EXHIBIT 2.1
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
among
XXXXX XXXXXXXX CORPORATION,
HB MERGER LLC
and
HB FINANCE LLC
dated as of
June 22, 2000
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TABLE OF CONTENTS
PAGE
ARTICLE I THE MERGER...................................................1
Section 1.1 The Merger..............................................1
Section 1.2 Effective Time..........................................2
Section 1.3 Closing.................................................2
Section 1.4 Certificate of Incorporation; By-laws...................2
Section 1.5 Directors and Officers of the Surviving
Corporation and Certain Subsidiaries....................3
ARTICLE II CONVERSION OF SHARES.........................................3
Section 2.1 Conversion of Capital Stock.............................3
Section 2.2 Exchange of Certificates................................4
Section 2.3 Company Awards..........................................7
Section 2.4 Dissenter's Rights......................................9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY................9
Section 3.1 Organization............................................9
Section 3.2 Capitalization.........................................10
Section 3.3 Authorization; Validity of Agreement...................11
Section 3.4 No Violations; Approvals...............................11
Section 3.5 SEC Reports and Financial Statements...................12
Section 3.6 Absence of Certain Changes.............................13
Section 3.7 Absence of Undisclosed Liabilities.....................14
Section 3.8 Information in Disclosure Documents....................14
Section 3.9 Employee Benefit Plans; ERISA..........................15
Section 3.10 Litigation; Compliance with Law........................17
Section 3.11 Intellectual Property..................................18
Section 3.12 Identified Contracts...................................19
Section 3.13 Real Property..........................................20
Section 3.14 Taxes..................................................22
Section 3.15 Environmental Matters..................................24
Section 3.16 Labor Matters..........................................27
Section 3.17 Required Vote by Company Stockholders..................28
Section 3.18 Board Recommendation...................................28
Section 3.19 Brokers................................................28
Section 3.20 Opinion of Financial Advisor...........................28
Section 3.21 Injunction.............................................28
Section 3.22 Annual Plan............................................28
Section 3.23 No Other Representations or Warranties.................28
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF MERGER
COMPANY AND FINANCE COMPANY.................................29
Section 4.1 Organization...........................................29
Section 4.2 Capitalization.........................................29
Section 4.3 Authorization; Validity of Agreement...................29
Section 4.4 Consents and Approvals; No Violations..................30
Section 4.5 Information in Disclosure Documents....................30
Section 4.6 Financing..............................................31
Section 4.7 Beneficial Ownership of Shares.........................31
Section 4.8 Brokers................................................31
Section 4.9 Surviving Corporation after the Merger.................32
Section 4.10 Employment Agreement...................................32
Section 4.11 No Prior Activities....................................32
Section 4.12 No Other Representations or Warranties.................32
ARTICLE V COVENANTS...................................................32
Section 5.1 Interim Operations of the Company......................32
Section 5.2 Acquisition Proposals..................................35
Section 5.3 Access to Information..................................37
Section 5.4 Further Action; Commercially Reasonable Efforts........38
Section 5.5 Employee Benefits......................................40
Section 5.6 Stockholders Meeting; Proxy Statement..................42
Section 5.7 Directors' and Officers' Insurance and
Indemnification........................................43
Section 5.8 Environmental Assessments..............................44
Section 5.9 Environmental Transfer Laws............................45
Section 5.10 Solvency Letter........................................45
Section 5.11 Indemnity..............................................45
Section 5.12 Listing for Surviving Corporation Preferred Stock......46
Section 5.13 Stockholders Agreement.................................47
Section 5.14 Exchange of Certain Company Common Stock...............47
Section 5.15 Charter Amendment......................................47
ARTICLE VI CONDITIONS..................................................47
Section 6.1 Conditions to Each Party's Obligation to Effect
the Merger.............................................47
Section 6.2 Conditions to the Obligation of the Company to
Effect the Merger......................................48
Section 6.3 Conditions to Obligations of Merger Company to
Effect the Merger......................................49
Section 6.4 Frustration of Closing Conditions......................51
ARTICLE VII TERMINATION.................................................51
Section 7.1 Termination............................................51
Section 7.2 Effect of Termination..................................53
ARTICLE VIII MISCELLANEOUS..............................................54
Section 8.1 Fees and Expenses......................................54
Section 8.2 Amendment; Waiver......................................56
Section 8.3 Survival...............................................57
Section 8.4 Notices................................................57
Section 8.5 Interpretation.........................................58
Section 8.6 Headings; Disclosure Letter............................60
Section 8.7 Counterparts...........................................60
Section 8.8 Entire Agreement.......................................60
Section 8.9 Parties in Interest....................................60
Section 8.10 Severability...........................................60
Section 8.11 Governing Law..........................................61
Section 8.12 Assignment.............................................61
Section 8.13 Publicity..............................................61
Section 8.14 Enforcement............................................61
TABLE OF DEFINED TERMS
1954 Code..................................................................23
accumulated funding deficiency.............................................16
Acquisition Corp............................................................1
Acquisition Corp. Common Stock..............................................3
Acquisition Proposal.......................................................37
affiliates.................................................................58
Agreement...................................................................1
Antitrust Division.........................................................39
Appraiser..................................................................45
Assertion..................................................................44
Assertion Against HB.......................................................46
associates.................................................................58
Balance Sheets.............................................................14
beneficial ownership.......................................................58
beneficially owns..........................................................31
Benefit Plans...............................................................8
blue sky...................................................................12
Board......................................................................11
Bonus Plan.................................................................41
Business Day...............................................................58
By-Laws....................................................................10
Capital Budget.............................................................14
CERCLA.....................................................................26
Certificate of Merger.......................................................2
Certificates................................................................5
Charter Amendment...........................................................1
Class TM Certificates.......................................................4
Class TM Merger Consideration...............................................4
Class TM Preferred Stock....................................................3
Class TM Shares.............................................................3
Closing.....................................................................2
Closing Date................................................................2
Code.......................................................................15
Commitment Letters.........................................................31
Common Stock Certificates...................................................3
Common Stock Merger Consideration...........................................3
Company.....................................................................1
Company Common Stock........................................................3
Company Employee...........................................................41
Company Properties.........................................................20
Company Property...........................................................20
Company SEC Documents......................................................13
Company Trust Agreements...................................................20
Competition Laws...........................................................39
Confidentiality Agreement:.................................................38
controlled corporation.....................................................23
Convertible Preferred Stock................................................10
Court......................................................................48
Cumulative Preferred Stock.................................................10
Deemed Shares...............................................................8
Deferred Compensation Plans:................................................8
Deferred Stock..............................................................8
Delaware Act................................................................1
Designated Settlement Fund.................................................24
DGCL........................................................................1
Disclosure Letter...........................................................7
Dissenting Shares...........................................................9
distributing corporation...................................................23
EBITDA.....................................................................58
Effective Time..............................................................2
Elected Deemed Share........................................................9
Elected Deferred Share......................................................8
Election Form...............................................................8
employee benefit plan..................................................15, 16
Environmental Claim........................................................26
Environmental Costs and Liabilities........................................26
Environmental Laws.........................................................26
Environmental Property Transfer Laws.......................................27
ERISA......................................................................15
ERISA Affiliate............................................................15
ERISA Plan.................................................................16
Exchange Act...............................................................12
Exchange Agent..............................................................4
Exchange Fund...............................................................5
Expenses...................................................................54
Finance Company.............................................................1
Foreign Plan...............................................................17
Fractional Securities Fund..................................................7
Free Cash Flow.............................................................58
FTC........................................................................39
GAAP.......................................................................13
Good Reason................................................................17
Governmental Entity........................................................12
Hazardous Substance........................................................27
HSR Act....................................................................39
Identified Contracts.......................................................19
include....................................................................58
includes...................................................................58
including..................................................................58
Indemnified Liability......................................................43
Indemnified Litigation Matter..............................................46
Indemnified Merger Parties.................................................46
Indemnified Merger Party...................................................46
Indemnified Parties........................................................43
Indemnified Party..........................................................43
Indemnitors................................................................44
Intellectual Property......................................................18
interest similar to an option..............................................23
Leased Properties..........................................................20
Leased Property............................................................20
Liens......................................................................11
made available.............................................................58
Management.................................................................59
mass layoff................................................................27
Material Adverse Effect....................................................59
Merger......................................................................1
Merger Company Membership Interests..........................................
Merger Consideration........................................................4
Merger Party Indemnitor....................................................45
MF Disclosure Letter........................................................3
multiemployer pension plan.................................................16
not stock..................................................................23
Option......................................................................7
Option Plans................................................................7
Owned Properties...........................................................20
Owned Property.............................................................20
PBGC.......................................................................16
Permitted Exceptions.......................................................59
Person.....................................................................60
Plans......................................................................15
plant closing..............................................................27
Proxy Statement:...........................................................42
qualified..................................................................16
RCRA.......................................................................26
Real Property Lease........................................................20
Real Property Leases.......................................................20
Release....................................................................27
Reorganization Plan........................................................28
Required Vote..............................................................28
Restated Certificate of Incorporation.......................................2
Return.....................................................................23
S-4........................................................................14
SAR.........................................................................7
SEC:.......................................................................12
Secretary of State..........................................................2
Securities Act:............................................................12
Shares...................................................................3, 4
single employer............................................................15
Solvency Letter............................................................45
Special Meeting............................................................42
Spread......................................................................7
Subsidiaries...............................................................60
Superior Proposal..........................................................37
Surviving Corporation.......................................................1
Surviving Corporation Common Stock..........................................4
Surviving Corporation Junior Preferred Stock................................4
Surviving Corporation Preferred Stock.......................................3
Tax........................................................................23
Tax Matters Agreement......................................................60
Taxes......................................................................23
Termination Fee............................................................54
TM Exchange Agreement......................................................47
Trust.......................................................................1
Trust Merger Agreements....................................................48
Trust Voting Agreement......................................................1
U.S. real property holding corporation.....................................23
without limitation.........................................................58
Year.......................................................................41
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, among Xxxxx Xxxxxxxx
Corporation, a Delaware corporation (the "Company"), HB Merger LLC, a
Delaware limited liability company ("Merger Company"), and HB Finance LLC,
a Delaware limited liability company ("Finance Company"), dated as of June
22, 2000 (the "Agreement").
WHEREAS, the respective members or Boards of Directors, as
the case may be, of Merger Company, Finance Company and the Company have
approved this Agreement and deemed this Agreement to be advisable and have
approved the transactions contemplated hereby, including the
recapitalization of the Company through the merger of Merger Company with
and into the Company (the "Merger") in accordance with the terms of this
Agreement, the General Corporation Law of the State of Delaware (the
"DGCL") and the Delaware Limited Liability Company Act (the "Delaware
Act"); and
WHEREAS, the Board (as defined herein) has approved the form
of Amendment to the Company's Restated Certificate of Incorporation
attached as Exhibit A hereto (the "Charter Amendment") and determined it to
be advisable; and
WHEREAS, contemporaneously with the execution and delivery
of this Agreement, as a condition and an inducement to the willingness of
Merger Company to enter into this Agreement, Merger Company is entering
into a voting agreement (the "Trust Voting Agreement") with Manville
Personal Injury Settlement Trust (the "Trust"), pursuant to which, on the
terms and subject to the conditions thereof, the Trust has agreed to vote
in favor of the adoption of this Agreement and approval of the transactions
contemplated hereby, including the Charter Amendment;
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
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the
conditions of this Agreement and in accordance with the DGCL and the
Delaware Act, at the Effective Time (as defined in Section 1.2 hereof),
Merger Company shall be merged with and into the Company. Upon the Merger,
the separate existence of Merger Company shall cease and the Company shall
continue as the surviving corporation (sometimes hereinafter referred to as
the "Surviving Corporation"). The Merger shall have the effect as provided
in the applicable provisions of the DGCL and the Delaware Act. Without
limiting the generality of the foregoing, upon the Merger, all the rights,
privileges, immunities, powers and franchises of the Company and Merger
Company shall vest in the Surviving Corporation and all obligations,
duties, debts and liabilities of the Company and Merger Company shall be
the obligations, duties, debts and liabilities of the Surviving
Corporation.
Section 1.2 Effective Time. Subject to the provisions of
this Agreement, on the Closing Date (as defined in Section 1.3 below),
Merger Company and the Company will cause an appropriate Certificate of
Merger (the "Certificate of Merger") to be executed and filed with the
Secretary of State of the State of Delaware (the "Secretary of State") in
such form and executed as provided in the DGCL and the Delaware Act. The
Merger shall become effective on the date and at the time when the
Certificate of Merger has been duly filed with the Secretary of State or,
subject to the DGCL and the Delaware Act, such time as is agreed upon by
the parties and specified in the Certificate of Merger, and such time is
hereinafter referred to as the "Effective Time."
Section 1.3 Closing. Unless this Agreement shall have been
terminated and the transactions contemplated herein abandoned pursuant to
Section 7.1 and subject to the satisfaction or waiver of the conditions set
forth in Article VI, the closing of the Merger (the "Closing") will take
place at 10:00 a.m., New York city time, on a date to be specified by the
parties, which shall be no later than the second Business Day (as defined
in Section 8.5) after satisfaction or waiver (by the party entitled to
waive the condition) of all of the conditions set forth in Article VI
hereof (except for the conditions set forth in Sections 6.1(a) and 6.1(f)
which cannot be waived and those conditions that by their nature cannot be
satisfied until the Closing, but subject to all such conditions having been
satisfied or waived at the time of the Closing) (the "Closing Date"), at
the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, Xxxx Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, unless another date and/or place is agreed to in
writing by the parties hereto.
Section 1.4 Certificate of Incorporation; By-laws. Pursuant
to the Merger, (i) the Restated Certificate of Incorporation of the
Company, as amended (the "Restated Certificate of Incorporation"), as in
effect immediately prior to the Merger shall be amended and restated in its
entirety in the form attached as Exhibit B hereto (including the terms of
the Surviving Corporation Preferred Stock (as defined in Section 2.1(a)
below) attached thereto as Annex A and the terms of the Surviving
Corporation Junior Preferred Stock (as defined in Section 2.1(b) below)
attached thereto as Annex B), and as so amended shall be the certificate of
incorporation of the Surviving Corporation until thereafter changed or
amended as provided therein or by applicable law, and (ii) the by-laws of
the Company, attached as Exhibit C hereto, shall be the by-laws of the
Surviving Corporation until thereafter changed or amended as provided
therein or by applicable law.
Section 1.5 Directors and Officers of the Surviving
Corporation and Certain Subsidiaries.
(a) The persons listed on Section 1.5(a) of the disclosure
letter separately delivered by Merger Company and Finance Company to the
Company on or prior to the date hereof (the "MF Disclosure Letter") shall,
from and after the Effective Time, be the directors of the Surviving
Corporation until their successors shall have been duly elected or
appointed and qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's certificate of
incorporation and by-laws.
(b) The officers of the Company immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation
and shall hold office until their respective successors are duly elected
and qualified, or their earlier death, resignation or removal.
ARTICLE II
CONVERSION OF SHARES
Section 2.1 Conversion of Capital Stock. At the Effective
Time, by virtue of the Merger and without any action on the part of the
Company, Merger Company, the holders of any shares of common stock, par
value $.01 per share, of the Company (referred to herein as "Common Shares"
or "Company Common Stock"), the holders of any shares of the Company Class
TM Preferred Stock, par value $.01 per share (referred to herein as "Class
TM Shares" or "Class TM Preferred Stock"), or the holders of any membership
interests of Merger Company (the "Merger Company Membership Interests"):
(a) Each issued and outstanding share of Company Common
Stock (other than Common Shares to be cancelled in accordance with Section
2.1(d) and the Dissenting Shares covered by Section 2.4) shall be converted
into the right to receive, payable upon surrender of the certificate or
certificates which immediately prior to the Effective Time represented
issued and outstanding shares of Company Common Stock (the "Common Stock
Certificates") in the manner provided in Section 2.2, $13.625 per share in
cash, payable to the holder thereof without interest, and 0.02 of a fully
paid and nonassessable share of Series A Redeemable PIK Preferred Stock,
par value $.01 per share, of the Surviving Corporation, the terms of which
are set forth in Annex A of Exhibit B hereto (the "Surviving Corporation
Preferred Stock"). Such consideration is referred to herein as the "Common
Stock Merger Consideration." All such shares of Company Common Stock, when
so converted, shall no longer be outstanding and shall automatically be
cancelled and retired and shall cease to exist, and each holder of a Common
Stock Certificate shall cease to have any rights with respect thereto,
except the right to receive the Common Stock Merger Consideration for each
share of Company Common Stock upon the surrender of such certificate in
accordance with Section 2.2. Any payment made pursuant to this Section
2.1(a) shall be made net of applicable withholding taxes to the extent such
withholding is required by law.
(b) Each issued and outstanding share of Class TM Preferred
Stock, the terms of which are set forth in Exhibit A hereto shall be
converted at the Effective Time into the right to receive, payable upon
surrender of the certificate or certificates which immediately prior to the
Effective Time represented issued and outstanding shares of Class TM
Preferred Stock (the "Class TM Certificates") in the manner provided in
Section 2.2, 0.6 of a fully paid and nonassessable share of common stock of
the Surviving Corporation (the "Surviving Corporation Common Stock") and
0.4 of a fully paid and nonassessable share of Series B Junior Redeemable
Convertible Preferred Stock, par value $.01 per share, of the Surviving
Corporation, the terms of which are set forth in Annex B to Exhibit B
hereto (the "Surviving Corporation Junior Preferred Stock"). Such
consideration is referred to herein as the "Class TM Merger Consideration",
and references to such consideration or the Common Stock Merger
Consideration, as applicable, are referred to hereby as the "Merger
Consideration". All such Class TM Shares, when so converted, shall no
longer be outstanding and shall automatically be cancelled and retired and
shall cease to exist, and each holder of a Class TM Certificate shall cease
to have any rights with respect thereto, except the right to receive the
Class TM Merger Consideration for each share of Class TM Preferred Stock
upon the surrender of the Class TM Certificates in accordance with Section
2.2. Any payment made pursuant to this Section 2.1(b) shall be made net of
applicable withholding taxes to the extent such withholding is required by
law.
(c) Each issued and outstanding Merger Company Membership
Interest shall be converted into and become 0.6 of a fully paid and
nonassessable share of Surviving Corporation Common Stock and 0.4 of a
fully paid and nonassessable share of Surviving Corporation Junior
Preferred Stock.
(d) All shares of Company Common Stock that are held by the
Company as treasury stock and all shares of Company Common Stock owned by
Merger Company or any Subsidiary of Merger Company shall be cancelled and
retired and shall cease to exist and no Merger Consideration shall be
delivered in exchange therefor.
Section 2.2 Exchange of Certificates.
(a) At least five Business Days prior to the Effective Time,
Merger Company shall designate the Company's registrar and transfer agent,
or such other bank or trust company as is reasonably satisfactory to the
Company, to act as exchange agent for the holders of Common Shares and
Class TM Shares (collectively, the "Shares") in connection with the Merger,
pursuant to an agreement providing for the matters set forth in this
Section 2.2 and such other matters as may be appropriate and the terms of
which are reasonably satisfactory to the Company (the "Exchange Agent"),
for the payment of the applicable Merger Consideration. Immediately prior
to the Effective Time, Finance Company and the Company will cause to be
deposited in trust with the Exchange Agent for the benefit of holders of
the Shares, as applicable, (i) the amount of cash, (ii) certificates
representing the number of whole shares of Surviving Corporation Preferred
Stock, (iii) certificates representing the number of whole shares of
Surviving Corporation Junior Preferred Stock and (iv) certificates
representing the number of whole shares of Surviving Corporation Common
Stock necessary to complete the transactions contemplated by this Section
2.2 on a timely basis (the "Exchange Fund").
At the Effective Time, the Surviving Corporation will
instruct the Exchange Agent to promptly, and in any event not later than
three Business Days following the Effective Time, mail (and to make
available for collection by hand) to each holder of record of Common Stock
Certificates or Class TM Certificates (collectively, the "Certificates"),
whose shares were converted pursuant to Section 2.1 into the right to
receive the applicable Merger Consideration (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and
title to such Certificates shall pass, only upon delivery of such
Certificates to the Exchange Agent and shall be in such form and have such
other provisions as Merger Company and the Company may reasonably specify)
and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for payment of the applicable Merger Consideration
(which shall provide that, at the election of the surrendering holder,
Certificates may be surrendered, and the applicable Merger Consideration
therefor collected, by hand delivery). At least two Business Days prior to
the Effective Time, Merger Company will cause the Exchange Agent to make
available for collection by hand at its offices in New York, New York, the
letter of transmittal and instructions referred to in the immediately
preceding sentence. Upon surrender of a Certificate for cancellation to the
Exchange Agent or to such other agent or agents as may be appointed by the
Company, together with such letter of transmittal, duly executed, the
holder of such Certificate shall be entitled to receive in exchange
therefor the applicable Merger Consideration for each share of Company
Common Stock or Class TM Preferred Stock, as the case may be, formerly
represented by such Certificate, to be mailed within three Business Days of
receipt thereof (and made available for collection by hand immediately
following the Effective Time if the completed letter of transmittal is
received at least one Business Day prior to the Effective Time), and the
Certificate so surrendered shall forthwith be cancelled. If payment of the
applicable Merger Consideration is to be made to a person or stock
certificates are to be issued to a person other than the person in whose
name the surrendered Certificate is registered, it shall be a condition of
payment or issuance that the Certificate so surrendered shall be properly
endorsed or shall be otherwise in proper form for transfer and that the
person requesting such payment shall have paid any transfer and other taxes
required by reason of the payment of the applicable Merger Consideration to
a person other than the registered holder of the Certificate surrendered or
shall have established to the satisfaction of the Surviving Corporation
that such tax either has been paid or is not applicable. In the event of a
transfer of ownership of Company Common Stock which is not registered in
the transfer records of the Company, the applicable Merger Consideration
and a check in the proper amount of cash in lieu of any fractional shares
of Surviving Corporation Preferred Stock pursuant to Section 2.2(d) and any
dividends or other distributions to which such holder is entitled, may be
issued with respect to such Company Common Stock to such a transferee if
the Certificates representing such Company Common Stock are presented to
the Exchange Agent (or if lost, stolen or destroyed, the procedures set
forth in Section 2.2(e) are complied with), accompanied by all documents
required to evidence and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid.
(b) Until surrendered as contemplated by this Section 2.2,
each Certificate (other than Certificates representing Company Common Stock
held by Merger Company, or any Subsidiary of Merger Company, or Dissenting
Shares (as defined in Section 2.4)) shall be deemed at any time after the
Effective Time to represent only the right to receive the applicable Merger
Consideration as contemplated by this Section 2.2. No interest or dividends
shall be paid or will accrue on any Merger Consideration payable to holders
of Certificates pursuant to the provisions of this Article II (other than
dividends, if any, accruing on the Surviving Corporation Preferred Stock,
Surviving Corporation Junior Preferred Stock or Surviving Corporation
Common Stock from the Effective Time pursuant to the terms thereof).
Notwithstanding the foregoing, neither the Exchange Agent
nor any party hereto shall be liable to a holder of any such shares for any
Surviving Corporation Preferred Stock, Surviving Corporation Junior
Preferred Stock or Surviving Corporation Common Stock or dividends thereon,
or, in accordance with Section 2.2(d), cash in lieu of fractional shares
thereof, delivered to a public official pursuant to applicable escheat law.
The Exchange Agent shall not be entitled to vote or exercise any rights of
ownership with respect to the Surviving Corporation Preferred Stock,
Surviving Corporation Junior Preferred Stock or Surviving Corporation
Common Stock held by it from time to time hereunder, except that it shall
receive and hold all dividends or other distributions paid or distributed
with respect to such Surviving Corporation Preferred Stock, Surviving
Corporation Junior Preferred Stock and Surviving Corporation Common Stock
for the account of the persons entitled thereto.
(c) Any portion of the Exchange Fund and the Fractional
Securities Fund (as defined in Section 2.2(d)) which remains unclaimed by
the former stockholders of the Company for one year after the Effective
Time shall be delivered to Surviving Corporation, upon demand of Surviving
Corporation, and any former stockholders of the Company shall thereafter
look only to Surviving Corporation for payment of their claim for the
Merger Consideration for the shares or for any cash in lieu of fractional
shares of Surviving Corporation Preferred Stock, Surviving Corporation
Junior Preferred Stock or Surviving Corporation Common Stock.
(d) No fractional shares of Surviving Corporation Preferred
Stock, Surviving Corporation Junior Preferred Stock or Surviving
Corporation Common Stock shall be issued in the Merger. Each holder of
shares of Surviving Corporation Preferred Stock, Surviving Corporation
Junior Preferred Stock or Surviving Corporation Common Stock to which such
holder otherwise would have been entitled pursuant to Section 2.2 (after
taking into account all Shares then held of record by such holder) shall
receive in lieu thereof, a cash payment in an amount equal to the product
of (i) in the case of Surviving Corporation Preferred Stock the fractional
interest of each such share to which such holder otherwise would have been
entitled, multiplied by $100 and (ii) in the case of Surviving Corporation
Junior Preferred Stock or Surviving Corporation Common Stock, as
applicable, the fractional interest of each such share to which such holder
otherwise would have been entitled, multiplied by $15.625 (the cash
comprising such aggregate payments in lieu of such fractional shares being
hereinafter referred to as the "Fractional Securities Fund"). The Company
shall, immediately prior to the Effective Time, make available to the
Exchange Agent cash in an amount sufficient to make the payments in lieu of
such fractional shares as aforesaid.
(e) In the event any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the
Person (as defined in Section 8.5) claiming such Certificate to be lost,
stolen or destroyed, the Exchange Agent will issue in exchange for such
lost, stolen or destroyed Certificate the applicable Merger Consideration
deliverable in respect thereof as determined in accordance with this
Article II, provided that the Person to whom the Merger Consideration is
paid shall, as a condition precedent to the payment thereof, give the
Surviving Corporation a bond in such sum as the Surviving Corporation may
direct or otherwise indemnify the Surviving Corporation in a manner
satisfactory to it against any claim that may be made against the Surviving
Corporation with respect to the Certificate claimed to have been lost,
stolen or destroyed.
(f) After the Effective Time, the stock transfer books of
the Company shall be closed and there shall be no transfers on the stock
transfer books of the Surviving Corporation of shares of Company Common
Stock and Class TM Preferred Stock which were outstanding immediately prior
to the Effective Time. If, after the Effective Time, Certificates are
presented to the Surviving Corporation, they shall be cancelled and
exchanged for the Merger Consideration as provided in this Article II,
subject to Section 262 of the DGCL.
Section 2.3 Company Awards.
(a) Immediately prior to the Effective Time, each
outstanding option (each, an "Option") to purchase shares of Company Common
Stock (other than Elected Management Options as defined in Section 2.3(c)
below) and each outstanding stock appreciation right with respect to
Company Common Stock (each, an "SAR") granted by the Company pursuant to
the Company's benefit plans (the "Option Plans") identified in Section 2.3
of the disclosure letter separately delivered by the Company to Merger
Company and Finance Company on or prior to the date hereof (the "Disclosure
Letter"), whether or not exercisable, which is outstanding and unexercised
at such time, shall be cancelled and each holder thereof shall be entitled
to receive, immediately prior to the Effective Time, an amount in cash
computed by multiplying (i) the excess, if any, of (A) the greater of (x)
$15.625 and (y) the highest Fair Market Value (as defined in the Company's
1996 Executive Incentive Compensation Plan) per Common Share at any time
during the 60-day period preceding the Effective Time, over (B) the
exercise price per share of Company Common Stock subject to such Option or
xxxxx xxxxx per share in respect of such SAR, as applicable (the "Spread"),
by (ii) the number of such shares of Company Common Stock then subject to
such Option or SAR; provided, that any such payment shall be net of all
withholding taxes required to be withheld by the Company.
(b) Immediately prior to the Effective Time, each share of
deferred stock ("Deferred Stock") awarded under the Option Plans (other
than an Elected Deferred Share as defined in Section 2.3(c) below) shall be
cancelled and each holder thereof shall be entitled to receive, immediately
prior to the Effective Time, with respect to each share of Deferred Stock
so cancelled, an amount in cash equal to the greater of (x) $15.625 and (y)
the highest Fair Market Value (as defined in the Company's 1996 Executive
Incentive Plan) per share of Company Common Stock at any time during the
60-day period preceding the Effective Time (net of all withholding taxes
required to be withheld by the Company).
(c) (i) Each member of Management (as defined in Section
8.5(iii)) shall have the right to elect, prior to the Special Meeting,
pursuant to an election form reasonably acceptable to the parties
("Election Form"), that, in lieu of receiving the Spread, with respect to
each Option owned by such member of Management for which an election is
made, the Spread on such option will be converted into the right to receive
(i) that number of shares of Surviving Corporation Common Stock equal to
the product of (a) the Spread divided by $15.625 and (b) 0.6 and (ii) that
number of shares of Surviving Corporation Junior Preferred Stock equal to
the product of (x) the Spread divided by $15.625 and (y) 0.4, in each case
on the terms and conditions set forth in the applicable Election Form;
provided, that any such payment shall be net of all withholding taxes
required to be withheld by the Company.
(ii) Each member of Management shall have the right to
elect, prior to the Special Meeting, that, in lieu of receiving the
corresponding cash payment as set forth in Section 2.3(b) with respect to
each share of Deferred Stock owned by such member (each share for which an
election is made, an "Elected Deferred Share"), such Elected Deferred Share
be converted into the Class TM Merger Consideration, on the terms and
subject to the conditions set forth in this Section 2.3(c) and the
applicable election form.
(d) Immediately prior to the Effective Time, (i) each unit
in the Company Deferred Compensation Plan deemed invested in assets other
than in Company Common Stock shall be converted into the right to receive
cash in an amount equal to the value of such unit, payable to the holder
thereof without interest, and (ii) each unit deemed invested in shares of
Company Common Stock in the Deferral Account (as defined in the Company's
Deferred Compensation Plan and the Non-Employee Directors' Deferred
Compensation Plan (together, the "Deferred Compensation Plans") (together
with the Option Plans, the "Benefit Plans")), including those Deferral
Accounts with respect to which one or more installment payments have
previously been made, shall be settled in a cash amount equal to $15.625
per share provided that any such payment shall be net of all withholding
taxes required to be withheld by the Company. To the extent that, at the
Effective Time, a member of Management has any portion of his Deferral
Account deemed invested in shares of the Company Common Stock (the "Deemed
Shares"), such member shall have the right to elect, prior to the Special
Meeting, pursuant to an election form that, in lieu of receiving a cash
payment set forth in the Deferred Compensation Plan with respect to each
Deemed Share owned by such member (each, an "Elected Deemed Share"), that
such Elected Deemed Share will be converted into the Class TM Merger
Consideration, on the terms and subject to the conditions set forth in this
Section 2.3(d) and the applicable election form (net of all withholding
taxes required to be withheld by the Company).
Notwithstanding anything in this Section 2.3 to the
contrary, in no event will the Company have an obligation hereunder that
violates the terms of the applicable Benefit Plans. Prior to the Effective
Time, the Company shall use its commercially reasonable efforts to (i)
obtain all required consents from, and provide any required notices to, the
holders of Options and Deferred Stock and (ii) amend the terms of the
applicable Benefit Plans, in each case as is necessary to give effect to
the provisions of paragraphs (a), (b), (c) and (d) of this Section 2.3;
provided however, that the Company shall not be required to make any
payment in respect of the foregoing (other than as set forth in Sections
2.3(a), (b), (c) and (d)).
Section 2.4 Dissenter's Rights. Notwithstanding anything in
this Agreement to the contrary, Common Shares outstanding immediately prior
to the Effective Time and held by a holder who has not voted in favor of
the Merger and who has delivered a written demand for appraisal of such
shares in accordance with Section 262 of the DGCL, if such Section 262
provides for appraisal rights for such Common Shares in the Merger
("Dissenting Shares"), shall not be converted into the right to receive the
Common Stock Merger Consideration, as provided in Section 2.1 hereof,
unless and until such holder fails to perfect or effectively withdraws or
otherwise loses his right to appraisal and payment under the DGCL. If,
after the Effective Time, any such holder fails to perfect or effectively
withdraws or loses his right to appraisal, such Dissenting Shares shall
thereupon be treated as if they had been converted as of the Effective Time
into the right to receive the Common Stock Merger Consideration to which
such holder is entitled, without interest or dividends thereon (except
dividends in respect of the Surviving Corporation Preferred Stock).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Merger Company and
Finance Company that:
Section 3.1 Organization. Each of the Company and its
Subsidiaries (as defined in Section 8.5(vii)) is a corporation or other
entity duly incorporated or organized, as the case may be, validly
existing, and in good standing (but, with respect to Subsidiaries not
organized in the United States, only to the extent such concept is
applicable) under the laws of the jurisdiction of its incorporation or
organization, has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as it is now being
conducted, and is qualified or licensed to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
nature of the business conducted by it makes such qualification or
licensing necessary, except where the failure to be so organized, existing
and in good standing or to have such power and authority, or to be so
qualified or licensed would not have a Material Adverse Effect (as defined
in Section 8.5(iv)). The Company has previously delivered to Merger Company
a complete and correct copy of each of its Restated Certificate of
Incorporation and by-laws, as currently in effect (the "By-Laws").
Section 3.2 Capitalization.
(a) The authorized capital stock of the Company consists of
300,000,000 shares of Company Common Stock, 7,200,000 shares of Convertible
Preferred Stock, Series A, par value $1.00 per share (the "Convertible
Preferred Stock") and 11,109,170 shares of Cumulative Preference Stock,
Series B, par value $1.00 per share (the "Cumulative Preferred Stock") and
prior to the Effective Time will also consist of 5,000,000 shares of Class
TM Preferred Stock. As of the date hereof, (i) 147,699,913 shares of
Company Common Stock are issued and outstanding, (ii) 17,013,046 shares of
Company Common Stock are issued and held in the treasury of the Company,
and (iii) there are no shares of Convertible Preferred Stock or Cumulative
Preferred Stock issued and outstanding or held in treasury and (iv)
12,804,482 shares of Company Common Stock are reserved for issuance upon
exercise of Options, SARs or Deferred Stock under the Option Plans or
Deferred Compensation Plans. No bonds, debentures, notes or other
indebtedness having the right to vote (or convertible into or exchangeable
for securities having the right to vote) on any matters on which
stockholders of the Company may vote are issued or outstanding. All the
outstanding shares of the Company's capital stock are, and all shares of
Class TM Preferred Stock and all shares which may be issued or granted
pursuant to the exercise of Options, SARs, or Deferred Stock will be, when
issued or granted in accordance with the respective terms thereof, duly
authorized, validly issued, fully paid and non-assessable. Except as set
forth in Section 3.2(a) of the Disclosure Letter as of the date hereof and
for the transactions contemplated hereby, there are no existing (i)
options, warrants, calls, pre-emptive rights, subscriptions or other
rights, convertible securities, agreements or commitments of any character
obligating the Company or any of its Subsidiaries to issue, transfer or
sell any shares of capital stock or other equity interest in, the Company
or any of its Subsidiaries or securities convertible into or exchangeable
for such shares or equity interests, (ii) contractual obligations of the
Company or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any capital stock of the Company or any Subsidiary of the Company
or (iii) voting trusts or similar agreements to which the Company is a
party with respect to the voting of the capital stock of the Company.
Schedule 3.2 (a) of the Disclosure Letter sets forth (A) with respect to
each Option, Deferred Stock or other such rights or obligations referred to
in this Section 3.2(a) owned by a director-level employee or higher,
including with respect to each Option owned by a director-level employee or
higher, the name of the holder thereof, the number of securities or
underlying securities associated therewith, the exercise or strike price
associated therewith, the vesting schedule, if any, the termination date
thereof and any other pricing information relating thereto and (B) the
aggregate number of securities or underlying securities associated
therewith and the price terms with respect to all other Options, SARs,
Deferred Stock or other such rights or obligations referred to in this
Section 3.2(a).
(b) Except as set forth in Section 3.2(b) of the Disclosure
Letter, all of the outstanding shares of capital stock (or equivalent
equity interests of entities other than corporations) of each of the
Company's Subsidiaries are beneficially owned, directly or indirectly, by
the Company free and clear of any mortgage, lien, pledge, charge,
encumbrance or other security interest (including any restriction on the
right to vote, sell or otherwise dispose of such capital stock or ownership
interests) (collectively, "Liens"), other than such restrictions as may
exist under applicable statute and all such shares or other ownership
interests have been duly authorized, validly issued and are fully paid and
non-assessable.
Section 3.3 Authorization; Validity of Agreement.
(a) The Company has the requisite corporate power and
authority to execute and deliver this Agreement and, subject to approval of
its stockholders as contemplated by Section 5.6 hereof, to consummate the
transactions contemplated hereby. The execution and delivery by the Company
of this Agreement and the consummation of the transactions contemplated
hereby have been duly approved and authorized by the Board of Directors of
the Company (the "Board") and, other than adoption of this Agreement by the
holders of a majority of the outstanding shares of Company Common Stock, no
other corporate proceedings on the part of the Company are necessary to
approve and authorize the execution and delivery of this Agreement and
approval of the Charter Amendment by the Company and the consummation by it
of the transactions contemplated hereby. This Agreement has been duly
executed and delivered by the Company and, assuming due authorization,
execution and delivery of this Agreement by Merger Company and Finance
Company, is a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except that such
enforcement may be subject to or limited by (i) bankruptcy, insolvency or
other similar laws, now or hereafter in effect, affecting creditors' rights
generally, and (ii) the effect of general principles of equity (regardless
of whether enforceability is considered in a proceeding at law or in
equity).
(b) The Board has adopted such resolutions as are necessary
so that the provisions of Section 203 of the DGCL are inapplicable to the
transactions contemplated by this Agreement.
Section 3.4 No Violations; Approvals.
(a) Neither the execution and delivery of this Agreement by
the Company nor the consummation by the Company of the transactions
contemplated hereby will (i) violate any provision of the Restated
Certificate of Incorporation or By-laws of the Company or violate any
provision of the certificate of incorporation or bylaws (or other
organizational documents with respect to non-incorporated entities) of its
Subsidiaries, (ii) except as set forth in Section 3.4(a) of the Disclosure
Letter, 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, amendment, cancellation, acceleration or the creation of a
Lien, other than a Permitted Exception, pursuant to), or require any
consent of any third party pursuant to, any of the terms, conditions or
provisions of any material note, bond, mortgage, indenture, guarantee,
other evidence of indebtedness, lease, license, contract, collective
bargaining agreement, agreement or other instrument or obligation to which
the Company or any of its Subsidiaries is a party or by which any of them
or any of their assets may be bound or (iii) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Company,
any of its Subsidiaries or any of their properties or assets; except in the
case of clauses (ii) or (iii) for such violations, breaches, defaults,
rights, creation of Liens or failure to obtain consents which would not
have a Material Adverse Effect.
(b) No filing or registration with, notification to, or
authorization, consent or approval of, any court, legislative, executive or
regulatory authority or agency (a "Governmental Entity") is legally
required in connection with the execution and delivery of this Agreement by
the Company or the consummation by the Company of the transactions
contemplated hereby, except (i) applicable requirements under Competition
Laws (as defined in Section 5.4(c)), (ii) with respect to the issuance of
Surviving Corporation Common Stock, Surviving Corporation Preferred Stock
and Surviving Corporation Junior Preferred Stock in the Merger, the
applicable requirements under the Securities Act of 1933, as amended (the
"Securities Act"), (iii) applicable requirements under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), (iv) the filing of
the Certificate of Merger with the Secretary of State, including the
amendments to the Restated Certificate of Incorporation that will become
effective as of the Effective Time set forth in Exhibit B hereto, and the
Charter Amendment, (v) applicable requirements under corporation, takeover
or "blue sky" laws of various states or non-United States change-in-control
or investment laws or regulations, (vi) applicable requirements under
Environmental Laws (as defined in Section 3.15) and (vii) such other
consents, approvals, orders, permits, authorizations, notifications,
registrations, declarations and filings the failure of which to be obtained
or made would not either individually, or in the aggregate, have a Material
Adverse Effect.
Section 3.5 SEC Reports and Financial Statements. The
Company has filed with the Securities and Exchange Commission (the "SEC")
all forms and documents required to be filed by it since January 1, 1997
under the Exchange Act and has heretofore made available to Merger Company
(i) its Annual Reports on Form 10-K for the years ended December 31, 1997,
December 31, 1998 and December 31, 1999, respectively, (ii) all proxy
statements relating to meetings of stockholders of the Company since
January 1, 1997 (in the form mailed to stockholders), (iii) its quarterly
report on Form 10-Q for the quarter ended March 31, 2000, and (iv) all
other forms, reports and registration statements filed by the Company with
the SEC since January 1, 1997 (other than registration statements on Form
S-8 or preliminary materials and registration statements in forms not
declared effective). The documents described in clauses (i)-(iv) above, as
amended, are referred to in this Agreement collectively as the "Company SEC
Documents". As of their respective dates, the Company SEC Documents,
including the financial statements and schedules provided therein or
incorporated by reference therein, (a) did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading and (b)
complied in all material respects with the applicable requirements of the
Exchange Act and the Securities Act, as the case may be, and the applicable
rules and regulations of the SEC thereunder. The consolidated financial
statements included or incorporated by reference in the Company SEC
Documents have been prepared in accordance with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis
during the periods involved (except as otherwise noted therein and except
that the quarterly financial statements are subject to year end adjustment
and do not contain all footnote disclosures required by GAAP) and fairly
present in all material respects the consolidated financial position and
the consolidated results of operations and cash flows of the Company and
its consolidated Subsidiaries as at the dates thereof or for the periods
presented therein.
Section 3.6 Absence of Certain Changes. Except as disclosed
in the Company SEC Documents or as disclosed in Section 3.6 of the
Disclosure Letter, from March 31, 2000 until the date of this Agreement,
(i) the Company and its Subsidiaries have conducted their operations in the
ordinary course, (ii) there has not been a Material Adverse Effect and
(iii) the Company and its Subsidiaries have not taken any of the following
actions:
(a) declared, set aside or paid (other than dividends paid
by Subsidiaries to the Company or other wholly-owned Subsidiaries of the
Company) any dividend or other distribution payable in cash, stock or
property with respect to its capital stock, other than regular quarterly
dividends consistent with past practice;
(b) incurred any material indebtedness for money borrowed or
issued or sold any debt securities or warrants or rights to acquire any
debt securities of the Company or its Subsidiaries or guaranteed any
material indebtedness for money borrowed other than under credit facilities
in the ordinary course of business and other than borrowings in the
ordinary course of business that can be repaid at any time without
prepayment penalty or other similar fees;
(c) granted any material increase in the fringe benefits or
compensation payable or to become payable by the Company to any officer or
director of the Company, except for normal increases in the ordinary course
of business consistent with past practice or to reflect promotions or new
hires;
(d) entered into any significant new line of business
outside of the buildings products industry, or incurred or committed to any
capital expenditures, or any obligations or liabilities in connection with
any capital expenditures, other than capital expenditures and obligations
or liabilities incurred or committed to that are no greater than the amount
designated therefor in the Company's current capital budget approved by the
Board in December, 1999, the amount of which has been furnished to Merger
Company prior to the date hereof (the "Capital Budget");
(e) other than in the ordinary course of business consistent
with past practice, sold, leased, mortgaged, encumbered or otherwise
disposed of, any material assets (including capital stock of Subsidiaries);
(f) merged or consolidated with, or purchased an equity
interest in all or substantially all of the assets (which assets shall be
material to the Company) of, any Person or other business organization or
any division or business thereof; or
(g) agreed to take any of the foregoing actions identified
in subparagraphs (a) through (f) above.
Section 3.7 Absence of Undisclosed Liabilities. Except as
expressly identified in the Company SEC Documents, or as reflected or
reserved against in the balance sheet dated as of December 31, 1999 or the
balance sheet dated as of March 31, 2000 constituting a portion of the
financial statements included in the Company's Annual Report on Form 10-K
for the term ended December 31, 1999 and the Company's quarterly report
filed on Form 10-Q, respectively (the "Balance Sheets") or in the notes
thereto and except for liabilities in respect of Litigation (which are the
subject of Section 3.10) and liabilities under Environmental Laws (which
are the subject of Section 3.15), neither the Company nor any of its
Subsidiaries had as of that date any liabilities which were material to the
Company and its Subsidiaries taken as a whole and which were required to be
set forth in the Balance Sheets or the notes thereto in accordance with
GAAP. Except as disclosed in the Company SEC Documents, since the date of
the Balance Sheet, the Company has not incurred any liabilities that would
be required to be reflected or reserved against in a consolidated balance
sheet of the Company and its Subsidiaries prepared in accordance with GAAP,
except for such liabilities as would not have a Material Adverse Effect,
liabilities resulting from the execution and delivery of this Agreement or
relating to the transactions contemplated hereby and except for liabilities
in respect of Litigation (which are the subject of Section 3.10) and
liabilities under Environmental Laws (which are the subject of Section
3.15).
Section 3.8 Information in Disclosure Documents. None of (i)
the registration statement on Form S-4 to be filed with the SEC by the
Company in connection with the issuance of Surviving Corporation Preferred
Stock as required by the terms of this Merger (the "S-4"), (ii) the Proxy
Statement (as defined in Section 5.6(b)) (and any amendment thereof or
supplement thereto) or (iii) any information to be supplied by the Company
in any other statement or schedule required to be filed by either the
Company or the Merger Company with the SEC in connection with the
transaction contemplated hereby will contain, at the date mailed to Company
stockholders and at the time of the Special Meeting (as defined in Section
5.6(a)), any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are
made, not misleading and the S-4, the Proxy Statement and any other
statement or schedule filed by the Company will comply in all material
respects with the applicable provisions of the Exchange Act and the rules
and regulations thereunder; except that no representation is made by the
Company with respect to statements made in the S-4, the Proxy Statement or
such statement or schedule based on information supplied by Merger Company
for inclusion in the S-4 or the Proxy Statement.
Section 3.9 Employee Benefit Plans; ERISA.
(a) Section 3.9(a) of the Disclosure Letter contains a true
and complete list of each material "employee benefit plan" as defined in
Section 3(3) of ERISA and each bonus, deferred compensation, incentive
compensation, stock purchase, stock option, stock award, severance or
termination benefit, hospitalization or other medical, life or other
insurance, supplemental unemployment benefits, profit-sharing, pension, or
retirement plan, program, agreement or arrangement, each employment,
retention or severance agreement or arrangement which cannot be terminated
in fewer than three months or without liability exceeding the greater of
one month's salary or one week of salary for each year of service and each
other material employee benefit plan, program, agreement or arrangement,
sponsored, maintained or contributed to by the Company or by any trade or
business, whether or not incorporated (an "ERISA Affiliate"), that together
with the Company would be deemed a "single employer" within the meaning of
Section 4001 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), for the benefit of any employee or former employee or
director of the Company or any ERISA Affiliate employed in the United
States (the "Plans").
(b) With respect to each Plan, the Company has heretofore
delivered or made available to Merger Company true and complete copies of
each of the following documents:
(i) the Plan;
(ii) the most recent annual report and actuarial report;
(iii) the most recent Summary Plan Description required
under ERISA with respect thereto;
(iv) if the Plan is funded through a trust or third party
funding vehicle, the trust or other funding agreement and the latest
financial statements thereof; and
(v) the most recent determination letter received from the
Internal Revenue Service with respect to each Plan intended to qualify
under Section 401(a) of the Internal Revenue Code of 1986, as amended (the
"Code") and each voluntary employee benefit association intended to qualify
under Section 501(c)(9) of the Code.
(c) No liability under Title IV of ERISA has been incurred
by the Company or any ERISA Affiliate that has not been satisfied in full,
and no condition exists that presents a material risk to the Company or any
ERISA Affiliate of incurring a liability under such Title, other than
liability for contributions due in the ordinary course and premiums due the
Pension Benefit Guaranty Corporation ("PBGC") (which contributions and
premiums have been paid when due) except for such liabilities that would
not have a Material Adverse Effect.
(d) No Plan that is an "employee benefit plan," as defined
in Section 3(3) of ERISA (an "ERISA Plan"), is a "multiemployer pension
plan," as defined in Section 3(37) of ERISA, nor is any ERISA Plan a plan
described in Section 4063(a) of ERISA.
(e) No ERISA Plan or any trust established thereunder has
incurred any "accumulated funding deficiency" (as defined in Section 302 of
ERISA and Section 412 of the Code), whether or not waived, as of the last
day of the most recent fiscal year of each ERISA Plan ended prior to the
Closing Date. Each ERISA Plan intended to be "qualified" within the meaning
of Section 401(a) of the Code has been determined by the Internal Revenue
Service to be so qualified (or timely application has been made therefor);
no event has occurred since the date of such determination that would
materially adversely affect such qualification; and each trust maintained
thereunder has been determined by the Internal Revenue Service to be exempt
from taxation under Section 501(a) of the Code. All contributions or other
payments required to have been made by Company and its Subsidiaries to or
under any Plan by applicable law or the terms of such Plan have been timely
and properly made. Each Plan has been operated and administered in all
material respects in accordance with its terms and applicable law,
including but not limited to ERISA and the Code except where a failure to
so operate or administer would not have a Material Adverse Effect. There
are no pending, or to the knowledge of the Company, threatened, material
claims by or on behalf of any Plan, by any employee or beneficiary covered
under any such Plan, or otherwise involving any such Plan (other than
routine claims for benefits).
(f) Except as disclosed in Schedule 3.9(f) of the Disclosure
Letter or in connection with equity compensation or otherwise disclosed or
referred to in Section 3.9 (or in Section 3.9 of the Disclosure Letter),
neither the execution and delivery of this Agreement nor the consummation
of the transactions contemplated hereby will, without further action (i)
result in any payment becoming due to any current or former employee or
director of Company and its Subsidiaries, (ii) increase any benefits under
any Plan, (iii) result in the acceleration of the time of payment or
vesting of any benefits, (iv) satisfy any condition or requirement
entitling any current or former employee or director of Company and its
Subsidiaries to additional rights or features with respect to any benefits,
or (v) result in any payment becoming due by the Company or any of its
Subsidiaries or the Merger Company that would be subject to Sections
162(m), 280G or 4999 of the Code.
(g) Section 3.9(g) of the Disclosure Letter identifies each
Employment Agreement containing a provision for "Good Reason" or similar
terms relating to the potential termination of the employee's employment
with the Company in connection with the consummation of the Merger. Neither
the Company nor its Subsidiaries has taken any corporate action
acknowledging that an individual party to a Listed Employee Agreement will
have, upon consummation of the Merger, "Good Reason" or a similar right (as
that term is defined in such Listed Employee Agreement) to terminate his or
her employment thereunder with the Company.
(h) With respect to each Plan that is not subject to United
States law (a "Foreign Plan"):
(i) Except as disclosed in Schedule 3.9(h) of the Disclosure
Letter, with respect to each Foreign Plan, any liability for accrued
benefit obligations has been funded (through insurance or otherwise) or a
book reserve account has been established (in each case sufficient to
procure or provide for the accrued benefit obligations in accordance with
GAAP), and each such account is reflected on the Balance Sheets except for
such liability for accrued benefit obligations incurred in the ordinary
course of business consistent with past practice since December 31, 1998 or
otherwise disclosed in the Company SEC Documents; and
(ii) each Foreign Plan required to be registered has been
registered and has been maintained in good standing with applicable
regulatory authorities.
Section 3.10 Litigation; Compliance with Law.
(a) Except as expressly identified in the Company SEC
Documents or Section 3.10 of the Disclosure Letter and except for claims
under Environmental Laws (which are the subject of Section 3.15), (i) as of
the date hereof, there is no suit, claim, action, proceeding or
investigation pending or, to the knowledge of the Company, threatened,
against the Company or any of its Subsidiaries which would reasonably be
expected to result in a liability greater than $5,000,000, whether or not
covered by insurance, and (ii) there is no suit, claim, action, proceeding
or investigation pending or, to the knowledge of the Company, threatened,
against the Company or any of its Subsidiaries which would have a Material
Adverse Effect.
(b) Except as expressly identified in the Company SEC
Documents and except for Environmental Laws (which are the subject of
Section 3.15), the operations of the Company and its Subsidiaries are not
being conducted in violation of any law, statute, regulation, judgment,
decree, order or injunction of any Governmental Entity, except where such
violations would not have a Material Adverse Effect.
(c) The Company and its Subsidiaries hold all licenses,
permits, variances and approvals of Governmental Entities necessary for the
lawful conduct of their respective businesses as currently conducted except
for licenses, permits, variances or approvals under Environmental Laws
(which are the subject of Section 3.15) and except where the failure to
hold such licenses, permits, variances or approvals would not have a
Material Adverse Effect.
(d) Except as set forth in Schedule 3.10(d) of the
Disclosure Letter, or as set forth in the Balance Sheets, neither the
Company nor any of its Subsidiaries has, as of the date therein, any
liabilities associated with the matters contemplated by this Section 3.10
which would be required to be reflected or reserved against in a
consolidated balance sheet of the Company and its Subsidiaries prepared in
accordance with GAAP, except for such liabilities as were incurred in the
ordinary course of business or would not have a Material Adverse Effect.
Section 3.11 Intellectual Property. Section 3.11 of the
Company Disclosure Letter sets forth a list of all registered and pending
applications for Intellectual Property (as hereinafter defined) of the
Company or its Subsidiaries material to the Company taken as a whole. The
Company and its Subsidiaries own free and clear of any Lien, other than
Permitted Exceptions, or possess licenses or other valid rights to use, all
patents, patent rights, domain names, trademarks (registered or
unregistered), trade dress, trade names, copyrights (registered or
unregistered), service marks, trade secrets, know-how and other
confidential or proprietary rights and information, inventions, processes,
formulae, as well as all goodwill symbolized by any of the foregoing
(collectively, "Intellectual Property") necessary in connection with the
business of the Company and its Subsidiaries as currently conducted, except
where the failure to possess such rights or licenses would not have a
Material Adverse Effect. Except as disclosed in Section 3.11 of the
Disclosure Letter, (i) the conduct, products or services of the business of
the Company and its Subsidiaries as currently conducted do not infringe
upon any Intellectual Property of any third party except where such
infringement would not reasonably be expected to create a liability in
excess of $2,000,000 or otherwise would not have a Material Adverse Effect,
(ii) there are no claims or suits pending or for which written notice has
been provided or, to the knowledge of the Company, threatened (A) alleging
that the Company's or its Subsidiaries' conduct, products or services
infringe upon any Intellectual Property of any third party except where
such infringement would not reasonably be expected to create a liability in
excess of $2,000,000 or otherwise have a Material Adverse Effect, or (B)
challenging the Company's or its Subsidiaries' ownership of, right to use,
or the validity or enforcement of any license or other agreement relating
to, the Company's and its Subsidiaries' Intellectual Property, and (ii) to
the knowledge of the Company, no Person is infringing upon any Intellectual
Property of the Company or its Subsidiaries except where such infringement
would not have a Material Adverse Effect. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
will not result in the loss of, or any encumbrance on, the rights of the
Company or any Subsidiary with respect to the Intellectual Property owned
or used by them, except where such loss or encumbrance would not reasonably
be expected to create a liability in excess of $2,000,000 or otherwise have
a Material Adverse Effect. All Intellectual Property necessary in
connection with the business of the Company and its Subsidiaries is valid,
subsisting, enforceable and, where applicable, has been properly
maintained, except as would not have a Material Adverse Effect.
Section 3.12 Identified Contracts.
(a) Other than the contracts or agreements of the Company
included as exhibits to the Company's Annual Report on Form 10-K for the
year ended December 31, 1999 and contracts or agreements between the
Company and its wholly-owned Subsidiaries or between wholly-owned
Subsidiaries of the Company, Section 3.12(a) of the Disclosure Letter lists
each of the contracts and agreements of the following types to which the
Company or any of its Subsidiaries is a party as of the date of this
Agreement (such contracts and agreements described below being "Identified
Contracts"):
(i) contracts, agreements and commitments for the purchase
of products or inventories by, or for the furnishing of services to, the
Company or its Subsidiaries that (A) require remaining payments by the
Company or its Subsidiaries in excess of $2,500,000 and (B) are not
terminable by the Company or its Subsidiaries, as the case may be, on
notice of one year or less without penalty;
(ii) contracts, agreements and commitments for the sale of
products or inventories, or for the furnishing of services, by the Company
or its Subsidiaries that (A) require remaining payments to the Company or
its Subsidiaries in excess of $2,500,000 and (B) are not terminable by the
Company or its Subsidiaries, as the case may be, on notice of one year or
less;
(iii) manufacturer's representative, sales agency and
distribution contracts and agreements under which there were in 1999 or
there are projected to be in 2000 annual sales in excess of $2,500,000;
(iv) mortgages, indentures, security agreements, notes, loan
agreements, guarantees and other contracts and agreements governing the
terms of indebtedness of the Company or its Subsidiaries to third parties
in excess of $5,000,000 principal amount;
(v) material contracts and agreements between the Company
and any of its affiliates;
(vi) shareholder, voting trust or similar contracts and
agreements relating to the voting of shares or other equity interests of
the Company or its Subsidiaries;
(vii) contracts and agreements entered into since January 1,
1991, providing for the acquisition or disposition of assets or direct or
indirect acquisition or disposition of 10% or more of any class of equity
securities of any Person having a value in excess of $5,000,000, other than
sales of inventories in the ordinary course of business and sales of
obsolete equipment;
(viii) capitalized leases which pursuant to their terms, are
reasonably expected to involve an aggregate payment obligation greater than
$5,000,000; and
(ix) agreements, contracts, understandings or arrangements
between the Company or any of its Subsidiaries and the Trust or the
Manville Property Damage Settlement Trust (collectively, "Company Trust
Agreements").
(b) Each Identified Contract is in full force and effect
(subject to termination in accordance with its terms following the date
hereof) and neither the Company nor any of its Subsidiaries nor, to the
knowledge of the Company as of the date hereof, any other party thereto, is
in material breach of, or material default under, any such Identified
Contract, except for such failures to be in full force and effect, breaches
or defaults which would not have a Material Adverse Effect.
Section 3.13 Real Property.
(a) Section 3.13(a) of the Disclosure Letter sets forth a
complete list of (i) all real property and interests in real property owned
in fee by the Company and its Subsidiaries (individually, an "Owned
Property" and collectively, the "Owned Properties"), and (ii) all real
property and interests in real property leased, subleased, or otherwise
occupied by the Company and its Subsidiaries as lessee with annual lease
payment obligations in excess of $500,000 (individually, a "Leased
Property" and collectively, the "Leased Properties," such Leased
Properties, together with the Owned Properties, being referred to herein
individually as a "Company Property" and collectively as the "Company
Properties").
(b) Owned Properties. Except as set forth in Section 3.13(b)
of the Disclosure Letter, the Company and its Subsidiaries have good,
marketable and valid fee simple title to all Owned Properties and all
buildings, structures and other improvements located thereon, free and
clear of all Liens, except the Permitted Exceptions.
(c) Leases.
(i) Except as set forth in Section 3.13(c)(i) of the
Disclosure Letter, the Company and its Subsidiaries have valid and binding
leasehold interests in and to the Leased Properties and all buildings,
structures or other improvements located thereon pursuant to the leases,
licenses and occupancy agreements listed on Section 3.13(a)(ii) of the
Disclosure Letter (each, a "Real Property Lease" and collectively, the
"Real Property Leases"), subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general principles
of equity (regardless of whether enforcement is sought in a proceeding at
law or in equity);
(ii) Except as set forth in Section 3.13(c)(ii) of the
Disclosure Letter, each of the Real Property Leases is in full force and
effect; the Company or a Subsidiary thereof holds good and valid leasehold
title to, and actual possession of, the Leased Properties subject thereto,
free and clear of all Liens of any nature whatsoever, except the Permitted
Exceptions. Except for the non-disturbance agreements listed in Section
3.13(c)(ii) of the Disclosure Letter, the Company is aware of no other
non-disturbance agreements to which it is a party.
(iii) Except as set forth in Section 3.13(c)(iii) of the
Disclosure Letter, there are no material leases or subleases executed by
the Company, as lessor, with respect to any of the Company Properties;
(iv) Each of the Real Property Leases entitles the Company
or its Subsidiary, as the case may be, to the use, occupancy and possession
of the Leased Properties specified therein for the purposes such Leased
Properties are now being used; and
(v) Neither the Company nor any of its Subsidiaries is in
material default, and to the knowledge of the Company and any of its
Subsidiaries no other material default exists, under any Real Property
Lease with a term extending more than one year from the date hereof and an
annual lease payment obligation in excess of $2,000,000.
(d) Except as set forth in Section 3.13(d) of the Disclosure
Letter, all of the buildings, fixtures and improvements included on or in
the Company Properties and owned or leased by the Company and its
Subsidiaries are in satisfactory condition and repair for the continued use
of the Company Properties in the ordinary course of business consistent
with past practices except to the extent that instances of noncompliance
with the preceding provisions of this sentence, individually or in the
aggregate, do not have a Material Adverse Effect.
(e) Except as set forth in Section 3.13(e) of the Disclosure
Letter, the Permitted Exceptions do not adversely affect, in any material
respect, the use, management or operation of the Company Properties except
to the extent that instances of noncompliance with the preceding provisions
of this sentence, individually or in the aggregate, do not have a Material
Adverse Effect.
(f) Except as set forth in Section 3.13(f) of the Disclosure
Letter, all certificates of occupancy necessary for the current use and
operation of each Company Property have been issued and are in full force
and effect, the use of the Company Properties is in conformity with such
certificates of occupancy except to the extent that instances of
noncompliance with the preceding provisions of this sentence, individually
or in the aggregate, do not have a Material Adverse Effect.
(g) Except as set forth in Section 3.13(g) of the Disclosure
Letter, there does not exist any actual or, to the knowledge of the
Company, threatened or contemplated condemnation or eminent domain
proceedings that affect any Company Property or any material part thereof
except to the extent that instances of noncompliance with the preceding
provisions of this sentence, individually or in the aggregate, do not have
a Material Adverse Effect.
(h) Except as set forth in Section 3.13(h) of the Disclosure
Letter, (x) no person or entity has any option or right of first refusal to
acquire title to the Company Properties or any material portion thereof or
interest therein; and (y) neither the Company nor any of its Subsidiaries
has entered into a contract to sell any material real estate interest
except in the ordinary course of business.
(i) The current use and occupancy of the Company Properties
and the improvements located thereon are not in violation of any recorded
or unrecorded covenants, conditions, restrictions, reservations, easements
or agreements affecting the Company Properties except to the extent that
instances of noncompliance with the preceding provisions of this sentence,
individually or in the aggregate, do not have a Material Adverse Effect.
(j) All Company Properties have sufficient access to public
roads.
(k) All water, gas and other utilities are sufficient to
enable the Company Properties to continue to be used and operated in the
ordinary course of business consistent with past practices.
Section 3.14 Taxes.
(a) Except as set forth in Section 3.14 of the Disclosure
Letter: (i) All material Returns (as defined in Section 3.14(b) below)
required to be filed with any taxing authority by the Company and its
Subsidiaries have been filed in accordance with all applicable laws; (ii)
the Company and its Subsidiaries have timely paid all Taxes (as defined in
Section 3.14(b) below) shown as due and payable on the Returns and as of
the time of filing the Returns correctly reflected the facts regarding the
income, business, assets, operations, activities and the status of the
Company and its Subsidiaries in all material respects; (iii) the Company
and its Subsidiaries have made provision for all material Taxes payable by
the Company, its Subsidiaries and the Trust, insofar as the Company is
responsible for the Taxes of the Trust, for which no Return has yet been
filed or in respect of which a final determination has not yet been made;
(iv) the charges, accruals and reserves for Taxes with respect to the
Company, its Subsidiaries and the Trust, insofar as the Company is
responsible for the Taxes of the Trust reflected in the Balance Sheet are
adequate under GAAP to cover the Tax liabilities accruing through the date
thereof; (v) to the knowledge of the Company there is no action, suit,
proceeding, investigation, audit or claim pending or threatened, against or
with respect to the Company or any of its Subsidiaries in respect of any
Tax; (vi) no material deficiencies for any Taxes have been proposed,
asserted or assessed against the Company or any of its Subsidiaries that
have not been fully paid or are not adequately reserved for in the most
recent financial statements contained in the Company SEC Documents; (vii)
none of the Company or any of the Company's Subsidiaries has waived any
statute of limitations or agreed to any extension of time within which to
file any Return, or to pay any material Taxes which such statute of
limitations has not expired or Return or Taxes have not since been timely
filed or paid; (viii) none of the Company or any of the Company's
Subsidiaries is party to or is bound by any Tax sharing, Tax indemnity or
similar agreement with respect to Taxes pursuant to which it will have any
obligation to make any payment after the Closing Date; (ix) since January
1, 1995 none of the Company nor any of the Company's Subsidiaries has
entered into a closing agreement pursuant to Section 7121 of the Code or
any predecessor provision or any similar provision of state, local or
foreign Tax law; (x) each of the Company and the Company's Subsidiaries has
withheld and paid over all material Taxes required to be withheld in
connection with any amounts paid over or owing to any employee, creditor,
independent contractor or other third party; (xi) no claim has been made in
writing by a Taxing authority in a jurisdiction where any of the Company or
the Company's Subsidiaries does not file Returns to the effect that the
Company or the Company's Subsidiaries is or may be subject to Taxation by
that jurisdiction; (xii) since January 1, 1996 neither the Company nor any
of its Subsidiaries has constituted either a "distributing corporation" or
a "controlled corporation" (within the meaning of Section 355(a)(1)(A) of
the Code) in a distribution of stock qualifying for tax-free treatment
under Section 355 of the Code; (xiii) the Company has not made an election
described in Notice 88-67 to treat the Convertible Preferred Stock as "not
stock" and an "interest similar to an option"; (xiv) on its 1987
consolidated federal income Tax Return, the Company elected under Section
468B of the Internal Revenue Code of 1954, as amended (the "1954 Code") to
treat the Designated Settlement Fund (as defined in Section 3.14(b) below)
as a designated settlement fund within the meaning of Section 468B of the
1954 Code; (xv) each of PLR 9146049 and PLR 9534031 remains in full force
and effect and neither the Company nor any of its Subsidiaries is aware of
any facts that may affect the continuing validity of such rulings; (xvi)
all transfers of money or property to the Designated Settlement Fund were
pursuant to a court order; and (xvii) the Company is not (and has not been
for five years) a "U.S. real property holding corporation" within the
meaning of Section 897 of the Code.
(b) As used in this Agreement:
(i) the term "Return" shall mean any return, declaration,
report, claim for refund, or information return or statement relating to
Taxes or any amendment thereto, and including any schedule or attachment
thereto;
(ii) the term "Tax" or "Taxes" shall mean all federal,
state, local or foreign taxes, assessments, duties, levies or similar
charges of any kind including, without limitation, all income, payroll,
withholding, unemployment insurance, social security, sales, use, service,
leasing, excise, franchise, gross receipts, value added, alternative or
add-on minimum, estimated, occupation, real and personal property, stamp,
duty, transfer, workers' compensation, severance, windfall profits, or
other Tax, charge, fee, levy or assessment of the same or of a similar
nature, including any interest, penalty or addition thereto, whether
disputed or not; and
(iii) the term "Designated Settlement Fund" shall mean the
non-grantor trust portion of the settlement fund established for claimants
against the Company which filed a petition for reorganization under chapter
11 of title 11, United States Code, on August 26, 1982 pursuant to Section
180 7(a)(7)(c) of the Tax Reform Act of 1986.
Section 3.15 Environmental Matters.
(a) Except as expressly identified in the Company SEC
Documents or as disclosed in Section 3.15(a) of the Disclosure Letter or
conditions which both (i) do not, as of the date hereof, constitute
Environmental Costs and Liabilities (as defined in this Section 3.15) in
excess of $1,000,000 individually or $5,000,000 in the aggregate that are
not expressly currently identified on the Company's environmental reserves
and (ii) would not have a Material Adverse Effect, the Company and its
Subsidiaries have been during the past five years and are in compliance in
all material respects with all applicable Environmental Laws (as
hereinafter defined) which compliance includes the possession of material
permits, licenses and governmental authorizations required under applicable
Environmental Laws and compliance with the terms and conditions thereof and
the Company is not aware of any facts, circumstances or conditions that
would reasonably be expected to interfere with such continued compliance
with existing Environmental Laws or require material capital expenditures
to maintain such compliance with existing Environmental Laws.
