each share of common stock, par value $0.01 per share, of MergerSub
("MergerSub Common Stock") outstanding immediately prior to the Effective Time
shall be converted into and become one share of common stock of the Surviving
Corporation with the same rights, powers and privileges (including
those granted under the Rights Agreement (as defined in Section 3.23)) as the
shares so converted;
(c) each share of preferred stock, par value $0.01 per share, of
MergerSub ("MergerSub Preferred Stock"), if any, outstanding immediately prior
to the Effective Time shall be converted into and become one share of preferred
stock of the Surviving Corporation with the same rights, powers and privileges
as the shares of preferred stock so converted;
(d) each outstanding warrant to purchase shares of MergerSub Common
Stock (each, a "MergerSub Warrant") shall be automatically amended to constitute
a warrant to acquire shares of common stock of the Surviving Corporation on the
same terms and conditions as the MergerSub Warrant; and
(e) each Share outstanding immediately prior to the Effective Time
shall, except as otherwise provided in Section 1.02(a)-(d) or as provided in
Section 1.06 with respect to Shares as to which appraisal rights have been
exercised, be converted into the following (the "Merger Consideration"):
(i) for each such Share with respect to which an election to retain
Company Stock (as defined below) has been effectively made and not
revoked or lost pursuant to Sections 1.03(c), (d) and (e) and Section
1.04(b) ("Stock Electing Shares"), or is deemed made pursuant to
Section 1.04(d)(ii), as the case may be, the right to retain one Share
of Common Stock (the "Stock Election Price"), par value $0.01 per share
("Company Stock"); and
(ii) for each such Share (other than Stock Electing Shares and Shares
as to which an election to retain Company Stock is deemed made pursuant
to Section 1.04(d)(ii)), the right to receive in cash an amount equal
to $34.50 (the "Cash Election Price").
For purposes of this Section, references to outstanding Shares include
the Rights (as defined in Section 3.22) associated with such Shares.
SECTION 1.03. Elections. (a) Each person who, on or prior to the
Election Date referred to in (c) below, is a record holder of Shares will be
entitled, with respect to such Shares, to make an unconditional election on or
prior to such Election Date to retain the Stock Election Price (a "Stock
Election"), on the basis hereinafter set forth. For purposes of this Agreement,
"Election" means a Stock Election.
(b) Prior to the mailing of the Company Proxy Statement (as defined in
Section 3.09), MergerSub shall appoint an agent (the "Exchange Agent") for
the purpose of exchanging certificates representing Shares for the Merger
Consideration. MergerSub will make available to the Exchange Agent, as needed,
the Merger Consideration to be paid in respect of the Shares.
(c) MergerSub shall prepare and mail a form of election, which form
shall be subject to the reasonable approval of the Company (the "Form of
Election"), with the Company Proxy Statement to the record holders of Shares as
of the record date for the Company Stockholder Meeting (as defined in Section
5.02), which Form of Election shall be used by each record holder of Shares who
makes an Election with respect to any or all its Shares. The Company will use
its best efforts to make the Form of Election and the Company Proxy Statement
available to all persons who become holders of Shares during the period between
such record date and the Election Date referred to below. Any such holder's
Election shall have been properly made only if the Exchange Agent shall have
received at its designated office, by 5:00 p.m., New York City time on the
business day (the "Election Date") next preceding the date of the Company
Stockholder Meeting, a Form of Election properly completed and signed and
accompanied by certificates for the Shares to which such Form of Election
relates, duly endorsed in blank or otherwise in form acceptable for transfer on
the books of the Company (or by an appropriate guarantee of delivery of such
certificates as set forth in such Form of Election from a firm which is a member
of a registered national securities exchange or of the National Association of
Securities Dealers, Inc. or a commercial bank or trust company having an office
or correspondent in the United States, provided such certificates are in fact
delivered to the Exchange Agent within three Nasdaq Stock Market trading days
after the date of execution of such guarantee of delivery).
(d) Any Form of Election may be revoked by the holder submitting it to
the Exchange Agent only by written notice received by the Exchange Agent (i)
prior to 5:00 p.m., New York City time on the Election Date or (ii) after the
date of the Company Proxy Statement, if (and to the extent that) the Exchange
Agent is legally required to permit revocations and the Effective Time shall not
have occurred prior to such date. In addition, all Forms of Election shall
automatically be revoked if the Exchange Agent is notified in writing by
MergerSub that the Merger has been abandoned. If a Form of Election is revoked,
the certificate or certificates (or guarantees of delivery, as appropriate) for
the Shares to which such Form of Election relates shall be promptly returned to
the stockholder submitting the same to the Exchange Agent.
(e) The determination of the Exchange Agent shall be binding whether or
not Elections have been properly made or revoked pursuant to this Section 1.03
with respect to Shares and when Elections and revocations were received by it.
If the Exchange Agent determines that any Election either (x) was not properly
made or (y) was not submitted to or received by the Exchange Agent with respect
to any Shares, such Shares shall be converted into Merger Consideration in
accordance with Section 1.02(e). The Exchange Agent shall also make all
computations as to the allocation and the proration contemplated by Section
1.04, and any such computation shall be conclusive and binding on the holders of
Shares. The Exchange Agent may, with the mutual agreement of MergerSub and the
Company, make such rules as are consistent with this Section 1.03 for the
implementation of the Elections provided for herein as shall be necessary or
desirable fully to effect such Elections.
SECTION 1.04. Proration of Election Price. (a) Notwithstanding anything
in this Agreement to the contrary but subject to Sections 1.02(a) and 1.06, the
number of Shares to be converted into the right to retain Company Stock at the
Effective Time (the "Stock Election Number") shall be 485,010 (excluding for
this purpose any Shares to be canceled pursuant to Section 1.02(a)).
(b) If the number of Stock Electing Shares exceeds the Stock Election
Number, then such Stock Electing Shares shall be converted into the right to
retain the Stock Election Price or the right to receive cash in accordance with
the terms of Section 1.02(e) in the following manner:
(i) A stock proration factor (the "Stock Proration Factor") shall be
determined by dividing the Stock Election Number by the total number of
Stock Electing Shares.
(ii) The number of Stock Electing Shares covered by each Stock Election
to be converted into the right to retain the Stock Election Price shall
be determined by multiplying the Stock Proration Factor by the total
number of Stock Electing Shares covered by such Stock Election.
(iii) All Stock Electing Shares, other than those Shares converted into
the right to receive the Stock Election Price in accordance with
Section 1.04(b)(ii), shall be converted into cash (on a consistent
basis among stockholders who made the Election referred to in Section
1.02(e)(i), pro rata to the number of shares as to which they made such
Election) as if such Shares were not Stock Electing Shares in
accordance with the terms of Section 1.02(e)(ii).
(c) If the number of Stock Electing Shares is equal to the Stock
Election Number, then all Stock Electing Shares shall be converted into the
right to receive the Stock Election Price in accordance with the terms of
Section 1.02(e)(i), and all Shares (other than Stock Electing Shares, Shares to
be cancelled pursuant to Section 1.02(a) and Dissenting Shares) shall be
converted into cash.
(d) If the number of Stock Electing Shares is less than the Stock
Election Number, then:
(i) All Stock Electing Shares shall be converted into the right to
receive the Stock Election Price in accordance with Section 1.02(e)(i).
(ii) Such number of Shares with respect to which a Stock Election is
not in effect, excluding Shares to be cancelled pursuant to Section
1.02(a) and Dissenting Shares (as defined in Section 1.06)
("Non-Electing Shares"), shall be converted into the right to retain
the Stock Election Price (and a Stock Election shall be deemed to have
been made with respect to such Shares) in accordance with Section
1.02(e) in the following manner:
(A) a cash proration factor (the "Cash Proration Factor")
shall be determined by dividing (x) the difference between the
Stock Election Number and the number of Stock Electing Shares,
by (y) the total number of Non-Electing Shares; and
(B) the number of Non-Electing Shares of each stockholder
to be converted into the right to retain the Stock Election
Price shall be determined by multiplying the Cash Proration
Factor by the total number of Non-Electing Shares of such
stockholder, so that the aggregate number of Stock Electing
Shares and Non-Electing Shares converted into such right
equals the Stock Election Number.
SECTION 1.05. Surrender and Payment. (a) As soon as reasonably
practicable as of or after the Effective Time, MergerSub shall deposit with the
Exchange Agent, for the benefit of the holders of Shares, for exchange in
accordance with this Article 1, the Merger Consideration. For purposes of
determining the Merger Consideration to be made available, MergerSub shall
assume, subject to Section 1.04(d)(ii), that no holder of Shares will perfect
his right to appraisal of his Shares. Promptly after the Effective Time,
MergerSub will send, or will cause the Exchange Agent to send, to each holder of
Shares at the Effective Time a letter of transmittal for use in such exchange
(which shall specify that the delivery shall be effected, and risk of loss and
title shall pass, only upon proper delivery of the certificates representing
Shares to the Exchange Agent).
(b) Each holder of Shares that have been converted into a right to
receive the Merger Consideration, upon surrender to the Exchange Agent of a
certificate or certificates representing such Shares, together with a properly
completed letter of transmittal covering such Shares, will be entitled to
receive the Merger Consideration payable in respect of such Shares. Until so
surrendered, each such certificate shall, after the Effective Time, represent
for all purposes, only the right to receive such Merger Consideration. No
interest will be paid or will accrue on any cash payable as Merger Consideration
or in lieu of any fractional shares of Company Stock.
(c) If any portion of the Merger Consideration is to be paid to a
Person other than the registered holder of the Shares represented by the
certificate or certificates surrendered in exchange therefor, it shall be a
condition to such payment that the certificate or certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and that
the Person requesting such payment shall pay to the Exchange Agent any transfer
or other taxes required as a result of such payment to a Person other than the
registered holder of such Shares or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable. For purposes of
this Agreement, "Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or any agency or
instrumentality thereof.
(d) After the Effective Time, there shall be no further registration
of transfers of Shares. If, after the Effective Time, certificates representing
Shares are presented to the Surviving Corporation, they shall be canceled and
exchanged for the consideration provided for, and in accordance with the
procedures set forth, in this Article 1.
(e) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 1.05(a) that remains unclaimed by the holders
of Shares six months after the Effective Time shall be returned to MergerSub,
upon demand, and any such holder who has not exchanged his Shares for the Merger
Consideration in accordance with this Section prior to that time shall
thereafter look only to MergerSub for payment of the Merger Consideration in
respect of his Shares. Notwithstanding the foregoing, MergerSub shall not be
liable to any holder of Shares for any amount paid to a public official pursuant
to applicable abandoned property laws. Any amounts remaining unclaimed by
holders of Shares two years after the Effective Time (or such earlier date
immediately prior to such time as such amounts would otherwise escheat to or
become property of any governmental entity) shall, to the extent permitted by
applicable law, become the property of MergerSub free and clear of any claims or
interest of any Person previously entitled thereto.
(f) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 1.05(a) to pay for Shares for which appraisal
rights have been perfected shall be returned to MergerSub, upon demand.
