EXHIBIT 1
AGREEMENT AND PLAN OF MERGER
among
SUNBEAM CORPORATION
LASER ACQUISITION CORP.
CLN HOLDINGS INC.
and
XXXXXXX (PARENT) HOLDINGS INC.
Dated as of
February 27, 1998
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND TERMS
Section 1.1 Certain Definitions . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Other Terms . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE II
THE HOLDINGS MERGER
Section 2.1 The Holdings Merger . . . . . . . . . . . . . . . . . . . 9
Section 2.2 Closing . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.3 Effective Time of the Holdings Merger . . . . . . . . . . 10
Section 2.4 Certificate of Incorporation . . . . . . . . . . . . . . . 10
Section 2.5 By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.6 Directors . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.7 Officers . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.8 Holdings Merger Election . . . . . . . . . . . . . . . . . 11
ARTICLE III
CONVERSION OF SHARES
Section 3.1 Effect on Capital Stock . . . . . . . . . . . . . . . . . 11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF HOLDINGS AND PARENT HOLDINGS
Section 4.1 Organization and Qualification . . . . . . . . . . . . . . 12
Section 4.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.3 Authority Relative to this Agreement
and the Registration Rights Agreement. . . . . . . . . . 13
Section 4.4 No Business Activities of Holdings
and Worldwide . . . . . . . . . . . . . . . . . . . . . 14
Section 4.5 Consents and Approvals; No Violations . . . . . . . . . . 14
Section 4.6 No Litigation . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.7 SEC Reports . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.8 Acquisition of Shares for Investment . . . . . . . . . . . 16
Section 4.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.10 Affiliate Agreements . . . . . . . . . . . . . . . . . . 18
Section 4.11 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 4.12 XXXXx Escrow Fund . . . . . . . . . . . . . . . . . . . . 18
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF LASER
Section 5.1 Laser Merger Sub . . . . . . . . . . . . . . . . . . . . . 19
Section 5.2 Authority Relative to this Agreement . . . . . . . . . . . 19
Section 5.3 Consents and Approvals; No Violations . . . . . . . . . . 20
Section 5.4 Acquisition of Shares for Investment . . . . . . . . . . . 20
ARTICLE VI
COVENANTS
Section 6.1 Conduct of Business . . . . . . . . . . . . . . . . . . . 21
Section 6.2 Reasonable Best Efforts . . . . . . . . . . . . . . . . . 22
Section 6.3 Consents . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.4 HSR Notification . . . . . . . . . . . . . . . . . . . . . 23
Section 6.5 XXXXx Refund . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.6 Listing Application . . . . . . . . . . . . . . . . . . . 24
Section 6.7 Access to Information; Confidentiality . . . . . . . . . . 24
Section 6.8 Advice of Changes . . . . . . . . . . . . . . . . . . . . 25
Section 6.9 Affiliate Agreements; Intercompany
Accounts . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 6.10 Registration Rights Agreement . . . . . . . . . . . . . . 26
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 7.1 Sales of Laser Shares . . . . . . . . . . . . . . . . . . 26
Section 7.2 Restrictive Legend . . . . . . . . . . . . . . . . . . . . 26
ARTICLE VIII
CONDITIONS TO CONSUMMATION
OF THE HOLDINGS MERGER
Section 8.1 Conditions to Each Party's Obligation
to Effect the Holdings Merger. . . . . . . . . . . . . . 27
Section 8.2 Conditions to Obligation of
Holdings to Effect the Holdings Merger . . . . . . . . . 28
Section 8.3 Conditions to Obligation of Laser to
Effect the Holdings Merger . . . . . . . . . . . . . . 29
ARTICLE IX
TAX MATTERS
Section 9.1 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 9.2 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . 32
Section 9.3 Tax Claims . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 9.4 Assistance and Cooperation . . . . . . . . . . . . . . . . 35
Section 9.5 Adjustment to Merger Consideration . . . . . . . . . . . . 36
Section 9.6 Survival of Obligations . . . . . . . . . . . . . . . . . 36
Section 9.7 Reorganization . . . . . . . . . . . . . . . . . . . . . . 36
Section 9.8 Tax Sharing Agreements . . . . . . . . . . . . . . . . . . 36
Section 9.9 Information . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE X
INDEMNIFICATION; SURVIVAL
Section 10.1 Parent Holdings' Agreement to Indemnify . . . . . . . . . 37
Section 10.2 Conditions of Indemnification
With Respect to Third-Party Claims . . . . . . . . . . 38
Section 10.3 Survival of Representations; Covenants . . . . . . . . . 39
ARTICLE XI
TERMINATION
Section 11.1 Termination . . . . . . . . . . . . . . . . . . . . . . . 39
Section 11.2 Effect of Termination . . . . . . . . . . . . . . . . . . 40
ARTICLE XII
MISCELLANEOUS
Section 12.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 12.2 Amendment . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 12.3 Extension; Waiver . . . . . . . . . . . . . . . . . . . . 41
Section 12.4 Assignment . . . . . . . . . . . . . . . . . . . . . . . 42
Section 12.5 Entire Agreement . . . . . . . . . . . . . . . . . . . . 42
Section 12.6 Parties in Interest . . . . . . . . . . . . . . . . . . . 42
Section 12.7 Expenses . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 12.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . 42
Section 12.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . 42
Section 12.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 12.11 Further Assurances . . . . . . . . . . . . . . . . . . . 42
Section 12.12 Specific Performance . . . . . . . . . . . . . . . . . . 43
Section 12.13 Certain Terms . . . . . . . . . . . . . . . . . . . . . 43
Section 12.14 Interpretation . . . . . . . . . . . . . . . . . . . . . 43
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
February 27, 1998, among Sunbeam Corporation, a Delaware corporation
("Laser"), Laser Acquisition Corp., a Delaware corporation and a wholly
owned subsidiary of Laser ("Laser Merger Sub"), Coleman (Parent) Holdings
Inc., a Delaware corporation ("Parent Holdings"), and CLN Holdings Inc.
("Holdings"), a Delaware corporation and a wholly owned subsidiary of
Parent Holdings.
WHEREAS, the Boards of Directors of Laser, Laser Merger Sub,
Parent Holdings and Holdings deem it advisable and in the best interests of
their respective stockholders that Laser Merger Sub merge with and into
Holdings (the "Holdings Merger"), and such Boards of Directors have
approved the Holdings Merger upon the terms and conditions set forth
herein;
WHEREAS, Parent Holdings, as the sole stockholder of Holdings,
and Laser, as the sole stockholder of Laser Merger Sub, have approved this
Agreement and the transactions contemplated hereby;
WHEREAS, at the Closing (as hereinafter defined), Laser and
Parent Holdings shall enter into a registration rights agreement (the
"Registration Rights Agreement") relating to the registration of the Laser
Shares (as hereinafter defined) issuable to Parent Holdings in the Holdings
Merger, in the form of Exhibit A hereto;
WHEREAS, for United States federal income tax purposes, it is
intended that the Holdings Merger provided for herein shall qualify as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and that this Agreement shall
constitute a plan of reorganization; and
WHEREAS, Laser, Laser Merger Sub and Holdings desire to make
certain representations, warranties, covenants and agreements in connection
with the Holdings Merger and also to prescribe certain conditions to the
Holdings Merger.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND TERMS
Section 1.1 Certain Definitions. As used in this Agreement, the
following terms shall have the meanings set forth or as referenced below:
"1998 Notes" shall have the meaning set forth in Section 4.4(a)
hereof.
"Affiliate" shall mean, as to any Person (as hereinafter defined),
any other Person which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. The term
"control" (including, with correlative meanings, the terms "controlled by"
and "under common control with"), as applied to any Person, means the
possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of voting securities or other ownership interest, by contract
or otherwise.
"Affiliate Agreements" shall have the meaning set forth in Section
4.10 hereof.
"Agreement" shall mean this Agreement, as the same may be amended
or supplemented from time to time in accordance with the terms hereof.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which banks in the City of New York are authorized or obligated
by law or executive order to close.
"Cash Payment" shall have the meaning set forth in Section 3.1(a)
hereof.
"Certificate of Incorporation" shall have the meaning set forth
in Section 2.4 hereof.
"Certificate of Merger" shall have the meaning set forth in
Section 2.3 hereof.
"Closing" shall mean the closing of the transactions contemplated
by this Agreement, as provided for in Section 2.2 hereof.
"Closing Date" shall have the meaning set forth in Section 2.2
hereof.
"Code" shall have the meaning set forth in the recitals hereof.
"Company" shall mean The Xxxxxxx Company, Inc., a Delaware
corporation.
"Company Common Stock" shall mean the common stock, par value
$.01 per share, of the Company.
"Company Merger" shall mean the consummation of the merger
contemplated by the Company Merger Agreement.
"Company Merger Agreement" shall mean the Agreement and Plan of
Merger among Laser, Merger Sub, and the Company, dated as of the date
hereof.
"Competition Laws" shall mean foreign statutes, rules,
regulations, orders, decrees, administrative and judicial doctrines, and
other foreign laws that are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization, lessening
of competition or restraint of trade.
"Confidentiality Agreements" shall have the meaning set forth in
Section 6.7 hereof.
"Consents" shall mean any consent, approval, waiver,
authorization or permit of, or to make any filing with or notification to,
any Governmental Entity or third party.
"Contract" shall mean any note, bond, mortgage, indenture,
license, contract, or other agreement or other instrument or obligation.
"Credit Suisse First Boston" shall mean Credit Suisse First
Boston Corporation, the Company's financial advisor.
"Damages" shall have the meaning set forth in Section 10.1(a)
hereof.
"DGCL" shall mean the General Corporation Law of the State of
Delaware.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Filed Holdings SEC Reports" shall have the meaning set forth in
Section 4.7(b) hereof.
"Filed Worldwide SEC Reports" shall have the meaning set forth in
Section 4.7(b).
"GAAP" shall mean United States generally accepted accounting
principles and practices in effect from time to time, consistently applied.
"Governmental Entity" shall mean any court, arbitral tribunal,
administrative agency or commission or other governmental or regulatory
authority or agency.