(b) Except as expressly identified in the Company SEC
Documents or as disclosed in Section 3.15(b) of the Disclosure Letter or
conditions which both (i) do not, as of the date hereof, constitute
Environmental Costs and Liabilities in excess of $1,000,000 individually or
$5,000,000 in the aggregate that are not currently reflected on the
Company's environmental reserves and (ii) would not have a Material Adverse
Effect, there are no Environmental Claims (as hereinafter defined) pending
or, to the knowledge of the Company, threatened, against the Company or its
Subsidiaries.
(c) Except as disclosed in Section 3.15(c) of the Disclosure
Letter, and except for costs associated with ongoing environmental
management of the Company's operations in the ordinary course of business,
including those costs reflected in the Company's environmental reserves,
the Company is not subject to any outstanding Environmental Costs and
Liabilities and, there are not, to the knowledge of the Company, any facts,
circumstances or conditions relating to, arising from, associated with or
attributable to the operations of the Company or any Subsidiary or any real
property currently or formerly owned, operated or leased by or on behalf of
the Company or any Subsidiary, including any Release (as defined in this
Section 3.15) of Hazardous Substances (as defined in this Section 3.15),
that in each case, both (i) as of the date hereof, constitute Environmental
Costs and Liabilities in excess of $1,000,000 individually or $5,000,000 in
the aggregate and (ii) would have a Material Adverse Effect.
(d) Except as disclosed in Section 3.15(d) of the Disclosure
Letter, none of the Company or its Subsidiaries has (i) entered into or
agreed to any consent decree, order or agreement with any third-party or
governmental agency under any Environmental Law or (ii) is subject to any
judgment, decree, or order issued pursuant to Environmental Laws and
requiring the Company to undertake any investigation, remediation or
monitoring as a result of Hazardous Substances in the soil or groundwater,
which in either case are both outstanding and would have a Material Adverse
Effect.
(e) Except as disclosed in Section 3.15(e) of the Disclosure
Letter, to the knowledge of the Company, there are not now on, in or under
any real property owned or operated by the Company or any Subsidiary (x)
any underground storage tanks, above-ground storage tanks, dikes or
impoundments containing Hazardous Substances, (y) any exposed friable
asbestos-containing materials, or (z) any polychlorinated biphenyls, the
presence of which both (i) as of the date hereof constitutes Environmental
Costs and Liabilities in excess of $1,000,000 individually or $5,000,000 in
the aggregate and (ii) would have a Material Adverse Effect.
(f) The Company has made available to Merger Company copies
of all current material environmental or health and safety related audits
or assessments involving the Company or any Subsidiary or any real property
currently owned, operated or leased by the Company and that are in the
Company's possession, custody or control.
(g) Except as disclosed on Schedule 3.15(g) of the
Disclosure Letter, the transactions contemplated under this Agreement do
not require the filing of any notice with or the approval of any
Governmental Entity with jurisdiction over environmental or health or
safety matters under any Environmental Property Transfer Law except where
the failure to make such filings would not have a Material Adverse Effect.
(h) Except as set forth in Schedule 3.15(i) of the
Disclosure Letter, or as set forth in the Balance Sheets, neither the
Company nor any of its Subsidiaries has, as of the date therein, any
liabilities associated with the matters contemplated by this Section 3.15
which would be required to be reflected or reserved against in a
consolidated balance sheet of the Company and its Subsidiaries prepared in
accordance with GAAP except for such liabilities as were incurred in the
ordinary course of business or would not have a Material Adverse Effect.
(i) Merger Company acknowledges that the representations and
warranties contained in this Section 3.15 are the only representations and
warranties being made by the Company with respect to compliance with, or
liability or claims under, Environmental Laws or with respect to permits
issued or required under Environmental Laws, that no other representation
by the Company contained in this Agreement shall apply to any such matters
and that no other representation or warranty, express or implied, is being
made with respect thereto.
As used in this Agreement:
(i) the term "Environmental Claim" means any claim, lien,
action, demand, proceeding, investigation or written notice to the Company
or its Subsidiaries by any person or entity alleging non-compliance with or
potential liability (including potential liability for investigatory costs,
clean-up costs, governmental response costs, natural resource damages,
personal injuries, or penalties) arising out of, based on, or resulting
from (a) the presence, or Release into the environment, of any Hazardous
Substance (as hereinafter defined) at any location, whether or not owned or
operated by the Company or its Subsidiaries or (b) circumstances forming
the basis of any violation, or alleged violation of any applicable
Environmental Law;
(ii) the term "Environmental Costs and Liabilities" means
any and all losses, Liabilities, obligations, damages, fines, penalties,
judgments, actions, claims, costs and expenses (including fees,
disbursements and expenses of legal counsel, experts, engineers and
consultants and the costs of investigation and feasibility studies and
remedial action) arising from or under any Environmental Law or any
agreement with any Governmental Entity or other Person thereunder or
pursuant thereto;
(iii) the term "Environmental Laws" means all federal,
state, local and foreign laws including statutes, codes, ordinances, rules,
regulations or other legal requirements, as in effect and as interpreted as
of the date hereof, relating to pollution or protection of the environment
or natural resources, including, laws and regulations relating to
emissions, discharges, releases or threatened releases of Hazardous
Substances, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Substances; and includes the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), 42 X.X.X.xx. 9601 et
seq., the Hazardous Materials Transportation Act, 49 X.X.X.xx. 1801 et
seq., the Resource Conservation and Recovery Act ("RCRA"), 42 X.X.X.xx.
6901 et seq., the Clean Water Act, 33 X.X.X.xx. 1251 et seq., the Clean Air
Act, 33 X.X.X.xx. 2601 et seq., the Toxic Substances Control Act, 15
X.X.X.xx. 2601 et seq., the Federal Insecticide, Fungicide, and Rodenticide
Act, 7 X.X.X.xx. 136 et seq., the Oil Pollution Act of 1990, 33 U.S.Css.
2701 et seq. and the Occupational Safety and Health Act, 29 X.X.X.xx. 651
et seq., to the extent it regulated exposure to Hazardous Substances, as
such laws have been amended or supplemented, and the regulations
promulgated pursuant thereto, and all analogous state or local statutes;
(iv) the term "Environmental Property Transfer Laws" means
any federal, state, local or foreign laws, statutes, codes, ordinances,
rules, regulations or other legal requirements relating to the environment
or natural resources, which condition the transfer of assets, real estate,
or stock on the approval of or the need to notify a Governmental Authority
having jurisdiction over the environment or natural resources, including,
but not limited to the New Jersey Industrial Site Recovery Act, the
Connecticut Property Transfer Law, the Indiana Responsible Property
Transfer Law, and the Illinois Responsible Property Transfer Act;
(v) the term "Hazardous Substance" means any and all
substances, wastes or materials regulated as hazardous, toxic, radioactive,
a pollutant, contaminant or words of similar import under any Environmental
Law, including, but not limited to, oil and petroleum products, asbestos
and asbestos-containing materials or polychlorinated biphenyls; and
(vi) the term "Release" means any release, spill, emission,
migration, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, or leaching into the environment.
Section 3.16 Labor Matters.
(a) Except as set forth in Section 3.16(a) of the Disclosure
Letter, the Company and its Subsidiaries are not a party to any labor or
collective bargaining agreement, and no employees of the Company or any of
its Subsidiaries are represented by any labor organization.
(b) Except as set forth in Section 3.16(b) of the Disclosure
Letter: (i) to the knowledge of the Company, there are no strikes, work
stoppages, slowdowns, lockouts, arbitrations or grievances or other labor
disputes pending or threatened in writing against or involving the Company
or any Subsidiary that would, individually or in the aggregate, have a
Material Adverse Effect; (ii) within the three years prior to the date
hereof, there have been no representation or certification proceedings, or
petitions seeking a representation proceeding, pending or, to the knowledge
of the Company, threatened in writing to be brought or filed with the
National Labor Relations Board or any other labor relations tribunal or
authority; and (iii) within the three years prior to the date hereof, to
the knowledge of the Company, there have been no organizing activities
involving the Company and its Subsidiaries with respect to any group of
employees of the Company or any of its Subsidiaries.
(c) Except as set forth in Section 3.16(c) of the Disclosure
Letter: there has been no "mass layoff" or "plant closing" as defined by
Worker Adjustment Retraining and Notification Act with respect to the
Company and its Subsidiaries within the six (6) months prior to Closing.
Section 3.17 Required Vote by Company Stockholders. The
affirmative vote of the holders of a majority of the outstanding Common
Shares entitled to vote hereon is the only vote of any class of capital
stock of the Company required by the DGCL, the Restated Certificate of
Incorporation or the By-Laws of the Company to adopt this Agreement
("Required Vote") or approve the Charter Amendment.
Section 3.18 Board Recommendation. On the date hereof, the
Board, at a meeting duly called and held, by the vote of the directors
present at such meeting, (i) approved this Agreement, the Merger and the
other transactions contemplated hereby, (ii) determined that this Agreement
and the Merger and the Charter Amendment are advisable and (iii) resolved
to recommend that the holders of shares of Company Common Stock vote to
adopt this Agreement and approve the Charter Amendment.
Section 3.19 Brokers. Except for X.X. Xxxxxx & Co.
Incorporated, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by
or on behalf of the Company. The Company is solely responsible for the fees
and expenses of X.X. Xxxxxx & Co. Incorporated which fees and expenses
shall be paid by the Company at the Closing. The Company's arrangements
with X.X. Xxxxxx & Co. Incorporated have been disclosed to Merger Company
prior to the date hereof.
Section 3.20 Opinion of Financial Advisor. The Company has
received the opinion of X.X. Xxxxxx Securities Inc., as of the date hereof,
to the effect that the Common Stock Merger Consideration to be received
pursuant to this Agreement is fair, from a financial point of view, to the
holders of the shares of Company Common Stock entitled to receive such
consideration.
Section 3.21 Injunction. The Injunction (as such term is
defined in the Manville Corporation Second Amended and Restated Plan of
Reorganization, dated November 28, 1988 ("Reorganization Plan")) has not
been vacated or modified in whole or in part, and is valid, binding and
enforceable against any and all Claims (as such term is defined in the
Reorganization Plan), including any and all AH Claims and Other Asbestos
Claims (as each such term is defined in the Reorganization Plan).
Section 3.22 Annual Plan. The Annual Plan approved by the
Board in December 1999 with respect to its business and provided by the
Company to Merger Company and its advisors was prepared in good faith and
was based on reasonable assumptions and nothing has come to the attention
of the Company that would indicate that the projected results set forth in
the Annual Plan are no longer achievable.
Section 3.23 No Other Representations or Warranties. Except
for the representations and warranties contained in this Article III,
neither the Company nor any other Person makes any other express or implied
representation or warranty on behalf of the Company or any of its
affiliates.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MERGER COMPANY AND FINANCE COMPANY
Each of Merger Company and Finance Company represents and
warrants to the Company as follows:
Section 4.1 Organization. Each of Merger Company, Finance
Company and their respective Subsidiaries is a limited liability company,
corporation or other entity duly incorporated or organized, as the case may
be, validly existing, and in good standing (but, with respect to
Subsidiaries not organized in the United States, only to the extent such
concept is applicable) under the laws of the jurisdiction of its
incorporation or organization, has all requisite corporate power and
authority and all necessary governmental approvals to own, lease and
operate its properties and to carry on its business as it is now being
conducted, and is qualified or licensed to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
nature of the business conducted by it makes such qualification or
licensing necessary, except where the failure to be so organized, existing
and in good standing or to have such power and authority, or to be so
qualified or licensed would not have a material adverse effect on the
business, results of operations or financial condition transactions
contemplated by this Agreement. The Merger Company has previously delivered
to Company a complete and correct copy of each of its Certificate of
Formation and Limited Liability Company Agreement, as currently in effect.
Section 4.2 Capitalization. Assuming consummation of the
Merger as contemplated by the Merger Agreement, Schedule 4.2 of the MF
Disclosure Letter sets forth the percentage equity ownership of the
Surviving Corporation that the members of Merger Company, the Trust,
Management and the other shareholders of the Surviving Corporation will own
immediately following the Closing, based on the equity participation of
Management as set forth therein.
Section 4.3 Authorization; Validity of Agreement. Each of
Merger Company and Finance Company has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery by Merger
Company and Finance Company of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by the members
of Merger Company and Finance Company and no other corporate proceedings on
the part of Merger Company or Finance Company is necessary to authorize the
execution and delivery of this Agreement by Merger Company and Finance
Company and the consummation of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Merger Company and
Finance Company and, assuming due authorization, execution and delivery of
this Agreement by the Company, is a valid and binding obligation of each of
Merger Company and Finance Company enforceable against each of them in
accordance with its terms, except that such enforcement may be subject to
or limited by (i) bankruptcy, insolvency or other similar laws, now or
hereafter in effect, affecting creditors' rights generally, and (ii) the
effect of general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
Section 4.4 Consents and Approvals; No Violations.
(a) Neither the execution and delivery of this Agreement by
Merger Company or Finance Company nor the consummation by Merger Company or
Finance Company of the transactions contemplated hereby will (i) violate
any provision of such company's certificate of formation or limited
liability company agreement, (ii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation or acceleration)
under, any of the terms, conditions or provisions of any material note,
bond, mortgage, indenture, guarantee, other evidence of indebtedness,
license, lease, contract, agreement or other instrument or obligation to
which such company or any of its Subsidiaries is a party or by which any of
them or any of their assets may be bound or (iii) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to such company,
any of its Subsidiaries or any of its properties or assets; except in the
case of clauses (ii) and (iii) for violations, breaches or defaults which
would not have a material adverse effect on the business, results of
operations or financial condition of such company and its Subsidiaries,
taken as a whole, or materially impair or delay the consummation of the
transactions contemplated by this Agreement.
(b) No filing or registration with, notification to, or
authorization, consent or approval of, any Governmental Entity is required
in connection with the execution and delivery of this Agreement by Merger
Company and Finance Company or the consummation by Merger Company or
Finance Company of the transactions contemplated hereby, except (i)
applicable requirements under Competition Laws, (ii) applicable
requirements under the Securities Act and Exchange Act, (iii) the filing of
the Certificate of Merger with the Secretary of State, (iv) applicable
requirements under corporation or "blue sky" laws of various states or
non-United States change-in-control laws or regulations, (v) applicable
requirements under Environmental Laws and (vi) such other consents,
approvals, orders, authorizations, notifications, registrations,
declarations and filings the failure of which to be obtained or made would
not have a material adverse effect on the business, results of operations
or financial condition of such company or and its Subsidiaries, taken as a
whole, or materially impair or delay the consummation of the transactions
contemplated by this Agreement.
Section 4.5 Information in Disclosure Documents. None of the
information supplied by Merger Company or Finance Company in writing for
inclusion in the S-4, Proxy Statement (including any amendments or
supplements thereto), or any other statement or schedule filed with the SEC
by the Company, Merger Company or Finance Company will contain, at the date
mailed to stockholders and at the time of the Special Meeting, any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading and
any statement or schedule filed by Merger Company and Finance Company will
comply in all material respects with the applicable provisions of the
Exchange Act and the rules and regulations thereunder; except that no
representation is made by either Merger Company or Finance Company with
respect to statements made in such statement or schedule based on
information supplied to Merger Company or Finance Company by the Company
for inclusion in such statement or schedule.
Section 4.6 Financing. Finance Company has delivered to the
Company on or prior to the date hereof executed commitment letters (the
"Commitment Letters") with respect to the financing arrangements for the
transactions contemplated hereby (the financing arrangements so described
in the Commitment Letters being referred to herein as the "Financing") from
(i) Bear Xxxxxxx Merchant Fund Corp. and HMTF Bridge Partners, L.P.,
committing to provide on the terms and conditions described therein equity
financing of $150 million, and $350 million respectively (which are
attached hereto as Exhibit D) and (ii) from Bear Xxxxxxx Corporate Lending
Inc. and Bear, Xxxxxxx & Co. Inc., committing to provide on the terms and
conditions described therein; debt financing of $1,750,000,000 and from
Bear Xxxxxxx Corporate Lending Inc. committing to provide bridge financing
of $600,000,000 (which are attached hereto as Exhibit E and Exhibit F,
respectively). As of the date of this Agreement, the Commitment Letters are
in full force and effect and have not been amended or rescinded. Merger
Company and Finance Company believe that the aggregate proceeds of the
Financing will be sufficient to (A) pay the Merger Consideration and any
amounts required to be paid in respect of cancellation of options, stock
appreciation rights and other Company Awards, deferred compensation
amounts, and otherwise to perform all of the obligations of Merger Company
and Finance Company hereunder, including the payment of all of the expenses
of Merger Company and Finance Company and (B) together with cash available
to the Surviving Corporation, perform the obligations of the Surviving
Corporation under this Agreement.
Section 4.7 Beneficial Ownership of Shares. None of Merger
Company, Finance Company nor any of their affiliates or associates (as
defined in Rule 12b-2 under the Exchange Act) "beneficially owns" (as
defined in Rule 13d-3 under the Exchange Act) more than 5% of the
outstanding shares of Company Common Stock or any securities convertible
into or exchangeable for Company Common Stock.
Section 4.8 Brokers. Except for Bear Xxxxxxx Merchant Fund
Corp. and Hicks, Muse, Xxxx & Xxxxx Incorporated, or their respective
designees, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by
or on behalf of Merger Company or Finance Company. Finance Company is
solely responsible for the fees and expenses of Bear Xxxxxxx Merchant Fund
Corp. and Hicks, Muse, Xxxx & Xxxxx Incorporated and affiliates to the
extent that the Closing does not occur except to the extent provided in
Section 8.1, provided however that upon the Closing the Surviving
Corporation shall have sole responsibility for the payment of such fees and
expenses. Merger Company's and Finance Company's payment obligations to
Bear Xxxxxxx Merchant Fund Corp. and Hicks, Muse, Xxxx & Xxxxx Incorporated
and affiliates have been disclosed to the Company prior to the date hereof.
Section 4.9 Surviving Corporation after the Merger. Merger
Company and Finance Company have engaged or will engage an appraisal firm
to deliver a letter at the Closing, the addressees of which will include
the Company and the Board and upon which such persons may rely, stating
that at the Effective Time and after giving effect to the Merger, the
financing and the other transactions contemplated in connection therewith
(including the incurrence of the Financing) and any changes in the
Surviving Corporation's assets and liabilities as a result thereof, the
Surviving Corporation: (i) will be solvent (i.e., the fair value of its
assets will not be less than the sum of its debts and that the present fair
saleable value of its assets will not be less than the amount required to
pay its probable liabilities on its debts as they become absolute and
mature); (ii) will not have unreasonably small capital with which to engage
in its business; and (iii) will not have incurred and will not plan to
incur debts beyond its ability to pay as they become absolute and mature.
Section 4.10 Employment Agreement. Merger Company has
previously provided to the Company a copy of the executed letter agreement
between Merger Company and Xxxxxxx X. Xxxxx, providing for the execution of
the Employment Agreement between the Company and Xxxxxxx X. Xxxxx effective
as of the Closing.
Section 4.11 No Prior Activities. Except for this Agreement
and transactions contemplated hereby or related hereto, Merger Company and
its Subsidiaries and Finance Company and its Subsidiaries (i) have not
entered into any agreements or arrangements with any Person or (ii) are not
subject to or bound by any obligation or undertaking. Except as
contemplated by this Agreement, Merger Company and its Subsidiaries and
Finance Company and its Subsidiaries have not engaged, directly or
indirectly, in any business activities of any type or kind.
Section 4.12 No Other Representations or Warranties. Except
for the representations and warranties contained in this Article IV,
neither Merger Company nor Finance Company nor any other Person makes any
other express or implied representation or warranty on behalf of Merger
Company, Finance Company or any of their respective affiliates.
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company. The Company
covenants and agrees as to itself and its Subsidiaries that during the
period from the date of this Agreement until the Effective Time or the
date, if any, on which this Agreement is earlier terminated pursuant to
Section 7.1 hereof, except as (i) expressly contemplated by this Agreement,
(ii) required by applicable law or by any contract or agreement disclosed
in the Disclosure Letter, (iii) described in Section 5.1 of the Disclosure
Letter or (iv) agreed to in writing by Merger Company, after the date
hereof and prior to the Effective Time:
(a) the business of the Company and its Subsidiaries will be
conducted only in the ordinary course and, to the extent consistent
therewith, the Company will use its commercially reasonable efforts to
preserve intact its business organization and goodwill and the business
organization and goodwill of its Subsidiaries and keep available the
services of their current officers and employees and preserve and maintain
existing relations with customers, suppliers, officers, employees and
creditors;
(b) the Company will not, nor will it permit any of its
Subsidiaries to, enter into any significant new line of business outside
the building products industry, or incur or commit to any capital
expenditures, or any obligations or liabilities in connection with any
capital expenditures other than capital expenditures and obligations or
liabilities incurred or committed to in an amount not greater in the
aggregate than the Capital Budget plus an additional $5,000,000 in the
aggregate;
(c) neither the Company nor its Subsidiaries will amend its
certificate of incorporation, by-laws or similar organizational documents,
except as contemplated by the transactions contemplated hereby;
(d) the Company shall not and shall not permit its
Subsidiaries to declare, set aside or pay (other than dividends paid by
Subsidiaries to the Company or other wholly-owned Subsidiaries of the
Company) any dividend or other distribution payable in cash, stock or
property with respect to its capital stock (other than the payment of
regular quarterly dividends consistent with past practice which dividends
shall not in any quarter exceed the amount of dividends paid per share of
Company Common Stock in the first quarter of the year 2000 and provided
that the record date for the third quarter of the year 2000 dividend may
not be earlier than September 25, 2000 and the record date for the fourth
quarter of the year 2000 dividend may not be earlier than December 26,
2000);
(e) except for the TM Exchange Agreement (as defined in
Section 5.14), neither the Company nor its Subsidiaries shall (i) adjust,
split, combine or reclassify any capital stock or issue, grant, sell,
transfer, pledge, dispose of or encumber any additional shares of, or
securities convertible into or exchangeable for, or options, warrants,
calls, commitments or rights of any kind to acquire, any shares of capital
stock of any class of the Company or its Subsidiaries, other than issuances
of shares of Company Common Stock pursuant to securities, options,
warrants, calls, commitments or rights existing at the date hereof and
disclosed to Merger Company (including as disclosed in the Company SEC
Documents); (ii) incur any indebtedness for money borrowed or issue or sell
any debt securities or warrants or rights to acquire any debt securities of
the Company or its Subsidiaries or guarantee any indebtedness for money
borrowed other than under credit facilities existing on the date hereof in
the ordinary course of business and other borrowings in the ordinary course
of business that can be repaid at any time without prepayment penalty or
other similar fees; or (iii) redeem, purchase or otherwise acquire directly
or indirectly any of its capital stock;
(f) other than in the ordinary course of business consistent
with past practice, the Company shall not, nor shall it permit any of its
Subsidiaries to, sell, lease, mortgage, encumber or otherwise dispose of,
any assets (including capital stock of Subsidiaries) with an aggregate
value of more than $5,000,000, other than sales of obsolete assets;
(g) the Company shall not, nor permit any of its
Subsidiaries to, merge or consolidate with, or purchase any equity interest
in all or substantially all of the assets of, any Person or other business
organization or any division or business thereof, if the aggregate amount
of the consideration paid or transferred by the Company in connection with
all such transactions would exceed $5,000,000; provided however, this
Section 5.1(g) shall not prohibit the Company from purchasing inventory in
the ordinary course of business;
(h) neither the Company nor its Subsidiaries shall (i)
except for normal increases in the ordinary course of business consistent
with past practice or to reflect promotions or new hires, grant any
material increase in the fringe benefits or compensation payable or to
become payable by the Company or any of its Subsidiaries to any officer or
director; (ii) adopt, amend or otherwise materially increase, or accelerate
the payment or vesting of the amounts payable or to become payable to any
officer or director of the Company or any of its Subsidiaries under any
existing bonus, incentive compensation, deferred compensation, severance,
profit sharing, stock option, stock appreciation right, restricted stock
purchase, insurance, pension, retirement or other employee benefit plan,
agreement or arrangement; or (iii) enter into or amend in any material
respect any existing employment or severance agreement with, or, except in
accordance with the existing written policies of the Company or existing
contracts or agreements, grant any severance or termination pay to any
officer or director of the Company or any of its Subsidiaries;
(i) the Company shall file all reports required to be filed
by it with the SEC or New York Stock Exchange between the date of this
Agreement and the Effective Time;
(j) neither the Company nor its Subsidiaries shall change
the accounting principles used by it in effect as of the date hereof unless
required by GAAP (or, if applicable with respect to Subsidiaries, foreign
generally accepted accounting principles) or applicable law;
(k) except in the ordinary course of business consistent
with past practice, the Company shall not, nor shall it permit any of its
Subsidiaries to, (i) except as set forth in clause (iii) below, pay,
discharge or satisfy any material claims (including claims of
stockholders), liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise) where such payment, discharge or
satisfaction would require any material payment except for the payment,
discharge or satisfaction of liabilities or obligations in accordance with
the terms of Identified Contracts as in effect on the date hereof, (ii)
modify, amend or terminate any Identified Contract in any material respect
or waive or release any material right or claim thereunder or (iii) settle
or compromise any litigation (whether or not commenced prior to the date of
this Agreement) other than settlements or compromises of litigation where
the aggregate amount paid (after giving effect to insurance proceeds) does
not exceed $5,000,000;
(l) the Company shall not, nor shall it permit any of its
Subsidiaries to, enter into or commit to enter into, or assume, any
operating or capital lease, other than (i) any such lease contemplated by
the Capital Budget or (ii) any such operating lease which is not material
to the Company and its Subsidiaries, taken as a whole;
(m) except for the agreements listed in Section 5.1(m) of
the Disclosure Letter, the Company shall not, nor shall it permit any of
its Subsidiaries to, enter into or modify any collective bargaining
agreement or any successor collective bargaining agreement to any
collective bargaining agreement. With respect to the agreements listed on
Section 5.1(m) of the Disclosure Letter, the Company agrees to keep Merger
Company reasonably informed as to the status of negotiations with respect
to any collective bargaining agreements listed thereon;
(n) the Company shall not, nor shall it permit any of its
Subsidiaries to, engage in any transaction with, or enter into any
agreement, arrangement, or understanding with, directly or indirectly, any
of the Company's affiliates, including any transaction, agreement,
arrangement or understanding with any affiliate or other person covered
under Item 404 of SEC Regulation S-K that would be required to be disclosed
under such Item 404 other than such transactions of the same general
nature, scope and magnitude as are disclosed in the Company SEC Documents;
(o) other than in the ordinary course of business consistent
with past practice or as required by law, the Company and its Subsidiaries
shall not make any Tax election, amend any Return or settle or compromise
any Tax liability or make any Tax payments; and
(p) neither the Company nor its Subsidiaries will enter into
an agreement, contract, commitment or arrangement that if completed would
be in contravention of any of the foregoing.
Section 5.2 Acquisition Proposals.
(a) The Company agrees that, except as expressly
contemplated by this Agreement, neither it nor any of its Subsidiaries
shall, and shall instruct their respective officers or directors,
investment bankers, attorneys, accountants, financial advisors, agents or
other representatives not to (i) initiate, solicit, encourage or knowingly
facilitate the making of any Acquisition Proposal (as hereinafter defined)
or (ii) except as permitted below, engage in negotiations or discussions
with, or furnish any non-public information or data to, any third party
relating to an Acquisition Proposal (other than the transactions
contemplated by this Agreement). Notwithstanding anything to the contrary
contained in this Agreement, until the receipt of the Required Vote, and
subject to the provisions of Section 5.2(b) and (c), the Company and the
Board (i) may participate in negotiations or discussions (including, as a
part thereof, making any counterproposal) with or furnish information or
data to any third party pursuant to a confidentiality agreement on terms no
less favorable to the Company as the Confidentiality Agreement (as defined
hereinafter), if either (A) the Board determines in good faith, after
receiving the advice of its financial advisors, that a third party has made
a Superior Proposal after the date hereof or an Acquisition Proposal that
the Board concludes would be reasonably likely to constitute a Superior
Proposal (and such Acquisition Proposal was not solicited by the Company or
any affiliate or agent of the Company at the explicit or implicit direction
of the Company) or (B) the Board determines in good faith, after
consultation with independent counsel, that the failure to participate in
such negotiations or discussions or to furnish such information or data
would be reasonably likely to constitute a breach of the Board's fiduciary
duties under applicable law, (ii) shall be permitted to (X) take and
disclose to the holders of the Company Common Stock a position with respect
to the Merger or another Acquisition Proposal (including a Superior
Proposal), or amend or withdraw such position, if, based on the advice of
independent counsel, the Board determines that such action is required
pursuant to Rules 14d-9 and 14e-2 under the Exchange Act and (Y) make
disclosure to stockholders as the Board determines after consultation with
independent counsel is necessary to comply with the Board's fiduciary
duties under applicable law and (iii) shall be permitted to request from
any Person making an Acquisition Proposal such information as may be
necessary for the Board to inform itself as to the material terms of the
Acquisition Proposal. Immediately after the execution and delivery of this
Agreement, the Company and its Subsidiaries will, and will instruct their
respective officers, directors, employees, investment bankers, attorneys,
accountants and other agents to, cease and terminate any existing
activities, discussions or negotiations with any parties conducted
heretofore with respect to any possible Acquisition Proposal. The Company
agrees that it will take the necessary steps to promptly inform its
officers, directors, investments bankers, attorneys, accountants, financial
advisors, agents or other representatives involved in the transactions
contemplated by this Agreement of the obligations undertaken in this
Section 5.2(a).
(b) In addition to the obligations of the Company set forth
in paragraph (a) above, the Company shall advise Merger Company orally and
in writing by the end of the next Business Day, but in no event more than
36 hours after its receipt), of any written request for information or of
any Acquisition Proposal and the material terms and conditions of such
request or Acquisition Proposal and the identity of the person making any
such request, or Acquisition Proposal and any determination by the Board
that an Acquisition Proposal is a Superior Proposal. The Company will keep
Merger Company reasonably informed as to the status and material terms and
conditions of any such request or Acquisition Proposal.
(c) If the Board is entitled to engage in negotiations or
discussions with, or furnish any information or data to, any third party on
the terms contemplated in Section 5.2(a), the Board may, prior to the
Required Vote, (i) (in addition to any other right that it may have to
withdraw or modify its recommendation in the exercise of its fiduciary
duties) withdraw or modify, or propose publicly to withdraw or modify, in a
manner adverse to Merger Company, the approval or recommendation by the
Board of the Merger or this Agreement or the Charter Amendment, (ii)
approve or recommend, or propose publicly to approve or recommend, any
Acquisition Proposal or (iii) cause the Company to enter into any letter of
intent, agreement in principle, acquisition agreement or other similar
agreement related to any Acquisition Proposal. The Board may only take the
actions described in clauses (ii) and (iii) of this subparagraph (c) if the
Board determines in good faith, after receiving the advice of its financial
advisors, that it has received a Superior Proposal and this Agreement has
terminated in accordance with the procedures contemplated in Section
7.1(c), including following the expiration of the five Business Day period
contemplated therein and the Company having paid any required Termination
Fee and Expenses as contemplated therein.
(d) For purposes of this Agreement, "Acquisition Proposal"
shall mean any bona fide proposal for the (i) direct or indirect
acquisition or purchase of a business or assets that constitutes 15% or
more of the net revenues, net income or the assets (based on the fair
market value thereof) of the Company and its Subsidiaries, taken as a
whole, (ii) direct or indirect acquisition or purchase of 15% or more of
any class of equity securities or capital stock of the Company or any of
its Subsidiaries whose business constitutes 15% or more of the net
revenues, net income or assets of the Company and its Subsidiaries, taken
as a whole, or (iii) merger, consolidation, restructuring, transfer of
assets or other business combination, sale of shares of capital stock,
tender offer, exchange offer, recapitalization, stock repurchase program or
other similar transaction that if consummated would result in any person or
persons beneficially owning 15% or more of any class of equity securities
of the Company or any of its Subsidiaries whose business constitutes 15% or
more of the net revenues, net income or assets of the Company and its
Subsidiaries, taken as a whole, other than the transactions contemplated by
this Agreement. The term "Superior Proposal" shall mean any bona fide
proposal, which was not solicited by the Company or any affiliate or agent
of the Company at the explicit or implicit direction of the Company, to
enter into an Acquisition Proposal made by a third party on terms and
conditions which the Board determines in its good faith judgment, after
receiving the advice of its financial advisors, to be more favorable to the
holders of the Company Common Stock from a financial point of view than the
transactions contemplated hereby (taking account of all of the terms
thereof, including price, likelihood of financing being available and
expected timing of consummation).
Section 5.3 Access to Information. From the date of this
Agreement until the Effective Time, the Company shall and shall cause each
of its Subsidiaries to afford to Merger Company and its officers,
employees, accountants, counsel and its authorized representatives
(including environmental consultants to the extent provided in Section 5.8)
reasonable access during normal business hours upon reasonable prior notice
to all of its books, records, assets, properties (provided that
environmental testing may only be performed by or on behalf of Merger
Company to the extent set forth in Section 5.8) and operations and, during
such period, the Company shall furnish promptly to Merger Company (i) a
copy of each report, letter, registration statement and other document
filed or received by it during such period pursuant to the requirements of
the Exchange Act, (ii) a copy of all correspondence, including pleadings,
relating to the obtaining of the order contemplated in Section 6.1(f) and
(iii) such other information used in the operation of its business as
Merger Company may reasonably request and the provision of which is not
inconsistent with applicable laws and would not breach any agreements.
Merger Company and its authorized representatives will conduct all such
inspections in a manner which will minimize any disruptions of the business
and operations of the Company and its Subsidiaries. Until the Effective
Time, Merger Company will hold any such information in accordance with the
provisions of the confidentiality agreement between the Company and Bear,
Xxxxxxx & Co., Inc., dated March 1, 2000 as if Merger Company were a party
thereto (the "Confidentiality Agreement"), and will cause such information
to be so held by their Representatives (as defined in the Confidentiality
Agreement). Upon a termination of this Agreement pursuant to Section 7.1,
Merger Company and its Representatives shall return (and hold confidential)
all information provided pursuant to this Section 5.3 and all other
Evaluation Material (as defined in the Confidentiality Agreement) pursuant
to the procedures set forth in the Confidentiality Agreement.
Section 5.4 Further Action; Commercially Reasonable Efforts.
(a) Upon the terms and subject to the conditions herein
provided, each of the parties hereto agrees to use its commercially
reasonable efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including using commercially
reasonable efforts to satisfy the conditions precedent to the obligations
of any of the parties hereto, to obtain all necessary authorizations,
consents and approvals, and to effect all necessary registrations and
filings. Each of the parties hereto will furnish to the other parties such
necessary information and reasonable assistance as such other parties may
reasonably request in connection with the foregoing and will provide the
other parties with copies of all filings made by such party with any
Governmental Entity or any other information supplied by such party to a
Governmental Entity in connection with this Agreement and the transactions
contemplated hereby.
(b) The Company agrees to, and to cause its Subsidiaries and
its and their respective officers, employees, advisors and accountants to,
reasonably cooperate with Merger Company in connection with the arrangement
of any financing to be consummated prior to or contemporaneously with the
Closing in respect of the transactions contemplated by this Agreement,
including participation in meetings, due diligence sessions, road shows,
the preparation of offering memoranda, private placement memoranda,
prospectuses and similar documents and comfort letters of accountants, as
may be reasonably requested by Merger Company. In conjunction with the
obtaining of any such financing, the Company agrees, at the reasonable
request of Merger Company, to call for prepayment or redemption, or to
prepay or redeem, or to attempt to renegotiate the terms of, any then
existing indebtedness for borrowed money of the Company; provided, however,
that no such prepayment or redemption or call for prepayment or redemption
or renegotiated terms shall actually be made or become effective (nor shall
the Company be required to incur any liability in respect of any such
prepayment or redemption or call therefor or renegotiation thereof) prior
to the Effective Time. Merger Company will promptly inform the Company of
all material developments relating to arranging such financing.
(c) Merger Company and the Company shall use their
respective commercially reasonable efforts to resolve such objections, if
any, as may be asserted with respect to the transactions contemplated
hereby under the laws, rules, guidelines or regulations of any Governmental
Entity. Without limiting the foregoing, the Company and Merger Company
shall, as soon as practicable, file Notification and Report Forms under the
HSR Act (as defined below) with the Federal Trade Commission (the "FTC")
and the Antitrust Division of the Department of Justice (the "Antitrust
Division") and shall use commercially reasonable efforts to respond as
promptly as practicable to all inquiries received from the FTC or the
Antitrust Division for additional information or documentation.
"Competition Laws" means statutes, rules, regulations, orders, decrees,
administrative and judicial doctrines, and other 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
and includes the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act") and, to the extent applicable, equivalent laws of
the European Union or the Member States thereof.
(d) The Company shall cooperate with Merger Company, and use
its commercially reasonable efforts to take all action necessary (including
agreeing to amend this Agreement and/or restructure the transactions
contemplated hereby prior to the Special Meeting), to cause the Surviving
Corporation to be entitled to recapitalization accounting treatment for the
transactions contemplated hereby for GAAP and SEC financial reporting
purposes, provided that the Board determines that any such action would not
reasonably be expected to affect adversely the Company or any of its
stockholders.
(e) The Company shall cooperate with Merger Company in
connection with any decision by Merger Company to order, at the sole
expense of Merger Company, any title insurance commitment or commitments
with respect to each parcel of Owned Property. The Company shall cooperate
with Merger Company in the event that Merger Company elects to purchase, at
the sole expense of Merger Company, title insurance and/or order, at the
sole expense of Merger Company, surveys with respect to each parcel of
Owned Property.
(f) Finance Company will use its commercially reasonable
efforts to obtain as promptly as practicable the Financing required to be
obtained to consummate the transactions contemplated hereby, as described
in Section 4.6, provided that Finance Company shall not be obligated to
seek a waiver of the conditions to such Financing. Neither Finance Company
nor Merger Company will intentionally take any action that would be
reasonably likely to result in the failure of the consummation of the
Financing.
(g) In case at any time after the Effective Time any further
action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and/or directors of the Surviving
Corporation shall take or cause to be taken all such necessary action.
(h) Each of the parties shall use commercially reasonable
efforts to prevent the entry of, and to cause to be discharged or vacated,
any order or injunction of a Governmental Entity precluding, restraining,
enjoining or prohibiting consummation of the Merger.
Section 5.5 Employee Benefits.
(a) Surviving Corporation hereby agrees to honor, and to
make required payments when due under, all contracts, agreements,
arrangements, policies, plans and commitments of the Company and its
Subsidiaries in effect as of the date hereof which are applicable with
respect to any employee, officer, director or executive or former employee,
officer, director or executive of the Company or any Subsidiary thereof,
including the Benefit Plans in existence as of the date hereof. Nothing
herein shall be construed to prohibit the Surviving Corporation from
amending or terminating such contracts, agreements, arrangements, policies,
plans and commitments in accordance with the terms thereof and with
applicable law.
(b) Surviving Corporation hereby agrees to assume, each
employment, retention, consulting or severance agreement or arrangement
that was entered into by and between the Company and any employee, officer,
director or executive or former employee, officer, director or executive of
the Company or any Subsidiary thereof and that is in effect as of the date
hereof and has been delivered to Merger Company as of the date hereof.
(c) Surviving Corporation hereby agrees that after the
Effective Time, it shall continue to maintain until the end of year 2001
the core benefits identified on Schedule 5.5 of the Disclosure Letter for
the benefit of employees and former employees of the Company and its
Subsidiaries which in the aggregate provide benefits that are no materially
less favorable taken as a whole (on a value or cost basis) than those
provided to them under the Benefit Plans on the date hereof. In addition,
Surviving Corporation hereby agrees that for a period of eighteen months
immediately following the Effective Time, it shall, or shall cause the
Surviving Corporation to, continue to maintain the Company Separation
Policy as in effect on the date hereof, without any amendment thereto which
is adverse to the participants therein.
(d) For purposes of all employee benefit plans, programs and
arrangements maintained by or contributed to by Surviving Corporation and
its Subsidiaries, Surviving Corporation shall cause each such plan, program
or arrangement to treat the prior service with the Company and its
affiliates of each person who is an employee or former employee of the
Company or its Subsidiaries immediately prior to the Effective Time (a
"Company Employee") (to the same extent such service is recognized under
analogous plans, programs or arrangements of the Company or its affiliates
prior to the Effective Time) as service rendered to Surviving Corporation,
for purposes of eligibility to participate and vesting; provided, however,
that any benefits provided by Surviving Corporation under any (i) ERISA
Plan, (ii) nonqualified employee benefit or deferred compensation plans,
stock option, bonus or incentive plans or (iii) other employee benefit or
fringe benefit programs, that may be in effect generally for employees of
Surviving Corporation or its Subsidiaries from time to time, shall be
reduced by benefits in respect of the same years of service under analogous
plans, programs and arrangements maintained by or contributed to by the
Company, the Surviving Corporation or their Subsidiaries. Surviving
Corporation shall (x) waive all limitations as to preexisting conditions
exclusions and waiting periods with respect to participation and coverage
requirements applicable to the Company Employees under any welfare benefit
plans that such Company Employees may be eligible to participate in after
the Effective Time, other than limitations or waiting periods that are
already in effect with respect to such employees and that have not been
satisfied as of the Effective Time under any welfare benefit plan
maintained for the Company Employees immediately prior to the Effective
Time and (y) provide each Company Employee with credit for any co-payments
and deductibles paid prior to the Effective Time in satisfying any
applicable deductible or out-of-pocket requirements under any welfare plans
that such employees are eligible to participate in after the Effective
Time.
(e) Surviving Corporation shall pay (no later than the
February 15th following the Year for which the payment is due) to each
individual who was a participant in any of the Company's annual incentive
compensation plans (each, a "Bonus Plan") immediately prior to the
Effective Time, a lump sum cash payment equal to the product of (i) the
bonus which such participant would have earned in respect of the year (the
"Year") in which the Effective Time occurs, based upon the actual
performance in such Year prior to the Effective Time, compared to the
target performance levels for the period in such Year prior to the
Effective Time and (ii) a fraction, the numerator of which is the number of
days in such Year prior to the Effective Time and the denominator of which
is 365; provided that such individual will only be entitled to such payment
if still employed at the end of such Year except for individuals previously
identified to Merger Company in writing to whom such requirement shall be
inapplicable. Merger Company may permit each member of Management as it
shall designate to elect, prior to the Effective Time, to invest such
deferred bonus amount in shares of Surviving Corporation Common Stock and
Surviving Corporation Junior Preferred Stock. In the event of such
election, the shares will be issued no later than the February 15th
following the Year for which payment is due to those individuals employed
at the end of such Year. The number of shares of Surviving Corporation
Common Stock and Surviving Corporation Junior Preferred Stock to be issued
will be determined by dividing the amount that would otherwise be payable
as a bonus that is elected to be converted by $15.625 and multiplying such
amount by the TM Merger Consideration. Notwithstanding anything in any
employee agreement to the contrary, the payment under this Section 5.5(e)
shall offset any payment under such employee agreement with respect to the
prorated bonus which may be payable under such employee agreement with
respect to the year in which the Effective Time occurs. Surviving
Corporation shall implement a replacement annual incentive compensation
plan similar to the existing plan except with respect to the targets
thereunder for the remainder of the year in which the Effective Time
occurs.
Section 5.6 Stockholders Meeting; Proxy Statement.
(a) The Company shall, in accordance with applicable law and
the Restated Certificate of Incorporation and the By-laws of the Company
duly call, give notice of, convene and hold a meeting of its stockholders
(the "Special Meeting") as promptly as reasonably practicable after the
date hereof for the purpose of considering and taking action upon this
Agreement, the Charter Amendment and such other matters as may be
appropriate at the Special Meeting.
(b) As soon as reasonably practicable following the date of
this Agreement, the Company shall prepare and file with the SEC, and Merger
Company and Finance Company shall cooperate with the Company in such
preparation and filing, an S-4 and a preliminary proxy statement and the
parties shall file, if necessary, any other statement or schedule relating
to this Agreement and the transactions contemplated hereby and use their
respective commercially reasonable efforts to furnish the information
required to be included by the SEC in the S-4, the Proxy Statement (as
hereinafter defined) and any such statement or schedule. After consultation
with Merger Company, the Company shall respond promptly to any comments
made by the SEC with respect to the S-4 or the preliminary proxy statement
and cause a definitive proxy statement (the "Proxy Statement") to be mailed
to its stockholders and the parties shall respond promptly to any comments
with respect to any other statement or schedule filed by them. No filing
of, or amendment or supplement to, the S-4, or the Proxy Statement or any
other statement or schedule will be made by the Company without providing
Merger Company a reasonable opportunity to review and comment thereon, and
no filing of any statement or schedule will be made by Merger Company or
Finance Company without providing the Company a reasonable opportunity to
review and comment thereon. If at any time after the date the S-4 is
declared effective by the SEC or otherwise becomes effective and prior to
the Special Meeting any information relating to the Company, Merger Company
or Finance Company, or any of their respective affiliates, officers or
directors, should be discovered by the Company, Merger Company or Finance
Company which is required to be set forth in an amendment or supplement to
the S-4, the Proxy Statement or any other statement or schedule, so that
none of the S-4, the Proxy Statement and any such statement or schedule
will include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, the party which
discovers such information shall promptly notify the other party hereto and
an appropriate amendment or supplement describing such information shall be
promptly filed with the SEC and, to the extent required by law,
disseminated to the stockholders of the Company. Subject to the fiduciary
obligations of the Board and applicable law, the Company shall include in
the Proxy Statement the recommendation of the Board that stockholders of
the Company adopt this Agreement.
(c) Merger Company and Finance Company agree that (i) they
will provide the Company with all information concerning Merger Company and
Finance Company and their affiliates necessary or appropriate to be
included in the Proxy Statement and (ii) at the Special Meeting or any
postponement or adjournment thereof (or at any other meeting at which the
Merger or this Agreement are considered by stockholders), they will vote,
or cause to be voted, all of the Shares then owned by them, or any of their
Subsidiaries and affiliates, if any, in favor of the approval and adoption
of this Agreement.
Section 5.7 Directors' and Officers' Insurance and
Indemnification.
(a) The certificate of incorporation and by-laws of the
Surviving Corporation shall contain the provisions with respect to
indemnification set forth in Article VIII of the Restated Certificate of
Incorporation and Article IV of the Company's By-laws on the date of this
Agreement and such additional provisions relating thereto as are described
in Exhibit B and Exhibit C attached hereto and shall provide for
indemnification to the fullest extent permitted by and in accordance with
the DGCL, which provisions shall not be amended, repealed or otherwise
modified for a period of six years after the Effective Time (or, in the
case of matters occurring prior to the Effective Time which have not been
resolved prior to the sixth anniversary of the Effective Time, until such
matters are finally resolved) in any manner that would adversely affect the
rights thereunder of individuals who at any time prior to the Effective
Time were directors or officers of the Company in respect of actions or
omissions occurring at or prior to the Effective Time (including the
transactions contemplated by this Agreement).
(b) The Surviving Corporation and its Subsidiaries shall
indemnify at all times after the Effective Time each person who is now, or
has been at any time prior to the date hereof, an employee, agent, director
or officer of the Company or of any of the Company's Subsidiaries
(individually an "Indemnified Party" and collectively the "Indemnified
Parties"), to the fullest extent permitted by applicable law, with respect
to any claim, liability, loss, damage, cost or expense, whenever asserted
or claimed ("Indemnified Liability"), based in whole or in part on, or
arising in whole or in part out of, any matter existing or occurring at or
prior to the Effective Time. The Surviving Corporation shall maintain in
effect for not less than six years after the Effective Time policies of
directors' and officers' liability insurance equivalent in all material
respects to those maintained by or on behalf of the Company and its
Subsidiaries on the date hereof (and having at least the same coverage and
containing terms and conditions which are no less advantageous to the
persons currently covered by such policies as insured) with respect to
matters existing or occurring at or prior to the Effective Time; provided,
however, that if the aggregate annual premiums for such insurance at any
time during such period shall exceed 200% of the per annum rate of premium
currently paid by the Company and its Subsidiaries for such insurance on
the date of this Agreement, then Surviving Corporation shall provide the
maximum coverage that shall then be available at an annual premium equal to
200% of such rate. Without limiting the foregoing, in the event any
Indemnified Party becomes involved in any capacity in any action,
proceeding or investigation based in whole or in part on, or arising in
whole or in part out of, any matter, including the transactions
contemplated hereby, existing or occurring at or prior to the Effective
Time, then to the extent permitted by law, Surviving Corporation shall
periodically advance to such Indemnified Party its legal and other expenses
(including the cost of any investigation and preparation incurred in
connection therewith), subject to the provision by such Indemnified Party
of an undertaking to reimburse the amounts so advanced in the event of a
final determination by a court of competent jurisdiction that such
Indemnified Party is not entitled thereto. Promptly after receipt by an
Indemnified Party of notice of the assertion (an "Assertion") of any claim
or the commencement of any action against him in respect to which indemnity
or reimbursement may be sought against the Company, the Surviving
Corporation or a subsidiary of the Company or the Surviving Corporation
("Indemnitors") hereunder, such Indemnified Party shall notify any
Indemnitor in writing of the Assertion, but the failure to so notify any
Indemnitor shall not relieve any Indemnitor of any liability it may have to
such Indemnified Party hereunder except to the extent that such failure
shall have materially and irreversibly prejudiced Indemnitor in defending
against such Assertion. Indemnitors shall be entitled to participate in
and, to the extent Indemnitors elect by written notice to such Indemnified
Party within 30 days after receipt by any Indemnitor of notice of such
Assertion, to assume the defense of such Assertion, at their own expense,
with counsel chosen by Indemnitors and reasonably satisfactory to such
Indemnified Party. Notwithstanding that Indemnitors shall have elected by
such written notice to assume the defense of any Assertion, such
Indemnified Party shall have the right to participate in the investigation
and defense thereof, with separate counsel chosen by such Indemnified
Party, but in such event the fees and expenses of such counsel shall be
paid by such Indemnified Party unless such separate counsel is required due
to a conflict of interest, in which case the Indemnitors shall be
responsible for the fees and expenses of one separate counsel. No
Indemnified Party shall settle any Assertion without the prior written
consent of Surviving Corporation, nor shall Surviving Corporation settle
any Assertion without either (i) the written consent of all Indemnified
Parties against whom such Assertion was made, or (ii) obtaining an
unconditional general release from the party making the Assertion for all
Indemnified Parties as a condition of such settlement. The provisions of
this Section 5.7 are intended for the benefit of, and shall be enforceable
by, the respective Indemnified Parties.
Section 5.8 Environmental Assessments.
In the event the Company or Merger Company receives
information after the date hereof as a result of which it concludes in good
faith that a site or sites owned or operated by the Company has associated
with it Environmental Costs and Liabilities that would have a Material
Adverse Effect, Merger Company shall have the right to arrange at its sole
cost and expense, upon reasonable notice to the Company, for an independent
environmental professional, possessing reasonable levels of insurance and
skills, to conduct tests at such sites; provided, that such testing shall
be conducted upon reasonable notice to the Company, in such a manner as to
minimize disruption to the Company's operations, and in accordance with a
sampling procedure approved in advance by the Company. Merger Company will,
at the Company's option, provide the Company with split samples from such
testing and copies of any reports prepared in connection therewith.
Section 5.9 Environmental Transfer Laws. Prior to the
Closing, the Company shall use its commercially reasonable efforts to
ensure compliance with all Environmental Property Transfer Laws, including
the New Jersey Industrial Site Recovery Act.
Section 5.10 Solvency Letter.
(a) Merger Company shall at its sole cost and expense
engage, and use commercially reasonable efforts to cause, a reputable
appraisal firm selected by Merger Company and reasonably satisfactory to
the Company (the "Appraiser") to deliver to the Company and the Board at
the Closing a letter addressed to Merger Company, the Company and the Board
(the "Solvency Letter") to the effect that, immediately after the Effective
Time and after giving effect to the Merger, the Financing and the other
transactions contemplated in connection therewith (and any changes in the
Surviving Corporation's assets and liabilities as a result thereof), the
Surviving Corporation: (i) will be solvent (i.e., in that both the fair
value of its assets will not be less than the sum of its debts and that the
present fair saleable value of its assets will not be less than the amount
required to pay its probable liability on its debts as they become absolute
and matured); (ii) will not have unreasonably small capital with which to
engage in its business; and (iii) will not have incurred and does not plan
to incur debts beyond its ability to pay as they become absolute and
matured.
Merger Company will request the Appraiser to deliver a form
of the Solvency Letter as promptly as practicable but in no event later
than five Business Days prior to the Closing Date. The parties agree to
cooperate with the Appraiser in connection with the preparation of the
Solvency Letter, including, providing the Appraiser with any information
reasonably available to them necessary for the Appraiser's preparation of
such letter.
Section 5.11 Indemnity. The Company, if prior to the
Effective Time, and the Surviving Corporation, at all times after the
Effective Time (each, a "Merger Party Indemnitor"), shall indemnify Merger
Company, Finance Company, their respective affiliates and each person who
is now, or has been at any time prior to the date hereof, an employee,
agent, director or officer of Merger Company or Finance Company, or of any
of Merger Company's or Finance Company's Subsidiaries and affiliates
(including Bear Xxxxxxx Merchant Fund Corp., Hicks, Muse, Xxxx & Xxxxx
Incorporated and their respective affiliates) (individually an "Indemnified
Merger Party" and collectively the "Indemnified Merger Parties"), to the
fullest extent permitted by applicable law, with respect to any claim,
liability, loss, damage, cost or expense, asserted against, or incurred by,
an Indemnified Merger Party which is primarily based on an allegation that
an Indemnified Merger Party has induced or acted in concert with the
Company or any of its directors to act contrary to or in violation of any
contract, duty or applicable law, to which the Company and the directors
are subject, to the extent such allegation relates to the negotiation,
execution or delivery of this Agreement or the Trust Voting Agreement by
the parties hereto and thereto or the performance of the obligations of the
parties hereunder or thereunder (an "Indemnified Litigation Matter").
Promptly after receipt by an Indemnified Merger Party of notice of the
assertion of any claim or the commencement of any action against such
Indemnified Merger Party in respect to which indemnity or reimbursement may
be sought against under this Section 5.11 (an "Assertion Against HB"), such
Indemnified Merger Party shall notify the Merger party Indemnitor in
writing of the Assertion Against HB, but the failure to so notify shall not
relieve of any liability it may have to such Indemnified Merger Party
hereunder except to the extent that such failure shall have actually
prejudiced in defending against such Assertion Against HB. In the event
that following receipt of notice from the Indemnified Merger Party, a
Merger Party Indemnitor notifies the Indemnified Merger Party that it
desires to defend the Indemnified Merger Party against such Assertion
Against HB, such Merger Party Indemnitor shall have the right to defend the
Indemnified Merger Party by appropriate proceedings and shall have the sole
power to direct and control such defense. If any Indemnified Merger Party
desires to participate in any such defense it may do so at its sole cost
and expense, provided, however, that if the defendants in any such action
shall include the Company and/or its officers or directors as well as an
Indemnified Merger Party and such Indemnified Merger Party shall have
received the advice of counsel that there exist defenses to such
Indemnified Merger Party that are different from or additional to those
available to the Company and/or such officers or directors, the Indemnified
Merger Parties shall have the right to select one separate counsel (and one
local counsel in such jurisdictions as are necessary) reasonably acceptable
to the Company to participate in the defense of such action on its behalf,
at the expense of the Company. If the Indemnified Merger Parties retain
such counsel, then to the extent permitted by law, the Merger Party
Indemnitor shall periodically advance to such Indemnified Merger Parties
their reasonable legal and other out-of-pocket expenses relating to the
Indemnified Litigation Matter (including the reasonable cost of any
investigation and preparation incurred in connection therewith). No
Indemnified Merger Party shall settle any Assertion Against HB without the
prior written consent of the Merger Party Indemnitor, nor shall the Merger
Party Indemnitor settle any Assertion Against HB without either (i) the
written consent of all Indemnified Merger Parties against whom such
Assertion Against HB was made, or (ii) obtaining an unconditional general
release from the party making the Assertion Against HB for all Indemnified
Merger Parties as a condition of such settlement. The provisions of this
5.11 are intended for the benefit of, and shall be enforceable by, the
respective Indemnified Merger Parties.
Section 5.12 Listing for Surviving Corporation Preferred
Stock. Merger Company agrees to use its commercially reasonable efforts to
have the Surviving Corporation Preferred Stock eligible for trading on the
Nasdaq National Market. If the Surviving Corporation Preferred Stock is not
eligible for trading on the Nasdaq National Market as of the Closing Date,
Merger Company will use its commercially reasonable efforts to arrange for
an established securities dealer or dealers to make a market in the
Surviving Corporation Preferred Stock.
Section 5.13 Stockholders Agreement. On or prior to the
Closing Date, the Company will execute and deliver, and Merger Company
shall cause the members thereof to execute and deliver, to the Trust the
Stockholders Agreement among the Company, the members of the Merger
Company, Management and the Trust, in the form attached hereto as Exhibit
G.
Section 5.14 Exchange of Certain Company Common Stock.
Immediately prior to the Closing (and after the Required Vote), the Company
shall issue the Class TM Preferred Stock to the Trust and Management, in
accordance with the terms of the exchange agreement among the Company, the
Trust and Management regarding the exchange of certain Company Common Stock
to Class TM Preferred Stock, in the form attached hereto as Exhibit H (the
"TM Exchange Agreement").
Section 5.15 Charter Amendment. On or prior to the Closing
Date, the Company shall file with the Secretary of State a certificate of
amendment to the Restated Certificate of Incorporation giving effect to the
Charter Amendment.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's Obligation to Effect
the Merger. The respective obligation of each party to effect the Merger
shall be subject to the satisfaction on or prior to the Closing Date of
each of the following conditions:
(a) This Agreement shall have been adopted and the Charter
Amendment shall have been approved by the affirmative vote of the holders
of a majority of the outstanding shares of Company Common Stock;
(b) No statute, rule, order, decree or regulation shall have
been enacted or promulgated and no other action shall have been taken by
any Governmental Entity of competent jurisdiction which permanently
restrains, enjoins or otherwise prohibits the consummation of the Merger or
makes the Merger illegal;
(c) There shall be no order or injunction of a Governmental
Entity of competent jurisdiction in effect precluding, restraining,
enjoining or prohibiting consummation of the Merger and there shall be no
suit, action or proceeding by a Governmental Entity seeking to restrain,
enjoin or prohibit the Merger;
(d) The applicable waiting period under the HSR Act shall
have expired or been terminated;
(e) Other than filing the Certificate of Merger and the
Restated Certificate of Incorporation in accordance with the DGCL, all
authorizations, consents and approvals of all Governmental Entities
required to be obtained prior to consummation of the Merger shall have been
obtained, except for such authorizations, consents and approvals the
failure of which to be obtained would not have a Material Adverse Effect;
(f) The Federal Bankruptcy Court of the Southern District of
New York (the "Court") shall have issued an order (i) approving of the
Trust's execution of and performance of the Trust Voting Agreement and the
transactions contemplated thereby; (ii) approving the Trust's execution and
performance of the TM Exchange Agreement, the Stockholders' Agreement, the
Escrow Agreement (provided that the Order shall not be deemed not to have
been obtained if the provisions therein regarding the separate order
referred to therein shall not have been obtained) and the Tax Matters
Agreement and the transactions contemplated thereby, including the Merger
and the execution and performance of the Amended Supplemental Agreement and
the Trust Amendment (as defined in the Tax Matters Agreement, and together
with the Trust Voting Agreement, the TM Exchange Agreement, the
Stockholders' Agreement, the Escrow Agreement and the Amended Supplemental
Agreement, the "Trust Merger Agreements"); (iii) discharging fully the
Trustees of the Trust from any and all liabilities relating to or arising
from the execution and delivery of and performance of their obligations
under the Trust Merger Agreements and discharging fully the Trustees of the
Trust from any and all liabilities relating to or arising from the
consummation of the transactions contemplated the Trust Merger Agreements
(other than the Trustees' obligations to the parties under the Trust Merger
Agreements); (iv) approving the transfer of all assets of the grantor trust
portion of the Trust that would constitute Qualified Payments (as defined
in Section 468B(d) of the Code) (as defined in the Tax Matters Agreement)
to the Designated Settlement Fund (as defined in the Tax Matters Agreement)
immediately following the receipt of such amount (and from time to time
thereafter as Qualified Payments are received as provided in Section 2.6 of
the Tax Matters Agreement), all in a form reasonably acceptable to the
Trust, which order shall be in full force and effect; and
(g) The S-4 shall have been declared effective under the
Securities Act and no stop order suspending the effectiveness of the S-4
shall be in effect and no proceeding for such purpose shall be pending
before or threatened by the SEC.
Section 6.2 Conditions to the Obligation of the Company to
Effect the Merger. The obligation of the Company to effect the Merger is
further subject to the satisfaction or waiver at or prior to the Closing
Date of the following conditions:
(a) The representations and warranties of Merger Company and
Finance Company set forth in this Agreement (i) to the extent qualified by
material adverse effect shall be true and correct, and (ii) to the extent
not qualified by material adverse effect shall be true and correct, except
that this clause (ii) shall be deemed satisfied so long as any failures of
such representations and warranties to be true and correct do not
individually or in the aggregate have a material adverse effect on the
business, results of operations or financial condition of Merger Company
and/or Finance Company and their respective Subsidiaries, taken as a whole,
or materially impair the consummation of the transactions contemplated by
this Agreement, in each of cases (i) and (ii), as of the date of this
Agreement and as of the Closing Date as though made on and as of the
Closing Date (except to the extent such representations and warranties are
made as of a specific date), and the Company shall have received a
certificate to such effect signed on behalf each of Merger Company and
Finance Company by the Chief Executive Officer of each of Merger Company
and Finance Company to such effect.
(b) Each of Merger Company and Finance Company shall have
performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date, and Company
shall have received a certificate signed on behalf of each of Merger
Company and Finance Company by the Chief Executive Officer of each of
Merger Company and Finance Company to such effect.
(c) The amount of cash necessary to complete the
transactions contemplated by the Agreement as set forth in 2.2(a) and (d)
shall be deposited with the Exchange Agent concurrently with the Closing.
(d) The Company shall have received the Solvency Letter as
referred to in Section 5.10, in form and substance reasonably satisfactory
to it.
(e) The members of Merger Company shall have executed and
delivered the Stockholders Agreement to the Company.
Section 6.3 Conditions to Obligations of Merger Company to
Effect the Merger. The obligation of Merger Company to effect the Merger is
further subject to the satisfaction or waiver at or prior to the Closing
Date of the following conditions:
(a) The representations and warranties of the Company set
forth in this Agreement (i) to the extent qualified by Material Adverse
Effect shall be true and correct, and (ii) to the extent not qualified by
Material Adverse Effect shall be true and correct, except that this clause
(ii) shall be deemed satisfied so long as any failures of such
representations and warranties to be true and correct do not individually
or in the aggregate have a Material Adverse Effect, in each of cases (i)
and (ii), as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date (except to the extent such
representations and warranties are made as of a specific date) and Merger
Company shall have received a certificate to such effect signed on behalf
of the Company by the Chief Executive Officer of the Company to such
effect.
(b) The Company shall have performed in all material
respects all material obligations required to be performed by it under this
Agreement at or prior to the Closing Date, and Merger Company shall have
received a certificate to such effect signed on behalf of the Company by
its Chief Executive Officer or Chief Financial Officer.
(c) The consents, approvals, authorizations, qualifications
and orders of Governmental Entities that are necessary to consummate the
transactions contemplated hereby shall have been obtained, other than those
the failure of which to be obtained, individually or in the aggregate,
would not have a Material Adverse Effect.
(d) There shall not be pending any suit, action or
proceeding brought by any Governmental Entity seeking to prohibit or limit
in any material respect the ownership or operation by the Company, Merger
Company or any of their respective affiliates of a substantial portion of
the business or assets of the Company and its Subsidiaries, taken as a
whole, or to require any such person to dispose of or hold separate any
material portion of the business or assets of the Company and its
Subsidiaries, taken as a whole, as a result of the Merger or any of the
other transactions contemplated by this Agreement.
(e) The proceeds of the Financing from the lenders
identified in the Commitment Letters, on the terms and conditions set forth
therein shall be available to the borrower under the Commitment Letters
simultaneously with the Closing.
(f) Since the date hereof, no Material Adverse Effect shall
have occurred nor shall have there occurred any event, development, change
or circumstance that would have a Material Adverse Effect (including an
adverse development in any litigation pending against the Company), and the
Company shall have delivered to Merger Company at the Closing a certificate
signed by its Chief Executive Officer or Chief Financial Officer, dated the
Closing Date, to the foregoing effect.
(g) The senior executive identified in Section 6.3(g) of the
Disclosure Letter who has entered into an employment arrangement regarding
his employment with the Company after the Closing shall not have terminated
his employment.
(h) The Tax Matters Agreement shall be in full force and
effect.
(i) The exchange of shares of Company Common Stock for
shares of Class TM Preferred Stock pursuant to the TM Exchange Agreement
shall have been consummated.
(j) There shall not have occurred, after the date hereof,
any public announcement by any of the following any commissioner of the
SEC; the chief accountant, any deputy chief accountant, any associate chief
accountant; or the director of the Division of Corporation Finance; in any
such case stating that the SEC has revised or intends to revise any of its
published interpretations in effect as of the date hereof concerning the
availability of "recapitalization accounting" treatment in a manner which
would adversely affect the Surviving Corporation's ability to qualify for
such treatment as a result of the transactions contemplated hereby.
Section 6.4 Frustration of Closing Conditions. Neither
Merger Company nor the Company may rely on the failure of any condition set
forth in Section 6.2 (other than Section 6.2(c)) or 6.3, as the case may
be, to be satisfied if such failure was caused by such party's failure to
fulfill in any material respects its obligations under this Agreement.
ARTICLE VII
TERMINATION
Section 7.1 Termination. Notwithstanding anything herein to
the contrary, this Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, whether before or after
stockholder adoption of this Agreement, except for clause (c) below which
cannot be effectuated after the adoption of this Agreement by the
stockholders of the Company by the Required Vote:
(a) By the mutual consent of the Members of Merger Company
and the Board.
(b) By either the Company or Merger Company if:
(i) the Merger shall not have been consummated on or prior
to November 30, 2000; provided, however, that such date shall automatically
be extended to December 28, 2000 if the Special Meeting shall not have been
held on or prior to November 1, 2000; and provided further that if the
Special Meeting shall not have been held on or prior to December 1, 2000
such date shall automatically be extended to the later of December 28, 2000
or that date which is 15 Business Days after the Special Meeting is held
but in no event shall such date extend beyond January 31, 2001 or such
other date, if any, as Merger Company and the Company shall agree in
writing (provided that the right to terminate this Agreement under this
Section 7.1(b)(i) shall not be available to a party whose failure to
fulfill in any material respect any obligation under this Agreement has
been the cause of or resulted in the failure of the Effective Time to occur
on or before such date); or
(ii) the stockholders of the Company fail to adopt this
Agreement by the Required Vote or fail to approve the Charter Amendment at
the Special Meeting (including any postponement or adjournment thereof); or
(iii) any Governmental Entity shall have issued a statute,
order, decree or regulation or taken any other action (which statute,
order, decree, regulation or other action the parties hereto shall have
used their commercially reasonable efforts to lift), in each case
permanently restraining, enjoining or otherwise prohibiting consummation of
the Merger or making the Merger illegal and such statute, order, decree,
regulation or other action shall have become final and non-appealable; or
(iv) the other party is in material breach of its
representations or warranties or fails to perform in any material respect
its covenants or other agreements hereunder to the extent required to have
been performed at such time, which breach or failure to perform (A) would
give rise to the failure of a condition set forth in Section 6.2 in the
case of such a breach or failure to perform on the part of the Merger
Company or Section 6.3 in the case of such a breach or failure to perform
on the part of Company and (B) is incapable of being cured by the party so
breaching or failing to perform prior to November 30, 2000 (or such later
date as may be applicable as set forth in Section 7.1(b)(i)) or, if capable
of being cured by such date, is not cured within 30 days after the
terminating party gives written notice of such breach to the other party;
or
(v) the Trust Voting Agreement is terminated pursuant to
Section 5(b) or Section 5(c) thereof provided that if the Trust Voting
Agreement terminates pursuant to Section 5(b)(iii) thereof, the Company may
not effect such termination unless contemporaneously therewith the Company
pays or causes to be paid to Merger Company, or its designee, in
immediately available funds the Termination Fee and any Expenses required
to be paid pursuant to Section 8.1.