(g) No dividends or other distributions with respect to Company Stock
with a record date after the Effective Time shall be paid to the holder of any
unsurrendered certificate for Shares with respect to the shares of Company Stock
represented thereby and no cash payment in lieu of fractional shares shall be
paid to any such holder pursuant to Section 1.08 until the surrender of such
certificate in accordance with this Article 1. Subject to the effect of
applicable laws, following surrender of any such certificate, there shall be
paid to the holder of the certificate representing whole shares of Company Stock
issued in exchange therefor, without interest, (i) at the time of such surrender
or as promptly after the sale of the Excess Shares (as defined in Section 1.08)
as practicable, the amount of any cash payable in lieu of a fractional share of
Company Stock to which such holder is entitled pursuant to Section 1.08 and the
amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole shares of Company
Stock, and (ii) at the appropriate payment date, the amount of dividends or
other distributions with a record date after the Effective Time but prior to
such surrender and a payment date subsequent to such surrender payable with
respect to such whole shares of Company Stock.
SECTION 1.06. Dissenting Shares. Notwithstanding Section 1.02, Shares
which are issued and outstanding immediately prior to the Effective Time and
which are held by a holder who has not voted such shares in favor of the Merger,
who shall have delivered a written demand for appraisal of such Shares in the
manner provided by the Delaware Law and who, as of the Effective Time, shall not
have effectively withdrawn or lost such right to appraisal ("Dissenting Shares")
shall not be converted into a right to receive the Merger Consideration. The
holders thereof shall be entitled only to such rights as are granted by Section
262 of the Delaware Law. Each holder of Dissenting Shares who becomes entitled
to payment for such Shares pursuant to Section 262 of the Delaware Law shall
receive payment therefor from the Surviving Corporation in accordance with the
Delaware Law; provided, however, that (i) if any such holder of Dissenting
Shares shall have failed to establish his entitlement to appraisal rights as
provided in Section 262 of the Delaware Law, (ii) if any such holder of
Dissenting Shares shall have effectively withdrawn his demand for appraisal of
such Shares or lost his right to appraisal and payment for his Shares under
Section 262 of the Delaware Law or (iii) if neither any holder of Dissenting
Shares nor the Surviving Corporation shall have filed a petition demanding a
determination of the value of all Dissenting Shares within the time provided in
Section 262 of the Delaware Law, such holder shall forfeit the right to
appraisal of such Shares and each such Share shall be treated as if it had been
a Non-Electing Share and had been converted, as of the Effective Time, into a
right to receive the Merger Consideration, without interest thereon, from the
Surviving Corporation as provided in Section 1.02 hereof. The Company shall give
MergerSub prompt notice of any demands received by the Company for appraisal of
Shares, and MergerSub shall have the right to participate in all negotiations
and proceedings with respect to such demands. The Company shall not, except with
the prior written consent of MergerSub, make any payment with respect to, or
settle or offer to settle, any such demands.
SECTION 1.07. Stock Options. (a) Except as set forth on Schedule
1.07(a), immediately prior to the Effective Time, each outstanding option to
acquire Shares granted to employees (the "Employee Options") and directors (the
"Director Options" and, together with the Employee Options, the "Options") shall
be canceled and, in lieu thereof, as soon as reasonably practicable as of or
after the Effective Time, the holders of such Options shall receive a cash
payment from the Company equal to the product of (i) the total number of Shares
previously subject to such Option and (ii) the excess of $34.50 over the
exercise price per Share subject to such Option, subject to any required
withholding of taxes.
(b) Prior to the Effective Time, the Company shall (i) obtain any
consents from holders of options to purchase Shares granted under the Company's
stock option or compensation plans or arrangements and (ii) make any amendments
to the terms of such stock option or compensation plans or arrangements that are
necessary to give effect to the transactions contemplated by Section 1.07(a).
Notwithstanding any other provision of this Section, payment may be withheld in
respect of any employee stock option until necessary or appropriate consents are
obtained.
SECTION 1.08. Fractional Shares. (a) No certificates or scrip
representing fractional shares of Company Stock shall be issued upon the
surrender for exchange of certificates representing Shares, and such fractional
share interests will not entitle the owner thereof to vote or to any rights of a
stockholder of the Surviving Corporation; and
(b) Notwithstanding any other provision of this Agreement, each holder
of Shares exchanged pursuant to the Merger who would otherwise have been
entitled to receive a fraction of a share of Company Stock (after taking into
account all Shares delivered by such holder) shall receive, in lieu thereof, a
cash payment (without interest) representing such holder's proportionate
interest in the net proceeds from the sale by the Exchange Agent (following the
deduction of applicable transaction costs), on behalf of all such holders, of
the shares (the "Excess Shares") of Company Stock representing such fractions.
Such sale shall be made as soon as practicable after the Effective Time.
ARTICLE 2
THE SURVIVING CORPORATION
SECTION 2.01. Certificate of Incorporation. The certificate of
incorporation of the Company in effect immediately prior to the Effective Time
shall be amended as of the Effective Time as set forth in Exhibit A, and, as so
amended, shall be the certificate of incorporation of the Surviving Corporation
until amended in accordance with applicable law.
SECTION 2.02. Bylaws. The bylaws of MergerSub in effect at the
Effective Time shall be the bylaws of the Surviving Corporation until amended in
accordance with applicable law.
SECTION 2.03. Directors and Officers. From and after the Effective
Time, until successors are duly elected or appointed and qualified in accordance
with applicable law, (a) the directors of MergerSub at the Effective Time shall
be the directors of the Surviving Corporation, and (b) the officers of the
Company at the Effective Time shall be the officers of the Surviving
Corporation.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to MergerSub that:
SECTION 3.01. Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and has all corporate powers required to carry on
its business as now conducted. The Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where the
failure to be so qualified would not, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect. The Company has heretofore
delivered to MergerSub true and complete copies of the Company's certificate of
incorporation and bylaws as currently in effect. For purposes of this Agreement,
"Material Adverse Effect" means any material adverse effect on the condition
(financial or otherwise), business, assets, or results of operations of the
Company and the Subsidiaries taken as a whole but excluding (i) any change
resulting from general economic conditions and (ii) with respect to the
agreements set forth on Schedule 3.04(c), any changes arising out of the
transactions contemplated by this Agreement and the public announcement thereof.
SECTION 3.02. Corporate Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby are within the Company's corporate
powers and, except for any required approval by the Company's stockholders by
majority vote in connection with the consummation of the Merger, have been duly
authorized by all necessary corporate and stockholder action. This Agreement
constitutes a valid and binding agreement of the Company.
SECTION 3.03. Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation of the Merger
by the Company require no action by or in respect of, or filing with, any
governmental body, agency, official or authority other than (a) the filing of a
certificate of merger in accordance with Delaware Law; (b) compliance with any
applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
0000 (xxx "XXX Xxx"); (c) compliance with any applicable requirements of the
Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder (the "Exchange Act"); (d) compliance with the applicable requirements
of the Securities Act of 1933 and the rules and regulations promulgated
thereunder (the "Securities Act"); (e) compliance with any applicable foreign or
state securities or Blue Sky laws; and (f) required filings under Italian law.
SECTION 3.04. Non-contravention. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby do not and will not (a) contravene or
conflict with the certificate of incorporation or bylaws of the Company, (b)
assuming compliance with the matters referred to in Section 3.03, contravene or
conflict with or constitute a violation of any provision of any law, regulation,
judgment, writ, injunction, order or decree of any court or governmental
authority binding upon or applicable to the Company or any Subsidiary or any of
their properties or assets, (c) except as set forth on Schedule 3.04(c),
constitute a default under or give rise to a right of termination, cancellation
or acceleration of any right or obligation of the Company or any Subsidiary or
to a loss of any benefit to which the Company or any Subsidiary is entitled
under any provision of any agreement, contract or other instrument binding upon
the Company or any Subsidiary or any license, franchise, permit or other similar
authorization held by the Company or any Subsidiary, or (d) result in the
creation or imposition of any Lien on any asset of the Company or any
Subsidiary, except, in the case of clauses (b), (c) and (d), for any such
violation, failure to obtain any such consent or other action, default, right,
loss or Lien that would not, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect. For purposes of this Agreement, "Lien"
means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset.
SECTION 3.05. Capitalization. The authorized capital stock of the
Company consists of 25,000,000 shares of Common Stock, of which as of January
19, 1998, there were outstanding 11,073,150 shares of Common Stock and there
were employee and director stock options to purchase an aggregate of not more
than 1,053,717 shares of Common Stock outstanding (of which options to purchase
an aggregate of 481,199 shares of Common Stock were exercisable). All
outstanding shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable. Except as set forth in this
Section and except for changes since January 19, 1998 resulting from the
exercise of employee and director stock options outstanding on such date or
purchases under the 1997 and 1998 Employee Stock Purchase Plans, which purchases
shall not exceed 150,000 shares of Common Stock in the aggregate, there are
outstanding (a) no shares of capital stock or other voting securities of the
Company, (b) no securities of the Company convertible into or exchangeable for
shares of capital stock or voting securities of the Company, and (c) no options
or other rights to acquire from the Company, and no obligation of the Company to
issue, any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of the Company (the items in
clauses (a), (b) and (c) being referred to collectively as the "Company
Securities"). There are no outstanding obligations of the Company or any
Subsidiary to repurchase, redeem or otherwise acquire any Company Securities.
SECTION 3.06. Subsidiaries. (a) Each Subsidiary is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted and is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where failure
to be so qualified would not, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect. For purposes of this Agreement,
"Subsidiary" means any corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are directly or
indirectly owned by the Company and/or one or more Subsidiaries. All
Subsidiaries and their respective jurisdictions of incorporation are identified
in Schedule 3.06(a).
(b) Except for Liens, limitations and restrictions under the Amended
and Restated Credit Agreement among the Company, various lending institutions
and Bankers Trust Company, as agent (the "BT Credit Agreement") and the Sixth
Variation Agreement, Syndicated Credit Agreement, dated January 18, 1996,
between Comweld Group Pty. Ltd., Duxtech Pty. Limited, Quetack Pty. Limited,
Thermadyne Australia Pty. Limited, various financial institutions and BT
Management Services Pty. Ltd., all of the outstanding capital stock of, or other
ownership interests in, each Subsidiary (other than directors' qualifying
shares), is owned by the Company, directly or indirectly, free and clear of any
Lien and free of any other limitation or restriction (including any restriction
on the right to vote, sell or otherwise dispose of such capital stock or other
ownership interests). All such capital stock has been duly authorized and
validly issued and is fully paid and non-assessable. There are no outstanding
(i) securities of the Company or any Subsidiary convertible into or exchangeable
for shares of capital stock or other voting securities or ownership interests in
any Subsidiary, and (ii) options or other rights to acquire from the Company or
any Subsidiary, and no other obligation of the Company or any Subsidiary to
issue, any capital stock, voting securities or other ownership interests in, or
any securities convertible into or exchangeable for any capital stock, voting
securities or ownership interests in, any Subsidiary (the items in clauses (i)
and (ii) being referred to collectively as the "Subsidiary Securities"). There
are no outstanding obligations of the Company or any Subsidiary to repurchase,
redeem or otherwise acquire any outstanding Subsidiary Securities.
SECTION 3.07. SEC Filings. (a) The Company has made available to
MergerSub (i) the Company's annual report on Form 10-K for the year ended
Xxxxxxxx 00, 0000 (xxx "Xxxxxxx 00-X") , (xx) its quarterly reports on Form 10-Q
for its fiscal quarters ended March 31, 1997, June 30, 1997 and September 30,
1997 and its current reports on Form 8-K dated May 12, 1997 and October 8, 1997
(together with the Company 10-K, the "Current SEC Reports"), (iii) its proxy or
information statements relating to meetings of, or actions taken without a
meeting by, the stockholders of the Company held since January 1, 1996, and (iv)
all of its other reports, statements, schedules and registration statements
filed with the Securities and Exchange Commission (the "SEC") since January 1,
1996 (collectively, the "SEC Documents").