"Holdings" shall have the meaning set forth in the recitals
hereof.
"Holdings Common Stock" shall mean the common stock, par value
$1.00, of Holdings.
"Holdings Disclosure Schedule" shall mean the disclosure schedule
being delivered by Holdings concurrently with the execution of this
Agreement.
"Holdings Effective Time" shall have the meaning set forth in
Section 2.3 hereof.
"Holdings Material Adverse Effect" shall mean a material adverse
effect on the business, results of operation or financial condition of
Holdings and its subsidiaries, taken as a whole.
"Holdings Merger" shall have the meaning set forth in the
recitals hereof.
"Holdings SEC Reports" shall have the meaning set forth in
Section 4.7(a) hereof.
"Holdings Shares" shall have the meaning set forth in Section
4.2(a).
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"Indebtedness" of any Person at any date shall include (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current trade liabilities
incurred in the ordinary course of business and payable in accordance with
customary practices), (b) any other indebtedness of such Person that is
evidenced by a note, bond, debenture or similar instrument, (c) all
obligations of such Person in respect of acceptances issued or created for
the account of such Person, (d) all liabilities secured by any Lien (as
hereinafter defined) on any property owned by such Person even though such
Person has not assumed or otherwise become liable for the payment thereof,
and (e) all direct or indirect guarantees of any of the foregoing for the
benefit of another Person.
"Indemnifying Party" shall have the meaning set forth in Section
9.2(c) hereof.
"Indenture" shall mean the Indenture between Holdings, as
successor to Xxxxxxx Escrow Corp., and First Trust National Association
dated May 20, 1997 relating to the Notes.
"IRS" shall mean the Internal Revenue Service of the United
States.
"Laser" shall have the meaning set forth in the recitals hereof.
"Laser Common Stock" shall mean the common stock, par value $.01
per share, of Laser.
"Laser Designees" shall have the meaning set forth in Section
8.3(d) hereof.
"Laser Group" shall have the meaning set forth in Section 10.1(a)
hereof.
"Laser Material Adverse Effect" shall mean a material adverse
effect on the business, results of operation or financial condition of
Laser and its subsidiaries, taken as a whole.
"Laser Merger Sub" shall have the meaning set forth in the
recitals hereof.
"Laser Merger Sub Common Stock" shall mean common stock, par
value $.01 per share, of Laser Merger Sub.
"Laser Shares" shall have the meaning set forth in the first
clause of Section 3.1 hereof.
"Laws" shall mean any federal, state, local or foreign law,
statute, ordinance, rule, regulation, order, judgment or decree,
administrative order or decree, administrative or judicial decision, and
any other executive or legislative proclamation.
"Liens" shall mean any lien, security interest, mortgage, pledge,
charge or similar encumbrance.
"XXXXx" shall mean the Liquid Yield Option Notes due 2013 of
Worldwide.
"XXXXx Escrow Fund" shall mean the funds held in the escrow
account established in connection with the redemption and exchange of the
XXXXx.
"Mafco Demand Note" shall mean the demand note issued by an
Affiliate of Parent Holdings, and held by Worldwide on the date hereof, in
connection with the Tax Sharing Arrangement among certain Affiliates of
Parent Holdings.
"Merger Consideration" shall have the meaning set forth in
Section 3.1(a)(i) hereof.
"Xxxxxx Xxxxxxx" shall mean Xxxxxx Xxxxxxx & Co. Incorporated,
Laser's financial advisor.
"Notes" shall mean the Senior Secured First Priority Discount
Notes due 2001, Senior Secured Second Priority Discount Notes due 2001,
Senior Secured First Priority Discount Exchange Notes due 2001, and Senior
Secured Second Priority Discount Exchange Notes due 2001 of Holdings, as
successor to Xxxxxxx Escrow Corp.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Parent Holdings" shall have the meaning set forth in the
recitals hereof.
"Person" shall mean an individual, a corporation, a partnership,
an association, a trust or other entity or organization.
"Pre-Closing Period" shall mean any taxable year or period that
ends on or before the Closing Date and, with respect to any Straddle
Period, the portion of such Straddle Period deemed to end on and include
the Closing Date.
"Post-Closing Period" shall mean any taxable year or period that
begins after the Closing Date and, with respect to any Straddle Period, the
portion of such Straddle Period deemed to begin after the Closing Date.
"Registration Rights Agreement" shall have the meaning set forth
in the recitals hereof.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Straddle Period" shall mean any taxable year or period beginning
before and ending after the Closing Date.
"subsidiary" shall mean, with respect to any party, any
corporation or other organization, whether incorporated or unincorporated,
of which (i) such party or any other subsidiary of such party is a general
partner or (ii) at least 50% of the securities or other interests having by
their terms ordinary voting power to elect a majority of the Board of
Directors or others performing similar functions with respect to such
corporation or other organization or at least 50% of the value of the
outstanding equity is directly or indirectly owned or controlled by such
party or by any one or more of its subsidiaries, or by such party and one
or more of its subsidiaries.
"Surviving Corporation" shall have the meaning set forth in
Section 2.1 hereof.
"Tax" (and, with correlative meaning, "Taxes" and "Taxable")
shall mean:
(i) any federal, state, local or foreign net income, gross
income, receipts, windfall profit, severance, property, production,
sales, use, license, excise, franchise, employment, payroll,
withholding, alternative or add-on minimum, ad valorem, transfer,
stamp, or environmental tax, or any other tax, custom, duty,
governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or penalty, addition to tax or
additional amount imposed by any Governmental Entity; and
(ii) any liability for the payment of amounts with respect
to payments of a type described in clause (i) as a result of being a
member of an affiliated, consolidated, combined or unitary group, or
as a result of any obligation under any Tax Sharing Arrangement or Tax
indemnity arrangement.
"Tax Claim" shall have the meaning set forth in Section 9.3(b)
hereof.
"Tax Proceeding" shall have the meaning set forth in Section
9.3(a) hereof.
"Tax Return" shall mean any return, report or statement required
to be filed with respect to any Tax (including any attachments thereto),
including, without limitation, any information return, claim for refund,
amended return or declaration of estimated Tax.
"Tax Sharing Arrangement" shall mean any written or unwritten
agreement or arrangement for the allocation or payment of Tax liabilities
or payment for Tax benefits with respect to a consolidated, combined or
unitary Tax Return.
"Termination Date" shall have the meaning set forth in Section
11.1(b) hereof.
"Third-Party Claims" shall have the meaning set forth in Section
10.2 hereof.
"Transfer" shall have the meaning set forth in Section 7.1
hereof.
"Treasury Regulations" shall mean the regulations promulgated by
the Treasury Department with respect to the Code.
"Worldwide" shall mean Xxxxxxx Worldwide Corporation, a Delaware
corporation and a wholly owned subsidiary of Holdings.
"Worldwide Common Stock" shall mean the common stock, par value
$1.00 per share, of Worldwide.
"Worldwide SEC Reports" shall have the meaning set forth in
Section 4.7(b) hereof.
"Worldwide Shares" shall have the meaning set forth in Section
4.2(b).
Section 1.2 Other Terms. Other terms may be defined elsewhere
in the text of this Agreement and, unless otherwise indicated, shall have
such meaning throughout this Agreement.
ARTICLE II
THE HOLDINGS MERGER
Section 2.1 The Holdings Merger. Upon the terms and subject to
the conditions set forth herein, and in accordance with the DGCL, at the
Holdings Effective Time (as defined in Section 2.3 hereof), Laser Merger
Sub shall be merged with and into Holdings. Following the Holdings
Effective Time, Holdings shall continue as the surviving corporation (the
"Surviving Corporation"), and the separate corporate existence of Laser
Merger Sub shall cease. The Holdings Merger shall have the effects set
forth in Section 259 of the DGCL.
Section 2.2 Closing. The closing of the Holdings Merger (the
"Closing") will take place at 10:00 a.m. on a date to be specified by the
parties (the "Closing Date"), which (subject to satisfaction or waiver of
the conditions set forth in Article VIII) shall be no later than the third
NYSE trading day after satisfaction or waiver of the conditions set forth
in Section 8.1, at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another time, date or
place is agreed to in writing by the parties hereto.
Section 2.3 Effective Time of the Holdings Merger. The Holdings
Merger shall become effective on the date and at the time at which a
properly executed certificate of merger (the "Certificate of Merger") is
duly filed with the Secretary of State of the State of Delaware. The
Certificate of Merger shall be filed as soon as practicable on or after the
Closing Date. When used in this Agreement, the term "Holdings Effective
Time" shall mean the date and time on which the Certificate of Merger is so
filed.
Section 2.4 Certificate of Incorporation. From and after the
Holdings Effective Time, the certificate of incorporation of Holdings as in
effect at the Holdings Effective Time (the "Certificate of Incorporation")
shall be the certificate of incorporation of the Surviving Corporation
until amended as provided by the DGCL and the Certificate of Incorporation.
Section 2.5 By-Laws. From and after the Holdings Effective Time,
the by-laws of Laser Merger Sub as in effect at the Holdings Effective Time
shall be the by-laws of the Surviving Corporation until amended as provided
by the DGCL, the Certificate of Incorporation of the Surviving Corporation
and the terms thereof.
Section 2.6 Directors. The directors of Laser Merger Sub at the
Holdings Effective Time shall be the initial directors of the Surviving
Corporation and shall hold office from the Holdings Effective Time until
their respective successors are duly elected or appointed and qualify in
the manner provided in the Certificate of Incorporation and by-laws of the
Surviving Corporation or as otherwise provided by Law.
Section 2.7 Officers. The officers of Laser Merger Sub at the
Holdings Effective Time shall be the initial officers of the Surviving
Corporation and shall hold office from the Holdings Effective Time until
their respective successors are duly elected or appointed and qualify in
the manner provided in the Certificate of Incorporation and by-laws of the
Surviving Corporation, or as otherwise provided by Law.
Section 2.8 Holdings Merger Election. Notwithstanding the
foregoing, at any time prior to the Holdings Effective Time, Holdings may
elect, in its sole discretion, upon notice to Laser, to effectuate the
Holdings Merger such that Holdings will be merged with and into Laser
Merger Sub, with Laser Merger Sub as the "Surviving Corporation" for all
purposes hereunder. In such event, the parties hereto shall execute an
appropriate amendment to this Agreement to reflect the foregoing.