(c) By the Company if (i) the Board authorizes the Company,
subject to complying with the terms of this Agreement, to enter into a
binding written agreement with respect to a transaction that constitutes a
Superior Proposal and the Company has notified Merger Company in writing
that it intends to enter into such an agreement and terminate this
Agreement pursuant to this clause (c), attaching the most current version
of such agreement to such notice, and (ii) during the five Business Day
period after the Company's notice, the Company shall have negotiated with
Merger Company regarding the terms and conditions of a revised proposal by
Merger Company and if the Board of Directors of the Company shall have
concluded, after considering any revised proposal made by Merger Company
during such period that any Superior Proposal giving rise to the Company's
notice, as then revised, continues to be a Superior Proposal. The Company
may not effect such termination unless contemporaneously therewith the
Company pays or causes to be paid to Merger Company, or its designee, in
immediately available funds the Termination Fee and Expenses required to be
paid pursuant to Section 8.1. The Company agrees (x) that it will not enter
into a binding agreement referred to in clause (ii) above until at least
five Business Days after it has provided the notice to Merger Company
required by the first sentence of this Section 7.1(c) and has made the
payments required by the immediately preceding sentence and (y) to notify
Merger Company promptly if the Board determines not to enter into a binding
agreement with respect to the Superior Proposal as to which notification
was given.
(d) By Merger Company if (i) the Company enters into a
written agreement for a Superior Proposal, (ii) the Board shall have
withdrawn or adversely modified its approval or recommendation of this
Agreement or the Merger and the Trust shall have terminated the Trust
Voting Agreement in accordance with Section 5(b)(i) thereof, (iii) the
Company continues to engage in negotiations or discussions with, or furnish
any information or data to, any third party relating to an Acquisition
Proposal for a period of 45 days after the earliest of (x) the signing of a
confidentiality agreement with such third party, (y) the giving of notice
to Merger Company of such Acquisition Proposal as required by Section 5.2
or (z) the commencement of negotiations with such third party or (iv) the
Special Meeting has not been held on or prior to January 15, 2001, unless
Merger Company has materially contributed to the failure to hold such
meeting or the Company has been restrained, enjoined or otherwise
prohibited by a Governmental Entity from holding the Special Meeting.
Section 7.2 Effect of Termination. In the event of the
termination of this Agreement as provided in Section 7.1, written notice
thereof shall forthwith be given to the other party specifying the
provision hereof pursuant to which such termination is made, and this
Agreement shall forthwith become null and void after the expiration of any
applicable period following such notice. In the event of such termination,
there shall be no liability on the part of Merger Company or the Company
except as set forth in Section 8.1 hereof, except with respect to the
requirement to comply with the Confidentiality Agreement and return or hold
evaluation materials pursuant to the procedures set forth therein and in
Section 5.3 and except for any intentional breach of this Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Fees and Expenses. Whether or not the Merger is
consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the
party incurring such costs or expenses, except as provided in Sections 5.7
and 5.11.
(a) In the event that
(i) this Agreement is terminated by the Company pursuant to
Section 7.1(c), or by the Company pursuant to Section 7.1(b)(v) due to the
Trust Voting Agreement being terminated pursuant to Section 5(b)(i) or
5(b)(iii) thereof, or
(ii) this Agreement is terminated by Merger Company pursuant
to Section 7.1(d)(i) or Section 7.1 (d)(ii) or by Merger Company pursuant
to Section 7.1(b)(v) due to the Trust Voting Agreement being terminated
pursuant to Section 5(b)(i) or 5(c)(ii) thereof
then in each such case the Company shall pay, or cause to be paid,
A. to Merger Company or its designee a fee (the "Termination
Fee") of $53,000,000. Acceptance of payment of the Termination Fee by
Merger Company shall constitute conclusive evidence that this Agreement has
been validly terminated, and upon such payment, each of the Company, Merger
Company and Finance Company shall be fully released and discharged from any
liability under this Agreement; and
B. to Merger Company and Finance Company as reimbursement,
the amount of their documented out-of-pocket fees and expenses including
commitment and other fees and expenses contemplated by the Commitment
Letters and those fees and expenses for environmental testing, reasonably
incurred thereby in connection with this Agreement and the transactions
contemplated hereby (including those which may be incurred in connection
with enforcing the terms of this Section 8.1), provided that in no event
shall such expense reimbursement exceed in the aggregate $12,500,000 (the
"Expenses").
(b) In the event that
(i) this Agreement is terminated by Merger Company pursuant
to Section 7.1(d)(iii) or 7.1(d)(iv) or by the Company or Merger Company
pursuant to Section 7.1(b)(v) due to the Trust Voting Agreement being
terminated pursuant to Section 5(b)(ii) or 5(c)(i) thereof or by Merger
Company pursuant to Section 7.1(b)(iv) as a result of a willful breach of a
representation or a willful breach of a covenant, or
(ii) this Agreement is terminated pursuant to Section 7.1(b)(ii):
then in each such case the Company shall pay, or cause to be
paid,
A. to Merger Company or its designee the Expenses; and
B. if prior to the first anniversary of such termination the
Company enters into a definitive agreement with respect to, or consummates,
an Acquisition Proposal, the Termination Fee; provided, however, that if
this Agreement is terminated as a result of the Trust Voting Agreement
being terminated pursuant to Section 5(b)(ii) or 5(c)(i) thereof, then such
Termination Fee shall only be required to be paid to Merger Company if
(prior to such first anniversary) the Company enters into definitive
documentation or consummates an Acquisition Proposal with (i) a Person that
made an Acquisition Proposal after the date of the Confidentiality
Agreement and prior to the time at which the Court entered its decision
with respect to the Court Approval or (ii) any other Person if the
consideration to be paid to the holders of the capital stock of the Company
by such other Person is of equal or greater value than the consideration to
be paid to such holders under this Agreement.
(c) In the event that this Agreement is terminated by Merger
Company pursuant to Section 7.1(b)(iv) other than as a result of a willful
breach of a covenant, the Company shall pay or cause to be paid the
Expenses to Merger Company or its designee.
(d) The Company shall pay the Termination Fee to Merger
Company or its designee concurrently with or prior to a termination
referred to in clause 8.1(a)(i) above. The Company shall pay the
Termination Fee to Merger Company or its designee within 24 hours of a
termination referred to clause 8.1(a)(ii) above. The Company shall pay the
Termination Fee to Merger Company or its designee promptly (and in any
event within two Business Days) after the first to occur of the execution
of an agreement relating to an Acquisition Proposal or the consummation of
an agreement relating to an Acquisition Proposal referred to in clauses
8.1(b)(i) and 8.1(b)(ii) above.
(e) With respect to the Termination Fee required to be paid
on or prior to the termination of the Agreement, the Company shall
reimburse the Expenses to Merger Company on the later of (i) the day that
is two Business Days after such termination and (ii) the day that is two
Business Days after the delivery by Merger Company to the Company of
documents reflecting expenses incurred.
(f) In the event that this Agreement is terminated pursuant
to Section 7.1(b)(ii), 7.1(b)(iv), 7.1(b)(v) (other than as provided in
Section 8.1(a)(i)), 7.1(d)(iii) or 7.1(d)(iv) in circumstances where
Section 8.1 requires the payment of Expenses, then the Company shall
reimburse Merger Company for the Expenses incurred to the date of
termination on the later of (i) the day that is two Business Days after
such termination and (ii) the day that is two Business Days after the
delivery by Merger Company to the Company of documents reflecting Expenses
incurred. Merger Company shall be entitled to be reimbursed for Expenses,
if any, thereafter incurred by it in connection with enforcing their right
to receive a Termination Fee or reimbursement of Expenses pursuant to this
Section 8.1, with such additional Expenses to be reimbursed concurrently
with the payment of any Termination Fee that may be due pursuant to Section
8.1.
Section 8.2 Amendment; Waiver.
(a) This Agreement may be amended by the parties hereto, by
action taken or authorized by their respective members or Boards of
Directors, at any time before or after approval by the stockholders of the
Company of the matters presented in connection with the Merger, but after
any such approval no amendment shall be made without the approval of such
stockholders if such amendment alters or changes (i) the Merger
Consideration, (ii) any term of the certificate of incorporation of the
Surviving Corporation or (iii) any terms or conditions of this Agreement if
such alteration or change would adversely affect the holders of any shares
of capital stock of the Company. This Agreement may not be amended,
supplemented or modified except by an instrument in writing signed on
behalf of each of the parties hereto.
(b) At any time prior to the Effective Time, the parties may
(i) extend the time for the performance of any of the obligations or other
acts of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties of the other parties contained herein or in
any document, certificate or writing delivered pursuant hereto or (iii)
waive compliance with any of the agreements or conditions of the other
parties hereto contained herein. Any agreement on the part of any party to
any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
Section 8.3 Survival. The respective representations and
warranties of Merger Company, Finance Company and the Company contained
herein or in any certificates or other documents delivered prior to or as
of the Effective Time shall not survive beyond the Effective Time. The
covenants and agreements of the parties hereto (including the Surviving
Corporation after the Merger) shall survive the Effective Time without
limitation (except for those which, by their terms, contemplate a shorter
survival period).
Section 8.4 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given upon (a)
transmitter's confirmation of a receipt of a facsimile transmission, (b)
confirmed delivery by a standard overnight carrier or when delivered by
hand or (c) the expiration of five Business Days after the day when mailed
in the United States by certified or registered mail, postage prepaid,
addressed at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to the Company, to:
Xxxxx Xxxxxxxx Corporation
000 00xx Xxxxxx 00000
Xxxxxx, Xxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Corporate Secretary
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
and a copy to:
Manville Personal Injury Settlement Trust
000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Chairman and Managing Trustee
and
(b) if to Merger Company or Finance Company:
HB Merger LLC / HB Finance LLC
c/x Xxxxx Muse Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxx, Xx.
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxx, Esq.
Section 8.5 Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a 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 phrase "made
available" when used in this Agreement shall mean that the information
referred to has been provided in a data room in connection with the due
diligence review conducted by Merger Company or has been otherwise made
available if requested by the party to whom such information is to be made
available. The words "affiliates" and "associates" when used in this
Agreement shall have the respective meanings ascribed to them in Rule 12b-2
under the Exchange Act. The phrase "beneficial ownership" and words of
similar import when used in this Agreement shall have the meaning ascribed
to it in Rule 13d-3 under the Exchange Act.
The following terms have the following definitions,
(i) "Business Day" means any day other than Saturday and
Sunday and any day on which banks are not required or authorized to close
in the State of Delaware or New York.
(ii) "EBITDA" shall mean gross revenue (other than gains or
losses from the sale of assets) less operating expenses (including direct
and indirect expenses and corporate overhead expenses, but excluding
depreciation and amortization and all other non-cash expenses). For the
purpose of this Agreement "Free Cash Flow" shall mean EBITDA minus the sum
of the following: (a) cash expenditures that are required to be capitalized
in accordance with GAAP, (b) cash interest expenses, net of cash interest
income, plus cash dividends on preferred stock, (c) local, state and
federal corporate income and other taxes accrued in accordance with GAAP,
and (d) the amount of any increase in working capital determined in
accordance with GAAP (with working capital being comprised of current
assets minus current liabilities, except the current portion of long-term
debt) with any change in working capital being determined based upon a
comparison with the balance sheet at the beginning of the fiscal period
being analyzed. In addition, for the purpose of determining Free Cash Flow,
EBITDA shall be increased by the amount of any decrease in working capital
determined as contemplated above.
(iii) "Management" means those persons listed in Section
8.5(iv) of the Disclosure Letter and any additional persons that may be
agreed to after the date hereof by Merger Company and the Company.
(iv) "Material Adverse Effect" shall mean any result,
occurrence, fact, change, event or effect (whether or not (i) foreseeable
or known as of the date of this Agreement, (ii) covered by insurance, or
(iii) constituting a breach of a representation, warranty or covenant set
forth in this Agreement) that, individually or in the aggregate with any
such other results, occurrences, facts, changes, events or effects, is or
would reasonably be expected to be (whether or not such result, occurrence,
fact, change, event or effect has, during the period or at the time in
question, manifested itself in the Company's historical financial
statements) (a) materially adverse to the Company's historical or near-term
or long-term projected (i) business, (ii) operations, (iii) assets, (iv)
liabilities, (v) financial condition or (vi) results of operations
(including EBITDA or Free Cash Flow), in each case, of the Company and its
Subsidiaries taken as a whole, or (b) materially adverse to the ability of
any person to perform on a timely basis any material obligation under this
Agreement or the Trust Voting Agreement or to consummate the transactions
contemplated thereby. For purposes of this paragraph, a Material Adverse
Effect shall be determined in light of Finance Company's intended capital
structure for this transaction as reflected in the Commitment Letters.
(v) "Permitted Exceptions" means (i) statutory Liens for
current taxes, assessments or other governmental charges not yet delinquent
or the amount or validity of which is being contested in good faith by
appropriate proceedings, provided an appropriate reserve is established
therefor; (ii) mechanics', carriers', workers', repairers', warehousemen's
and similar Liens arising or incurred in the ordinary course of business
that are not material to the business, operations and financial condition
of the property so encumbered or the Company and its Subsidiaries; (iii)
zoning, entitlement and other land use and environmental regulations by any
Governmental Entity, provided that such regulations have not been violated;
and (iv) agreements with utility companies which have no Material Adverse
Effect on the continued use of any Company Property in the ordinary course
of business consistent with past practices; (v) Liens arising or resulting
from any action taken by Merger Company; (vi) any other covenants,
conditions, restrictions, reservations, rights, Liens, easements and other
matters affecting title, which do not individually or in the aggregate
materially adversely affect the value or use of any of the Real Property as
same has been used by the Company or any of its Subsidiaries consistent
with past practices; and (vii) matters set forth in Section 3.13 of the
Disclosure Letter.
(vi) "Person" shall mean an individual, limited or general
partnership, limited liability company, joint venture, trust, association,
joint-stock company) corporation, unincorporated entity or Governmental
Entity.
(vii) "Subsidiaries" shall mean with respect to any Person,
any other Person of which more than 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 are owned
by such Person.
(viii) "Tax Matters Agreement" shall mean the Tax Matters
and Amended Trust Relationship Agreement dated as of June, 2000 between the
Company and the Trust, the form of which is attached hereto as Exhibit I.
Section 8.6 Headings; Disclosure Letter. The headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. Any
matter disclosed pursuant to any Section of the Disclosure Letter shall be
deemed to be disclosed for all purposes under this Agreement but such
disclosure shall not be deemed to be an admission or representation as to
the materiality of the item so disclosed.
Section 8.7 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original but all
of which shall be considered one and the same agreement;
Section 8.8 Entire Agreement. This Agreement, together with
the Confidentiality Agreement, constitutes the entire agreement, and
supersedes all prior agreements and understandings (written and oral),
among the parties with respect to the subject matter hereof.
Section 8.9 Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and
(other than Section 5.7, 5.11 and 8.9) nothing in this Agreement, express
or implied, is intended to or shall confer upon any other person any
rights, benefits or remedies of any nature whatsoever under or by reason of
this Agreement. Without limiting the foregoing, except with respect to the
obligations of the Trust under the Trust Voting Agreement, no direct or
indirect holder of any equity interests or securities of either party
hereto (whether such holder is a limited or general partner, member,
stockholder or otherwise), nor any affiliate of any party hereto, nor any
director, officer, employee, representative, agent or other controlling
person of each of the parties hereto and their respective affiliates shall
have any liability or obligation arising under this Agreement or the
transactions contemplated hereby.
Section 8.10 Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void, unenforceable or
against its regulatory policy, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
Section 8.11 Governing Law. This Agreement shall be governed
and construed in accordance with the laws of the State of Delaware without
giving effect to the principles of conflicts of law thereof.
Section 8.12 Assignment. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties; provided, however, that each of
Merger Company and Finance Company shall be permitted to assign its rights
under this Agreement to any newly formed wholly-owned subsidiaries of the
members thereof and provided further that any such assignment will not
relieve such party of its obligations hereunder. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and
be enforceable by, the parties and their respective successors and assigns,
and except to the extent necessary to enforce the provisions of Section
5.7, 5.11 and 8.9, the provisions of this Agreement are not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder.
Section 8.13 Publicity. Except as otherwise permitted by
this Agreement or required by law or stock exchange rules, so long as this
Agreement is in effect, neither the Company nor Merger Company shall, or
shall permit any of its affiliates to, issue or cause the publication of
any press release or other public announcement with respect to this
Agreement or the transactions contemplated hereby without first obtaining
the consent of the other parties hereto, which consent shall not be
unreasonably withheld. The parties agree that the initial press release to
be issued with respect to the transactions contemplated by this Agreement
shall be in the form heretofore agreed to by the parties.
Section 8.14 Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this
Agreement in any Federal court located in the State of Delaware or in any
Delaware state court, this being in addition to any other remedy to which
they are entitled at law or in equity. In addition, each of the parties
hereto (a) consents to submit itself to the personal jurisdiction of any
Federal court located in the State of Delaware or any Delaware state court
in the event any dispute arises, out of this Agreement or any of the
transactions contemplated by this Agreement and (b) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court and (c) agrees that such forum is not
an inconvenient forum.
IN WITNESS WHEREOF, Xxxxx Xxxxxxxx Corporation, HB Merger
LLC and HB Finance LLC have caused this Agreement to be signed by their
respective officers hereunto duly authorized as of the date first written
above.
XXXXX XXXXXXXX CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Director
HB MERGER LLC
By: /s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President and
Assistant Secretary
HB FINANCE LLC
By: /s/ Xxxxxxx X. Xxxx
--------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President and
Assistant Secretary
EXHIBIT A
FORM OF CERTIFICATE OF AMENDMENT TO
RESTATED CERTIFICATE OF INCORPORATION
OF
XXXXX XXXXXXXX CORPORATION
The undersigned, [ ], certifies that he is the [ ] of Xxxxx
Xxxxxxxx Corporation (the "Company"), a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware
(the "DGCL"), in accordance with the provisions of Section 242 thereof,
DOES HEREBY CERTIFY:
That the following amendment was adopted in accordance with the
provisions of Sections 242 of the DGCL:
1. The name of the Company is Xxxxx Xxxxxxxx Corporation.
2. This certificate of amendment was approved by the Board of
Directors of the Company and thereafter duly adopted by the stockholders
thereof, in accordance with the provisions of Section 242 of the DGCL.
3. Article FOURTH of the Restated Certificate of Incorporation
is amended by deleting said Article in its entirety and substituting the
following in lieu thereof:
"FOURTH: The total number of shares of all classes of capital
stock which the Company shall have authority to issue is three hundred five
million (305,000,000) shares, of which three hundred million (300,000,000)
shares shall be common stock with a par value of $.01 per share ("Common
Stock") and five million (5,000,000) shares shall be Class TM Preferred
Stock with a par value of $.01 per share. A description of the different
classes of stock of the Company and a statement of the designations and the
powers, preferences and special rights, and the qualifications, limitations
or restrictions thereof, of the various classes of stock are as follows:
A. Provisions Relating to Class TM Preferred Stock. The rights,
preferences, privileges, restrictions and other matters relating to the
Class TM Preferred Stock are as follows:
(1) Designation and Amount. The shares of such series shall be
designated as Class TM Preferred Stock (the "TM Preferred Stock") and the
number of shares constituting the TM Preferred Stock shall be five million
(5,000,000).
(2) Rank. The TM Preferred Stock shall, with respect to dividend
distributions and distributions upon the liquidation, winding-up and
dissolution of the Company, rank prior to all classes of common stock of
the Company, and to each other class of capital stock or series of
preferred stock hereafter created by the Board, the terms of which do not
expressly provide that it ranks prior to or pari passu with the TM
Preferred Stock as to dividend distributions or distributions upon the
liquidation, winding-up and dissolution of the Company. The TM Preferred
Stock shall, with respect to dividend distributions and distributions upon
the liquidation, winding-up and dissolution of the Company, rank pari passu
with any class of capital stock or series of preferred stock hereafter
created by the Board, the terms of which expressly provide that it ranks
pari passu with the TM Preferred Stock as to dividend distributions and
distributions upon the liquidation, winding-up and dissolution of the
Company.
(3) Dividends and Distributions. The holders of shares of TM
Preferred Stock shall be entitled to receive dividends and distributions in
an amount and at the time payable as any dividends and distributions that
are declared on the Common Stock, as if each share of TM Preferred Stock is
equal to one share of Common Stock.
(4) Voting Rights. The holders of shares of the TM Preferred
Stock shall have the following voting rights:
Each share of TM Preferred Stock shall entitle the holder
thereof to one vote on all matters submitted to a vote of the stockholders
of the Company. Except as otherwise provided herein or by law, the holders
of shares of TM Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
stockholders of the Company; provided, however, that the affirmative vote
of the holders of a majority of the outstanding shares of TM Preferred
Stock on the relevant record date, voting separately as a class, shall be
required for any amendment, alteration or exchange or similar transaction,
of any of the provisions of this Certificate which would alter or change
the powers, preferences or special rights of the shares of TM Preferred
Stock so as to adversely affect them.
Except as set forth herein or otherwise required by law,
holders of TM Preferred Stock shall have no special voting rights and their
consent as a class shall not be required for taking any corporate action.
(5) Reacquired Shares. Any shares of TM Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever
(including by reclassification) shall be retired and cancelled promptly
after the acquisition thereof. All such shares shall, upon their
retirement, become authorized but unissued shares of preferred stock
without designation as to series and may be reissued as part of a new
series of preferred stock to be created by resolution or resolutions of the
Board of Directors or as otherwise permitted under the DGCL
(6) Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Company, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the TM Preferred Stock
unless, prior thereto, the holders of shares of TM Preferred Stock shall
have received $15.625 per share, or (2) to the holders of stock ranking on
a parity (either as to dividends or distributions upon liquidation,
dissolution or winding up) with the TM Preferred Stock, except
distributions made ratably on the TM Preferred Stock and all other such
parity stock in proportion to the total amounts to which the holders of all
such shares are entitled as to dividends or upon such liquidation,
dissolution or winding up.
For purposes of this Article Fourth, Section 6 only, neither
the sale, lease, conveyance, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of
the property or assets of the Company nor the consolidation or merger of
the Company with or into one or more corporations shall be deemed to be a
liquidation, dissolution or winding-up of the affairs of the Company
(unless such sale, conveyance, exchange or transfer is in connection with a
dissolution or winding up of the business of the Company).
(7) Redemption. The shares of TM Preferred Stock are not
redeemable.
(8) Conversion. The shares of TM Preferred Stock shall be
automatically converted into an equal number of validly issued, fully paid
and non-assessable shares of Common Stock in the event that the merger (the
"Merger") contemplated by the Agreement and Plan of Merger among HB Merger
LLC, HB Finance LLC and the Company, dated as of June 22, 2000 (the "Merger
Agreement"), shall not have been consummated by the Business Day after the
transactions contemplated by the Exchange Agreement, among the Company,
Manville Personal Injury Settlement Trust and certain individuals party
thereto, dated as of June 22, 2000 (the "Exchange Agreement"), are
consummated. If the Merger is not so consummated, or if the Merger
Agreement is terminated, each holder of a certificate representing TM
Preferred Stock shall, after the earlier to occur of such events, be
entitled to receive certificates representing Common Stock upon
presentation of certificates representing TM Preferred Stock as provided
for in the Exchange Agreement.
(9) Restriction on Transferability. Except as contemplated by the
Merger Agreement and the Exchange Agreement, the shares of TM Preferred
Stock may not be transferred or pledged in any manner whatsoever.
(10) Reports. So long as any shares of TM Preferred Stock are
outstanding, the Company will furnish holders thereof by first class mail,
postage prepaid, at such holder's address as the same appears on the stock
register of the Company, with the quarterly and annual financial reports
that the Company is required to file with the Securities and Exchange
Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended, or, in the event that the Company is not
required to file such reports, reports containing the same financial
information as would be required in such reports.
(11) General Provisions.
(a) If any of the TM Preferred Stock certificates shall be
mutilated, lost, stolen or destroyed, the Company shall issue, in
exchange and in substitution for and upon cancellation of the
mutilated TM Preferred Stock certificate, or in lieu of and
substitution for the TM Preferred Stock certificate lost, stolen
or destroyed, a new TM Preferred Stock certificate of like tenor
and representing an equivalent amount of shares of TM Preferred
Stock, but only upon receipt of evidence of such loss, theft or
destruction of such TM Preferred Stock certificate and indemnity,
if requested, satisfactory to the Company.
(b) The term "outstanding," when used in reference to
shares of a specific series or class of capital stock of the
Company, shall mean issued shares, excluding shares held by
the Company or a subsidiary.
(c) No holder of shares of TM Preferred Stock will,
except as otherwise provided in subparagraph (8) above, by
virtue of such holder's holding such shares, possess any
preemptive rights to subscribe for or acquire any unissued
shares of capital stock of the Company (whether now or
hereafter authorized) or securities of the Company
convertible into, or exercisable or exchangeable for, shares
of capital stock of the Company.
(d) Each holder of TM Preferred Stock, by acceptance
thereof, acknowledges and agrees that payments of dividends
on or liquidation preference of TM Preferred Stock, and
exchange, redemption and repurchase of TM Preferred Stock,
by the Company are subject to restrictions on the Company
contained in certain credit and financing agreements binding
on the Company or certain of its subsidiaries.
(e) If any payment, redemption, exchange or other
action shall be required by the terms hereof to be made or
taken on a day that is not a Business Day, such payment,
redemption, exchange or other action shall be made or taken
on the immediately succeeding Business Day. "Business Day"
means any day except a Saturday, Sunday or other day on
which commercial banks in the State of Delaware or the State
of New York are authorized by law to close.
B. Provisions Relating to Common Stock. The rights, preferences,
privileges, restrictions and other matters relating to the Common Stock are
as follows:
No holder of Common Stock of the Company shall be entitled as
of right to purchase or subscribe for any part of the unissued stock of the
Company or of any stock of the Company to be issued by reason of any
increase of the authorized capital stock of the Company or of the number of
its shares, or of bonds, certificates of indebtedness, debentures, or other
securities convertible into stock of the Company or of any stock of the
Company purchased by it or its nominee or nominees.
The holders of the Common Stock shall have the right to one
vote per share on all questions to the exclusion of all other classes or
classes of stock, except as by law expressly provided or as otherwise
herein expressly provided with respect to the holders of any other class or
classes of stock."
IN WITNESS WHEREOF, the Company has caused this Certificate of
Amendment to be signed by [ ], its [ ], this _____ day of ____________,
2000.
XXXXX XXXXXXXX CORPORATION
By:
-------------------------------------
Name:
Title:
EXHIBIT B
FORM OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
XXXXX XXXXXXXX CORPORATION
Xxxxx Xxxxxxxx Corporation, a corporation organized and
existing under the laws of the State of Delaware (the "Company"), does
hereby certify that:
1. The name of this corporation is Xxxxx Xxxxxxxx Corporation.
The original Certificate of Incorporation of the Company was filed, under
the original name of the Company, Manville Corporation, with the Office of
the Secretary of State of Delaware on August 21, 1981. A Restated
Certificate of Incorporation was filed with the Secretary of State of
Delaware on November 28, 1988.
2. This Amended and Restated Certificate of Incorporation has
been duly adopted in accordance with Sections 242 and 245 of the General
Corporation Law of the State of Delaware (the "DGCL"), and amends the
provisions of the Certificate of Incorporation, as amended and restated to
date, of the Company.
3. The text of the Certificate of Incorporation is
hereby amended and restated to read in its entirety as follows:
FIRST: The name of the Corporation is Xxxxx Xxxxxxxx
Corporation.
SECOND: The address of the registered office of the Company in
the State of Delaware is 0 Xxxx Xxxxxxxxxx Xxxxxx, in the City of Dover,
County of Kent, State of Delaware. The name of the registered agent of the
Company in the State of Delaware at such address is National Corporate
Research, Ltd.
THIRD: The purpose of the Company is to engage in any
lawful act or activity for which corporations may be organized
under the DGCL, as it may from time to time be amended.
FOURTH: The total number of shares of all classes of capital
stock which the Company shall have the authority to issue is seventy
million (70,000,000) shares, of which: (i) forty million (40,000,000)
shares shall be shares of common stock, with a par value of $.01 per share
("Common Stock"); and (ii) thirty million (30,000,000) shares shall be
shares of preferred stock, with a par value of $.01 per share ("Preferred
Stock"), with eight million (8,000,000) shares designated as Series A
Redeemable PIK Preferred Stock ("PIK Preferred Stock") with the terms as
set forth in Annex A to this Amended and Restated Certificate of
Incorporation and with sixteen million (16,000,000) shares designated as
Series B Convertible Preferred Stock ("Junior Preferred Stock") with the
terms set forth in Annex B to this Amended and Restated Certificate of
Incorporation.
A description of the different classes of stock of the Company
and a statement of the designations and the powers, preferences and special
rights, and the qualifications, limitations or restrictions thereof, of the
various classes of stock are as follows:
A. Provisions Relating to Preferred Stock
The Preferred Stock may be issued from time to time in one or
more series. The Board of Directors is hereby authorized, within the
limitations and restrictions stated in this Certificate of Incorporation,
including the terms of any Preferred Stock set forth on Annex A or Annex B
hereto, to fix or alter the dividend rights, dividend rate, conversion
rights, voting rights, rights and terms of redemption (including sinking
fund provisions), the redemption price or prices, the liquidation
preferences of any wholly unissued series of Preferred Stock, and the
number of shares constituting any such series and the designation thereof,
or any of them; and to increase or decrease the number of shares of any
series subsequent to the issue of shares of that series shall be so
decreased, the shares constituting such decrease shall resume the status
which they had prior to the adoption of the resolution originally fixing
the number of shares of such series. The authority of the Board of
Directors with respect to each such series will include, without limiting
the generality of the foregoing, the determination of any or all of the
following:
(1) The number of shares of any series and the designation to
distinguish the shares of such series from the shares of all other series;
(2) Whether dividends, if any, will be cumulative or
noncumulative, the dividend rate of such series, and the dates and
preferences of dividends on such series;
(3) The right or obligation, if any, of the Company to redeem
shares of the particular series of Preferred Stock at the option of the
Company, at the option of the holder, or both, and, if redeemable, the
price, terms, conditions and manner of such redemption;
(4) The special and relative rights and preferences, if any, and
the amount or amounts per share, which the shares of such series of
Preferred Stock shall be entitled to receive upon any voluntary or
involuntary liquidation, dissolution or winding up of the Company or in the
event of any merger or consolidation of or sale of assets by the Company;
(5) The right, if any, of the holders of such series of Preferred
Stock to convert the same into, or exchange the same for, shares of any
other class or series of stock of the Company, and the terms and conditions
of such conversion or exchange, including the price or prices or the rate
or rates of conversion or exchange and the terms of adjustment, if any;
(6) The terms of any sinking fund or redemption or repurchase or
purchase account, if any; the obligation, if any, of the Company to retire,
redeem, repurchase or purchase shares of such series pursuant to such fund
or account; and the terms and conditions of such obligation;
(7) The voting powers, if any, and whether such voting powers are
full or limited in such series;
(8) Limitations, if any, on the issuance of additional shares of
such series or any shares of any other class or series of stock of the
Company or other entity; and
(9) Such other preferences, powers, and special, participating,
optional, relative or other rights, and the qualifications, limitations and
restrictions thereof, as the Board of Directors shall determine;
all as may be determined from time to time by the Board of Directors and
stated in the resolution or resolutions providing for the issuance of such
Preferred Stock (collectively, a "Preferred Stock Designation").
B. Provisions Relating to Common Stock. The holders of the Common
Stock will be entitled to one vote on each matter submitted to a vote at a
meeting of stockholders for each share of Common Stock held of record by
such holder as of the record date for such meeting and shall be entitled to
all other statutory rights as provided for by law under the DGCL, but shall
not be entitled to vote the shares of Common Stock cumulatively.
FIFTH: Election of directors need not be by written
ballot.
SIXTH: (a) Except as provided below, no director of the Company
shall be liable to the Company or its stockholders for monetary damages
arising from a breach of any duty. Nothing in this Article Sixth shall
eliminate or limit the liability of any director for any act, omission or
transaction or under any statutory provision if and to the extent that the
DGCL does not permit such elimination or limitation. Neither amendment nor
repeal of this paragraph (a) nor the adoption of any provision of the
Certificate of Incorporation inconsistent with this paragraph (a) in
respect of any matter occurring, or any cause of action, suit or claim
that, but for this paragraph (a) of this Article, would accrue or arise,
prior to such amendment, repeal or adoption of an inconsistent provision.
(b) The Company shall indemnify any person who is or was a
party to any threatened, pending or completed action, suit or proceeding
(regardless of whether commenced before or after the date of the merger of
HB Merger LLC into the Company which occurred on [ ], 2000), whether civil,
criminal, administrative or investigative (including, without limitation,
any action, suit or proceeding by or in the right of the Company or any
partnership, corporation, joint venture, trust or other enterprise with
respect to which such person serves or has served as a director, officer,
fiduciary, employee or agent) by reason of the fact that such person is or
was at any time a director, officer, fiduciary, employee or agent of the
Company, including any predecessor thereto or constituent thereof, or is or
was serving at the request of the Company, including any predecessor
thereto or constituent thereof, as a director, officer, fiduciary, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise and irrespective of when the acts or omissions involved in such
action, suit or proceeding occurred or allegedly occurred, against all
expenses (including attorneys' fees and expenses), judgments, fines and
amounts paid in settlement, whenever paid or payable, to the fullest extent
and in the manner (including by way of advancement of costs and expenses)
that a corporation organized under Delaware law is from time to time
permitted to indemnify its directors, officers, fiduciaries, employees and
agents.
SEVENTH: Special meetings of stockholders for the transaction
of such business as may properly come before the meeting may be called by
order of the Board of Directors, by the Secretary of the Company, by
stockholders holding together at least a majority of all the shares of the
Company entitled to vote at the meeting or, with respect to the matters set
forth in Section 4 or Section 5 of Annex A to this Amended and Restated
Certificate of Incorporation of the Company, relating to the PIK Preferred
Stock, as provided in such Annex A, or with respect to the matters set
forth in Section 4(b) of Annex B to this Amended and Restated Certificate
of Incorporation of the Company, relating to the Junior Preferred Stock, as
provided in such Annex B, and shall be held at such date and time, within
or without the State of Delaware, as may be specified by such order.
IN WITNESS WHEREOF, the undersigned has executed this Amended
and Restated Certificate of Incorporation and hereby acknowledges that the
facts stated herein are true, this day of , 2000
By:
-------------------------------
Name:
Title:
ANNEX A
FORM OF TERMS, PREFERENCES, RIGHTS AND LIMITATIONS
of
SERIES A REDEEMABLE PIK PREFERRED STOCK
of
XXXXX XXXXXXXX CORPORATION
The rights, preferences, privileges, restrictions and other
matters relating to the Series A Redeemable PIK Preferred Stock are as
follows:
(1) Designation and Amount. The shares of such series of preferred
stock, par value $.01 per share, of Xxxxx Xxxxxxxx Corporation (the
"Company") shall be designated as Series A Redeemable PIK Preferred Stock
(the "PIK Preferred Stock"), and the number of shares constituting the PIK
Preferred Stock shall be 8,000,000. Such number of shares may be increased
or decreased by resolution of the Board of Directors of the Company (the
"Board"); provided, however, that: (i) in no event shall shares of PIK
Preferred Stock be issued other than pursuant to the Agreement and Plan of
Merger dated as of June 22, 2000 among HB Merger LLC, HB Finance LLC and
the Company (the "Merger Agreement"), or as pay-in-kind dividends on
outstanding shares of PIK Preferred Stock; (ii) no decrease shall reduce
the number of shares of PIK Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares issuable as
pay-in-kind dividends on the PIK Preferred Stock through the Scheduled
Redemption Date (as hereinafter defined); and (iii) the Board shall, from
time to time, increase such number of reserved shares to the extent, if
any, that the number of previously reserved shares shall be inadequate for
the issuance of such pay-in-kind dividends.
(2) Rank. The PIK Preferred Stock shall, with respect to dividends
and distributions upon the liquidation, winding-up and dissolution of the
Company, rank prior to all classes of common stock of the Company, to the
Series B Convertible Preferred Stock, par value $.01 per share, of the
Company (the "Junior Preferred Stock") and to each other class of capital
stock or series of preferred stock hereafter created by the Board not in
violation of the terms hereof, the terms of which do not expressly provide
that it ranks prior to or pari passu with the PIK Preferred Stock as to
dividends and distributions upon the liquidation, winding-up and
dissolution of the Company (collectively referred to with the common stock
of the Company and the Junior Preferred Stock as "Junior Securities"). The
PIK Preferred Stock shall, with respect to dividends and distributions upon
the liquidation, winding-up and dissolution of the Company, rank pari passu
with any class of capital stock or series of preferred stock hereafter
created by the Board not in violation of the terms hereof, the terms of
which expressly provide that it ranks pari passu with the PIK Preferred
Stock as to dividends and distributions upon the liquidation, winding-up
and dissolution of the Company ("Parity Securities"). The PIK Preferred
Stock shall, with respect to dividends and distributions upon the
liquidation, winding-up and dissolution of the Company, rank junior to each
class of capital or series of preferred stock hereafter created by the
Board which has been approved by the holders of the PIK Preferred Stock in
accordance herewith, the terms of which expressly provide that it ranks
prior to the PIK Preferred Stock as to dividends and distributions upon the
liquidation, winding-up and dissolution of the Company ("Senior
Securities"); provided, however, that no such approval by the holders of
the PIK Preferred Stock shall be required with respect to such liquidation
preference or stated amount of shares of any class of capital stock or
series of preferred stock of the Company or any of its direct or indirect
subsidiaries (including any pay-in-kind dividends paid thereon) as shall be
issued in lieu of up to $600,000,000 of initial proceeds from the sale of
debt securities as part of the Permanent Debt Financing (as hereinafter
defined) and the first refinancing (if any) of the Permanent Debt
Financing.
(3) Dividends and Distributions. The holders of shares of PIK
Preferred Stock, in preference to the holders of shares of any Junior
Securities, shall be entitled to receive, when, as and if declared by the
Board out of funds legally available therefor, cumulative dividends, at a
rate of 13.0% per annum (as such rate may be increased in accordance with
the terms hereof, the "Dividend Rate") of the Liquidation Preference (as
hereinafter defined) (computed on the basis of a 360-day year and taking
into account the different dividend rates, if any, during the course of
such year) payable in cash on [insert date which is six-month anniversary
of Effective Date] and [insert date which is twelve-month anniversary of
Effective Date] of each year (each a "Dividend Payment Date"), or at the
option of the Company, on each Dividend Payment Date on or prior to the
seventh anniversary of the Effective Date (as hereinafter defined), by
validly issuing fully paid and non-assessable shares of PIK Preferred Stock
with an aggregate Liquidation Preference equal to the amount of the
dividends to be paid. All undeclared dividends and declared but unpaid
dividends shall compound on a semi-annual basis at the then applicable
Dividend Rate, without any duplication when and if the dividends are
actually paid. In the event (i) that the Company fails to redeem the PIK
Preferred Stock on the Scheduled Redemption Date, pursuant to Section 8(a)
hereof, or (ii) of a Change of Control (as hereinafter defined) and the
failure of the Company to redeem the PIK Preferred Stock pursuant to
Section 8(c) hereof, the Dividend Rate then applicable shall be increased
to 15.0% per annum.
(a) The Company shall take all action permitted under
applicable law to permit the payment of dividends, including through
revaluation of assets to make funds legally available for such payment.
(b) All dividends and distributions paid with respect to
shares of PIK Preferred Stock shall be paid pro rata to the holders of the
PIK Preferred Stock. All shares of PIK Preferred Stock issued in respect of
any Dividend Payment Date shall be deemed issued on the applicable Dividend
Payment Date, and will thereupon be duly authorized, validly issued, fully
paid and non-assessable and free and clear of all liens and charges. On and
after a Dividend Payment Date, until certificates representing additional
shares of PIK Preferred Stock shall have been issued, the certificates
representing such shares held by a holder on the Dividend Record Date shall
represent not only such existing shares, but also the additional shares of
PIK Preferred Stock issued to such holder pursuant to such dividend.
"Dividend Record Date" means with respect to the dividend payable on
[insert date which is six-month anniversary of Effective Date] and [insert
date which is twelve-month anniversary of Effective Date] of each year, the
immediately preceding [insert date which is fifteen days after five-month
anniversary of Effective Date] and [insert date which is fifteen days after
eleven-month anniversary of Effective Date].
(4) Voting Rights. The holders of PIK Preferred Stock shall not be
entitled to any voting rights except as hereinafter provided in this
Section 4 or in Section 5 hereof or as otherwise provided by law.
(a) If and whenever: (i) three dividends on the PIK Preferred
Stock have not been paid in full; (ii) any bankruptcy, insolvency,
arrangement, reorganization, receivership or similar proceedings under any
federal or state law shall be commenced by or against the Company and, in
the case of any such involuntary proceeding, such proceeding remains
undismissed or unstayed for sixty (60) days following the commencement
thereof, or the Company shall take any corporate action authorizing any
such proceedings; (iii) if, for any reason (including the reason that funds
are not legally available for a redemption), the Company shall have failed
to discharge its scheduled redemption obligation on the Scheduled
Redemption Date pursuant to Section 8(a) hereof or shall have failed to
discharge its redemption obligation based on the occurrence of a Change of
Control pursuant to Section 8(c) hereof; or (iv) the Company shall have
failed to comply in any material respect with any of the covenants set
forth in Section 5 or 6 hereof and such noncompliance shall continue for a
period of thirty (30) days (any such event referred to in clauses (i),
(ii), (iii) or (iv) above being hereinafter referred to as a "Triggering
Event"), the number of directors then constituting the Board shall be
increased by two, and the holders of PIK Preferred Stock then outstanding
shall be entitled to elect two additional directors to serve on the entire
Board at any annual meeting of the stockholders or special meeting held in
place thereof; provided, however, that if (A) the Liquidation Preference of
the outstanding PIK Preferred Stock as of the date of the Triggering Event
is 50% or less of the aggregate Liquidation Preference of PIK Preferred
Stock issued to that date, including as pay-in-kind dividends on the PIK
Preferred Stock, or (B) the amount of outstanding Liquidation Preference of
PIK Preferred Stock as of the date of the Triggering Event shall thereafter
be reduced by 50% or more, from the time after which the holders of the PIK
Preferred Stock first have the right hereunder to elect directors, the
right to elect such additional directors shall be reduced to the right to
elect one additional director. In any case, such election shall occur
ninety (90) days after one of the Triggering Events has occurred if such
Triggering Event has not then been cured; provided, however, that once such
Triggering Event has been cured, the right to elect such additional
directors or director, as the case may be, shall automatically cease (but
subject always to the same provisions for the vesting of such voting rights
in the case of the occurrence of any subsequent Triggering Event) and the
term of office of one director elected pursuant to such election shall
forthwith terminate and the size of the entire Board shall be reduced
accordingly. At any time after such voting power shall have been so vested
in the holders of PIK Preferred Stock, the secretary of the Company (the
"Secretary") may, and upon the written request of any holder of PIK
Preferred Stock (addressed to the Secretary at the principal office of the
Company) shall, call a special meeting of the holders of the PIK Preferred
Stock for the election of the directors or director, as the case may be, to
be elected by them as herein provided, such call to be made by notice
similar to that provided in the Amended and Restated Certificate of
Incorporation or by-laws of the Company for a special meeting of the
stockholders or as required by law. If any such special meeting required to
be called as above provided shall not be called by the Secretary within 20
days after receipt of any such request, then any holder of PIK Preferred
Stock may call such meeting, by providing notice thereof, and for that
purpose shall have access to the stock-record books of the Company. The
directors or director, as the case may be, elected at any such special
meeting shall hold office until the next annual meeting of the stockholders
or special meeting held in lieu thereof, if such office shall not have been
terminated as provided above. If any vacancy shall occur among the
directors or director, as the case may be, elected by the holders of PIK
Preferred Stock or the successor of such remaining directors or director,
as the case may be, the remaining director elected by the holders of a
majority of the outstanding shares of PIK Preferred Stock or, if there is
no such director, the holders of a majority of the outstanding shares of
PIK Preferred Stock shall be entitled to fill such vacancy, and any person
entitled shall serve until the next annual meeting of the stockholders or
special meeting held in place thereof if such office shall not have
previously terminated as provided above. Except for cause, directors
appointed by the holders of the PIK Preferred Stock may only be removed by
the holders of a majority of the outstanding shares of PIK Preferred Stock
as set forth in the following sentence. Holders of a majority of the
outstanding shares of PIK Preferred Stock may remove Directors that have
been elected on their behalf with or without cause.
(b) So long as any shares of PIK Preferred Stock remain
outstanding, without the written consent of the holders of a majority of
the outstanding shares of PIK Preferred Stock or the approval of holders of
a majority of the outstanding shares of PIK Preferred Stock at a meeting of
such holders called for such purpose, the Company shall not amend, alter or
repeal any provision of the Amended and Restated Certificate of
Incorporation of the Company including, without limitation, this Annex A
relating to the PIK Preferred Stock (by merger or otherwise) so as to
adversely affect the specified preferences, rights, privileges, powers or
voting rights of the PIK Preferred Stock; provided, however, that any such
amendment that reduces the dividend payable on or the Liquidation
Preference of the PIK Preferred Stock shall require the approval of each
holder of PIK Preferred Stock adversely affected thereby. So long as any
shares of PIK Preferred Stock remain outstanding, without the written
consent of the holders of a majority of the outstanding shares of PIK
Preferred Stock or the approval of holders of a majority of the outstanding
shares of PIK Preferred Stock at a meeting of such holders called for such
purpose, the Company shall not, except with respect to such liquidation
preference or stated amount of shares of any class of capital stock or
series of preferred stock of the Company or any of its direct or indirect
subsidiaries (including any pay-in-kind dividends paid thereon) as shall be
issued in lieu of up to $600,000,000 of initial proceeds from the sale of
debt securities as part of the Permanent Debt Financing and the first
refinancing (if any) of the Permanent Debt Financing: (i) create, authorize
or issue any Senior Securities, or increase the authorized number of shares
of any such class or series, or reclassify any authorized stock of the
Company into any Senior Securities or create, authorize or issue any
obligation or security convertible into or evidencing the right to purchase
any Senior Securities; (ii) issue any Parity Securities, directly or
indirectly, to any Affiliate of the Company or its officers or directors;
(iii) issue any Parity Securities so long as Manville Personal Injury
Settlement Trust holds a majority of the outstanding shares of PIK
Preferred Stock; provided, however, that no such consent or approval of the
holders of PIK Preferred Stock shall be required with respect to the
issuance of any shares of Parity Securities (the "Basket Parity
Securities") otherwise in compliance with this Section 4(b) (A) having an
initial liquidation preference (excluding pay-in-kind dividends) not
exceeding $150,000,000 in the aggregate at any time outstanding and (B) on
which the Company shall not, either on a mandatory basis or at its option,
pay any dividends in cash or other property (other than payment in equity
securities of the Company that may be issued in compliance with this
Section 4(b)) unless the Company is then paying semi-annual cash (rather
than pay-in-kind) dividends on the PIK Preferred Stock; or (iv) issue any
capital stock with a scheduled redemption date prior to the Scheduled
Redemption Date (as hereinafter defined) or redeem, repurchase, pay
dividends or make other distributions in cash or other property on capital
stock following the Scheduled Redemption Date if the PIK Preferred Stock
has not been redeemed in full. Except as set forth above in this Section
4(b) or in Section 5 hereof, (x) the creation, authorization or issuance of
any Junior Securities or any Parity Securities, (y) a decrease in the
amount of authorized capital stock of any class, including any preferred
stock (other than as set forth in Section 1 hereof), or (z) an increase in
the amount of authorized capital stock of any class of Junior Securities or
Parity Securities shall not require the consent of the holders of PIK
Preferred Stock and shall be deemed not to affect adversely the specified
preferences, rights, privileges, powers or voting rights of holders of PIK
Preferred Stock.
(c) In exercising the voting rights set forth in this Section
4 or in Section 5 hereof, each share of PIK Preferred Stock shall have one
vote per share. Except as otherwise required by applicable law or as set
forth herein, the shares of PIK Preferred Stock shall not have any
relative, participating, optional or other special voting rights and powers
and the consent of the holders thereof shall not be required for the taking
of any corporate action.
(5) Certain Restrictions. Except with respect to such liquidation
preference or stated amount of shares of any class of capital stock or
series of preferred stock of the Company or any of its direct or indirect
subsidiaries (including any pay-in-kind dividends paid thereon) as shall be
issued in lieu of up to $600,000,000 of initial proceeds from the sale of
debt securities as part of the Permanent Debt Financing and the first
refinancing (if any) of the Permanent Debt Financing, so long as any shares
of PIK Preferred Stock remain outstanding, without the written consent of
the holders of a majority of the outstanding shares of PIK Preferred Stock
or the approval of holders of a majority of the outstanding shares of PIK
Preferred Stock at a meeting of such holders called for such purpose:
(a) the Company shall not:
(i) declare or pay dividends on, or make any other
distributions on, any shares of Junior Securities (other than
dividends payable solely in Junior Securities of the same class
and/or a different class);
(ii) declare or pay dividends on or make any other
distributions on any Parity Securities, except: (A) dividends paid
on Basket Parity Securities in accordance with the proviso to
Section 4(b)(iii) hereof; provided, however, that after the
seventh anniversary of the Effective Date, no cash dividends shall
be paid by the Company on Basket Parity Securities at any time
when there shall be any unpaid cash dividends due on the PIK
Preferred Stock; and (B) dividends paid ratably on shares of the
PIK Preferred Stock and all other Parity Securities on which
dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(iii) redeem, purchase, repurchase or otherwise acquire for
value any Junior Securities; provided, however, that the Company
may at any time redeem, purchase, repurchase or otherwise acquire
shares of any such Junior Securities (A) in exchange for shares of
any Junior Securities or (B) utilizing cash in an amount not
greater than the proceeds of any offering by the Company of Junior
Securities effected substantially contemporaneously with the
applicable redemption, purchase, repurchase or other acquisition;
or
(iv) redeem, purchase, repurchase or otherwise acquire for
value any Parity Securities except in accordance with a purchase
offer made in writing or by publication (as determined by the
Board) to all holders of such shares (including shares of the PIK
Preferred Stock) upon such terms as the Board, after consideration
of the respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(b) The Company shall not permit any direct or indirect
subsidiary of the Company to purchase or otherwise acquire for value any
shares of the capital stock of the Company unless the Company could, under
paragraph (a) of this Section 5, purchase or otherwise acquire such shares
at such time and in such manner.
(c) The Company shall not permit any direct or indirect
subsidiary of the Company to (i) redeem, purchase, repurchase or otherwise
acquire for value any equity securities of any direct or indirect
subsidiary of the Company; provided, however, that any such subsidiary may
acquire any such equity securities (A) in exchange for any equity
securities of the Company or any equity securities of any of its direct or
indirect subsidiaries that may be issued in compliance with Section 4(b)
hereof and this Section 5 or (B) utilizing cash in an amount not greater
than the proceeds of any offering by the Company or any of its direct or
indirect subsidiaries of equity securities effected substantially
contemporaneously with the applicable redemption, purchase, repurchase or
other acquisition; or (ii) issue any equity securities to any Person;
provided, however, that any such subsidiary may issue, to any Person that
is not an Affiliate of the Company or its officers or directors, equity
securities which do not by their terms provide for (A) the payment of
dividends or other distributions in cash or other property (other than
payments in equity securities that may be issued in compliance with Section
4(b) hereof and this Section 5) or (B) the mandatory redemption, on a date
when any shares of the PIK Preferred Stock remain outstanding, of such
equity securities for cash or other property (other than redemption
payments in equity securities that may be issued in compliance with Section
4(b) hereof and this Section 5); or (iii) pay any dividend or other
distribution on any equity securities in cash or other property (other than
payments in equity securities that may be issued in compliance with Section
4(b) hereof and this Section 5); provided, however, that none of the
restrictions set forth in this Section 5(c) shall apply to any redemption,
purchase, repurchase or other acquisition of equity securities from, or any
issuance of equity securities to, or the payment of any dividend or other
distribution to, the Company or any of its direct or indirect wholly owned
subsidiaries.
(d) The Company shall not allow any encumbrance or
restrictions on the ability of any of its direct or indirect wholly-owned
subsidiaries to: (1) pay dividends, in cash or otherwise, or make any other
distributions on or in respect of its capital stock to the Company or any
other subsidiary; (2) make loans or advances to the Company or any other
subsidiary; or (3) transfer any of its properties or assets to the Company
or any other subsidiary, except for such encumbrances or restrictions
imposed under or by reason of:
(i) applicable law;
(ii) this Annex A relating to the PIK Preferred Stock;
(iii) customary non-assignment provisions of any lease
governing a leasehold interest of the Company or any subsidiary;
(iv) any instrument governing Acquired Indebtedness (as
hereinafter defined) or Acquired Preferred Stock (as hereinafter
defined), which encumbrance or restriction is not applicable to
any Person (as hereinafter defined), or the properties or assets
of any Person, other than the Person, or the property or assets of
the Person, so acquired;
(v) any agreements of the Company or its subsidiaries
existing on the date hereof as such agreements are from time to
time in effect; provided, however, that any amendments or
modifications of such agreements that affect the encumbrances or
restrictions of the types subject to this covenant shall not
result in such encumbrances or restrictions being less favorable
to the Company in any material respect, as determined in good
faith by the Board, than the provision as in effect before giving
effect to the respective amendment or modification;
(vi) any restriction with respect to such a subsidiary
imposed pursuant to an agreement entered into for the sale or
disposition of all or substantially all the capital stock or
assets of such subsidiary pending the closing of such sale or
disposition;
(vii) an agreement effecting a refinancing, replacement,
substitution or restructuring of indebtedness issued, assumed or
incurred pursuant to an agreement referred to in clause (iv) or
(v) in this Section 5(d); provided, however, that the provisions
relating to such encumbrance or restriction contained in any such
refinancing, replacement, substitution or restructuring agreement
or any such other agreement are no less favorable to the Company
in any material respect as determined in good faith by the Board
than the provisions relating to such encumbrance or restriction
contained in agreements referred to in such clause (iv) or (v);
(viii) restrictions on the transfer of assets subject to any
lien imposed by the holder of such lien;
(ix) any licensing agreement to the extent such restrictions
or encumbrances limit the transfer of property subject to such
licensing agreement;
(x) restrictions relating to preferred stock issued by a
subsidiary of the Company in compliance with Section 5(c)(ii)
hereof that requires due and payable pay-in-kind dividends (or
dividends of equity securities that otherwise are issued in
compliance with Section 5(c)(ii) hereof and this Section 5(d)(x))
thereon to be paid in full prior to the payment of dividends on
such subsidiary's common stock; or
(xi) any agreement or instrument evidencing indebtedness of
the Company or any of its subsidiaries including, without
limitation, the Bridge Loan (as hereinafter defined) (if any) and
the Permanent Debt Financing.
(e) The Company shall not, and shall not permit any of its
subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (as hereinafter defined) of the Company (each of
the foregoing, an "Affiliate Transaction"), unless such Affiliate
Transaction shall have been approved by a majority of the members of the
Board; provided, however, that if such Affiliate Transaction or series of
related Affiliate Transactions involve aggregate consideration in excess of
$10,000,000, such Affiliate Transaction shall be approved by a majority of
the Board and evidenced in a resolution of the Board certifying that that
the terms of such Affiliate Transaction are at least as favorable to the
Company or the relevant subsidiary as might reasonably have been obtained
in a comparable arm's length transaction with an unaffiliated third party;
and provided further, the foregoing restrictions shall not apply to such
Affiliate Transactions as are exempted from any covenant or restriction
relating to transactions between the Company and its Affiliates set forth
in the agreements representing the Bridge Loan, the Permanent Debt
Financing and the first refinancing (if any) of the Permanent Debt
Financing.
(6) Reacquired Shares. Any shares of PIK Preferred Stock purchased
or otherwise acquired by the Company in any manner whatsoever (including by
redemption or reclassification) shall be retired and cancelled promptly
after the acquisition thereof. All such shares shall upon their retirement
become authorized but unissued shares of preferred stock without
designation as to series and may be reissued either as PIK Preferred Stock
subject to the limitations hereof or as part of a new series of preferred
stock to be created by resolution or resolutions of the Board or as
otherwise permitted under the DGCL.
(7) Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Company, no distribution shall be made:
(a) to the holders of Junior Securities unless, prior thereto, the holders
of shares of PIK Preferred Stock shall have received a liquidation
preference of $100 per full share of PIK Preferred Stock (the "Liquidation
Preference"), plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared and including for any
partial semi-annual period, to the date of payment; or (b) to the holders
of Parity Securities, except distributions made ratably on the PIK
Preferred Stock and all other such Parity Securities in proportion to the
total amounts to which the holders of all such shares are entitled upon
such liquidation, dissolution or winding up.
For purposes of this Section 7 only, neither the sale, lease,
conveyance, exchange or transfer (for cash, shares of stock, securities or
other consideration) of all or substantially all of the property or assets
of the Company nor the consolidation or merger of the Company with or into
one or more corporations shall be deemed to be a liquidation, dissolution
or winding-up of the affairs of the Company (unless such sale, conveyance,
exchange or transfer is in connection with a dissolution or winding up of
the business of the Company).
(8) Redemption.
(a) Scheduled Redemption. Subject to the extent that the
Company has funds legally available therefor, each outstanding share of PIK
Preferred Stock shall be redeemed by the Company on the twelfth anniversary
of the Effective Date (the "Scheduled Redemption Date") at the Liquidation
Preference plus accrued and unpaid dividends, if any, to the Scheduled
Redemption Date.
(b) Redemption at the Option of the Company. All outstanding
shares of PIK Preferred Stock shall be redeemable at the option of the
Company, at any time as a whole or from time to time in part (any such
partial redemption to be effected pro rata among the holders of outstanding
shares of PIK Preferred Stock), on not less than 30 nor more than 60 days'
notice to the holders of the PIK Preferred Stock at the following prices
(expressed as percentages of the Liquidation Preference) (each such
percentage hereinafter referred to as the "Redemption Price") plus accrued
and unpaid dividends and distributions thereon, whether or not declared and
including for any partial semi-annual period, to the date of redemption, if
redeemed during the following periods as indicated below:
Period Redemption Price
------ ----------------
Effective Date to (but not including) first anniversary thereof 106.5%
thereafter to (but not including) second anniversary thereof 105.2%
thereafter to (but not including) third anniversary thereof 103.9%
thereafter to (but not including) fourth anniversary thereof 102.6%
thereafter to (but not including) fifth anniversary thereof 101.3%
and thereafter 100.0%
(c) Redemption in the Event of a Change in Control. In the
event of a Change in Control (as hereinafter defined), the Company shall
send a notice of the occurrence of such Change in Control (the "Notice of
Occurrence"), by first class mail, postage prepaid, not more than thirty
(30) days following the occurrence of such Change in Control, to each
record holder of outstanding shares of PIK Preferred Stock. Such Notice of
Occurrence shall specify (i) that a Change in Control has occurred; (ii)
that such holder has the right to require the Company to redeem its
outstanding shares of PIK Preferred Stock, but only on the terms and
subject to the conditions set forth in this Section 8(c); (iii) the date,
not less than thirty (30) days after date of the Notice of Occurrence, by
which such holder must notify the Company of such holder's intent to
exercise such redemption right; (iv) that the redemption price shall be
101% of the Liquidation Preference of the PIK Preferred Stock, in cash,
plus accrued and unpaid dividends and distributions thereon, whether or not
declared and including for any partial semi-annual period, to the date of
redemption; and (v) that dividends on the shares the holder elects to
require the Company to redeem will cease to accrue on such date of
redemption. Upon receipt of such Notice of Occurrence, any holder of PIK
Preferred Stock may, within the time period specified by the Company,
notify the Company, by first class mail, postage prepaid, as to whether
such holder elects to exercise the redemption right. If the holders of a
majority of the outstanding shares of PIK Preferred Stock elect to require
such redemption, the Company shall, subject to the extent that it has funds
legally available therefor, redeem all of the outstanding shares of PIK
Preferred Stock at such redemption price within sixty (60) days of
receiving such majority election in accordance with the procedures set
forth in Section 8(e) hereof. If the holders of less than a majority of the
outstanding shares of PIK Preferred Stock elect to require such redemption,
no shares of PIK Preferred Stock shall be redeemed as a result of the
occurrence of such Change in Control. For purposes of this Section 8(c), a
"Change in Control" shall be defined as: (i) the acquisition of more than
50% of the outstanding shares of Common Stock by any one holder other than
the holders of Common Stock immediately following the Merger (each, an
"Initial Holder") or (ii) the acquisition by a Person that is not an
Initial Holder or an Affiliate thereof of a number of shares of Common
Stock that is more than the aggregate number of shares of Common Stock then
held by the Initial Holders and their Affiliates.
(d) Status of Redeemed Shares. At the time of redemption
specified in the resolution of the Board authorizing such redemption, the
rights of the holders of the PIK Preferred Stock redeemed shall cease,
except for the right to receive the redemption price specified in Sections
8(a), 8(b) and 8(c) hereof, as the case may be, without interest, plus
accrued and unpaid dividends and distributions thereon, whether or not
declared and including for any partial semi-annual period, to the date of
redemption.
(e) Notice of Redemption, etc. Except as otherwise provided
herein, the Company shall (i) mail written notice of each redemption of any
PIK Preferred Stock, by first class mail, postage prepaid, to each record
holder thereof not more than sixty (60) nor less than thirty (30) days
prior to the date on which such redemption is to be made and (ii) pay the
amount specified in Section 8(a), 8(b) or 8(c) hereof, as the case may be,
to the applicable holder of PIK Preferred Stock, against delivery by such
holder to the Company of those certificates representing PIK Preferred
Stock held by such holder which have then been so redeemed. In case fewer
than the total number of shares of PIK Preferred Stock represented by any
certificate are redeemed, a new certificate representing the number of
unredeemed shares of PIK Preferred Stock shall be issued to the holder
thereof without cost to such holder within five (5) Business Days (as
hereinafter defined) after surrender of the certificate representing the
redeemed shares of PIK Preferred Stock.
(9) Reports. So long as any shares of the PIK Preferred Stock are
outstanding, the Company shall furnish each holder thereof by first class
mail, postage prepaid, at such holder's address as the same appears on the
stock register of the Company, with (a) the annual financial reports that
the Company is required to file with the Securities and Exchange Commission
(the "SEC") pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or (b) in the event
that the Company is not required to file such reports, (i) annual reports
containing the same financial information as would be required in reports
so filed and (ii) quarterly financial reports containing the same financial
information as would be required in quarterly reports filed with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act.
(10) General Provisions.
(a) If any of the PIK Preferred Stock certificates shall be
mutilated, lost, stolen or destroyed, the Company shall issue, in exchange
and in substitution for and upon cancellation of the mutilated PIK
Preferred Stock certificate, or in lieu of and substitution for the PIK
Preferred Stock certificate lost, stolen or destroyed, a new PIK Preferred
Stock certificate of like tenor and representing an equivalent number of
shares of PIK Preferred Stock, but only upon receipt of evidence of such
loss, theft or destruction of such PIK Preferred Stock certificate and
indemnity, if requested, satisfactory to the Company.
(b) The term "Acquired Indebtedness" shall mean indebtedness
of a Person or any of its subsidiaries existing at the time such Person
becomes a subsidiary of the Company or at the time it merges or
consolidates with the Company or any of its subsidiaries or assumed in
connection with the acquisition of assets from such Person and not incurred
by such Person in connection with, or in anticipation or contemplation of,
such Person becoming a subsidiary of the Company or such merger,
consolidation or acquisition.
(c) The term "Acquired Preferred Stock" shall mean the
preferred stock of any Person at such time as such Person becomes a
subsidiary of the Company or at the time it merges or consolidates with the
Company or any of its subsidiaries and not issued by such Person in
connection with, or in anticipation or contemplation of, such Person
becoming a subsidiary of the Company or such merger, consolidation or
acquisition.
(d) The term "Affiliate" shall mean, with respect to any
specified Person, a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with, such specified Person.
(e) The term "Bridge Loan" shall mean the bridge loan issued
in connection with the Merger by Bear Xxxxxxx Corporate Lending Inc. as
contemplated, by the certain bridge loan commitment letter dated June 22,
2000.
(f) The term "Effective Date" shall mean the date on which
the Merger is effective pursuant to Section 1.2 of the Merger Agreement.
(g) The term "Merger" shall mean the merger of HB Merger LLC
into the Company which occurred on [ ], 2000.
(h) The term "outstanding," when used in reference to shares
of a specific series or class of capital stock of the Company, shall mean
issued shares, excluding shares held by the Company or a subsidiary of the
Company.
(i) The term "Permanent Debt Financing" shall mean any senior
and subordinated unsecured notes, and any preferred equity securities
issued in lieu thereof, issued by the Company or any subsidiary of the
Company in connection with the Merger or issued by the Company or any
subsidiary of the Company to repay all or part of the Bridge Loan.
(j) The term "Person" shall mean an individual, partnership,
corporation, limited liability company, unincorporated organization, trust
or joint venture, or a governmental agency of political subdivision
thereof.
(k) No holder of shares of PIK Preferred Stock shall, by
virtue of such holder's holding such shares, possess any preemptive rights
to subscribe for or acquire any unissued shares of capital stock of the
Company (whether now or hereafter authorized) or securities of the Company
convertible into, or exercisable or exchangeable for, shares of capital
stock of the Company.
(l) The headings of the sections, subsections, clauses and
subclauses hereof are for convenience of reference only and shall not
define, limit or affect any of the provisions hereof.
(m) Each holder of PIK Preferred Stock, by acceptance
thereof, acknowledges and agrees that payments of dividends and premium on
and Liquidation Preference of PIK Preferred Stock, and exchange, redemption
and repurchase of PIK Preferred Stock, by the Company are subject to
restrictions on the Company contained in certain credit and financing
agreements binding on the Company or certain of its subsidiaries.
(n) If any payment, redemption, exchange or other action
shall be required by the terms hereof to be made or taken on a day that is
not a Business Day, such payment, redemption, exchange or other action
shall be made or taken on the immediately succeeding Business Day.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in the State of Delaware or the State of New York
are authorized by law to close.
ANNEX B
FORM OF TERMS, PREFERENCES, RIGHTS AND LIMITATIONS
of
SERIES B CONVERTIBLE PREFERRED STOCK
of
XXXXX XXXXXXXX CORPORATION
The rights, preferences, privileges, restrictions and other
matters relating to the Series B Convertible Preferred Stock are as
follows:
(1) Designation and Amount. The shares of such series of preferred
stock, par value $.01 per share, of Xxxxx Xxxxxxxx Corporation (the
"Company") shall be designated as Series B Convertible Preferred Stock (the
"Junior Preferred Stock"), and the number of shares constituting the Junior
Preferred Stock shall be 16,000,000. Such number of shares may be increased
or decreased by resolution of the Board of Directors of the Company (the
"Board"); provided, however, that no decrease shall reduce the number of
shares of Junior Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion
of any outstanding securities issued by the Company convertible into Junior
Preferred Stock.