(b) As of its filing date, each such report or statement filed
pursuant to the Exchange Act did not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading.
(c) Each such registration statement, as amended or supplemented, if
applicable, filed pursuant to the Securities Act as of the date such statement
or amendment became effective did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
SECTION 3.08. Financial Statements. The audited consolidated financial
statements and unaudited consolidated interim financial statements of the
Company included in the Company 10-K and the quarterly reports on Form 10-Q
referred to in Section 3.07(a)(ii) fairly present in all material respects, in
conformity with generally accepted accounting principles applied on a consistent
basis (except as may be indicated in the notes thereto), the consolidated
financial position of the Company and its consolidated subsidiaries as of the
dates thereof and their consolidated results of operations and changes in
financial position for the periods then ended (subject to normal year-end
adjustments in the case of any unaudited interim financial statements). For
purposes of this Agreement, "Balance Sheet" means the consolidated balance sheet
of the Company and its subsidiaries as of December 31, 1996 (and the notes
thereto) set forth in the Company 10-K, "Balance Sheet Date" means December 31,
1996 and "1997 Balance Sheet" means the consolidated balance sheet of the
Company and its subsidiaries as of December 31, 1997.
SECTION 3.09. Disclosure Documents. (a) Each document required to be
filed by the Company with the SEC in connection with the transactions
contemplated by this Agreement (the "Company Disclosure Documents"), including,
without limitation, the proxy or information statement of the Company containing
information required by Regulation 14A under the Exchange Act, and, if
applicable, Rule 13e-3 and Schedule 13E-3 under the Exchange Act (the "Company
Proxy Statement"), to be filed with the SEC in connection with the Merger, and
any amendments or supplements thereto will, when filed, comply as to form in all
material respects with the applicable requirements of the Exchange Act. The
representations and warranties contained in this Section 3.09(a) will not apply
to statements or omissions included in the Company Disclosure Documents based
upon information furnished to the Company in writing by MergerSub specifically
for use therein.
(b) At the time the Company Proxy Statement or any amendment or
supplement thereto is first mailed to stockholders of the Company and, at the
time such stockholders vote on adoption of this Agreement, the Company Proxy
Statement, as supplemented or amended, if applicable, will not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. At the time of the filing of any
Company Disclosure Document other than the Company Proxy Statement and at the
time of any distribution thereof, such Company Disclosure Document will not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The representations
and warranties contained in this Section 3.09(b) will not apply to statements or
omissions included in the Company Disclosure Documents based upon information
furnished to the Company in writing by MergerSub specifically for use therein.
(c) The information with respect to the Company or any Subsidiary that
the Company furnishes to MergerSub in writing specifically for use in the
MergerSub Disclosure Documents (as defined in Section 6.01) will not, at the
time of the filing thereof, at the time of any distribution thereof and at the
time of the meeting of the Company's stockholders, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in the light
of the circumstances under which they were made, not misleading.
SECTION 3.10. Absence of Certain Changes. Except as set forth on
Schedule 3.10 attached hereto, since the Balance Sheet Date, the Company and
Subsidiaries have conducted their business in the ordinary course consistent
with past practice and there has not been:
(a) any event, occurrence or development of a state of circumstances
or facts which has had or reasonably would be expected to have a Material
Adverse Effect;
(b) any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of capital stock of the Company, or any
repurchase, redemption or other acquisition by the Company or any Subsidiary of
any outstanding shares of capital stock or other securities of, or other
ownership interests in, the Company or any Subsidiary;
(c) except as disclosed in the Current SEC Reports or as contemplated
by this Agreement, any amendment of any material term of any outstanding
security of the Company or any Subsidiary;
(d) except as disclosed in the Current SEC Reports or the 1997 Balance
Sheet, any incurrence, assumption or guarantee by the Company or any Subsidiary
of any indebtedness for borrowed money other than in the ordinary course of
business and in amounts and on terms consistent with past practices, but in any
event not in excess of $25,000,000;
(e) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of the Company or any
Subsidiary which, individually or in the aggregate, has had or would reasonably
be expected to have a Material Adverse Effect;
(f) any material change in any method of accounting or accounting
practice by the Company or any Subsidiary, except for any such change required
by reason of a concurrent change in generally accepted accounting principles;
(g) except as disclosed in the Current SEC Reports, any (i) grant of
any severance or termination pay to any director or executive officer of the
Company or any Subsidiary, (ii) entering into of any employment, deferred
compensation or other similar agreement (or any amendment to any such existing
agreement) with any director or executive officer of the Company or any
Subsidiary, (iii) increase in benefits payable under any existing severance or
termination pay policies or employment agreements other than in the ordinary
course of business consistent with past practice or (iv) increase in
compensation, bonus or other benefits payable to directors, officers or
employees of the Company or any Subsidiary, other than in the ordinary course of
business consistent with past practice; or
(h) any cancellation of any licenses, sublicenses, franchises, permits
or agreements to which the Company or any Subsidiary is a party, or any
notification to the Company or any Subsidiary that any party to any such
arrangements intends to cancel or not renew such arrangements beyond its
expiration date as in effect on the date hereof, which cancellation or
notification, individually or in the aggregate, has had or reasonably could be
expected to have a Material Adverse Effect.
SECTION 3.11. No Undisclosed Material Liabilities. There are no
liabilities of the Company or any Subsidiary of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, which
individually or in the aggregate would be reasonably likely to have a Material
Adverse Effect, other than:
(a) liabilities disclosed or provided for in the Balance Sheet or the
balance sheets (and the notes thereto) included in the Company's reports on Form
10-Q referred to in Section 3.07(a)(ii);
(b) liabilities incurred in the ordinary course of business consistent
with past practice since the Balance Sheet Date or as otherwise specifically
contemplated by this Agreement; and
(c) liabilities under this Agreement.
SECTION 3.12. Litigation. Except as set forth in the Current SEC
Reports, there is no action, suit, investigation or proceeding (or any basis
therefor) pending against, or to the knowledge of the Company threatened against
or affecting, the Company or any Subsidiary or any of their respective
properties before any court or arbitrator or any governmental body, agency or
official which, if determined or resolved adversely to the Company or any
Subsidiary in accordance with the plaintiff's demands, would reasonably be
expected to have a Material Adverse Effect or which in any manner challenges or
seeks to prevent, enjoin, alter or materially delay the Merger or any of the
other transactions contemplated hereby.
SECTION 3.13. Taxes. Except as set forth in the Schedule 3.13:
(a) all material tax returns, statements, reports and forms (including
estimated tax returns and reports and information returns and reports) required
to be filed with any taxing authority with respect to any tax period (or portion
thereof) ending on or before the Effective Time (a "Pre-Closing Tax Period") by
or on behalf of the Company or any Subsidiary of the Company (collectively, the
"Returns"), were filed when due (including any applicable extension periods) in
accordance with all applicable laws in all material respects.
(b) The Company and its Subsidiaries have timely paid, or withheld and
remitted to the appropriate taxing authority, all taxes shown as due and payable
on the Returns that have been filed.
(c) The charges, accruals and reserves for taxes with respect to the
Company and any Subsidiary for any Pre-Closing Tax Period (including any
Pre-Closing Tax Period for which no Return has yet been filed) reflected on the
books of the Company and its Subsidiaries (excluding any provision for deferred
income taxes) are adequate to cover such taxes.
(d) There is no material claim (including under any indemnification or
tax-sharing agreement), audit, action, suit, proceeding, or investigation now
pending or threatened in writing against or in respect of any tax or "tax asset"
of the Company or any Subsidiary. For purposes of this Section 3.13, the term
"tax asset" shall include any net operating loss, net capital loss, investment
tax credit, foreign tax credit, charitable deduction or any other credit or tax
attribute which could reduce taxes.
(e) There are no Liens for taxes upon the assets of the Company or its
Subsidiaries except for Liens for current taxes not yet due.
(f) Neither the Company nor any of its Subsidiaries has been a United
States real property holding corporation within the meaning of Section 897(c)(2)
of the Internal Revenue Code of 1986, as amended (the "Code") during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
SECTION 3.14. ERISA. (a) Schedule 3.14(a) sets forth a list identifying
each "employee benefit plan", as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974 ("ERISA"), which (i) is subject to any
provision of ERISA and which is not already listed as an International Plan on
Schedule 3.14(i) and (ii) is maintained, administered or contributed to by the
Company or any affiliate (as defined below) and covers any employee or former
employee of the Company or any affiliate or under which the Company or any
affiliate has any liability. The most recent copies of such plans (and, if
applicable, related trust agreements) and all amendments thereto have been made
available to MergerSub together with (A) the most recent annual reports (Form
5500 including, if applicable, Schedule B thereto) prepared in connection with
any such plan and (B) the most recent actuarial valuation report prepared in
connection with any such plan. Such plans are referred to collectively herein as
the "Employee Plans". For purposes of this Section, "affiliate" of any Person
means any other Person which, together with such Person, would be treated as a
single employer under Section 414 of the Code. The only Employee Plans which
individually or collectively would constitute an "employee pension benefit plan"
as defined in Section 3(2) of ERISA (the "Pension Plans") are identified as such
in the list referred to above.
(b) No Employee Plan constitutes a "multiemployer plan", as defined in
Section 3(37) of ERISA (a "Multiemployer Plan"), and no Employee Plan is
maintained in connection with any trust described in Section 501(c)(9) of the
Code. The only Employee Plan that is subject to Title IV of ERISA (the
"Retirement Plan") is the Thermadyne Group, Inc. Retirement Plan. As of the
January 1, 1997 actuarial valuation report, the liabilities on a Retirement
Protection Act of 1994 basis exceeded the fair market value of the assets of
such plan by less than $3,500,000. No "accumulated funding deficiency", as
defined in Section 412 of the Code, exists with respect to any Pension Plan,
whether or not waived. The Company knows of no "reportable event", within the
meaning of Section 4043 of ERISA, and no event described in Section 4041, 4042,
4062 or 4063 of ERISA has occurred in connection with any Employee Plan, other
than a "reportable event" that will not have a Material Adverse Effect. No
condition exists and no event has occurred that would be reasonably likely to
result in termination of the Retirement Plan with a liability greater than the
liability disclosed in this Section and neither the Company nor any of its
affiliates has incurred any liability under Title IV of ERISA arising in
connection with the termination of, or complete or partial withdrawal from, any
plan covered or previously covered by Title IV of ERISA, which liability has not
been satisfied. Nothing done or omitted to be done and no transaction or holding
of any asset under or in connection with any Employee Plan has or will make the
Company or any Subsidiary, any officer or director of the Company or any
Subsidiary subject to any liability under Title I of ERISA or liable for any tax
pursuant to Section 4975 of the Code that could have a Material Adverse Effect.
(c) Each Employee Plan which is intended to be qualified under Section
401(a) of the Code is so qualified (other than with respect to a disqualifying
event the correction of which would not have a Material Adverse Effect) and has
been so qualified during the period from its adoption to date, and each trust
forming a part thereof is exempt from tax pursuant to Section 501(a) of the
Code. The Company has made available to MergerSub copies of the most recent
Internal Revenue Service determination letters with respect to each such Plan.
Each Employee Plan has been maintained in compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations,
including but not limited to ERISA and the Code, which are applicable to such
Plan other than any non-compliance which could not have a Material Adverse
Effect.
(d) Except as set forth in Schedule 3.14(d) there is no contract,
agreement, plan or arrangement covering any employee or former employee of the
Company or any affiliate that, individually or collectively, could give rise to
the payment of any amount that would not be deductible pursuant to the terms of
Section 280G of the Code.