ARTICLE III
CONVERSION OF SHARES
Section 3.1 Effect on Capital Stock. At the Holdings Effective
Time, by virtue of the Holdings Merger and without any action on the part
of any holder thereof:
(a) Conversion of Holdings Common Stock.
(i) The Holdings Shares shall be converted into the right
to receive an aggregate of (A) 14,099,749 fully paid and nonassessable
shares of Laser Common Stock (the "Laser Shares") and (B) $159,956,756
in cash, without interest thereon (the "Cash Payment" and, together
with the Laser Shares, the "Merger Consideration").
(ii) If, prior to the Holdings Effective Time, Laser shall
(A) pay a dividend in, subdivide, combine into a smaller number of
shares or issue by reclassification of its shares, any shares of Laser
Common Stock, the number of Laser Shares to be issued pursuant to
Section 3.1(a)(i) hereof shall be adjusted appropriately or (B) pay an
extraordinary dividend (other than regular quarterly dividend
payments, consistent with past practice), whether in cash or property,
the amount of the Cash Payment shall be adjusted appropriately, such
that the aggregate amount of cash, or if a dividend shall have been
paid in other property, cash and other property, shall be equal to
that which would have been received had the dividend been paid
following the Holdings Effective Time at a time when the Laser Shares
were already issued to and the Cash Payment made to Parent Holdings.
(iii) The shares of Holdings Common Stock converted in
accordance with paragraph (i) of this Section 3.1(a) shall no longer
be outstanding and shall automatically be cancelled and retired and
shall cease to exist, and Parent Holdings, as the holder thereof,
shall cease to have any rights with respect thereto, except the right
to receive the Merger Consideration.
(b) Conversion of Laser Merger Sub Common Stock. Each share of
Laser Merger Sub Common Stock issued and outstanding immediately prior to
the Holdings Effective Time shall be converted into and become one fully
paid and nonassessable share of common stock, par value $1.00 per share, of
the Surviving Corporation.
(i) Exchange of Certificates. At the Closing, Parent
Holdings shall surrender certificates representing the Holdings
Shares, and Laser shall deliver or cause to be delivered to Parent
Holdings a duly executed stock certificate or stock certificates
representing the Laser Shares, and the Cash Payment, in immediately
available funds by wire transfer to an account specified in writing by
Parent Holdings at least one day prior to the Closing Date. In
connection with the delivery by Laser of the Laser Shares, Laser shall
utilize all shares of Laser Common Stock held by Laser as treasury
shares before issuing any authorized but unissued shares of Laser
Common Stock.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF HOLDINGS
AND PARENT HOLDINGS
Holdings and Parent Holdings hereby represent and warrant to Laser
as follows:
Section 4.1 Organization and Qualification.
(a) Each of Holdings and Worldwide is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and has the corporate power to carry on its business as
it is now being conducted.
Section 4.2 Capitalization.
(a) The authorized capital stock of Holdings consists of 1,000
shares of Holdings Common Stock (the "Holdings Shares"), all of which are
issued and outstanding and beneficially owned by Parent Holdings. All of
the issued and outstanding shares of Holdings Common Stock are validly
issued, fully paid and nonassessable and free of preemptive rights. Except
as set forth above, there are no other shares of capital stock of Holdings
issued or outstanding nor any options, warrants, subscriptions, calls,
rights, convertible securities or other agreements or commitments
obligating Holdings to issue, transfer, sell, redeem, repurchase or
otherwise acquire any shares of its capital stock or securities.
(b) The authorized capital stock of Worldwide consists of 1,000
shares of Worldwide Common Stock (the "Worldwide Shares"), all of which are
issued and outstanding and beneficially owned by Holdings, free and clear
of all Liens, other than the pledge in connection with the Notes. All of
the issued and outstanding shares of Worldwide Common Stock are validly
issued, fully paid and nonassessable and free of preemptive rights. Except
as set forth above, there are no other shares of capital stock of Worldwide
issued or outstanding nor any options, warrants, subscriptions, calls,
rights, convertible securities or other agreements or commitments
obligating Worldwide to issue, transfer, sell, redeem, repurchase or
otherwise acquire any shares of its capital stock or securities.
Section 4.3 Authority Relative to this Agreement and the
Registration Rights Agreement. Each of Holdings and Parent Holdings has
the requisite corporate power and authority to execute and deliver this
Agreement and, if a party thereto, the Registration Rights Agreement, to
perform its obligations hereunder and, if a party thereto, thereunder and
to consummate the transactions contemplated hereby and, if a party thereto,
thereby. The execution, delivery and performance of this Agreement and the
Registration Rights Agreement, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by all necessary
corporate action on the part of Holdings and Parent Holdings, and no other
corporate action on the part of Holdings or Parent Holdings (including on
the part of their respective stockholders) is required to authorize the
execution, delivery and performance hereof and thereof and the consummation
of the transactions contemplated hereby and thereby. This Agreement has
been duly executed and delivered by each of Parent Holdings and Holdings
and, assuming that it constitutes a valid and binding agreement of Laser
and Laser Sub, constitutes the valid and binding obligation of Parent
Holdings and Holdings enforceable against Parent Holdings and Holdings in
accordance with its terms, except that such enforcement may be subject to
any bankruptcy, insolvency, reorganization, moratorium or other laws now or
hereafter in effect relating to or limiting creditors' rights generally and
the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceedings therefor may be brought. Prior
to the Holdings Effective Time, the Registration Rights Agreement will have
been duly executed and delivered by Parent Holdings and, assuming that it
constitutes the valid and binding agreement of Laser, will constitute the
valid and binding obligation of Parent Holdings enforceable against Parent
Holdings in accordance with its terms, except that such enforcement may be
subject to any bankruptcy, insolvency, reorganization, moratorium or other
laws now or hereafter in effect relating to or limiting creditors' rights
generally and the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceedings therefor may be
brought.
Section 4.4 No Business Activities of Holdings and Worldwide.
(a) Since its formation, Holdings has engaged in no business
activities or operations, other than in connection with holding the
Worldwide Shares and the stock of its predecessor corporation and in
connection with the Senior Secured Discount Notes due 1998 of Holdings and
the Series B Senior Secured Discount Notes due 1998 of Holdings
(collectively, the "1998 Notes") and the Notes. Holdings has no material
assets other than Worldwide Common Stock, and has no liabilities other than
under the Notes and other de minimis liabilities. Worldwide is the
beneficial owner of 44,067,520 shares of Company Common Stock, free and
clear of all Liens, other than the pledge pursuant to the XXXXx and the
Notes.
(b) Since its formation, Worldwide has engaged in no business
activities or operations, other than in connection with holding shares of
Company Common Stock and in connection with the 1998 Notes, the Notes and
the XXXXx. Worldwide has no material assets other than the Company Common
Stock (other than, as of the date hereof, the Mafco Demand Note and the
XXXXx Escrow Fund), and has no liabilities other than under the XXXXx, the
Notes and other de minimis liabilities.
Section 4.5 Consents and Approvals; No Violations. Except for
applicable requirements of the HSR Act, the Securities Act, the Exchange
Act, Competition Laws and state securities or blue sky Laws, no filing
with, and no permit, authorization, consent or approval of, any
Governmental Entity is necessary for the consummation by Parent Holdings or
Holdings of the transactions contemplated by this Agreement, except for
such filings, permits, authorizations, consents or approvals the failure of
which to be made or obtained would not individually or in the aggregate (i)
have a Holdings Material Adverse Effect or (ii) delay in any material
respect or prevent the consummation of any of the transactions contemplated
by this Agreement. Except as set forth on Section 4.5 of the Holdings
Disclosure Schedule, neither the execution and delivery of this Agreement
by Parent Holdings or Holdings, nor the consummation by Parent Holdings or
Holdings of the transactions contemplated hereby, nor compliance by Parent
Holdings or Holdings with any of the provisions hereof, will (a) conflict
with or result in any breach of any provisions of the certificate of
incorporation or by-laws of Parent Holdings, Holdings or Worldwide; (b)
result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any Contract or of any license, franchise,
permit, concession, certificate of authority, order, approval, application
or registration of, from or with any Governmental Entity to which Parent
Holdings, Holdings or Worldwide is a party or by which any of them or any
of their properties or assets may be bound; or (c) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Holdings,
Parent Holdings or Worldwide or any of their properties or assets, except
in the case of clauses (b) and (c) for violations, breaches or defaults
which would not individually or in the aggregate have a Holdings Material
Adverse Effect.
Section 4.6 No Litigation. As of the date hereof, there is no
suit, action, proceeding or investigation pending against or affecting
Holdings or Worldwide.
Section 4.7 SEC Reports.
(a) Holdings has filed all reports, forms, registrations,
schedules, statements and other documents required to be filed by it with
the SEC since January 1, 1997 (the "Holdings SEC Reports"). As of their
respective dates, the Holdings SEC Reports complied in all material
respects with the requirements of the Securities Act or the Exchange Act,
as the case may be, and the applicable rules and regulations promulgated
thereunder. Except to the extent that information contained in any Filed
Holdings SEC Report has been revised, amended or superseded by a later
Filed Holdings SEC Report, none of the Filed Holdings SEC Reports, when
filed, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except that no representation or warranty is made
herein with respect to any information relating to the Company and its
subsidiaries. For purposes of this Agreement, the Holdings SEC Reports
filed and publicly available prior to the date of this Agreement (as
revised, amended or superseded by the Holdings SEC Reports filed and
publicly available prior to the date of this Agreement) are hereinafter
referred to as the "Filed Holdings SEC Reports."