(2) Rank. The Junior Preferred Stock shall rank, with respect to
distributions upon the liquidation, winding-up and dissolution of the
Company, prior to all classes of common stock, par value $.01 per share, of
the Company (the "Common Stock") and prior to each other class of capital
stock or series of preferred stock hereafter created by the Board, the
terms of which do not expressly provide that it ranks prior to or pari
passu with the Junior Preferred Stock as to Dividends (as hereinafter
defined) and distributions upon the liquidation, winding-up and dissolution
of the Company (the "Junior Securities"). The Junior Preferred Stock shall
rank: (a) with respect to Dividends, pari passu with the Common Stock; and
(b) with respect to Dividends and distributions upon the liquidation,
winding-up and dissolution of the Company, pari passu with any class of
capital stock or series of preferred stock hereafter created by the Board,
the terms of which expressly provide that it ranks pari passu with the
Junior Preferred Stock as to Dividends and distributions upon the
liquidation, winding-up and dissolution of the Company (the "Parity
Securities"). The Junior Preferred Stock shall rank, with respect to
Dividends and distributions upon the liquidation, winding-up and
dissolution of the Company, junior to the Series A Redeemable PIK Preferred
Stock (the "PIK Preferred Stock") and junior to any class of capital stock
or series of preferred stock hereafter created by the Board, the terms of
which expressly provide that it ranks prior to the Junior Preferred Stock
as to Dividends and distributions upon the liquidation, winding-up and
dissolution of the Company (collectively referred to with the PIK Preferred
Stock as the "Senior Securities").
(3) Dividends and Distributions. Subject to the prior and superior
rights of the holders of shares of the Senior Securities, the holders of
shares of Junior Preferred Stock shall be entitled to receive, when, as and
if declared by the Board out of funds legally available therefor, dividends
or distributions in cash, securities or other property (individually a
"Dividend" and collectively "Dividends"), but only when, as and if
Dividends are declared and paid on the Common Stock, payable with respect
to each share of Junior Preferred Stock as if each such share were
converted into the number of shares of Common Stock into which such share
of Junior Preferred Stock would be converted if such share was converted
immediately prior to the record date for such Dividend. Dividends shall not
be deemed to include any securities which are to be taken into account in
adjusting the Conversion Ratio (as hereinafter defined) as set forth in
Section 7(d) hereof.
(4) Voting Rights. The holders of shares of the Junior Preferred Stock
shall have the following voting rights:
(a) Each share of Junior Preferred Stock shall entitle the holder
thereof to vote, on all matters submitted to a vote of the stockholders of
the Company, the number of votes equal to the number of shares of Common
Stock into which such share of the Junior Preferred Stock would be
converted if converted immediately prior to the record date for such vote.
Except as otherwise provided herein or in any Certificate of Designations
creating another series of Senior Securities or Parity Securities, or by
law, the holders of shares of Junior Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters
submitted to a vote of stockholders of the Company.
(b) So long as any shares of Junior Preferred Stock remain
outstanding, without the written consent of the holders of at least 85% of
the outstanding shares of Junior Preferred Stock or the approval of holders
of at least 85% of the outstanding shares of Junior Preferred Stock at a
meeting of such holders called for such purpose, the Company shall not
amend, alter or repeal any provision of the Amended and Restated
Certificate of Incorporation of the Company including, without limitation,
this Annex B relating to the Junior Preferred Stock (by merger or
otherwise) so as to adversely affect the specified preferences, rights,
privileges, powers or voting rights of the Junior Preferred Stock;
provided, however, that any such amendment that reduces the Liquidation
Preference (as hereinafter defined) of the Junior Preferred Stock shall
require the approval of each holder of Junior Preferred Stock adversely
affected thereby.
(c) Except as set forth herein or as required by law, holders of
Junior Preferred Stock shall have no special voting rights and their
consent or vote as a class shall not be required for taking any corporate
action.
(5) Reacquired Shares. Any shares of Junior Preferred Stock purchased
or otherwise acquired by the Company in any manner whatsoever (including by
redemption or reclassification) shall be retired and cancelled promptly
after the acquisition thereof. All such shares shall upon their retirement
become authorized but unissued shares of preferred stock without
designation as to series and may be reissued either as Junior Preferred
Stock or as part of a new series of preferred stock to be created by
resolution or resolutions of the Board or as otherwise permitted under the
DGCL.
(6) Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Company, no distribution shall be made (a)
to the holders of shares of Junior Securities (either as to Dividends or
distributions upon liquidation, dissolution or winding up) or the Common
Stock (as to distributions upon liquidation, dissolution or winding up)
unless, prior thereto, the holders of shares of Junior Preferred Stock
shall have received a liquidation preference of $15.625 per share (the
"Liquidation Preference"), or (b) to the holders of Parity Securities
(either as to Dividends or distributions upon liquidation, dissolution or
winding up) and Common Stock (as to Dividends), except distributions made
ratably on the Junior Preferred Stock and all other such Parity Securities
or Common Stock, as applicable, in proportion to the total amounts to which
the holders of all such shares are entitled upon such liquidation,
dissolution or winding up.
For purposes of this Section 6 only, neither the sale, lease,
conveyance, exchange or transfer (for cash, shares of stock, securities or
other consideration) of all or substantially all of the property or assets
of the Company nor the consolidation or merger of the Company with or into
one or more corporations shall be deemed to be a liquidation, dissolution
or winding-up of the affairs of the Company (unless such sale, conveyance,
exchange or transfer is in connection with a dissolution or winding up of
the business of the Company).
(7) Conversion Rights.
(a) Optional Conversion. Each outstanding share of Junior Preferred
Stock shall be converted into, subject to adjustment as set forth in
Section 7(d) hereof, one fully paid and non-assessable share of Common
Stock (such share-for-share conversion ratio, as adjusted from time to
time, being hereinafter referred to as the "Conversion Ratio") if the
holders of a majority of the outstanding shares of Junior Preferred Stock,
voting as a class, approve such conversion; provided, however, that such
holders may elect, from time to time, to require the conversion of less
than all of the shares of Junior Preferred Stock then outstanding, in which
case such partial conversion will be made on an equal basis such that,
immediately following such conversion, each holder of Junior Preferred
Stock will hold the same percentage of the issued and outstanding Junior
Preferred Stock as it held immediately prior to such conversion. Following
written notice to the Company of any such election, the Company shall
establish a record date for such conversion (which shall be no earlier than
the date of the Company's receipt of such notice and no later than 20 days
after the Company's receipt of such notice) and shall notify each holder of
record (as of such record date), by first class mail, postage prepaid, of
the full or partial conversion of the Junior Preferred Stock in accordance
with this Section 7(a) and that the issuance of certificates representing
the shares of Common Stock issued as a result of conversion (and any Junior
Preferred Stock remaining outstanding after such conversion) shall be
effected in accordance with the procedures set forth in Section 7(c)
hereof. Failure to give such notice to any such holder shall in no way
affect the full or partial, as applicable, conversion of such Junior
Preferred Stock into Common Stock. The conversion effected pursuant to this
Section 7(a) shall be deemed to have occurred on the record date
established as set forth above and the shares of Junior Preferred Stock
converted on such conversion shall be automatically converted at such time.
Immediately following such conversion, the rights of the holders of
converted Junior Preferred Stock shall cease and the persons entitled to
receive the Common Stock upon the conversion of Junior Preferred Stock
shall be treated for all purposes as having become the owners of such
Common Stock.
(b) Mandatory Conversion. All outstanding shares of Junior Preferred
Stock shall automatically be converted, at the Conversion Ratio, into fully
paid and non-assessable shares of Common Stock at such time as the Company
consummates a Qualified Initial Public Offering (as hereinafter defined),
in which the aggregate per share offering price is at least $15.625 per
share (provided that in the event the Company shall effect any stock
dividend, stock split, reverse stock split or other combination of shares
of common stock, recapitalization, reclassification, merger, consolidation
or exchange offer, or similar events and transactions, then, and in each
such case, such minimum price per share in effect immediately prior to such
event or transaction or the record date therefor, whichever is earlier,
shall be appropriately adjusted as determined in good faith by the Board);
provided, however, that such outstanding shares of Junior Preferred Stock
shall not be converted if, and to the extent that, shares of Junior
Preferred Stock shall have been called for redemption pursuant to Section
8(b) hereof on or prior to the date of consummation of the Qualified
Initial Public Offering; and provided further that, notwithstanding the
immediately preceding proviso, such unconverted shares of Junior Preferred
Stock shall nevertheless automatically be converted on the date that the
applicable redemption payment is due pursuant to Section 8(e) hereof if and
to the extent that such redemption payment shall not be made. The term
"Qualified Initial Public Offering" shall mean one or a series of firm
commitment underwritten public offerings of newly issued Common Stock
pursuant to a registration statement under the Securities Act of 1933, as
amended, where (i) the proceeds to the Company (prior to deducting any
underwriters' discounts and commissions) equal or exceed $100,000,000 and
(ii) upon consummation of such offering, the Common Stock is listed on the
New York Stock Exchange or American Stock Exchange or authorized to be
traded on the Nasdaq National Market. The Company shall notify each record
holder of Junior Preferred Stock, by first class mail, postage prepaid, on
the date of consummation of the Qualified Initial Public Offering, of the
mandatory conversion of all outstanding shares of Junior Preferred Stock in
accordance with this Section 7(b) and that the issuance of certificates
representing the shares of Common Stock issued on conversion thereof shall
be effected in accordance with the procedures set forth in Section 7(c)
hereof. Failure to give such notice to any such holder shall in no way
affect the mandatory conversion of such Junior Preferred Stock into Common
Stock. Immediately following such conversion, the rights of the holders of
all Junior Preferred Stock shall cease and the persons entitled to receive
the Common Stock upon the conversion of Junior Preferred Stock shall be
treated for all purposes as having become the owners of such Common Stock.
(c) Mechanics; Transfer Tax; Conversion Price.
(i) As soon as practicable after the conversion of any
shares of Junior Preferred Stock into Common Stock under Section 7(a)
or 7(b) above, the Company shall deliver to the applicable holder of
Junior Preferred Stock a certificate for the number of shares of
Common Stock issuable upon the conversion (and a new certificate
representing the unconverted portion, if any, of the shares of Junior
Preferred Stock represented by the certificate or certificates
surrendered for conversion), against delivery by such holder to the
Company of those certificates representing Junior Preferred Stock held
by such holder which have been converted in such conversion. The
person in whose name the Common Stock certificate is registered shall
be treated as the stockholder of record on and after the Conversion
Date. No payment or adjustment shall be made for accrued and unpaid
Dividends, if any, on converted shares of Junior Preferred Stock or
for Dividends on any Common Stock issued upon such conversion. The
holder of record of a share of Junior Preferred Stock at the close of
business on a record date with respect to the payment of Dividends on
the Junior Preferred Stock in accordance with Section 3 hereof shall
be entitled to receive such Dividends with respect to such share of
Junior Preferred Stock on the corresponding dividend payment date,
notwithstanding the conversion of such share after such record date
and prior to such dividend payment date.
(ii) Upon conversion of shares of Junior Preferred Stock,
the Company shall pay any documentary, stamp or similar issue or
transfer tax due on the issue of shares of Common Stock upon the
conversion; provided, however, the holder shall pay any such tax that
is due because the shares are issued in a name other than the holder's
name.
(iii) The Company has reserved and shall continue to reserve
out of its authorized but unissued Common Stock or its Common Stock
held in treasury sufficient shares of Common Stock to permit the
conversion, in full, of all of the Junior Preferred Stock to Common
Stock. All shares of Common Stock that may be issued upon conversion
of the Junior Preferred Stock shall be fully paid and non-assessable.
(d) Conversion Ratio Adjustments.
(i) If, at any time after the issuance of the Junior Preferred
Stock, the outstanding shares of the Common Stock shall be increased
by a stock dividend payable in shares of Common Stock or by a stock
split, subdivision or split-up of shares of Common Stock, then,
following the record date for the determination of holders of Common
Stock entitled to receive such Common Stock pursuant to such stock
dividend, stock split, subdivision or split-up, the Conversion Ratio
shall be proportionately adjusted so that the number of shares of
Common Stock issuable upon conversion of each share of Junior
Preferred Stock shall be increased to the number of shares of Common
Stock the holder of each such share of Junior Preferred Stock would
have held after such stock dividend, stock split, subdivision or
split-up, if such holder had converted each such share of Junior
Preferred Stock immediately prior thereto, in accordance with the
provisions hereof.
(ii) If, at any time after the issuance of the Junior
Preferred Stock, the outstanding shares of Common Stock shall be
decreased by a combination (including, without limitation, any reverse
stock split) of the outstanding shares of Common Stock, then,
following the record date for such combination, the Conversion Ratio
shall be proportionately adjusted so that the number of shares of
Common Stock issuable upon conversion of each share of Junior
Preferred Stock shall be decreased to the number of shares of Common
Stock the holder of each such share of Junior Preferred Stock would
have held after such combination, if such holder had converted each
such share of Junior Preferred Stock immediately prior thereto, in
accordance with the provisions hereof.
(iii) In the case of any consolidation of the Company, the
merger of the Company with or into any other entity, statutory share
exchange or other reorganization or similar transaction or the sale or
transfer of all or substantially all the assets of the Company, in any
such case pursuant to which the Common Stock is converted into other
securities, cash or assets, then, upon consummation of such
transaction, each share of Junior Preferred Stock shall automatically
become convertible into the kind or amount of securities, cash and
other assets receivable upon the consolidation, merger, statutory
share exchange or other reorganization, sale, transfer or similar
transaction, by a holder of the number of shares of Common Stock into
which such share of Junior Preferred Stock would have been converted
if such share of Junior Preferred Stock was converted immediately
prior to such consolidation, merger, statutory share exchange or other
reorganization, sale, transfer or similar transaction (assuming such
holder of Common Stock failed to exercise any rights of election and
received per share the kind and amount of consideration receivable per
share by a plurality of non-electing shares). Appropriate adjustment
(as determined in good faith by the Board) shall be made in the
application of the provisions herein set forth with respect to the
rights and interests thereafter of the holders of Junior Preferred
Stock, to the end that the provisions set forth herein (including
provisions with respect to changes in and other adjustment of the
Conversion Ratio) shall thereafter be applicable, as nearly as
reasonably possible, in relation to any shares of stock or other
securities or property thereafter deliverable upon the conversion of
Junior Preferred Stock. If this Section 7(d)(iii) applies, Sections
7(d)(i) and 7(d)(ii) do not apply.
(iv) If the Company takes any action that would require an
adjustment in the Conversion Ratio pursuant to Section 7(d)(i), (ii)
or (iii) above, the Company shall mail to the holders of Junior
Preferred Stock a notice stating the proposed record or effective
date, as the case may be, and such adjustment shall become effective
immediately after the record date of the event triggering the
adjustment. The Company shall mail such notice, by first class mail,
postage prepaid, at least ten (10) days before such date. However,
failure to mail the notice or any defect in it shall not affect the
validity of any such action.
(8) Redemption.
(a) Scheduled Redemption. Subject to the extent that the Company has
funds legally available therefor, each outstanding share of Junior
Preferred Stock shall be redeemed by the Company on , 2021 [the date which
is six months after the twentieth anniversary of the date of issuance] (the
"Scheduled Redemption Date") at the Liquidation Preference (subject to the
right each such record holder to receive Dividends due on a dividend
payment date).
(b) Redemption at the Option of the Company. All outstanding shares of
Junior Preferred Stock shall be redeemable at the option of the Company, at
any time as a whole or from time to time in part (any such partial
redemption to be effected pro rata among the holders of outstanding shares
of Junior Preferred Stock), on not less than thirty (30) nor more than
sixty (60) days' notice to the holders of the Junior Preferred Stock at the
Liquidation Preference (subject to the right of each such record holder to
receive Dividends due on a dividend payment date) on the payment date
specified in such notice which date shall not be less than thirty (30) nor
more than sixty (60) days after the date of such notice.
(c) Redemption in the Event of a Change in Control. In the event of a
Change in Control (as hereinafter defined), the Company shall send a notice
of the occurrence of such Change in Control (the "Notice of Occurrence"),
by first class mail, postage prepaid, not more than thirty (30) days
following the occurrence of such Change in Control, to each record holder
of outstanding shares of Junior Preferred Stock. The Notice of Occurrence
shall specify (i) that a Change in Control has occurred; (ii) that such
holder has the right to require the Company to redeem outstanding shares of
Junior Preferred Stock, but only on the terms and subject to the conditions
set forth in this Section 8(c); (iii) the date, not less than thirty (30)
days after date of the Notice of Occurrence, by which such holder must
notify the Company of such holder's intent to exercise such redemption
right; and (iv) that the redemption price shall be 100% of the Liquidation
Preference of the Junior Preferred Stock, in cash (subject to the right of
each such record holder to receive Dividends due on a dividend payment
date). Upon receipt of such Notice of Occurrence, any holder of Junior
Preferred Stock may, within the time period specified by the Company,
notify the Company, by first class mail, postage prepaid, as to whether
such holder elects to exercise the redemption right. If the holders of a
majority of the outstanding shares of Junior Preferred Stock elect to
require such redemption, the Company shall, subject to the extent that it
has funds legally available therefor, redeem all of the outstanding shares
of Junior Preferred Stock at such redemption price within sixty (60) days
after receiving such majority election in accordance with the procedures
set forth in Section 8(e) hereof; provided, however, that in order for the
Company to effect such redemption, no shares of PIK Preferred Stock may be
outstanding; and provided further that if the holders of a majority of the
outstanding shares of Junior Preferred Stock elect to exercise their
redemption right pursuant to this Section 8(c), such redemption shall be
deferred until such time that no shares of PIK Preferred Stock are
outstanding. If the holders of less than a majority of the outstanding
shares of Junior Preferred Stock elect to require such redemption, no
shares of Junior Preferred Stock shall be redeemed as a result of the
occurrence of such Change in Control. For purposes of this Section 8(c), a
"Change in Control" shall be defined as: (i) the acquisition of more than
50% of the outstanding shares of Common Stock by any one holder other than
the holders of Common Stock immediately following the Merger (as
hereinafter defined; each such holder being hereinafter referred to as an
"Initial Holder") or (ii) the acquisition by a Person that is not an
Initial Holder or an Affiliate thereof of a number of shares of Common
Stock that is more than the aggregate number of shares of Common Stock then
held by the Initial Holders and their Affiliates.
(d) Status of Redeemed Shares. At the time of redemption specified in
the resolution of the Board authorizing such redemption, the rights of the
holders of the Junior Preferred Stock redeemed shall cease, except for the
right to receive the Liquidation Preference without interest (subject to
the right each such record holder to receive Dividends due on a dividend
payment date).
(e) Notice of Redemption, Etc. Except as otherwise provided herein,
the Company shall (i) mail written notice of each redemption of any Junior
Preferred Stock, by first class mail, postage prepaid, to each record
holder thereof not more than sixty (60) nor less than thirty (30) days
prior to the date on which such redemption is to be made and (ii) pay the
amount specified in Section 8(a), 8(b) or 8(c), as the case may be, to the
applicable holder of Junior Preferred Stock, against delivery by such
holder to the Company of those certificates representing Junior Preferred
Stock held by such holder which have then been so redeemed. In case fewer
than the total number of shares of Junior Preferred Stock represented by
any certificate are redeemed, a new certificate representing the number of
unredeemed shares of Junior Preferred Stock shall be issued to the holder
thereof without cost to such holder within five (5) Business Days (as
hereinafter defined) after surrender of the certificate representing the
redeemed shares of Junior Preferred Stock.
(9) General Provisions.
(a) If any of the Junior Preferred Stock certificates shall be
mutilated, lost, stolen or destroyed, the Company shall issue, in exchange
and in substitution for and upon cancellation of the mutilated Junior
Preferred Stock certificate, or in lieu of and substitution for the Junior
Preferred Stock certificate lost, stolen or destroyed, a new Junior
Preferred Stock certificate of like tenor and representing an equivalent
number of shares of Junior Preferred Stock, but only upon receipt of
evidence of such loss, theft or destruction of such Junior Preferred Stock
certificate and indemnity, if requested, satisfactory to the Company.
(b) The term "Merger" shall mean the merger of HB Merger LLC into the
Company which occurred on [ ], 2000.
(c) The term "outstanding," when used in reference to shares of a
specific series or class of capital stock of the Company, shall mean issued
shares, excluding shares held by the Company or a subsidiary of the
Company.
(d) No holder of shares of Junior Preferred Stock shall, by virtue of
such holder's holding such shares, possess any preemptive rights to
subscribe for or acquire any unissued shares of capital stock of the
Company (whether now or hereafter authorized) or securities of the Company
convertible into, or exercisable or exchangeable for, shares of capital
stock of the Company.
(e) The headings of the sections, subsections, clauses and subclauses
hereof are for convenience of reference only and shall not define, limit or
affect any of the provisions hereof.
(f) Each holder of Junior Preferred Stock, by acceptance thereof,
acknowledges and agrees that payments of Dividends on and Liquidation
Preference of Junior Preferred Stock, and exchange, redemption and
repurchase of Junior Preferred Stock, by the Company are subject to
restrictions on the Company contained in certain credit and financing
agreements binding on the Company or certain of its subsidiaries.
(g) If any payment, redemption, exchange or other action shall be
required by the terms hereof to be made or taken on a day that is not a
Business Day, such payment, redemption, exchange or other action shall be
made or taken on the immediately succeeding Business Day. "Business Day"
means any day except a Saturday, Sunday or other day on which commercial
banks in the State of Delaware or the State of New York are authorized by
law to close.
EXHIBIT C
FORM OF
BY-LAWS
OF
XXXXX XXXXXXXX CORPORATION
(a Delaware corporation)
Amended and Restated as of [ ], 2000
ARTICLE I
Stockholders
SECTION 1. Annual Meetings. The annual meeting of stockholders
for the election of directors and for the transaction of such other
business as may properly come before the meeting shall be held each year at
such date and time, within or without the State of Delaware, as the Board
of Directors shall determine.
SECTION 2. Notice of Meetings. Written notice of all meetings of
the stockholders, stating the place, date and hour of the meeting and name
and capacity of the person issuing the notice, shall be mailed or delivered
to each stockholder not less than 10 nor more than 60 days prior to the
meeting. Notice of any special meeting shall state in general terms the
purpose or purposes for which the meeting is to be held.
SECTION 3. Stockholder Lists. The officer who has charge of the
stock ledger of the Company shall prepare and make, at least 10 days before
every meeting of stockholders, a complete list of the stockholders entitled
to vote at the meeting, arranged in alphabetical order, and showing the
address of each stockholder and the number of shares registered in the name
of each stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, either at a place
within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. The list shall also be produced and
kept at the time and place of the meeting during the whole time thereof,
and may be inspected by any stockholder who is present.
The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger, the list required by
this section or the books of the Company, or to vote in person or by proxy
at any meeting of stockholders.
SECTION 4. Quorum. Except as otherwise required by law or the
Certificate of Incorporation, a quorum for the transaction of business at
any meeting of stockholders shall consist of the holders of record of a
majority of the issued and outstanding shares of the capital stock of the
Company (or of a separate class, if a class shall have a separate class
vote) entitled to vote at the meeting, present in person or by proxy. At
all meetings of the stockholders at which a quorum is present, all matters,
except as otherwise provided by law or the Certificate of Incorporation,
shall be decided by the vote of the holders of a majority of the shares
entitled to vote thereat present in person or by proxy. If there be no such
quorum, the holders of a majority of such shares so present or represented
by proxy may adjourn the meeting from time to time, without further notice,
until a quorum shall have been obtained. When a quorum is once present it
is not broken by the subsequent withdrawal of any stockholder.
SECTION 5. Organization. Meetings of stockholders shall be
presided over by the Chairman, if any, or if none or in the Chairman's
absence the Vice-Chairman, if any, or if none or in the Vice-Chairman's
absence the President, if any, or if none or in the President's absence a
Vice-President, or, if none of the foregoing is present, by a chairman to
be chosen by the stockholders entitled to vote who are present in person or
by proxy at the meeting. The Secretary of the Company (the "Secretary"), or
in the Secretary's absence an Assistant Secretary, shall act as secretary
of every meeting, but if neither the Secretary nor an Assistant Secretary
is present, the presiding officer of the meeting shall appoint any person
present to act as secretary of the meeting.
SECTION 6. Voting; Proxies; Required Vote. (a) At each meeting of
stockholders, every stockholder shall be entitled to vote in person or by
proxy appointed by instrument in writing, subscribed by such stockholder or
by such stockholder's duly authorized attorney-in-fact (but no such proxy
shall be voted or acted upon after three years from its date, unless the
proxy provides for a longer period), and, unless the Certificate of
Incorporation provides otherwise, shall have one vote for each share of
stock entitled to vote registered in the name of such stockholder on the
books of the Company on the applicable record date fixed pursuant to these
By-laws. At all elections of directors the voting may but need not be by
ballot and a plurality of the votes cast there shall elect. Except as
otherwise required by law or the Certificate of Incorporation, any other
action shall be authorized by a majority of the votes cast.
(b) Any action required or permitted to be taken at any meeting
of stockholders may, except as otherwise required by law or the Certificate
of Incorporation, be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of record of the issued and outstanding
capital stock of the Company having a majority of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted, and the writing or
writings are filed with the permanent records of the Company. Prompt notice
of the taking of corporate action without a meeting by less than unanimous
written consent shall be given to those stockholders who have not consented
in writing.
(c) Where a separate vote by a class or classes, present in
person or represented by proxy, shall constitute a quorum entitled to vote
on that matter, the affirmative vote of the majority of shares of such
class or classes present in person or represented by proxy at the meeting
shall be the act of such class, unless otherwise provided in the
Certificate of Incorporation.
SECTION 7. Inspectors. The Board of Directors, in advance of any
meeting, shall appoint one or more inspectors of election to act at the
meeting or any adjournment thereof. If an inspector or inspectors so
appointed are unable to act at the meeting, the person presiding at the
meeting shall appoint one or more other inspectors. In case any person who
may be appointed as an inspector fails to appear or act, the vacancy may be
filled by appointment made by the directors in advance of the meeting or at
the meeting by the person presiding thereat. Each inspector, if any, before
entering upon the discharge of his or her duties, shall take and sign an
oath faithfully to execute the duties of inspector at such meeting with
strict impartiality and according to the best of his ability. The
inspectors shall determine the number of shares of stock outstanding and
the voting power of each, the shares of stock represented at the meeting,
the existence of a quorum, and the validity and effect of proxies, and
shall receive votes, ballots or consents, hear and determine all challenges
and questions arising in connection with the right to vote, count and
tabulate all votes, ballots or consents, determine the result, and do such
acts as are proper to conduct the election or vote with fairness to all
stockholders. On request of the person presiding at the meeting, the
inspector or inspectors shall make a report in writing of any challenge,
question or matter determined by such inspector or inspectors and execute a
certificate of any fact found by such inspector or inspectors.
SECTION 8. Certain Stockholder Approval Matters. Notwithstanding
anything to the contrary contained herein, the provisions of Article 6 of
that certain Stockholders' Agreement dated as of _______________ among the
Company and certain stockholders of the Company (the "Stockholders'
Agreement") are hereby incorporated by reference for all purposes.
ARTICLE II
Board of Directors
SECTION 1. General Powers. The business, property and affairs of
the Company shall be managed by, or under the direction of, the Board of
Directors.
SECTION 2. Qualification; Number; Term; Remuneration. (a) Each
director shall be at least 18 years of age. A director need not be a
stockholder, a citizen of the United States, or a resident of the State of
Delaware. The number of directors constituting the entire Board shall be as
may be fixed from time to time as set forth in the Stockholders' Agreement.
The use of the phrase "entire Board" herein refers to the total number of
directors which the Company would have if there were no vacancies on the
Board of Directors.
(b) Directors who are elected at an annual meeting of
stockholders, and directors who are elected in the interim to fill
vacancies and newly created directorships, shall hold office until the next
annual meeting of stockholders and until their successors are elected and
qualified or until their earlier resignation or removal.
(c) Directors may be paid their expenses, if any, of attendance
at each meeting of the Board of Directors and may be paid a fixed sum for
attendance at each meeting of the Board of Directors or a stated salary as
director. No such payment shall preclude any director from serving the
Company in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for
attending committee meetings.
SECTION 3. Quorum and Manner of Voting. Except as otherwise
provided by law, a majority of the entire Board shall constitute a quorum.
A majority of the directors present, whether or not a quorum is present,
may adjourn a meeting from time to time to another time and place without
notice. The vote of the majority of the directors present at a meeting at
which a quorum is present shall be the act of the Board of Directors.
SECTION 4. Places of Meetings. Meetings of the Board of Directors
may be held at any place within or without the State of Delaware, as may
from time to time be fixed by resolution of the Board of Directors, or as
may be specified in the notice of meeting.
SECTION 5. Annual Meeting. Following the annual meeting of
stockholders, the newly elected Board of Directors shall meet for the
purpose of the election of officers and the transaction of such other
business as may properly come before the meeting. Such meeting may be held
without notice immediately after the annual meeting of stockholders at the
same place at which such stockholders' meeting is held.
SECTION 6. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times and places as the Board of Directors
shall from time to time by resolution determine. Notice need not be given
of regular meetings of the Board of Directors held at times and places
fixed by resolution of the Board of Directors.
SECTION 7. Special Meetings. Special meetings of the Board of
Directors shall be held whenever called by the Chairman or President or by
a majority of the directors then in office.
SECTION 8. Notice of Meetings. A notice of the place, date and
time and the purpose or purposes of each special meeting of the Board of
Directors shall be given to each director by mailing and telecopying or
telephoning the same at least two days before the special meeting, or by
telecopying or telephoning the same, or by delivering the same personally
not later than the day before the day of the meeting.
SECTION 9. Organization. At all meetings of the Board of
Directors, the Chairman, if any, or if none or in the Chairman's absence or
inability to act the President, or in the President's absence or inability
to act any Vice-President who is a member of the Board of Directors, or in
such Vice-President's absence or inability to act a chairman chosen by the
directors, shall preside. The Secretary of the Company shall act as
secretary at all meetings of the Board of Directors when present, and, in
the Secretary's absence, the presiding officer may appoint any person to
act as secretary.
SECTION 10. Resignation. Any director may resign at any time upon
written notice to the Company and such resignation shall take effect upon
receipt thereof by the President or Secretary, unless otherwise specified
in the resignation. Except as otherwise provided in the Certificate of
Incorporation, any or all of the directors may be removed, with or without
cause, by the holders of a majority of the shares of stock outstanding and
entitled to vote for the election of directors.
SECTION 11. Vacancies. Unless otherwise provided in these By-laws
or the Certificate of Incorporation, vacancies on the Board of Directors,
whether caused by resignation, death, disqualification, removal, an
increase in the authorized number of directors or otherwise, may be filled
by the affirmative vote of a majority of the remaining directors, although
less than a quorum, or by a sole remaining director, or at a special
meeting of the stockholders, by the holders of shares entitled to vote for
the election of directors.
SECTION 12. Action by Written Consent. Any action required or
permitted to be taken at any meeting of the Board of Directors may be taken
without a meeting if all the directors consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Board
of Directors.
ARTICLE III
Committees
SECTION 1. Appointment. From time to time the Board of Directors
by a resolution adopted by a majority of the entire Board may appoint any
committee or committees for any purpose or purposes, to the extent lawful,
which shall have powers as shall be determined and specified by the Board
of Directors in the resolution of appointment.
SECTION 2. Procedures, Quorum and Manner of Acting. Each
committee shall fix its own rules of procedure, and shall meet where and as
provided by such rules or by resolution of the Board of Directors. Except
as otherwise provided by law, the presence of a majority of the then
appointed members of a committee shall constitute a quorum for the
transaction of business by that committee, and in every case where a quorum
is present the affirmative vote of a majority of the members of the
committee present shall be the act of the committee. Each committee shall
keep minutes of its proceedings, and actions taken by a committee shall be
reported to the Board of Directors.
SECTION 3. Action by Written Consent. Any action required or
permitted to be taken at any meeting of any committee of the Board of
Directors may be taken without a meeting if all the members of the
committee consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the committee.
SECTION 4. Term; Termination. In the event any person shall cease
to be a director of the Company, such person shall simultaneously therewith
cease to be a member of any committee appointed by the Board of Directors.
ARTICLE IV
Officers
SECTION 1. Election and Qualifications. The Board of Directors
shall elect the officers of the Company, which shall include a President
and a Secretary, and may include, by election or appointment, one or more
Vice-Presidents (any one or more of whom may be given an additional
designation of rank or function), a Treasurer and such assistant
secretaries, such Assistant Treasurers and such other officers as the Board
may from time to time deem proper. Each officer shall have such powers and
duties as may be prescribed by these By-laws and as may be assigned by the
Board of Directors or the President. Any two or more offices may be held by
the same person except the offices of President and Secretary.
SECTION 2. Term of Office and Remuneration. The term of office of
all officers shall be one year and until their respective successors have
been elected and qualified, but any officer may be removed from office,
either with or without cause, at any time by the Board of Directors. Any
vacancy in any office arising from any cause may be filled for the
unexpired portion of the term by the Board of Directors. The remuneration
of all officers of the Company may be fixed by the Board of Directors or in
such manner as the Board of Directors shall provide.
SECTION 3. Resignation; Removal. Any officer may resign at any
time upon written notice to the Company and such resignation shall take
effect upon receipt thereof by the President or Secretary, unless otherwise
specified in the resignation. Any officer shall be subject to removal, with
or without cause, at any time by vote of a majority of the entire Board.
SECTION 4. Chairman of the Board. The Chairman of the Board of
Directors, if there be one, shall preside at all meetings of the Board of
Directors and shall have such other powers and duties as may from time to
time be assigned by the Board of Directors.
SECTION 5. President and Chief Executive Officer. The President
shall be the chief executive officer of the Company, and shall have such
duties as customarily pertain to that office. The President shall have
general management and supervision of the property, business and affairs of
the Company and over its other officers; may appoint and remove assistant
officers and other agents and employees, other than officers referred to in
Section 1 of this Article IV; and may execute and deliver in the name of
the Company powers of attorney, contracts, bonds and other obligations and
instruments.
SECTION 6. Vice-President. A Vice-President may execute and
deliver in the name of the Company contracts and other obligations and
instruments pertaining to the regular course of the duties of said office,
and shall have such other authority as from time to time may be assigned by
the Board of Directors or the President.
SECTION 7. Treasurer. The Treasurer shall in general have all
duties incident to the position of Treasurer and such other duties as may
be assigned by the Board of Directors or the President.
SECTION 8. Secretary. The Secretary shall in general have all the
duties incident to the office of Secretary and such other duties as may be
assigned by the Board of Directors or the President.
SECTION 9. Assistant Officers. Any assistant officer shall have
such powers and duties of the officer such assistant officer assists as
such officer or the Board of Directors shall from time to time prescribe.
ARTICLE V
Indemnification
SECTION 1. Indemnification. The Company shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in
the right of the Company) by reason of the fact that he is or was a
Director, officer, employee or agent of the Company, or is or was serving
at the request of the Company as a Director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests
of the Company, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
The Company shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Company to procure a judgment in
its favor by reason of the fact that he is or was a Director, officer,
employee or agent, of the Company as a Director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company and
except that no indemnification shall be made in respect of any claim, issue
or matter as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to the Company
unless and only to the extent that the Court of Chancery of the State of
Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of
chancery of the State of Delaware or such other court shall deem proper.
To the extent that a Director, officer, employee or agent of the
Company has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in the first two paragraphs of this
Section 1 of Article V or in defense of any claim, issue or matter therein,
he shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
Any indemnification under the first two paragraphs of this
Section 1 of Article V (unless ordered by a court) shall be made by the
Company only as authorized in the specific case upon a determination that
indemnification of the Director, officer, employee or agent is proper in
the circumstances because he has met the applicable standard of conduct set
forth in the first two paragraphs of this Section 1 of Article V. Such
determination shall be made (1) by the Board of Directors by a majority
vote of a quorum consisting of Directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not obtainable, or
even if obtainable a quorum of disinterested Directors so directs, by
independent legal counsel in a written opinion, or (3) by the shareholders.
Expenses incurred in defending a civil or criminal action, suit
or proceeding shall be paid by the Company in advance of the final
disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of the Director, officer, employee or agent to
repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Company as authorized in this Section 1
of Article V.
The indemnification provided by this Section 1 of Article V shall
not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any by-law, agreement, vote of
shareholders or disinterested Directors or otherwise, both as to action in
their official capacity and as to action in another capacity while holding
such office, and shall continue as to a person who has ceased to be a
Director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
The Company shall have power to purchase and maintain insurance
on behalf of any person who is or was a Director, officer, employee or
agent of the Company, or is or was serving at the request of the Company as
a Director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the Company would have the power to
indemnify him against such liability under the provisions of this Section 1
of Article V.
For purposes of this Section 1 of Article V, references to "the
Company" shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate existence had
continued, would have had power and authority to indemnify its Directors,
officers, and employees, or agents, so that any person who is or was a
Director, officer, employee or agent of such constituent corporation, or is
or was serving at the request of such constituent corporation as a
Director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise shall stand in the same position
under the provisions of this Section 1 of Article V with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
For purposes of this Section 1 of Article V, references to "other
enterprises" shall include employee benefit plans; references to "fines"
shall include any excise taxes assessed on a person with respect to an
employee benefit plan; and references to "serving at the request of the
corporation" shall include any service as a Director, officer, employee or
agent of the Company which imposes duties on, or involves services by, such
Director, officer, employee, or agent with respect to an employee benefit
plan, its participants, or beneficiaries; and a person who acted in good
faith and in a manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed
to have acted in a manner "not opposed to the best interests of the
Company" as referred to in this Section 1 of Article V.
ARTICLE VI
Books and Records
SECTION 1. Location. The books and records of the Company may be
kept at such place or places within or outside the State of Delaware as the
Board of Directors or the officers in charge thereof may from time to time
determine. The record books containing the names and addresses of all
stockholders, the number and class of shares of stock held by each and the
dates when they respectively became the owners of record thereof shall be
kept by the Secretary as prescribed in the By-laws and by such officer or
agent as shall be designated by the Board of Directors.
SECTION 2. Addresses of Stockholders. Notices of meetings and all
other corporate notices may be delivered personally or mailed to each
stockholder at the stockholder's address as it appears on the records of
the Company.
SECTION 3. Fixing Date for Determination of Stockholders of
Record. (a) In order that the Company may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors and which record date
shall not be more than 60 nor less than 10 days before the date of such
meeting. If no record date is fixed by the Board of Directors, the record
date for determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new
record date for the adjourned meeting.
(b) In order that the Company may determine the stockholders
entitled to consent to corporate action in writing without a meeting, the
Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is
adopted by the Board of Directors and which date shall not be more than 10
days after the date upon which the resolution fixing the record date is
adopted by the Board of Directors. If no record date has been fixed by the
Board of Directors, the record date for determining stockholders entitled
to consent to corporate action in writing without a meeting, when no prior
action by the Board of Directors is required, shall be the first date on
which a signed written consent setting forth the action taken or proposed
to be taken is delivered to the Company by delivery to its registered
office in this State, its principal place of business, or an officer or
agent of the Company having custody of the book in which proceedings of
meetings of stockholders are recorded. Delivery made to the Company's
registered office shall be by hand or by certified or registered mail,
return receipt requested. If no record date has been fixed by the Board of
Directors and prior action by the Board of Directors is required by this
chapter, the record date for determining stockholders entitled to consent
to corporate action in writing without a meeting shall be at the close of
business on the day on which the Board of Directors adopts the resolution
taking such prior action.
(c) In order that the Company may determine the stockholders
entitled to receive payment of any dividend or other distribution or
allotment of any rights or the stockholders entitled to exercise any rights
in respect of any change, conversion or exchange of stock, or for the
purpose of any other lawful action, the Board of Directors may fix a record
date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted and which record date shall be
not more than 60 days prior to such action. If no record date is fixed, the
record date for determining stockholders for any such purpose shall be at
the close of business on the day on which the Board of Directors adopts the
resolution relating thereto.
ARTICLE VII
Certificates Representing Stock
SECTION 1. Certificates; Signatures. The shares of the Company
shall be represented by certificates, provided that the Board of Directors
of the Company may provide by resolution or resolutions that some or all of
any or all classes or series of its stock shall be uncertificated shares.
Any such resolution shall not apply to shares represented by a certificate
until such certificate is surrendered to the Company. Notwithstanding the
adoption of such a resolution by the Board of Directors, every holder of
stock of the Company represented by certificates and upon request every
holder of uncertificated shares shall be entitled to have a certificate,
signed by or in the name of the Company by the Chairman or Vice-Chairman of
the Board of Directors, or the President or Vice-President, and by the
Treasurer or an Assistant Treasurer, or the Secretary or an Assistant
Secretary of the Company, representing the number of shares registered in
certificate form. Any and all signatures on any such certificate may be
facsimiles. In case any officer, transfer agent or registrar who has signed
or whose facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Company with the same effect
as if he were such officer, transfer agent or registrar at the date of
issue. The name of the holder of record of the shares represented thereby,
with the number of such shares and the date of issue, shall be entered on
the books of the Company.
SECTION 2. Transfers of Stock. Upon compliance with provisions
restricting the transfer or registration of transfer of shares of stock, if
any, shares of capital stock shall be transferable on the books of the
Company only by the holder of record thereof in person, or by duly
authorized attorney, upon surrender and cancellation of certificates for a
like number of shares, properly endorsed, and the payment of all taxes due
thereon.
SECTION 3. Fractional Shares. The Company may, but shall not be
required to, issue certificates for fractions of a share where necessary to
effect authorized transactions, or the Company may pay in cash the fair
value of fractions of a share as of the time when those entitled to receive
such fractions are determined, or it may issue scrip in registered or
bearer form over the manual or facsimile signature of an officer of the
Company or of its agent, exchangeable as therein provided for full shares,
but such scrip shall not entitle the holder to any rights of a stockholder
except as therein provided.
The Board of Directors shall have power and authority to make all
such rules and regulations as it may deem expedient concerning the issue,
transfer and registration of certificates representing shares of the
Company.
SECTION 4. Lost, Stolen or Destroyed Certificates. The Company
may issue a new certificate of stock in place of any certificate,
theretofore issued by it, alleged to have been lost, stolen or destroyed,
and the Board of Directors may require the owner of any lost, stolen or
destroyed certificate, or his legal representative, to give the Company a
bond sufficient to indemnify the Company against any claim that may be made
against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of any such new certificate.
ARTICLE VIII
Dividends
Subject to applicable law and the Certificate of Incorporation,
the Board of Directors shall have full power to determine whether any, and,
if any, what part of any, funds legally available for the payment of
dividends shall be declared as dividends and paid to stockholders; the
division of the whole or any part of such funds of the Company shall rest
wholly within the lawful discretion of the Board of Directors, and it shall
not be required at any time, against such discretion, to divide or pay any
part of such funds among or to the stockholders as dividends or otherwise;
and before payment of any dividend, there may be set aside out of any funds
of the Company available for dividends such sum or sums as the Board of
Directors from time to time, in its absolute discretion, thinks proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or
for repairing or maintaining any property of the Company, or for such other
purpose as the Board of Directors shall think conducive to the interest of
the Company, and the Board of Directors may modify or abolish any such
reserve in the manner in which it was created.
ARTICLE IX
Ratification
Any transaction, questioned in any law suit on the ground
of lack of authority, defective or irregular execution, adverse interest of
director, officer or stockholder, non-disclosure, miscomputation, or the
application of improper principles or practices of accounting, may be
ratified before or after judgment, by the Board of Directors or by the
stockholders, and if so ratified shall have the same force and effect as if
the questioned transaction had been originally duly authorized. Such
ratification shall be binding upon the Company and its stockholders and
shall constitute a bar to any claim or execution of any judgment in respect
of such questioned transaction.
ARTICLE X
Corporate Seal
The corporate seal shall have inscribed thereon the name of the
Company and the year of its incorporation, and shall be in such form and
contain such other words and/or figures as the Board of Directors shall
determine. The corporate seal may be used by printing, engraving,
lithographing, stamping or otherwise making, placing or affixing, or
causing to be printed, engraved, lithographed, stamped or otherwise made,
placed or affixed, upon any paper or document, by any process whatsoever,
an impression, facsimile or other reproduction of said corporate seal.
ARTICLE XI
Fiscal Year
The fiscal year of the Company shall be fixed, and shall be
subject to change, by the Board of Directors. Unless otherwise fixed by the
Board of Directors, the fiscal year of the Company shall be the calendar
year.
ARTICLE XII
Waiver of Notice
Whenever notice is required to be given by these By-laws or by
the Certificate of Incorporation or by law, a written waiver thereof,
signed by the person or persons entitled to said notice, whether before or
after the time stated therein, shall be deemed equivalent to notice.
ARTICLE XIII
Bank Accounts, Drafts, Contracts, Etc.
SECTION 1. Bank Accounts and Drafts. In addition to such bank
accounts as may be authorized by the Board of Directors, the primary
financial officer or any person designated by said primary financial
officer, whether or not an employee of the Company, may authorize such bank
accounts to be opened or maintained in the name and on behalf of the
Company as he may deem necessary or appropriate, payments from such bank
accounts to be made upon and according to the check of the Company in
accordance with the written instructions of said primary financial officer,
or other person so designated by the Treasurer.
SECTION 2. Contracts. The Board of Directors may authorize any
person or persons, in the name and on behalf of the Company, to enter into
or execute and deliver any and all deeds, bonds, mortgages, contracts and
other obligations or instruments, and such authority may be general or
confined to specific instances.
SECTION 3. Proxies; Powers of Attorney; Other Instruments. The
Chairman, the President or any other person designated by either of them
shall have the power and authority to execute and deliver proxies, powers
of attorney and other instruments on behalf of the Company in connection
with the rights and powers incident to the ownership of stock by the
Company. The Chairman, the President or any other person authorized by
proxy or power of attorney executed and delivered by either of them on
behalf of the Company may attend and vote at any meeting of stockholders of
any company in which the Company may hold stock, and may exercise on behalf
of the Company any and all of the rights and powers incident to the
ownership of such stock at any such meeting, or otherwise as specified in
the proxy or power of attorney so authorizing any such person. The Board of
Directors, from time to time, may confer like powers upon any other person.
SECTION 4. Financial Reports. The Board of Directors may appoint
the primary financial officer or other fiscal officer to cause to be
prepared and furnished to stockholders entitled thereto any special
financial notice and/or financial statement, as the case may be, which may
be required by any provision of law.
ARTICLE XIV
Amendments
These By-laws may only be amended, modified or repealed, and new
By-laws adopted, by the vote of the stockholders of the Company. In
addition to the vote required by Section 6 of Article I of these By-laws,
the affirmative vote of the Required Holders (as defined in the
Stockholders' Agreement) shall be required to adopt, amend, modify or
repeal these By-laws. Amendment, modification, repeal or adoption of the
By-laws shall not be made by any other means.
Exhibit D(1)
BEAR XXXXXXX MERCHANT FUND CORP.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
June 22, 2000
HB Finance LLC
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Re: Equity Commitment
Ladies and Gentlemen:
In accordance with our recent discussions, Bear Xxxxxxx
Merchant Fund Corp., a Delaware corporation, or an affiliate thereof (the
"Equity Investor") is pleased to commit to make or otherwise arrange for a
cash contribution of equity to Xxxxx Xxxxxxxx Corporation ("Target") in an
aggregate amount equal to $150,000,000 ("Equity Investment") in connection
with the merger of HB Merger LLC, a Delaware limited liability company
("Mergerco") with and into Target (the "Merger") pursuant to a merger
agreement between you, Mergerco and Target (the "Merger Agreement"). Such
equity contribution (the "Equity Commitment") shall form part of the Equity
to be contributed by the Sponsor Group (the "Investor Equity Contribution")
to be used for the Merger (such terms, as well as other capitalized terms
not otherwise defined herein, having the meanings assigned to them in the
Senior Credit Facilities Commitment Letter of even date herewith among you,
Bear, Xxxxxxx & Co. Inc. and Bear Xxxxxxx Corporate Lending Inc. (the
"Commitment Letter")).
The Equity Investor's commitment hereunder is subject to (a)
the satisfaction, in the independent judgment of the Equity Investor, of
the conditions set forth in the Merger Agreement with respect to the
consummation of the Merger without giving effect to any modification or
waiver effected without the Equity Investor's prior written consent, (b)
the satisfaction, in the independent judgment of the Equity Investor, of
the conditions set forth in the Commitment Letter without giving effect to
any modification or waiver effected without the Equity Investor's prior
written consent, (c) the satisfaction, in the independent judgment of the
Equity Investor, of the conditions set forth in any other equity commitment
letter forming a part of the Investor Equity Contribution, without giving
effect to any modification or waiver effected without the Equity Investor's
prior written consent, and (d) the concurrent (i) funding of the debt
financing contemplated by the Commitment Letter, (ii) funding of the other
equity commitments forming a part of the Investor Equity Contribution,
(iii) rollover of at least $10,000,000 in the aggregate of common stock and
junior preferred stock of Target by certain members of management of
Target, and (iv) consummation of the Merger contemporaneous with the
funding of the Equity Investment by the Equity Investor.
The commitment set forth in this letter shall expire,
terminate and be of no further force of effect upon termination of the
Commitment Letter (unless definitive documentation with respect to the
Facilities shall have been entered into by the Borrower prior thereto).
No person or entity other than you shall be entitled to rely
on this commitment letter. This commitment letter is not assignable by you
(other than an assignment of your rights and obligations hereunder to
Target concurrently with the closing of the Merger and only if the Merger
occurs) and any purported assignment shall be void. This commitment letter
shall be binding on and inure solely to the benefit of each party hereto
and (other than to the extent specifically set forth in the next three
paragraphs) nothing in this commitment letter, express or implied, is
intended to or shall confer upon any other person any rights, benefits or
remedies whatsoever under or by reason of this commitment letter.
In the event the Merger is not consummated, and pursuant to
the Merger Agreement or otherwise Target or one or more of its affiliates
pays to you or one or more of your affiliates or designees a termination or
"break-up" fee or any other payment, you will pay or cause your affiliates
or designees to pay, as applicable, such termination or "break-up fee" or
any other payment 58.3% to HMTF Bridge Partners, L.P. or its designee and
41.7% to the Equity Investor or its designee after payment in full of the
expenses and fees set forth in paragraph 3(e) of that certain letter
agreement dated of even date herewith by and among you and Bear, Xxxxxxx &
Co. Inc. The Equity Investor shall be entitled to reimbursement with
respect to its reasonable and documented out-of-pocket expenses incurred in
connection with the consummation of the Merger; provided, however, that in
the event that the Merger is not consummated, the Equity Investor only
shall be reimbursed to the extent that Target or one or more of its
affiliates pays to you or one or more of your affiliates, pursuant to the
Merger Agreement or otherwise, any amounts in respect of expenses incurred
by you or one or more of your affiliates (including, if applicable, any of
the other persons contributing equity as part of the Investor Equity
Contribution) and to the extent that such amounts paid by Target or one or
more of its affiliates is insufficient to reimburse in full each such
person making an equity commitment as part of the Investor Equity
Contribution (the "Equity Participants"), such amounts shall be shared
among the Equity Participants 41.7% to the Equity Investor or its designee
and 58.3% to HMTF Bridge Partners, L.P. or its designee.
You agree to indemnify and hold harmless the Equity
Investor, and its affiliates, owners, officers, directors, agents, and
employees (collectively, the "Indemnified Persons") against all expenses,
damages, claims, and liabilities suffered or incurred by any of them
arising out of or in connection with this letter and the transactions
contemplated hereby (including those resulting from any Indemnified
Person's negligence), provided that the foregoing will not apply to any
losses of an Indemnified Person to the extent they are found by a final
decision of a court of competent jurisdiction to have resulted solely from
the gross negligence or willful misconduct of such Indemnified Person;
provided, however, that if the Merger is not consummated you shall not be
required to reimburse any expenses pursuant to this paragraph except as
otherwise provided in the immediately preceding paragraph. Such indemnity
shall be payable as expenses, damages, and liabilities are incurred and
shall survive any termination of this letter. YOU HEREBY ACKNOWLEDGE THAT
THE FOREGOING INDEMNITY SHALL BE APPLICABLE TO ALL CLAIMS, LIABILITIES,
LOSSES, DAMAGES OR EXPENSES THAT HAVE RESULTED FROM OR ARE ALLEGED TO HAVE
RESULTED FROM THE ACTIVE OR PASSIVE OR THE SOLE, JOINT OR CONCURRENT
ORDINARY NEGLIGENCE OF THE EQUITY INVESTOR OR ANY OTHER INDEMNIFIED PERSON.
IN ADDITION, THE EQUITY INVESTOR ACKNOWLEDGES THAT (A) YOU ARE A SPECIAL
PURPOSE ENTITY FORMED SOLELY FOR THE PURPOSE OF THE MERGER AND (B) YOU HAVE
NO SIGNIFICANT ASSETS OR, EXCEPT AS PROVIDED BY THIS LETTER, THE COMMITMENT
LETTER, ANY OTHER EQUITY COMMITMENT LETTER OR AS CONTEMPLATED BY THE
IMMEDIATELY PRECEDING PARAGRAPH, ACCESS TO CAPITAL AND, ACCORDINGLY, THAT
YOU WILL LIKELY HAVE NO ABILITY TO FULFILL YOUR OBLIGATIONS UNDER THIS
PARAGRAPH UNLESS THE MERGER IS CONSUMMATED.
Notwithstanding anything that may be expressed or implied in
this commitment letter, you, by your acceptance hereof, acknowledge and
agree that (a) notwithstanding that the Equity Investor is a corporation,
no recourse hereunder or under any documents or instruments delivered in
connection herewith may be had against any officer, agent or employee of
the Equity Investor or any direct or indirect holder of any equity
interests or securities of the Equity Investor (whether such holder is a
limited or general partner, member, stockholder or otherwise), any
affiliate of the Equity Investor, or any direct or indirect director,
officer, employee, partner, affiliate, member, controlling person or
representative of any of the foregoing (any such person or entity, a
"Related Person"), whether by the enforcement of any judgement or
assessment or by any legal or equitable proceeding, or by virtue of any
statute, regulation or other applicable law, and (b) no personal liability
whatsoever will attach to, be imposed on or otherwise be incurred by
Related Persons under this commitment letter or any documents or
instruments delivered in connection herewith or with the Transaction or for
any claim based on, in respect of or by reason of such obligations or by
their creation.
This commitment letter shall be governed by the laws of the
State of New York and may be executed in two or more counterparts, each of
which shall be deemed an original or which together shall constitute one
and the same instrument.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
Please indicate your acceptance of the foregoing by
executing and returning to us the enclosed copy of this letter.
Very truly yours,
BEAR XXXXXXX MERCHANT FUND CORP.
By:
---------------------------
Name: Xxxxxxx X. Xxxx
Title: Managing Director
ACCEPTED AND AGREED TO:
HB FINANCE LLC
By:
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and Assistant Secretary
EXHIBIT D(2)
HMTF BRIDGE PARTNERS, L.P
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
June 22, 2000
HB Finance LLC
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Re: Equity Commitment
Ladies and Gentlemen:
In accordance with our recent discussions, HMTF Bridge
Partners, L.P., a Delaware limited partnership (the "Equity Investor") is
pleased to commit to make or otherwise arrange for a cash contribution of
equity to Xxxxx Xxxxxxxx Corporation (the "Target") in an aggregate amount
equal to $350,000,000 ("Equity Investment") in connection with the merger
of HB Merger LLC, a Delaware limited liability company ("Mergerco") with
and into Target (the "Merger") pursuant to a merger agreement between you,
Mergerco and Target (the "Merger Agreement"). Such equity contribution (the
"Equity Commitment") shall form part of the Equity to be contributed by the
Sponsor Group (the "Investor Equity Contribution") to be used for the
Merger (such terms, as well as other capitalized terms not otherwise
defined herein, having the meanings assigned to them in the Senior Credit
Facilities Commitment Letter of even date herewith among you, Bear, Xxxxxxx
& Co. Inc. and Bear Xxxxxxx Corporate Lending Inc. (the "Commitment
Letter")).
The Equity Investor's commitment hereunder is subject to (a)
the satisfaction, in the independent judgment of the Equity Investor, of
the conditions set forth in the Merger Agreement with respect to the
consummation of the Merger without giving effect to any modification or
waiver effected without the Equity Investor's prior written consent, (b)
the satisfaction, in the independent judgment of the Equity Investor, of
the conditions set forth in the Commitment Letter without giving effect to
any modification or waiver effected without the Equity Investor's prior
written consent, (c) the satisfaction, in the independent judgment of the
Equity Investor, of the conditions set forth in any other equity commitment
letter forming a part of the Investor Equity Contribution, without giving
effect to any modification or waiver effected without the Equity Investor's
prior written consent, and (d) the concurrent (i) funding of the debt
financing contemplated by the Commitment Letter, (ii) funding of the other
equity commitments forming a part of the Investor Equity Contribution, and,
(iii) rollover of at least $10,000,000 in the aggregate of common stock and
junior preferred stock of Target by certain members of management of
Target, and (iv) consummation of the Merger contemporaneous with the
funding of the Equity Investment by the Equity Investor.
The commitment set forth in this letter shall expire,
terminate and be of no further force of effect upon termination of the
Commitment Letter (unless definitive documentation with respect to the
Facilities shall have been entered into by the Borrower prior thereto).
No person or entity other than you shall be entitled to rely
on this commitment letter. This commitment letter is not assignable by you
(other than an assignment of your rights and obligations hereunder to
Target concurrently with the closing of the Merger and only if the Merger
occurs) and any purported assignment shall be void. This commitment letter
shall be binding on and inure solely to the benefit of each party hereto
and (other than to the extent specifically set forth in the next three
paragraphs) nothing in this commitment letter, express or implied, is
intended to or shall confer upon any other person any rights, benefits or
remedies whatsoever under or by reason of this commitment letter.
In the event the Merger is not consummated, and pursuant to
the Merger Agreement or otherwise Target or one or more of its affiliates
pays to you or one or more of your affiliates or designees a termination or
"break-up" fee or any other payment, you will pay or cause your affiliates
or designees to pay, as applicable, such termination or "break-up fee" or
any other payment 58.3% to the Equity Investor or its designee and 41.7% to
Bear Xxxxxxx Merchant Fund Corp. or its designee after payment in full of
the expenses and fees set forth in paragraph 3(e) of that certain letter
agreement dated of even date herewith by and among you and Bear, Xxxxxxx &
Co. Inc. The Equity Investor shall be entitled to reimbursement with
respect to its reasonable and documented out-of-pocket expenses incurred in
connection with the consummation of the Merger; provided, however, that in
the event that the Merger is not consummated, the Equity Investor shall
only be reimbursed to the extent that Target or one or more of its
affiliates pays to you or one or more of your affiliates, pursuant to the
Merger Agreement or otherwise, any amounts in respect of expenses incurred
by you or one or more of your affiliates (including, if applicable, any of
the other persons contributing equity as part of the Investor Equity
Contribution) and to the extent that such amounts paid by Target or one or
more of its affiliates is insufficient to reimburse in full each such
person making an equity commitment as part of the Investor Equity
Contribution (the "Equity Participants"), such amounts shall be shared
among the Equity Participants 58.3% to the Equity Investor or its designee
and 41.7% to Bear Xxxxxxx Merchant Fund Corp. or its designee.
You agree to indemnify and hold harmless the Equity
Investor, and its affiliates, owners, partners, officers, directors,
agents, and employees (collectively, the "Indemnified Persons") against all
expenses, damages, claims, and liabilities suffered or incurred by any of
them arising out of or in connection with this letter and the transactions
contemplated hereby (including those resulting from any Indemnified
Person's negligence), provided that the foregoing will not apply to any
losses of an Indemnified Person to the extent they are found by a final
decision of a court of competent jurisdiction to have resulted solely from
the gross negligence or willful misconduct of such Indemnified Person;
provided, however, that if the Merger is not consummated you shall not be
required to reimburse any expenses pursuant to this paragraph except as
otherwise provided in the immediately preceding paragraph. Such indemnity
shall be payable as expenses, damages, and liabilities are incurred and
shall survive any termination of this letter. YOU HEREBY ACKNOWLEDGE THAT
THE FOREGOING INDEMNITY SHALL BE APPLICABLE TO ALL CLAIMS, LIABILITIES,
LOSSES, DAMAGES OR EXPENSES THAT HAVE RESULTED FROM OR ARE ALLEGED TO HAVE
RESULTED FROM THE ACTIVE OR PASSIVE OR THE SOLE, JOINT OR CONCURRENT
ORDINARY NEGLIGENCE OF THE EQUITY INVESTOR OR ANY OTHER INDEMNIFIED PERSON.
IN ADDITION, THE EQUITY INVESTOR ACKNOWLEDGES THAT (A) YOU ARE A SPECIAL
PURPOSE ENTITY FORMED SOLELY FOR THE PURPOSE OF THE MERGER AND (B) YOU HAVE
NO SIGNIFICANT ASSETS OR, EXCEPT AS PROVIDED BY THIS LETTER, THE COMMITMENT
LETTER, ANY OTHER EQUITY COMMITMENT LETTER OR AS CONTEMPLATED BY THE
IMMEDIATELY PRECEDING PARAGRAPH, ACCESS TO CAPITAL AND, ACCORDINGLY, THAT
YOU WILL LIKELY HAVE NO ABILITY TO FULFILL YOUR OBLIGATIONS UNDER THIS
PARAGRAPH UNLESS THE MERGER IS CONSUMMATED.
Notwithstanding anything that may be expressed or implied in
this commitment letter, you, by your acceptance hereof, acknowledge and
agree that (a) notwithstanding that the Equity Investor is a partnership,
no recourse hereunder or under any documents or instruments delivered in
connection herewith may be had against any officer, agent or employee of
the Equity Investor, any direct or indirect holder of any equity interests
or securities of the Equity Investor (whether such holder is a limited or
general partner, member, stockholder or otherwise), any affiliate of the
Equity Investor, or any direct or indirect director, officer, employee,
partner, affiliate, member, controlling person or representative of any of
the foregoing (any such person or entity, a "Related Person"), whether by
the enforcement of any judgement or assessment or by any legal or equitable
proceeding, or by virtue of any statute, regulation or other applicable
law, and (b) no personal liability whatsoever will attach to, be imposed on
or otherwise be incurred by Related Persons under this commitment letter or
any documents or instruments delivered in connection herewith or with the
Transaction or for any claim based on, in respect of or by reason of such
obligations or by their creation.
This commitment letter shall be governed by the laws of the
State of New York and may be executed in two or more counterparts, each of
which shall be deemed an original or which together shall constitute one
and the same instrument.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
Please indicate your acceptance of the foregoing by
executing and returning to us the enclosed copy of this letter.
Very truly yours,
HMTF BRIDGE PARTNERS, L.P.
By: HMTF Bridge Partners, LLC,
its general partner
By:
----------------------------
Name: Xxxxxx Xxxxx
Title: Principal
ACCEPTED AND AGREED TO:
HB FINANCE LLC
By:
----------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President and Assistant Secretary
EXHIBIT E
BEAR, XXXXXXX & CO. INC.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
BEAR XXXXXXX CORPORATE LENDING INC.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
June 22, 2000
Senior Credit Facilities
Commitment Letter
HB Finance LLC
c/o Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Mr. Xxxx Xxxxx
and
c/o Bear Xxxxxxx Merchant Fund Corp.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mr. Xxxx Xxxxxx
Ladies and Gentlemen:
You have advised Bear, Xxxxxxx & Co. Inc. ("Bear Xxxxxxx") and
Bear Xxxxxxx Corporate Lending Inc. ("BSCL") that Hicks, Muse, Xxxx & Xxxxx
Incorporated and Bear Xxxxxxx Merchant Fund Corp. (collectively, the
"Sponsors") intend, together with certain of their respective affiliates
and certain other investors (collectively with the Sponsors, the "Sponsor
Group") and certain existing stockholders and members of management of the
Target referred to below (the "Rollover Shareholders" and, together with
the Sponsor Group, the "Investor Group"), to cause your affiliate, HB
Merger LLC ("Mergerco"), a newly-formed limited liability company owned by
the Sponsor Group, to enter into a merger agreement (the "Merger
Agreement") with Xxxxx Xxxxxxxx Corporation, a Delaware corporation (the
"Target"), pursuant to which Mergerco will be merged (the "Merger") with
and into the Target (with the Target as the surviving corporation) and the
Investor Group will acquire all of the outstanding capital stock and
options of the Target (the "Transaction"). You have further advised us that
the Transaction will be effected pursuant to a recapitalization (the
"Recapitalization") in which the Investor Group will subscribe for and
purchase newly issued equity of the Target or, in the case of the Rollover
Shareholders, roll over certain of their existing common equity of the
Target into a combination of pay-in-kind preferred, junior preferred and
common equity of the Target, and that certain existing indebtedness of the
Target will be refinanced (the "Refinancing") concurrently with the
consummation of the Recapitalization (currently estimated to be
$471,800,000 at the closing of the Transaction), all as more specifically
described in the Sources and Uses Table attached hereto as Schedule I. In
connection with the Recapitalization, the Target will transfer all of its
assets to a wholly-owned subsidiary of the Target reasonably acceptable to
Bear Xxxxxxx and BSCL (the "Borrower"). References herein to the
"Transaction" shall include the financings described herein (including the
Merger and the Refinancing) and all other transactions related to the
Transaction.
You have also advised us that you propose to finance the
Transaction and the related premiums, fees, expenses and tax settlement
costs from the following sources: (a) $853,100,000 in common and preferred
equity of the Target on the terms described in the Transaction
Documentation (as defined in the Term Sheet described below) or as
otherwise reasonably satisfactory to us (the "Equity"), consisting of no
less than $500,000,000 contributed in cash by the Sponsor Group and
approximately $353,100,000 (based on liquidation preference in the case of
preferred stock and based on the consideration per share paid in the
Transaction in the case of common stock) in pay-in-kind preferred stock of
the Target (the "Rollover PIK Preferred Stock"), junior preferred stock of
the Target (the "Junior Preferred Stock") and common stock of the Target
(the "Rollover Common Equity"), (b) approximately $1,750,000,000 from
senior secured credit facilities (such credit facilities, the "Senior
Credit Facilities") of the Borrower comprised of term loan facilities
aggregating $1,450,000,000 (the "Term Loan Facilities") and a $300,000,000
revolving credit facility (the "Revolving Credit Facility") (of which
approximately $108,400,000 is expected, subject to changes in (i) the
Target's and its subsidiaries' existing bank debt in the ordinary course of
business, (ii) the amount of excess cash on the Target's balance sheet at
the closing of the Transaction and (iii) the amount of the management
equity rollover, to be drawn initially to finance the Transaction), (c)
excess cash on the Target's balance sheet expected to be available at the
closing of the Transaction (currently estimated to be $54,300,000) and (d)
at least $600,000,000 in gross cash proceeds from either (i) the issuance
by the Borrower of senior subordinated unsecured notes (the "Senior
Subordinated Notes") in a public offering or Rule 144A private placement or
(ii) in the event the Borrower is unable to issue the full amount of the
Senior Subordinated Notes at or prior to the time the Transaction is
consummated, borrowings under a senior subordinated bridge facility (the
"Senior Subordinated Bridge Facility"; together with the Senior Credit
Facilities, the "Facilities") as interim bridge financing to the Senior
Subordinated Notes. The Revolving Credit Facility will be used to finance
(x) a portion of the cost of the Transaction and (y) the continuing
operations of the Borrower and its subsidiaries after the Transaction.
Bear Xxxxxxx is pleased to advise you that it is willing to act
as exclusive advisor, sole lead arranger and sole book manager for the
Senior Credit Facilities.
Furthermore, BSCL is pleased to advise you of its commitment to
provide (or to cause one of its subsidiaries or affiliates to provide) the
entire amount of the Senior Credit Facilities, upon the terms and subject
to the conditions set forth or referred to in this commitment letter (this
"Commitment Letter") and in the Summary of Terms and Conditions attached
hereto as Exhibit A (the "Term Sheet").
It is agreed that Bear Xxxxxxx will act as the sole and
exclusive advisor, lead arranger and book manager for the Senior Credit
Facilities, and that Bear Xxxxxxx will, in such capacity, perform the
duties and exercise the authority customarily performed and exercised by it
in such role. You agree that no other agents, co-agents, lead arrangers or
book managers will be appointed, no other titles will be awarded and no
compensation (other than that expressly contemplated by the Term Sheet and
the Fee Letter referred to below) will be paid in connection with the
Senior Credit Facilities, unless you and we shall so agree.