(e) Schedule 3.14(e) sets forth a list of each material employment,
severance or other similar contract, arrangement or policy and each material
plan or arrangement (written or oral) providing for insurance coverage
(including any self-insured arrangements), workers' compensation, disability
benefits, supplemental unemployment benefits, vacation benefits, retirement
benefits or for deferred compensation, profit-sharing, bonuses, stock options,
stock appreciation or other forms of incentive compensation or post-retirement
insurance, compensation or benefits which (i) is not an Employee Plan, (ii) is
entered into, maintained or contributed to, as the case may be, by the Company
or any of its affiliates, (iii) covers any U.S. employee or former U.S. employee
of the Company or any of its affiliates and (iv) are currently in effect. Such
contracts, plans and arrangements as are described above, copies or descriptions
of all of which have been previously made available to MergerSub are referred to
collectively herein as the "Benefit Arrangements". Each Benefit Arrangement has
been maintained in compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations that are
applicable to such Benefit Arrangement, other than any non-compliance which
could not have a Material Adverse Effect.
(f) The excess of the present value of the accumulated post-retirement
benefit obligation in respect of post-retirement life, health and medical
benefits for retired employees of the Company and its affiliates, determined
using assumptions that are reasonable in the aggregate in accordance with FAS
106 as of January 1, 1997, over the fair market value of any fund, reserve or
other assets segregated for the purpose of satisfying such liability (including
for such purposes any fund established pursuant to Section 401(h) of the Code)
does not in the aggregate exceed $17,00,000.
(g) Except as disclosed in writing to MergerSub in Schedule 3.14(g),
there has been no amendment to, written interpretation or announcement (whether
or not written) by the Company or any of its affiliates relating to, or change
in employee participation or coverage under, any Employee Plan or Benefit
Arrangement which would increase materially the expense of maintaining such
Employee Plan or Benefit Arrangement above the level of the expense incurred in
respect thereof for the fiscal year ended on the Balance Sheet Date.
(h) Except as disclosed in Schedule 3.14(h), neither the Company nor
any Subsidiary is a party to or subject to any union contract or any employment
contract or arrangement providing for annual future compensation of $200,000 or
more with any officer, consultant, director or employee.
(i) Schedule 3.14(i) identifies each material International Plan (as
defined below). The Company has made available to MergerSub copies of each such
International Plan. Each International Plan has been maintained in substantial
compliance with its terms and with the requirements prescribed by any and all
applicable statutes, orders, rules and regulations (including any special
provisions relating to qualified plans where such Plan was intended to so
qualify and any funding requirements and accounting principles with regard to
reserves) and has been maintained in good standing with applicable regulatory
authorities, other than any non-compliance which could not have a Material
Adverse Effect. There has been no amendment to, written interpretation of or
announcement (whether or not written) by the Company or any Subsidiary relating
to, or change in employee participation or coverage under, any International
Plan that would increase materially the expense of maintaining such
International Plan above the level of expense incurred in respect thereof for
the most recent fiscal year ended prior to the date hereof. From and after the
Closing Date, MergerSub and its Affiliates will get the full benefit of any
funds available under such plans to pay benefits and any accruals or reserves
with respect thereto.
"International Plan" means any material employment, severance or
similar contract or arrangement (whether or not written) or any material plan,
policy, fund, program or arrangement or contract providing for severance,
insurance coverage (including any self-insured arrangements), workers'
compensation, disability benefits, supplemental unemployment benefits, vacation
benefits, pension or retirement benefits or for deferred compensation,
profit-sharing, bonuses, stock options, stock appreciation rights or other forms
of incentive compensation or post-retirement insurance, compensation or benefits
that (i) is not an Employee Plan or a Benefit Arrangement, (ii) is entered into,
maintained, administered or contributed to by the Company or any Subsidiary,
(iii) covers any employee or former employee of the Company or any Subsidiary
and (iv) are currently in effect.
SECTION 3.15. [Intentionally Omitted].
SECTION 3.16. Labor Matters. The Company is in compliance with all
currently applicable laws respecting employment practices, terms and conditions
of employment and wages and hours, and is not engaged in any unfair labor
practice, failure to comply with which or engagement in which, as the case may
be, would reasonably be expected to have a Material Adverse Effect. There is no
unfair labor practice complaint pending or, to the knowledge of Company,
threatened against the Company before the National Labor Relations Board or
otherwise which if adversely resolved is likely to have a Material Adverse
Effect. Except as set forth in Schedule 3.16, there are no strikes, slowdowns,
union organizational campaigns or other protected concerted activity under the
National Labor Relations Act or, to the knowledge of Company, threats thereof,
by or with respect to any employees of the Company which could have a Material
Adverse Effect.
SECTION 3.17. Compliance with Laws and Court Orders. Neither the
Company nor any Subsidiary is in violation of, or has since January 1, 1996
violated, and to the knowledge of the Company none is under investigation with
respect to or has been threatened to be charged with or given notice of any
violation of, any applicable law, rule, regulation, judgment, injunction, order
or decree , except for violations that have not had and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
SECTION 3.18. Licenses and Permits. As used herein, the term "Permits"
shall mean any licenses, franchises, permits, certificates, approvals or other
similar authorizations affecting, or relating in any way to, the assets or
business of the Company and its Subsidiaries. Except as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect,
(i) the Company or its Subsidiaries own, hold or possess adequate right to use
all Permits required in connection with the operation of the business of the
Company and its Subsidiaries, (ii) the Permits are valid and in full force and
effect, (iii) neither the Company nor any Subsidiary is in default under, and no
condition exists that with notice or lapse of time or both would constitute a
default under, the Permits and (iv) none of the Permits will be terminated or
impaired or become terminable, in whole or in part, as a result of the
transactions contemplated hereby.
SECTION 3.19. Intellectual Property. The Company and the Subsidiaries
own or possess adequate licenses or other rights to use all Intellectual
Property Rights necessary to conduct the business now operated by them, except
where the failure to own or possess such licenses or rights would not be
reasonably likely to have a Material Adverse Effect. To the knowledge of the
Company, the Intellectual Property Rights of the Company and the Subsidiaries do
not conflict with or infringe upon any Intellectual Property Rights of others to
the extent that, if sustained, such conflict or infringement would be reasonably
likely to have a Material Adverse Effect. For purposes of this Agreement,
"Intellectual Property Right" means any trademark, service xxxx, trade name,
mask work, copyright, patent, software license, other data base, invention,
trade secret, know-how (including any registrations or applications for
registration of any of the foregoing) or any other similar type of proprietary
intellectual property right.
SECTION 3.20. Finders' Fees. With the exception of fees payable to
Gleacher NatWest & Co., a copy of whose engagement agreement has been provided
to MergerSub, there is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf, of
the Company or any Subsidiary who might be entitled to any fee or commission
from the Company or any Subsidiary or any of its affiliates upon consummation of
the transactions contemplated by this Agreement.
SECTION 3.21. Inapplicability of Certain Restrictions. The Company's
certificate of incorporation contains a provision in which the Company expressly
elects not to be governed by Section 203 of the Delaware Law, and therefore
Section 203 does not in any way restrict the consummation of the Merger or the
other transactions contemplated by this Agreement. The adoption of this
Agreement by the affirmative vote of the holders of Shares entitling such
holders to exercise at least a majority of the voting power of the Shares is the
only vote of holders of any class or series of the capital stock of the Company
required to adopt this Agreement, or to approve the Merger or any of the other
transactions contemplated hereby and no higher or additional vote is required
pursuant to of the Company's Certificate of Incorporation or otherwise.
SECTION 3.22. Rights Plan. The Company and its Board of Directors have
amended the Shareholder Rights Agreement dated May 1, 1997 (the "Rights
Agreement") (without redeeming the Rights (as defined therein)) so that neither
the execution or delivery of this Agreement nor the consummation of the Merger
will (i) cause any Rights issued pursuant to the Rights Agreement to become
exercisable or to separate from the Shares to which they are attached, (ii)
cause the MergerSub or any of its Affiliates to be an Acquiring Person (as each
such term is defined in the Rights Agreement) or (iii) trigger other provisions
of the Rights Agreement, including giving rise to a Distribution Date (as such
term is defined in the Rights Agreement), and such amendment shall be in full
force and effect from and after the date hereof.
SECTION 3.23. Environmental Matters. (a) Except as set forth in the
Company 10-K or Schedule 3.23:
(i) except as would not be reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect, no notice, notification,
demand, request for information, citation, summons, complaint or order
has been received by, or, to the knowledge of the Company or any
Subsidiary, is pending or threatened by any Person against, the Company
or any Subsidiary nor has any material penalty been assessed against
the Company or any Subsidiary with respect to any (A) alleged violation
of any Environmental Law or liability thereunder, (B) alleged failure
to have any permit, certificate, license, approval, registration or
authorization required under any Environmental Law, (C) generation,
treatment, storage, recycling, transportation or disposal of any
Hazardous Substance or (D) discharge, emission or release of any
Hazardous Substance;
(ii) no Hazardous Substance has been discharged, emitted, released or
is present at any property now or previously owned, leased or operated
by the Company or any Subsidiary, which circumstance, individually or
in the aggregate, would reasonably be likely to result in a Material
Adverse Effect; and
(iii) there are no Environmental Liabilities that have had or would
reasonably be likely to have a Material Adverse Effect.
(b) There has been no environmental investigation, study, audit, test,
review or other analysis conducted of which the Company has knowledge in
relation to the current or prior business of the Company or any property or
facility now or previously owned or leased by the Company or any Subsidiary
which has not been made available to MergerSub at least five days prior to the
date hereof.
(c) Neither the Company nor any Subsidiary owns or leases any real
property, or conducts any operations, in New Jersey or Connecticut.
(d) For purposes of this Section, the following terms shall have the
meanings set forth below:
(i) "Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances,
rules, judgments, orders, decrees, codes, injunctions, permits,
concessions, grants, franchises, licenses, legally binding agreements
and governmental restrictions, relating to the environment or to
emissions, discharges or releases of pollutants, contaminants or other
hazardous substances or wastes into the environment, including without
limitation ambient air, surface water, ground water or land, or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants,
contaminants or other hazardous substances or wastes or the clean-up or
other remediation thereof;
(ii) "Environmental Liabilities" means any and all liabilities of or
relating to the Company and any Subsidiary, whether contingent or
fixed, actual or potential, known or unknown, which (i) arise under or
relate to matters covered by Environmental Laws and (ii) relate to
actions occurring or conditions existing on or prior to the Effective
Time; and
(iii) "Hazardous Substances" means any toxic, radioactive, corrosive or
otherwise hazardous substance, including petroleum, its derivatives,
by-products and other hydrocarbons, or any substance having any
constituent elements displaying any of the foregoing characteristics,
which in any event is regulated under Environmental Laws.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF MERGERSUB
MergerSub represents and warrants to the Company that:
SECTION 4.01. Corporate Existence and Power. MergerSub is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted. Since the date of its incorporation, MergerSub
has not engaged in any activities other than in connection with or as
contemplated by this Agreement and the Merger or in connection with arranging
any financing required to consummate the transactions contemplated hereby.
SECTION 4.02. Corporate Authorization. The execution, delivery and
performance by MergerSub of this Agreement and the consummation by MergerSub of
the transactions contemplated hereby are within the corporate powers of
MergerSub and have been duly authorized by all necessary corporate action. This
Agreement constitutes a valid and binding agreement of MergerSub.