(b) Worldwide has filed all reports, forms, registrations,
schedules, statements and other documents required to be filed by it with
the SEC since January 1, 1997 (the "Worldwide SEC Reports"). As of their
respective dates, the Worldwide SEC Reports complied in all material
respects with the requirements of the Securities Act or the Exchange Act,
as the case may be, and the applicable rules and regulations promulgated
thereunder. Except to the extent that information contained in any Filed
Worldwide SEC Report has been revised, amended or superseded by a later
Filed Worldwide SEC Report, none of the Filed Worldwide SEC Reports, when
filed, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except that no representation or warranty is made
herein with respect to any information relating to the Company and its
subsidiaries. For purposes of this Agreement, the Worldwide SEC Reports
filed and publicly available prior to the date of this Agreement (as
amended, revised or superseded by the Worldwide SEC Reports filed and
publicly available prior to the date of this Agreement) are hereinafter
referred to as the "Filed Worldwide SEC Reports."
Section 4.8 Acquisition of Shares for Investment. Parent Holdings
is not acquiring the Laser Shares with any present intention of
distributing or selling any of such Laser Shares in violation of federal or
state securities laws.
Section 4.9 Taxes.
(a) Except as would not have a Holdings Material Adverse Effect or
as set forth on Section 4.9 of the Holdings Disclosure Schedule:
(i) Each of Holdings and Worldwide (A) has filed (or there
has been filed on its behalf) with the appropriate Governmental
Entities all Tax Returns required to be filed by it, and all such Tax
Returns are true, correct and complete and (B) has paid all Taxes due
by it;
(ii) There are no outstanding waivers in writing or
comparable consents regarding the application of any statute of
limitations in respect of Taxes of Holdings or Worldwide;
(iii) There is no action, suit, investigation, audit,
claim or assessment pending or proposed in writing or threatened in
writing with respect to Taxes of Holdings or Worldwide and to the best
of Holdings' knowledge, no basis exists therefor;
(iv) There are no Liens for Taxes upon the assets of
Holdings or Worldwide except Liens relating to current Taxes not yet
due;
(v) All Taxes which Holdings or Worldwide are required by
law to withhold or to collect for payment have been duly withheld and
collected, and have been paid or accrued, reserved against and entered
on the books of Holdings in accordance with GAAP; and
(vi) No power of attorney which is currently in force has
been granted by or with respect to Holdings or Worldwide with respect
to any matter relating to Taxes.
(b) Except as would not have a Holdings Material Adverse Effect,
Holdings and its subsidiaries have previously delivered or made available
to Laser (and its representatives) complete and accurate copies of:
(i) all audit reports, letter rulings, technical advice
memoranda relating to United States federal, state, local and foreign
Taxes due from or with respect to Holdings or its subsidiaries;
(ii) United States federal Tax Returns (to the extent that
such Tax Returns relate to Holdings and its subsidiaries), and those
state, local or foreign Tax Returns filed by (or on behalf of)
Holdings or any of its subsidiaries (to the extent that such Tax
Returns relate to Holdings and its subsidiaries) (including, in each
case, workpapers related to such Tax Returns);
(iii) any closing agreements entered into by Holdings or
any of its subsidiaries with any taxing authority, in each case
existing on the date hereof; and
(iv) any Tax Sharing Arrangements and Tax indemnity
arrangements to which Holdings or any of its subsidiaries was a party
at any time prior to the Closing Date. Holdings and its subsidiaries
will deliver or make available to Laser (and its representatives) all
similar materials for all matters arising after the date hereof.
Section 4.10 Affiliate Agreements. Section 4.10 of the Holdings
Disclosure Schedule sets forth a true and complete list of all agreements,
Contracts, arrangements, payables, obligations and understandings between
Holdings or any of its subsidiaries, on the one hand, and Parent Holdings
or any of its Affiliates (other than Holdings or its subsidiaries), on the
other hand (the "Affiliate Agreements").
Section 4.11 Brokers. No broker, investment banker or other
person, other than Credit Suisse First Boston, the Company's financial
advisor, the fees and expenses of which will be paid by the Company (as
reflected in an agreement between Credit Suisse First Boston and the
Company, a copy of which has been furnished to Laser), is entitled to any
broker's, finder's or other similar fee or commission in connection with
the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company or any of its Affiliates.
Section 4.12 XXXXx Escrow Fund. The XXXXx Escrow Fund is
sufficient to fund the redemption, exchange or other retirement in full of
the XXXXx and related expenses.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF LASER
Laser hereby makes the same representations and warranties to
Parent Holdings and Holdings as the representations and warranties made by
Laser to the Company in the Company Merger Agreement, and also represents
and warrants to Parent Holdings and Holdings as follows:
Section 5.1 Laser Merger Sub. Laser Merger Sub is a corporation
duly organized, validly existing and in good standing under the Laws of the
State of Delaware. Laser Merger Sub is a newly incorporated company formed
solely for purposes of consummating the transactions contemplated by this
Agreement and has engaged in no activity other than as provided in, or
contemplated by, this Agreement. The authorized capital stock of Laser
Merger Sub consists of 1,000 shares of Laser Merger Sub Common Stock, all
of which are validly issued, fully paid and nonassessable and free of
preemptive rights and are owned by Laser. Except as set forth above there
are no shares of capital stock of Laser Merger Sub issued or outstanding or
any options, warrants, subscription, calls, rights, convertible securities
or other agreements or commitments obligating Laser Merger Sub to issue,
transfer, sell, redeem, repurchase or otherwise acquire any shares of its
capital stock or securities.
Section 5.2 Authority Relative to this Agreement. Each of Laser
and Laser Merger Sub has the corporate power and authority to execute and
deliver this Agreement and, if a party thereto, the Registration Rights
Agreement, to perform its obligations hereunder and, if a party thereto,
thereunder and to consummate the transactions contemplated hereby and, if a
party thereto, thereby. The execution, delivery and performance of this
Agreement and the Registration Rights Agreement, and the consummation of
the transactions contemplated hereby, thereby and by the Company Merger
Agreement, have been duly authorized by all necessary corporate action on
the part of Laser and Laser Merger Sub and no other corporate action on the
part of Laser or Laser Merger Sub (including on the part of their
respective stockholders) is required to authorize the execution, delivery
and performance hereof or thereof and the consummation of the transactions
contemplated hereby and thereby. This Agreement has been duly executed and
delivered by Laser and Laser Merger Sub and constitutes the valid and
binding obligation of Laser and Laser Merger Sub, assuming it is the valid
and binding obligation of Parent Holdings and Holdings, enforceable against
Laser and Laser Merger Sub in accordance with its terms, except that such
enforcement may be subject to any bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to
creditors' rights generally and other forms of equitable relief may be
subject to equitable defenses and the discretion of the court before which
any proceedings therefore may be brought. Prior to the Holdings Effective
Time, the Registration Rights Agreement will have been duly executed and
delivered by Laser and, assuming that it constitutes the valid and binding
agreement of Parent Holdings, will constitute the valid and binding
obligation of Laser enforceable against Laser in accordance with its terms,
except that such enforcement may be subject to any bankruptcy, insolvency,
reorganization, moratorium or other laws now or hereafter in effect
relating to or limiting creditors' rights generally and the remedy of
specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before
which any proceedings therefor may be brought.
Section 5.3 Consents and Approvals; No Violations. Except for
applicable requirements of the HSR Act, the Securities Act, the Exchange
Act, Competition Laws and state securities or blue sky Laws, no filing
with, and no permit, authorization, consent or approval of, any
governmental or regulatory authority is necessary for the consummation by
Laser and Laser Merger Sub of the transactions contemplated by this
Agreement, except for such filings, permits, authorizations, consents or
approvals the failure of which to be made or obtained would not (i)
individually or in the aggregate have a Laser Material Adverse Effect or
(ii) delay in any material respect or prevent the consummation of any of
the transactions contemplated by this Agreement. Neither the execution and
delivery of this Agreement by Laser and Laser Merger Sub nor the
consummation by Laser and Laser Merger Sub of the transactions contemplated
hereby, nor compliance by Laser and Laser Merger Sub with any of the
provisions hereof, will (a) conflict with or result in any breach of any
provisions of the certificate of incorporation or by-laws of Laser or Laser
Merger Sub; (b) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the
terms, conditions or provisions of any Contract or of any license,
franchise, permit, concession, certificate of authority, order, approval,
application or registration of, from or with any Governmental Entity to
which Laser or Laser Merger Sub is a party or by which either of them or
any of their properties or assets may be bound; or (c) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to Laser,
Laser Merger Sub or any of their properties or assets, except, in the case
of clauses (b) and (c), for violations, breaches or defaults which would
not individually or in the aggregate have a Laser Material Adverse Effect.
Section 5.4 Acquisition of Shares for Investment. Laser is
acquiring the Holdings Shares for its own account for investment purposes
only and not with a view toward or for a sale in connection with, any
distribution thereof, or with any present intention of distributing or
selling any of such in violation of federal or state securities laws.
ARTICLE VI
COVENANTS
Section 6.1 Conduct of Business. Except as expressly permitted by
this Agreement or with the prior written consent of Laser, during the
period from the date of this Agreement to the Holdings Effective Time,
Holdings shall and shall cause Worldwide to conduct its business only in
the ordinary course consistent with past practice, except that Holdings and
Worldwide shall be permitted (but not required) to (i) effect the merger of
Worldwide with Holdings, and (ii) take all action necessary in connection
with the redemption or exchange of the XXXXx and payment of any amounts
thereunder and distribution to Parent Holdings from the XXXXx Escrow Fund
of any excess thereof. Without limiting the generality of the foregoing,
and except as otherwise expressly permitted by this Agreement, during the
period from the date of this Agreement through the Holdings Effective Time,
Holdings shall not and shall cause Worldwide not to, without the prior
written consent of Laser:
(a) declare, set aside or pay any dividend or other distribution
(whether in cash, securities or property or any combination thereof) in
respect of any class or series of its capital stock, other than in respect
of the XXXXx Escrow Fund or the Mafco Demand Note;
(b) settle or compromise any Tax liability or agree to any
adjustment of any Tax attribute or make any election with respect to its
Taxes other than in the ordinary course of business;
(c) amend its certificate of incorporation or by-laws;
(d) acquire by merging or consolidating with, or by purchasing a
substantial portion of the assets or securities of, or by any other manner,
any corporation, partnership or other entity;
(e) create, incur, assume or guarantee any Indebtedness;
(f) except as otherwise required by Law or GAAP, change any of the
accounting or Tax principles, practices or methods used by Holdings or
Worldwide or fail to maintain the accounts, books and records of Holdings
or Worldwide in the usual, regular and ordinary manner on a basis
consistently applied;
(g) make any payments, loans, advances or other distributions to,
or enter into any transaction, agreement or arrangement with, any of its
Affiliates, officers, directors, or stockholders or it or its Affiliates or
any associates or family members of any of the foregoing, or make any
changes in or modify any of the Affiliate Agreements, other than in the
ordinary course of business consistent with past practice or as required by
the Affiliate Agreements, other than in respect of the XXXXx Escrow Fund or
the Mafco Demand Note;
(h) adjust, split, combine, subdivide or reclassify any shares of
its capital stock;
(i) issue, sell, deliver, transfer, repurchase, redeem, acquire or
pledge or authorize or propose the issuance, sale, delivery, transfer,
repurchase, redemption, acquisition or pledge of shares of capital stock of
any class or series, or any securities (other than the XXXXx) convertible
into capital stock of any class or series, or grant or enter into any
rights, warrants, options, agreements or commitments with respect to the
issuance of such capital stock or convertible securities;
(j) take any action that would make any representation or warranty
of Parent Holdings or Holdings contained in this Agreement untrue or
incorrect in any material respect and which could reasonably be expected to
prevent the satisfaction of any condition to closing set forth in Article
VIII hereof or otherwise prevent or materially delay the consummation of
the transactions contemplated by this Agreement; or
(k) enter into any agreement or commitment to take any of the
foregoing actions.