We intend to syndicate the Senior Credit Facilities to a group
of financial institutions identified by us in consultation with you and
acceptable to you (such acceptance not to be unreasonably withheld)
(together with BSCL, the "Senior Lenders"). Bear Xxxxxxx intends to
commence syndication efforts promptly following the execution of the Merger
Agreement, and you agree actively to assist, and to cause the Sponsors and
the Target actively to assist, Bear Xxxxxxx in completing a syndication
satisfactory to it and you. Such assistance shall include (a) your using
commercially reasonable efforts to ensure that the syndication efforts
benefit materially from the Sponsors' existing lending relationships and
the existing lending relationships of the Target, (b) direct contact
between senior management and advisors of the Target and the Sponsors and
the proposed Senior Lenders, (c) assistance in the preparation of a
Confidential Information Memorandum and other marketing materials to be
used in connection with the syndication and (d) the hosting, with Bear
Xxxxxxx, of one or more meetings of prospective Senior Lenders. You also
agree that, at your expense, you will work with Bear Xxxxxxx to procure a
rating for the Senior Credit Facilities by Xxxxx'x Investors Service, Inc.
and Standard & Poor's Ratings Group prior to the commencement of the
syndication of the Senior Credit Facilities. Without limiting or otherwise
affecting the foregoing and the other conditions to BSCL's commitment set
forth herein, it is understood and agreed that BSCL's commitment hereunder
is not subject to the successful syndication of the Senior Credit
Facilities or a credit rating being obtained.
Bear Xxxxxxx will manage all aspects of the syndication in
consultation with you, including decisions as to the selection of
institutions to be approached and when they will be approached, when their
commitments will be accepted, which institutions will participate, the
allocations of the commitments among the Senior Lenders and the amount and
distribution of fees among the Senior Lenders. To assist Bear Xxxxxxx in
its syndication efforts, you agree promptly to prepare and provide, and to
cause the Target promptly to prepare and provide, to Bear Xxxxxxx all
information with respect to the Target and the Transaction, including all
projections, pro forma financial statements, financial models and business
plans (collectively, the "Projections"), as we may reasonably request in
connection with the arrangement and syndication of the Senior Credit
Facilities. You hereby represent and covenant that (a) all information,
other than the Projections (the "Information"), that has been or will be
made available to Bear Xxxxxxx by you, the Target or any of your respective
representatives in connection with the transactions contemplated hereby,
taken as a whole, is or will be, when furnished, complete and correct in
all material respects and does not or will not, when furnished, contain any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not materially
misleading in light of the circumstances under which such statements are
made and (b) the Projections that have been or will be made available to
Bear Xxxxxxx by you, the Target or any of your respective representatives
have been or will be prepared in good faith based upon reasonable
assumptions at the time of the preparation thereof; provided that such
representation and warranty with respect to Information and Projections
provided by the Target shall be limited to your actual knowledge. You
understand that in arranging and syndicating the Senior Credit Facilities
we may use and rely on the Information and the Projections without
independent verification thereof.
As consideration for BSCL's commitment hereunder and Bear
Xxxxxxx' agreement to perform the services described herein, you agree to
pay, or to cause the Borrower to pay, to BSCL the nonrefundable fees set
forth in Annex I to the Term Sheet and in the Fee Letter dated the date
hereof and delivered herewith (the "Fee Letter").
BSCL's commitment hereunder and Bear Xxxxxxx' agreement to
perform the services described herein are subject to (a) our reasonable
satisfaction that there shall not have occurred or become known to us after
the date hereof any event, development, condition or circumstance that has
had or could reasonably be expected to have a material adverse effect on
the Transaction or on the business, assets, property, condition (financial
or otherwise), results of operations or prospects of the Target and its
subsidiaries, taken as a whole, (b) our not becoming aware after the date
hereof of any information or other material matter (including any matter
relating to financial models and underlying assumptions relating to the
Projections) affecting the Target or the Transaction that in our reasonable
judgment is inconsistent in a material and adverse manner to the Target and
its subsidiaries, taken as a whole, with any such information or other
matter disclosed to us prior to the date hereof, (c) there not having
occurred and being continuing after the date hereof a material disruption
of or material adverse change in financial, banking or capital market
conditions that, in our sole discretion, could materially impair the
syndication of the Senior Credit Facilities, (d) our satisfaction that
prior to and during the syndication of the Senior Credit Facilities there
shall be no competing offering, placement or arrangement of any debt
securities or bank financing by or on behalf of the Sponsors, any affiliate
thereof or, from and after the execution of the Merger Agreement, the
Target or any of its subsidiaries (which, in the case of the Sponsors or
any of their affiliates, would materially impair the syndication of the
Senior Credit Facilities) (other than the offering and placement of the
Senior Subordinated Notes and the Senior Subordinated Bridge Facility and
other facilities disclosed to Bear Xxxxxxx and BSCL the syndication of
which is coordinated with the syndication of the Senior Credit Facilities
to the reasonable satisfaction of Bear Xxxxxxx and BSCL), (e) the
negotiation, execution and delivery of definitive documentation with
respect to the Senior Credit Facilities satisfactory to Bear Xxxxxxx and
its counsel on or before the earlier of (A) the date which is 30 days after
the then-operative termination date of the Merger Agreement and (B)
February 28, 2001, (f) your compliance with your covenants and agreements
with us under this Commitment Letter and the Fee Letter in respect of the
Transaction, and (g) the other conditions set forth or referred to herein
or in the Fee Letter or the Term Sheet. Those matters that are not covered
by the provisions hereof (including the immediately preceding paragraph
hereof) and of the Term Sheet are subject to the approval and agreement of
Bear Xxxxxxx, BSCL and the Sponsors.
You agree (a) to indemnify and hold harmless Bear Xxxxxxx,
BSCL, their affiliates and their respective officers, directors, employees,
advisors, and agents (each, an "Indemnified Person") as set forth in Annex
A hereto and (b) to reimburse Bear Xxxxxxx, BSCL and their affiliates from
time to time upon presentation of reasonable supporting documentation for
all reasonable out-of-pocket expenses (including due diligence expenses,
syndication expenses, consultant's fees and expenses, travel expenses, and
fees, charges and disbursements of counsel) incurred in connection with the
Senior Credit Facilities and any related documentation (including this
Commitment Letter, the Term Sheet, the Fee Letter and the definitive
financing documentation) or the amendment, modification or waiver of this
Commitment Letter, the Term Sheet or the Fee Letter; provided that if the
Transaction is not consummated you shall not be required to reimburse any
expenses pursuant to this clause (b) except as otherwise agreed in writing
between you and Bear Xxxxxxx. No Indemnified Person shall be liable for any
damages arising from the use by unauthorized persons of Information or
other materials sent through electronic, telecommunications or other
information transmission systems that are intercepted by such persons or
for any special, indirect, consequential or punitive damages in connection
with the Senior Credit Facilities.
You acknowledge that Bear Xxxxxxx and its affiliates (the term
"Bear Xxxxxxx" as used below in this paragraph being understood to include
such affiliates) may be providing debt financing, equity capital or other
services (including financial advisory services) to other persons in
respect of which you or the Sponsors may have conflicting interests. Bear
Xxxxxxx will not use confidential information obtained from you or the
Sponsors by virtue of the Transaction or its other relationships with you
or the Sponsors in connection with the performance by Bear Xxxxxxx of
services for other persons, and Bear Xxxxxxx will not furnish any such
information to other persons. You also acknowledge that Bear Xxxxxxx has no
obligation to use in connection with the Transaction, or to furnish to you,
confidential information obtained from other persons.
This Commitment Letter shall not be assignable by you (other
than (i) an assignment of your rights hereunder to an affiliate of yours
which becomes a party to, and succeeds to all of your rights under, the
Merger Agreement, or (ii) an assignment of your rights and obligations
hereunder and under the Fee Letter to the Target or the Borrower
concurrently with the closing of the Recapitalization and only if the
Recapitalization occurs) without the prior written consent of Bear Xxxxxxx
and BSCL (and any purported assignment without such consent shall be null
and void), is intended to be solely for the benefit of the parties hereto
and is not intended to confer any benefits upon, or create any rights in
favor of, any person (including, without limitation, the Target and the
Borrower) other than the parties hereto and the Indemnified Persons. This
Commitment Letter may not be amended or waived except by an instrument in
writing signed by each of you, Bear Xxxxxxx and BSCL. This Commitment
Letter may be executed in any number of counterparts, each of which shall
be an original, and all of which, when taken together, shall constitute one
agreement. Delivery of an executed signature page of this Commitment Letter
by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof. This Commitment Letter and the Fee Letter are
the only agreements that have been entered into among us with respect to
the Senior Credit Facilities and set forth the entire understanding of the
parties with respect thereto. This Commitment Letter shall be governed by,
and construed in accordance with, the laws of the State of New York.
This Commitment Letter is delivered to you on the understanding
that neither this Commitment Letter, the Term Sheet or the Fee Letter nor
any of their terms or substance shall be disclosed, directly or indirectly,
by you to any other person except (a) to your directors, officers,
committees, agents, employees and advisors and, on a confidential basis, to
the directors, officers, committees, agents, employees and advisors of the
Sponsors and to the directors, officers, agents, employees and advisors of
the Target, in each case who are directly involved in the consideration of
this matter or (b) as may be compelled in a judicial or administrative
proceeding or as otherwise required by law (in which case you agree to
inform us promptly thereof), provided, that the foregoing restrictions
shall cease to apply (except in respect of the Fee Letter and its terms and
substance) after this Commitment Letter has been accepted by you.
The compensation, reimbursement, indemnification and
confidentiality provisions contained herein and in the Fee Letter shall
remain in full force and effect notwithstanding the termination of this
Commitment Letter or BSCL's commitment hereunder; provided, that your
obligations under this Commitment Letter, other than those arising under
the thirteenth paragraph hereof, shall automatically terminate and be
superseded by the provisions of the definitive documentation relating to
the Senior Credit Facilities upon the execution thereof, and you shall
automatically be released from all liability in connection therewith at
such time; provided, further, that in the event that the syndication of the
Senior Credit Facilities has not been successfully completed prior to the
execution of such definitive documentation, you shall enter into, and shall
cause the Borrower to enter into, a satisfactory agreement with Bear
Xxxxxxx and BSCL with respect to the completion of such syndication,
pursuant to which you and the Borrower shall agree to satisfy your
obligations under the fifth, sixth and seventh paragraphs hereof until such
time as such syndication shall have been successfully completed.
No direct or indirect holder of any equity interests or
securities of either party hereto (whether such holder is a limited or
general partner, member, stockholder or otherwise), nor any affiliate of
any party hereto, nor any director, officer, employee, representative,
agent or other controlling person of each of the parties hereto and their
respective affiliates shall have any liability or obligation arising under
this Commitment Letter or the transactions contemplated hereby and the
parties hereto hereby waive and release all claims related to any such
liability or obligation.
You hereby irrevocably submit to the non-exclusive jurisdiction
of any court of the State of New York located in the Borough of Manhattan
in the City of New York or the United States District Court for the
Southern District of the State of New York, or any appellate courts from
any thereof, for the purpose of any suit, action or other proceeding
arising out of this Commitment Letter, the Fee Letter or any of the
agreements or transactions contemplated hereby, which is brought by or
against you and you (i) hereby irrevocably agree that all claims in respect
of any such suit, action or proceeding may be heard and determined in any
such court and (ii) hereby agree not to commence any action, suit or
proceeding relating to this Commitment Letter, the Fee Letter or any such
other agreements or transactions other than in such court except to the
extent mandated by applicable law. You hereby waive any objection that you
may now or hereafter have to the venue of any such suit, action or
proceeding in any such court or that such suit, action or proceeding was
brought in an inconvenient court and agree not to plead or claim the same.
You hereby acknowledge that you have been advised by counsel in the
negotiation, execution and delivery of this Commitment Letter, the Fee
Letter and the other agreements and transactions contemplated hereby, that
neither Bear Xxxxxxx nor BSCL has any fiduciary relationship with or
fiduciary duty to you or any other person arising out of or in connection
with this Commitment Letter, the Fee Letter or any of the other agreements
or transactions contemplated hereby and that neither BSCL nor Bear Xxxxxxx
has been retained to advise or has advised you or any other person pursuant
to this Commitment Letter regarding the wisdom, prudence or advisability of
entering into or consummating the Transaction. EACH OF BEAR XXXXXXX, BSCL
AND YOU HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS COMMITMENT LETTER, THE FEE
LETTER OR ANY OF THE OTHER AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY
AND FOR ANY COUNTERCLAIM RELATING THERETO.
If the foregoing correctly sets forth our agreement, please
indicate your acceptance of the terms hereof and of the Term Sheet and the
Fee Letter by returning to us executed counterparts hereof and of the Fee
Letter not later than the earlier of (i) 5:00 p.m., New York City time, on
June 23, 2000 and (ii) 24 hours after the execution of the Merger
Agreement. BSCL's commitment and Bear Xxxxxxx' agreements herein will
automatically expire at such time in the event Bear Xxxxxxx has not
received such executed counterparts in accordance with the immediately
preceding sentence; provided that BSCL's commitment and Bear Xxxxxxx'
agreements herein will immediately expire upon (i) the execution by the
Target of any agreement with any parties other than the Sponsors which
contemplates the acquisition of all or substantially all of the stock or
assets of the Target or (ii) the termination or expiration of the Merger
Agreement.
Bear Xxxxxxx and BSCL are pleased to have been given the
opportunity to assist you in connection with this important financing.
Very truly yours,
BEAR, XXXXXXX & CO. INC.
By:____________________________
Name:
Title:
BEAR XXXXXXX CORPORATE LENDING
INC.
By:____________________________
Name:
Title:
Accepted and agreed to as of the
date first written above by:
HB FINANCE LLC
By:____________________________
Name:
Title:
Annex A
Capitalized terms used and not otherwise defined herein are
used with the meanings attributed thereto in the Commitment Letter dated
June 22, 2000 (the "Commitment Letter") from Bear, Xxxxxxx & Co. Inc. and
Bear Xxxxxxx Corporate Lending Inc. to HB Finance LLC (the "Indemnifying
Party") of which these Indemnification Provisions form an integral part.
To the fullest extent permitted by applicable law, the
Indemnifying Party agrees that it will indemnify and hold harmless each of
the Indemnified Persons from and against any and all losses, claims,
damages, obligations, penalties, judgments, awards, liabilities, costs,
expenses and disbursements and any and all actions, suits, proceedings and
investigations in respect thereof and any and all reasonable third party
fees, costs, expenses and disbursements in giving testimony or furnishing
documents in response to a subpoena or otherwise (including, without
limitation, the costs, expenses and disbursements, as and when incurred, of
investigating, preparing or defending any such action, proceeding or
investigation (whether or not in connection with litigation in which any of
the Indemnified Persons is a party) and including, without limitation, any
and all losses, claims, damages, obligations, penalties, judgments, awards,
liabilities, costs, expenses and disbursements, resulting from any
negligent act or omission of any of the Indemnified Persons), directly or
indirectly, caused by, relating to, based upon, arising out of or in
connection with (i) the Transaction, (ii) the Commitment Letter, the Fee
Letter or the Senior Credit Facilities, or (iii) any untrue statement or
alleged untrue statement of a material fact contained in, or material
omissions or alleged omissions in, information furnished by the
Indemnifying Party or any of its subsidiaries or affiliates to any of the
Indemnified Persons or any other person in connection with the Transaction
or the Commitment Letter, provided, however, such indemnity agreement shall
not apply to any portion of any such loss, claim, damage, obligation,
penalty, judgment, award, liability, cost, expense or disbursement to the
extent it is found in a final judgment by a court of competent jurisdiction
(not subject to further appeal) to have resulted primarily and directly
from (a) the gross negligence or willful misconduct of any of the
Indemnified Persons or (b) the breach of the Commitment Letter by any
Indemnified Person.
These Indemnification Provisions shall be in addition to any
liability which any Indemnifying Party may have to the Indemnified Persons.
If any action, suit, proceeding or investigation is commenced,
as to which any of the Indemnified Persons proposes to demand
indemnification, it shall notify the Indemnifying Party with reasonable
promptness, provided, however, that any failure by any of the Indemnified
Persons to so notify the Indemnifying Party shall not relieve the
Indemnifying Party from its obligations hereunder, except to the extent it
has been materially prejudiced by such failure. Bear Xxxxxxx, on behalf of
the Indemnified Persons, shall have the right to retain one counsel of its
choice to represent the Indemnified Persons, and the Indemnifying Party
shall pay the reasonable fees, expenses and disbursement of such counsel,
and such counsel shall, to the extent consistent with its professional
responsibilities, cooperate with the Indemnifying Party and any counsel
designated by the Indemnifying Party. The Indemnifying Party shall be
liable for any settlement of any claim against any of the Indemnified
Persons made with its written consent, which consent shall not be
unreasonably withheld. Without the prior written consent of Bear Xxxxxxx
(which consent shall not be unreasonably withheld), the Indemnifying Party
shall not settle or compromise any claim, permit a default or consent to
the entry of any judgment in respect thereof unless (i) such settlement,
compromise or consent includes, as an unconditional term thereof, the
giving by the claimant to each of the Indemnified Persons of an
unconditional and irrevocable release from all liability in respect of such
claim, (ii) the terms of such release do not, in Bear Xxxxxxx' judgment,
materially and adversely affect the business of the Indemnified Persons and
(iii) the Indemnifying Party gives to Bear Xxxxxxx reasonable advance
notice of such settlement, compromise or claim. Notwithstanding the
foregoing, the consent of Bear Xxxxxxx shall not be required for the
settlement or compromise of a claim if (a) such settlement or compromise
involves only the payment of money by the Indemnifying Party, (b) any such
payment is made in full by the Indemnifying Party at the time of such
settlement or compromise, and (c) such settlement or compromise includes,
as an unconditional term thereof, the giving by the claimant to each of the
Indemnified Persons of an unconditional and irrevocable release from all
liability in respect of such claim, and does not involve or constitute an
admission of guilt or liability by an Indemnified Person or contain any
adverse finding of fact with respect thereto.
In order to provide for just and equitable contribution, if a
claim for indemnification pursuant to these Indemnification Provisions is
made but it is found by a judgment of a court of competent jurisdiction
(not subject to further appeal) that such indemnification may not be
enforced in such case, even though the express provisions hereof provided
for indemnification in such case, then the Indemnifying Party, on the one
hand, and the Indemnified Persons, on the other hand, shall contribute to
the losses, claims, damages, obligations, penalties, judgments, awards,
liabilities, costs, expenses and disbursements to which the Indemnified
Persons may be subject in accordance with the relative benefits received by
the Indemnifying Party, on the one hand, and the Indemnified Persons, on
the other hand, and also the relative fault of the Indemnifying Party, on
the one hand, and the Indemnified Persons, on the other hand, in connection
with the statements, acts or omissions which resulted in such losses,
claims, damages, obligations, penalties, judgments, awards, liabilities,
costs, expenses and disbursements and the relevant equitable considerations
shall also be considered. No person found liable for a fraudulent
misrepresentation shall be entitled to contribution from any other person
who is not also found liable for such fraudulent misrepresentation.
Notwithstanding the foregoing, none of the Indemnified Persons shall be
obligated to contribute any amount hereunder that exceeds the amount of
fees previously received by such Indemnified Person pursuant to the
Commitment Letter and the Fee Letter.
Except as provided in the fourteenth paragraph of the
Commitment Letter, the expiration or termination of BSCL's commitment under
the Commitment Letter shall not affect these Indemnification Provisions,
which provisions shall remain operative and in full force and effect.
SCHEDULE I
SOURCES AND USES TABLE
Sources:
-------
Revolving Loans(1) $ 108,400,000(2)
Tranche A Term Loans 500,000,000
Tranche B Term Loans 650,000,000
Tranche C Term Loans 300,000,000
Senior Subordinated Notes or
Senior Subordinated Bridge Facility 600,000,000
Rollover of Existing Indebtedness 16,000,000(2)
Excess Cash 54,300,000(2)
Rollover Equity 353,100,000(3,4)
Sponsor Group Equity 500,000,000(4)
Total Sources $3,081,800,000
==============
Uses:
----
Purchase of Equity $2,279,000,000
Tax Settlement Costs 90,000,000
Rollover of Existing Indebtedness 16,000,000(2)
Rollover Common Equity and Junior
Preferred Stock (other than
Management Rollover Equity) 50,000,000
Management Rollover Common Equity and
Junior Preferred Stock 15,000,000(4)
Refinancing of Existing Indebtedness
(including accrued interest) 471,800,000(2)
Estimated Fees and Expenses 160,000,000
Total Uses $3,081,800,000
==============
-------------
(1) $300,000,000 total facility.
(2) Subject to adjustment at the time of closing as described herein.
(3) Consisting of Rollover PIK Preferred Stock, Junior Preferred Stock
and Rollover Common Equity, based on liquidation preference in the
case of preferred stock and based on the consideration per share paid
in the Transaction in the case of common stock.
(4) Management rollover equity may be less than $15,000,000 but not less
than $10,000,000, with the difference to be made up by Sponsor Group
Equity or additional borrowings under the Revolving Credit Facility.
Exhibit A
$1,750,000,000 SENIOR CREDIT FACILITIES
Summary of Terms and Conditions
June 22, 2000
Hicks, Muse, Xxxx & Xxxxx Incorporated and Bear Xxxxxxx
Merchant Fund Corp. (collectively, the "Sponsors") intend, together with
certain of their respective affiliates and certain other investors
(collectively with the Sponsors, the "Sponsor Group") and certain existing
stockholders and members of management of the Target referred to below (the
"Rollover Shareholders" and, together with the Sponsor Group, the "Investor
Group"), to cause HB Merger LLC ("Mergerco"), a newly-formed limited
liability company owned by the Sponsor Group, to enter into a merger
agreement (the "Merger Agreement") with Xxxxx Xxxxxxxx Corporation, a
Delaware corporation (the "Target"), pursuant to which Mergerco will be
merged (the "Merger") with and into the Target (with the Target as the
surviving corporation) and the Investor Group will acquire all of the
outstanding capital stock and options of the Target (the "Transaction").
The Transaction will be effected pursuant to a recapitalization (the
"Recapitalization") in which the Investor Group will subscribe for and
purchase newly issued equity of the Target or, in the case of the Rollover
Shareholders, roll over certain of their existing common equity of the
Target into a combination of pay-in-kind preferred, junior preferred and
common equity of the Target. The Sponsors intend to refinance (the
"Refinancing") certain existing indebtedness of the Target concurrently
with the consummation of the Recapitalization (currently estimated to be
$471,800,000 at the closing of the Transaction), all as more specifically
described in the Sources and Uses Table attached as Schedule I to the
Commitment Letter of which this Exhibit A is a part. In connection with the
Recapitalization, the Target will transfer all of its assets to a
wholly-owned subsidiary of the Target reasonably acceptable to Bear Xxxxxxx
and BSCL (the "Borrower"). References herein to the "Transaction" shall
include the financings described herein (including the Merger and the
Refinancing) and all other transactions related to the Transaction.
The Transaction and the related premiums, fees, expenses and
tax settlement costs will be financed from the following sources: (a)
$853,100,000 in common and preferred equity of the Target on the terms
described in the Transaction Documentation (as defined in Annex II) or as
otherwise reasonably satisfactory to Bear Xxxxxxx and BSCL (the "Equity"),
consisting of no less than $500,000,000 contributed in cash by the Sponsor
Group and approximately $353,100,000 (based on liquidation preference in
the case of preferred stock and based on the consideration per share paid
in the Transaction in the case of common stock) in pay-in-kind preferred
stock of the Target (the "Rollover PIK Preferred Stock"), junior preferred
stock of the Target (the "Junior Preferred Stock") and common stock of the
Target (the "Rollover Common Equity"), (b) approximately $1,750,000,000
from senior secured credit facilities (such credit facilities, the "Senior
Credit Facilities") of the Borrower comprised of term loan facilities
aggregating $1,450,000,000 (the "Term Loan Facilities") and a $300,000,000
revolving credit facility (the "Revolving Credit Facility") (of which
approximately $108,400,000 is expected, subject to changes in (i) the
Target's and its subsidiaries' existing bank debt in the ordinary course of
business, (ii) the amount of excess cash on the Target's balance sheet at
the closing of the Transaction and (iii) the amount of the management
equity rollover, to be drawn initially to finance the Transaction), (c)
excess cash on the Target's balance sheet expected to be available at the
closing of the Transaction (currently estimated to be $54,300,000) and (d)
at least $600,000,000 in gross cash proceeds from either (i) the issuance
by the Borrower of senior subordinated unsecured notes (the "Senior
Subordinated Notes") in a public offering or Rule 144A private placement or
(ii) in the event the Borrower is unable to issue the full amount of the
Senior Subordinated Notes at or prior to the time the Transaction is
consummated, borrowings under a senior subordinated bridge facility (the
"Senior Subordinated Bridge Facility"; together with the Senior Credit
Facilities, the "Facilities") as interim bridge financing to the Senior
Subordinated Notes. The Revolving Credit Facility will also be used to
finance the continuing operations of the Borrower and its subsidiaries
after the Transaction.
I Parties
-------
Borrower: The Borrower. Certain foreign subsidiaries of the
Borrower may be designated as additional borrowers
under the Revolving Credit Facility on terms and
conditions to be agreed upon.
Guarantors: The Target and each of its direct and indirect
present and future domestic subsidiaries (other
than the Borrower) (the "Guarantors"; the Borrower
and the Guarantors, collectively, the "Credit
Parties"). To the extent subsidiaries of the
Borrower are designated as additional borrowers as
described above, the Borrower will guarantee any
borrowings made by such subsidiaries under the
Revolving Credit Facility.
Advisor, Sole Lead
Arranger and Sole
Book Manager: Bear, Xxxxxxx & Co. Inc. (in such capacity, the
"Lead Arranger").
Syndication Agent: Bear Xxxxxxx Corporate Lending Inc. (in such
capacity, the "Syndication Agent").
Administrative Agent: A Senior Lender acceptable to the Borrower and the
Lead Arranger (in such capacity, the
"Administrative Agent" and, together with the Lead
Arranger and the Syndication Agent, the "Agents").
Senior Lenders: A syndicate of banks, financial institutions and
other entities arranged by the Lead Arranger and
acceptable to the Borrower (such acceptance not to
be unreasonably withheld) (collectively, the
"Senior Lenders").
II Types and Amounts of Senior Credit Facilities
---------------------------------------------
1 Term Loan Facilities
--------------------
Types and Amounts of
Senior Credit
Facilities: Term Loan Facilities in an aggregate amount of
$1,450,000,000 (the loans thereunder, the "Term
Loans") as follows:
Tranche A Term Loan Facility: A six and one
half-year term loan facility (the "Tranche A Term
Loan Facility") in an aggregate principal amount
equal to $500,000,000 (the loans thereunder, the
"Tranche A Term Loans"). The Tranche A Term Loans
shall be repayable in semi-annual installments in
amounts to be agreed upon until the date that is
six and one-half years after the Closing Date (as
defined in Annex II).
Tranche B Term Loan Facility: A seven and one
half-year term loan facility (the "Tranche B Term
Loan Facility") in an aggregate principal amount
equal to $650,000,000 (the loans thereunder, the
"Tranche B Term Loans"). The Tranche B Term Loans
shall be repayable in semi-annual installments in
amounts to be agreed upon until the date that is
seven and one-half years after the Closing Date.
Tranche C Term Loan Facility: An eight and one
half-year term loan facility (the "Tranche C Term
Loan Facility") in an aggregate principal amount
equal to $300,000,000 (the loans thereunder, the
"Tranche C Term Loans"). The Tranche C Term Loans
shall be repayable in semi-annual installments in
amounts to be agreed upon until the date that is
eight and one-half years after the Closing Date.
Availability: The Term Loans shall be made in a single
drawing on the Closing Date.
Purpose: The proceeds of the Term Loans shall be
used to finance the Transaction and to pay
related fees and expenses.
2 Revolving Credit Facility
-------------------------
Type and Amount of
Facility: Six and one half-year Revolving Credit Facility in
the amount of $300,000,000 (or the equivalent
thereof in foreign currencies under the
multi-currency option described below) (the loans
thereunder, the "Revolving Credit Loans").
Availability: The Revolving Credit Facility shall be available on
a revolving basis during the period commencing on
the Closing Date and ending on the six and one
half-year anniversary thereof (the "Revolving
Credit Termination Date"). Not more than
$108,400,000 in Revolving Credit Loans shall be
made on the Closing Date (subject to changes in (i)
the Target's and its subsidiaries' existing bank
debt in the ordinary course of business, (ii) the
amount of excess cash on the Target's balance sheet
at the closing of the Transaction and (iii) the
amount of the management equity rollover).
Letters of Credit: A portion of the Revolving Credit Facility not in
excess of an amount to be agreed shall be available
for the issuance of letters of credit (the "Letters
of Credit") by a Senior Lender to be selected in
the syndication process and agreed to by the
Borrower (in such capacity, the "Issuing Lender").
No Letter of Credit shall have an expiration date
after the earlier of (a) one year after the date of
issuance and (b) five business days prior to the
Revolving Credit Termination Date, provided that
any Letter of Credit with a one-year tenor may
provide for the renewal thereof for additional
one-year periods (which shall in no event extend
beyond the date referred to in clause (b) above).
Drawings under any Letter of Credit shall be
reimbursed by the Borrower (whether with its own
funds or with the proceeds of Revolving Credit
Loans) on the same business day. To the extent that
the Borrower does not so reimburse the Issuing
Lender, the Senior Lenders under the Revolving
Credit Facility shall be irrevocably and
unconditionally obligated to reimburse the Issuing
Lender on a pro rata basis.
Swing Line Loans: A portion of the Revolving Credit Facility not in
excess of an amount to be agreed shall be available
for swing line loans (the "Swing Line Loans") from
a Senior Lender to be selected in the syndication
process and agreed to by the Borrower (in such
capacity, the "Swing Line Lender") on same-day
notice. Any such Swing Line Loans will reduce
availability under the Revolving Credit Facility on
a dollar-for-dollar basis. Each other Senior Lender
under the Revolving Credit Facility shall acquire,
under certain circumstances, an irrevocable and
unconditional pro rata participation in each Swing
Line Loan.
Multi-Currency
Option: Loans under the Revolving Credit Facility shall be
available in foreign currencies to be agreed
("Foreign Currency Loans"), subject to limits for
each such currency to be agreed. The structure of
the manner and mechanics for the funding of Foreign
Currency Loans (i.e. whether Foreign Currency Loans
in one or more countries shall be made available by
all the Senior Lenders or a sub-group of Senior
Lenders consisting of one or more Senior Lenders
fronting on behalf of the other Senior Lenders)
shall be determined by the Syndication Agent after
consultation with the Borrower, but it is the
intention of the Syndication Agent that all the
Senior Lenders under the Revolving Credit Facility
shall share the risk on a pro rata basis.
Maturity: The Revolving Credit Termination Date.
Purpose: The proceeds of the Revolving Credit Loans shall be
used to finance the Transaction and to pay related
fees and expenses and for general corporate
purposes of the Borrower and its subsidiaries in
the ordinary course of business.
III Certain Payment Provisions
--------------------------
Fees and Interest
Rates As set forth on Annex I.
Optional Prepayments
and Commitment
Reductions: Loans may be prepaid and commitments may be reduced
by the Borrower in minimum amounts to be agreed
upon. Optional prepayments of the Term Loans shall
be applied to the Tranche A Term Loans, the Tranche
B Term Loans and the Tranche C Term Loans ratably
in accordance with the then-outstanding amounts
thereof and may not be reborrowed. Optional
prepayments of the Tranche A Term Loans, the
Tranche B Term Loans or the Tranche C Term Loans,
as applicable, shall be applied, first, to the next
two installments thereof, and second, ratably to
the remaining installments thereof in accordance
with the then-remaining number of installments.
Notwithstanding the foregoing, so long as any
Tranche A Term Loans are outstanding, each holder
of Tranche B Term Loans or Tranche C Term Loans
shall have the right to refuse all or any portion
of such prepayment allocable to its Tranche B Term
Loans or Tranche C Term Loans, as the case may be,
on or prior to the second anniversary of the
Closing Date and the amount so refused will be
applied to prepay the Tranche A Term Loans.
Mandatory Prepayments
and Commitment
Reductions: The following amounts shall be applied to prepay
the Term Loans:
(a) 100% of the net proceeds of any incurrence of
certain indebtedness and 50% of the net proceeds of
any sale or issuance of equity (other than
indebtedness in respect of the Senior Subordinated
Notes (or any other subordinated debt securities
issued in lieu of the Senior Subordinated Notes to
refinance or replace the Senior Subordinated Bridge
Facility (the "Take-Out Securities")) and certain
other customary exceptions to be agreed) after the
Closing Date by the Target or any of its
subsidiaries;
(b) 100% of the net proceeds of any sale or other
disposition (including as a result of casualty or
condemnation) by the Target or any of its
subsidiaries of any assets in excess of an amount
to be agreed (except for (i) the sale of inventory
in the ordinary course of business and certain
other dispositions to be agreed on and (ii) a
capacity for reinvestment in like assets within 12
months of such sale or other disposition to be
agreed); and
(c) 50% of excess cash flow (to be defined) for
each fiscal year of the Borrower and its
subsidiaries based on audited annual financial
statements (commencing with the 2001 fiscal year),
provided that no such prepayment shall be required
with respect to any fiscal year for which the ratio
of consolidated total debt to consolidated EBITDA
is less than 3.0 to 1.0.
Each such prepayment of the Term Loans shall be
applied to the Tranche A Term Loans, the Tranche B
Term Loans and the Tranche C Term Loans ratably in
accordance with the then-outstanding amounts
thereof and may not be reborrowed. Mandatory
prepayments of the Tranche A Term Loans, the
Tranche B Term Loans or the Tranche C Term Loans,
as applicable, shall be applied, first, to the next
two installments thereof, and second, ratably to
the remaining installments thereof in accordance
with the then-remaining number of installments.
Notwithstanding the foregoing, so long as any
Tranche A Term Loans are outstanding, each holder
of Tranche B Term Loans or Tranche C Term Loans
shall have the right to refuse all or any portion
of such prepayment allocable to its Tranche B Term
Loans or Tranche C Term Loans, as the case may be,
and the amount so refused will be applied to prepay
the Tranche A Term Loans.
To the extent that the aggregate extensions of
credit under the Revolving Credit Facility exceed
the amount of the Revolving Credit Facility by an
amount to be agreed as a result of fluctuations in
currency exchange rates, the extensions of credit
thereunder shall be reduced by the amount of such
excess. To the extent that there are limits on
borrowings in any particular foreign currency under
the Revolving Credit Facility, borrowings in such
currencies shall be repaid to the extent such
limits are exceeded.
IV Collateral The obligations of each Credit Party in respect of
the Senior Credit Facilities shall be secured by a
perfected first priority security interest in
substantially all of its present and future
tangible and intangible assets (including, without
limitation, intellectual property, owned real
property with a value in excess of an amount to be
agreed and all of the capital stock of the Borrower
and each of its direct and indirect domestic
subsidiaries and 65% of the capital stock of each
of its first-tier foreign subsidiaries), except for
(a) leasehold interests in real property and (b)
those assets as to which the Syndication Agent
shall determine in its discretion that the costs of
obtaining such a security interest are excessive in
relation to the value of the security to be
afforded thereby.
V Certain Conditions
------------------
Initial Conditions: As set forth on Annex II.
On-Going Conditions: The making of each extension of credit shall be
conditioned upon (a) the accuracy in all material
respects of all representations and warranties in
the Credit Documentation (as defined in Annex II)
(including, without limitation, the material
adverse change and litigation representations) and
(b) there being no default or event of default in
existence at the time of, or after giving effect to
the making of, such extension of credit. As used
herein and in the Credit Documentation, a "material
adverse change" shall mean any event, development
or circumstance that has had or could reasonably be
expected to have a material adverse effect on (a)
as of the Closing Date, the Transaction, (b) the
business, assets, property, condition (financial or
otherwise), results of operations or prospects of
the Borrower and its subsidiaries taken as a whole,
or (c) the validity or enforceability of any of the
Credit Documentation or the rights and remedies of
the Agents and the Senior Lenders thereunder.
VI Certain
Documentation
Matters The Credit Documentation shall contain
representations, warranties, covenants and events
of default customary for financings of this type
and other terms deemed appropriate by the Senior
Lenders, including, without limitation (in each
case, with appropriate qualifications and
exceptions to be agreed):
Representations and
Warranties: Financial statements (including pro forma financial
statements); absence of undisclosed liabilities; no
material adverse change; corporate existence;
compliance with law; corporate power and authority;
enforceability of Credit Documentation; no conflict
with law or contractual obligations; no material
litigation; no default; ownership of property;
liens; intellectual property; no burdensome
restrictions; taxes; Federal Reserve regulations;
ERISA; Investment Company Act; subsidiaries;
environmental matters; solvency; labor matters;
accuracy of disclosure; creation and perfection of
security interests; status as senior debt; and no
other designated senior debt.
Affirmative Covenants: Delivery of financial statements, reports, final
accountants' letters, projections, officers'
certificates and other information requested by any
Senior Lender; payment of other obligations;
continuation of business and maintenance of
existence and material rights and privileges;
compliance with laws and material contractual
obligations; maintenance of property and insurance;
maintenance of books and records; right of each of
the Senior Lenders to inspect property and books
and records; notices of defaults, litigation and
other material events; compliance with
environmental laws; further assurances (including,
without limitation, with respect to security
interests in after-acquired property); and
agreement to obtain interest rate protection on
terms and conditions reasonably satisfactory to the
Syndication Agent such that at least 50% of the
long-term debt of the Borrower and its subsidiaries
bears interest at a fixed rate.
Financial Covenants: Minimum fixed charge coverage and maximum total
leverage having terms to be determined.
Negative Covenants: Limitations on: indebtedness; liens; guarantee
obligations; mergers, consolidations, liquidations
and dissolutions; sales of assets; dividends and
other payments in respect of capital stock
(including the Rollover PIK Preferred Stock and the
Junior Preferred Stock); capital expenditures;
investments, loans and advances; optional payments
and modifications of subordinated and other
material debt instruments; transactions with
affiliates; sale and leasebacks; changes in fiscal
year; negative pledge clauses; changes in lines of
business; designated senior debt; and changes in
passive holding company status of the Target.
Events of Default: Nonpayment of principal when due; nonpayment of
interest, fees or other amounts after a grace
period of 5 business days; material inaccuracy of
representations and warranties; violation of
covenants (subject, in the case of certain
affirmative covenants, to a grace period to be
agreed upon); cross-default; bankruptcy events;
certain ERISA events; material judgments; actual or
asserted invalidity of any guarantee or security
document, subordination provisions or security
interest; and a change of control (the definition
of which is to be agreed but in any event including
any change of control in respect of the Senior
Subordinated Notes, any Take-Out Securities or the
Senior Subordinated Bridge Facility).
Voting: Amendments and waivers with respect to the Credit
Documentation shall require the approval of Senior
Lenders holding not less than a majority of the
aggregate amount of the Term Loans, Revolving
Credit Loans, participations in Letters of Credit
and Swing Line Loans and unused commitments under
the Senior Credit Facilities, except that (a) the
consent of each Senior Lender directly affected
thereby shall be required with respect to (i)
reductions in the amount or extensions of the final
maturity of any Loan, (ii) reductions in the rate
of interest or any fee or extensions of any due
date thereof, (iii) increases in the amount or
extensions of the expiry date of any Senior
Lender's commitment and (iv) modifications to the
pro rata provisions of the Credit Documentation,
(b) the consent of Senior Lenders holding not less
than a percentage to be agreed of the aggregate
amount of the Tranche A Term Loans, the Tranche B
Term Loans or the Tranche C Term Loans, as the case
may be, shall be required with respect to
extensions of the scheduled amortization of any
Tranche A Term Loan, Tranche B Term Loan or Tranche
C Term Loan, respectively, and (c) the consent of
100% of the Senior Lenders shall be required with
respect to (i) decreases in any of the voting
percentages and (ii) releases of all or
substantially all of the Guarantors or all or
substantially all of the collateral. In addition,
the consent of Senior Lenders holding a majority of
the aggregate amount of the Tranche A Term Loans,
the Tranche B Term Loans or the Tranche C Term
Loans, as the case may be, shall be required with
respect to certain modifications affecting the Term
Loan Facilities.
Assignments
and Participations: The Senior Lenders shall be permitted to assign and
sell participations in their Loans and commitments,
subject, in the case of assignments (other than
assignments to another Senior Lender or to an
affiliate of a Senior Lender), to the consent of
the Administrative Agent and the Borrower (and, in
the case of any assignment relating to the
Revolving Credit Facility, the Issuing Lender and
the Swing Line Lender) (which consent in each case
shall not be unreasonably withheld) and the giving
of notice to the Syndication Agent. Non-pro rata
assignments shall be permitted. In the case of
partial assignments (other than to another Senior
Lender or to an affiliate of a Senior Lender), the
minimum assignment amount shall be $5,000,000, and,
after giving effect thereto, the assigning Senior
Lender shall have commitments and Loans aggregating
at least $5,000,000, in each case unless otherwise
agreed by the Borrower and the Administrative
Agent. Participants shall have the same benefits as
the Senior Lenders with respect to yield protection
and increased cost provisions. Voting rights of
participants shall be limited to those matters with
respect to which the affirmative vote of the Senior
Lender from which it purchased its participation
would be required as described under "Voting"
above. Pledges of Loans in accordance with
applicable law shall be permitted without
restriction. Promissory notes shall be issued under
the Senior Credit Facilities only upon request.
Yield Protection: The Credit Documentation shall contain customary
provisions (a) protecting the Senior Lenders
against increased costs or loss of yield resulting
from changes in reserve, tax, capital adequacy and
other requirements of law and from the imposition
of or changes in withholding or other taxes and (b)
indemnifying the Senior Lenders for "breakage
costs" incurred in connection with, among other
things, any prepayment of a Eurodollar Loan (as
defined in Annex I) on a day other than the last
day of an interest period with respect thereto.
Expenses and
Indemnification: The Borrower shall pay (a) all reasonable
out-of-pocket expenses of the Agents associated
with the syndication of the Senior Credit
Facilities and the preparation, execution, delivery
and administration of the Credit Documentation and
any amendment or waiver with respect thereto
(including the reasonable fees, disbursements and
other charges of counsel) and (b) all out-of-pocket
expenses of the Agents and the Senior Lenders
(including the reasonable fees, disbursements and
other charges of one counsel to the Agents and one
additional counsel to the Senior Lenders) in
connection with the enforcement of the Credit
Documentation.
The Agents and the Senior Lenders (and their
affiliates and their respective officers,
directors, employees, advisors and agents) will
have no liability for, and will be indemnified and
held harmless against, any loss, liability, cost or
expense incurred in respect of the financing
contemplated hereby or the use or the proposed use
of proceeds thereof (except to the extent resulting
from the gross negligence or willful misconduct of
the indemnified party or a breach by the
indemnified person of its obligations under the
Credit Documentation).
Governing Law and
Forum: State of New York.
Counsel to Lead
Arranger: Xxxxxxx Xxxxxxx & Xxxxxxxx.
Annex I
Interest and Certain Fees
Interest Rate Options: The Borrower may elect that the Loans comprising
each borrowing bear interest at a rate per annum
equal to:
the Base Rate plus the Applicable Margin;
or
the Eurodollar Rate plus the Applicable
Margin.
provided, that (i) all Swing Line Loans shall bear
interest based upon the Base Rate, and (ii) all
Foreign Currency Loans shall bear interest as
described below under "Foreign Currency Loan
Interest and Fees".
As used herein:
"Base Rate" means the higher of (i) the rate of
interest publicly announced by the Administrative
Agent as its prime rate in effect at its principal
office in New York City (the "Prime Rate"), and
(ii) the federal funds effective rate from time to
time plus 0.5%.
"Applicable Margin" means (a) in the case of
Tranche A Term Loans and Revolving Credit Loans (i)
1.50%, if such Loans are Base Rate Loans (as
defined below) and (ii) 2.50%, if such Loans are
Eurodollar Loans (as defined below), (b) in the
case of Tranche B Term Loans (i) 2.00%, if such
Loans are Base Rate Loans and (ii) 3.00%, if such
Loans are Eurodollar Loans and (c) in the case of
Tranche C Term Loans (i) 2.25%, if such Loans are
Base Rate Loans and (ii) 3.25%, if such Loans are
Eurodollar Loans. The foregoing margins shall be
subject to adjustment after six months following
the Closing Date by amounts to be agreed upon based
on the ratio of consolidated total funded debt to
consolidated EBITDA and provided that no default or
event of default has occurred and is continuing.
"Eurodollar Rate" means the rate (adjusted for
statutory reserve requirements for eurocurrency
liabilities) at which eurodollar deposits for one,
two, three or six (or, to the extent available to
all the Senior Lenders, nine or twelve) months (as
selected by the Borrower) are offered in the
interbank eurodollar market.
Interest Payment
Dates: In the case of Loans bearing interest based upon
the Base Rate ("Base Rate Loans"), quarterly in
arrears.
In the case of Loans bearing interest based upon
the Eurodollar Rate ("Eurodollar Loans"), on the
last day of each relevant interest period and, in
the case of any interest period longer than three
months, on each successive date three months after
the first day of such interest period.
Commitment Fees: The Borrower shall pay a commitment fee calculated
at the rate of 0.50% per annum, on the average
daily unused portion of the Revolving Credit
Facility, payable quarterly in arrears. The
foregoing rate shall be subject to adjustment after
six months following the Closing Date by amounts to
be agreed upon based on the ratio of consolidated
total funded debt to consolidated EBITDA and
provided that no default or event of default has
occurred and is continuing. Swing Line Loans shall,
for purposes of the commitment fee calculations
only, not be deemed to be a utilization of the
Revolving Credit Facility. Issuances of Letters of
Credit shall be deemed to be a utilization of the
Revolving Credit Facility.
Letter of Credit Fees: The Borrower shall pay a commission on all
outstanding Letters of Credit at a per annum rate
to be agreed on the face amount of each such Letter
of Credit. Such commission shall be shared ratably
among the Senior Lenders participating in the
Revolving Credit Facility and shall be payable
quarterly in arrears.
A fronting fee calculated at a rate per annum to be
agreed on the face amount of each Letter of Credit
shall be payable quarterly in arrears to the
Issuing Lender for its own account. In addition,
customary administrative, issuance, amendment,
payment and negotiation charges shall be payable to
the Issuing Lender for its own account.
Foreign Currency Loan
Interest and Fees: In the event that Foreign Currency Loans in a
foreign currency are made available by all the
Senior Lenders, such Foreign Currency Loans shall
bear interest at a base rate to be agreed upon plus
the Applicable Margin then in effect for Eurodollar
Loans. In the event that Foreign Currency Loans are
fronted by one or more Senior Lenders, (a) such
Foreign Currency Loans shall bear interest at base
rate to be agreed upon, (b) the Borrower shall pay
a commission on such Foreign Currency Loans at a
per annum rate equal to the Applicable Margin then
in effect with respect to Eurodollar Loans on the
face amount of each such Loan and (c) a fronting
fee equal to an amount to be determined per annum
on the face amount of each such Multi-Currency Loan
shall be payable quarterly in arrears to the
relevant fronting Senior Lender or Senior Lenders
for its or their own account. The commission
payable pursuant to clause (b) of the immediately
preceding sentence shall be shared ratably among
the Senior Lenders participating in the Revolving
Credit Facility and shall be payable quarterly in
arrears.
Default Rate: At any time when the Borrower is in default in the
payment of any amount of principal due under the
Senior Credit Facilities, such amount shall bear
interest at 2% above the rate otherwise applicable
thereto. Overdue interest, fees and other amount
shall bear interest at 2% above the rate applicable
to Base Rate Loans.
Rate and Fee Basis: All per annum rates shall be calculated on the
basis of a year of 360 days (or 365/366 days, in
the case of Base Rate Loans the interest rate
payable on which is then based on the Prime Rate)
for actual days elapsed.
Annex II
Certain Conditions
Initial Conditions: The availability of the Senior Credit Facilities
shall be conditioned upon the continuing
satisfaction of the following conditions precedent
(the date upon which all such conditions precedent
shall be satisfied, the "Closing Date") on or
before ------------ the earlier of (A) the date
which is 30 days after the then-operative
termination date of the Merger Agreement and (B)
February 28, 2001:
(a) Each Credit Party shall have executed and
delivered satisfactory definitive financing
documentation with respect to the Senior Credit
Facilities (the "Credit Documentation").
(b) The following transactions shall have occurred
prior to, or shall occur concurrently with, the
initial extension of credit under the Senior Credit
Facilities:
(i) The Target shall have received no less than
$500,000,000 in cash from the issuance of its
equity to the Sponsor Group (as a result of the
Merger) on the terms and conditions set forth in
the Transaction Documentation or as otherwise
reasonably satisfactory to the Syndication Agent.
Pursuant to the Transaction, approximately
$353,100,000 in common stock or options of the
Target held by the Rollover Shareholders shall have
been rolled over into pay-in-kind preferred stock,
junior preferred stock and common stock of the
Target (based on liquidation preference in the case
of preferred stock and based on the consideration
per share paid in the Transaction in the case of
common stock), after giving effect to the
Transaction and on the terms and conditions set
forth in the Transaction Documentation or as
otherwise reasonably satisfactory to the
Syndication Agent.
(ii) The Borrower shall have received the net cash
proceeds from (a) the issuance of at least
$600,000,000 of the Senior Subordinated Notes (or
any Take-Out Securities) or (b) borrowings of at
least $600,000,000 under the Senior Subordinated
Bridge Facility on terms and conditions reasonably
satisfactory to the Syndication Agent and each of
the Senior Lenders; provided that it is hereby
acknowledged that to the extent such terms and
conditions are substantially the same as those
described herein, they shall be deemed reasonably
satisfactory.
(iii) The Transaction shall have been consummated
for aggregate consideration (including fees and
expenses) of approximately $3,081,800,000 (subject
to changes in the Target's and its subsidiaries'
existing bank debt in the ordinary course of
business) pursuant to (i) the Merger Agreement,
dated as of June 22, 2000, executed by the Target,
HB Finance LLC and Mergerco and (ii) the stock
voting agreement, dated as of June 22, 2000,
executed by Mergerco and the Manville Personal
Injury Settlement Trust (together, the "Transaction
Documentation"), and no material provision thereof
shall have been amended, waived or otherwise
modified, and no consent or agreement shall be made
by Mergerco thereunder, in a manner materially
adverse to the interests of the Senior Lenders
without the prior written consent of the
Syndication Agent.
(iv) The Transaction (including the Merger) shall
have been approved by the holders of at least a
majority of the outstanding common stock of the
Target and the Transaction shall have been
consummated in all material respects in accordance
with the terms of the Transaction Documentation and
all applicable requirements of law.
(v) All amounts outstanding under the Target's
existing revolving credit facility shall have been
repaid, all commitments thereunder shall have been
terminated and all liens securing such facilities
shall have been terminated, in each case on terms
and conditions reasonably satisfactory to the
Syndication Agent.
(vi) The Target's other outstanding indebtedness
for borrowed money (other than certain indebtedness
to be agreed) shall have been redeemed or
repurchased on terms and conditions reasonably
satisfactory to the Syndication Agent. The
consummation of the Transaction shall not trigger
any change of control put rights under any such
indebtedness to remain outstanding after the
Closing Date.
(vii) The capital structure of the Target and its
subsidiaries shall be reasonably satisfactory to
the Syndication Agent, after giving effect to the
Transaction; provided that it is hereby
acknowledged that to the extent such capital
structure is the same as that described herein, it
shall be deemed to be reasonably satisfactory.
(viii) The Target shall have transferred
all of its assets to the Borrower.
(c) The Senior Lenders, the Administrative Agent,
the Syndication Agent and the Lead Arranger shall
have received all fees required to be paid, and all
expenses for which invoices have been presented, on
or before the Closing Date.
(d) All material governmental and third party
approvals (including any bankruptcy court approval)
necessary or, in the reasonable discretion of the
Syndication Agent, advisable in connection with the
Transaction, the financing contemplated hereby and
the continuing operations of the Borrower and its
subsidiaries shall have been obtained and be in
full force and effect, and all applicable waiting
periods shall have expired without any action being
taken or known to be threatened by any competent
authority which would restrain, prevent or
otherwise impose adverse conditions on the
Transaction or the financing thereof.
(e) Each of the Senior Lenders shall have received
unaudited interim financial statements of the
Target, prepared in the same manner as the
historical audited statements previously delivered
to the Senior Lenders, for each quarterly period
commencing with the fiscal quarter ended June 30,
2000, and for the same quarterly period during the
most recently ended fiscal year (such interim
financial statements to be delivered within 45 days
of the end of the applicable fiscal quarter).
(f) Each of the Senior Lenders shall have received
and shall be reasonably satisfied with consolidated
pro forma balance sheets and income statements of
the Borrower as of the last day of the most
recently ended fiscal quarter prior to the Closing
Date, giving effect to the Transaction and the
transactions contemplated by the Merger Agreement
and the Commitment Letter (meeting the requirements
of Regulation S-X for a registration statement on
Form S-1).
(g) The Syndication Agent and the Administrative
Agent shall have received the results of a recent
lien search in each relevant jurisdiction with
respect to the Target and its domestic
subsidiaries, and such search shall reveal no liens
on any of the material assets of the Target or its
domestic subsidiaries except for liens permitted by
the Credit Documentation, Permitted Exceptions (as
defined in the Merger Agreement, other than clause
(v) of such definition) or liens to be discharged
on or prior to the Closing Date pursuant to
documentation reasonably satisfactory to the
Syndication Agent.
(h) The fees and expenses to be incurred in
connection with the Transaction and the financing
thereof shall not exceed $160,000,000 in the
aggregate.
(i) All actions and filings required, in the
judgment of the Syndication Agent, to perfect the
security interests in the collateral for the Senior
Credit Facilities shall have been taken or made (or
arrangements reasonably satisfactory to the
Syndication Agent shall have been made with respect
thereto).
(j) The Syndication Agent shall have received and
shall be reasonably satisfied with a solvency
opinion from an independent valuation firm
reasonably satisfactory to the Syndication Agent
which shall document the solvency of the Target and
its subsidiaries after giving effect to the
Transaction and the other transactions contemplated
hereby.
(k) Each of the Senior Lenders shall have received
such legal opinions (including opinions from (i)
counsel to the Credit Parties and (ii) such special
and local counsel as may reasonably be required by
the Syndication Agent), documents and other
instruments as are customary for transactions of
this type or as they may reasonably request.
(l) The Syndication Agent shall be satisfied that
the pro forma ratio (adjusted to give effect to the
Transaction and the transactions contemplated by
the Merger Agreement and consummated on or prior to
the Closing Date) of consolidated total funded debt
to consolidated EBITDA of the Target (excluding
certain non-recurring charges acceptable to the
Syndication Agent) for the twelve month period
ending on the date of the most recently ended
fiscal quarter for which internal financial
statements are available is no greater than 4.65 to
1.0, and the Target shall provide support for such
calculation of a nature that is reasonably
satisfactory to the Syndication Agent (and, except
as may be acceptable to the Syndication Agent, in
conformity with Regulation S-X).
(m) The Syndication Agent shall be reasonably
satisfied as to the absence of any action, suit,
investigation, litigation or proceeding pending or
known to be threatened in any court or before any
arbitrator or governmental instrumentality that
purports to affect the Transactions or the
Facilities or any of the other transactions
contemplated hereby, or that could reasonably be
expected to have a material adverse effect on the
Transactions or the Facilities or any of the other
transactions contemplated hereby.
(n) All representations and warranties in the
Credit Documentation (including, without
limitation, the material adverse change and
litigation representations) shall be true and
correct in all material respects.
(o) No default or event of default under the Credit
Documentation shall exist at the time of, or after
giving effect to the making of, the loans to be
made on the Closing Date.
Exhibit F
BEAR XXXXXXX CORPORATE LENDING INC.
000 XXXX XXXXXX
XXX XXXX, XXX XXXX 00000
June 22, 2000
CONFIDENTIAL
HB Finance LLC
c/o Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Mr. Xxxx Xxxxx
and
c/o Bear Xxxxxxx Merchant Fund Corp.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mr. Xxxx Xxxxxx
BRIDGE COMMITMENT LETTER
Ladies and Gentlemen:
HB Finance LLC ("FINANCECO"), an affiliate of Hicks,
Muse, Xxxx & Xxxxx Incorporated ("XXXXX MUSE") and Bear Xxxxxxx Merchant
Fund Corp. (together with Xxxxx Muse, the "SPONSORS"), formed to effect the
transactions described herein with HB Merger LLC ("MERGERCO"), has advised
Bear Xxxxxxx Corporate Lending Inc. ("BSCL" and, together with BSCL's
assigns, the "BRIDGE LENDERS") that Financeco and Mergerco intend to enter
into a merger agreement (the "MERGER AGREEMENT") with Xxxxx Xxxxxxxx
Corporation (the "TARGET"), pursuant to which the Sponsors, certain
existing stockholders and members of management of the Target (the
"ROLLOVER SHAREHOLDERS" and, collectively with the Sponsors, the "INVESTOR
GROUP"), would acquire all of the common stock and options of the Target
for approximately $2,344,000,000 (excluding any tax settlement payments).
You have further advised us that the Merger (as defined below) will be
effected pursuant to a recapitalization, and in connection therewith, the
Target will create a newly-formed wholly-owned subsidiary, which may be a
limited liability company (the "COMPANY"), and will transfer all of its
assets to such subsidiary (the "RECAPITALIZATION"). Mergerco will be merged
with and into the Target (the "MERGER") with the Target being the surviving
entity. Financeco has further informed BSCL that in order to: (a) pay for
the Target's stock in the Merger, (b) refinance certain of the Target's and
its subsidiaries' existing bank debt concurrently with the Merger (the
"REFINANCING"), and (c) pay certain fees, expenses and tax settlement costs
associated with the Recapitalization, the Merger and the financing thereof
(collectively, the "TRANSACTIONS"), Financeco expects that (i) the Company
will borrow approximately $1,558,400,000 under a $1,750,000,000 senior
secured bank credit facility consisting of: (a) a $300,000,000 six and
one-half year revolving credit facility (the "REVOLVER") (of which
approximately $108,400,000 is expected to be drawn on the Closing Date (as
defined in Annex 1 hereto), subject to changes in (i) the Target's and its
subsidiaries' existing bank debt in the ordinary course of business and
(ii) the amount of excess cash on the Target's balance sheet as of the
Closing Date), (b) a six and one-half year amortizing term loan A of
$500,000,000, (c) a seven and one-half year amortizing term loan B of
$650,000,000, and (d) an eight and one-half year amortizing term loan C of
$300,000,000 (collectively, the "SENIOR TERM LOANS" and, together with the
Revolver, the "SENIOR CREDIT Facility"), (ii) the Target will issue to the
Sponsors no less than $500,000,000 of equity on the terms and conditions
described in the Transaction Documentation (as defined in Annex 3) or as
otherwise reasonably satisfactory to BSCL (the "SPONSOR EQUITY FINANCING"),
(iii) the existing Shareholders will roll over certain of their existing
common equity of the Target into approximately $353,100,000 (based on
liquidation preference in the case of preferred stock and based on the
consideration paid per share in the case of the common stock) consisting of
a combination of pay-in-kind preferred stock (the "ROLLOVER PIK PREFERRED
STOCK"), junior preferred stock and common stock of the Target
(collectively with the Sponsor Equity Financing, the "EQUITY FINANCING");
(iv) the Company will issue $600,000,000 of senior subordinated notes due
2010 (the "PERMANENT DEBT FINANCING") and (v) the Company will utilize
approximately $54,300,000 of excess cash on the Target's balance sheet
expected to be available as of the Closing Date. Immediately following the
Transactions: (a) the Target will have a single class of common stock
outstanding, all of which will be owned by the Sponsors and the Rollover
Shareholders and, except as described in this paragraph will not have any
debt outstanding and (b) the Company will be a wholly-owned subsidiary of
the Target, with no debt outstanding except as described in this paragraph.
As used below, the defined term "MERGERCO" shall mean both Mergerco prior
to the Merger and Mergerco together with the Target, after giving effect to
the Merger.
You and Bear, Xxxxxxx & Co. Inc. ("BEAR XXXXXXX") have
entered into an engagement letter of even date herewith (the "BRIDGE
ENGAGEMENT LETTER") pursuant to which Bear Xxxxxxx was exclusively engaged
to provide certain services, including assisting Financeco, the Company
and/or one or more of its subsidiaries in their efforts to structure and
obtain any and all debt financing (and/or certain equity financings)
required in connection with the Merger and the Refinancing, including,
without limitation, the Permanent Debt Financing (including, without
limitation, any Permanent Debt Financing, including Take-Out Securities,
used to refinance, refund or replace any Bridge Loans, Term Loans or
Exchange Notes (each as defined below)) (collectively, the "PERMANENT
FINANCINGS").
Accordingly, in reliance on the description of the
Transactions set forth above, the parties hereto agree as follows:
1. BRIDGE FINANCING COMMITMENT. In the event that the placement of
the Permanent Debt Financing cannot be consummated by the date on which the
Merger is to be consummated for any reason other than a breach or default
by Financeco or the Company under the documents governing the Permanent
Debt Financing, BSCL hereby commits that it and/or one or more other Bridge
Lenders (as permitted by the terms of this Bridge Commitment Letter) will
provide, on the date on which the Merger is consummated, senior
subordinated increasing rate exchangeable loans (the "BRIDGE LOANS") to the
Company and to such of the Company's affiliates as may be borrowers under
the Senior Credit Facility (the "BORROWER") in an aggregate principal
amount of $600.0 million (the "AGGREGATE COMMITMENT"), on the terms set
forth in this letter (together with the summary of principal terms and
conditions attached as Annex 1, Annex 2 and Annex 3 hereto and hereby made
a part hereof as though fully set forth herein, the "BRIDGE COMMITMENT
LETTER"). The Bridge Loans will mature one year from their date of issuance
and, provided that no Conversion Default (as defined in Annex 1 hereto)
exists on such date, shall be automatically converted into term loans
maturing on the tenth anniversary of the funding date of the Bridge Loans
(the "TERM LOANS"). The Bridge Lender in respect of such Term Loan will
have the option, at any time or from time to time, to request senior
subordinated increasing rate exchange notes (the "EXCHANGE NOTES" and,
together with the Bridge Loans and the Term Loans, the "BRIDGE FINANCING")
of the Borrower, maturing on the tenth anniversary of the funding date of
the Bridge Loans, in exchange for such Term Loan in an aggregate principal
amount equal to the then outstanding principal amount of the Term Loan
being exchanged, plus any capitalized interest added thereto; provided,
however, that a Bridge Lender may not elect to exchange only a portion of
its outstanding Term Loans for Exchange Notes unless such Bridge Lender
intends at the time of such partial exchange of Term Loans promptly to sell
the Exchange Notes received in such exchange.
BSCL shall be entitled, subject to the agreement of the
lenders under the Senior Credit Facility, if such agreement is required
under the terms of the Senior Credit Facility, on or after the Closing
Date, to cause the Target to issue senior or senior subordinated bridge
loans on the terms and conditions set forth in this Bridge Commitment
Letter in lieu of an equivalent principal amount of Bridge Loans of the
Company if BSCL determines that such modification is advisable to ensure a
successful syndication of the Bridge Loans. The commitments under this
Bridge Commitment Letter are subject to the agreements in this paragraph.
2. CONDITIONS PRECEDENT. The several obligations of BSCL and any
other Bridge Lender(s) under this Bridge Commitment Letter to make any
Bridge Loans are subject to: (i) the satisfaction of the conditions
precedent set forth in Annex 3 hereto; (ii) our reasonable satisfaction
that there shall not have occurred or become known to us after the date
hereof any event, development, condition or circumstance that has had or
could reasonably be expected to have a material adverse effect on the
Transactions or on the business, assets, property, condition (financial or
otherwise), results of operations or prospects of the Target and its
subsidiaries, taken as a whole; (iii) our not becoming aware after the date
hereof of any information or other material matter (including any matter
relating to financial models and underlying assumptions relating to the
projections delivered to BSCL) affecting the Target or the Transactions
that in our reasonable judgment is inconsistent in a material and adverse
manner to the Target and its subsidiaries, taken as a whole, with any such
information or other matter disclosed to us prior to the date hereof; (iv)
no event shall have occurred and be continuing after the date hereof that
has caused or could be reasonably expected to cause any material disruption
or material adverse change, as determined by BSCL, in the markets for bank
debt, high yield debt or the financial or capital markets generally that,
in the sole discretion of BSCL, could materially impair the syndication or
funding of the Bridge Loans and (v) the negotiation, execution and delivery
of definitive documentation with respect to the Bridge Loans satisfactory
to BSCL and its counsel on or before the earlier of (A) the date which is
30 days after the then-operative termination date of the Merger Agreement
and (B) February 28, 2001, including, without limitation, a definitive
bridge loan agreement (the "BRIDGE LOAN AGREEMENT") covering the matters
referred to in this Bridge Commitment Letter and such other customary
matters as the Required Bridge Lenders (as defined in Annex 1 hereto) may
reasonably request (collectively, the "BRIDGE FINANCING DOCUMENTS").
3. SYNDICATION. Prior to or after execution of the Bridge Loan
Agreement, BSCL may assign all or any portion of the Aggregate Commitment
to one or more financial institutions or other investors; provided that,
with the consent of Financeco (which consent shall not be unreasonably
withheld), BSCL shall be relieved of its obligation to make Bridge Loans in
the amount so assigned in connection with any such assignment to a
commercial bank or investment bank of national standing. BSCL will, after
consultation with the Sponsors, manage all aspects of the syndication and
Financeco and the Company will, and will cause each of their respective
subsidiaries and affiliates to, cooperate with BSCL in connection with any
syndication of all or any portion of the Aggregate Commitment.
4. LIMITATION ON OTHER ACQUISITIONS AND SECURITIES ISSUANCES.
Until the earlier to occur of (i) the date on which the Aggregate
Commitment expires or is terminated without funding or (ii) the date Bridge
Loans are funded, Financeco will not, and will not permit its subsidiaries
or affiliates whose principal asset is or is expected to be any securities
of the Target or the Company (excluding any of the Sponsors) or any person
acting for any of them, to: (A) syndicate, offer or issue, or attempt to
syndicate, offer or issue, any debt (other than the Senior Credit Facility
and, in accordance with the terms of the Bridge Engagement Letter, the
Permanent Debt Financing), any equity (other than the Equity Financing) or
any other security intended to replace the Bridge Loans except, in each
case, in accordance with the terms of the Bridge Engagement Letter or the
Bridge Fee Letter (as defined below) or as otherwise provided in the Bridge
Engagement Letter or the Bridge Fee Letter or (B) make any acquisition of
the capital stock or a material portion of the assets of any person or
entity other than (1) the Merger, (2) short-term investments in marketable
investment grade securities made for cash management purposes or (3)
acquisitions of inventory and equipment in the ordinary course of business.
5. EXPENSES; INDEMNIFICATION. Financeco hereby agrees to (a)
reimburse BSCL for all reasonable fees and disbursements of Xxxxxx &
Xxxxxxx and all of BSCL's reasonable travel and other out-of-pocket
expenses, in each case incurred in connection with this Bridge Commitment
Letter, the fee letter of even date herewith by and between BSCL and
Financeco (the "BRIDGE FEE LETTER"), the Transactions or otherwise arising
out of BSCL's commitment hereunder; provided that if the Transactions are
not consummated, Financeco shall not be required to reimburse any expenses
except as may be otherwise agreed to in writing between Bear Xxxxxxx and
Financeco or Mergerco and (b) to defend, indemnify and hold harmless BSCL,
the Bridge Lenders and each of the other Indemnified Persons identified and
as set forth in the indemnification provisions attached as EXHIBIT A hereto
(the "INDEMNIFICATION PROVISIONS") and hereby made a part hereof as though
fully set forth herein. The obligations of Financeco under this Section 5
and the Bridge Fee Letter shall survive expiration or termination of this
Bridge Commitment Letter and the Bridge Fee Letter; provided that if any
Bridge Financing is consummated, the terms of the definitive documentation
relating thereto shall supercede the indemnification terms of this Section
5.