SECTION 4.03. Governmental Authorization. The execution, delivery and
performance by MergerSub of this Agreement and the consummation by MergerSub of
the transactions contemplated by this Agreement require no action by or in
respect of, or filing with, any governmental body, agency, official or authority
other than (a) the filing of a certificate of merger in accordance with the
Delaware Law, (b) compliance with any applicable requirements of the HSR Act;
(c) compliance with any applicable requirements of the Exchange Act; (d)
compliance with the applicable requirements of the Securities Act; (e)
compliance with any applicable foreign or state securities or Blue Sky laws; and
(f) required filings under Australian and Italian law.
SECTION 4.04. Non-contravention. The execution, delivery and
performance by MergerSub of this Agreement and the consummation by MergerSub of
the transactions contemplated hereby do not and will not (a) contravene or
conflict with the certificate of incorporation or bylaws of MergerSub, (b)
assuming compliance with the matters referred to in Section 4.03, contravene or
conflict with any provision of law, regulation, judgment, order or decree
binding upon MergerSub, or (c) constitute a default under or give rise to any
right of termination, cancellation or acceleration of any right or obligation of
MergerSub or to a loss of any benefit to which MergerSub is entitled under any
agreement, contract or other instrument binding upon MergerSub.
SECTION 4.05. Disclosure Documents. (a) The information with respect to
MergerSub that MergerSub furnishes to the Company in writing specifically for
use in any Company Disclosure Document will not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading (i) in the case of the Company Proxy Statement at the
time the Company Proxy Statement or any amendment or supplement thereto is first
mailed to stockholders of the Company, at the time the stockholders vote on
adoption of this Agreement and at the Effective Time, and (ii) in the case of
any Company Disclosure Document other than the Company Proxy Statement, at the
time of the filing thereof and at the time of any distribution thereof.
(b) The MergerSub Disclosure Documents (as defined in Section 6.01),
when filed, will comply as to form in all material respects with the applicable
requirements of the Securities Act and will not at the time of the filing
thereof, at the time of any distribution thereof or at the time of the meeting
of the Company's stockholders, contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading, provided, that this representation and warranty will not apply to
statements or omissions in the MergerSub Disclosure Documents based upon
information furnished to MergerSub in writing by the Company specifically for
use therein.
SECTION 4.06. Finders' Fees. Except for Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation ("DLJSC"), whose fees will be paid by MergerSub, there is
no investment banker, broker, finder or other intermediary who might be entitled
to any fee or commission from MergerSub or any of its affiliates upon
consummation of the transactions contemplated by this Agreement.
SECTION 4.07. Financing. The Company has received copies of (a) a
commitment letter dated January 20, 1998 from DLJ Merchant Banking Partners II,
L.P., DLJ Merchant Banking Partners II - A, L.P., DLJ Offshore Partners II,
X.X., XXX Xxxxxxxxxxx Xxxxxxxx, X.X., XXX Diversified Partners - A, L.P., DLJ
Millennium Partners, L.P., DLJ Millennium Partners - A, L.P., DLJMB Funding II,
Inc., UK Investment Plan 1997 Partners, DLJ EAB Partners, L.P., DLJ ESC II, L.P.
and DLJ First ESC, L.P. pursuant to which each of the foregoing has committed,
subject to the terms and conditions set forth therein, to purchase securities of
MergerSub for an aggregate amount equal to $140,000,012, (b) a letter dated
January 20, 1998 from DLJ Bridge Fund Inc. ("DLJ Bridge Fund") pursuant to which
DLJ Bridge Fund has committed, subject to the terms and conditions set forth
therein, to purchase Senior Subordinated Notes of a newly-formed Delaware
corporation ("Operating Co.") in the amount of $205,000,000 and Senior PIK Notes
of MergerSub in the amount of $95,000,000 and (c) a commitment letter dated
January 20, 1998 from DLJ Capital Funding, Inc. ("DLJ Senior Debt Fund")
pursuant to which DLJ Senior Debt Fund has committed, subject to the terms and
conditions set forth therein, to enter into one or more credit agreements
providing for loans to Operating Co. of up to $430,000,000. As used in this
Agreement, the aforementioned entities shall hereinafter be referred to as the
"Financing Entities." The aforementioned credit agreements and commitments to
purchase debt and equity securities of MergerSub or Operating Co. shall be
referred to as the "Financing Agreements" and the financing to be provided
thereunder shall be referred to as the "Financing." The aggregate proceeds of
the Financing are in an amount sufficient to pay the Merger Consideration, to
repay the Company's and its Subsidiaries' indebtedness (excluding certain
capital lease obligations) together with any interest, premium or penalties
payable in connection therewith, to provide a reasonable amount of working
capital financing and to pay related fees and expenses (collectively, the
"Required Amounts"). As of the date hereof, none of the commitment letters
relating to the Financing Agreements referred to above has been withdrawn and
MergerSub does not know of any facts or circumstances that may reasonably be
expected to result in any of the conditions set forth in the commitment letters
relating to the Financing Agreements not being satisfied. MergerSub believes
that the Financing will not create any liability to the directors and
stockholders of the Company under any federal or state fraudulent conveyance or
transfer law. MergerSub further believes that, upon the consummation of the
transactions contemplated hereby, including, without limitation, the Financing,
the Surviving Corporation (i) will not become insolvent, (ii) will not be left
with unreasonably small capital, (iii) will not have incurred debts beyond its
ability to pay such debts as they mature, and (iv) the capital of the Company
will not become impaired. As of the date of this Agreement, MergerSub knows of
no reason why the Merger will not be recorded as a "recapitalization" for
financial reporting purposes.
SECTION 4.08. Capitalization. The authorized capital stock of MergerSub
consists of (i) 30,000,000 shares of MergerSub Common Stock, of which as of the
date hereof, there were outstanding 58,000 shares and (ii) 15,000,000 shares of
MergerSub Preferred Stock, of which as of the date hereof no shares were
outstanding. All outstanding shares of capital stock of MergerSub have been duly
authorized and validly issued and are fully paid and nonassessable. As of the
moment immediately prior to the Effective Time, 2,608,696 shares of MergerSub
Common Stock and 2,000,000 shares of MergerSub Preferred Stock, and MergerSub
Warrants to acquire 353,428 shares of MergerSub Common Stock at an exercise
price of not less than $0.01 per share, will be outstanding; except as set forth
in this Section, there will be, at the Effective Time, (a) no shares of capital
stock or other voting securities of MergerSub, (b) no securities of MergerSub
convertible into or exchangeable for shares of capital stock or voting
securities of MergerSub and (c) no options or other rights to acquire from
MergerSub, and no obligation of MergerSub to issue any capital stock, voting
securities or securities convertible into or exchangeable for capital stock or
voting securities of MergerSub (the items referred to in clauses (a), (b) and
(c) being referred to collectively as the "MergerSub Securities"). There are no
outstanding obligations of MergerSub to repurchase, redeem or otherwise acquire
any MergerSub Securities.
ARTICLE 5
COVENANTS OF THE COMPANY
The Company agrees that:
SECTION 5.01. Conduct of the Company. Except as otherwise specifically
provided in this Agreement, from the date hereof to the Effective Time, the
Board of Directors of the Company shall not approve or authorize any action that
would allow the Company and its Subsidiaries to carry on their respective
businesses other than in the ordinary and usual course of business and
consistent with past practice or any action that would prevent the Company and
its Subsidiaries from using their reasonable best efforts to (i) preserve intact
its present business organization, (ii) maintain in effect all federal, state
and local licenses, approvals and authorizations, including, without limitation,
all permits that are required for the Company or any of its Subsidiaries to
carry on their business, (iii) keep available the services of its key officers
and employees and (iv) maintain satisfactory relationships with its customers,
lenders, suppliers and others having business relationships with it. Without
limiting the generality of the foregoing, and except as otherwise specifically
provided in this Agreement, without the prior written consent of MergerSub,
prior to the Effective Time, the Board of Directors of the Company shall not,
nor shall it authorize or direct the Company or any Subsidiary, directly or
indirectly, to:
(a) adopt or propose any change in its certificate of incorporation or
bylaws;
(b) except pursuant to existing agreements or arrangements or as set
forth on Schedule 5.01(b), (i) acquire (by merger, consolidation or acquisition
of stock or assets) any material corporation, partnership or other business
organization or division thereof, or sell, lease or otherwise dispose of a
material subsidiary or a material amount of assets or securities; (ii) waive,
release, grant, or transfer any rights of material value; (iii) modify or change
in any material respect any existing material license, lease, contract, or other
document; (iv) except to refund or refinance commercial paper, incur, assume or
prepay an amount of long-term or short-term debt, except in the ordinary course
of business, consistent with past practice; (v) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other person, except in the ordinary
course of business, consistent with past practice; (vi) make any loans, advances
or capital contributions to, or investments in, any other person, except in the
ordinary course of business, consistent with past practice; or purchase any
property or assets of any other individual or entity, except in the ordinary
course of business, consistent with past practice; or (vii) authorize any new
capital expenditures which, in the aggregate, are in excess of $15,000,000;
(c) take any action that would make any representation and warranty of
the Company hereunder inaccurate in any respect at, or as of any time prior to,
the Effective Time, or omit to take any action necessary to prevent any such
representation or warranty from being inaccurate in any respect at any such
time;
(d) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock,
other than cash dividends and distributions by a wholly owned subsidiary of the
Company to the Company or to a subsidiary all of the capital stock which is
owned directly or indirectly by the Company, or redeem, repurchase or otherwise
acquire or offer to redeem, repurchase, or otherwise acquire any of its
securities or any securities of its subsidiaries;
(e) except as expressly as contemplated by this Agreement, adopt or
amend any bonus, profit sharing, compensation, severance, termination, stock
option, pension, retirement, deferred compensation, employment or employee
benefit plan, agreement, trust, plan, fund or other arrangement for the benefit
and welfare of any director, officer or employee, or (except for normal
increases in the ordinary course of business that are consistent with past
practices and that, in the aggregate, do not result in a material increase in
benefits or compensation expense to the Company) increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay any
benefit not required by any existing plan or arrangement (including, without
limitation, the granting of stock options or stock appreciation rights or the
removal of existing restrictions in any benefit plans or agreements);
(f) revalue in any material respect any of its assets, including,
without limitation, writing down the value of inventory in any material manner
or write-off of notes or accounts receivable in any material manner;
(g) pay, discharge or satisfy any material claims, liabilities or
obligations (whether absolute, accrued, asserted or unasserted, contingent or
otherwise) other than the payment, discharge or satisfaction in the ordinary
course of business, consistent with past practices, of liabilities reflected or
reserved against in the consolidated financial statements of the Company or
incurred in the ordinary course of business, consistent with past practices;
(h) make any tax election or settle or compromise any material income
tax liability;
(i) take any action other than in the ordinary course of business and
consistent with past practices with respect to accounting policies or
procedures; or
(j) agree or commit to do any of the foregoing.
SECTION 5.02. Stockholder Meeting; Proxy Material. The Company shall
cause a meeting of its stockholders (the "Company Stockholder Meeting") to be
duly called and held as soon as reasonably practicable for the purpose of voting
on the approval and adoption of this Agreement and the Merger. The Board of
Directors of the Company shall, subject to its fiduciary duties as advised by
counsel, recommend approval and adoption of this Agreement and the Merger by the
Company's stockholders. In connection with such meeting, the Company (a) will
promptly prepare and file with the SEC, will use its best efforts to have
cleared by the SEC and will thereafter mail to its stockholders as promptly as
practicable the Company Proxy Statement and all other proxy materials for such
meeting, (b) will use its best efforts to obtain the necessary approvals by its
stockholders of this Agreement and the transactions contemplated hereby and (c)
will otherwise comply with all legal requirements applicable to such meeting.