Section 6.2 Reasonable Best Efforts.
(a) Upon the terms and subject to the conditions of this
Agreement, each of the parties hereto agrees to, and Holdings agrees to
cause Worldwide and the Company and its subsidiaries to, use 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 to consummate and make effective the transactions
contemplated by this Agreement and the Company Merger Agreement, as
applicable, as promptly as practicable (including satisfaction, but not
waiver, of the conditions set forth in Article VIII hereof and Article VIII
of the Company Merger Agreement).
(b) Laser shall perform all of its obligations under the Company
Merger Agreement in accordance with their terms.
Section 6.3 Consents.
(a) Without limiting the generality of Section 6.2(a) hereof, each
of the parties hereto shall, and Holdings shall and shall cause Worldwide
and the Company and its subsidiaries to, use reasonable best efforts to
obtain all Consents of all Governmental Entities and, to the extent that
the failure to obtain such Consents would have a Holdings Material Adverse
Effect or a Laser Material Adverse Effect, as applicable, all third parties
necessary in connection with the consummation of the transactions
contemplated by this Agreement and the Company Merger Agreement prior to
the Holdings Effective Time. Notwithstanding the foregoing, none of the
parties hereto nor Worldwide nor the Company or any of its subsidiaries
shall have any obligation to pay any fee to any third party (other than
filing or similar fees payable to Governmental Entities) for the purpose of
obtaining any Consent or any costs and expenses of any third party
resulting from the process of obtaining such Consents. Each of the parties
hereto shall make or cause to be made all filings and submissions under
laws and regulations applicable to it as may be required for the
consummation of the transactions contemplated by this Agreement.
(b) Notwithstanding the foregoing, nothing in this Agreement shall
be deemed to require any party hereto to enter into any agreement with any
Governmental Entity which requires, or to consent to any order, decree or
judgment which requires, such party to hold, separate or divest, or to
restrict the dominion or control of such party or any of its Affiliates
over, any of the assets, properties or businesses of such party or its
Affiliates in existence on the date hereof.
Section 6.4 HSR Notification. As soon as reasonably practicable,
Laser and Parent Holdings shall make, or cause to be made, all filings and
submissions under the HSR Act and any other applicable Competition Laws as
may be reasonably required to be made in connection with this Agreement and
the transactions contemplated hereby. Subject to Section 6.7 hereof,
Parent Holdings will furnish to Laser and Laser will furnish to Parent
Holdings, such information and assistance as the other may reasonably
request in connection with the preparation of any such filings or
submissions. Subject to Section 6.7 hereof, Parent Holdings will provide
Laser, and Laser will provide Parent Holdings, with copies of all
correspondence, filings or communications (or memoranda setting forth the
substance thereof) between such party or any of its representatives, on the
one hand, and any Governmental Entity or authority or members of their
respective staffs, on the other hand, with respect to this Agreement and
the transactions contemplated hereby. Parent Holdings and Laser shall
consult with one another with respect to any such correspondence, filings
or communications and shall engage in any discussions with any Governmental
Entity on a joint basis.
Section 6.5 XXXXx Refund. Promptly following redemption, exchange
or other retirement in full of the XXXXx, Laser shall cause to be paid to
Parent Holdings all amounts remaining in the XXXXx Escrow Fund by wire
transfer of immediately available funds to an account(s) designated in
writing by Parent Holdings. Until the making of such payment, Laser shall
cause Holdings and Worldwide to comply with all of their obligations under
the Indenture relating to the XXXXx, the Indenture and the related Escrow
Agreement, shall not take any action to amend such indenture or agreement
in any manner adverse to Parent Holdings and shall use reasonable best
efforts to take action to cause the redemption or retirement in full of the
XXXXx as promptly as practicable. Promptly following the Holdings
Effective Time, at the request of Parent Holdings, Laser shall cause
Holdings and Worldwide to give the escrow agent under such Escrow Agreement
irrevocable written notice of the assignment of all right, title and
interest in and to any such amounts to and for the benefit of Parent
Holdings, on which notice Parent Holdings may rely. Following the
redemption or retirement in full of the XXXXx, the Mafco Demand Note shall
be canceled automatically without the further action of any Person, and
shall be of no further force or effect whatsoever, and, until the time of
such cancellation, no demand or request for payment of any kind shall be
made with respect to the Mafco Demand Note.
Section 6.6 Listing Application. Laser shall prepare and submit
to the NYSE a listing application covering the Laser Shares to be issued in
connection with the Holdings Merger, and shall use its reasonable best
efforts to obtain as promptly as practicable approval for the listing of
such Laser Shares, subject to official notice of issuance.
Section 6.7 Access to Information; Confidentiality. Holdings and
Laser shall each afford, and Holdings shall cause Worldwide, the Company
and each of its subsidiaries to afford, to the other and to the other's
financial advisors, legal counsel, accountants consultants and other
representatives full access at all reasonable times throughout the period
prior to the Holdings Effective Time to all of its books, records,
properties, plants and personnel (provided that all such access shall be on
reasonable advance notice and shall not disrupt normal business operations)
and, during such period, each shall furnish promptly to the other (a) a
copy of each report, schedule and other document filed or received by it
pursuant to the requirements of federal or state securities laws, and (b)
all other information as such other party may reasonably request, provided
that no investigation pursuant to this Section 6.7 shall affect any
representations or warranties made herein or the conditions to the
obligations of the respective parties to consummate the Holdings Merger.
Each party and their respective affiliates, representatives and agents
shall hold in confidence all nonpublic information in accordance with the
terms of the Confidentiality Agreements between Laser and the Company dated
February 4, 1998 and February 23, 1998 (the "Confidentiality Agreements").
Section 6.8 Advice of Changes. Upon obtaining knowledge of any
such occurrence, Holdings or Laser shall promptly advise the other party
orally and in writing of (i) any representation or warranty made by it
contained in this Agreement that is qualified as to materiality becoming
untrue or inaccurate in any respect or any such representation or warranty
that is not so qualified becoming untrue or inaccurate in any material
respect, (ii) the failure by it to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement or (iii) any change or event (x)
having, or which, insofar as can reasonably be foreseen, would have, in the
case of Laser, a Laser Material Adverse Effect and, in the case of
Holdings, a Holdings Material Adverse Effect, (y) having, or which, insofar
as can reasonably be foreseen, would have, the effect set forth in clause
(i) above or (z) which has resulted, or which, insofar as can reasonably be
foreseen, would result, in any of the conditions set forth in Article VIII
not being satisfied; provided, however, that no such notification shall
affect the representations, warranties, covenants or agreements of the
parties or the conditions to the obligations of the parties under this
Agreement.
Section 6.9 Affiliate Agreements; Intercompany Accounts. Parent
Holdings and Holdings shall cause all intercompany accounts to be settled,
and all Affiliate Agreements to be treated, as set forth in Section 4.10 of
the Holdings Disclosure Schedule.
Section 6.10 Registration Rights Agreement. Immediately prior to
the Holdings Effective Time, Parent Holdings and Laser shall execute and
deliver the Registration Rights Agreement.
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 Sales of Laser Shares. Parent Holdings agrees not to,
directly or indirectly, sell, transfer, pledge, assign or otherwise dispose
of or otherwise transfer (other than, in any such case, in connection with
a pledge to secure bona fide indebtedness or other obligations)
(collectively, "Transfer"), any Laser Shares received pursuant to the terms
hereof as consideration for the Holdings Merger, other than to one of its
Affiliates who agrees in writing to be bound by the terms of this Section
7.1, for a period of nine (9) months from and after the Holdings Effective
Time, except that Parent Holdings may Transfer (A) from and after the date
that is three (3) months following the Holdings Effective Time, twenty-five
percent (25%) of the total number of the Laser Shares, and (B) from and
after the date that is six (6) months following the Holdings Effective
Time, an additional twenty-five percent (25%) of the total number of the
Laser Shares (such that a total of fifty percent (50%) of the total number
of the Laser Shares shall be Transferable from and after the date that is
six (6) months following the Holdings Effective Time).