6. EXPIRATION; TERMINATION. The Aggregate Commitment will expire
and this Commitment will terminate upon the occurrence of any of the
following, without further act or condition: (i) at 5:00 p.m. (New York
time) on the earlier of (A) the date which is 30 days after the
then-operative termination date of the Merger Agreement and (B) February
28, 2001, unless prior to that time the Bridge Financing Documents have
been executed, all conditions required to be met hereunder or thereunder
for the funding of the Bridge Loans have been satisfied or waived in
writing by BSCL in its sole discretion, and the Bridge Loans have been
funded; (ii) funding of the Permanent Financings, in escrow or otherwise;
(iii) termination or expiration of the Merger Agreement; (iv) termination
of the Bridge Engagement Letter by Financeco or the Company; (v) the
occurrence of any material breach or material default in the performance of
any of the material obligations of Financeco or the Company or any of its
subsidiaries or affiliates set forth in, or relating to the transactions
contemplated by, the Bridge Engagement Letter or any other agreement or
legal obligation enforceable by BSCL, Bear Xxxxxxx or any of their
respective affiliates; (vi) written notice to the Bridge Lenders by the
Sponsors or Financeco of their desire to terminate the Aggregate
Commitment; or (vii) the execution by the Target of any agreement with any
parties other than the Sponsors which contemplates the acquisition of all
or substantially all of the stock or assets or the Target.
7. DISCLOSURE.
(a) This Bridge Commitment Letter, the Bridge Fee Letter, the
Bridge Engagement Letter and each subsequent communication relating to the
Transactions, are being delivered to you on the understanding that neither
they, nor their substance, shall be disclosed by Financeco or any of its
affiliates to any third person except to its committees, officers,
directors, employees, attorneys, agents and advisors and, on a confidential
basis, this Bridge Commitment Letter may be disclosed to the committees,
officers, directors, employees, attorneys, agents and advisors of the
Sponsors and the Target, in each case, who are directly involved in the
consideration of this matter. In addition, Financeco and Mergerco and their
respective advisors may make such public disclosure of this Bridge
Commitment Letter, the Bridge Fee Letter and the Bridge Engagement Letter
as may be compelled in a judicial or administrative proceeding or as is
required by law or regulation of the Securities and Exchange Commission (in
which case you agree to inform us promptly thereof).
(b) BSCL and each other Bridge Lender, if any, may freely
discuss the Transactions contemplated hereby on a confidential basis with
their respective affiliates (including, without limitation, Bear Xxxxxxx),
any prospective Bridge Lender or participant, in each case, who has signed
a confidentiality agreement reasonably acceptable to Financeco, and may
freely disclose to any such affiliate, prospective Bridge Lender or
participant and permit any such affiliate, prospective Bridge Lender or
participant, from time to time, to use for any purpose contemplated by this
Bridge Commitment Letter, any and all information at any time provided to
Bear Xxxxxxx, BSCL or any other Bridge Lender by or on behalf of Financeco
or the Company or any of their subsidiaries or affiliates.
8. MISCELLANEOUS. The following provisions shall be applicable
both to this Bridge Commitment Letter and to the Bridge Fee Letter:
(a) GOVERNING LAW; CONSENT TO JURISDICTION; NO THIRD PARTY
BENEFICIARIES; WAIVER OF TRIAL BY JURY. The validity and interpretation of
this Bridge Commitment Letter and the Bridge Fee Letter shall be governed
by, and construed and enforced in accordance with, the laws of the State of
New York applicable to agreements made and to be fully performed therein
(excluding the conflicts of laws rules). Financeco hereby irrevocably
submits to the non-exclusive jurisdiction of any court of the State of New
York located in the Borough of Manhattan in the City of New York or the
United States District Court for the Southern District of the State of New
York, or any appellate courts from any thereof, for the purposes of any
suit, action or other proceeding arising out of this Bridge Commitment
Letter, the Bridge Fee Letter or any of the agreements or transactions
contemplated hereby, which is brought by or against Financeco and Financeco
(i) hereby irrevocably agrees that all claims in respect of any such suit,
action or proceeding may be heard and determined in any such court and (ii)
hereby agrees not to commence any action, suit or proceeding relating to
this Bridge Commitment Letter, the Bridge Fee Letter or any such other
agreements or transactions other than in such court except to the extent
mandated by applicable law. Financeco hereby waives any objection that it
may now or hereafter have to the venue of any such suit, action or
proceeding in any court or that such suit, action or proceeding was brought
in an inconvenient court and agrees not to plead or claim the same.
Financeco hereby acknowledges that it has been advised by counsel in the
negotiation, execution and delivery of this Bridge Commitment Letter, the
Bridge Fee Letter and the other agreements and transactions contemplated
hereby, that BSCL does not have any fiduciary relationship with or
fiduciary duty to Financeco or any other person arising out of or in
connection with this Bridge Commitment Letter, the Bridge Fee Letter or any
of the other agreements or transactions contemplated hereby and that BSCL
has not been retained to advise or has advised you or any other person
regarding the wisdom, prudence or advisability of entering into or
consummating the Transactions. EACH OF BSCL AND YOU HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS BRIDGE COMMITMENT LETTER, THE BRIDGE FEE LETTER OR ANY
OTHER AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY AND FOR ANY
COUNTERCLAIM RELATING THERETO.
(b) SEVERABILITY. If it is found in a final judgment by a
court of competent jurisdiction (not subject to further appeal) that any
term or provision hereof is invalid or unenforceable: (i) the remaining
terms and provisions hereof shall be unimpaired and shall remain in full
force and effect and (ii) the invalid or unenforceable provision or term
shall be replaced by a term or provision that is valid and enforceable and
that comes closest to expressing the intention of such invalid or
unenforceable term or provision.
(c) COMPLETE AGREEMENT; WAIVERS AND OTHER CHANGES TO BE IN
WRITING. This Bridge Commitment Letter and the Bridge Fee Letter embody the
entire agreement and understanding of the parties hereto with respect to
the subject matter hereof and thereof and supersede any and all prior
agreements and understandings relating to the matters provided for herein
and therein. No alteration, waiver, amendment or supplement of or to this
Bridge Commitment Letter or the Bridge Fee Letter shall be binding or
effective unless the same is set forth in a writing signed by a duly
authorized representative of each party hereto or thereto.
(d) POWER, AUTHORITY AND BINDING EFFECT. Each of the parties
hereto represents and warrants to each of the other parties hereto and
their respective successors and permitted assigns that (i) it has all
requisite power and authority to enter into this Bridge Commitment Letter
and the Bridge Fee Letter and (ii) each of this Bridge Commitment Letter
and the Bridge Fee Letter has been duly and validly authorized by all
necessary action on the part of such party, has been duly executed and
delivered by such party and constitutes a legally valid and binding
agreement of such party, enforceable against it in accordance with its
terms, except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights of creditors generally or by general principles of
equity.
(e) NO LIABILITY FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE DAMAGES; LIMITATION ON LIABILITY. No party hereto shall be liable
for any special, indirect or consequential damages or, to the fullest
extent that a claim for punitive damages may lawfully be waived, for any
punitive damages on any claim (whether founded in contact, tort, legal duty
or any other theory of liability) arising from or related in any manner to
this Bridge Commitment Letter or the negotiation, execution,
administration, performance, breach or enforcement of this Bridge
Commitment Letter or the instruments and agreements evidencing, governing
or relating to the other Transactions contemplated hereby or any amendment
thereto or the funding of the Bridge Loans or the consummation of, or any
failure to consummate, any of the Transactions or any act, omission, breach
or wrongful conduct in any manner related thereto. No direct or indirect
holder of any equity interests or securities of either party hereto
(whether such holder is a limited or general partner, member, stockholder
or otherwise), nor any affiliate of any party hereto, nor any director,
officer, employee, representative, agent or other controlling person of
each of the parties hereto and their respective affiliates shall have any
liability or obligation arising under this Bridge Commitment Letter or the
transactions contemplated hereby and the parties hereto hereby waive and
release all claims related to any such liability or obligation.
(f) RELIANCE ON INFORMATION. In undertaking and performing
its obligations under this Bridge Commitment Letter, BSCL and each of the
other Bridge Lenders, if any, is relying and will continue to rely: (i)
without independent verification thereof, on the accuracy and completeness
of all financial and other information furnished by or on behalf of
Financeco, the Company or any of their respective subsidiaries and (ii) on
each of the representations, warranties, covenants and legal waivers by or
on behalf of Financeco set forth in this Bridge Commitment Letter.
Financeco represents and warrants to each of the Bridge Lenders that all
financial and other information which it has provided to BSCL and the other
Bridge Lenders, if any, in connection with this Bridge Commitment Letter
and the Transactions contemplated hereby does not and will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not materially misleading; provided that such representation and warranty
with respect to information provided by the Target shall be limited to your
actual knowledge.
(g) ASSIGNMENT. This Bridge Commitment Letter shall not be
assignable by you (other than (i) an assignment of your rights hereunder to
an affiliate of yours which becomes a party to, and succeeds to all of your
rights under, the Merger Agreement, or (ii) an assignment of all your
rights and obligations hereunder and under the Bridge Fee Letter to the
Target or the Company concurrently with the closing of the Recapitalization
and only if the Recapitalization occurs) without the prior written consent
of Bear Xxxxxxx and BSCL (and any purported assignment without such consent
shall be null and void), is intended to be solely for the benefit of the
parties hereto and is not intended to confer any benefits upon, or create
any rights in favor of, any person (including, without limitation, the
Target and the Company) other than the parties hereto and the Indemnified
Persons.
(h) COUNTERPARTS. This Bridge Commitment Letter and the
Bridge Fee Letter may each be executed in one or more counterparts, all of
which, taken together, shall constitute one and the same agreement.
(i) TIME OF ESSENCE. Time shall be of the essence whenever
and wherever a date or period of time is prescribed or referred to in this
Bridge Commitment Letter or the Bridge Fee Letter.
[signature page follows]
This Bridge Commitment Letter may only be accepted by (i)
signing this Bridge Commitment Letter in the space provided below and
returning it to the undersigned, along with a signed copy of the Bridge Fee
Letter, and (ii) signing the Bridge Engagement Letter and returning it to
Bear Xxxxxxx, in each case, within 24 hours after execution of the Merger
Agreement and in any event by not later than 5:00 p.m. (New York time) on
June 23, 2000.
Very truly yours,
BEAR XXXXXXX CORPORATE LENDING INC.
By:
Name:
Title:
AGREED TO AND ACCEPTED AS OF
JUNE 22, 2000:
HB FINANCE LLC
By:
Name:
Title:
EXHIBIT A
INDEMNIFICATION PROVISIONS
Capitalized terms used and not otherwise defined herein
are used with the meanings attributed thereto in the Bridge Commitment
Letter dated June 22, 2000 (the "BRIDGE COMMITMENT LETTER") from Bear
Xxxxxxx Corporate Lending Inc. ("BSCL") to HB Finance LLC (the
"INDEMNIFYING PARTY") of which these Indemnification Provisions form an
integral part.
To the fullest extent permitted by applicable law, the
Indemnifying Party agrees that it will indemnify and hold harmless each of
BSCL, the Bridge Lenders and the affiliated entities, directors, officers,
employees, legal counsel, agents and controlling persons (within the
meaning of the federal securities laws) of each of BSCL and the other
Bridge Lenders (all of the foregoing, collectively, the "INDEMNIFIED
PERSONS"), from and against any and all losses, claims, damages,
obligations, penalties, judgments, awards, liabilities, costs, expenses and
disbursements and any and all actions, suits, proceedings and
investigations in respect thereof and any and all reasonable third party
fees, costs, expenses and disbursements in giving testimony or furnishing
documents in response to a subpoena or otherwise (including, without
limitation, the costs, expenses and disbursements, as and when incurred, of
investigating, preparing or defending any such action, proceeding or
investigation (whether or not in connection with litigation in which any of
the Indemnified Persons is a party) and including, without limitation, any
and all losses, claims, damages, obligations, penalties, judgments, awards,
liabilities, costs, expenses and disbursements, resulting from any
negligent act or omission of any of the Indemnified Persons), directly or
indirectly, caused by, relating to, based upon, arising out of or in
connection with (i) the Transactions, (ii) the Bridge Commitment Letter,
the Bridge Fee Letter or the Bridge Financing Documents, or (iii) any
untrue statement or alleged untrue statement of a material fact contained
in, or material omissions or alleged material omissions from any filing
with any governmental agency or similar statements or omissions in or from
any information furnished by the Sponsors, the Indemnifying Party, the
Company or any of their respective subsidiaries or affiliates to any of the
Indemnified Persons or any other person in connection with the Transactions
or the Bridge Commitment Letter; provided, however, such indemnity
agreement shall not apply to any portion of any such loss, claim, damage,
obligation, penalty, judgment, award, liability, cost, expense or
disbursement to the extent it is found in a final judgment by a court of
competent jurisdiction (not subject to further appeal) to have resulted
primarily and directly from the gross negligence or willful misconduct of
any of the Indemnified Persons or primarily and directly from the breach of
the Bridge Commitment Letter by an Indemnified Person.
These Indemnification Provisions shall be in addition to
any liability which the Indemnifying Party may have to the Indemnified
Persons or the persons indemnified below in this sentence and shall extend
to the following: BSCL, Bear Xxxxxxx, their respective affiliated entities,
directors, officers, employees, legal counsel, agents and controlling
persons (within the meaning of the federal securities laws). All references
to "BSCL" in these Indemnification Provisions shall be understood to
include any and all of the foregoing.
If any action, suit, proceeding or investigation is
commenced, as to which any of the Indemnified Persons proposes to demand
indemnification, it shall notify the Indemnifying Party with reasonable
promptness; provided, however, that any failure by any of the Indemnified
Persons to so notify the Indemnifying Party shall not relieve the
Indemnifying Party from its obligations hereunder except to the extent it
has been materially prejudiced by such failure. BSCL, on behalf of the
Indemnified Persons, shall have the right to retain one counsel of its
choice to represent the Indemnified Persons, and the Indemnifying Party
shall pay the reasonable fees, expenses and disbursement of such counsel;
and such counsel shall, to the extent consistent with its professional
responsibilities, cooperate with the Indemnifying Party and any counsel
designated by the Indemnifying Party. The Indemnifying Party shall be
liable for any settlement of any claim against any of the Indemnified
Persons made with its written consent (which consent shall not be
unreasonably withheld). Without the prior written consent of BSCL (which
consent shall not be unreasonably withheld), the Indemnifying Party shall
not settle or compromise any claim, or permit a default or consent to the
entry of any judgment in respect thereof unless (i) such settlement,
compromise or consent includes, as an unconditional term thereof, the
giving by the claimant to each of the Indemnified Persons of an
unconditional and irrevocable release from all liability in respect of such
claim, (ii) the terms of such release do not, in BSCL's judgment,
materially and adversely affect the business of the Indemnified Persons and
(iii) the Indemnifying Party gives to BSCL reasonable advance notice of
such settlement, compromise or claim. Notwithstanding the foregoing, the
consent of Bear Xxxxxxx shall not be required for the settlement or
compromise of a claim if: (a) such settlement or compromise involves only
the payment of money by the Indemnifying Party; (b) any such payment is
made in full by the Indemnifying Party at the time of such settlement or
compromise and (c) such settlement or compromise includes, as an
unconditional term thereof, the giving by the claimant to each of the
Indemnified Persons of an unconditional and irrevocable release from all
liability in respect of such claim and does not involve or constitute an
admission of guilt or liability by any Indemnified Person or contain any
adverse finding of fact with respect thereto.
In order to provide for just and equitable contribution,
if a claim for indemnification pursuant to these Indemnification Provisions
is made but is found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) that such indemnification may
not be enforced in such case, even though the express provisions hereof
provide for indemnification in such case, then the Indemnifying Party, on
the one hand, and the Indemnified Persons, on the other hand, shall
contribute to the losses, claims, damages, obligations, penalties,
judgments, awards, liabilities, costs, expenses and disbursements to which
the Indemnified Persons may be subject in accordance with the relative
benefits received by the Indemnifying Party, on the one hand, and the
Indemnified Persons, on the other hand, and also the relative fault of the
Indemnifying Party , on the one hand, and the Indemnified Persons, on the
other hand, in connection with the statements, acts or omissions which
resulted in such losses, claims, damages, obligations, penalties,
judgments, awards, liabilities, costs, expenses and disbursements and the
relevant equitable considerations shall also be considered. No person found
liable for a fraudulent misrepresentation shall be entitled to contribution
from any other person who is not also found liable for such fraudulent
misrepresentation. Notwithstanding the foregoing, none of the Indemnified
Persons shall be obligated to contribute any amount hereunder that exceeds
the amount of fees previously received by such Indemnified Person pursuant
to the Bridge Commitment Letter and the Bridge Fee Letter.
Except as set forth in Section 5 of the Bridge Commitment
Letter, neither expiration or termination of the Aggregate Commitment nor
funding or repayment of any Bridge Financing, the Exchange Notes or the
Permanent Financings shall affect these Indemnification Provisions which
shall then remain operative and in full force and effect.
ANNEX 1
SUMMARY OF TERMS AND CONDITIONS OF BRIDGE LOANS
Capitalized terms used and not otherwise defined herein
have the meanings set forth in the Bridge Commitment Letter to which this
Summary of Terms and Conditions is attached and of which it forms an
integral part.
BORROWER: The Company and/or such other affiliate or
affiliates of the Company as may be the borrowers
under the Senior Credit Facility (the "BORROWER").
GUARANTOR(S): Each affiliate of the Company that guarantees all or
a portion of the indebtedness under the Senior
Credit Facility (the "GUARANTORS" and, together with
the Borrower, the "OBLIGORS").
BRIDGE LENDER(S): BSCL and/or its assigns.
ADMINISTRATIVE
AGENT: BSCL or a commercial bank selected by BSCL.
LOANS: $600.0 million in aggregate principal amount of
unsecured exchangeable senior subordinated
increasing rate loans due 2001 (the "BRIDGE Loans").
The funding date of the Bridge Loans is hereinafter
referred to as the "CLOSING DATE."
GUARANTEES: The Guarantors will jointly and severally guarantee
the payment when due of all the Bridge Loans and the
costs of collection and enforcement thereof pursuant
to senior subordinated unconditional guarantees (the
"GUARANTEES"). The Guarantees will be subordinated
to the Guarantors' guarantees of the Senior Credit
Facility to the same extent as the Bridge Loans are
subordinated to the indebtedness under the Senior
Credit Facility. A subsidiary's guarantee will be
released upon the sale of such subsidiary to the
extent released under the Senior Credit Facility or
as otherwise provided in the Bridge Financing
Documents.
USE OF PROCEEDS: To consummate the Merger and the Refinancing and
to pay fees and expenses associated with the
Transactions.
AVAILABILITY The Bridge Loans must be drawn in a single drawing.
Amounts borrowed under the Bridge Facility that are
subsequently repaid may not be reborrowed.
MATURITY/EXCHANGE: The Bridge Loans will mature on the date that is one
year following the Closing Date (the "BRIDGE
MATURITY DATE"). If any Bridge Loan has not been
previously repaid in full on or prior to the Bridge
Maturity Date, such Bridge Loan shall be
automatically converted into a term loan (the "TERM
LOANS") with a final maturity on the nine-year
anniversary of the Bridge Maturity Date. The Term
Loans will be governed by the Bridge Loan Agreement
and, except as expressly set forth in Annex 2 to the
Bridge Commitment Letter, shall have the same terms
as the Bridge Loans. The Bridge Lender in respect of
such Term Loan will have the option, at any time or
from time to time, to request Exchange Notes (the
"EXCHANGE NOTES") in exchange for such Term Loan
having the terms set forth in the term sheet
attached as Annex 2 to the Bridge Commitment Letter;
provided, however, that a Bridge Lender may not
elect to exchange only a portion of its outstanding
Term Loans for Exchange Notes unless such Bridge
Lender intends at the time of such partial exchange
of Term Loans promptly to sell the Exchange Notes
received in such exchange.
The Term Loans and the Exchange Notes shall be pari
passu for all purposes.
INTEREST: The Bridge Loans will bear interest at a rate per
annum equal at all times during each interest period
(as set forth below) to the greatest of (each as
determined at the beginning of the applicable
interest period): (a) the three-month London
interbank offered rate, adjusted for reserves
("LIBOR") calculated on the basis of the actual
number of days elapsed in a year of 360 days, plus
the applicable Spread; (b) the Bear Xxxxxxx Single B
High Yield Index plus the applicable Spread and (c)
the Treasury Rate (as defined below) plus the
applicable Spread. The "Spread" will initially be
(a) with respect to LIBOR Loans, 675 basis points,
(b) with respect to any Bear Xxxxxxx Single B High
Yield Index Loans, 100 basis points and (c) with
respect to any Treasury Rate Loans, 675 basis
points. If the Bridge Loans are not repaid in whole
within 180 days following the Closing Date, the
applicable Spread will increase by 100 basis points
at the end of such 180 days period and shall
increase by an additional 50 basis points at the end
of each 90-day period thereafter; provided, however,
that the interest rate applicable to the Bridge
Loans shall not (i) (except as provided in the next
paragraph) exceed 17% per annum, and (ii) exceed the
maximum rate permitted by applicable law; and,
provided, further, that the Borrower shall have the
option to pay any interest in excess of 15% on the
Bridge Loans by capitalizing such excess interest on
the applicable interest payment date.
Notwithstanding the foregoing, the interest in
effect at any time prior to the Bridge Maturity Date
shall not be less than 13.25% per annum.
"TREASURY RATE" means (a) the rate borne by direct
obligations of the United States maturing on the
date which is ten years after the Closing Date and
(b) if there are no such obligations, the rate
determined by linear interpolation between the rates
borne by the two direct obligations of the United
States maturing closest to, but straddling, the date
which is ten years after the Closing Date, in each
case, as published by the Board of Governors of the
Federal Reserve System.
Notwithstanding the foregoing, after the occurrence
and during the continuance of an event of default,
interest will accrue on the Bridge Loans at the
then-applicable rate plus 200 basis points per
annum.
Interest with respect to LIBOR Loans will be
payable in arrears at the end of each three-month
LIBOR period and on the date of any prepayment or
repayment of the Bridge Loans. Interest on all other
Bridge Loans will be payable quarterly in arrears
and on the date of any prepayment or repayment of
the Bridge Loans.
SECURITY: None.
RANKING;
SUBORDINATION: The Bridge Loans will be unsecured, senior
subordinated obligations of the Obligors. The Bridge
Loans and all obligations with respect thereto will
be subordinated in right of payment, on terms
reasonably satisfactory to the Bridge Lenders, to
the payment in full of all obligations of the
Borrower under the Senior Credit Facility and
certain refinancings thereof. The Obligors will not
be permitted to incur any indebtedness that is
subordinated to the borrowings under the Senior
Credit Facility and senior to any other indebtedness
of the Obligors. Nothing in the subordination
provisions will prevent any holder of Bridge Loans
from receiving and retaining any proceeds originally
received by any Obligor that were used to repay
Bridge Loans to the extent required under the
"Mandatory Repayments" provision below, and the same
may be retained by such holder free and clear of any
claims by holders of any debt, pursuant to these
subordination provisions or otherwise.
MANDATORY
REPAYMENTS: The net cash proceeds from any of the following
(collectively, "NET PROCEEDS") will be used to repay
the Bridge Loans (subject to prior mandatory
prepayments on the Senior Credit Facility, if any,
and certain exceptions to be agreed to in the Bridge
Loan Agreement), in each case at 100% of the
principal amount of the Bridge Loans repaid plus
accrued and unpaid interest to the date of the
repayment and any LIBOR breakage costs: (i) any
direct or indirect public offering or private
placement of any senior or subordinated debt or
equity securities, including, without limitation,
any Permanent Financings, after the Closing Date by
any Obligor or any affiliate of any Obligor, (ii)
any future bank borrowings by any Obligor other than
under the Senior Credit Facility as in effect on the
Closing Date and (iii) any future asset sales by any
Obligor or any affiliate or direct or indirect
subsidiary of an Obligor.
CHANGE OF CONTROL: The Borrower shall prepay the Bridge Loans at a price
of 100% of principal amount, plus accrued and unpaid
interest, upon the occurrence of a change of control.
OPTIONAL
REPAYMENT: The Bridge Loans may be prepaid, in whole or in
part, at the option of the Borrower at any time upon
three business days' written notice at a price equal
to 100% of the principal amount thereof plus accrued
interest to the date of redemption and any LIBOR
breakage costs.
PAYMENTS: Payments by the Obligors will be made by wire
transfer of immediately available funds.
INDEMNIFICATION: The Obligors will, jointly and severally, indemnify
and hold harmless the Bridge Lenders in connection
with the Bridge Financing Documents and the
Transactions on terms substantially similar to the
Indemnification Provisions set forth in Exhibit A to
the Bridge Commitment Letter.
MODIFICATION OF
THE BRIDGE LOANS: Modification of the Bridge Loan Agreement may be
made with consent of the Required Bridge Lenders,
except that, without the consent of the Bridge
Lenders holding 100% of the Bridge Loans affected
thereby, no modification or change may extend the
final maturity of any Bridge Loans or time of
payment of any interest on the Bridge Loans, reduce
the rate of interest or the principal amount of any
Bridge Loans or reduce the percentage of Bridge
Lenders necessary to modify or change the Bridge
Loan Agreement. As used herein, "REQUIRED BRIDGE
LENDERS" means the Bridge Lenders holding (i) prior
to the Closing Date, greater than 50% of the
Aggregate Commitment or (ii) after the Closing Date,
more than 50% of the aggregate principal amount of
the Bridge Loans then outstanding.
COST AND YIELD
PROTECTION: The Bridge Lenders shall receive cost and yield
protection customary for facilities and transactions
of this type, including, but not limited to,
compensation in respect of "break funding," taxes
(including but not limited to gross-up provisions
for withholding taxes imposed by any governmental
authority), changes in capital requirements,
guidelines or policies or their interpretation or
application, illegality, change in circumstances,
reserves and other provisions deemed necessary by
the Bridge Lenders to provide customary protection
for U.S. and non-U.S. financial institutions.
CONDITIONS
PRECEDENT: The several obligations of the Bridge Lenders to
make the Bridge Loans will be subject to the closing
conditions set forth in the Bridge Commitment Letter
and on Annex 3 to the Bridge Commitment Letter.
COVENANTS: The Bridge Loan Agreement will contain such
covenants with respect to the Company and its
subsidiaries as are usual and customary for
financings of this kind (in each case with customary
carve-outs, exceptions and/or qualifications),
including, without limitation, as to (i) use of
proceeds; (ii) refinancing of the Bridge Loans;
(iii) furnishing of financial information in
accordance with generally accepted accounting
principles, access to other information and access
to management; (iv) compliance with laws; (v)
maintenance of existence, (vi) restrictions on
liens; (vii) restrictions on indebtedness; (viii)
restrictions on investments; (ix) restrictions on
dividends, distributions, redemptions and other
restricted payments (to be defined); (x)
restrictions on sales and other dispositions of
assets; (xi) restrictions on mergers and
consolidations (other than with existing
subsidiaries) and restrictions on additional
acquisitions and consolidations; (xii) restrictions
on transactions with affiliates; (xiii) restrictions
on business activities; and (xiv) restrictions on
material adverse amendments to charter documents.
EVENTS OF
DEFAULT: The Bridge Loan Agreement will include such events
of default as are usual and customary for financings
of this kind, in each case, with customary
qualifications, including, without limitation: (i)
the failure of the Obligors to pay principal on the
Bridge Financing when due; (ii) the failure of the
Obligors to pay interest or fees on the Bridge
Financing and the continuance of such failure for
five business days; (iii) the failure of the
Obligors to comply with any other provision,
condition, covenant, promise, warranty or
representation in the Bridge Financing Documents,
provided that in certain cases such failure
continues for 30 days after notice; (iv) a default
under any instrument or instruments governing
indebtedness of any of the Obligors or their
subsidiaries when such default causes such
indebtedness to become accelerated and due prior to
its stated maturity or failure to pay any such
indebtedness at its stated maturity in an aggregate
principal amount exceeding a threshold amount to be
agreed; (v) final uninsured (or not covered by a
solvent indemnitor) judgments aggregating in excess
of a threshold amount to be agreed rendered against
the Obligors or any of their subsidiaries and not
discharged or stated within 60 days; (vi) certain
events of bankruptcy, insolvency or reorganization
with respect to any of the Obligors or any of their
subsidiaries; (vii) material misrepresentations in
the Bridge Financing Documents; (viii) certain ERISA
defaults; (ix) the exercise of any change of control
put right by any lender under any instrument or
instruments governing indebtedness, with a minimum
aggregate principal amount to be agreed, of any of
the Obligors; or (x) any Guarantee shall become
invalid.
"CONVERSION DEFAULT" shall mean each of the events
set forth in clauses (ii), (iii), (iv), (vi) and (x)
of the immediately preceding paragraph.
In case an event of default shall occur and be
continuing, the holders of more than 50% in
aggregate principal amount of the Bridge Loans then
outstanding, by notice in writing to the Borrower,
may declare the principal of and all accrued
interest on the Bridge Loans to be immediately due
and payable; provided, however, that no such notice
shall be necessary in the case of an event of
default described in clause (vi) of the immediately
preceding paragraph. An acceleration notice may be
annulled and past defaults (except for payment
defaults not yet cured) may be waived by the holders
of a majority in aggregate principal amount of
Bridge Loans then outstanding.
REPRESENTATIONS AND
WARRANTIES: The Bridge Loan Agreement will contain such
representations and warranties with respect to the
Obligors, the Target and their respective
subsidiaries as are usual and customary for
financings of this kind (in each case with customary
carve-outs, exceptions and qualifications),
including, without limitation: (i) organization and
good standing, (ii) capitalization, (iii)
authorization and enforceability, (iv) no conflicts,
(v) governmental regulations (including margin
regulations), (vi) no defaults, (vii) no violation
of law, (viii) absence of litigations, proceedings,
labor disputes, etc., (ix) financial condition
(including solvency matters), (x) Investment Company
Act and Xxxx-Xxxxx-Xxxxxx matters, (xi) absence of
material adverse change, (xii) absence of
undisclosed liabilities, (xiii) financial statements
and (xiv) full disclosure.
ASSIGNMENTS AND
PARTICIPATIONS: Each of the Bridge Lenders will have the absolute
and unconditional right, upon notice to the Borrower
and the Administrative Agent, to: (i) assign all (or
any portion in excess of $5.0 million) of its Bridge
Loans to any one or more Permitted Assignees and
(ii) pledge all or any portion of its Bridge Loans
to any Federal Reserve Bank or to any funding source
of such Bridge Lender. In addition, subject to
customary limitations on participants' voting
rights, each of the Bridge Lenders may sell
participations (a) in its share of the Aggregate
Commitment to any Permitted Assignee, provided that
no such participation shall relieve the selling
Bridge Lender of its obligations to make Bridge
Loans on the Closing Date, and (b) in its Bridge
Loans to any Permitted Assignee. As used herein,
"PERMITTED ASSIGNEE" means (i) any "qualified
institutional buyer" (as defined in Rule 144A under
the Securities Act of 1933, as amended) or (ii) any
"accredited investor" (as defined in Section 2(15)
of the Securities Act of 1933, as amended).
GOVERNING LAW
AND FORUM: New York.
COUNSEL FOR THE
BRIDGE LENDERS: Xxxxxx & Xxxxxxx.
ANNEX 2
SUMMARY OF TERMS AND CONDITIONS OF EXCHANGE NOTES
AND TERM LOANS
Capitalized terms used but not defined herein have the
meanings given in the Bridge Commitment Letter to which this Annex 2 is
attached or, if not defined therein, in Annex 1 thereto.
EXCHANGE NOTES
/TERM LOANS: If the Bridge Loans are not repaid in their
entirety on or before the Bridge Maturity Date, such
Bridge Loans shall be automatically converted to
term loans ("TERM LOANS"), provided that no
Conversion Default has occurred and is continuing.
The Bridge Lender in respect of such Term Loan will
have the option, at any time or from time to time,
to request Exchange Notes in exchange for such Term
Loan in an aggregate principal amount equal to the
then outstanding principal amount of the Term Loan
being exchanged, plus any capitalized interest added
thereto; provided, however, that a Bridge Lender may
not elect to exchange only a portion of its
outstanding Term Loans for Exchange Notes unless
such Bridge Lender intends at the time of such
partial exchange of Term Loans promptly to sell the
Exchange Notes received in such exchange.
The Term Loans will be governed by the Bridge Loan
Agreement and, except as expressly set forth below,
shall have the same terms as the Bridge Loans.
The Borrower will issue Exchange Notes, and the
Guarantors will issue joint and several guarantees
thereof, under an indenture which complies with the
Trust Indenture Act of 1939, as amended (the
"INDENTURE"). The Obligors will appoint a trustee
reasonably acceptable to the holders of the Exchange
Notes.
MATURITY: The Term Loans and the Exchange Notes will mature on
the tenth anniversary of the Closing Date (i.e., the
ninth anniversary of the Bridge Maturity Date).
DENOMINATION: The Exchange Notes will be issued in denominations
of $1,000 and integral multiples thereof.
INTEREST RATE: The rate per annum (expressed as a fixed percentage)
applicable to the Bridge Loans on the Bridge
Maturity Date plus 50 basis points, which rate shall
increase by 50 basis points on the last day of each
90-day period after the Bridge Maturity Date;
provided, however, that the interest rate applicable
to the Term Loans and the Exchange Notes (i) shall
not (except as provided in the next paragraph)
exceed 17% per annum, and (ii) shall not exceed the
maximum rate permitted by applicable law; and,
provided, further, that the Borrower shall have the
option to pay interest on the Term Loans or the
Exchange Notes, as applicable, through the issuance
of additional Term Loans or Exchange Notes, as
applicable, for such amount in excess of 15% per
annum. Notwithstanding the foregoing, after the
occurrence and during the continuance of a default
or an event of default, interest will accrue on the
Term Loans and the Exchange Notes at the
then-applicable rate plus 200 basis points per
annum. Interest will be payable in arrears at the
end of each 90-day period after the Bridge Maturity
Date, and on the maturity date of the Term Loans and
the Exchange Notes, as applicable.
RANKING;
SUBORDINATION: Same as Bridge Loans.
GUARANTEES: Same as Bridge Loans.
SECURITY: None.
MANDATORY
REDEMPTION: None.
CHANGE OF
CONTROL: Upon the occurrence of a change of control, the
Borrower shall offer to repay the Term Loans and
redeem the Exchange Notes at a price of 101% of
principal amount, plus accrued interest.
OPTIONAL
REDEMPTION: Except as provided in the next sentence, the Term
Loans may be repayed and the Exchange Notes may be
redeemed, in whole or in part, at the option of the
Borrower at any time upon three business days'
written notice at par plus accrued and unpaid
interest to the date of redemption.
Prior to the first transfer of any Exchange Notes to a
person who was not a Bridge Lender or any affiliate
thereof, the Bridge Lender or affiliate thereof that
is the transferor shall give the Borrower notice of
such proposed transfer and an opportunity to redeem
such Exchange Notes at par plus accrued interest.
Once an Exchange Note has been transferred to a
person who was not a Bridge Lender or any affiliate
thereof, such Exchange Note will be subject to call
protection customary for fixed rate high-yield debt
securities for a period of five years from the
Closing Date.
If the Borrower elects to optionally redeem all or any
portion of the Exchange Notes, then the Borrower
shall be required to optionally prepay, on a pro
rata basis, outstanding Term Loans, if any, at par
plus accrued and unpaid interest.
PAYMENTS: Same as Bridge Loans.
TRANSFERABILITY: Unlimited except as otherwise provided by law.
DEFEASANCE: The Indenture will contain customary defeasance
provisions.
MODIFICATION: Modification of the Indenture may be made with
consent of the Required Bridge Lenders, except that,
without the consent of the Bridge Lenders holding
100% of the Exchange Notes affected thereby, no
modification or change may extend the final maturity
of any Exchange Notes or time of payment of any
interest on the Exchange Notes, reduce the rate of
interest or the principal amount of any Exchange
Notes or reduce the percentage of Bridge Lenders
necessary to modify or change the Indenture.
REGISTRATION RIGHTS: The Obligors will file within 30 days after
the Bridge Maturity Date (the "TRIGGER DATE"), and
will use commercially reasonable efforts to cause to
become effective as soon thereafter as practicable,
a shelf registration statement with respect to the
Exchange Notes (a "SHELF REGISTRATION STATEMENT").
If a Shelf Registration Statement is declared
effective, the Obligors will keep such registration
statement effective and available (subject to
customary exceptions) until it is no longer needed
to permit unrestricted resales of the Exchange Notes
but in no event longer than two years. If within 120
days from the Trigger Date (the "EFFECTIVENESS
DATE") a Shelf Registration Statement for the
Exchange Notes has not been declared effective, then
the Obligors will pay liquidated damages in the form
of increased interest of 50 basis points per annum
on the principal amount of Exchange Notes
outstanding to holders of such Exchange Notes who
are unable to freely transfer Exchange Notes from
and including the 120th day after the Trigger Date
to but excluding the effective date of such Shelf
Registration Statement. On the 121st day after the
Effectiveness Date, the interest shall increase by
50 basis points per annum, and on each 90-day
anniversary of the Effectiveness Date thereafter,
shall increase by 50 basis points per annum, to a
maximum increase in interest of 150 basis points.
The Obligors will also pay such increased interest
for any period of time (subject to customary
exceptions) following the effectiveness of a Shelf
Registration Statement that such Shelf Registration
Statement is not available for sales thereunder. All
accrued increased interest will be paid on each
quarterly interest payment date. In addition, unless
and until the Obligors have caused the Shelf
Registration Statement to become effective, the
holders of the Exchange Notes will have the right to
"piggy-back" in the registration of any debt
securities (subject to customary scale-back
provisions) that are registered by any of the
Obligors (other than on a Form S-4) unless all the
Exchange Notes will be redeemed or repaid from the
proceeds of such securities.
COVENANTS: The Indenture will contain covenants which are usual
and customary for financings of this kind.
EVENTS OF
DEFAULT: The Indenture will contain events of default which
are usual and customary for financings of this kind.
GOVERNING LAW
AND FORUM: New York.
COUNSEL FOR
THE BRIDGE
LENDERS: Xxxxxx & Xxxxxxx.
ANNEX 3
CERTAIN CONDITIONS
Capitalized terms used but not defined herein have the meanings
given in the Bridge Commitment Letter to which this Annex 3 is attached or,
if not defined therein, in Annex 1 or Annex 2 thereto.
The availability of the Bridge Loans shall be conditioned upon
the satisfaction of the following conditions precedent:
1. The Borrower shall have executed and delivered
satisfactory definitive financing documentation with respect to the Bridge
Loans, including, without limitation, the Bridge Loan Agreement (the
"BRIDGE LOAN DOCUMENTATION").
2. The following transactions shall have occurred prior
to, or shall occur concurrently with, the funding of the Bridge Loans:
a. The Target shall have received no less than
$500,000,000 in cash from the issuance of its common stock to the
Sponsors (or as a result of the Merger) on the terms and
conditions described in the Transaction Documentation or as
otherwise reasonably satisfactory to BSCL. Pursuant to the
Transactions, approximately $353,100,000 in common stock or
options of the Target held by the Rollover Shareholders shall have
been rolled over into pay-in-kind preferred stock, junior
preferred stock and common stock of the Target (based on
liquidation preference in the case of preferred stock and based on
the consideration per share paid in the Transactions in the case
of common stock), after giving effect to the Transactions and on
the terms and conditions described in the Transaction
Documentation or as otherwise reasonably satisfactory to BSCL.
b. The Borrower and the financial institutions
party thereto shall have entered into the $1,750,000,000 Senior
Credit Facility consisting of a $300,000,000 six and one-half year
revolving credit facility, a $500,000,000 six and one-half year
amortizing term loan A, a $650,000,000 seven and one-half year
amortizing term loan B and a $300,000,000 eight and one-half year
amortizing term loan C. All conditions precedent to borrowings
under the Senior Credit Facility shall have been satisfied or,
with the prior approval of the Required Lenders, waived.
c. The Transactions shall have been consummated
for aggregate consideration (including fees and expenses) of
approximately $3,081,800,000 (subject to changes in the Target's
and its subsidiaries' existing bank debt in the ordinary course of
business) pursuant to (i) the Merger Agreement, dated as of June
22, 2000, executed by the Target, Mergerco and Financeco and (ii)
the stock voting agreement, dated as of June 22, 2000, executed by
Mergerco and The Manville Personal Injury Settlement Trust
(together, the "TRANSACTION DOCUMENTATION"), and no material
provision thereof shall have been amended, waived or otherwise
modified, and no consent or agreement shall be made by Mergerco or
Financeco thereunder, in a manner materially adverse to the
interests of the Bridge Lenders without the prior written consent
of BSCL.
d. The Transactions (including the Merger) shall
have been approved by the holders of at least a majority of the
outstanding common stock of the Target and the Transactions shall
have been consummated in all material respects in accordance with
the terms of the Transaction Documentation and all applicable
requirements of law.
e. All amounts outstanding under the Target's
existing revolving credit facility shall have been repaid, all
commitments thereunder shall have been terminated and all liens
securing such facilities shall have been terminated, in each case,
on terms and conditions reasonably satisfactory to BSCL.
f. The Target's other outstanding indebtedness
for borrowed money (other than certain indebtedness to be agreed)
shall have been redeemed or repurchased on terms and conditions
reasonably satisfactory to BSCL. The consummation of the
Transactions shall not trigger any change of control put rights
under any such indebtedness to remain outstanding after the
Closing Date.
g. The capital structure of the Target and its
subsidiaries shall be reasonably satisfactory to BSCL, after
giving effect to the Transactions; provided that it is hereby
acknowledged that to the extent such capital structure is the same
as that described herein, it shall be deemed to be reasonably
satisfactory.
h. The Target shall have transferred all of its
assets to the Company.
3. BSCL, Bear Xxxxxxx, the Bridge Lenders, and Xxxxxx &
Xxxxxxx shall have received all reasonable fees required to be
paid, and all expenses for which invoices have been presented, on
or before the Closing Date.
4. All material governmental and third-party approvals
(including any bankruptcy court approval) necessary or, in the
reasonable discretion of BSCL, advisable in connection with the
Transactions, the financing contemplated hereby and the continuing
operations of the Borrower and its respective subsidiaries shall
have been obtained and be in full force and effect, and all
applicable waiting periods shall have expired without any action
being taken or known to be threatened by any competent authority
which would restrain, prevent or otherwise impose adverse
conditions on the Transactions or the financing thereof.
5. Each of the Bridge Lenders shall have received
unaudited interim financial statements of the Target, prepared in
the same manner as the historical audited statements previously
delivered to BSCL, for each quarterly period commencing with the
fiscal quarter ended June 30, 2000 and for the same quarterly
period during the most recently ended fiscal year (such interim
financial statements to be delivered within 45 days of the end of
the applicable fiscal quarter).
6. Each of the Bridge Lenders shall have received and
shall be reasonably satisfied with consolidated pro forma balance
sheets and income statements of the Company as of the last day of
the most recently ended fiscal quarter prior to the Closing Date,
giving effect to the Transactions and the transactions
contemplated by the Merger Agreement and the Bridge Commitment
Letter (meeting the requirements of Regulation S-X for a
registration statement on Form S-1).
7. The Bridge Lenders and Bear Xxxxxxx shall have
received the written permission of each of the Company and the
Target to include each of the financial statements referred to in
paragraphs (5) and (6) in any manner in connection with the Bridge
Loans and/or the Permanent Financing.
8. The fees and expenses to be incurred in connection
with the Transactions and the financing thereof shall not exceed
$160,000,000 in the aggregate.
9. BSCL shall have received and shall be reasonably
satisfied with a solvency opinion from an independent valuation
firm reasonably satisfactory to BSCL which shall document the
solvency of the Target and its subsidiaries after giving effect to
the Transactions and the other transactions contemplated hereby.
10. Each of the Bridge Lenders shall have received such
legal opinions (including opinions (i) from counsel to the
Obligors and (ii) from such special and local counsel as may
reasonably be required by BSCL), documents and other instruments
as are customary for transactions of this type or as they may
reasonably request.
11. BSCL shall be satisfied that the pro forma ratio
(giving effect to the Transactions and the transactions
contemplated by the Merger Agreement and consummated on or prior
to the Closing Date) of consolidated total funded debt to
consolidated EBITDA (excluding certain non-recurring charges as
accepted by BSCL) of the Target for the twelve month period ending
on the date of the most recently ended fiscal quarter for which
internal financial statements are available is no greater than
4.65 to 1.0, and the Target shall provide support for such
calculation of a nature that is reasonably satisfactory to the
BSCL (and, except as may be accepted by BSCL, in conformity with
Regulation S-X).
12. The Required Lenders shall be reasonably satisfied as
to the absence of any action, suit, investigation, litigation or
proceeding pending or known to be threatened in any court or
before any arbitrator or governmental instrumentality that
purports to affect the Transactions, the Senior Credit Facility,
the Bridge Financing or any of the other transactions contemplated
hereby, or that could reasonably be expected to have a material
adverse effect on the Transactions or the Senior Credit Facility,
the Bridge Financing or any of the other transactions contemplated
hereby.
13. All representations and warranties in the Bridge Loan
Documentation (including, without limitation, the material adverse
change and litigation representations) shall be true and correct
in all material respects.
14. No default or event of default under the Bridge Loan
Documentation or the Senior Credit Facility shall exist at the
time of, or after giving effect to the making of, the Bridge Loans
or the loans under the Senior Credit Facility to be made on the
Closing Date.
15. The Bridge Lenders shall have received not less than
three business days prior notice of the expected Closing Date.
EXHIBIT G
FORM OF
STOCKHOLDERS' AGREEMENT
XXXXX XXXXXXXX CORPORATION
--------------------
Dated as of _____________, ____
--------------------
TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS.............................................1
1.1 Definitions................................................1
1.2 Rules of Construction.....................................10
ARTICLE 2 MANAGEMENT OF THE COMPANY AND CERTAIN
ACTIVITIES.............................................11
2.1 Board of Directors........................................11
2.1.1 Board Representation................................11
2.1.2 Vacancies...........................................11
2.1.3 Termination of Rights...............................12
2.1.4 Costs and Expenses..................................12
2.2 Other Activities of the Holders; Fiduciary Duties.........12
2.3 Request for Sale of Company by HMTF.......................13
ARTICLE 3 REGISTRATION RIGHTS....................................13
3.1 Demand Registration.......................................13
3.1.1 Request for Registration of Registrable
Shares..............................................13
3.1.2 Request for Registration of PIK Preferred...........14
3.1.3 Company S-3 Obligation..............................15
3.1.4 Effective Registration and Expenses.................15
3.1.5 Selection of Underwriters...........................15
3.1.6 Priority on Demand Registrations....................16
3.1.7 Rights of Nonrequesting Holders.....................16
3.1.8 Deferral of Filing..................................16
3.2 Piggyback Registrations...................................17
3.2.1 Right to Piggyback..................................17
3.2.2 Priority on Registrations...........................18
3.3 Shelf Registration........................................18
3.3.1 Obligation to File..................................18
3.3.2 Maintenance of Effectiveness........................19
3.3.3 Certain Limitations on Sales........................19
3.4 Holdback Agreement........................................20
3.5 Registration Procedures...................................20
3.6 Suspension of Dispositions................................24
3.7 Registration Expenses.....................................25
3.8 Indemnification...........................................25
ARTICLE 4 TRANSFERS OF SECURITIES................................28
4.1 Preemptive Rights.........................................28
4.1.1 Rights to Participate in Future Sales...............28
4.1.2 Exceptions to Preemptive Rights.....................29
4.2 Drag Along Rights.........................................29
4.2.1 Applicability.......................................29
4.2.2 Notice of Significant Drag Sale.....................30
4.3 Tag Along Rights..........................................30
4.3.1 Applicability.......................................30
4.3.2 Terms of Participation Offer........................31
4.4 Certain Events Not Deemed Transfers.......................31
4.5 Transfer and Exchange.....................................31
4.6 Replacement Securities....................................32
4.7 Concurrent Transfer of Securities.........................32
ARTICLE 5 LIMITATION ON TRANSFERS................................32
5.1 Restrictions on Transfer..................................32
5.2 Restrictive Legends.......................................32
5.2.1 Securities Act Legend...............................32
5.2.2 Other Legends.......................................33
5.3 Notice of Proposed Transfers..............................33
5.4 Termination of Certain Restrictions.......................33
CERTAIN STOCKHOLDER APPROVAL MATTERS..................................34
6.1 Transactions Requiring Affirmative Vote of the
Required Holders..........................................34
6.2 Suspension and Termination of Special Stockholder
Voting Rights.............................................35
COMPANY CALL; COMPANY COVENANT........................................35
7.1 IPO Rights; Sale Rights;..................................35
7.1.1 IPO Rights..........................................35
7.1.2 Sale Rights.........................................35
7.2 Company Call; Purchase Price..............................36
7.2.1 Company Call........................................36
7.2.2 Purchase Price......................................37
7.3 Trust Liquidity Right.....................................37
7.4 Company Covenant..........................................37
ARTICLE 8 TERMINATION............................................37
8.1 Termination...............................................37
8.2 Termination of Certain Provisions.........................38
ARTICLE 9 MISCELLANEOUS..........................................38
9.1 Notices...................................................38
9.2 Governing Law.............................................39
9.3 Successors and Assigns....................................39
9.4 Certain Waivers...........................................40
9.5 Duplicate Originals.......................................40
9.6 Severability..............................................40
9.7 No Waivers; Amendments....................................40
9.8 Furnishing Information; Confidentiality...................40
STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT (this "Stockholders' Agreement")
dated as of ______ ___, ____ (the "Effective Date"), is entered into by and
among Xxxxx Xxxxxxxx Corporation, a Delaware corporation (including its
successors, the "Company"), and the securityholders listed on the signature
pages hereof.
In consideration of the premises, mutual covenants and
agreements hereinafter contained and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions.
"ACCREDITED INVESTOR" means an "Accredited Investor," as
defined in Regulation D, or any successor rule then in effect.
"ACCREDITED OFFEREE" shall have the meaning provided in
Section 4.1 hereof.
"ADVICE" shall have the meaning provided in Section 3.6
hereof.
"AFFILIATE" shall have the meaning set forth in the
Exchange Act.
"ANNUAL BUDGET" means with respect to any fiscal year of
the Company, the budget prepared by the management of the
Company and approved by the Board reflecting costs and expenses
projected to be incurred by the Company for such fiscal year.
"BENEFICIALLY-OWNED" shall have the meaning set forth in
the Exchange Act.
"BOARD" means the Board of Directors of the Company as in
office from time to time.
"BSMB" means Bear Xxxxxxx Merchant Fund Corp., a
Delaware corporation.
"BSMB CONTROL GROUP" means those Persons listed in clause
(a) of the definition of "BSMB Group".
"BSMB DEMAND GROUP" means any group of Holders of
twenty-five percent (25%) of the Securities Beneficially Owned
by the BSMB Group.
"BSMB GROUP" means (a) BSMB and its Affiliates, including
any investment fund formed and controlled by BSMB or any
Affiliate of BSMB, and its and their respective officers,
directors, partners and employees (and members of their
respective families and trusts for the primary benefit of such
family members) and (b) its Initial Permitted Transferees.
"BSMB TRANSFEREE" means any member of the BSMB Group to
which any Securities Beneficially Owned by either the BSMB
Group or the HMTF Group are Transferred after the Effective
Date.
"BUSINESS DAY" means a day that is not a Legal Holiday. A
"Legal Holiday" used with respect to a particular place of
payment is a Saturday, a Sunday or a day on which banking
institutions at such place are not required to be open.
"COMMON STOCK" means shares of the Common Stock, $.01 par
value per share, of the Company, and any capital stock of any
Person for which such Common Stock hereafter may be exchanged.
"COMMON STOCK EQUIVALENTS" means the Junior Preferred
Stock and any other rights, warrants, options, convertible
securities or indebtedness, exchangeable securities or
indebtedness, or other rights to purchase, exercisable for or
convertible or exchangeable into, directly or indirectly,
Common Stock and securities convertible or exchangeable into
Common Stock, whether at the time of issuance or upon the
passage of time or the occurrence of some future event.
"COMPANY" shall have the meaning set forth in the
introductory paragraph hereof.
"COMPANY CALL" shall have the meaning set forth in
Section 7.2.1(a) hereof.
"CONTROL" shall have the meaning set forth in the
Exchange Act.
"CO-SELLER" shall have the meaning set forth in Section
4.2.1 hereof.
"CREDIT AGREEMENT" [to be entered into]
"DEMAND REGISTRATION" means a PIK Demand Registration or
R/S Demand Registration, as applicable.
"DEMAND REQUEST" means a PIK Demand Request or R/S Demand
Request, as applicable.
"DGCL" means the Delaware General Corporation Law, as
amended from time to time.
"EFFECTIVE DATE" shall have the meaning set forth in the
introductory paragraph hereof.
"EFFECTIVENESS PERIOD" shall have the meaning set forth
in Section 3.3.1 hereof.
"EXERCISE DATE" shall have the meaning set forth in
Section 7.2.1(d) hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated by the
SEC thereunder.
"EXCLUDED REGISTRATION" means a registration under the
Securities Act of securities registered on Form S-4 or Form S-8
or any successor form.
"FAIR MARKET VALUE" shall have the meaning set forth in
Section 7.2.2(a) hereof.
"FAMILY TRANSFER" shall have the meaning set forth in
Section 4.4 hereof.
"FIXED CHARGES RATIO" means the fixed charge coverage
financial covenant set forth in Section [___] of the Credit
Agreement as in effect from time to time.
"FULLY-DILUTED COMMON STOCK" means, at any time, the then
outstanding Common Stock plus (without duplication) all shares
of Common Stock issuable, whether at such time or upon the
passage of time or the occurrence of some future event, upon
the exercise, conversion or exchange of all then outstanding
Common Stock Equivalents assuming exercise, conversion or
exchange at such time.
"GROUP TRANSFEREE" means a BSMB Transferee or an HMTF
Transferee, as the case may be.
"XXXXX" means C.L. "Xxxxx" Xxxxx.
"XXXXX EMPLOYMENT AGREEMENT" means that certain
employment agreement dated ______ __, ____ by and among Xxxxx
and the Company.
"XXXXX FAMILY MEMBER" means, to the extent provided for
in Securities Act Form S-8, any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
including adoptive relationships, any person sharing Henry's
household (other than a tenant or employee), a trust in which
these persons have more than 50% of the beneficial interest, a
foundation in which these persons (or the employee) control the
management of assets, and any other entity in which these
persons (or Xxxxx) own more than 50% of the voting interests or
as otherwise defined in Securities Act Form S-8.
"HMTF" means Hicks, Muse, Xxxx & Xxxxx Incorporated, a
Texas corporation.
"HMTF CONTROL GROUP" means those Persons listed in clause
(a) of the definition of "HMTF Group".
"HMTF DEMAND GROUP" means any group of Holders of
twenty-five percent (25%) of the Securities Beneficially Owned
by the HMTF Group.
"HMTF GROUP" means (a) HMTF and its Affiliates, including
any investment fund formed and controlled by HMTF or any
Affiliate of HMTF, and its and their respective officers,
directors, partners and employees (and members of their
respective families and trusts for the primary benefit of such
family members) and (b) its Initial Permitted Transferees.
"HMTF TRANSFEREE" means any member of the HMTF Group to
which any Securities Beneficially Owned by either the BSMB
Group or the HMTF Group are Transferred after the Effective
Date.
"HOLDER" means (i) a Person listed on the signature page
hereof, (ii) any direct or indirect transferee of any such
Person who shall become a party to this Stockholders' Agreement
pursuant to Section 5.1, (iii) an Initial Permitted Transferee
and (iv) any Management Holder who shall become a party to this
Stockholders' Agreement after the Effective Date.
"INFORMATION" shall have the meaning set forth in Section
9.8.2 hereof.
"INITIAL PERMITTED TRANSFEREE" means any Person to whom
any Securities Beneficially Owned by either the BSMB Group or
the HMTF Group is transferred or sold after the Effective Date;
provided that such Person will constitute an "Initial Permitted
Transferee" under this Stockholders' Agreement only to the
extent (x) such Person shall have granted to BSMB or HMTF, as
applicable, an irrevocable proxy to vote such Securities and
(y) after giving effect to such transfer or sale, the BSMB
Control Group or the HMTF Control Group, as applicable, shall
own more than fifty percent (50%) of the Securities
Beneficially Owned by it on the Effective Date; provided
further that a Person shall cease to be deemed an Initial
Permitted Transferee if the irrevocable proxy referred to above
ceases to be in effect, lapses or is withdrawn.
"INSPECTORS" shall have the meaning set forth in Section
3.5(x) hereof.
"IPO NOTICE" shall have the meaning set forth in Section
7.1.1(a) hereof.
"JUNIOR PREFERRED STOCK" means the Series B Convertible
Preferred Stock, par value $.01 per share, of the Company.
"LEVERAGE RATIO" means the maximum total leverage
financial covenant as set forth in Section [___] of the Credit
Agreement as in effect from time to time.
"LIQUIDITY NOTICE" shall have the meaning provided in
Section 7.3 hereof.
"MANAGEMENT HOLDER" means any of the Persons listed on
Schedule 1.1 hereto and any other Person who becomes a party to
this Stockholders' Agreement pursuant to the terms of his/her
option agreement with the Company.
"MANAGEMENT SECURITIES" means, with respect to any
Management Holder, (a) any Securities which are issued upon the
required exercise and payment by the Management Holder of the
required exercise price of any outstanding options upon
termination of such Management Holder's employment with the
Company and (b) any Securities of the Company or rights to
receive Securities of the Company pursuant to Section 2.3(c)(1)
of the Merger Agreement.
"MATERIAL ADVERSE EFFECT" shall have the meaning provided
in Section 3.1.6 hereof.
"MERGER AGREEMENT" means that certain Merger Agreement
dated as of June 22, 2000, among the Company, HB Finance LLC, a
Delaware limited liability company and HB Merger LLC, a
Delaware limited liability company ("Mergerco") pursuant to
which Mergerco will merge with and into the Company (the
"Merger").
"XXXXX'X" shall have the meaning provided in Section 7.3
hereof.
"NASD" shall have the meaning provided in Section 3.7
hereof.
"NOMINATING HOLDER" shall have the meaning provided in
Section 2.1.1 hereof.
"OFFER NOTICE" shall have the meaning provided in Section
4.1 hereof.
"OFFERED SECURITIES" shall have the meaning provided in
Section 4.1 hereof.
"PARTICIPATION OFFER" shall have the meaning provided in
Section 4.3 hereof.
"PARTY DESIGNEE" shall have the meaning provided in
Section 2.1.1 hereof.
"PERFORMANCE HURDLES" means, for any fiscal quarter, the
time at which (a) the Leverage Ratio is less than 95% of the
maximum Leverage Ratio permitted under the Credit Agreement and
(b) the Fixed Charges Ratio is greater than 105% of the minimum
Fixed Charges Ratio permitted under the Credit Agreement.
"PERSON" or "PERSON" means any individual, corporation,
partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated
organization or government or other agency or political
subdivision thereof.
"PIK PREFERRED STOCK" means the Series A Redeemable PIK
Preferred Stock, par value $.01 per share, of the Company.
"PIK DEMAND REQUEST" shall have the meaning set forth in
Section 3.1.2(a) hereof.
"PIK DEMAND REGISTRATION" shall have the meaning set
forth in Section 3.1.2(a) hereof.
"PIK REQUIRED FILING DATE" shall have the meaning set
forth in Section 3.1.2(b) hereof.
"PIK S-3 REGISTRATION" shall have the meaning set forth
in Section 3.1.2(c) hereof.
"PREEMPTIVE RIGHTS OFFER" shall have the meaning set
forth in Section 4.1 hereof.
"PREEMPTIVE RIGHTS TRANSACTION" shall have the meaning
set forth in Section 4.1 hereof.
"QUALIFIED HOLDER" means (a) a Holder owning five percent
(5%) or more of the Fully-Diluted Common Stock and (b) Xxxxx so
long as he is employed by the Company or is a director of the
Company.
"QUALIFIED IPO" means one or a series of firm commitment
underwritten public offerings of newly issued Common Stock
pursuant to a registration statement under the Securities Act
where (i) the proceeds to the Company (prior to deducting any
underwriters' discounts and commissions) equal or exceed One
Hundred Million Dollars ($100,000,000) and (ii) following
consummation of such offering or offerings, the Common Stock is
listed on the New York Stock Exchange or American Stock
Exchange or authorized to be traded on the Nasdaq National
Market.
"RATING" shall have the meaning set forth in Section 7.3
hereof.
"RECORDS" shall have the meaning set forth in Section
3.5(x) hereof.
"REGISTRABLE SECURITIES" means Registrable Shares or PIK
Preferred, as the case may be.
"REGISTRABLE SHARES" means at any time (a) the Common
Stock owned by the Holders, whether owned on the date hereof or
acquired hereafter and (b)(i) the shares of Common Stock
issuable or issued upon conversion of the Junior Preferred
Stock and (ii) any other shares of the Common Stock issued as
(or issuable upon conversion or exercise of any warrant, right
or other security which is issued as) a dividend or other
distribution with respect to or in exchange for or replacement
of the Junior Preferred Stock; provided, however, that
Registrable Shares shall not include any shares (i) the sale of
which has been registered pursuant to the Securities Act and
which shares have been sold pursuant to such registration or
(ii) which have been sold pursuant to Rule 144 of the SEC under
the Securities Act.
"REGISTRATION EXPENSES" shall have the meaning provided
in Section 3.7 hereof.
"REGULATION D" means Regulation D promulgated under the
Securities Act by the SEC.
"REQUESTED IPO" shall have the meaning set forth in
Section 7.1.1(a) hereof.
"REQUESTING HOLDERS" shall have the meaning set forth in
Section 3.1.7.
"REQUIRED FILING DATE" shall mean the PIK Required Filing
Date or the R/S Required Filing Date, as applicable.
"REQUIRED HOLDERS" means Holders who then own
beneficially more than 50% of the aggregate number of shares of
Securities subject to this Stockholders' Agreement; provided
however that (a) so long as the HMTF Group owns at least fifty
percent (50%) of the Securities owned by it on the Effective
Date and the HMTF Control Group owns a majority of the
Securities at any time owned by the HMTF Group, no action
permitted to be taken by the Required Holders may be taken by
the Required Holders unless a majority of the Holders in the
HMTF Group is included in the Required Holders and has
consented to such action, and (b) so long as the BSMB Group
owns at least fifty percent (50%) of the Securities owned by it
on the Effective Date and the BSMB Control Group owns a
majority of the Securities at any time owned by the BSMB Group,
no action permitted to be taken by the Required Holders may be
taken by the Required Holders unless a majority of the Holders
in the BSMB Group is included in the Required Holders and has
consented to such action.
"REQUIRED PERCENTAGE" means (a) with respect to the HMTF
Group, twenty percent (20%), (b) with respect to the BSMB
Group, ten percent (10%) and (c) with respect to the Trust,
five percent (5%); provided, that if the Trust has not sold at
least 20% of the Securities Beneficially Owned by it on the
Effective Date, the Required Percentage with respect to the
Trust from time to time shall be a percentage equal to the
percentage of the Fully Diluted Common Stock then Beneficially
Owned by the Trust (it being intended the dilution from new
issuances of Securities will not affect the Trust under this
definition unless and until Securities representing at least
20% of the Securities Beneficially Owned by it on the Effective
Date have been Transferred by it).
"R/S DEMAND REQUEST" shall have the meaning set forth in
Section 3.1.1(a) hereof.
"R/S DEMAND REGISTRATION" shall have the meaning set
forth in Section 3.1.1(a) hereof.
"R/S DEMAND REQUESTING HOLDER" shall have the meaning set
forth in Section 3.1.1(a) hereof.
"R/S REQUIRED FILING DATE" shall have the meaning set
forth in Section 3.1.1(b) hereof.
"R/S S-3 REGISTRATION" shall have the meaning set forth
in Section 3.1.1(c) hereof.
"S-3 ELIGIBILITY" shall have the meaning provided in
Section 3.1.3 hereof.
"SALE OPTION" shall have the meaning set forth in Section
7.1.2 hereof.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means the Common Stock and the
Junior Preferred Stock.
"SECURITIES ACT" means the Securities Act of 1933, as
amended, and the rules and regulations promulgated by the SEC
thereunder.
"SELLER AFFILIATES" shall have the meaning provided in
Section 3.8.1 hereof.
"SELLING HOLDER" shall have the meaning set forth in
Section 4.3.1 hereof.
"SENIOR DEBT COVENANTS" means the Leverage Ratio
and the Fixed Charges Ratio.
"SHELF REGISTRATION" shall have the meaning set forth in
Section 3.3.1 hereof.
"SHELF REGISTRATION REQUEST" shall have the meaning set
forth in Section 3.3.1 hereof.
"SHELF SHARES" shall have the meaning set forth in
Section 3.3.1 hereof.
"SIGNIFICANT DRAG SALE" shall have the meaning provided
in Section 4.2 hereof.
"SIGNIFICANT TAG SALE" shall have the meaning provided in
Section 4.3 hereof.
"STOCKHOLDERS' AGREEMENT" means this Stockholders'
Agreement, as such from time to time may be amended.
"SUBSIDIARY" of any Person means (i) a corporation a
majority of whose outstanding shares of capital stock or other
equity interests with voting power, under ordinary
circumstances, to elect directors, is at the time, directly or
indirectly, owned by such Person, and (ii) any other Person
(other than a corporation) in which such Person, directly or
indirectly, at the date of determination thereof, has (x) at
least a majority ownership interest or (y) the power to elect
or direct the election of a majority of the directors or other
governing body of such Person.
"SUSPENSION EVENT" means the earlier to occur of (a) the
time at which the Company reasonably expects to be in default
of the Senior Debt Covenants as certified in writing to BSMB by
the chief financial officer of the Company or (b) either, for
any fiscal quarter, (i) the Leverage Ratio exceeds 95% of the
maximum Leverage Ratio permitted under the Credit Agreement or
(ii) the Fixed Charges Ratio is less than 105% of the minimum
Fixed Charges Ratio permitted under the Credit Agreement.
"SUSPENSION NOTICE" shall have the meaning provided in
Section 3.6 hereof.
"TAG CO-SELLER" shall have the meaning set forth in
Section 4.3.1 hereof.
"TERMINATED MANAGEMENT HOLDER" shall have the meaning
provided in Section 7.2.1(a) hereof.
"TRANSFER" means any disposition of any Security or any
interest therein that would constitute a "sale" thereof within
the meaning of the Securities Act.
"TRANSFER NOTICE" shall have the meaning provided in
Section 5.3 hereof.
"TRUST" shall mean the Manville Personal Injury
Settlement Trust, a New York Trust.
1.2 Rules of Construction. Unless the context otherwise requires
(1) a term has the meaning assigned to it;
(2) "or" is not exclusive;
(3) words in the singular include the plural,
and words in the plural include the singular;
(4) provisions apply to successive events and
transactions; and
(5) "herein," "hereof" and other words of similar import
refer to this Stockholders' Agreement as a whole and not to any
particular Article, Section or other subdivision.