SECTION 5.03. Access to Information. From the date hereof until the
Effective Time, the Company will give MergerSub, its counsel, financial
advisors, auditors and other authorized representatives full access to the
offices, properties, books and records of the Company and the Subsidiaries, will
furnish to MergerSub, their counsel, financial advisors, auditors and other
authorized representatives such financial and operating data and other
information as such Persons may reasonably request and will instruct the
Company's employees, counsel and financial advisors to cooperate with MergerSub
in its investigation of the business of the Company and the Subsidiaries;
provided that no investigation pursuant to this Section shall affect any
representation or warranty given by the Company to MergerSub hereunder; and
provided, further that any information provided to MergerSub pursuant to this
Section 5.03 shall be subject to the Confidentiality Agreement dated as of
November 6, 1997 between the Company and DLJ Merchant Banking II, Inc. (the
"Confidentiality Agreement").
SECTION 5.04. Other Offers. (a) Neither the Company nor any of its
Subsidiaries shall (whether directly or indirectly through advisors, agents or
other intermediaries), nor shall the Company or any of its Subsidiaries
authorize or permit any of its or their officers, directors, agents,
representatives, advisors or Subsidiaries to (x) solicit, initiate or take any
action knowingly to facilitate the submission of inquiries, proposals or offers
from any Third Party (as defined below) (other than MergerSub) relating to (i)
any acquisition or purchase of 20% or more of the consolidated assets of the
Company and its Subsidiaries or of over 20% of any class of equity securities of
the Company or any of its Subsidiaries, (ii) any tender offer (including a self
tender offer) or exchange offer that if consummated would result in any Third
Party beneficially owning 20% or more of any class of equity securities of the
Company or any of its Subsidiaries, (iii) any merger, consolidation, business
combination, sale of substantially all assets, recapitalization, liquidation,
dissolution or similar transaction involving the Company or any of its
Subsidiaries whose assets, individually or in the aggregate, constitute more
than 20% of the consolidated assets of the Company other than the transactions
contemplated by this Agreement, or (iv) any other transaction the consummation
of which would or could reasonably be expected to impede, interfere with,
prevent or materially delay the Merger or which would or could reasonably be
expected to materially dilute the benefits to MergerSub of the transactions
contemplated hereby (collectively, "Acquisition Proposals"), or agree to or
endorse any Acquisition Proposal, (y) enter into or participate in any
discussions or negotiations regarding any of the foregoing, or furnish to any
Third Party any information with respect to its business, properties or assets
or any of the foregoing or (z) grant any waiver or release under any standstill
or similar agreement with respect to any class of equity securities of the
Company or any of its Subsidiaries; provided, however, that the foregoing shall
not prohibit the Company (either directly or indirectly through advisors, agents
or other intermediaries) from (i) furnishing information pursuant to an
appropriate confidentiality letter (which letter shall not be less favorable to
the Company in any material respect than the Confidentiality Agreement, and a
copy of which shall be provided for informational purposes only to MergerSub)
concerning the Company and its businesses, properties or assets to a Third Party
who has made a bona fide Acquisition Proposal, (ii) engaging in discussions or
negotiations with such a Third Party who has made a bona fide Acquisition
Proposal, (iii) following receipt of a bona fide Acquisition Proposal, taking
and disclosing to its stockholders a position contemplated by Rule 14e-2(a)
under the Exchange Act or otherwise making disclosure to its stockholders, (iv)
following receipt of a bona fide Acquisition Proposal, failing to make or
withdrawing or modifying its recommendation referred to in Section 5.02 and/or
(v) taking any non-appealable, final action ordered to be taken by the Company
by any court of competent jurisdiction but in each case referred to in the
foregoing clauses (i) through (iv) only to the extent that the Board of
Directors of the Company shall have concluded in good faith on the basis of
advice from outside counsel that such action is required to prevent the Board of
Directors of the Company from breaching its fiduciary duties to the stockholders
of the Company under applicable law; provided, further, that (A) the Board of
Directors of the Company shall not take any of the foregoing actions referred to
in clauses (i) through (iv) until after giving reasonable notice to MergerSub
with respect to its intent to take such action and (B) if the Board of Directors
of the Company receives an Acquisition Proposal, to the extent it may do so
without breaching its fiduciary duties as advised by counsel and as determined
in good faith and without violating any of the conditions of such Acquisition
Proposal, then the Company shall promptly inform MergerSub of the terms and
conditions of such proposal and the identity of the person making it. The
Company will immediately cease and cause its advisors, agents and other
intermediaries to cease any and all existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any of the
foregoing. As used in this Agreement, the term "Third Party" means any person,
corporation, entity or "group," as defined in Section 13(d) of the Exchange Act,
other than MergerSub or any of its affiliates.
(b) If a Payment Event (as hereinafter defined) occurs, the Company
shall pay to MergerSub, within two business days following such Payment Event, a
fee of $16,732,853.
(c) "Payment Event" means (w) the termination of this Agreement
pursuant to Section 9.01(e); (x) the termination of this Agreement pursuant to
Section 9.01(f) in contemplation of a merger agreement or a tender or exchange
offer or any transaction of the type listed in clause (z) below, on financial
terms more favorable to the Company's stockholders than the Merger; (y) the
termination of this Agreement by MergerSub pursuant to Section 9.01(c) but only
if the breach of covenant or warranty or misrepresentation in question arises
out of the bad faith or wilful misconduct of the Company; or (z) the occurrence
of any of the following events within 12 months of the termination of this
Agreement pursuant to Section 9.01(g) whereby stockholders of the Company
receive, pursuant to such event, cash, securities or other consideration having
an aggregate value, when taken together with the value of any securities of the
Company or its Subsidiaries otherwise held by the stockholders of the Company
after such event, in excess of $34.50 per Share: the Company is acquired by
merger or otherwise by a Third Party; a Third Party acquires more than 50% of
the total assets of the Company and its Subsidiaries, taken as a whole; a Third
Party acquires more than 50% of the outstanding Shares or the Company adopts and
implements a plan of liquidation, recapitalization or share repurchase relating
to more than 50% of the outstanding Shares or an extraordinary dividend relating
to more than 50% of the outstanding Shares or 50% of the assets of the Company
and its Subsidiaries, taken as a whole.
(d) Upon the termination of this Agreement for any reason other than
(i) a termination by either the Company or MergerSub pursuant to Section
9.01(a), (ii) a termination by the Company pursuant to Section 9.01(c) or (iii)
a termination that follows a failure of the conditions set forth in Sections
8.01(b), 8.01(c), 8.01(d),8.02(b), 8.02(c),8.02(d), 8.02(e) or 8.03 to be
satisfied, the Company shall reimburse MergerSub and its affiliates not later
than two business days after submission of reasonable documentation thereof for
100% of their documented out-of-pocket fees and expenses (including, without
limitation, the reasonable fees and expenses of their counsel and investment
banking fees), actually incurred by any of them or on their behalf in connection
with this Agreement and the transactions contemplated hereby and the arrangement
of, obtaining the commitment to provide or obtaining the Financing for the
transactions contemplated by this Agreement (including fees payable to the
Financing Entities and their respective counsel) provided that the aggregate
amount payable pursuant to this Section 5.04(d) shall not exceed $7,000,000.
(e) The Company acknowledges that the agreements contained in this
Section 5.04 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, MergerSub would not enter into
this Agreement; accordingly, if the Company fails to promptly pay any amount due
pursuant to this Section 5.04, and, in order to obtain such payment, the other
party commences a suit which results in a judgment against the Company for the
fee or fees and expenses set forth in this Section 5.04, the Company shall also
pay to MergerSub its costs and expenses incurred in connection with such
litigation.
(f) This Section 5.04 shall survive any termination of this Agreement,
however caused.
SECTION 5.05. Notices of Certain Events. The Company shall promptly
notify MergerSub of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge threatened against, relating to or
involving or otherwise affecting the Company or any Subsidiary which, if pending
on the date of this Agreement, would have been required to have been disclosed
pursuant to Section 3.12 or which relate to the consummation of the transactions
contemplated by this Agreement.
SECTION 5.06. Resignation of Directors. Prior to the Effective Time,
the Company shall deliver to MergerSub evidence satisfactory to MergerSub of the
resignation of all directors of the Company (other than Xxxxxxx X. Xxxxxx and
Xxxxx X. Xxxx) effective at the Effective Time.
SECTION 5.07. Rights Agreement. The Company covenants and agrees that
it will not (i) redeem the Rights, (ii) amend the Rights Agreement or (iii) take
any action which would allow any Person (as defined in the Rights Agreement)
other than the MergerSub to acquire beneficial ownership of 10% or more of the
Common Shares without causing a Distribution Date (as such term is defined in
the Rights Agreement) to occur.
SECTION 5.08. Preferred Stock. Provided that MergerSub shall have
provided to Company reasonably in advance of the first mailing to stockholders
of the Company Proxy Statement the terms thereof, prior to the Effective Time,
the Board of Directors of the Company shall take all necessary action to
establish the terms of the Mirror Preferred Stock and file the Certificate of
Designation with respect thereto with the Delaware Secretary of State, all in
accordance with the applicable provisions of Delaware Law. The "Mirror Preferred
Stock" shall be Preferred Stock of the Company, the terms of and certificate of
designations of which shall be identical in all respects (except the name of the
Company) to the terms of the MergerSub Preferred Stock and the certificate of
designations therefor.
SECTION 5.09. Formation of Operating Co. Prior to the Effective Time,
the Company shall take all necessary action to incorporate Operating Co., a
direct, wholly-owned subsidiary of the Company, in accordance with the
applicable provisions of Delaware Law. Operating Co. shall be the holder,
directly or indirectly, of all the capital stock of each other Subsidiary.
SECTION 5.10. Outstanding Debt Securities. (a) Upon the occurrence of
the Effective Time, the Company shall call for redemption and redeem all of its
outstanding 10.25% Senior Notes due May 1, 2002 (the "Outstanding Senior Notes")
so that, as promptly as practicable after the Effective Time, all such
Outstanding Senior Notes shall be redeemed. (b) Prior to the Effective Time, the
Company shall make a tender offer and consent solicitation to all holders of its
outstanding 10.75% Senior Subordinated Notes due November 1, 2003 (the
"Outstanding Subordinated Notes") for the purchase of all of the Outstanding
Subordinated Notes (and the amendment of the related indenture to eliminate
financial covenants therein), such that the scheduled closing date for such
tender offer shall be the Effective Time and the Company shall purchase all
Outstanding Subordinated Notes validly tendered thereunder.
SECTION 5.11. Solvency Advice. The Company shall request an
independent advisor to deliver the advice contemplated by Section 8.03(b) as
promptly as practicable.
SECTION 5.12. Transfers by Affiliates. The Company shall use its
reasonable best efforts to obtain and provide to MergerSub prior to the Closing
undertakings in writing from each person, if any, who according to counsel for
the Company might reasonably be considered "affiliates" of the Company within
the meaning of Rule 145(c) of the SEC pursuant to the Securities Act (each, an
"Affiliate"), in each case in form and substance satisfactory to counsel for
MergerSub providing (i) such Affiliate will notify MergerSub in writing before
offering for sale or selling or otherwise disposing of any shares of Company
Stock owned by such Affiliate and (ii) no such sale or other disposition shall
be made unless and until the Affiliate has supplied to MergerSub an opinion of
counsel for the Affiliate (which opinion and counsel shall be reasonably
satisfactory to MergerSub) to the effect that such transfer is not in violation
of the Securities Act.