Section 7.2 Restrictive Legend. Pursuant to Section 7.1 hereof,
each certificate representing the Laser Shares received by Parent Holdings
shall be stamped or otherwise imprinted with the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO THE RESTRICTIONS ON TRANSFER CONTAINED IN THE AGREEMENT AND PLAN OF
MERGER DATED AS OF FEBRUARY 27, 1998 AMONG SUNBEAM CORPORATION, LASER
ACQUISITION CORP., CLN HOLDINGS INC., AND XXXXXXX (PARENT) HOLDINGS
INC. AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, ASSIGNED, OR
OTHERWISE DISPOSED OF OR TRANSFERRED (OTHER THAN, IN ANY SUCH CASE, IN
CONNECTION WITH A PLEDGE TO SECURE BONA FIDE INDEBTEDNESS OR OTHER
OBLIGATIONS) ("TRANSFERRED") EXCEPT AS PERMITTED BY THE TERMS THEREOF.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR THE SECURITIES LAWS OF ANY STATE. THE SHARES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE TRANSFERRED, AND THE COMPANY WILL NOT REGISTER
THE TRANSFER OF SUCH SECURITIES, EXCEPT (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT, (B) PURSUANT TO RULE 144 UNDER
THE ACT, OR (C) UPON RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH TRANSFER IS EXEMPT
FROM REGISTRATION UNDER THE ACT.
Upon request of Parent Holdings, Laser shall cause to be issued
certificates representing such Laser Shares as to which the restrictions
set forth herein are no longer applicable without such legend.
ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE HOLDINGS MERGER
Section 8.1 Conditions to Each Party's Obligation to Effect the
Holdings Merger. The respective obligations of each party to effect the
Holdings Merger shall be subject to the satisfaction or waiver, to the
extent permitted by Law, at or prior to the Holdings Effective Time of the
following conditions:
(a) Any waiting period applicable to the consummation of the
Holdings Merger under the HSR Act shall have expired or been terminated.
(b) All of the Laser Shares shall have been previously approved
for listing on the NYSE, subject only to official notice of issuance, if
required.
(c) No preliminary or permanent injunction or other order by any
federal or state court in the United States of competent jurisdiction which
prohibits the consummation of this Agreement or the Holdings Merger shall
have been issued and remain in effect.
(d) All authorizations, consents, orders, declarations or
approvals of, or filings with, or terminations or expirations of waiting
periods imposed by, any Governmental Entity, which the failure to obtain,
make or occur would have the effect of making this Agreement or the
Holdings Merger Agreement or any of the transactions contemplated hereby
illegal.
Section 8.2 Conditions to Obligation of Holdings to Effect the
Holdings Merger. The obligation of Holdings to effect the Holdings Merger
shall be subject to the satisfaction by Laser or waiver by Holdings or
Parent Holdings, to the extent permitted by Law, at or prior to the
Holdings Effective Time of the following additional conditions:
(a) The representations and warranties of Laser in this Agreement
and the Company Merger Agreement that are qualified as to materiality shall
be true and correct, and the representations and warranties of Laser in
this Agreement and the Company Merger Agreement that are not so qualified
shall be true and correct in all material respects, in each case as of the
date hereof, and, except to the extent such representations and warranties
refer to a specific date, as of the Closing Date as though made on the
Closing Date; provided, however, that this condition shall be deemed
satisfied unless the failure or failures of such representations and
warranties to be so true and correct (disregarding for this purpose all
qualifications in such representations and warranties relating to
materiality or knowledge), in the aggregate, would have a Laser Material
Adverse Effect.
(b) Laser shall have performed in all material respects all
obligations required to be performed by it under this Agreement or under
the Company Merger Agreement at or prior to the Closing Date.
(c) Except as disclosed in the Filed Laser SEC Reports, since the
date of the most recent audited financial statements included in the Filed
Laser SEC Reports, there shall not have been any event, change or
development which individually or in the aggregate has had or reasonably
would be expected to have a Laser Material Adverse Effect or would impair
the ability of Laser to consummate the transactions contemplated by this
Agreement or to satisfy its obligations hereunder.
(d) The Registration Rights Agreement shall have been duly
executed and delivered by each of the parties thereto.
Section 8.3 Conditions to Obligation of Laser to Effect the
Holdings Merger. The obligation of Laser to effect the Holdings Merger
shall be subject to the satisfaction by Holdings and Parent Holdings or
waiver by Laser, to the extent permitted by Law, at or prior to the
Holdings Effective Time of the following additional conditions, unless:
(a) The representations and warranties of Holdings and Parent
Holdings in this Agreement and the representations of the Company in the
Company Merger Agreement that are qualified as to materiality shall be true
and correct, and the representations and warranties of Holdings and Parent
Holdings in this Agreement and the representations of the Company in the
Company Merger Agreement shall be true and correct in all material
respects, in each case as of the date hereof, and, except to the extent
such representations and warranties refer to a specific date, as of the
Closing Date as though made at and as of the Closing Date; provided,
however, that this condition shall be deemed satisfied unless the failure
or failures of such representations and warranties to be so true and
correct (disregarding for this purpose all qualifications in such
representations and warranties relating to materiality or knowledge), in
the aggregate, would have a Holdings Material Adverse Effect or Company
Material Adverse Effect (as defined in the Company Merger Agreement), as
the case may be.
(b) Parent Holdings and Holdings shall have performed in all
material respects all obligations required to be performed by them under
this Agreement at or prior to the Closing Date.
(c) The Company shall have performed in all material respects
those obligations required to be performed by it under the Company Merger
Agreement on or prior to the Closing Date.
(d) Up to six (6) individuals designated by Laser (the "Laser
Designees") shall have been duly elected members of the Board of Directors
of the Company and all other members of such Board shall have resigned, all
effective as of the later of (i) the Closing and (ii) the eleventh (11th)
day following the date on which the Section 14(f) Notice (as defined in the
Company Merger Agreement) shall have been filed with the SEC and mailed to
all stockholders of record of the Company in accordance with the Company
Merger Agreement.
ARTICLE IX
TAX MATTERS
Section 9.1 Taxes.
(a) Parent Holdings shall indemnify and hold Laser and Laser's
subsidiaries and Affiliates harmless from and against the following:
(i) any liability for Taxes of any member of the
"affiliated group" (within the meaning of Section 1504(a) of the Code)
(except for the Company and its subsidiaries) of which Mafco Holdings
Inc. (or any predecessor or successor) is the common parent that
arises under the provisions of Treasury Regulation Section 1.1502-6(a)
(or any successor provision) or comparable provisions of foreign,
state or local law; and
(ii) except to the extent provided in Section 9.1(b)(iii),
any liability for Taxes (other than Taxes that arise under the
provisions of Treasury Regulatory Section 1.1502-6(a) (or any
successor provision) or comparable provisions of foreign, state or
local law) imposed on Holdings or Worldwide or for which Holdings or
Worldwide may otherwise be liable for any Pre-Closing Period
(including, without limitation, any Taxes resulting from Holdings or
Worldwide ceasing to be a member of the "affiliated group" of which
Mafco Holdings Inc. (or any successor) is the common parent, any
income Taxes that arise in the Holdings Merger, and any Taxes imposed
on Holdings or Worldwide as a result of any transaction effected
between (and including) the date hereof and the Closing Date).
(b) Laser shall indemnify and hold Parent Holdings and its
Affiliates harmless from and against the following:
(i) Taxes imposed on Holdings or Worldwide for any Post-
Closing Period;
(ii) except to the extent provided in Section 9.1(a)(i), any
liability for Taxes of the Company and any of its subsidiaries; and
(iii) any liability for Taxes resulting from
transactions or actions taken by Holdings or Worldwide on the Closing
Date but after the Holdings Effective Time, except for transactions or
actions undertaken in the ordinary course of business.
(c) To the extent permitted by law or administrative practice, (i)
the taxable year of Holdings or Worldwide which includes the Closing Date
shall be treated as closing on (and including) the Closing Date and (ii)
all transactions not in the ordinary course of business occurring after the
Holdings Effective Time shall be reported on Laser's consolidated United
States federal income Tax Return to the extent permitted by Treasury
Regulation Section 1.1502-76(b)(1)(ii)(B) and shall be similarly reported
on other Tax Returns of Laser or its Affiliates to the extent permitted by
Law. For purposes of paragraphs (a) and (b)(i), where it is necessary to
apportion between Parent Holdings and Laser the Tax liability of an entity
for a Straddle Period (which is not treated under the immediately preceding
sentence as closing on the Closing Date), such liability shall be
apportioned between the period deemed to end at the close of the Closing
Date and the period deemed to begin at the beginning of the day following
the Closing Date on the basis of an interim closing of the books, except
that Taxes (such as real property Taxes) imposed on a periodic basis shall
be allocated on a daily basis.
(d) For purposes of Sections 9.1(a) and (b), whenever it is
necessary to allocate an item of income, gain, deduction, loss or credit to
either a taxable year or period that is not part of a Straddle Period and
that ends on or before the Closing Date or a taxable year or period that is
not part of a Straddle Period and that begins after the Closing Date, such
allocation shall be made consistent with the Law.
(e) Any real property transfer or gains Tax, sales Tax, use Tax,
stamp Tax, stock transfer Tax, or other similar Tax imposed on Holdings or
any of its subsidiaries arising out of or in connection with the
transactions contemplated by this Agreement shall be borne by the party
primarily obligated for such Tax under applicable Law, and each party shall
indemnify the other party for any such Tax for which it is so liable.
(f) (i) Except as set forth in Section 9.1(f)(iii), Laser shall
be entitled to any refund of Taxes or the benefit of the utilization of any
Tax attribute (including, without limitation, any net operating loss,
investment Tax credit, foreign Tax credit, or other credit or deduction) of
(x) the Company or any of its subsidiaries and (y) for a Post-Closing
Period, Holdings or Worldwide . If Parent Holdings or any of its
Affiliates or subsidiaries receives any refund of Tax to which Laser is
entitled pursuant to this Section 9.1(f)(i) or utilizes any Tax attribute
to which Laser is entitled pursuant to this Section 9.1(f)(i), Parent
Holdings shall promptly notify Laser and shall pay the amount of such
refund or the benefit realized from such utilization within five (5) days
of the receipt of such refund or the realization of such benefit.
(ii) Except as set forth in Section 9.1(f)(iii), Parent
Holdings shall be entitled to any refund of Taxes or the benefit of
the utilization of any Tax attribute of Holdings or Worldwide for a
Pre-Closing Period. If Laser or any of its Affiliates or subsidiaries
receives any refund of Tax to which Parent Holdings is entitled
pursuant to this Section 9.1(f)(ii) or utilizes any Tax attribute to
which Parent Holdings is entitled pursuant to this Section 9.1(f)(ii),
Laser shall promptly notify Parent Holdings and shall pay the amount
of such refund or the benefit realized from such utilization within
five (5) days of the receipt of such refund or the realization of such
benefit.