ARTICLE 2
MANAGEMENT OF THE COMPANY AND CERTAIN ACTIVITIES
2.1 Board of Directors.
2.1.1 Board Representation. Unless otherwise increased by a majority
of the Holders of the issued and outstanding Securities in accordance with
the DGCL, the Board shall consist of nine (9) directors, five being
appointed by the HMTF Group, two being appointed by the BSMB Group, one
being appointed by the Trust (each of HMTF Group, BSMB Group and the Trust,
a "Nominating Holder," and each such director so appointed, a "Party
Designee") and one of whom shall be the chief executive officer of the
Company. To the extent that the Board is increased as contemplated in the
preceding sentence, the HMTF Group shall always (subject to Section 2.1.3)
have the right to appoint a majority of the Board and, so long as the HMTF
Group has the right to and does appoint a majority of such increased Board,
the BSMB Group shall have the right (subject to Section 2.1.3) to appoint
that percentage of the members of the increased Board (and the Board shall
be further increased if reasonably required to so accomplish the desired
result) that is as close as practicable to the ratio of seven (7) board
members for the HMTF Group for every three (3) board members for the BSMB
Group. Each Holder shall vote his or its shares of Securities at any
regular or special meeting of stockholders of the Company or in any written
consent executed in lieu of such a meeting of stockholders and shall take
all other actions required by the DGCL to give effect to the agreements
contained in this Stockholders' Agreement (including without limitation the
election of persons designated by the Nominating Holders to be elected as
directors as described in the preceding sentence) and to ensure that the
certificate of incorporation of the Company and bylaws of the Company as in
effect immediately following the Effective Date do not, at any time
thereafter, conflict in any respect with the provisions of this
Stockholders' Agreement. In order to effectuate the provisions of this
Section 2.1, each of the HMTF Group or the BSMB Group hereby agrees that
when any action or vote is required to be taken by such Holder pursuant to
this Stockholders' Agreement, such Holder shall use his or its best efforts
to call, or cause the appropriate officers and directors of the Company to
call, a special or annual meeting of stockholders of the Company, as the
case may be, and each Holder agrees when any action or vote is required to
be taken by such Holder pursuant to this Agreement, such Holder shall
execute or cause to be executed a consent in writing in lieu of any such
meetings pursuant to Section 228(a) of the DGCL if requested by the Board.
Any committee formed by the Board shall include one (1) or more
representatives of the HMTF Group and the BSMB Group unless otherwise
consented to by the Required Holders.
2.1.2 Vacancies. If, prior to his or her election to the Board
pursuant to Section 2.1.1 hereof, any Party Designee shall be unable or
unwilling to serve as a director of the Company, the respective Nominating
Holder appointing such Party Designee shall be entitled to nominate a
replacement who shall then be a Party Designee for purposes of this Section
2. If, following an election to the Board pursuant to Section 2.1.1 hereof,
any Party Designee shall resign, be removed (which shall occur without
cause, only upon request of the Nominating Holder appointing such Party
Designee, but with cause may occur upon a vote of the Required Holders), or
be unable to serve for any reason prior to the expiration of his term as a
director of the Company (including disability or death), the respective
Nominating Holder appointing such Party Designee shall, within thirty (30)
days of such event, notify the Board in writing of a replacement Party
Designee, and either (i) the Holders shall vote their shares of Securities,
at any regular or special meeting called for the purpose of filling
positions on the Board or in any written consent executed in lieu of such a
meeting of stockholders, and shall take all such other actions necessary to
ensure the election to the Board of such replacement Party Designee to fill
the unexpired term of the Party Designee who such new Party Designee is
replacing or (ii) the Nominating Holders shall cause their respective Party
Designees to elect such replacement Party Designee to fill the unexpired
term of the Party Designee who such new Party Designee is replacing. If a
Nominating Holder requests that their Party Designee be removed as a
Director (with or without cause) by written notice thereof to the Company,
then the Company shall take all actions necessary to effect, and each of
the Holders shall vote all its or his capital stock in favor of, such
removal upon such request (or, if applicable, provide a written consent).
2.1.3 Termination of Rights. The right of a Nominating Holder to
appoint directors under Section 2.1.1, but not the obligation of such
Nominating Holder to vote its shares of Securities as provided herein,
shall terminate at the time at which such Nominating Holder ceases to own
its respective Required Percentage of the Fully-Diluted Common Stock;
provided that to the extent the HMTF Group's rights under Section 2.1.1
terminate as provided in this Section 2.1.3, the HMTF Group shall have the
right to appoint the number of directors equal to the greater of (x) the
number of directors which may be appointed by the BSMB Group pursuant to
Section 2.1.1 and (y) the number of directors calculated in accordance with
the following formula: an amount (which shall be rounded up to the next
whole number if such amount is not a whole number) equal to (I) the
percentage of Fully-Diluted Common Stock Beneficially Owned by the HMTF
Group multiplied by (II) the number of directors that exist immediately
prior to the occurrence of such event which may be appointed to the Board
pursuant to Section 2.1.1, rounded to the nearest whole number.
2.1.4 Costs and Expenses. The Company will pay all reasonable
out-of-pocket expenses incurred by the Party Designees in connection with
their participation in meetings of the Board (and committees thereof) and
the Boards of Directors (and committees thereof) of the Subsidiaries of the
Company.
2.2 Other Activities of the Holders; Fiduciary Duties. It is
understood and accepted that the Holders and their Affiliates have
interests in other business ventures which may be in conflict with the
activities of the Company and its Subsidiaries and that, subject to
applicable law, nothing in this Stockholders' Agreement shall limit the
current or future business activities of the Holders whether or not such
activities are competitive with those of the Company and its Subsidiaries.
Nothing in this Stockholders' Agreement, express or implied, shall relieve
any officer or director of the Company of any fiduciary or other duties or
obligations they may have to the Company's stockholders.
2.3 Request for Sale of Company by HMTF. Notwithstanding anything
to the contrary contained in this Stockholders' Agreement but subject to
Section 8.2, at any time after the Effective Date, HMTF may give written
notice to the Company and the Holders requiring a sale of the Company. Such
sale may be effected pursuant to a stock or asset disposition, as
determined by HMTF in its sole discretion. To the extent necessary in order
to consummate such sale, each Holder hereby agrees to vote all of its or
his capital stock in favor of such sale upon the request of HMTF.
Notwithstanding anything to the contrary contained herein, each of the
Holders shall receive the same consideration for each of the Securities it
then Beneficially Owns as the HMTF Group in such sale. If such sale is to
be consummated pursuant to a stock purchase, all Holders selling pursuant
to this Section 2.3 shall be treated identically with the Securities being
sold by the HMTF Group in all respects; provided, that no Holder other than
the Holders in the HMTF Group shall be required to make any representations
or warranties in connection with such Transfer other than representations
and warranties as to (i) such Holder's ownership of his or its Securities
to be Transferred free and clear of all liens, claims and encumbrances
other than those arising hereunder, (ii) such Holder's power and authority
to effect such Transfer, and (iii) such matters pertaining to compliance
with securities laws as the purchaser may reasonably require. No Holder not
in the HMTF Group shall be required to agree to any matter other than the
foregoing representations and warranties and transfer of its Securities.
Any indemnity obligations of the Holders other than the HMTF Group arising
under the definitive documentation for such sale shall be several and shall
relate solely to the representations and warranties described above and
shall be in proportion to and in an amount no greater than the
consideration received by such Holder in such sale. In no event shall any
Holder be required to sell any securities if the sale thereof would be in
violation of any law, rule, regulation, statute or order of any
governmental entity.
ARTICLE 3
REGISTRATION RIGHTS
3.1 Demand Registration.
3.1.1 Request for Registration of Registrable Shares.
(a) At any time after one hundred eighty (180) days after
the consummation of a Qualified IPO, either the HMTF Demand
Group, on behalf of the HMTF Group, the BSMB Demand Group, on
behalf of the BSMB Group, or the Trust (each, an "R/S Demand
Requesting Holder") may request the Company, in writing (an
"R/S Demand Request"), to effect the registration under the
Securities Act of all or part of its or their Registrable
Shares which, in the aggregate, have an offering value of at
least Twenty-Five Million Dollars ($25,000,000) or, if less,
all of their Registrable Shares (an "R/S Demand Registration").
(b) Each R/S Demand Request shall specify the number of
Registrable Shares proposed to be sold. Subject to Section
3.1.8, the Company shall file the R/S Demand Registration as
promptly as practicable but in no event later than ninety (90)
days after receiving an R/S Demand Request (the "R/S Required
Filing Date") and shall use all commercially reasonable efforts
to cause the same to be declared effective by the SEC as
promptly as practicable after such filing; provided, that the
Company need effect only (i) five (5) R/S Demand Registrations
pursuant to an R/S Demand Request made by the HMTF Demand
Group, (ii) only three (3) R/S Demand Registrations pursuant to
an R/S Demand Request made by the BSMB Demand Group, and (iii)
only one (1) R/S Demand Registration pursuant to an R/S Demand
Request made by the Trust; provided, further, that if more than
twenty percent (20%) of any Registrable Shares requested to be
registered pursuant to an R/S Demand Request made under
paragraph (a) of this Section 3.1.1 are excluded from the
applicable R/S Demand Registration pursuant to Section 3.1.6
below, the R/S Demand Requesting Holder or R/S Demand
Requesting Holders shall have the right, with respect to each
such exclusion, to request one (1) additional R/S Demand
Registration under such paragraph (a).
(c) Notwithstanding paragraph (b) of this Section 3.1.1,
in the event that the Company shall be eligible to effect a
registration under the Securities Act using Form S-3 (or other
comparable short-form registration statement) ("S-3
Eligibility"), (i) any Qualified Holder shall be entitled to
request an unlimited number of R/S Demand Registrations of such
Registrable Shares on Form S-3 (or other comparable short-form
registration statement) (an "R/S S-3 Registration"), and (ii)
the Company shall be required to use its commercially
reasonable efforts to effect such R/S S-3 Registrations, and
such R/S S-3 Registrations shall not be considered an R/S
Demand Registration for purposes of the limits on the number of
R/S Demand Registrations contained in such paragraph (b) nor be
subject to the $25,000,000 threshold set forth in paragraph (a)
of this Section 3.1.1, but all such requests shall be
considered R/S Demand Requests for other purposes under this
Article III.
3.1.2 Request for Registration of PIK Preferred.
(a) At any time after the Effective Date, the Trust may
request the Company, in writing (a "PIK Demand Request"), to
effect the registration under the Securities Act of all or part
of its shares of PIK Preferred which, in the aggregate, have an
offering value of at least Twenty-Five Million Dollars
($25,000,000) (a "PIK Demand Registration").
(b) Each PIK Demand Request shall specify the number of
shares of PIK Preferred proposed to be sold. Subject to Section
3.1.8, the Company shall file the PIK Demand Registration as
promptly as practicable but in no event later than ninety (90)
days after receiving a PIK Demand Request (the "PIK Required
Filing Date") and shall use all commercially reasonable efforts
to cause the same to be declared effective by the SEC as
promptly as practicable after such filing; provided, that the
Company need effect only four (4) PIK Demand Registrations
pursuant to PIK Demand Requests made by the Trust; provided,
further, that if more than twenty percent (20%) of any shares
of PIK Preferred requested to be registered pursuant to a PIK
Demand Request made under paragraph (a) of this Section 3.1.2
are excluded from the applicable PIK Demand Registration
pursuant to Section 3.1.6 below, the Trust shall have the
right, with respect to each such exclusion, to request one (1)
additional PIK Demand Registration under such paragraph (a).
(c) Notwithstanding paragraph (b) of this Section 3.1.2,
in the event that the Company has S-3 Eligibility, (i) the
Trust shall be entitled to request an unlimited number of PIK
Demand Registrations of shares of PIK Preferred on Form S-3 (or
other comparable short-form registration statement) (an "PIK
S-3 Registration"), and (ii) the Company shall be required to
use its commercially reasonable efforts to effect such PIK S-3
Registrations, and such PIK S-3 Registrations shall not be
considered a PIK Demand Registration for purposes of the limits
on the number of PIK Demand Registrations contained in such
paragraph (b) nor be subject to the $25,000,000 threshold set
forth in paragraph (a) of this Section 3.1.2, but all such
requests shall be considered PIK Demand Requests for other
purposes under this Article III.
3.1.3 Company S-3 Obligation. The Company agrees to use all
reasonable efforts to make all required filings with the SEC that are
within the Company's control so as to maintain its S-3 Eligibility.
3.1.4 Effective Registration and Expenses. A registration will
not count as a Demand Registration until it has become effective (unless
the Requesting Holders withdraw all their Registrable Securities and the
Company has performed its obligations hereunder in all material respects,
in which case such demand will count as a Demand Registration unless the
Requesting Holders pay all Registration Expenses, as hereinafter defined,
in connection with such withdrawn registration); provided, that if, after
it has become effective, an offering of Registrable Securities pursuant to
a registration is interfered with by any stop order, injunction, or other
order or requirement of the SEC or other governmental agency or court, such
registration will be deemed not to have been effected and will not count as
a Demand Registration.
3.1.5 Selection of Underwriters. The offering of Registrable
Securities pursuant to a Demand Registration shall be in the form of a
"firm commitment" underwritten offering if so requested by the Requesting
Holders. The Requesting Holders of a majority of the Registrable Securities
to be registered in a Demand Registration shall select the investment
banking firm or firms to manage the underwritten offering; provided that
such selection shall be subject to the consent of the Company, which
consent shall not be unreasonably withheld.
3.1.6 Priority on Demand Registrations. No securities to be sold
for the account of any Person (including the Company) other than a
Requesting Holder shall be included in a Demand Registration unless the
managing underwriter or underwriters shall advise the Company or the
Requesting Holders in writing that the inclusion of such securities will
not materially and adversely affect the price or completion of the offering
(a "Material Adverse Effect"). Furthermore, in the event the managing
underwriter or underwriters shall advise the Company or the Requesting
Holders that the amount of Registrable Securities proposed to be included
in such Demand Registration by the Requesting Holders is sufficiently large
to cause a Material Adverse Effect (whether or not a Person other than a
Requesting Holder has requested registration), the Registrable Securities
of the Requesting Holders to be included in such Demand Registration shall
equal the number of shares which the Company is so advised can be sold in
such offering without a Material Adverse Effect and such shares shall be
allocated pro rata among the Requesting Holders on the basis of the number
of Registrable Securities in each class Beneficially Owned by each such
Requesting Holder. No Holder may participate in any registration statement
hereunder unless such Holder (x) agrees to sell such Holder's Registrable
Securities on the basis provided in any underwriting arrangements approved
by the Company and (y) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements, and other documents, each
in customary form, reasonably required under the terms of such underwriting
arrangements; provided, however, that no such Holder shall be required to
make any representations or warranties in connection with any such
registration other than representations and warranties as to (i) such
Holder's ownership of his or its Registrable Securities to be sold or
Transferred free and clear of all liens, claims, and encumbrances, (ii)
such Holder's power and authority to effect such Transfer, and (iii) such
matters pertaining to compliance with federal and state securities laws as
may be reasonably requested; provided further, however, that the obligation
of such Holder to indemnify pursuant to any such underwriting arrangements
shall be several, and the liability of each such Holder will be in
proportion to, and provided further that such liability will be limited to,
the net amount received by such Holder from the sale of his or its
Registrable Securities pursuant to such registration.
3.1.7 Rights of Nonrequesting Holders. Upon receipt of any Demand
Request, the Company shall promptly (but in any event within ten (10) days)
give written notice of such proposed Demand Registration to all other
Holders, who shall have the right, exercisable by written notice to the
Company within twenty (20) days after their receipt of the Company's
notice, to elect to include in such Demand Registration such portion of
their Registrable Securities as they may request. All Holders requesting to
have their Registrable Securities included in a Demand Registration in
accordance with the preceding sentence shall be deemed to be "Requesting
Holders" for purposes of this Section 3.1.
3.1.8 Deferral of Filing. The Company may defer the filing (but
not the preparation) of a registration statement required by Section 3.1
until a date not later than one hundred eighty (180) days after the
Required Filing Date (or, if longer, one hundred eighty (180) days after
the effective date of the registration statement contemplated by clause
(ii) below) if (i) at the time the Company receives the Demand Request, the
Company or any of its Subsidiaries are engaged in confidential negotiations
or other confidential business activities, disclosure of which would, in
the reasonable judgment of the Company, be required in such registration
statement (but would not be required if such registration statement were
not filed), and the Board determines in good faith that such disclosure
would be materially detrimental to the Company and its stockholders, or
(ii) prior to receiving the Demand Request, the Board had determined to
effect a registered underwritten public offering of the Company's
securities for the Company's account and the Company had taken substantial
steps (including, but not limited to, selecting a managing underwriter for
such offering) and is proceeding with reasonable diligence to effect such
offering. A deferral of the filing of a registration statement pursuant to
this Section 3.1.8 shall be lifted, and the requested registration
statement shall be filed forthwith, if, in the case of a deferral pursuant
to clause (i) of the preceding sentence, the negotiations or other
activities are disclosed or terminated, or, in the case of a deferral
pursuant to clause (ii) of the preceding sentence, the proposed
registration for the Company's account is abandoned. In order to defer the
filing of a registration statement pursuant to this Section 3.1.8, the
Company shall promptly, upon determining to seek such deferral, deliver to
each Requesting Holder a certificate signed by an executive officer of the
Company stating that the Company is deferring such filing pursuant to this
Section 3.1.8 and a general statement of the reason for such deferral and
an approximation of the anticipated delay. Within twenty (20) days after
receiving such certificate, the holders of a majority of the Registrable
Securities Beneficially Owned by the Requesting Holders and for which
registration was previously requested may withdraw such Demand Request by
giving notice to the Company; if withdrawn, the Demand Request shall be
deemed not to have been made for all purposes of this Agreement. The
Company may defer the filing of a particular registration statement
pursuant to this Section 3.1.8 only once.
3.2 Piggyback Registrations.
3.2.1 Right to Piggyback. Each time the Company proposes to
register any of its equity securities at any time after a Qualified IPO
(other than pursuant to an Excluded Registration or a Demand Request) under
the Securities Act for sale to the public (whether for the account of the
Company or the account of any securityholder of the Company) and the form
of registration statement to be used permits the registration of
Registrable Shares, the Company shall give prompt written notice to each
Holder of Registrable Shares (which notice shall be given not less than
thirty (30) days prior to the effective date of the Company's registration
statement), which notice shall offer each such Holder the opportunity to
include any or all of its or his Registrable Shares in such registration
statement, subject to the limitations contained in Section 3.2.2 hereof.
Each Holder other than a Management Holder (including Xxxxx until such time
as he ceases to be employed by the Company), and, to the extent permitted
by the underwriter, each Management Holder, who desires to have its or his
Registrable Shares included in such registration statement shall so advise
the Company in writing (stating the number of shares desired to be
registered) within twenty (20) days after the date of such notice from the
Company. Any Holder shall have the right to withdraw such Holder's request
for inclusion of such Holder's Registrable Shares in any registration
statement pursuant to this Section 3.2.1 by giving written notice to the
Company of such withdrawal. Subject to Section 3.2.2 below, the Company
shall include in such registration statement all such Registrable Shares so
requested to be included therein; provided, however, that the Company may
at any time withdraw or cease proceeding with any such registration if it
shall at the same time withdraw or cease proceeding with the registration
of all other equity securities originally proposed to be registered.
3.2.2 Priority on Registrations. If the managing underwriter
advises the Company in writing that the number of equity securities
requested to be included in a registration for which rights have been
requested pursuant to Section 3.2 by all Persons (including the Company)
exceeds the number of shares which can be sold in such offering without
causing a Material Adverse Effect, the Company will be obligated to include
in such registration only (i) first, any and all equity securities for sale
by the Company, (ii) second, to the extent of any remaining Registrable
Shares which may be sold in such offering without causing a Material
Adverse Effect, each other Holder shall be entitled to include any and all
Registrable Shares Beneficially Owned by such Holder in the registration
(pro rata based on the total number of such Registrable Shares Beneficially
Owned by each such Holder), and (iii) third, to the extent of any remaining
equity securities which the Company is advised may be sold in such offering
without causing a Material Adverse Effect, pro rata among any other Persons
holding equity securities requested to be included pursuant to any other
registration rights that may have been, or may hereafter be, granted by the
Company (on the basis of the total number of equity securities that each
holder thereof Beneficially Owns) on the basis of the number of equity
securities of the Company Beneficially Owned by such Person. If as a result
of the provisions of this Section 3.2.2 any Holder shall not be entitled to
include all Registrable Shares in a registration that such Holder has
requested to be so included, such Holder may withdraw such Holder's request
to include Registrable Shares in such registration statement. No Holder may
participate in any registration statement hereunder unless such Holder (x)
agrees to sell such Holder's Registrable Shares on the basis provided in
any underwriting arrangements approved by the Company and (y) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements, and other documents, each in customary form, reasonably
required under the terms of such underwriting arrangements; provided,
however, that no such Holder shall be required to make any representations
or warranties in connection with any such registration other than
representations and warranties as to (i) such Holder's ownership of his or
its Registrable Shares to be sold or transferred free and clear of all
liens, claims, and encumbrances, (ii) such Holder's power and authority to
effect such transfer, and (iii) such matters pertaining to such Person's
compliance with securities laws as may be reasonably requested; provided
further, however, that the obligation of such Holder to indemnify pursuant
to any such underwriting arrangements shall be several, and the liability
of each such Holder will be in proportion to, and provided further that
such liability will be limited to, the net amount received by such Holder
from the sale of his or its Registrable Shares pursuant to such
registration.
3.3 Shelf Registration.
3.3.1 Obligation to File. At any time after one hundred eighty
(180) days after the consummation of a Qualified IPO, either the HMTF
Demand Group, on behalf of the HMTF Group, or the BSMB Demand Group, on
behalf of the BSMB Group, may request (the "Shelf Registration Request")
the Company to file with the SEC, as soon as practicable, a registration
statement for a resale offering to be made on a continuous basis pursuant
to Rule 415 promulgated under the Securities Act covering all of the
Registrable Shares Beneficially Owned by the HMTF Group or the BSMB Group,
as the case may be (the "Shelf Registration"). The Shelf Registration shall
be on Form S-3 under the Securities Act or another appropriate form
permitting registration of all Registrable Shares Beneficially Owned by the
HMTF Group and the BSMB Group for resale (the "Shelf Shares") by the
Holders of such Shelf Shares in the manner or manners designated by them
(including, without limitation, one or more underwritten offerings). The
Company shall use its commercially reasonable efforts to cause the Shelf
Registration to be declared effective pursuant to the Securities Act as
promptly as reasonably practicable following the filing thereof, but in no
event later than the 180th day after the Shelf Registration Request, and to
keep the Shelf Registration continuously effective under the Securities Act
for a one (1) year period following the date of the effectiveness of such
Shelf Registration, or such shorter period ending when either (1) all Shelf
Shares covered by the Shelf Registration have been sold in the manner set
forth and as contemplated in the Shelf Registration or pursuant to Rule 144
promulgated under the Securities Act or (2) there cease to be outstanding
any Shelf Shares (the "Effectiveness Period"). Notwithstanding anything to
the contrary contained herein, at such time as (a) the HMTF Control Group
ceases to own a majority of the Securities owned by the HMTF Group, it
shall no longer be permitted to make a Shelf Registration Request under
this Section 3.3.1 and (b) the BSMB Control Group ceases to own a majority
of the Securities owned by the BSMB Group, it shall no longer be permitted
to make a Shelf Registration Request pursuant to this Section 3.3.1.
3.3.2 Maintenance of Effectiveness. The Company shall use its
commercially reasonable efforts to keep the Shelf Registration continuously
effective for the Effectiveness Period, by supplementing and amending the
Shelf Registration if required by the rules, regulations or instructions
applicable to the registration form used for such Shelf Registration, if
required by the Securities Act or if reasonably requested by Holders of
Shelf Shares covered by such registration statement or by any underwriter
of such Shelf Shares.
3.3.3 Certain Limitations on Sales. Notwithstanding anything to
the contrary in Section 3.3.1 or Section 3.3.2 hereof, the Company may, by
delivering written notice to the Holders of Shelf Shares, prohibit offers
and sales of Shelf Shares pursuant to the Shelf Registration until a date
not later than ninety (90) days after the date of such notice if (i) the
Company or any of its Subsidiaries is engaged in confidential negotiations
or other confidential business activities, disclosure of which would, in
the reasonable judgment of the Company, be required in such registration
statement (but would not be required if such registration statement were
not filed), and the Board determines in good faith that such disclosure
would be materially detrimental to the Company and its stockholders
(provided, however, that upon the public disclosure by the Company of the
negotiations or business activities described above, the suspension of the
use of the Shelf Registration pursuant to this Section 3.3.3 shall cease
and the Company shall promptly notify Holders that dispositions of Shelf
Shares may be resumed) or (ii) the Company is required to file a post
effective amendment to such Shelf Registration. In no event may the Company
prohibit offers and sales of Shelf Shares pursuant to the Shelf
Registration (i) for a period of more than ninety (90) days following the
delivery by the Company of the notice provided for in the first sentence of
this Section 3.3.3 or, (ii) more than twice in any 12-month period.
3.4 Holdback Agreement. Unless the managing underwriter otherwise
agrees, each of the Company, and the Holders agree (and the Company agrees,
in connection with any underwritten registration, to use its reasonable
efforts to cause its Affiliates to agree) not to effect any public sale or
private offer or distribution of any Securities or Common Stock Equivalents
during the ten (10) business days prior to the effectiveness under the
Securities Act of any underwritten registration and during such time period
after the effectiveness under the Securities Act of any underwritten
registration (not to exceed one hundred eighty (180) days) (except, if
applicable, as part of such underwritten registration) as the Company and
the managing underwriter may agree.
3.5 Registration Procedures. Whenever any Holder has requested
that any Registrable Securities be registered pursuant to this
Stockholders' Agreement, the Company will use its commercially reasonable
efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof,
and pursuant thereto the Company will in addition to the other requirements
set forth in this Article III as promptly as practicable:
(i) prepare and file with the SEC a registration
statement on Form S-3 or any appropriate form under the
Securities Act, together with a prospectus, to be used in
connection therewith, with respect to such Registrable
Securities and use its commercially reasonable efforts to
cause such registration statement to become effective;
(ii) prepare and file with the SEC such amendments,
post-effective amendments, and supplements to such
registration statement and the prospectus included therein
as may be necessary to keep such registration statement
effective for a period of not less than one hundred eighty
(180) days (or such lesser period as is necessary for the
underwriters in an underwritten offering to sell unsold
allotments) or, in the case of a Shelf Registration, for the
period specified in Section 3.3.2, and comply with the
provisions of the Securities Act with respect to the
disposition of all securities covered by such registration
statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in
such registration statement;
(iii) furnish to each seller of Registrable Securities
and the underwriters of the securities being registered such
number of copies of such registration statement, each
amendment and supplement thereto, the prospectus to be used
in connection therewith (including each preliminary
prospectus), any documents incorporated by reference therein
and such other documents as such seller or underwriters may
reasonably request in order to facilitate the disposition of
the Registrable Securities owned by such seller or the sale
of such securities by such underwriters (it being understood
that, subject to Section 3.6 and the requirements of the
Securities Act and applicable state securities laws, the
Company consents to the use of the prospectus and any
amendment or supplement thereto by each seller and the
underwriters in connection with the offering and sale of the
Registrable Securities covered by the registration statement
of which such prospectus, amendment or supplement is a
part);
(iv) use its commercially reasonable efforts to
register or qualify such Registrable Securities under such
other securities or blue sky laws of such jurisdictions as
the managing underwriter reasonably requests (or, in the
event the registration statement does not relate to an
underwritten offering, as the holders of a majority of such
Registrable Securities may reasonably request); use its
commercially reasonable efforts to keep each such
registration or qualification (or exemption therefrom)
effective during the period in which such registration
statement is required to be kept effective; and do any and
all other acts and things which may be reasonably necessary
or advisable to enable each seller to consummate the
disposition of such Registrable Securities owned by such
seller in such jurisdictions (provided, however, that the
Company will not be required to (A) qualify generally to do
business in any jurisdiction where it would not otherwise be
required to qualify but for this subparagraph or (B) consent
to general service of process in any such jurisdiction);
(v) promptly notify each seller and each underwriter
and (if requested by any such Person) confirm such notice in
writing (A) when a prospectus or any prospectus supplement
or post-effective amendment has been filed and, with respect
to a registration statement or any post-effective amendment,
when the same has become effective, (B) of the issuance by
any state securities or other regulatory authority of any
order suspending the qualification or exemption from
qualification of any of the Registrable Securities under
state securities or "blue sky" laws or the initiation of any
proceedings for that purpose, and (C) of the happening of
any event which makes any statement of a material fact made
in a registration statement or related prospectus untrue or
which requires the making of any changes in such
registration statement, prospectus or documents so that they
will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading in light of the circumstances under which they
were made, and, as promptly as practicable thereafter,
prepare and file with the SEC and furnish a supplement or
amendment to such prospectus so that, as thereafter
deliverable to the purchasers of such Registrable
Securities, such prospectus will not contain any untrue
statement of a material fact or omit a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(vi) make generally available to the Company's
securityholders an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act no later
than thirty (30) days after the end of the twelve (12) month
period beginning with the first day of the Company's first
fiscal quarter commencing after the effective date of a
registration statement, which earnings statement shall cover
said twelve (12) month period, and which requirement will be
deemed to be satisfied if the Company timely files complete
and accurate information on Forms 10-Q, 10-K and 8-K under
the Exchange Act and otherwise is in accordance with the
definitions set forth in Rule 158 under the Securities Act;
(vii) if requested by the managing underwriter or any
seller promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing
underwriter or any seller reasonably requests to be included
therein, including, without limitation, with respect to the
Registrable Securities being sold by such seller, the
purchase price being paid therefor by the underwriters and
with respect to any other terms of such underwritten
offering of the Registrable Securities to be sold in such
offering, and promptly make all required filings of such
prospectus supplement or post-effective amendment;
(viii) as promptly as reasonably practicable after
filing with the SEC of any document which is incorporated by
reference into a registration statement (in the form in
which it was incorporated), deliver a copy of each such
document to each seller;
(ix) cooperate with the sellers and the managing
underwriter, if applicable, to facilitate the timely
preparation and delivery of certificates (which shall not
bear any restrictive legends unless required under
applicable law) representing securities sold under any
registration statement, and enable such securities to be in
such denominations and registered in such names as the
managing underwriter, if applicable, or such sellers may
request and keep available and make available to the
Company's transfer agent prior to the effectiveness of such
registration statement a supply of such certificates;
(x) promptly make available after a request therefor,
for inspection by any seller, any underwriter participating
in any disposition pursuant to any registration statement,
if applicable, and any attorney, accountant or other agent
or representative retained by any such seller or underwriter
(collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents and properties of the
Company (collectively, the "Records"), as shall be
reasonably necessary to enable them to exercise their due
diligence responsibility, and cause the Company's officers,
directors and employees to supply all information reasonably
requested by any such Inspector in connection with such
registration statement; provided, that, unless the
disclosure of such Records is necessary to avoid or correct
a misstatement or omission in the registration statement or
the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent
jurisdiction, the Company shall not be required to provide
any information under this subparagraph (x) if (A) the
Company believes, after consultation with counsel for the
Company, that to do so would cause the Company to forfeit an
attorney-client privilege that was applicable to such
information or (B) if either (1) the Company has requested
and been granted from the SEC confidential treatment of such
information contained in any filing with the SEC or
documents provided supplementally or otherwise or (2) the
Company reasonably determines in good faith that such
Records are confidential and so notifies the Inspectors in
writing unless prior to furnishing any such information with
respect to (A) or (B) such Holder of Registrable Securities
requesting such information agrees to enter into a
confidentiality agreement in customary form and subject to
customary exceptions; and provided, further that each Holder
of Registrable Securities agrees that it will, upon learning
that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow
the Company, at its expense, to undertake appropriate action
and to prevent disclosure of the Records deemed
confidential;
(xi) furnish to each seller and underwriter, if
applicable, a signed counterpart of (A) an opinion or
opinions of counsel to the Company, and (B) in the case of a
"firm commitment" underwritten offering, a comfort letter or
comfort letters from the Company's independent public
accountants, each in customary form and covering such
matters of the type customarily covered by opinions or
comfort letters, as the case may be, as the sellers or
managing underwriter reasonably requests;
(xii) cause the Registrable Securities included in any
registration statement to be (A) listed on each securities
exchange, if any, on which the same class of securities of
the Company are then listed, or (B) , if not listed on a
national securities exchange, authorized to be quoted and/or
listed for trading (to the extent applicable) on the
National Association of Securities Dealers, Inc. ("NASD")
Automated Quotation System or the Nasdaq National Market if
the Registrable Securities so qualify;
(xiii) provide a CUSIP number for the Registrable
Securities included in any registration statement not later
than the effective date of such registration statement;
(xiv) cooperate with each seller and each underwriter,
if applicable, participating in the disposition of such
Registrable Securities and their respective counsel in
connection with any filings required to be made with the
NASD;
(xv) during the period when the prospectus is required
to be delivered under the Securities Act, promptly file all
documents required to be filed with the SEC pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act;
(xvi) notify each seller of Registrable Securities
promptly of any request by the SEC for the amending or
supplementing of such registration statement or prospectus
or for additional information;
(xvii) prepare and file with the SEC promptly any
amendments or supplements to such registration statement or
prospectus which, in the opinion of counsel for the Company
or the managing underwriter, if applicable, is required in
connection with the distribution of the Registrable
Securities;
(xviii) in the case of a "firm commitment" underwritten
offering, enter into such agreements (including underwriting
agreements in the managing underwriter's customary form) as
are customary in connection with an underwritten
registration; and
(xix) advise each seller of such Registrable
Securities, as promptly as reasonably practicable after it
shall receive notice or obtain knowledge thereof, of the
issuance of any stop order by the SEC suspending the
effectiveness of such registration statement or the
initiation or threatening of any proceeding for such purpose
and promptly use its best efforts to prevent the issuance of
any stop order or to obtain its withdrawal at the earliest
possible moment if such stop order should be issued.
3.6 Suspension of Dispositions. Each Holder agrees by acquisition of
any Registrable Securities that, upon receipt of any notice (a "Suspension
Notice") from the Company of the happening of any event of the kind
described in Section 3.5(v)(C) such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to a registration statement
until such Holder's receipt of the copies of the supplemented or amended
prospectus, or until it is advised in writing (the "Advice") by the Company
that the use of the prospectus may be resumed, and has received copies of
any additional or supplemental filings which are incorporated by reference
in the prospectus, and, if so directed by the Company, such Holder will
deliver to the Company all copies, other than permanent file copies then in
such Holder's possession, of the prospectus covering such Registrable
Securities current at the time of receipt of such notice. In the event the
Company shall give any such notice, the time period regarding the
effectiveness of registration statements set forth in Section 3.5(ii)
hereof shall be extended by the number of days during the period from and
including the date of the giving of the Suspension Notice to and including
the date when each seller of Registrable Securities covered by such
registration statement shall have received the copies of the supplemented
or amended prospectus or the Advice. The Company shall use its commercially
reasonable efforts and take such actions as are reasonably necessary to
render the Advice as promptly as practicable.
3.7 Registration Expenses. All expenses incident to the Company's
performance of or compliance with this Article 3 including, without
limitation, all registration and filing fees, all fees and expenses
associated with filings required to be made with the NASD (including, if
applicable, the fees and expenses of any "qualified independent
underwriter" as such term is defined in Schedule E of the By-Laws of the
NASD, and of its counsel), as may be required by the rules and regulations
of the NASD, fees and expenses of compliance with securities or "blue sky"
laws (including reasonable fees and disbursements of counsel in connection
with "blue sky" qualifications of the Registrable Securities), rating
agency fees, printing expenses (including expenses of printing certificates
for the Registrable Securities in a form eligible for deposit with
Depository Trust Company and of printing prospectuses if the printing of
prospectuses is requested by a holder of Registrable Securities), messenger
and delivery expenses, the Company's internal expenses (including without
limitation all salaries and expenses of its officers and employees
performing legal or accounting duties), the fees and expenses incurred in
connection with any listing of the Registrable Securities, fees and
expenses of counsel for the Company and its independent certified public
accountants (including the expenses of any special audit or "cold comfort"
letters required by or incident to such performance), securities acts
liability insurance (if the Company elects to obtain such insurance), the
fees and expenses of any special experts retained by the Company in
connection with such registration, and the fees and expenses of other
persons retained by the Company and reasonable fees and expenses of one
firm of counsel for the sellers (which shall be selected by the holders of
a majority of the Registrable Securities being included in any particular
registration statement) (all such expenses being herein called
"Registration Expenses") will be borne by the Company whether or not any
registration statement becomes effective; provided that in no event shall
Registration Expenses include any underwriting discounts, commissions, or
fees attributable to the sale of the Registrable Securities or any counsel
(except as provided above), accountants, or other persons retained or
employed by the Holders.
3.8 Indemnification.
3.8.1 The Company agrees to indemnify and reimburse, to the
fullest extent permitted by law, each seller of Registrable Securities, and
each of its employees, advisors, agents, representatives, partners,
officers, trustees and directors and each Person who controls (within the
meaning of the Securities Act or the Exchange Act) such seller and any
agent or investment advisor thereof (collectively, the "Seller Affiliates")
(A) against any and all losses, claims, damages, liabilities, and expenses,
joint or several (including, without limitation, attorneys' fees and
disbursements except as limited by Section 3.8.3) based upon, arising out
of, related to or resulting from any untrue statement or alleged untrue
statement of a material fact contained in any registration statement,
prospectus, or preliminary prospectus or any amendment thereof or
supplement thereto, or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances under which they were made,
and (B) against any and all costs and expenses (including reasonable fees
and disbursements of counsel) as may be reasonably incurred in
investigating, preparing, or defending against any litigation, or
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon, arising out of, related
to or resulting from any such untrue statement or omission or alleged
untrue statement or omission, to the extent that any such expense or cost
is not paid under subparagraph (A) above; except insofar as the same are
made in reliance upon and in strict conformity with information furnished
in writing to the Company by such seller or any Seller Affiliate for use
therein or arise from such seller's or any Seller Affiliate's failure to
deliver a copy of the registration statement or prospectus or any
amendments or supplements thereto after the Company has furnished such
seller or Seller Affiliate with a sufficient number of copies of the same.
The reimbursements required by this Section 3.8.1 will be made by periodic
payments during the course of the investigation or defense, as and when
bills are received or expenses incurred.
3.8.2 In connection with any registration statement in which a
seller of Registrable Securities is participating, each such seller will
furnish to the Company in writing such information and affidavits as the
Company reasonably requests for use in connection with any such
registration statement or prospectus and, to the fullest extent permitted
by law, each such seller will indemnify the Company and its directors and
officers and each Person who Controls the Company against any and all
losses, claims, damages, liabilities, and expenses (including, without
limitation, reasonable attorneys' fees and disbursements except as limited
by Section 3.8.3) based upon, arising out of, related to, or resulting from
any untrue statement or alleged untrue statement of a material fact
contained in the registration statement, prospectus, or any preliminary
prospectus or any amendment thereof or supplement thereto, or any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the
extent that such untrue statement or alleged untrue statement or omission
or alleged omission is contained in any information or affidavit so
furnished in writing by such seller or any of its Seller Affiliates
specifically for inclusion in the registration statement; provided that the
obligation to indemnify will be several, not joint and several, among such
sellers of Registrable Securities, and the liability of each such seller of
Registrable Securities will be in proportion to, and provided further that
such liability will be limited to, the net amount received by such seller
from the sale of Registrable Securities pursuant to such registration
statement; provided, however, that such seller of Registrable Securities
shall not be liable in any such case to the extent that prior to the filing
of any such registration statement or prospectus or amendment thereof or
supplement thereto, such seller has furnished in writing to the Company
information expressly for use in such registration statement or prospectus
or any amendment thereof or supplement thereto which corrected or made not
misleading information previously furnished to the Company.
3.8.3 Any Person entitled to indemnification hereunder will (A)
give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification (provided that the failure to
give such notice shall not limit the rights of such Person unless the
indemnifying party is materially prejudiced thereby) and (B) unless in such
indemnified party's reasonable judgment after advice from independent
counsel a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying
party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided, however, that any person
entitled to indemnification hereunder shall have the right to employ
separate counsel and to participate in the defense of such claim, and the
fees and expenses of such counsel shall be at the expense of such person
unless (X) the indemnifying party has agreed to pay such fees or expenses,
or (Y) the indemnifying party shall have failed to assume the defense of
such claim or failed to employ counsel reasonably satisfactory to such
person. If such defense is not assumed by the indemnifying party as
permitted hereunder, the indemnifying party will not be subject to any
liability for any settlement made by the indemnified party without its
written consent (but such consent will not be unreasonably withheld). If
such defense is assumed by the indemnifying party pursuant to the
provisions hereof, such indemnifying party shall not settle or otherwise
compromise the applicable claim unless (1) such settlement or compromise
contains a full and unconditional release of the indemnified party with
respect to the claim or (2) the indemnified party otherwise consents in
writing. An indemnifying party who is not entitled to, or elects not to,
assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party, a conflict of interest may exist between
such indemnified party and any other of such indemnified parties with
respect to such claim, in which event the indemnifying party shall be
obligated to pay the reasonable fees and disbursements of such additional
counsel or counsels.
3.8.4 Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 3.8.1 or Section 3.8.2
are unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages, liabilities, or expenses (or
actions in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities, or expenses
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and the indemnified
party in connection with the actions which resulted in the losses, claims,
damages, liabilities or expenses as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or indemnified party, and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The parties
hereto agree that it would not be just and equitable if contribution
pursuant to this Section 3.8.4 were determined by pro rata allocation (even
if the sellers or any underwriters or all of them were treated as one
entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in this
Section 3.8.4. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities, or expenses (or actions
in respect thereof) referred to above shall be deemed to include any legal
or other fees or expenses reasonably incurred by such indemnified party in
connection with investigating or, except as provided in Section 3.8.3,
defending any such action or claim. Notwithstanding the provisions of this
Section 3.8.4, no seller shall be required to contribute an amount greater
than the dollar amount by which the net proceeds received by such seller
with respect to the sale of any Registrable Securities exceeds the amount
of damages which such seller has otherwise been required to pay by reason
of any and all untrue or alleged untrue statements of material fact or
omissions or alleged omissions of material fact made in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto related to such sale of Registrable Securities. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation. The
sellers' obligations in this Section 3.8.4 to contribute shall be several
in proportion to the amount of Registrable Securities registered by them
and not joint.
If indemnification is available under this Section 3.8, the
indemnifying parties shall indemnify each indemnified party to the full
extent provided in Section 3.8.1 and Section 3.8.2 without regard to the
relative fault of said indemnifying party or indemnified party or any other
equitable consideration provided for in this Section 3.8.4 subject, in the
case of the Holders, to the limited dollar amounts set forth in Section
3.8.2.
3.8.5 The indemnification and contribution provided for under
this Stockholders' Agreement will remain in full force and effect
regardless of any investigation made by or on behalf of the indemnified
party or any officer, director, or controlling Person of such indemnified
party and will survive the transfer of securities.
ARTICLE 4
TRANSFERS OF SECURITIES
4.1 Preemptive Rights.
4.1.1 Rights to Participate in Future Sales. In case the Company
proposes to issue or sell (a) any shares of Common Stock or Common Stock
Equivalents to any Person, or (b) any other security of the Company to any
one or more members of the BSMB Control Group or the HMTF Control Group
(the "Offered Securities"), the Company shall, no later than thirty (30)
days prior to the consummation of such transaction (a "Preemptive Rights
Transaction"), give notice in writing of such Preemptive Rights Transaction
(the "Offer Notice") to each Qualified Holder. The Offer Notice shall
describe the proposed Preemptive Rights Transaction, identify the proposed
purchaser, and contain an offer (the "Preemptive Rights Offer") to sell to
each Qualified Holder who certifies (to the reasonable satisfaction of the
Company) that such Qualified Holder is an Accredited Investor (an
"Accredited Offeree"), at the same price and for the same consideration to
be paid by the proposed purchaser, all or part of such Accredited Offeree's
pro rata portion of the Offered Securities (which shall be the percentage
ownership of the Fully-Diluted Common Stock Beneficially Owned by such
Qualified Holder, excluding, for the purposes of such calculation, any
shares of Common Stock issuable upon exercise of any Common Stock
Equivalents granted pursuant to any employee, officer or director benefit
plan or arrangement multiplied by the number of Offered Securities to be
issued, and the number of Offered Securities to be sold to the prospective
purchaser shall be reduced by the number of Offered Securities agreed to be
purchased by each Qualified Holder pursuant to this Section 4.1.1). If any
such Qualified Holder fails to accept such offer by written notice thirty
(30) days after its receipt of the Offer Notice, the Company may proceed
with the proposed issue or sale of the Offered Securities, free of any
right on the part of such Qualified Holder under this Section 4.1.1 in
respect thereof. In the event any Subsidiary of the Company proposes to
issue or sell any security of such Subsidiary to any Holder or its
Affiliates, the Company shall use its reasonable best efforts to cause such
Subsidiary to offer pre-emptive rights with respect to such security to the
other Qualified Holders on terms and conditions substantially similar to
those contained in this Section 4.1.1.
4.1.2 Exceptions to Preemptive Rights. This Section 4.1 shall not
apply to (i) issuances or sales of Common Stock or Common Stock Equivalents
to employees, officers, and/or directors of the Company and/or any of its
Subsidiaries pursuant to employee benefit or similar plans or arrangements
of the Company and/or its Subsidiaries, (ii) issuances or sales of Common
Stock or Common Stock Equivalents upon exercise of any Common Stock
Equivalent, (iii) securities distributed or set aside ratably to all
holders of Common Stock and Common Stock Equivalents (or any class or
series thereof) on a per share equivalent basis, (iv) issuances or sales of
Common Stock or Common Stock Equivalents pursuant to a registered
underwritten public offering or issuances in, a merger of the Company or a
Subsidiary of the Company into or with another entity or an acquisition by
the Company or a Subsidiary of the Company of another business or
corporation or (v) the issuance of the Securities in the Merger. In the
event of any issuances or sales of Common Stock or Common Stock Equivalents
as a unit with any other security of the Company or its Subsidiaries, the
preemptive rights under this Section 4.1 shall be applicable to the entire
unit rather than only the Common Stock or Common Stock Equivalent included
in the unit.
4.2 Drag Along Rights.
4.2.1 Applicability. In connection with any Transfer by members
of the HMTF Group of shares of Securities representing more than
seventy-five percent (75%) of the shares of Securities then Beneficially
Owned by the HMTF Group (a "Significant Drag Sale"), the HMTF Group shall
have the right to require all, but not less than all of the non-selling
Holders (each, a "Co-Seller") to Transfer a portion of its Securities which
represents the same percentage of the Fully Diluted Common Stock
Beneficially Owned by such Co-Seller as the shares being disposed of by the
HMTF Group represent of the Fully Diluted Common Stock Beneficially Owned
by the HMTF Group. (For example, if the HMTF Group is selling seventy-five
percent (75%) of their Fully Diluted Common Stock position, each Co-Seller
shall be required to sell seventy-five percent (75%) of its Fully Diluted
Common Stock position.) All Securities Transferred by Holders pursuant to
this Section 4.2 shall be sold for the same consideration, and otherwise
treated identically with the Securities being sold by the HMTF Group in all
respects; provided, that (x) the Co-Seller shall not be required to make
any representations or warranties in connection with such Transfer other
than representations and warranties as to (i) such Co-Seller's ownership of
his or its Securities to be Transferred free and clear of all liens, claims
and encumbrances, other than those arising hereunder, (ii) such Co-Seller's
power and authority to effect such Transfer, and (iii) such matters
pertaining to compliance with securities laws as the Transferee may
reasonably require and (y) any indemnity obligations of such Co-Seller
arising under the definitive documentation for such Transfer shall be
several, and shall relate solely to the representations and warranties
described above and shall be in an amount no greater than the consideration
received by the Co-Seller in such sale. No Co-Seller shall be required to
agree to any other matter other than the foregoing representations and
warranties and Transfer of its Securities. In no event shall any Co-Seller
be required to sell any Securities if the sale thereof would be in
violation of any law, rule, regulation, statute or order of any
governmental entity.
4.2.2 Notice of Significant Drag Sale. HMTF, on behalf of the
HMTF Group, shall give each Co-Seller at least thirty (30) days' prior
written notice of any Significant Drag Sale as to which the HMTF Group
intends to exercise its rights under Section 4.2. If the HMTF Group elects
to exercise its rights under Section 4.2, the Co-Sellers shall take such
actions as may be reasonably required and otherwise cooperate in good faith
with the HMTF Group in connection with consummating the Significant Drag
Sale (including, without limitation, the voting of any Securities or other
voting capital stock of the Company to approve such Significant Drag Sale).
At the closing of such Significant Drag Sale, each Co-Seller shall deliver
certificates for all shares of Securities to be sold by such Co-Seller,
duly endorsed for transfer, with the signature guaranteed, to the purchaser
against payment of the appropriate purchase price.
4.3 Tag Along Rights.
4.3.1 Applicability. In the event that any Holder alone or
together with its Affiliates including in the case of HMTF Group, all
members of the HMTF Group, and, in the case of BSMB Group, all members of
the BSMB Group (the "Selling Holder") desires to directly or indirectly
effect a sale of shares of Securities representing five percent (5%) of the
shares of the Fully-Diluted Common Stock in one or a series of transactions
(a "Significant Tag Sale"), and, in the case of the HMTF Group, if
applicable, it does not elect to exercise its rights (if any) under Section
4.2 hereof, then at least thirty (30) days prior to the closing of such
Significant Tag Sale, the Selling Holder shall make an offer (the
"Participation Offer") to each Holder (a "Tag Co-Seller") to include in the
proposed Significant Tag Sale a portion of its Securities which represents
the same percentage of such Tag Co-Seller's Fully-Diluted Common Stock as
the shares being sold by the Selling Holder represent of its Fully-Diluted
Common Stock; provided that, if the consideration to be received by the
Selling Holder includes any securities, only Tag Co-Sellers who have
certified to the reasonable satisfaction of the Selling Holder that they
are Accredited Investors shall be entitled to participate in such transfer,
unless the transferee consents otherwise. No Holder shall include terms in
a Significant Tag Sale deliberately included for the sole purpose of
excluding a Tag Co-Seller's participation in such Significant Tag Sale.
4.3.2 Terms of Participation Offer. The Participation Offer shall
describe the terms and conditions of the proposed Significant Tag Sale and
shall be conditioned upon (i) the consummation of the transactions
contemplated in the Participation Offer with the Transferee named therein,
and (ii) each Tag Co-Seller's execution and delivery of all agreements and
other documents as the Selling Holder is required to execute and deliver in
connection with such Significant Tag Sale (provided that the Tag Co-Seller
shall not be required to make any representations or warranties in
connection with such Transfer other than representations and warranties as
to (A) such Tag Co-Seller's ownership of his or its Securities to be
Transferred free and clear of all liens, claims, and encumbrances, (B) such
Tag Co-Seller's power and authority to effect such transfer and (C) such
matters pertaining to compliance with securities laws as the transferee may
reasonably require). If any Tag Co-Seller shall accept the Participation
Offer, the Selling Holder shall reduce, to the extent necessary, the number
of Securities it otherwise would have sold in the proposed transfer so as
to permit those Tag Co-Sellers who have accepted the Participation Offer to
sell the number of Securities that they are entitled to sell under this
Section 4.3, and the Selling Holder and such Tag Co-Sellers shall transfer
the number of Securities specified in the Participation Offer to the
proposed transferee in accordance with the terms of such transfer as set
forth in the Participation Offer.
4.4 Certain Events Not Deemed Transfers. In no event shall any
exchange, reclassification, or other conversion of shares into any cash,
securities, or other property pursuant to a merger or consolidation of the
Company or any Subsidiary with, or any sale or transfer by the Company or
any Subsidiary of all or substantially all its assets to, any Person
constitute a Significant Drag Sale of shares of Securities by the HMTF
Group for purposes of Section 4.2 or a Significant Tag Sale of shares of
Securities by any Holder for purposes of Section 4.3. In addition, Sections
4.2 and 4.3 hereof shall not apply to any Transfer of shares of Securities
(a) solely among members of the HMTF Group and/or the BSMB Group, (b) by
the BSMB Group or the HMTF Group to an Initial Permitted Transferee as long
as the BSMB Group or the HMTF Group, as the case maybe, agrees with any
Holder which would otherwise participate in such Significant Tag Sale that
it shall not permit the irrevocable proxy granted by the Initial Permitted
Transferee to be directly or indirectly exercised by any other Person and
that such proxy shall remain in force, or (c) by Xxxxx to a Xxxxx Family
Member (i) by will or the laws of descent and distribution or (ii) by gift
without consideration of any kind (a "Family Transfer").
4.5 Transfer and Exchange. When Securities are presented to the
Company with a request to register the transfer of such Securities or to
exchange such Securities for Securities of other authorized denominations,
the Company shall register the transfer or make the exchange as requested
if the requirements of this Stockholders' Agreement for such transaction
are met; provided, however, that the Securities surrendered for transfer or
exchange shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Company, duly executed by the Holder
thereof or its attorney and duly authorized in writing. No service charge
shall be made for any registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith.
4.6 Replacement Securities. If a mutilated Security is
surrendered to the Company or if the Holder of a Security claims and
submits an affidavit or other evidence, satisfactory to the Company, to the
effect that the Security has been lost, destroyed or wrongfully taken, the
Company shall issue a replacement Security if the Company's requirements
are met. If required by the Company, such Holder must provide an indemnity
bond, or other form of indemnity, sufficient in the judgment of the Company
to protect the Company against any loss which may be suffered. The Company
may charge such Holder for its reasonable out-of-pocket expenses in
replacing a Security which has been mutilated, lost, destroyed, or
wrongfully taken.
4.7 Concurrent Transfer of Securities. A Transfer of Common Stock
may only be made by a Holder if such Holder Transfers a percentage of the
Junior Preferred Stock Beneficially Owned by such Holder to the same
Transferee in such transaction equal to the percentage of Common Stock
Beneficially Owned by such Holder being Transferred.
ARTICLE 5
LIMITATION ON TRANSFERS
5.1 Restrictions on Transfer. The Securities shall not be
Transferred or otherwise conveyed, assigned or hypothecated before
satisfaction of (i) the conditions specified in Section 5.1, Section 5.2,
and Section 5.3, which conditions are intended to ensure compliance with
the provisions of the Securities Act with respect to the Transfer of any
Security and (ii) if applicable, Article 4 hereof. Any purported Transfer
in violation of this Article 5 and/or, if applicable, Article 4 hereof
shall be void ab initio and of no force or effect. Other than Transfers
subject to Sections 4.2 or 4.3 hereof and other than Transfers to the
public pursuant to an effective registration statement or sales to the
public pursuant to Rule 144 under the Securities Act otherwise permitted
hereunder, each Holder will cause any proposed Transferee (including any
Initial Permitted Transferee, Xxxxx Family Member or Group Transferee) of
any Security Beneficially Owned by it (other than a Group Transferee) to
agree to take and hold such Securities subject to the provisions and upon
the conditions specified in this Stockholders' Agreement, and to execute
and deliver to the Company an Instrument of Accession in the form of
Exhibit A hereto.
5.2 Restrictive Legends.
5.2.1 Securities Act Legend. Except as otherwise provided in
Section 5.4 hereof, each Security Beneficially Owned by a Holder, and each
Security issued to any subsequent Transferee of such Security, shall be
stamped or otherwise imprinted with a legend in substantially the following
form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR PURSUANT TO
THE SECURITIES OR "BLUE SKY" LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED,
EXCEPT PURSUANT TO (i) A REGISTRATION STATEMENT WITH RESPECT TO SUCH
SECURITIES WHICH IS EFFECTIVE UNDER SUCH ACT, (ii) RULE 144 UNDER SUCH ACT,
OR (iii) ANY OTHER EXEMPTION FROM REGISTRATION UNDER SUCH ACT.
5.2.2 Other Legends. Except as otherwise permitted by the last
sentence of Section 5.1, each Security issued to each Holder or a
subsequent transferee shall include a legend in substantially the following
form:
THIS SECURITY IS SUBJECT TO RESTRICTIONS ON TRANSFER, VOTING
AND OTHER TERMS AND CONDITIONS SET FORTH IN THE STOCKHOLDERS' AGREEMENT
DATED AS OF _______________, ____, A COPY OF WHICH MAY BE OBTAINED FROM
XXXXX XXXXXXXX CORPORATION AT ITS PRINCIPAL EXECUTIVE OFFICES.
5.3 Notice of Proposed Transfers. Other than with respect to a
Transfer to (a) an Initial Permitted Transferee, (b) a Xxxxx Family Member,
(c) a Group Transferee or (d) in accordance with Article 3, prior to any
Transfer or attempted Transfer of any Security, the Holder of such Security
shall (i) give at least ten (10) days' prior written notice (a "Transfer
Notice") to the Company of such Holder's intention to effect such Transfer,
and (ii) either (A) provide to the Company an opinion reasonably
satisfactory to the Company from counsel who shall be reasonably
satisfactory to the Company (or supply such other evidence reasonably
satisfactory to the Company) that the proposed Transfer of such Security
may be effected without registration under the Securities Act, or (B)
unless the Securities to be Transferred are registered under the Exchange
Act certify to the Company that the Holder reasonably believes the proposed
transferee is a "qualified institutional buyer" and that such Holder has
taken reasonable steps to make the proposed transferee aware that such
Holder may rely on Rule 144A under the Securities Act in effecting such
Transfer. After receipt of the Transfer Notice and opinion (if required),
the Company shall, within five (5) days thereof, so notify the Holder of
such Security and such Holder shall thereupon be entitled to Transfer such
Security in accordance with the terms of the Transfer Notice. Each Security
issued upon such Transfer shall bear the restrictive legend set forth in
Section 5.2.1, unless in the opinion of such counsel such legend is not
required in order to ensure compliance with the Securities Act. The Holder
of the Security giving the Transfer Notice shall not be entitled to
Transfer such Security until receipt of the notice from the Company under
this Section 5.3. Prior to a Transfer of any Security to (x) an Initial
Permitted Transferee or (y) a Xxxxx Family Member pursuant to a Family
Transfer, the Holder of such Security shall certify to the Company that the
Holder reasonably believes such Initial Permitted Transferee or Xxxxx
Family Member, as the case may be, is an Accredited Investor. In addition,
notwithstanding anything to the contrary contained herein, any Transfer to
a Group Transferee may be made without the necessity of satisfaction of the
conditions set forth in this Section 5.3 (other than the condition
contained in the third sentence of this Section 5.3).
5.4 Termination of Certain Restrictions. Notwithstanding the
foregoing provisions of this Section 5, the restrictions imposed by Section
5.2.1 upon the transferability of the Securities and the legend
requirements of Section 5.2.1 shall terminate as to any Security (i) when
and so long as such Security shall have been effectively registered under
the Securities Act and disposed of pursuant thereto or (ii) when the
Company shall have received an opinion of counsel reasonably satisfactory
to it that such Security may be freely transferred at any time without
registration thereof under the Securities Act and that such legend may be
removed. Whenever the restrictions imposed by Section 5.2.1 shall terminate
as to any Security, the Holder thereof shall be entitled to receive from
the Company, at the Company's expense, a new Security not bearing the
restrictive legend set forth in Section 5.2.1.
ARTICLE 6
CERTAIN STOCKHOLDER APPROVAL MATTERS
6.1 Transactions Requiring Affirmative Vote of the Required
Holders. The following actions may not be taken by the Company without the
affirmative vote of the Required Holders (which vote shall not be
unreasonably withheld):
(a) engaging in any business substantially different
from or unrelated to the Company's present business;
(b) other than in connection with a sale of the Company
(whether as an asset or stock transaction, whether pursuant to
Section 2.3, Section 4.2 or otherwise), (i) disposing of a
material portion of its assets or properties or (ii) acquiring
amounts material to it of assets, properties or capital stock
from another Person, including, without limitation, by way of
merger, consolidation, stock purchase, asset purchase or
otherwise;
(c) approving the Annual Budget of the Company or
taking any action which is materially inconsistent with
the approved Annual Budget;
(d) issuing options or other consideration to members
of the Board or the Boards of Directors of any of its
Subsidiaries;
(e) entering into any transaction with an Affiliate of the
Company or causing a Subsidiary of the Company to enter into a
transaction with an Affiliate of the Company, other than (i)
issuances of Offered Securities contemplated by Section 4.1.1,
(ii) the payment of reasonable and customary fees and
reimbursement of expenses payable to the directors of the
Company, (iii) the payment to HMTF and BSMB or their respective
Affiliates of fees and expenses pursuant to a monitoring and
oversight agreement and a financial advisory agreement approved
by the Board and (iv) employment arrangements with respect to
the procurement of services of officers and employees in the
ordinary course of business and the payment of reasonable fees
in connection therewith; or
(f) replacing the chief executive officer, chief financial
officer or president of the Company (items (a) through (f) of
this Section 6.1 are referred to herein as the "Special
Stockholder Voting Rights").
6.2 Suspension and Termination of Special Stockholder Voting Rights.
6.2.1 At the time a Suspension Event occurs, the Special
Stockholder Voting Rights granted to the Holders under Section 6.1 (other
than clause (e) thereof) shall be suspended. Such Special Stockholder
Voting Rights shall be reinstated (as to any action of the Company
thereafter being proposed) at the earlier of the time at which the Company
(a) achieves the Performance Hurdles or (b) no longer reasonably believes
it will be in default of the Senior Debt Covenants, as certified in writing
to HMTF by the chief financial officer of the Company.
6.2.2 The Special Stockholder Voting Rights shall terminate at
the time that either (i) each of the BSMB Group and the HMTF Group ceases
to own at least fifty percent (50%) of the Securities each owned on the
Effective Date or (ii) each of the BSMB Control Group and the HMTF Control
Group ceases to own at least a majority of the Securities owned by each of
the HMTF Group and the BSMB Group, respectively.
ARTICLE 7
CERTAIN IPO RIGHTS AND SALE RIGHTS;
COMPANY CALL; COMPANY COVENANT
7.1 IPO Rights; Sale Rights;.
7.1.1 IPO Rights.
(a) If a Qualified IPO does not occur by the fifth (5th)
anniversary of the Effective Date, BSMB shall have the right to
request a Qualified IPO (the "Requested IPO") by delivering a written
notice (the "IPO Notice") to the Company and HMTF requesting that the
Company effect a Qualified IPO and, subject to Section 7.1.2, the
Company shall use commercially reasonable efforts to effect the
Requested IPO as soon as practicable thereafter.
(b) The right of BSMB to require a Qualified IPO pursuant to this
Section 7.1.1 shall terminate at the earlier to occur of (i) the time
at which the Holders comprising the BSMB Group have transferred more
than twenty-five percent (25%) of the Securities Beneficially Owned by
them on the Effective Date or (ii) the time at which the BSMB Control
Group shall cease to own a majority of the Securities at any time
owned by the BSMB Group.
7.1.2 Sale Rights. In the event BSMB has exercised its right to
request a Qualified IPO under Section 7.1.1, HMTF shall have the right to
cause the Company to hire a nationally recognized investment bank for the
purpose of marketing the Company for sale (the "Sale Option"), but the
Company shall not be required to effect the Requested IPO until the time at
which the Sale Option terminates as contemplated in the proviso to the
following sentence. If HMTF elects to exercise the Sale Option, HMTF shall
deliver a notice to BSMB, within thirty (30) days following the delivery of
the IPO Notice to HMTF by BSMB, indicating its intent to exercise the Sale
Option and the Company shall thereafter use its reasonable best efforts to
sell all of the equity securities or all or substantially all of the assets
of the Company (including by way of merger or consolidation); provided that
in the event a definitive agreement for the sale of the Company is not
entered into within six (6) months after delivery of the notice of Sale
Option by HMTF to BSMB, under this Section 7.1.2, the right of the Company
to exercise the Sale Option shall terminate and BSMB shall thereafter have
the right to require the Company to effect a Qualified IPO in accordance
with the terms of Section 7.1.1.
7.2 Company Call; Purchase Price.
7.2.1 Company Call
(a) If any Management Holder (other than Xxxxx) (i) voluntarily
terminates his employment with the Company, (ii) has his employment
terminated at any time by the Company for Cause (as defined in such
Management Holder's employment agreement), (iii) voluntarily
terminates his employment with the Company and executes and delivers
to the Company a non-compete agreement (A) in form and substance
substantially similar to the non-compete provisions set forth in such
Management Holder's employment agreement (without giving effect to any
change of control provision contained therein) or (B) if such
Management Holder's employment agreement does not contain such
non-compete provisions, in form and substance satisfactory to the
Company or (iv) is terminated by the Company without Cause (in each
case, a "Terminated Management Holder"), then the Company will have
the option to purchase (the "Company Call"), and if the Company Call
is exercised by the Company, such Management Holder shall sell to the
Company, all or any portion (at the Company's option) of the shares of
Common Stock and Management Securities Beneficially Owned by such
Management Holder. For purposes of this Section 7.2.1(a), termination
of any Management Holder's employment with the Company as the result
of such Management Holder's death or permanent disability (as defined
in the Company's Board of Director-approved disability policy, as in
effect from time to time) shall be deemed to constitute termination of
such Management Holder's employment by the Company without Cause.
(b) If Xxxxx (i) voluntarily terminates his employment with the
Company prior to the second anniversary of the Effective Date, or (ii)
has his employment terminated at any time by the Company for Cause (as
defined in the Xxxxx Employment Agreement), then the Company will have
a Company Call, and if the Company Call is exercised by the Company,
Xxxxx (and any Xxxxx Family Member to whom Xxxxx has transferred
Securities pursuant to a Family Transfer) shall sell to the Company,
all or any portion (at the Company's option) of the shares of Common
Stock and Management Securities Beneficially Owned by Xxxxx and all
such Xxxxx Family Members.
(c) The Company shall give notice in writing to the Terminated
Management Holder or Xxxxx, as the case may be, of the exercise of the
Company Call within one hundred eighty (180) days from the date of the
termination of the Terminated Management Holder's or Henry's
employment, as applicable. If no notice is given within the time limit
specified above, the Company Call shall terminate.
7.2.2 Purchase Price
(a) In the case of any exercise by the Company of the Company
Call following termination of employment described in either clause of
(a) or (b) of Section 7.2.1, the purchase price payable by the Company
for the Common Stock and the Management Securities being purchased
will be a cash amount equal to the Fair Market Value of such Common
Stock and Management Securities. For purposes of this Section 7.2.2,
"Fair Market Value" means the fair market value of the Common Stock
and Management Securities as determined by the Board in good faith as
of the date of such exercise of the Company Call.
(b) The closing of a purchase under this Section 7.2.2 shall take
place at the Company's principal executive offices within thirty (30)
days after the purchase price has been determined in accordance with
clause (a) above. At such closing, the Management Holder shall deliver
to the Company the certificates or instruments evidencing the Common
Stock and Management Securities being purchased (free of all liens,
claims and encumbrances), duly endorsed (or accompanied by duly
executed stock powers) and otherwise in good form for delivery,
against payment of the purchase price by the Company.
7.3 Trust Liquidity Right. If, prior to the consummation of a
Qualified IPO, the most junior publicly traded debt security of the Company
is unconditionally rated (the "Rating") BBB- or higher by Standard & Poor's
Rating Group ("S&P") or Baa3 or higher by Xxxxx'x Investors Services, Inc.
("Moody's"), the Trust may deliver a notice to HMTF and BSMB (the
"Liquidity Notice") requiring HMTF and BSMB for period of twelve (12)
months after delivery of the Liquidity Notice to use commercially
reasonable efforts to assist the Trust in consummating a Transfer of all of
its Securities to Person. The obligation of BSMB and HMTF under this
Section 7.3 shall automatically terminate upon the expiration of such
twelve-month period. At any time during such twelve-month period that the
Rating has been placed under review or withdrawn by S&P or Moody's, as the
case may be, the Liquidity Notice shall be deemed to have been
automatically withdrawn by the Trust.
7.4 Company Covenant. The Company agrees to use all reasonable
efforts to cause each Person who is obligated to become a party to this
Stockholders' Agreement after the Effective Date pursuant to the terms of
his/her option agreement to execute and deliver to the Company an
Instrument of Accession in the form of Exhibit A hereto.
ARTICLE 8
TERMINATION
8.1 Termination.
(a) The provisions of this Stockholders' Agreement shall
terminate on the tenth (10th) anniversary of the Effective Date;
provided, however, that Sections 2.1, 2.3, 4.1, 4.2, 4.3, 4.4, 4.7,
Article 5 (other than Sections 5.2 and 5.4), Article 6, Article 7 and
Section 9.8 of this Stockholders' Agreement shall terminate upon the
consummation, prior to the expiration of such ten (10) year period, of
a Qualified IPO.