ARTICLE 6
COVENANTS OF MERGERSUB
MergerSub agrees that:
SECTION 6.01. SEC Filings. As soon as practicable after the date of
announcement of the execution of the Merger Agreement, MergerSub shall file
(separately, or as part of the Company Proxy Statement) with the SEC, if
required, a Rule 13E-3 Transaction Statement ("Transaction Statement") with
respect to the Merger (together with any supplements or amendments thereto,
collectively the "MergerSub Disclosure Documents"). MergerSub and the Company
each agrees to correct any information provided by it for use in the MergerSub
Disclosure Documents if and to the extent that it shall have become false or
misleading in any material respect. MergerSub agrees to take all steps necessary
to cause the MergerSub Disclosure Documents as so corrected to be filed with the
SEC and to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. The Company and its
counsel shall be given an opportunity to review and comment on each MergerSub
Disclosure Document prior to its being filed with the SEC.
SECTION 6.02. Voting of Shares. MergerSub agrees to vote all Shares
beneficially owned by it in favor of adoption of this Agreement at the Company
Stockholder Meeting.
SECTION 6.03. Director and Officer Liability. For a period of 6 years
after the Effective Time, MergerSub will cause the Surviving Corporation to
indemnify and hold harmless the present and former officers and directors of the
Company in respect of acts or omissions occurring prior to the Effective Time to
the extent provided under the Company's certificate of incorporation and bylaws
in effect on the date hereof; provided that such indemnification shall be
subject to any limitation imposed from time to time under applicable law. For a
period of 6 years after the Effective Time, MergerSub will cause the Surviving
Corporation to use its best efforts to provide officers' and directors'
liability insurance in respect of acts or omissions occurring prior to the
Effective Time covering each such Person currently covered by the Company's
officers' and directors' liability insurance policy on terms with respect to
coverage and amount no less favorable than those of such policy in effect on the
date hereof, provided that in satisfying its obligation under this Section,
MergerSub shall not be obligated to cause the Surviving Corporation to pay
premiums in excess of 125% of the amount per annum the Company paid in its last
full fiscal year, which amount has been disclosed to MergerSub.
SECTION 6.04. Employee Plans and Benefit Arrangements. (a) From and
after the Effective Time, subject to applicable law, the Surviving Corporation
and its subsidiaries will honor obligations of the Company and its subsidiaries
incurred prior to the Effective Time under all existing Employee Plans and
Benefit Arrangements and International Plans (as defined in Section 3.14).
(b) MergerSub agrees that, for at least one year from the Effective
Time, subject to applicable law, the Surviving Corporation and its Subsidiaries
will provide benefits to their employees which will, in the aggregate, be
comparable to those currently provided by the Company and its subsidiaries to
their employees. Notwithstanding the foregoing, nothing herein shall obligate or
require the Surviving Corporation or any of its subsidiaries to provide its
employees with a plan or arrangement similar to the equity-based compensation
plans currently maintained by the Company and nothing herein shall limit the
Surviving Corporation's right to amend, modify or terminate any Employee Plan or
Benefit Arrangement, as defined in Section 3.14.
(c) It is MergerSub's current intention to maintain the Surviving
Corporation's headquarters at its present location or another location in the
greater St. Louis area.
SECTION 6.05. Financing. MergerSub shall use its reasonable best
efforts to obtain the Financing. In the event that any portion of such Financing
becomes unavailable, regardless of the reason therefor, MergerSub will use its
reasonable best efforts to obtain alternative financing on substantially
comparable or more favorable terms from other sources.
SECTION 6.06. NASDAQ Listing. MergerSub will not take any action, for
at least three years after the Effective Time of the Merger, to cause the
Company Stock to be de-listed from The NASDAQ National Market System ("NASDAQ");
provided, however, that the MergerSub may cause or permit the Company Stock to
be de-listed in connection with a transaction which results in the termination
of registration of such securities under Section 12 of the Exchange Act, and
provided, further, that nothing in this Section 6.06 shall require the Company
to take any affirmative action to prevent the Company Stock from being de-listed
by NASDAQ if the Company Stock ceases to meet the applicable listing standards.
ARTICLE 7
COVENANTS OF MERGERSUB AND THE COMPANY
The parties hereto agree that:
SECTION 7.01. Best Efforts. Subject to the terms and conditions of this
Agreement, each party will use its reasonable best efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement. Each party shall also refrain from
taking, directly or indirectly, any action contrary to or inconsistent with the
provisions of this Agreement, including action which would impair such party's
ability to consummate the Merger and the other transactions contemplated hereby.
Without limiting the foregoing, the Company and its Board of Directors shall use
their reasonable best efforts to (a) take all action necessary so that no state
takeover statute or similar statute or regulation is or becomes applicable to
the Merger or any of the other transactions contemplated by this Agreement and
(b) if any state takeover statute or similar statute or regulation becomes
applicable to any of the foregoing, take all action necessary so that the Merger
and the other transactions contemplated by this Agreement may be consummated as
promptly as practicable on the terms contemplated by this Agreement and
otherwise to minimize the effect of such statute or regulation on the Merger and
the other transactions contemplated by this Agreement.
SECTION 7.02. Certain Filings. (a) The Company and MergerSub shall use
their respective reasonable best efforts to take or cause to be taken, (i) all
actions necessary, proper or advisable by such party with respect to the prompt
preparation and filing with the SEC of a Form S-4 registration statement (the
"Registration Statement"), the Company Disclosure Documents and the MergerSub
Disclosure Documents, (ii) such actions as may be required to have the
Registration Statement declared effective under the Securities Act and to have
the Company Proxy Statement cleared by the SEC, in each case as promptly as
practicable, and (iii) such actions as may be required to have to be taken under
state securities or applicable Blue Sky laws in connection with the issuance of
the securities contemplated hereby.
(b) The Company agrees to provide, and will cause its Subsidiaries and
its and their respective officers, employees and advisors to provide, (i) prior
to the Closing, all documents that MergerSub may reasonably request relating to
the existence of the Company and the Subsidiaries and the authority of the
Company for this Agreement, all in form and substance reasonably satisfactory to
MergerSub, and (ii) all necessary cooperation in connection with the arrangement
of any financing to be consummated contemporaneous with or at or after the
Closing in respect of the transactions contemplated by this Agreement, including
without limitation, (x) participation in meetings, due diligence sessions and
road shows, (y) the preparation of offering memoranda, private placement
memoranda, prospectuses and similar documents, and (z) the execution and
delivery of any commitment letters, underwriting or placement agreements, pledge
and security documents, other definitive financing documents, or other requested
certificates or documents, including a certificate of the chief financial
officer of the Company with respect to solvency matters, comfort letters of
accountants and legal opinions as may be requested by MergerSub; provided that
the form and substance of any of the material documents referred to in clause
(y) , and the terms and conditions of any of the material agreements and other
documents referred to in clause (z), shall be substantially consistent with the
terms and conditions of the financing required to satisfy the condition
precedent set forth in Section 8.02(c).
(c) The Company and MergerSub shall cooperate with one another (i) in
determining whether any action by or in respect of, or filing with, any
governmental body, agency or official, or authority is required, or any actions,
consents, approvals or waivers are required to be obtained from parties to any
material contracts, in connection with the consummation of the transactions
contemplated by this Agreement and (ii) in seeking any such actions, consents,
approvals or waivers or making any such filings, furnishing information required
in connection therewith or with the Company Disclosure Documents and MergerSub
Disclosure Documents and seeking timely to obtain any such actions, consents,
approvals or waivers.
SECTION 7.03. Public Announcements. MergerSub and the Company will
consult with each other before issuing any press release or making any public
statement with respect to this Agreement and the transactions contemplated
hereby and, except for any press release or public statement as may be required
by applicable law or any listing agreement with any national securities exchange
or the Nasdaq Stock Market, will not issue any such press release or make any
such public statement prior to such consultation.
SECTION 7.04. Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or MergerSub, any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of the Company or MergerSub, any other actions and things to vest,
perfect or confirm of record or otherwise in the Surviving Corporation any and
all right, title and interest in, to and under any of the rights, properties or
assets of the Company acquired or to be acquired by the Surviving Corporation as
a result of, or in connection with, the Merger.
ARTICLE 8
CONDITIONS TO THE MERGER
SECTION 8.01. Conditions to the Obligations of Each Party. The
obligations of the Company and MergerSub to consummate the Merger are
subject to the satisfaction of the following conditions:
(a) This Agreement shall have been adopted by the stockholders of the
Company in accordance with Delaware law;
(b) Any applicable waiting period under the HSR Act relating to the
Merger shall have expired or been terminated;
(c) No provision of any applicable law or regulation and no judgment,
order, decree or injunction shall prohibit or restrain the consummation of the
Merger; provided, however, that the Company and MergerSub shall each use its
reasonable best efforts to have any such judgment, order, decree or injunction
vacated;
(d) All consents, approvals and licenses of any governmental or other
regulatory body required in connection with the execution, delivery and
performance of this Agreement and for the Surviving Corporation to conduct the
business of the Company in substantially the manner now conducted, shall have
been obtained, unless the failure to obtain such consents, authorizations,
orders or approvals would not have a Material Adverse Effect after giving effect
to the transactions contemplated by this Agreement (including the Financing);
and
(e) The Registration Statement shall have been declared effective and
no stop order suspending the effectiveness of the Registration Statement shall
be in effect and no proceedings for such purpose shall be pending before or
threatened by the SEC.
SECTION 8.02. Conditions to the Obligations of MergerSub. The
obligations of MergerSub to consummate the Merger are subject to the
satisfaction of the following further conditions:
(a) The Company shall have performed in all material respects all of
its obligations hereunder required to be performed by it at or prior to the
Effective Time, the representations and warranties of the Company contained in
this Agreement and in any certificate or other writing delivered by the Company
pursuant hereto shall be true in all material respects at and as of the
Effective Time (provided that representations made as of a specific date shall
be required to be true as of such date only) as if made at and as of such time
and MergerSub shall have received a certificate signed by the Chief Executive
Officer of the Company to the foregoing effect;
(b) There shall not be instituted or pending (x) any action or
proceeding by any government or governmental authority or agency or (y) any
action or proceeding by any other person, in any case referred to in clauses (x)
and (y), before any court or governmental authority or agency that has
reasonable likelihood of success (i) challenging or seeking to make illegal, to
delay materially or otherwise directly or indirectly to restrain or prohibit the
consummation of the Merger or seeking to obtain material damages or otherwise
directly or indirectly relating to the transactions contemplated by this
Agreement, (ii) seeking to restrain or prohibit MergerSub's (including its
Subsidiaries and affiliates) ownership or operation of all or any material
portion of the business or assets of the Company and its Subsidiaries, taken as
a whole, or to compel MergerSub or any of its Subsidiaries or affiliates to
dispose of or hold separate all or any material portion of the business or
assets of the Company and its Subsidiaries, taken as a whole, (iii) seeking to
impose or confirm material limitations on the ability of MergerSub or any of its
Subsidiaries or affiliates to effectively control the business or operations of
the Company and its Subsidiaries, taken as a whole, or effectively to exercise
full rights of ownership of the Shares or Company Stock, including, without
limitation, the right to vote any Shares or Company Stock acquired or owned by
MergerSub or any of its Subsidiaries or affiliates on all matters properly
presented to the Company's stockholders, or (iv) seeking to require divestiture
by MergerSub or any of its Subsidiaries or affiliates of any Shares or Company
Stock, and no court, arbitrator or governmental body, agency or official shall
have issued any judgment, order, decree or injunction, and there shall not be
any statute, rule or regulation, that, in the sole judgment of MergerSub is
likely, directly or indirectly, to result in any of the consequences referred to
in the preceding clauses (i) through (iv);
(c) The funds in an amount at least equal to the Required Amounts
shall have been made available to MergerSub and/or Operating Co. as
contemplated in Section 4.07;
(d) The holders of not more than 6% of the outstanding Shares shall
have demanded appraisal of their Shares in accordance with Delaware Law;
(e) No change in accounting practice or policies after the date hereof
shall cause MergerSub reasonably to conclude that the Merger will not be
recorded as a "recapitalization" for financial reporting purposes;
(f) The certificate of designation for the Mirror Preferred Stock
shall have been accepted for filing by the Delaware Secretary of State; and
(g) Total indebtedness (long and short term) of the Company and its
Subsidiaries as of the Effective Time shall not exceed $410,000,000, excluding
for purposes hereof any indebtedness incurred in connection with the proposed
acquisitions set forth in Schedule 5.01(b) hereof, but including the aggregate
amount of participation interests outstanding under the Company's trade accounts
receivable securitization agreement.
SECTION 8.03. Conditions to the Obligation of the Company. The
obligation of the Company to consummate the Merger is subject to the
satisfaction of the following further condition:
(a) MergerSub shall have performed in all material respects all of its
obligations hereunder required to be performed by it at or prior to the
Effective Time, the representations and warranties of MergerSub contained in
this Agreement and in any certificate or other writing delivered by either of
them pursuant hereto shall be true in all material respects at and as of the
Effective Time (provided that representations made as of a specific date shall
be required to be true as of such date only) as if made at and as of such time
and the Company shall have received a certificate signed by the President or any
Vice President of MergerSub to the foregoing effect.
(b) The Board of Directors of the Company shall have received advice,
reasonably satisfactory to the Board, from an independent advisor confirming the
belief of MergerSub set forth in the second to last sentence of Section 4.07.
ARTICLE 9
TERMINATION
SECTION 9.01. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of this Agreement by the stockholders of the
Company):
(a) by mutual written consent of the Company on the one hand and
MergerSub on the other hand;
(b) by either the Company or MergerSub, if the Merger has not been
consummated by June 30, 1998, provided that the party seeking to exercise such
right is not then in breach in any material respect of any of its obligations
under this Agreement;
(c) by either the Company or MergerSub, if MergerSub (in the case of
termination by the Company), or the Company (in the case of termination by
MergerSub) shall have breached in any material respect any of its obligations
under this Agreement or any representation and warranty of MergerSub (in the
case of termination by the Company) or the Company (in the case of termination
by MergerSub) shall have been incorrect in any material respect when made or at
any time prior to the Closing;
(d) by either the Company or MergerSub, if there shall be any law or
regulation that makes consummation of the Merger illegal or otherwise prohibited
or if any judgment, injunction, order or decree enjoining MergerSub or the
Company from consummating the Merger is entered and such judgment, injunction,
order or decree shall become final and nonappealable;
(e) by MergerSub if the Board of Directors of the Company shall have
withdrawn or modified or amended, in a manner adverse to MergerSub, its approval
or recommendation of this Agreement and the Merger or its recommendation that
stockholders of the Company adopt and approve this Agreement and the Merger, or
approved, recommended or endorsed any proposal for a transaction other than the
Merger (including a tender or exchange offer for Shares) or if the Company has
failed to call the Company Stockholders Meeting or failed as promptly as
practicable after the Registration Statement is declared effective to mail the
Company Proxy Statement to its stockholders or failed to include in such
statement the recommendation referred to above;
(f) by the Company if prior to the Effective Time the Board of
Directors of the Company shall have withdrawn or modified or amended, in a
manner adverse to MergerSub, its approval or recommendation of this Agreement
and the Merger or its recommendation that stockholders of the Company adopt and
approve this Agreement and the Merger in order to permit the Company to execute
a definitive agreement providing for the acquisition of the Company or in order
to approve a tender or exchange offer for any or all of the Shares, in either
case, that is determined by the Board of Directors of the Company to be on
financial terms more favorable to the Company's stockholders than the Merger,
provided that the Company shall be in compliance with Section 5.04;
(g) by either the Company or MergerSub if, at a duly held
stockholders meeting of the Company or any adjournment thereof at which this
Agreement and the Merger is voted upon, the requisite stockholder adoption and
approval shall not have been obtained.
The party desiring to terminate this Agreement pursuant to Sections
9.01(b)-(g) shall give written notice of such termination to the other party in
accordance with Section 10.01.
SECTION 9.02. Effect of Termination. If this Agreement is terminated
pursuant to Section 9.01, this Agreement shall become void and of no effect with
no liability on the part of any party hereto, except that the agreements
contained in Sections 5.04 and 10.04 shall survive the termination hereof.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including telecopy or similar
writing) and shall be given,
if to MergerSub, to:
Xxxxx X. Xxxxxx
C/O DLJ Merchant Banking II, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: 000-000-0000
with a copy to:
Xxxxxx X. Xxxxx, Xx.
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
if to the Company, to:
Xxxxx X. Xxxx
Xxxxxxxxx X. Xxxxxxxxx
000 X. Xxxxxx Xx., Xxx. 000
Xx. Xxxxx, XX 00000
Telecopy: (000) 000-0000
with a copy to:
R. Xxxxx Xxxxx
Xxxx Xxxxxxx & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
or such other address or telecopy number as such party may hereafter specify for
the purpose by notice to the other parties hereto. Each such notice, request or
other communication shall be effective (a) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this Section and the
appropriate telecopy confirmation is received or (b) if given by any other
means, when delivered at the address specified in this Section.
SECTION 10.02. Survival of Representations and Warranties. The
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Effective Time or the termination of this Agreement except for the agreements
set forth in Sections 6.03, 6.04 and 6.06 which will survive the Effective Time
and Sections 5.04 and 10.04 which will survive any termination hereof.
SECTION 10.03. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived prior to the Effective Time if, and only if,
such amendment or waiver is in writing and signed, in the case of an amendment,
by the Company and MergerSub or in the case of a waiver, by the party against
whom the waiver is to be effective; provided that after the adoption of this
Agreement by the stockholders of the Company, no such amendment or waiver
shall, without the further approval of such stockholders, alter or change (i)
the amount or kind of consideration to be received in exchange for any shares of
capital stock of the Company, (ii) any term of the certificate of incorporation
of the Surviving Corporation or (iii) any of the terms or conditions of this
Agreement if such alteration or change would adversely affect the holders of any
shares of capital stock of the Company.
(b) No failure or delay by any 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 10.04. Expenses. Except as provided in Section 5.04, all costs
and expenses incurred in connection with this Agreement shall be paid by the
party incurring such cost or expense.
SECTION 10.05. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto.
SECTION 10.06. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of Delaware.
SECTION 10.07. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
THERMADYNE HOLDINGS
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
MERCURY ACQUISITION
CORPORATION
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxx
Title: President
EXHIBIT A
CERTIFICATE OF INCORPORATION
OF THE
SURVIVING CORPORATION
*****
As of the Effective Time, the Restated Certificate of Incorporation of
the Surviving Corporation shall be amended as follows:
Article Second shall be deleted in its entirety, and replaced with the
following:
"SECOND: The address of its registered office in the State of Delaware
is 0000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000. The name of its registered
agent at such address is Corporation Service Company."
Article Fourth shall be deleted in its entirety, and replaced with the
following:
"FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is 45,000,000 consisting of 30,000,000 shares of
Common Stock, par value $.01 per share (the "Common Stock") and 15,000,000
shares of Preferred Stock, par value $.01 per share (the "Preferred Stock"). The
Board of Directors is hereby empowered to authorize by resolution or resolutions
from time to time the issuance of one or more classes or series of Preferred
Stock and to fix the designations, powers, preferences and relative,
participating, optional or other rights, if any, and the qualifications,
limitations or restrictions thereof, if any, with respect to each such class or
series of Preferred Stock and the number of shares constituting each such class
or series, and to increase or decrease the number of shares of any such class or
series to the extent permitted by the General Corporation Law of the State of
Delaware as the same exists or may hereafter be amended ( the "Delaware Law")."
Articles Sixth and Seventh shall be deleted in their entirety, and
replaced by the following:
"SIXTH: The Board of Directors shall have the power to adopt, amend or
repeal the bylaws of the Corporation.
SEVENTH: Election of directors need not be by written ballot unless the
bylaws of the Corporation so provide."
Article Eighth shall be amended to reflect the following change. The
last sentence of Article Eighth shall be deleted in its entirety and replaced by
the following:
"In addition to the circumstances in which a director of the
Corporation is not personally liable as set forth in the foregoing provisions of
this Article EIGHTH, a director shall not be liable to the Corporation or its
stockholders to such further extent as permitted by any law hereafter enacted,
including without limitation any subsequent amendment to the Delaware General
Corporation Law."
Article Ninth shall be deleted in its entirety, and replaced by the
following:
"NINTH: (1) A director of the Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director to the fullest extent permitted by Delaware Law.
(2)(a) Each person (and the heirs, executors or administrators of such
person) who was or is a party or is threatened to be made a party to, or is
involved in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that such person is or was a director or officer of the Corporation or is or was
serving at the request of the Corporation as a director or officer of another
corporation, partnership, joint venture, trust or other enterprise, shall be
indemnified and held harmless by the Corporation to the fullest extent permitted
by Delaware Law. The right to indemnification conferred in this ARTICLE NINTH
shall also include the right to be paid by the Corporation the expenses incurred
in connection with any such proceeding in advance of its final disposition to
the fullest extent authorized by Delaware Law. The right to indemnification
conferred in this ARTICLE NINTH shall be a contract right.
(b) The Corporation may, by action of its Board of Directors, provide
indemnification to such of the officers, employees and agents of the Corporation
to such extent and to such effect as the Board of Directors shall determine to
be appropriate and authorized by Delaware Law.
(3) The Corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any expense, liability or loss
incurred by such person in any such capacity or arising out of his status as
such, whether or not the Corporation would have the power to indemnify him
against such liability under Delaware Law.
(4) The rights and authority conferred in this ARTICLE NINTH shall not
be exclusive of any other right which any person may otherwise have or hereafter
acquire.
(5) Neither the amendment nor repeal of this ARTICLE NINTH, nor the
adoption of any provision of this Certificate of Incorporation or the bylaws of
the Corporation, nor, to the fullest extent permitted by Delaware Law, any
modification of law, shall eliminate or reduce the effect of this ARTICLE NINTH
in respect of any acts or omissions occurring prior to such amendment, repeal,
adoption or modification."
Article Eleventh shall be deleted in its entirety, and replaced by the
following:
"ELEVENTH: The Corporation reserves the right to amend this Certificate
of Incorporation in any manner permitted by Delaware Law and, with the sole
exception of those rights and powers conferred under the above ARTICLE NINTH,
all rights and powers conferred herein on stockholders, directors and officers,
if any, are subject to this reserved power."
Article Twelfth shall be deleted in its entirety.
Except as provided above, the Certificate of Incorporation of the
Surviving Corporation shall remain in full force and effect.