(iii) No payment shall be made in respect of a Tax
deduction, Tax credit or other Tax benefit pursuant to this Section
9.1(f) in duplication of payments previously made in respect of the
same Tax deduction, Tax credit or other Tax benefit.
(g) Any indemnity payment required under this Article IX as a
result of an adjustment shall be paid seven (7) days after a
"determination" within the meaning of Section 1313(a) of the Code. Any
payment required to be made under this Article IX by one party to the other
party that is not made on or before the date specified in this Article IX
shall bear interest after such date at the rate specified in Code Section
6621(a)(2) for underpayments.
Section 9.2 Tax Returns.
(a) Parent Holdings shall file or cause to be filed when due (i)
all Tax Returns that are required to be filed on or before the Closing Date
by or with respect to Holdings or any of its subsidiaries and (ii) all
consolidated, combined or unitary Tax Returns that are required to be filed
by or with respect to Parent Holdings or any entity that will be its
Affiliate after the Holdings Merger, on the one hand, and Holdings or any
of its subsidiaries, on the other hand, for taxable years or periods that
include or precede the Closing Date. Parent Holdings shall remit (or cause
to be remitted) any Taxes shown as due on such Tax Returns. In the case of
Tax Returns described in clause (ii) above, Laser shall pay Parent Holdings
no later than five (5) days prior to the due date (including extensions) of
any such Tax Return the Tax in connection with such Tax Return for which
Laser is liable pursuant to this Article IX (or Parent Holdings shall pay
Laser on such date the excess, if any, of any estimated Tax payments by the
Company or any of its subsidiaries, relating to the period covered by such
Tax Return, over the Tax in connection with such Tax Return for which Laser
is liable pursuant to this Article IX). Holdings and its subsidiaries
shall cooperate in the preparation of any Tax Returns for which Parent
Holdings has filing responsibility hereunder. Such cooperation shall
include, but not be limited to, furnishing in a timely manner return
preparation packages in the form and of the quality provided prior to the
Holdings Merger. Such packages shall be prepared in good faith in a manner
consistent with past practice.
(b) Laser shall file or cause to be filed when due all other Tax
Returns that are required to be filed by or with respect to Holdings or any
of its subsidiaries. Laser shall remit (or cause to be remitted) any Taxes
shown as due on such Tax Returns. Parent Holdings shall pay Laser no later
than five (5) days prior to the due date (including extensions) of any such
Tax Return the Tax in connection with such Tax Return for which Parent
Holdings is liable pursuant to this Article IX.
(c) The party with filing responsibility under this Section 9.2
for a Tax Return shall, 20 days prior to the due date (including
extensions) of such Tax Return, present to the other party (the
"Indemnifying Party") for the approval (which approval shall not be
unreasonably withheld) of the Indemnifying Party the portion, if any, of
the Tax Return reflecting solely the items and positions for which the
Indemnifying Party is liable pursuant to this Article IX.
(d) From and after the date hereof, Parent Holdings and each of
its Affiliates shall not amend any Tax Return with respect to Taxes for
which Laser or any of its Affiliates is liable pursuant to this Agreement,
without the written consent of Laser, which consent shall not be
unreasonably withheld.
(e) From and after the date hereof, any payment (including any
estimated payment) in respect of Taxes pursuant to a Tax Sharing
Arrangement that includes Holdings or any of its subsidiaries shall be
reduced by any payment that would be owed by the other party pursuant to a
Tax Sharing Arrangement.
Section 9.3 Tax Claims.
(a) In the case of any Tax audit, examination or judicial or
administrative proceeding (a "Tax Proceeding") relating to a combined,
consolidated or unitary Tax Return that includes Mafco Holdings Inc. (or
any predecessor or successor thereto), Laser shall be entitled to control
the portion of the Tax Proceeding, if any, relating solely to items for
which Laser is liable pursuant to this Agreement, and Parent Holdings shall
be entitled to control every other portion of the Tax Proceeding; provided,
however, that neither Parent Holdings nor any of its Affiliates shall
settle or otherwise dispose of any issue in any such Tax Proceeding that
could materially affect the Tax liability hereunder of Laser, without the
prior written consent of Laser, which consent shall not be unreasonably
withheld. Parent Holdings shall be entitled to control the Pre-Closing
Period portion of a Tax Proceeding relating to a Straddle Period Tax
Return, or a Tax Return for a Pre-Closing Period ending before the Closing
Date, of Holdings or Worldwide; provided, however, that neither Parent
Holdings nor any of its Affiliates shall settle or otherwise dispose of any
issue in any such Tax Proceeding that could materially affect the Tax
liability hereunder of Laser, without the prior written consent of Laser,
which consent shall not be unreasonably withheld.
(b) Parent Holdings or Laser, as the case may be, shall promptly
notify the other party in writing of any tax claim that could result in
liability of the other party under this Agreement (a "Tax Claim"). With
respect to any Tax Claim, the party controlling the Tax Proceeding with
respect thereto shall (i) not make any submission to any taxing authority
without offering the other party the opportunity to review it, (ii) keep
the other party informed as to the progress of such Tax Claim, (iii)
provide the other party with any information that it receives in connection
with the Tax Proceeding, (iv) permit the other party to participate (at its
own expense) in all conferences, meetings or proceedings with any taxing
authority in which the indemnified Tax Claim is or may be a subject, and
(v) permit the other party to participate (at its own expense) in all court
appearances in which the indemnified Tax Claim is or may be a subject.
With respect to any Tax Claim, the party not controlling the Tax Proceeding
with respect thereto shall not take any action or make any representations
in connection with such Tax Claim with respect to issues affecting the
other party's indemnity hereunder. With respect to any Tax Claim relating
to a Pre-Closing Period for which Laser is or may be liable pursuant to
this Agreement, Parent Holdings or any of its Affiliates shall either file
(or cause to be filed) submissions at Laser's direction or appoint (or
cause to be appointed) Laser or its authorized representatives as
additional authorized representatives entitled to communicate fully with
the Internal Revenue Service or the appropriate state, local or foreign
taxing authority with respect to such Tax Claim.
(c) Nothing contained in this Section 9.3 shall be construed as
limiting any party's right to indemnification under Section 9.1.
Section 9.4 Assistance and Cooperation. After the Closing Date,
each of Parent Holdings and Laser shall (and shall cause their respective
Affiliates to):
(a) timely sign and deliver such certificates or forms as may be
necessary or appropriate to establish an exemption from (or otherwise
reduce), or file Tax Returns or other reports with respect to, Taxes
described in Section 9.1(e) (relating to sales, transfer and similar
Taxes);
(b) assist the other party in preparing any Tax Returns which such
other party is responsible for preparing and filing in accordance with
Section 9.2;
(c) cooperate fully in preparing for any audits of, or disputes
with taxing authorities regarding, any Tax Returns of Holdings and each of
its subsidiaries;
(d) make available to the other and to any taxing authority as
reasonably requested in connection with any Tax Return described in Section
9.4(b) or any proceeding described in Section 9.4(c), all information
relating to any Taxes or any Tax Returns of Holdings and each of its
subsidiaries, including, without limitation, records, returns, schedules,
documents, work papers or other relevant materials;
(e) provide timely notice to the other in writing of any Tax
audits or assessments of Holdings and each of its subsidiaries that are
pending or proposed in writing for taxable periods for which the other may
have a liability under this Article IX; and
(f) furnish the other with copies of all correspondence received
from any taxing authority in connection with any Tax audit or information
request with respect to any such taxable period.
Section 9.5 Adjustment to Merger Consideration. For all Tax
purposes, any payment by Laser or Parent Holdings under this Agreement will
be an adjustment to the Merger Consideration.
Section 9.6 Survival of Obligations. Notwithstanding anything to
the contrary in this Agreement, and notwithstanding Article X of this
Agreement, the obligations of the parties set forth in this Article IX
shall be unconditional and absolute and shall remain in effect until 90
days after the expiration of the applicable statute of limitations.
Section 9.7 Reorganization. Laser shall not, and shall not permit
any of its subsidiaries or Affiliates to, take any action that could
prevent the Holdings Merger from qualifying as a reorganization within the
meaning of Section 368(a) of the Code. Laser and Parent Holdings shall
treat, and shall cause their respective Affiliates to treat, the Holdings
Merger as a reorganization for all Tax and reporting purposes.
Section 9.8 Tax Sharing Agreements. All rights and obligations of
Parent Holdings (and the entities that will be its Affiliates after the
Holdings Effective Time) pursuant to any of the Tax Sharing Arrangements or
any Tax indemnity arrangements involving Holdings or any of its
subsidiaries will terminate on the Closing Date.
Section 9.9 Information. Notwithstanding any other provision of
this Agreement or the Company Merger Agreement, neither Laser nor any of
its Affiliates nor any other Person shall have any right to receive or
obtain any information relating to Taxes of Parent Holdings or any of its
Affiliates other than information relating solely to Holdings or any of its
subsidiaries.
ARTICLE X
INDEMNIFICATION; SURVIVAL
Section 10.1 Parent Holdings' Agreement to Indemnify.
(a) Subject to the terms and conditions of this Article X, from
and after the Closing Date, Parent Holdings shall indemnify, defend and
hold harmless Laser and its subsidiaries (including after the Closing Date,
the Company and its subsidiaries) and each of their respective successors
and permitted assigns, directors, officers, employees, representatives,
agents, Affiliates and associates (collectively, the "Laser Group") from
and against any and all losses, liabilities, expenses (including reasonable
attorneys' fees), claims and damages (collectively, "Damages") asserted
against, resulting to, imposed upon or suffered by the Laser Group, or any
one of them, arising out of or related to any liability or obligation of
Holdings or Worldwide existing on or prior to the Closing Date other than
any such liability or obligation (i) arising in connection with the Notes,
the XXXXx and the 1998 Notes, (ii) which is also a liability or obligation
of the Company or its subsidiaries (on a joint basis or otherwise), or
(iii) which relates to the conduct, operations or activities of the Company
or its subsidiaries.
(b) If there are any conflicts between the provisions of this
Section 10.1 and Section 9.3 with respect to Tax Claims, the provisions of
Section 9.3 shall control.
(c) Any payment by Parent Holdings under Article IX or this
Section 10.1 will be an adjustment to the Merger Consideration.
(d) Anything in this Agreement to the contrary notwithstanding,
the liability of Parent Holdings to indemnify the Laser Group pursuant to
this Section 10.1 against any Damages sustained by reason of any Laser
Claim shall be limited to Laser Claims as to which the Laser Group has
given Parent Holdings written notice, setting forth in reasonable detail
the basis for such Laser Claim, on or prior to the fourth (4th) anniversary
of the Closing Date.
Section 10.2 Conditions of Indemnification With Respect to Third-
Party Claims. The obligations and liabilities of Parent Holdings with
respect to Laser Claims for Damages which arise or result from claims made
by third parties ("Third-Party Claims") shall be subject to the following
conditions:
(a) The Laser Group shall give Parent Holdings prompt notice of
any such Third-Party Claim, and Parent Holdings shall have the right to
undertake the defense thereof by representatives chosen by it; provided,
however, that failure to provide prompt notice shall not affect Parent
Holdings' obligations hereunder except to the extent that Parent Holdings
is actually prejudiced by such failure;
(b) If Parent Holdings undertakes the defense of any such Third-
Party Claim, the Laser Group shall, to the best of its ability, assist
Parent Holdings, at the expense of Parent Holdings, in the defense of such
Third-Party Claim, and shall promptly send to Parent Holdings, at the
expense of Parent Holdings, copies of any documents received by the Laser
Group which relate to such Third-Party Claim;
(c) If Parent Holdings, within a reasonable time after notice of
any such Third-Party Claim, fails to defend the member(s) of the Laser
Group against which such Third-Party Claim has been asserted, the Laser
Group shall (upon further notice to Seller) have the right to undertake the
defense, compromise or settlement of such Third-Party Claim on behalf of
and for the account and risk of Parent Holdings, subject to the right of
Parent Holdings to assume the defense of such Third-Party Claim at any time
prior to settlement, compromise or final determination thereof; and
(d) Anything in this Article X to the contrary notwithstanding,
(i) if there is a reasonable probability that a Third-Party Claim may
materially and adversely affect the Laser Group other than as a result of
money damages or other money payments, the Laser Group shall have the
right, at its own cost and expense, to defend, compromise or settle such
Third-Party Claim, and shall by doing so release Parent Holdings from any
liability to provide indemnification with respect to such Third-Party
Claim; and (ii) Parent Holdings shall not, without the written consent of
the Laser Group, settle or compromise any Third-Party Claim or consent to
the entry of any judgment which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the Laser Group a
release from all liability with respect to such Third-Party Claim.
Section 10.3 Survival of Representations; Covenants. The
representations and warranties in this Agreement shall terminate upon and
not survive the Closing Date. This Section 10.3 shall not limit any
covenant or agreement of the parties contained herein which by its terms
contemplates performance after the Holdings Effective Time.
ARTICLE XI
TERMINATION
Section 11.1 Termination. This Agreement may be terminated at any
time prior to the Holdings Effective Time:
(a) by mutual written agreement of Laser and Holdings;
(b) by either Laser or Holdings if the Holdings Merger shall not
have been consummated on or before August 31, 1998 (the "Termination
Date"); provided, however, that the right to terminate this Agreement under
this Section 11.1(b) shall not be available to any party whose failure to
fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Closing to occur on or before the
Termination Date;
(c) by either Laser or Holdings if a court of competent
jurisdiction or governmental, regulatory or administrative agency or
commission shall have issued an order, decree or ruling or taken any other
action (which order, decree or ruling the parties shall use their
reasonable best efforts to lift), in each case permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement, and such order, decree, ruling or other action shall have become
final and nonappealable;
(d) by either Laser or Holdings in the event of a breach by the
other party or any of its subsidiaries (including, in the case of Holdings,
the Company and its subsidiaries) of any representation, warranty, covenant
or other agreement contained in this Agreement or the Company Merger
Agreement, as applicable, which would give rise to the failure of a
condition set forth in Section 8.2(a) or Section 8.3(a) hereof or
Section 8.1 thereof, as applicable, and is not capable of being cured
(provided that the terminating party is not then in material breach of any
representation, warranty, covenant or other agreement contained in this
Agreement).
Section 11.2 Effect of Termination. In the event of termination
of this Agreement as provided in Section 11.1 hereof, this Agreement shall
forthwith become void, provided that the last sentence of Section 6.7 and
Article XII shall continue, and there shall be no liability on the part of
any of the parties, nothing herein shall relieve any party from liability
for any willful breach hereof.
ARTICLE XII
MISCELLANEOUS
Section 12.1 Notices. All notices or other communications
hereunder shall be deemed to have been duly given and made if in writing
and if served by personal delivery upon the party for whom it is intended,
if delivered by registered or certified mail, return receipt requested, or
by a national courier service, or if sent by telecopier; provided that the
telecopy is promptly confirmed by telephone confirmation thereof, to the
person at the address set forth below, or such other address as may be
designated in writing hereafter, in the same manner, by such person:
If to Holdings:
CLN Holdings Inc.
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx #000-X
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
Attention: General Counsel
with copies to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
If to Laser:
Sunbeam Corporation
0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxx, Esq.
with copies to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Any such notification shall be deemed delivered (i) upon receipt,
if delivered personally, (ii) on the next business day, if sent by national
courier service for next business day delivery or (iii) the business day
received, if sent by telecopier.
Section 12.2 Amendment. This Agreement may be amended by the
parties pursuant to a writing adopted by action taken by all of the parties
at any time before the Closing Date. This Agreement may not be amended
except by an instrument in writing signed by the Parties.
Section 12.3 Extension; Waiver. At any time before the Closing
Date, any party hereto may (a) extend the time for the performance of any
of the obligations or other acts of the other parties, (b) waive any
inaccuracies in the representations and warranties contained herein or in
any document delivered pursuant hereto and (c) waive compliance with any of
the agreements or conditions contained herein. Any agreement on the part
of a party to any such extension or waiver shall be valid only as against
such party and only if set forth in an instrument in writing signed by such
party. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of
such rights.
Section 12.4 Assignment. No party to this Agreement may assign
any of its rights or obligations under this Agreement without the prior
written consent of the other party hereto.
Section 12.5 Entire Agreement. This Agreement (including all
Schedules and Exhibits hereto) contains the entire agreement among the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral or written, with respect to such
matters, except for the Confidentiality Agreements which will remain in
full force and effect for the term provided for therein.
Section 12.6 Parties in Interest. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, express or
implied, is intended to confer upon any Person other than Laser, Holdings,
Worldwide, their respective subsidiaries or their successors or permitted
assigns, any rights or remedies under or by reason of this Agreement.
Section 12.7 Expenses. Whether or not the transactions
contemplated by this Agreement are consummated, all costs and expenses
incurred in connection with this Agreement and the transactions
contemplated hereby shall be borne by the party incurring such expenses.
Section 12.8 Governing Law. This Agreement shall be governed by
the laws of the State of Delaware, its rules of conflict of laws
notwithstanding.
Section 12.9 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, and all of
which shall constitute one and the same agreement.
Section 12.10 Headings. The heading references herein and in the
table of contents hereto are for convenience purposes only, do not
constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
Section 12.11 Further Assurances. From time to time after the
Closing Date, at the request of the other party hereto and at the expense
of the party so requesting, Holdings and Laser shall execute and deliver to
such requesting party such documents and take such other action as such
requesting party may reasonably request in order to consummate the
transactions contemplated hereby.
Section 12.12 Specific Performance. Each party hereto
acknowledges that money damages would be both incalculable and an
insufficient remedy for any breach of this Agreement by such party and that
any such breach would cause the other party hereto irreparable harm.
Accordingly, each party hereto also agrees that, in the event of any breach
or threatened breach of the provisions of this Agreement by such party, the
other party hereto shall be entitled to equitable relief without the
requirement of posting a bond or other security, including in the form of
injunctions and orders for specific performance.
Section 12.13 Certain Terms. As used herein: (i) the term
"material adverse effect" (including as used in any definition) with
respect to any Person, shall exclude any change, event, effect or
circumstance (a) arising in connection with the announcement or performance
of the transactions contemplated by this Agreement and the Company Merger
Agreement and (b) affecting in the United States economy generally or such
Person's industries generally; and (ii) "to the knowledge of Holdings"
shall mean to the actual knowledge of Xxxx X. Xxxxxxx, Xxxxx X. Xxxxx and
Xxxxxx X. Xxxx.
Section 12.14 Interpretation. When a reference is made to this
Agreement to an Article or Section, such reference shall be to an Article
or Section of, this Agreement unless otherwise indicated. Whenever the
words "include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation". The
words "hereof", "herein" and "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement. The phrase "made available" in
this Agreement shall mean that the information referred to has been made
available if requested by the party to whom such information is to be made
available. All terms defined in this Agreement shall have the defined
meanings used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the
plural forms of such terms and to the masculine as well as to the feminine
and neuter genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument that is
referred to herein means such agreement, instrument or statute as from time
to time amended, modified or supplemented, including (in the case of
agreements or instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and references to
all attachments thereto and instruments incorporated therein. References
to a person are also to its permitted successors and assigns and, in the
case of an individual, to his heirs and estate, as applicable.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have executed or caused this
Agreement to be executed as of the date first written above.
SUNBEAM CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
LASER ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxxx
________________________________
Name: Xxxxxxx X. Xxxxxx
Title:
CLN HOLDINGS INC.
By: /s/ Xxxxx X. Xxxxxxxx
____________________________
Name: Xxxxx X. Xxxxxxxx
Title: Executive Vice President
XXXXXXX (PARENT) HOLDINGS INC.
By: /s/ Xxxxx X. Xxxxxxxx
_______________________________
Name: Xxxxx X. Xxxxxxxx
Title: Executive Vice President