(b) The provisions of this Stockholders' Agreement shall
terminate with respect to any Holder at such time as such Holder no
longer Beneficially Owns any Securities or PIK Preferred Stock of the
Company.
8.2 Termination of Certain Provisions. Sections 2.3 and 4.2 of
this Stockholders' Agreement shall terminate at the time at which the HMTF
Group ceases to Beneficially Own at least twenty-five and two-tenths
percent (25.2%) of the Fully-Diluted Common Stock unless the BSMB Group
otherwise consents; provided that such consent right shall terminate at
such time as the BSMB Group and the HMTF Group collectively Beneficially
Own less Securities than the Securities then Beneficially Owned by the
Trust.
ARTICLE 9
MISCELLANEOUS
9.1 Notices. Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given if
made by hand delivery, by telex, by telecopier or registered or certified
mail, postage prepaid, return receipt requested, addressed as follows (or
at such other address as may be substituted by notice given as herein
provided):
If to the Company:
Xxxxx Xxxxxxxx Corporation
000 00xx Xxxxxx 00000
Xxxxxx, Xxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Corporate Secretary
With copies to (which shall not constitute notice):
Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Xx.
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
and
Bear Xxxxxxx Merchant Fund Corp.
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx
Xxxxxxxx & Xxxxx
Citigroup Center
000 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx Xxxxx, Esq.
and
Manville Personal Injury Settlement Trust
000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Chairman and Managing Trustee
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxxxx, Esq.
If to any Holder, at its address listed on the signature pages
hereof.
Any notice or communication hereunder shall be deemed to have
been given or made as of the date so delivered if personally delivered;
when answered back, if telexed; when receipt is acknowledged, if
telecopied; and five (5) calendar days after mailing if sent by registered
or certified mail (except that a notice of change of address shall not be
deemed to have been given until actually received by the addressee).
Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other
Holders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
9.2 Governing Law. THIS STOCKHOLDERS' AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
9.3 Successors and Assigns. Assignments of a party's rights and
obligations hereunder shall only be made in strict conformity with this
Agreement.
9.4 Certain Waivers. This Stockholders' Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and
nothing in this Stockholders' Agreement, express or implied, is intended to
or shall confer upon any other person (except as set forth in Section 3.8
or this Section 9.4) any rights, benefits or remedies of any nature
whatsoever under or by reason of this Stockholders' Agreement. Without
limiting the foregoing, no direct or indirect holder of any equity
interests or securities of any party hereto (whether such holder is a
limited or general partner, member, stockholder or otherwise), nor any
Affiliate of any party hereto, nor any director, officer, employee,
representative, agent or other controlling person of each of the parties
hereto and their respective Affiliates shall have any liability or
obligation arising under this Stockholders' Agreement or the transactions
contemplated hereby.
9.5 Duplicate Originals. All parties may sign any number of
copies of this Stockholders' Agreement. Each signed copy shall be an
original, but all of them together shall represent the same agreement.
9.6 Severability. In case any provision in this Stockholders'
Agreement shall be held invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such
provision in every other respect and the remaining provisions shall not in
any way be affected or impaired thereby
9.7 No Waivers; Amendments.
9.7.1 No failure or delay on the part of the Company or any
Holder in exercising any right, power or remedy hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such
right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. The remedies provided for
herein are cumulative and are not exclusive of any remedies that may be
available to the Company or any Holder at law or in equity or otherwise.
9.7.2 Any provision of this Stockholders' Agreement may be
amended or waived if, but only if, such amendment or waiver is in writing
and is signed by the Company and the Required Holders; provided that no
such amendment or waiver shall, unless signed by all of the Holders
affected, (i) amend the provisions of this Section 9.7.2, (ii) change the
number of Holders which shall be required for the Holders or any of them to
take any action under this Section 9.7.2 or any other provision of this
Stockholders' Agreement or (iii) adversely affect the rights granted to any
specific Holder.
9.8 Furnishing Information; Confidentiality.
9.8.1 The Company hereby agrees to furnish to (i) each
Qualified Holder, within thirty (30) days after the end of each month, such
monthly financial statements of the Company as are furnished to the
Company's senior bank lenders, (ii) each Holder, within forty-five (45)
days after the end of each fiscal quarter of the Company, such quarterly
financial statements of the Company as are furnished to the Company's
senior bank lenders, (iii) each Holder, within one hundred twenty (120)
days after the end of each fiscal year of the Company, such annual
financial statements and budgets of the Company as are furnished to the
Company's senior bank lenders. The Company's obligation under this Section
9.8.1 shall not obligate the Company to furnish any Information (as
hereinafter defined) that it does not possess and (iv) BSMB, any financial
covenant compliance certificates delivered under the Credit Agreement. In
addition, except as set forth in this Section 9.8.1 (i) no Holder shall
have the right to receive any such Information following the time at which
such Holder owns less than one percent of the number of shares of Common
Stock then issued and outstanding and (ii) Xxxxx shall not have the right
to receive any such Information upon the initial date at which he ceases to
be employed by the Company.
9.8.2 No Holder (other than among the members of the HMTF
Control Group and/or the BSMB Control Group) shall, in any manner, either
directly or indirectly, divulge, disclose, or communicate to any person or
entity (other than among the members of the HMTF Control Group and/or the
BSMB Control Group) any non-public information, data and materials relating
to the Company and its operations, businesses and activities, (the
"Information"), provided that the foregoing confidentiality obligation
shall not apply to any Information that has previously become available to
and known by the public for a period of at least forty-eight (48) hours
(other than as a result of a wrongful disclosure). The foregoing provisions
of this Section 9.8.2 shall not prohibit the disclosure of Information by
(a) any Holder to the extent required by applicable law, (b) by BSMB or
HMTF to an Initial Permitted Transferee to the extent such Initial
Permitted Transferee agrees in writing to be bound by this Section 9.8.2 or
(c) any Holder with the written consent of the Company which consent will
not be unreasonably withheld or delayed. Any Holder receiving such a demand
for disclosure shall give written notice thereof to the Company as promptly
as is reasonably practicable after such Holder learns of any such demand.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this
Stockholders' Agreement to be duly executed as of the date first written
above.
XXXXX XXXXXXXX CORPORATION
By:
--------------------------------------
Name:
Title:
NAME OF HOLDER:
[HMTF ENTITY]
By:
--------------------------------------
Name:
Title:
Address:
c/o Hicks, Muse, Xxxx & Xxxxx
Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx,
Xx.
Copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
NAME OF HOLDER:
[BSMB ENTITY]
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
Address:
------------------------------------
------------------------------------
------------------------------------
Copy to:
------------------------------------
------------------------------------
------------------------------------
NAME OF HOLDER:
[MANAGEMENT STOCKHOLDERS]
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
Address:
------------------------------------
------------------------------------
------------------------------------
Copy to:
------------------------------------
------------------------------------
------------------------------------
NAME OF HOLDER:
MANVILLE PERSONAL INJURY
SETTLEMENT TRUST
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
Address:
------------------------------------
------------------------------------
------------------------------------
Copy to:
------------------------------------
------------------------------------
------------------------------------
EXHIBIT A
Instrument of Accession
Reference is made to that certain Stockholders' Agreement,
dated as of ________, ____, a copy of which is attached hereto (as amended
and in effect from time to time, the "Stockholders' Agreement"), among
Xxxxx Xxxxxxxx Corporation, a Delaware corporation (the "Company"), and the
persons signatory thereto.
The undersigned, ________________________ [print name], in
order to become the owner or holder of ________ shares of ________ [Common
Stock/Junior Preferred Stock (as defined in the Stockholders' Agreement)],
of the Company, hereby agrees that by the undersigned's execution hereof
the undersigned is a party to the Stockholders' Agreement subject to all of
the restrictions, conditions and obligations applicable to Holders (as
defined in the Stockholders' Agreement) set forth in the Stockholders'
Agreement. This Instrument of Accession shall take effect and shall become
a part of said Stockholders' Agreement immediately upon execution.
Executed as of the date set forth below.
Signature:
-------------------------
Address:
----------------------------
----------------------------
----------------------------
Date:
----------------------------
ACCEPTED:
XXXXX XXXXXXXX CORPORATION
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
Date:
----------------------------
EXHIBIT H
FORM OF
EXCHANGE AGREEMENT
EXCHANGE AGREEMENT (this "Agreement"), dated as of June 22,
2000, by and among Xxxxx Xxxxxxxx Corporation, a Delaware corporation (the
"Company"), Manville Personal Injury Settlement Trust (the "Trust") and
those individuals listed on the attached Schedule A (each a "Management
Person" and together, "Management," and collectively, with the Trust, each
individually an "Investor" and together the "Investors").
WHEREAS, the Company, HB Merger LLC, a Delaware limited
liability company ("Merger Company") and HB Finance LLC, a Delaware limited
liability company, have entered into an Agreement and Plan of Merger, dated
as of June 22, 2000 (the "Merger Agreement"), which provides for, among
other things, the merger of Merger Company with and into the Company (the
"Merger") in accordance with the terms of the Merger Agreement, the General
Corporation Law of the State of Delaware (the "DGCL") and the Delaware
Limited Liability Company Act; and
WHEREAS, in furtherance of the transactions contemplated by the
Merger Agreement, the parties desire to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, the parties hereto agree as follows:
Section 1. The Exchange; Closing.
(a) At the Class TM Closing (as defined herein), subject to the
satisfaction or waiver of the conditions set forth in Section 5 hereof,
each Investor will exchange the number of shares of common stock, par value
$0.01 per share, of the Company (referred to herein as "Common Shares" or
"Company Common Stock") set forth next to its name on the attached Schedule
A for an equal number of shares of Class TM Preferred Stock, par value
$0.01 per share, of the Company (referred to herein as "Class TM Preferred
Stock"). At the effective time of the Merger (the "Effective Time") each
share of Class TM Preferred Stock, shall be converted in the Merger into
0.6 of a fully paid and nonassessable share of Surviving Corporation Common
Stock and 0.4 of a fully paid and nonassessable share of
Surviving Corporation Junior Preferred Stock in accordance with Section
2.1(b) of the Merger Agreement.
(b) At the Class TM Closing, each Investor will deliver to the
Company (i) one or more stock certificates that, in the aggregate,
represent all of the shares of Company Common Stock to be exchanged by such
Investor as set forth in Column 2, in each case duly endorsed in blank or
accompanied by stock powers duly executed in blank, in proper form for
transfer and (ii) such additional documents and certificates as the Company
may reasonably request, in exchange for issuance and delivery by the
Company of the Class TM Preferred Stock. At the reasonable request of the
Company, each Management Person will surrender its stock certificates for
the Common Shares to the Company prior to the Special Meeting to be held in
escrow until the Class TM Closing.
(c) At the Class TM Closing, the Company shall deliver to each
Investor one or more certificates evidencing the shares of Class TM
Preferred Stock which such Investor is entitled to receive, each of which
shall be registered in the name of such Investor or its designee.
(d) The closing of the exchange of Common Shares for shares of
Class TM Preferred Stock under this Agreement (the "Class TM Closing")
shall take place, (i) immediately prior to the closing under the Merger
Agreement (the "Merger Agreement Closing"), but shall not occur until after
the adoption of the Merger Agreement and the amendment to the restated
certificate of incorporation of the Company authorizing the creation of
Class TM Preferred Stock (which amendment is attached hereto as Annex A)
(the "Charter Amendment") by an affirmative vote of the holders of a
majority of the outstanding shares of Company Common Stock at the Special
Meeting and the filing of the Charter Amendment with the Secretary of State
of Delaware in accordance with the provisions of the DGCL or (ii) at such
other time and place prior to the Merger Agreement Closing, but after the
adoption of the Merger Agreement and the Charter Amendment by an
affirmative vote of the holders of a majority of the outstanding shares of
Company Common Stock, that the Company and the Investors may agree (such
date is referred to herein as the "Class TM Closing Date"), at the offices
of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, Xxxx Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
Section 2. Representations and Warranties of the Company. The
Company hereby represents and warrants to the Investors that:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
(b) The authorized capital stock of the Company as of the Class
TM Closing will consist of (i) 300,000,000 shares of Company Common Stock
and (ii) 5,000,000 shares of Class TM Preferred Stock, none of which shall
be issued and outstanding prior to the Class TM Closing. When the
certificates evidencing the shares of Class TM Preferred Stock have been
delivered in exchange for shares of Common Stock as provided in this
Agreement, the shares of Class TM Preferred Stock will be duly authorized,
validly issued, fully paid and non-assessable and free and clear of any
mortgage, lien, pledge, charge, encumbrance or other security interest
(including any restriction on the right to vote, sell or otherwise dispose
of such capital stock or ownership interests) (referred to herein as
"Encumbrances"), other than Encumbrances resulting from actions taken by
the Investors and except as set forth in the Charter Amendment.
(c) The Company has the corporate power and authority to
execute, deliver and, subject to adoption of the Charter Amendment and the
filing of the Charter Amendment with the Secretary of State of Delaware in
accordance with the provisions of the DGCL, perform its obligations under
this Agreement and consummate the transactions contemplated hereby. The
execution, delivery and performance of the Merger Agreement and the
consummation of the transactions contemplated thereby have been duly
authorized by all necessary corporate action on the part of the Company
other than the receipt of necessary approvals by the Company's
stockholders. This Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding obligation of the
Company, assuming the due execution and delivery by the other parties
thereto, enforceable against the Company in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors rights
generally.
(d) Except for (i) the filing of the Charter Amendment with the
Secretary of State of Delaware and (ii) any filing of notification required
under the HSR Act, if any, no filing or registration with, or
authorization, consent or approval of any legislative, judicial, executive
or regulatory body, authority or agency (a "Governmental Authority") is
required in connection with the execution, delivery and performance of this
Agreement by the Company.
(e) Neither the execution and delivery by the Company of this
Agreement, nor the performance by the Company of its obligation hereunder
will (i) contravene or violate any law, rule or regulation to which the
Company is subject or any judgment, order, writ, injunction or decree of
any Governmental Authority which is applicable to Company or (ii) violate,
or result in a breach or default (with or without the giving of notice or
lapse of time, or both) under any contract, to which the Company is a
party, except for such violations, breaches or defaults which would not
prevent or materially impair or delay the Class TM Closing.
(f) The Company has not incurred, and will not incur, directly
or indirectly as a result of any action taken by the Company, any liability
for brokerage or finders' fees or agents' commissions or any similar
charges in connection with this Agreement.
(g) The Company shall not be deemed to have made to the
Investors any representation or warranty under this Agreement other than as
expressly made by the Company in this Section 2 hereof.
Section 3. Representations and Warranties of the Investors.
Each Investor hereby represents and warrants, with respect to itself, to
the Company as follows:
(a) It has the power and authority to enter into, deliver and,
except with respect to the Trust in respect of the matter described in
Section 6(c), perform its obligations under this Agreement and consummate
the transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by such Investor and is a valid and
binding obligation of such Investor, assuming the due execution and
delivery by the other parties thereto, enforceable against such Investor in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors rights generally.
(b) Except for filings under the HSR Act, if any, and except
with respect to the Trust in respect of the matter described in Section
6(c), no filing or registration with, or authorization, consent or approval
of any Governmental Authority or other Person is required in connection
with the execution, delivery and performance of this Agreement by such
Investor.
(c) It acknowledges its understanding that the exchange of the
shares of Company Common Stock for the Class TM Preferred Stock pursuant
hereto is intended to be exempt from registration under the Securities Act
of 1933, as amended (the "Securities Act"), and that:
(i) It has such knowledge, experience and skill in evaluating
and investing in issues of equity securities, including securities of new
and speculative issuers, based on actual participation in financial,
investment and business matters, such that it is capable of evaluating the
merits and risks of an investment in the Company for itself;
(ii) It is familiar with the business and operations of
the Company, has had the opportunity to conduct a due diligence review of
the Company concerning the terms and conditions of the offering of the
shares of Class TM Preferred Stock to be received by such Investor and
other matters pertaining to an investment in the shares of Class TM
Preferred Stock; and
(iii) It has been advised that the shares of Class TM
Preferred Stock have not been registered under the Securities Act, or any
state securities or blue sky laws, and that the terms thereof prohibit
resale without the consent of the Company. Except as contemplated by the
Merger Agreement, it is exchanging its Company Common Stock to be exchanged
hereunder for shares of Class TM Preferred Stock for its own account for
investment, and not with a view to, or for resale in connection with, the
distribution thereof, and has no present intention of distributing or
reselling any thereof.
(d) Neither the execution and delivery by such Investor of this
Agreement, nor performance by such Investor or its obligations hereunder
will (i) contravene or violate any law, rule or regulation to which such
Investor is subject or any judgment, order, writ, injunction or decree of
any Governmental Authority which is applicable to such Investor or (ii)
violate or result in a breach or default (with or without the giving of
notice or lapse of time, or both) under any contract to which such Investor
is a party, except for such violations, breaches, or defaults which would
not prevent or materially impair or delay the Class TM Closing.
(e) Immediately prior to the Class TM Closing, such Investor
owns, beneficially and of record, the shares of Company Common Stock set
forth next to such Investor's name on Schedule A hereto, free and clear of
all Encumbrances.
(f) Such Investor has not incurred, directly or indirectly, as
a result of any action taken by such Investor, any liability for brokerage
or finders' fees or agents' commissions or any similar charges in
connection with this Agreement.
(g) Each Investor shall not be deemed to have made to the
Company any representation or warranty other than as expressly made by such
Investor in this Section 3 hereof.
Section 4. Efforts. Upon the terms and subject to the
conditions herein provided, all of the parties hereto agree to use their
commercially reasonable efforts to take, or cause to be taken, all action
and to do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including using commercially
reasonable efforts to satisfy the conditions precedent to the obligations
of the parties hereto.
Section 5. Conditions to the Class TM Closing. The respective
obligations of each party to effect this Agreement shall be subject to the
satisfaction on or prior to the Class TM Closing of each of the following
conditions:
(a) No Injunction. No statute, rule, order, decree or
regulation shall have been enacted or promulgated by any Governmental
Authority of competent jurisdiction which prohibits the consummation of the
transactions contemplated hereby.
(b) Stockholder Approval. The Charter Amendment shall have
been approved by the affirmative vote of the holders of a majority of the
outstanding shares of Company Common Stock.
(c) Court Approval. The Court Approval (as defined in the Tax
Matters and Amended Trust Relationship Agreement, between the Trust and the
Company, dated the date hereof) shall have been obtained and not vacated,
reversed, modified or amended, in whole or in part, so as to materially
limit the Court Approval.
(d) Agreements and Representations and Warranties. Each
Investor shall have performed in all material respects all of its
obligations hereunder required to be performed by it at or prior to the
Class TM Closing Date and the representations and warranties contained in
this Agreement with respect to each Investor shall be true and correct in
all material respects at and as of the Class TM Closing Date as if made at
and as of such time. The Company shall have performed in all material
respects all of its obligations hereunder required to be performed by it at
or prior to the Class TM Closing Date and the representations and
warranties contained in this Agreement with respect to the Company shall be
true and correct in all material respects at and as of the Class TM Closing
Date as if made at and as of such time.
Section 6. Miscellaneous.
(a) Amendment; Waiver. This Agreement may not be amended,
supplemented or modified, except by an instrument in writing signed on
behalf of each of the parties hereto and the Merger Company. At any time
prior to the Class TM Closing, the parties may (i) extend the time for the
performance of any of the obligations or other acts of the other parties
hereto or (ii) waive any inaccuracies in the representations and warranties
of the other parties contained herein. Any agreement on the part of any
party to any such extension or waiver shall be valid as to such party only
if set forth in an instrument in writing signed on behalf of such party.
(b) Additional Investors. At any time prior to the Class TM
Closing, with the written consent of the Company and Merger Company, one or
more additional investors (each an "Additional Investor") may be added as a
party or parties to this Agreement. The Company shall ensure that all
Additional Investors becoming a party to this Agreement agree in writing by
executing a counterpart to be bound by the provisions of this Agreement as
a party hereto and in the capacity of an Investor.
(c) Waiver of Right of First Refusal. The Company hereby
waives, with respect solely to the exchange of Common Shares for shares of
Class TM Preferred Stock by the Trust contemplated herein, any and all
rights to purchase such Common Shares, as provided in Section 3.03 of the
Amended and Restated Supplemental Agreement, dated as of April 5, 1996,
between the Company and the Trust.
(d) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given upon (i) transmitter's
confirmation of a receipt of a facsimile transmission, (ii) confirmed
delivery by a standard overnight carrier or when delivered by hand or (iii)
the expiration of five Business Days after the day when mailed in the
United States by certified or registered mail, postage prepaid, addressed
at the following addresses (or at such other address for a party as shall
be specified by like notice):
(i) if to the Company, to:
Xxxxx Xxxxxxxx Corporation
000 00xx Xxxxxx 00000
Xxxxxx, Xxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Corporate Secretary
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
and
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxx, Esq.
(ii) if to the Trust, to:
Manville Personal Injury Settlement Trust
000 Xxxxxxx Xxxx
Xxxxxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Managing Trustee
with a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxxxx, Esq.
(iii) if to the Investors, at the address listed on the
signature page.
(e) Interpretation. Terms used herein which are not defined
shall have the meanings ascribed to them in the Merger Agreement. When a
reference is made in this Agreement to Sections, such reference shall be to
a 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 phrase
"beneficial ownership" and words of similar impact when used in this
Agreement shall have the meaning ascribed to it under Rule 13d-3 of the
Securities Exchange Act of 1934, as amended.
(f) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
shall be considered one and the same agreement. Facsimile signatures shall
be deemed originals.
(g) Entire Agreement; Headings. This Agreement constitutes the
entire understanding and agreement of the parties with respect to the
subject matter of this Agreement and supersedes all prior agreements or
understandings (written or oral) between the parties with respect to the
subject matter hereof. The headings in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of this Agreement.
(h) Parties in Interest. Except as set forth in Sections 6(a),
6(b) and 6(m), nothing in this Agreement, express or implied, is intended
to or shall confer upon any person other than the parties hereto any
rights, benefits or remedies of any nature whatsoever under or by reason of
this Agreement. Without limiting the foregoing, no direct or indirect
holder of any equity interests or securities of the Company in any party
hereto, nor any affiliate of any party hereto, nor any director, officer,
employees, representative, agent or other controlling persons of each of
the parties hereto and their respective affiliates not a party hereto shall
have any liability or obligation arising under this Agreement or the
transactions contemplated hereby.
(i) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void, unenforceable or against its
regulatory policy, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
(j) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware without
giving effect to the principles of conflicts of law thereof.
(k) Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable
by, the parties hereto and their respective successors and permitted
assigns.
(l) Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in any
Federal court located in the State of Delaware or in any Delaware state
court, this being in addition to any other remedy to which they are
entitled at law or in equity. In addition, each of the parties hereto (i)
consents to submit itself to the personal jurisdiction of any Federal court
located in the State of Delaware or any Delaware state court in the event
any dispute arises, out of this Agreement or any of the transactions
contemplated by this Agreement and (ii) agrees that it will not attempt to
deny or defeat such personal jurisdiction by motion or other request for
leave from any such court and (iii) agrees that such forum is not an
inconvenient forum.
(m) Termination. This Agreement shall terminate upon
termination of the Merger Agreement or upon the collective agreement of
each of the parties hereto and Merger Company. Upon termination of this
Agreement or the Merger Agreement, all shares of Class TM Preferred Stock
held by each Investor shall automatically convert into to an equal number
of shares of Company Common Stock. In the event of a termination there
shall be no liability on the party of any party hereto, except with respect
to prior breaches of the terms hereof.
[Execution Page Follows]
IN WITNESS WHEREOF, the Investors and the Company have caused
this Agreement to be signed by their respective officers hereunto duly
authorized as of the date first written above.
XXXXX XXXXXXXX CORPORATION
By:________________________________
Name:
Title:
Investors:
MANVILLE PERSONAL INJURY
SETTLEMENT TRUST
By:_______________________________
Name:
Title:
__________________________________
[Management Investor]
__________________________________
[Management Investor]
__________________________________
[Management Investor]
SCHEDULE A
-------------------------------------------------------------------------------
Stockholder Number of Shares of Company Common Stock
-------------------------------------------------------------------------------
The Trust 3,200,000
Management Investor
Management Investor
Management Investor
-------------------------------------------------------------------------------
ANNEX A
FORM OF CERTIFICATE OF AMENDMENT TO
RESTATED CERTIFICATE OF INCORPORATION
OF
XXXXX XXXXXXXX CORPORATION
The undersigned, [ ], certifies that he is the [ ] of Xxxxx
Xxxxxxxx Corporation (the "Company"), a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware
(the "DGCL"), in accordance with the provisions of Section 242 thereof,
DOES HEREBY CERTIFY:
That the following amendment was adopted in accordance with the
provisions of Sections 242 of the DGCL:
1. The name of the Company is Xxxxx Xxxxxxxx Corporation.
2. This certificate of amendment was approved by the Board of
Directors of the Company and thereafter duly adopted by the stockholders
thereof, in accordance with the provisions of Section 242 of the DGCL.
3. Article FOURTH of the Restated Certificate of Incorporation
is amended by deleting said Article in its entirety and substituting the
following in lieu thereof:
"FOURTH: The total number of shares of all classes of capital
stock which the Company shall have authority to issue is three hundred five
million (305,000,000) shares, of which three hundred million (300,000,000)
shares shall be common stock with a par value of $.01 per share ("Common
Stock") and five million (5,000,000) shares shall be Class TM Preferred
Stock with a par value of $.01 per share. A description of the different
classes of stock of the Company and a statement of the designations and the
powers, preferences and special rights, and the qualifications, limitations
or restrictions thereof, of the various classes of stock are as follows:
A. Provisions Relating to Class TM Preferred Stock. The rights,
preferences, privileges, restrictions and other matters relating to the
Class TM Preferred Stock are as follows:
(1) Designation and Amount. The shares of such series shall be
designated as Class TM Preferred Stock (the "TM Preferred Stock") and the
number of shares constituting the TM Preferred Stock shall be five million
(5,000,000).
(2) Rank. The TM Preferred Stock shall, with respect to dividend
distributions and distributions upon the liquidation, winding-up and
dissolution of the Company, rank prior to all classes of common stock of
the Company, and to each other class of capital stock or series of
preferred stock hereafter created by the Board, the terms of which do not
expressly provide that it ranks prior to or pari passu with the TM
Preferred Stock as to dividend distributions or distributions upon the
liquidation, winding-up and dissolution of the Company. The TM Preferred
Stock shall, with respect to dividend distributions and distributions upon
the liquidation, winding-up and dissolution of the Company, rank pari passu
with any class of capital stock or series of preferred stock hereafter
created by the Board, the terms of which expressly provide that it ranks
pari passu with the TM Preferred Stock as to dividend distributions and
distributions upon the liquidation, winding-up and dissolution of the
Company.
(3) Dividends and Distributions. The holders of shares of TM
Preferred Stock shall be entitled to receive dividends and distributions in
an amount and at the time payable as any dividends and distributions that
are declared on the Common Stock, as if each share of TM Preferred Stock is
equal to one share of Common Stock.
(4) Voting Rights. The holders of shares of the TM Preferred
Stock shall have the following voting rights:
Each share of TM Preferred Stock shall entitle the holder
thereof to one vote on all matters submitted to a vote of the stockholders
of the Company. Except as otherwise provided herein or by law, the holders
of shares of TM Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
stockholders of the Company; provided, however, that the affirmative vote
of the holders of a majority of the outstanding shares of TM Preferred
Stock on the relevant record date, voting separately as a class, shall be
required for any amendment, alteration or exchange or similar transaction,
of any of the provisions of this Certificate which would alter or change
the powers, preferences or special rights of the shares of TM Preferred
Stock so as to adversely affect them.
Except as set forth herein or otherwise required by law,
holders of TM Preferred Stock shall have no special voting rights and their
consent as a class shall not be required for taking any corporate action.
(5) Reacquired Shares. Any shares of TM Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever
(including by reclassification) shall be retired and cancelled promptly
after the acquisition thereof. All such shares shall, upon their
retirement, become authorized but unissued shares of preferred stock
without designation as to series and may be reissued as part of a new
series of preferred stock to be created by resolution or resolutions of the
Board of Directors or as otherwise permitted under the DGCL
(6) Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Company, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the TM Preferred Stock
unless, prior thereto, the holders of shares of TM Preferred Stock shall
have received $15.625 per share, or (2) to the holders of stock ranking on
a parity (either as to dividends or distributions upon liquidation,
dissolution or winding up) with the TM Preferred Stock, except
distributions made ratably on the TM Preferred Stock and all other such
parity stock in proportion to the total amounts to which the holders of all
such shares are entitled as to dividends or upon such liquidation,
dissolution or winding up.
For purposes of this Article Fourth, Section 6 only, neither
the sale, lease, conveyance, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of
the property or assets of the Company nor the consolidation or merger of
the Company with or into one or more corporations shall be deemed to be a
liquidation, dissolution or winding-up of the affairs of the Company
(unless such sale, conveyance, exchange or transfer is in connection with a
dissolution or winding up of the business of the Company).
(7) Redemption. The shares of TM Preferred Stock are not
redeemable.
(8) Conversion. The shares of TM Preferred Stock shall be
automatically converted into an equal number of validly issued, fully paid
and non-assessable shares of Common Stock in the event that the merger (the
"Merger") contemplated by the Agreement and Plan of Merger among HB Merger
LLC, HB Finance LLC and the Company, dated as of June 22, 2000 (the "Merger
Agreement"), shall not have been consummated by the Business Day after the
transactions contemplated by the Exchange Agreement, among the Company,
Manville Personal Injury Settlement Trust and certain individuals party
thereto, dated as of June 22, 2000 (the "Exchange Agreement"), are
consummated. If the Merger is not so consummated, or if the Merger
Agreement is terminated, each holder of a certificate representing TM
Preferred Stock shall, after the earlier to occur of such events, be
entitled to receive certificates representing Common Stock upon
presentation of certificates representing TM Preferred Stock as provided
for in the Exchange Agreement.
(9) Restriction on Transferability. Except as contemplated by the
Merger Agreement and the Exchange Agreement, the shares of TM Preferred
Stock may not be transferred or pledged in any manner whatsoever.
(10) Reports. So long as any shares of TM Preferred Stock are
outstanding, the Company will furnish holders thereof by first class mail,
postage prepaid, at such holder's address as the same appears on the stock
register of the Company, with the quarterly and annual financial reports
that the Company is required to file with the Securities and Exchange
Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended, or, in the event that the Company is not
required to file such reports, reports containing the same financial
information as would be required in such reports.
(11) General Provisions.
(a) If any of the TM Preferred Stock certificates shall be
mutilated, lost, stolen or destroyed, the Company shall issue, in
exchange and in substitution for and upon cancellation of the
mutilated TM Preferred Stock certificate, or in lieu of and
substitution for the TM Preferred Stock certificate lost, stolen
or destroyed, a new TM Preferred Stock certificate of like tenor
and representing an equivalent amount of shares of TM Preferred
Stock, but only upon receipt of evidence of such loss, theft or
destruction of such TM Preferred Stock certificate and indemnity,
if requested, satisfactory to the Company.
(b) The term "outstanding," when used in reference to
shares of a specific series or class of capital stock of the
Company, shall mean issued shares, excluding shares held by
the Company or a subsidiary.
(c) No holder of shares of TM Preferred Stock will,
except as otherwise provided in subparagraph (8) above, by
virtue of such holder's holding such shares, possess any
preemptive rights to subscribe for or acquire any unissued
shares of capital stock of the Company (whether now or
hereafter authorized) or securities of the Company
convertible into, or exercisable or exchangeable for, shares
of capital stock of the Company.
(d) Each holder of TM Preferred Stock, by acceptance
thereof, acknowledges and agrees that payments of dividends
on or liquidation preference of TM Preferred Stock, and
exchange, redemption and repurchase of TM Preferred Stock,
by the Company are subject to restrictions on the Company
contained in certain credit and financing agreements binding
on the Company or certain of its subsidiaries.
(e) If any payment, redemption, exchange or other
action shall be required by the terms hereof to be made or
taken on a day that is not a Business Day, such payment,
redemption, exchange or other action shall be made or taken
on the immediately succeeding Business Day. "Business Day"
means any day except a Saturday, Sunday or other day on
which commercial banks in the State of Delaware or the State
of New York are authorized by law to close.
B. Provisions Relating to Common Stock. The rights, preferences,
privileges, restrictions and other matters relating to the Common Stock are
as follows:
No holder of Common Stock of the Company shall be entitled as
of right to purchase or subscribe for any part of the unissued stock of the
Company or of any stock of the Company to be issued by reason of any
increase of the authorized capital stock of the Company or of the number of
its shares, or of bonds, certificates of indebtedness, debentures, or other
securities convertible into stock of the Company or of any stock of the
Company purchased by it or its nominee or nominees.
The holders of the Common Stock shall have the right to one
vote per share on all questions to the exclusion of all other classes or
classes of stock, except as by law expressly provided or as otherwise
herein expressly provided with respect to the holders of any other class or
classes of stock."
IN WITNESS WHEREOF, the Company has caused this Certificate of
Amendment to be signed by [ ], its [ ], this _____ day of ____________,
2000.
XXXXX XXXXXXXX CORPORATION
By:
-------------------------------------
Name:
Title:
EXHIBIT I
FORM OF
TAX MATTERS AND AMENDED
TRUST RELATIONSHIP AGREEMENT
THIS TAX MATTERS AND AMENDED TRUST RELATIONSHIP AGREEMENT (this
"Agreement"), dated as of June 22, 2000, between Xxxxx Xxxxxxxx
Corporation, a Delaware corporation (the "Company"), and Manville Personal
Injury Settlement Trust (the "Trust"), a New York trust.
WHEREAS, the Company is a party to the Amended and Restated
Manville Personal Injury Settlement Trust Agreement, dated as of April 29,
1997 (the "Trust Agreement"), among the Company and the Trustees named
therein;
WHEREAS, the Trust and the Company are parties to agreements
including the Second Amended and Restated Supplemental Agreement, dated as
of April 5, 1996, between the Trust and the Company (the "Supplemental
Agreement");
WHEREAS, pursuant to paragraph (ii) of Section 1807(a)(7)(C) of
the Tax Reform Act of 1986, the Company (or any successor thereof) is
liable for the tax imposed by Section 468B of the Code with respect to the
income of the Trust (the "Statutory Tax Provision"); and
WHEREAS, the Company and the Trust desire to amend the
Supplemental Agreement and the Trust Agreement to be effective as of the
Closing.
NOW, THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the adequacy and receipt of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Terms Defined. The following terms used
herein shall have the meanings ascribed to them in this Article I.
"Agreement" shall have the meaning set forth in the recitals.
"Amended Supplemental Agreement" shall have the meaning set
forth in Section 3.1 hereof.
"Closing" shall have the meaning set forth in Section 4.3
hereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" shall have the meaning set forth in the recitals.
"Company Amount" shall have the meaning set forth in Section
2.1 hereof.
"Court" shall mean the United States Bankruptcy Court for the
Southern District of New York (or such other court as may be administering
the Cases (as defined in the Supplemental Agreement)) and, with respect to
any particular proceeding within a Case, any other court which may be
exercising jurisdiction over such proceeding.
"Designated Settlement Fund" shall mean the non-grantor trust
portion of the settlement fund established for claimants against the
Company which filed a petition for reorganization under Chapter 11 of Title
11, United States Code on August 26, 1982, pursuant to Section 1807(a)(7)
(C) (i) of the Tax Reform Act of 1986.
"Final Order" means (a) a judgment, order or other decree
issued and entered by the Court or by any state or other federal court or
other tribunal located in one of the states, territories or possessions of
the United States or the District of Columbia, which judgment, order or
decree (x) has not been reversed or stayed and as to which the time to
appeal has expired and as to which no appeal or petition for review,
rehearing or certiorari is pending or (y) with respect to which any appeal
has been finally decided and no further appeal or petition for certiorari
can be taken or granted; or (b) stipulation or other agreement entered into
which has the effect of any such judgment, order or other decree.
"Futures Representative" shall mean Xxxxxx Xxxxxx Xxxxx, the
successor to the Legal Representative of the Future Claimants against the
Trust appointed pursuant to the Second Amended and Restated Plan of
Reorganization of the Company or any of his successors in such capacity.
"Governmental Agency" shall mean any domestic, foreign,
supranational, national, federal, state, regional or local government and
any department, bureau, agency, authority, commission, board, court,
tribunal, or other legislative, executive, judicial, regulatory or
administrative body or instrumentality of any such government or any
official empowered to act on behalf of any of the foregoing, or any
arbitral tribunal acting within the proper scope of its jurisdiction.
"Indemnified Parties" shall have the meaning set forth in
Section 2.2 hereof.
"Merger" shall mean the merger contemplated by the Merger
Agreement.
"Merger Agreement" shall mean the Agreement and Plan of Merger
among HB Merger LLC, a Delaware limited liability company, HB Finance LLC,
a Delaware limited liability company, and the Company, dated as of the date
hereof.
"Order" shall have the meaning set forth in Section 6.1(c).
"SCB" shall mean the Selected Counsel for the Beneficiaries
appointed pursuant to the Second Amended and Restated Plan of
Reorganization of the Company.
"Statutory Tax Provision" shall have the meaning set forth in
the recitals.
"Supplemental Agreement" shall have the meaning set forth in
the recitals.
"TM Exchange Agreement" shall have the meaning set forth in the
Merger Agreement.
"Tax" or "Taxes" shall mean all federal, state, local, or
foreign taxes, assessments, duties, levies or similar charges of any kind
imposed on the income of the Designated Settlement Fund (including, without
limitation, any Tax imposed pursuant to the Statutory Tax Provision) and
including any interest, fines, penalties, assessments or additions to Tax
resulting from, attributable to or incurred in connection with any such Tax
or any contest or dispute thereof.
"Tax Return" shall mean any return, declaration, report, claim
for refund, or information return or statement relating to Taxes of the
Designated Settlement Fund or any amendment thereto, and including any
schedule or attachment thereto.
"Trust" shall have the meaning set forth in the recitals.
"Trust Agreement" shall have the meaning set forth in the
recitals.
"Trust Amendment" shall have the meaning set forth in Section
3.2.
"Trustees" shall have the meaning set forth in the Supplemental
Agreement.
"Trust Voting Agreement" shall have the meaning set forth in
the Merger Agreement.
ARTICLE II
LIMITATION OF TAX LIABILITY
Section 2.1 Satisfaction of Tax Liability. At the Closing
provided for in Section 4.3 hereof and in accordance with the provisions of
this Agreement, the Company shall pay to the Trust by wire transfer of
immediately available funds to an account designated by the Trust an amount
in cash equal to $90,000,000 (the "Company Amount").
Section 2.2 Trust Payment and Indemnity. (a) The Trust hereby
covenants and agrees, from and after the Closing, to (i) duly and timely
(taking into account any applicable extensions) file all Tax Returns
required to be filed by the Trust with the appropriate taxing authority and
pay any and all Taxes as and when due and payable and (ii) indemnify,
defend and hold harmless the Company and any of its successors, affiliates
and subsidiaries and each of the officers, directors and employees of the
Company or such successors, affiliates or subsidiaries (the "Indemnified
Parties") in respect of (A) the Taxes referred to in clause (i) above, (B)
any costs, expenses, losses, penalties and damages (other than
consequential damages and lost profits) arising from such Taxes (including
reasonable fees and expenses of counsel and other litigation and settlement
costs, but excluding any taxes imposed on the Indemnified Parties in
respect of the payment for any Taxes imposed with respect to income
attributable to the Trust) which an Indemnified Party shall have suffered
or incurred, and (C) until the expiration of the applicable statute of
limitations any taxes and costs, expenses (including reasonable fees and
expenses of counsel and other litigation and settlement costs), losses,
penalties and damages (other than consequential damages and lost profits)
relating thereto (collectively "Losses") suffered or incurred by any
Indemnified Party resulting from or arising out of the breach of any
representations contained in Section 5.1(e) hereof, provided, however, that
the foregoing shall not relieve the Company of liability for (and the Trust
shall not be obligated to indemnify, defend or hold harmless the
Indemnified Parties for) its obligation to pay the amount required to be
paid by the Company pursuant to Section 2.2(b), and provided further, that
the Trust shall have no responsibility to indemnify, defend or hold
harmless any Indemnified Party for any Losses which result from the gross
negligence or willful misconduct of any Indemnified Party.
(b) Within 30 days following the end of the month in
which the Closing occurs, the Trust will provide to the Company a
certificate of an authorized representative of the Trust certifying the
taxable income of the Trust for the portion of the taxable year or period
ending on the date of the Closing, together with a schedule showing in
reasonable detail the calculation of taxable income of the Trust. Such
certificate shall state that the Trust will pay to the Internal Revenue
Service or other applicable taxing authority the amount of Tax payment
being sought from the Company pursuant to this Section 2.2(b) following
remittance of such payment from the Company to the Trust. The Trust will
calculate the taxable income of the Trust for the portion of the taxable
year or period ending on the date of the Closing by adding (i) the taxable
income attributable to the Designated Settlement Fund (including any
capital gains or losses) through the month ending prior to the date of the
Closing, (ii) the taxable income attributable to the Designated Settlement
Fund (excluding any capital gains or losses) for the month including the
date of the Closing, multiplied by a fraction equal to (x) the total number
of days in such month up to and including the date of the Effective Time,
divided by (y) the total number of days in such month, and (iii) the amount
of any capital gains and losses incurred by the Designated Settlement Fund
during the month of the Closing, to the extent that the asset generating
such capital gain or loss is sold on or before the date of the Closing. The
Company will remit to the Trust by wire transfer of immediately available
funds an amount equal to (i)(a) the taxable income of the Trust calculated
as set forth in the immediately preceding sentence, multiplied by (b) the
applicable tax rate of the Trust, minus (ii) any estimated Tax payments
previously paid to the Trust for the portion of the taxable year or period
of the Trust ending on the date of the Closing net of Taxes paid by the
Trust not yet reimbursed by the Company to the extent the Company is
obligated to reimburse the Trust for such Taxes, not later than five
business days before the due date for payment of such Taxes.
(c) Following the date hereof until and including the
date of the Closing, the Trust will manage its investments in and the
expenses of the Designated Settlement Fund consistent with past practice;
provided, that the foregoing shall not prevent the Trustees from being
entitled at all times to act as required by their fiduciary duties under
applicable law.
Section 2.3 Notice of Payments; Information.
(a) At least ten (10) days prior to the due date for
filing a Tax Return (including applicable extensions), the Trust shall
provide the Company with draft copies of such Tax Return. In no event shall
the Trust be required to provide any work papers underlying its Tax
Returns. The Company shall only have the right to review and comment on
such Tax Returns, and in the event the Company disagrees with any
information contained in such Tax Return, the Company shall not have the
right to institute the dispute procedures provided in Section 2.7 hereof.
(b) Within 10 business days after filing any Tax Return
the Trust shall deliver to the Company a copy of such Tax Return and, with
respect to any Tax Return filed on an annual basis, a notice setting forth
the amount of Taxes paid during the twelve months preceding such Tax
Return.
(c) The Company shall have the right to review the
accounts of the Trust and to discuss the affairs, finances and accounts of
the Trust with the Trustees and the officers of the Trust to the extent
that such affairs, finances and accounts may reasonably be related to
calculating the Trust's Tax liability or reviewing the Tax Returns of the
Trust, all at such reasonable times and intervals as the Company may
reasonably request and at the expense of the Company and, in any event,
only during normal business hours.
(d) The Company shall retain in strict confidence all
information supplied to it by the Trust pursuant to this Agreement, except
to the extent that (i) the Company is compelled to disclose such
information as a result of court order, subpoena or similar legal duress
or, in the opinion of counsel to the Company, is otherwise required to
disclose such information to any governmental department, agency,
authority, commission or other body, it being understood that the Company
shall consult with the Trust upon receiving such an order or subpoena or in
connection with obtaining such an opinion as part of its good faith
determination as to whether disclosure is required or (ii) any such
information is or becomes generally available to the public other than as a
result of a disclosure by the Company or its subsidiaries or any of their
employees, representatives or agents.
Section 2.4 Indemnification Procedures. Each Indemnified Party
shall, upon receipt of written notice of any claim or the service of any
summons or other initial legal process upon it in any action instituted
against it, in respect of which indemnity may be sought on account of the
indemnity agreement contained in Section 2.2 hereof, promptly give written
notice of such claim, but in any event within 10 business days after
receipt of such notice by the Indemnified Party, or the commencement of
such action to the Trust; provided, however, that the failure to promptly
provide such notice within such time period shall not affect the rights of
such Indemnified Party to indemnification hereunder except to the extent
the Trust is prejudiced thereby. The Trust shall assume the defense of such
claim or action, and (i) such defense shall be conducted by counsel chosen
by the Trust, which counsel shall be reasonably satisfactory to the
Indemnified Party against whom the claim is asserted or who is the
defendant in such action, and (ii) such Indemnified Party may retain
additional counsel; provided, however, that such Indemnified Party shall
bear all of the fees and expenses of any counsel retained by it, except
that if an actual conflict of interest exists between the Trust and an
Indemnified Party, the Trust will pay the reasonable fees and expenses of
any counsel reasonably satisfactory to the Trust retained by such
Indemnified Party. The Trust shall not be entitled to settle or compromise
any such claim or action unless at the time of such settlement and
compromise such liability is fully satisfied by the Trust.
Section 2.5 No Further Taxes. Except as provided in Section
2.2(b), from and after the Closing, the Company shall have no further
obligation to indemnify and pay the Trust in respect of any Taxes,
non-income taxes of the Designated Settlement Fund, costs, expenses, losses
and damages (including fees and expenses of counsel and other litigation
and settlement costs), regardless of when incurred, in connection with any
Taxes and non-income taxes of the Designated Settlement Fund, imposed upon
the Trust at any time.
Section 2.6 Transfers to Designated Settlement Fund. Following
the Effective Time (as defined in the Merger Agreement), the Trust shall
transfer to the Designated Settlement Fund all assets received by the
grantor trust portion of the Trust that would constitute Qualified Payments
(as defined in section 468B(d) of the Code) immediately following receipt
of such assets.
Section 2.7 Dispute Procedures. Except as otherwise provided in
Section 2.3(a) hereof, any dispute between the Trust and the Company as to
any matter in Section 2.2 or 2.3 hereof shall be resolved by a mutually
acceptable independent nationally recognized accounting firm. The Trust and
the Company will instruct such accounting firm to reach its conclusion
regarding any such dispute and to name the party to such dispute that has
lost such dispute within twenty (20) days after its appointment. The report
of such accounting firm shall be final, binding and conclusive on the
parties. The fees and expenses of such accounting firm shall be borne by
the party to such dispute that such accounting firm determines has lost
such dispute.
ARTICLE III
OTHER MATTERS
Section 3.1 Supplemental Agreement. At the Closing, the parties
hereto shall enter into the Third Amended and Restated Supplemental
Agreement in the form attached as Exhibit A hereto (the "Amended
Supplemental Agreement"), whereupon the Supplemental Agreement shall be
amended and restated as set forth in the Amended Supplemental Agreement,
and shall thereafter continue in full force and effect as so amended and
restated.
Section 3.2 Trust Agreement. At the Closing, the Company shall,
and the Trust shall cause the Trustees to, enter into the Amendment to the
Trust Agreement in the form attached as Exhibit B hereto (the "Trust
Amendment") whereupon the Trust Agreement shall be amended as set forth in
the Trust Amendment, and shall thereafter continue in full force and effect
as so amended.
Section 3.3 Escrow Agreement. At the Closing, the Company and
the Trust shall enter into the Escrow Agreement in the form attached as
Exhibit C hereto (the "Escrow Agreement").
ARTICLE IV
OTHER DELIVERIES AND AGREEMENTS
Section 4.1 Company Deliveries at Closing. At the Closing,
the Company shall deliver to the Trust:
(a) the Company Amount;
(b) the Amended Supplemental Agreement executed by
the Company;
(c) the Trust Amendment executed by the Company;
(d) the Escrow Agreement executed by the Company;
and
(e) a certificate delivered by an officer of the
Company confirming the accuracy of the matters set forth in
Section 6.1(a).
Section 4.2 Trust Deliveries at Closing. At the Closing,
the Trust shall deliver or cause to be delivered to the Company:
(a) the Amended Supplemental Agreement executed by
the Trust;
(b) the Trust Amendment executed by the Trustees;
(c) the Escrow Agreement executed by the Trust; and
(d) certificate delivered by an officer of the Trust
confirming the accuracy of the matters set forth in Section 6.2(a).
Section 4.3 Closing. The consummation of the transactions
contemplated by this Agreement (the "Closing") will take place at the
offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, Four Times Square, New
York, New York concurrently with the satisfaction or waiver of the last to
be satisfied or waived of the conditions set forth in Article 6 or at such
other time and place as the parties hereto may agree.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of the Trust. The
Trust represents and warrants to the Company as of the date of this
Agreement and as of the Closing that:
(a) The Trust has been duly organized and is validly
existing as a trust under the laws of the State of New York. The Trust has
all requisite power and authority to execute and deliver this Agreement,
the TM Exchange Agreement, the Stockholders' Agreement, the Escrow
Agreement and the Amended Supplemental Agreement and to consummate the
transactions contemplated hereby and thereby. The Trustees have all
requisite power and authority to execute and deliver the Trust Amendment.
The execution and delivery of this Agreement, the Amended Supplemental
Agreement, the TM Exchange Agreement, the Stockholders' Agreement, the
Escrow Agreement and the Trust Amendment, and the consummation of the
transactions contemplated hereby and thereby, have been duly and validly
authorized by the Trust or the Trustees, as the case may be, and no other
proceedings on the part of the Trust or the Trustees, as the case may be,
are necessary to authorize the execution and delivery of such agreements
or, except for obtaining the concurrence of the SCB and the Futures
Representative as provided in Sections 6.1(b) and 6.2(b) and the issuance
and effectiveness of the Order as provided in Sections 6.1(c) and 6.2(c),
the consummation of the transactions contemplated hereby and thereby.
(b) This Agreement and the TM Exchange Agreement have
been (and the Stockholders' Agreement, the Amended Supplemental Agreement,
the Escrow Agreement and the Trust Amendment when delivered will have been)
duly executed and delivered by the Trust or the Trustees, as the case may
be, and this Agreement and the TM Exchange Agreement constitute (and the
Stockholders' Agreement, the Amended Supplemental Agreement, the Escrow
Agreement and Trust Amendment when executed and delivered will constitute)
a valid and legally binding obligation of the Trust or the Trustees, as the
case may be, enforceable against the Trust or the Trustees, as the case may
be, in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors rights and to general
equity principles.
(c) None of the execution and delivery by the Trust of
this Agreement, the Amended Supplemental Agreement, the TM Exchange
Agreement, the Stockholders' Agreement or the Escrow Agreement, the
execution and delivery by the Trustees of the Trust Amendment, the
consummation by the Trust or the Trustees, as the case may be, of the
transactions contemplated hereby and thereby nor compliance by the Trust
with the terms and conditions of such agreements will (A) conflict with or
result in a breach of, or constitute a default under, or require any
consent or waiver under, any of the terms, obligations, covenants,
conditions or provisions of (i) any indenture, mortgage, deed of trust,
pledge, bank loan or credit agreement, or other agreement or instrument to
which the Trust is a party or by which it or its assets may be bound (other
than the Trust Agreement) or (ii) the Trust Agreement or (B) conflict with
or result in a breach of, or require any consent or waiver under any of the
terms, conditions or provisions of any statute, judgment, order, writ,
injunction, decree, rule or regulation of any Governmental Agency subject
to the Trust's obtaining the concurrence of the SCB and the Futures
Representative as provided in Sections 6.1(b) and 6.2(b), the issuance and
effectiveness of the Order as provided by Sections 6.1(c) and 6.2(c); and
except in the case of (A)(i) or (B) for any such conflict, breach or
default that would not prevent or materially delay the consummation of the
transactions contemplated hereby and would not be reasonably expected to,
individually or in the aggregate, have a material adverse effect on the
Trust.
(d) All necessary licenses, permits, consents, approvals,
authorizations, qualifications and orders of Governmental Agencies (if any)
and other persons required to be received by the Trust in order to
consummate the transactions contemplated hereby have been received by the
Trust, except those listed on Schedule 5.1(d) and except for those which
the failure to receive would not prevent or materially delay the
consummation of the transactions contemplated hereby.
(e) Except as set forth on Schedule 5.1(e), (i) the Trust
has filed all material Tax Returns required to be filed with any taxing
authority in accordance with all applicable laws, has timely paid all Taxes
required to be paid with respect to such Tax Returns and all such Tax
Returns were true, correct and complete in all material respects; (ii) to
the knowledge of the Trust there is no action, suit, proceeding,
investigation, audit or claim pending or threatened, against or with
respect to the Trust in respect of any Tax; (iii) no material deficiencies
for any Taxes have been proposed, asserted or assessed against the Trust
that have not been fully paid; (iv) the Trust has not (A) waived any
statute of limitations with respect to Taxes or (B) agreed to any extension
of time within which to file any Tax Return since January 1, 1998; (v)
since January 1, 1995, the Trust has not entered into any closing agreement
with respect to Taxes pursuant to Section 7121 of the Code or any
predecessor provision or any similar provision of state, local or foreign
Tax law; (vi) no claim has been made in writing and provided to the Trust
by a taxing authority in a jurisdiction where the Trust does not file Tax
Returns to the effect that the Trust is or may be subject to Taxation by
that jurisdiction; and (vii) none of the trustees of the Trust (a) has ever
been employed by the Company or any of its affiliates in any capacity,
except that one or more Trustees serve or have served on the Board of
Directors of the Company from time to time, (b) is affiliated with a
significant customer of, or supplier to, the Company or any of its
affiliates, or (c) except for shares of Company Common Stock (as defined in
the Merger Agreement) owned of record by the Trust or stock owned
indirectly through mutual funds, owns, or has owned during the period such
Trustee has been a Trustee of the Trust, any stock or securities in the
Company or any of its affiliates.
Section 5.2 Representations and Warranties of the Company. The
Company represents and warrants to the Trust as of the date of this
Agreement and as of the Closing that:
(a) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware. The Company has all corporate power and authority to execute and
deliver this Agreement, the Amended Supplemental Agreement, the Trust
Amendment, the Stockholders' Agreement, the Escrow Agreement and the TM
Exchange Agreement, and to consummate the transactions contemplated hereby
and thereby. The execution and delivery by the Company of this Agreement,
the Amended Supplemental Agreement, the Trust Agreement, the Stockholders'
Agreement, the Escrow Agreement and the TM Exchange Agreement, and the
consummation of the transactions contemplated hereby and thereby, have been
duly and validly authorized by the Company, and no other proceedings on the
part of the Company are necessary to authorize the execution and delivery
of this Agreement, the Amended Supplemental Agreement, the Stockholders'
Agreement, the Escrow Agreement, the TM Exchange Agreement or the Trust
Amendment, or the consummation of the transactions contemplated hereby and
thereby.
(b) This Agreement and the TM Exchange Agreement have
been (and the Amended Supplemental Agreement, the Trust Amendment, the
Stockholders' Agreement and the Escrow Agreement when delivered will have
been) duly executed and delivered by the Company, and this Agreement and
the TM Exchange Agreement constitute (and the Amended Supplemental
Agreement, the Stockholders' Agreement, the Escrow Agreement and the Trust
Amendment when executed and delivered will constitute) a valid and legally
binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditor rights and to general
equity principles.
(c) None of the execution and delivery by the Company of
this Agreement, the Amended Supplemental Agreement, the Trust Amendment,
the Stockholders' Agreement, the Escrow Agreement and the TM Exchange
Agreement, the consummation by the Company of the transactions contemplated
hereby and thereby nor compliance by the Company with the terms and
conditions of such agreements will (A) conflict with or result in a breach
of, or constitute a default under, or require any consent or waiver under,
any of the terms, obligations, covenants, conditions or provisions of (i)
any indenture, mortgage, deed of trust, pledge, bank loan or credit
agreement, or other agreement or instrument to which the Company is a party
or by which it or its assets may be bound (other than the certificate of
incorporation and by-laws of the Company) or (ii) the certificate of
incorporation or by-laws of the Company or (B) conflict with or result in a
breach of any of the terms, conditions or provisions of any statute,
judgment, order, writ, injunction, decree, rule or regulation of any
Governmental Agency; except in the case of (A)(i) or (B) for any such
conflict, breach or default that would not prevent or materially delay the
consummation of the transactions contemplated hereby and would not be
reasonably expected to, individually or in the aggregate, have a material
adverse effect on the Company.
(d) All necessary licenses, permits, consents, approvals,
authorizations, qualifications and order of Governmental Agencies (if any)
and other persons required to be received by the Company in order to
consummate the transactions contemplated hereby have been received by the
Company, except for those which the failure to receive would not prevent or
materially delay the consummation of the transactions contemplated hereby.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions Precedent to the Obligations of the
Trust. The obligation of the Trust to effect the Closing is subject to the
satisfaction, or waiver by the Trust, of the following conditions:
(a) The representations and warranties of the Company
contained in this Agreement shall be true and correct in all material
respects as of the date when made and as of the Closing and all agreements
contained in this Agreement to be performed by the Company prior to or at
the Closing shall have been performed.
(b) The Trust shall have obtained the respective
concurrences of the SCB and the Futures Representative to the Amended
Supplemental Agreement and the Trust Amendment in a form reasonably
acceptable to the Trust.
(c) An order (the "Order") of the Court shall have been
issued granting the application of the Trustees to (i) approve the Trust's
execution and performance of the TM Exchange Agreement, the Stockholders'
Agreement, the Escrow Agreement (provided that the Order shall not be
deemed to not have been obtained if the provisions therein regarding the
separate order referred to therein shall not have been obtained) and this
Agreement and the transactions contemplated hereby and thereby, including,
without limitation, the Merger and the execution and performance of the
Amended Supplemental Agreement and the Trust Amendment; (ii) approve the
Trusts's execution and performance of the Trust Voting Agreement and the
transactions contemplated thereby (the TM Exchange Agreement, the
Stockholders' Agreement, the Escrow Agreement, this Agreement, the Amended
Supplemental Agreement, the Trust Amendment and the Trust Voting Agreement
are referred to herein as the "Trust Merger Agreements"); (iii) discharge
fully the Trustees from any and all liabilities relating to or arising from
the execution and delivery of and performance of its obligations under the
Trust Merger Agreements and discharge fully the Trustees from any and all
liabilities relating to or arising from the consummation of the
transactions contemplated by the Trust Merger Agreements (other than the
Trustees' obligations to the other parties under the Trust Merger
Agreements), and (iv) approve the transfer of all assets of the grantor
trust portion of the Trust that would constitute Qualified Payments (as
defined in Section 468B(d) of the Code) to the Designated Settlement Fund
immediately following the receipt of such amount (and from time to time
thereafter following receipt as provided in Section 2.6), after notice to
all beneficiaries of the Trust (by notice to the appropriate class and
subclass representatives' counsel), the SCB and the Future Representatives,
all in a form reasonably acceptable to the Trust, which Order shall be in
full force and effect but may be subject to appeal or discretionary review
by another court; provided, however, that if upon its review of objections
raised to the issuance of the Order, the Trust believes in good faith after
consultation with the Company that, as a condition to the Trust's
obligations under this Agreement, the Order should be a Final Order, then
for purposes of this condition the Trust may require that the Order be a
Final Order.
(d) (i) The Trust shall have received all necessary
licenses, permits, consents, approvals, authorizations, qualifications and
orders contained on Schedule 5.1(d) and (ii) there shall not be any
effective injunction, writ, preliminary restraining order or other order of
any nature issued by a court of competent jurisdiction, and no person shall
have commenced any proceeding which would be reasonably likely to result in
the issuance of any such injunction, writ, preliminary restraining order or
other order, in each case prohibiting the consummation of the transactions
contemplated hereby.
(e) The Merger shall have been consummated.
Section 6.2 Conditions Precedent to the Obligations of the
Company. The obligation of the Company to effect the Closing is subject to
the satisfaction, or waiver by the Company, of the following conditions:
(a) The representations and warranties of the Trust
contained in this Agreement shall be true and correct in all material
respects as of the date when made and as of the Closing and all agreements
contained in this Agreement to be performed by the Trust prior to or at the
Closing shall have been performed.
(b) The Trust shall have obtained the respective
concurrences of the SCB and the Futures Representative to the Amended
Supplemental Agreement and the Trust Amendment in a form reasonably
acceptable to the Company.
(c) The Order shall have been issued and be in a form
reasonably acceptable to the Company, which Order shall be in full force
and effect but may be subject to appeal or discretionary review by another
court; provided, however, that if upon its review of objections raised to
the issuance of the Order, the Company believes in good faith after
consultation with the Trust that, as a condition to the Company's
obligations under this Agreement, the Order should be a Final Order, then
for purposes of this condition the Company may require that the Order be a
Final Order.
(d) There shall not be any effective injunction, writ,
preliminary restraining order or other order of any nature issued by a
court of competent jurisdiction, and no person shall have commenced any
proceeding which would be reasonably likely to result in the issuance of
any such injunction, writ, preliminary restraining order or other order, in
each case prohibiting the consummation of the transaction contemplated
hereby.
(e) The Merger shall have been consummated.
(f) The Trust shall have irrevocably instructed its
relevant banking institution(s) that (1) the Company Amount and (2) all of
the cash proceeds paid to the Trust as a result of the conversion of its
shares of Company Common Stock pursuant to the Merger, upon receipt, shall
be immediately transferred to the Designated Settlement Fund portion of the
Trust by transfer of immediately available funds.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Commercially Reasonable Efforts by the Trust. The
Trust agrees to use its commercially reasonable efforts to (i) obtain as
soon as reasonably possible after the date hereof all consents necessary
for it to perform its obligations under this Agreement, the Amended
Supplemental Agreement and the Trust Amendment and to consummate the
transactions contemplated hereby, including, without limitation, the
concurrence of the SCB and the Futures Representative as contemplated in
Sections 6.1(b) and 6.2(b) and (ii) take, or cause to be taken, all action
and to do, or cause to be done all things reasonably necessary, proper or
advisable under applicable laws and regulations to obtain the Order;
provided, however that nothing contained in this Agreement shall be deemed
to require the Trust to consummate the Merger other than as required in
accordance with the Voting Agreement, subject to the terms and conditions
thereof. The Trust shall furnish to the Company copies of all motions and
filings made by the Trust with the Court in connection with any other
information supplied by the Trust to a Governmental Agency in connection
with the Order.
Section 7.2 Commercially Reasonable Efforts by the Company. The
Company shall use its commercially reasonable efforts to obtain as soon as
reasonably possible after the date hereof all consents necessary for it to
perform its obligations under this Agreement, the Amended Supplemental
Agreement and the Trust Amendment, and to consummate the transactions
contemplated hereby; provided, however, that nothing contained in this
Agreement shall be deemed to require the Company to consummate the Merger
other than as required in accordance with the Merger Agreement, subject to
the terms and conditions thereof.
Section 7.3 Termination. If (i) the Merger shall not have
occurred on or prior to November 30, 2000; provided, however, that such
date shall be automatically be extended to December 28, 2000 if the Special
Meeting (as defined in the Merger Agreement) shall not have been held on or
prior to November 1, 2000; and provided further that if the Special Meeting
shall not have been held on or prior to December 1, 2000 such date shall
automatically be extended to the later of December 28, 2000 or that date
which is 15 Business Days (as defined in the Merger Agreement) after the
Special Meeting is held but in no event shall such date extend beyond
January 31, 2001, or such other date, if any, as the Trust and the Company
shall agree in writing, or (ii) the Merger Agreement shall have been
terminated, then either party shall have the right to terminate this
Agreement by giving written notice to the other party hereto. If the Order
is denied by the Court, or if prior to the Effective Time, the Order is
vacated, reversed, modified or amended, in whole or in part, so as to
materially limit the Court's approval of the Trust's execution and
performance of its obligations under the Trust Merger Agreements and the
transactions contemplated hereby and thereby, including, without
limitation, the Merger, either party shall have the right to terminate this
Agreement, by giving written notice of termination to the other party. Upon
the termination of the Trust in accordance with the terms of the Trust
Agreement, this Agreement shall terminate without notice to the Company,
provided that the Trust shall have made adequate provision for any accrued,
but unpaid Taxes reflected, or that should have been reflected in
accordance with United States generally accepted accounting principles, on
the books and records of the Trust and any other liabilities under this
Agreement.
Section 7.4 Effect of Termination. In the event of termination
of this Agreement pursuant to this Article VII, this Agreement shall become
void and of no effect with no liability hereunder on the part of any party
hereto (or of any of its directors, trustees, officers, employees, agents,
legal and financial advisors or other representatives); provided that
termination shall not relieve any party from liability for any willful
breach of this Agreement prior to the termination hereof.
Section 7.5 Amendments. This Agreement may be modified,
supplemented or amended at any time and from time to time only by a writing
signed by each party hereto.
Section 7.6 Trust Deposit. Immediately following the Closing,
the Trust shall have deposited into the Escrow Account (as defined in the
Escrow Agreement) the amounts required under Section 1.1 of the Escrow
Agreement.
Section 7.7 Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including
facsimile transmission or similar writing) and shall be given:
if to the Trust, to:
Manville Personal Injury Settlement Trust
000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Chairman and Managing Trustee
with a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxxxx, Esq.
if to the Company, to:
Xxxxx Xxxxxxxx Corporation
000 00xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Corporate Secretary
with copies to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Fax: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: L. Xxxxxx Xxxxxxx, Esq.
and, after the Closing
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxx, Esq.
Section 7.8 Counterparts; Integration. This Agreement may be
signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same instrument. This Agreement together with the Amended Supplemental
Agreement, the Exhibits hereto and the Schedules hereto constitutes the
entire agreement and understanding between the parties hereto relating to
the subject matter hereof and supersedes any and all prior agreements and
understandings, oral and written, relating to the subject matter hereof.
Section 7.9 Headings. The headings used in this Agreement are
inserted for convenience only, and neither constitute a portion of this
Agreement nor in any manner affect the construction of the provisions of
this Agreement.
Section 7.10 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors. Except for the right of the Company
to assign its rights and delegate its obligations to its successors,
neither the Company nor the Trust may assign or otherwise transfer any of
its rights or delegate any of its obligations under this Agreement.
Section 7.11 Survival of Representations and Warranties. The
representations and warranties of the parties contained in this Agreement
shall survive the Closing indefinitely.
Section 7.12 Specific Performance. Each of the Company and the
Trust agrees that the other party would be irreparably damaged if for any
reason the Company or the Trust, as the case may be, failed to perform its
obligations under this Agreement and that such other party would not have
an adequate remedy at law for money damages in such event. Accordingly, the
Company and the Trust each agrees that the other party shall, to the
maximum extent permitted, be entitled to specific performance and
injunctive and other relief to enforce the performance of this Agreement.
This provision is without prejudice to any other rights that the Company or
the Trust may have against the other party for any failure of such other
party to perform its obligations hereunder.
Section 7.13 Third Parties. This Agreement constitutes an
agreement solely between the parties hereto, and is not intended to and
shall not confer any rights, remedies, obligations or liabilities, legal or
equitable, on any person or entity other than the parties hereto and their
respective successors and assigns, or otherwise constitute any person or
entity a third-party beneficiary under or by reason of this Agreement;
provided that the foregoing shall not be deemed to impermissibly diminish
the equitable interest, if any, that the Trust beneficiaries may otherwise
have herein by reason of their status.
Section 7.14 GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW. SUBJECT TO SECTION 2.7 HEREOF, THE COMPANY AND THE
TRUST HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES
BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR PURPOSES OF ALL
LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE COMPANY AND THE TRUST
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, (I) ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF
ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM AND (II) ALL RIGHTS TO TRIAL BY JURY IN ANY SUCH PROCEEDING.
Section 7.15 Further Assurances. From time to time after the
Closing, at the request of one of the parties hereto, the Trust and the
Company 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 more effectively the transactions contemplated
hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and
year first above written.
XXXXX XXXXXXXX CORPORATION
By:
--------------------------------
Name:
Title:
MANVILLE PERSONAL INJURY SETTLEMENT
TRUST
By:
--------------------------------
Name:
Title:
