RECAPITALIZATION AGREEMENT
Dated as of April 12, 2000
among
TEKNI-PLEX, INC.,
TEKNI-PLEX PARTNERS LLC,
MST/TP PARTNERS L.P.,
MST/TP HOLDING, INC.,
MST PARTNERS, L.P.,
MST OFFSHORE PARTNERS C.V.,
MST MANAGEMENT, L.P.,
MST OFFSHORE MANAGEMENT N.V.,
WESTON PRESIDIO OFFSHORE CAPITAL C.V.,
WESTON PRESIDIO CAPITAL III L.P.,
WPC ENTREPRENEUR FUND L.P.,
SBIC PARTNERS L.P.,
X.X. XXXXXX CAPITAL CORPORATION,
TEKNI-PLEX MANAGEMENT LLC,
DR. F. XXXXXXX XXXXX,
XXXXXXX X.X. XXXXX,
XXXXXX X. XXXX,
and
XXXXXXX X. XXXXXXXXX
and
for purposes of Section 2.01(k)
J. XXXXXX XxXXXXX
XXXXX X. XXXXXXX
XXXXXXX X. XXXXXX
for purposes of Section 2.01(n)
J. XXXXXX XxXXXXX
for purposes of Section 3.01
XXXXXXX X. XXXXXXX
XXXXX X. XXXXXXX
XXXXXXX X. XXXXXX
XXXXXXX X. XXXXXXXX
for purposes of Section 3.03(a)(iv)
J. XXXXXX XxXXXXX
XXXXX X. XXXXXXX
XXXXXXX X. XXXXXX
TABLE OF CONTENTS
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PAGE
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ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions....................................................3
ARTICLE 2
RECAPITALIZATION
SECTION 2.01. Conversion, Redemptions and Refinancing........................6
SECTION 2.02. Expenses......................................................10
SECTION 2.03. Closing.......................................................11
ARTICLE 3
COVENANTS
SECTION 3.01. Exclusivity...................................................11
SECTION 3.02. Tax Treatment and Venture Capital Operating Company Status
...................................................................13
SECTION 3.03. Further Actions...............................................13
SECTION 3.04. Director and Officer Liability................................17
SECTION 3.05. Transfer Restrictions.........................................18
SECTION 3.06. Existing WPC or SBIC Partners Right...........................18
SECTION 3.07. Election of Directors.........................................18
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF ALL PARTIES
SECTION 4.01. Existence and Power...........................................18
SECTION 4.02. Authorization.................................................19
SECTION 4.03. Governmental Authorization....................................19
SECTION 4.04. Noncontravention..............................................19
SECTION 4.05. Finders' Fees.................................................19
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF INDIVIDUAL PARTIES
SECTION 5.01. Corporation...................................................20
SECTION 5.02. Foreign Law...................................................20
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SECTION 5.03. Purchase for Investment.......................................21
ARTICLE 6
CONDITIONS PRECEDENT
SECTION 6.01. Conditions for all Parties....................................21
SECTION 6.02. Conditions for MST............................................22
SECTION 6.03. Conditions for WPC............................................23
SECTION 6.04. Conditions for the Corporation................................24
SECTION 6.05. Condition for SBIC Partners...................................25
SECTION 6.06. Condition for Xxxxx...........................................25
SECTION 6.07. Conditions for XX Xxxxxx......................................26
ARTICLE 7
TERMINATION
SECTION 7.01. Termination...................................................26
SECTION 7.02. Effect of Termination.........................................26
SECTION 7.03. Survival......................................................27
ARTICLE 8
INDEMNIFICATION
SECTION 8.01. Indemnification...............................................27
SECTION 8.02. Procedures....................................................28
SECTION 8.03. Calculation of Damages........................................29
SECTION 8.04. Waiver and Release; Exclusivity...............................29
SECTION 8.05. Termination...................................................30
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Remedies......................................................30
SECTION 9.02. Binding Effect; Benefit.......................................30
SECTION 9.03. Assignability.................................................30
SECTION 9.04. Waivers.......................................................30
SECTION 9.05. Entire Agreement..............................................30
SECTION 9.06. Headings......................................................31
SECTION 9.07. Severability..................................................31
SECTION 9.08. Amendments....................................................31
SECTION 9.09. Governing Law; Submission to Jurisdiction.....................31
SECTION 9.10. Waiver of Jury Trial..........................................31
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SECTION 9.11. Counterparts..................................................31
SECTION 9.12. Notices.......................................................31
SECTION 9.13. Interpretation................................................32
SECTION 9.14. Confidentiality...............................................32
SECTION 9.15. Public Announcements..........................................33
SECTION 9.16. Conduct of Business...........................................33
SECTION 9.17. Recapitalization Proposal Superseded..........................33
Schedule 4.04
Exhibit A Form of Tekni-Plex Amended and Restated Limited Liability
Company Agreement
Exhibit B Form of MST Limited Liability Company Agreement
Exhibit C Form of Investor Purchase Agreement
Exhibit D Form of Stock Purchase Agreement
Exhibit E Form of Investors' Agreement
Exhibit F Statements of MST Management's General Partners and MST
Offshore Management's Managing Directors
Exhibit G Press Release
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RECAPITALIZATION AGREEMENT
THIS RECAPITALIZATION AGREEMENT (this "Agreement") is dated as of April
12, 2000 among Tekni-Plex, Inc., a corporation organized under the laws of
Delaware (the "Corporation"), Tekni-Plex Partners LLC, a limited liability
company organized under the laws of Delaware ("TP LLC"), MST/TP Partners L.P.,
a limited partnership organized under the laws of Delaware ("MST"), MST/TP
Holding, Inc., a corporation organized under the laws of California and the
sole limited partner of MST ("MST Holding"), MST Partners, L.P., a partnership
organized under the laws of Delaware and a co-general partner of MST ("MST
Domestic Fund"), MST Offshore Partners C.V., a limited partnership organized
under the laws of the Netherlands Antilles and a co-general partner of MST
("MST Offshore Fund"), MST Management, L.P., a limited partnership organized
under the laws of Delaware and the general partner of MST Domestic Fund and
co-general partner of MST Offshore Fund acting in its capacity as liquidator
("MST Management"), MST Offshore Management N.V., a naamloze vennootschap (a
limited liability company) organized under the laws of the Netherlands Antilles
and a co-general partner of MST Offshore Fund acting in its capacity as
liquidator ("MST Offshore Management"), Weston Presidio Offshore Capital C.V.,
a limited partnership organized under the laws of the Netherlands Antilles
("Existing WPC"), Weston Presidio Capital III L.P., a limited partnership
organized under the laws of Delaware, and WPC Entrepreneur Fund L.P., a limited
partnership organized under the laws of Delaware (together with Weston Presidio
Capital III L.P., "WPC"), SBIC Partners L.P., a limited partnership organized
under the laws of Delaware ("SBIC Partners"), X.X. Xxxxxx Capital Corporation,
a corporation organized under the laws of Delaware ("XX Xxxxxx"), Tekni-Plex
Management LLC, a limited liability company organized under the laws of
Delaware ("TP Management LLC"), Dr. F. Xxxxxxx Xxxxx, an individual residing at
0000 Xxxxxxx Xxxxx, Xxxxxx Xxxxx, XX 00000 ("Xxxxx"), Xxxxxxx X.X. Xxxxx, an
individual residing at 00 Xxxxxx Xxxx Xxxx, Xxxxxxxxxx, XX 00000 ("Xxxxx"),
Xxxxxx X. Xxxx, an individual residing at 0000 Xxxxx Xxxxx Xxxxxxx, Xxxxxxxxx,
XX 00000 ("Xxxx") and Xxxxxxx X. Xxxxxxxxx, an individual residing at 0000
Xxxxxxxxxx Xxxxx, Xxxxxx, Xxxx 00000 ("Xxxxxxxxx"). J. Xxxxxx XxXxxxx
("XxXxxxx") is party to this Agreement solely for purposes of Sections 2.01(k),
2.01(n) and 3.03(a)(iv), Xxxxxxx X. Xxxxxxx ("Xxxxxxx") and Xxxxxxx X. Xxxxxxxx
of Winthrop, Stimson, Xxxxxx & Xxxxxxx ("Xxxxxxxx") are parties to this
Agreement solely for purposes of Section 3.01. Xxxxx X. Xxxxxxx and Xxxxxxx X.
Xxxxxx are parties to this Agreement solely for purposes of Sections 2.01(k),
3.01 and 3.03(a)(iv). Notwithstanding the foregoing, each signatory hereto
(other than Xxxxxxxx) is also signing in his individual capacity as well as his
capacity as partner, managing director, officer or director for purposes of
Sections 8.04 and 9.10. Capitalized terms not otherwise defined herein have the
meanings specified in Article 1.
WHEREAS, prior to the date of this Agreement, Tekni-Plex Partners L.P., a
limited partnership organized under the laws of Delaware (the "TP
Partnership"),
owned 100% of the outstanding common stock, par value $0.01 per share, of the
Corporation ("Common Stock"); and
WHEREAS, on October 5, 1999, Existing WPC submitted to MST and the
Corporation an offer letter (the "Recapitalization Proposal"), accepted by
them, that constituted their mutual understanding regarding the
recapitalization to be consummated in accordance with the provisions of the
Transaction Agreements (the "Recapitalization") which Recapitalization Proposal
valued the enterprise value of the Corporation at $875 million; and
WHEREAS, on the date hereof the partners of TP Partnership entered into
the Limited Liability Company Agreement of TP LLC (the "TP LLC Original
Agreement") approving the conversion (the "TP Conversion") of TP Partnership
from a limited partnership into a limited liability company, pursuant to
Section 18-214 of the Delaware Limited Liability Company Act, 6 Del. C.
Sections 18-101 et seq., as amended (the "LLC Act"), Section 17-219 of the
Delaware Revised Uniform Limited Partnership Act, 6 Del. C. Sections 17-101 et
seq., as amended (the "Partnership Act"), and Section 11.4 of the partnership
agreement governing the TP Partnership; and
WHEREAS, pursuant to the TP Original LLC Agreement, all of MST's Interests
were converted into 465.6118 shares of Common Stock, representing approximately
54.9% of the outstanding Common Stock of the Corporation, simultaneously with
the TP Conversion; and
WHEREAS, pursuant to the engagement letter dated April 12, 2000 among
Deutsche Bank Securities Inc., MST Domestic Fund and MST Offshore Fund and
agreed to by the Company, an opinion was delivered to the general partners of
the MST Domestic Fund and MST Offshore Fund regarding the fairness from a
financial point of view of the consideration to be received by the indirect
equity holders of the Corporation who elect to receive cash for their equity
interests in connection with the Recapitalization; and
WHEREAS, X.X. Xxxxxx Securities, Inc.("JPMSI") has issued a "highly
confident" letter to the Corporation regarding the financing necessary to
consummate the Recapitalization; and
WHEREAS, the parties desire to effect the Recapitalization on the terms
and subject to the conditions set forth in this Agreement; and
WHEREAS, the parties desire to specify the steps to be taken in connection
with the Recapitalization.
2
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto, intending to be legally bound, do hereby agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) Unless the context otherwise specifies or
requires, the terms defined in this Section 1.01 shall, for the purpose of this
Agreement, have the meanings herein specified.
"Acceleration Event" means the determination (i) by all members of the
Committee or (ii) by a majority of the Committee and Xxxxxxxx that the
Effective Time may occur prior to June 30, 2000.
"Affiliate" means, with respect to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with such
Person; provided that no stockholder of the Corporation shall be deemed an
Affiliate of any other stockholder of the Corporation solely by reason of any
investment in the Corporation. For the purpose of this definition, the term
"control" (including with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), when used with respect to any
Person, means (i) the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise or
(ii) the direct or indirect beneficial ownership of at least 20% of the profits
or assets of such Person.
"Bond Tender Offer Statement" means the tender offer statement/consent
solicitation which (i) shall be circulated to the holders of Senior
Subordinated Notes due 2007 and Senior Subordinated Notes due 2008 and (ii) is
in form and substance satisfactory to WPC and the Corporation.
"Board of Directors" means the board of directors of the Corporation.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Interest" shall have the meaning ascribed to it in the TP Original LLC
Agreement.
"ISRA" shall have the meaning ascribed to it in the TP Original LLC
Agreement.
3
"LLC Act" shall have the meaning ascribed to it in the TP Original LLC
Agreement.
"Member" shall have the meaning ascribed to it in the TP Original LLC
Agreement.
"Person" means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Securities Act" means the Securities Act of 1933, as the same may be
amended, and the rules and regulations promulgated thereunder.
"Senior Subordinated Notes due 2007" means the $75 million in aggregate
principal amount of 11 1/4% Senior Subordinated Notes due April 1, 2007 which
is governed by the indenture dated as of April 1, 1997 among the Corporation,
Dolco Packaging, Corp. and Marine Midland Bank.
"Senior Subordinated Notes due 2008" means the $200 million in aggregate
principal amount of 9 1/4% Senior Subordinated Notes due March 1, 2008 which is
governed by the indenture dated as of March 1, 1998 among the Corporation, P.T.
Holding, Inc., PureTec Corporation and Plastic Specialties and Technologies,
Inc.
"Share Price" means $507,933.
"TP Partnership Agreement" means the amended and restated agreement of
limited partnership of TP Partnership dated as of September 25, 1997.
"Transaction Agreements" means this Agreement, the TP LLC Original
Agreement, the TP LLC Agreement, the MST LLC Agreement, the Investors'
Agreement and the Purchase Agreements.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
---- -------
Agreement Preamble
Alternative Sale Section 3.01(a)
Announcement Section 3.03(f)
Xxxxx Preamble
Xxxxx Option Agreement Section 2.01(i)
Cap Section 8.01(a)
Claim Section 8.02(a)
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Term Section
---- -------
Closing Section 2.03
Code Section 3.02
Committee Section 3.01(b)
Common Stock Recitals
Corporation Preamble
Damages Section 8.01
Xxxxxxxxx Preamble
DBAB Letter Section 8.01(b)
Deductible Section 8.01
Designated Expenses Section 2.02
Effective Time Section 2.03
Electing Person Section 2.01(i)
Existing WPC Preamble
SBIC Partners Preamble
Financial Projections Section 6.03(c)
Financial Statements Section 6.03(c)
Xxxxxxx Preamble
GP Statements Section 3.03(a)(iv)
Indemnified Officer/Director Section 3.04(a)
Indemnified Party Section 8.02
Information Statement Section 3.03(a)(iii)
Investors' Agreement Section 2.01(l)
XX Xxxxxx Preamble
JPMSI Recitals
LLC Act Recitals
Limited Partners Section 3.03(d)
XxXxxxx Section 2.01(n)
MST Preamble
MST Domestic Fund Preamble
MST Indemnified Party Section 8.01(a)
MST Holding Preamble
MST Holding Management Agreement Section 2.01(k)
MST LLC Section 2.01(b)
MST LLC Agreement Section 2.01(b)
MST Management Preamble
MST Management Agreement Section 2.01(k)
MST Offshore Fund Preamble
MST Offshore Management Preamble
Partnership Act Recitals
Purchase Agreement Section 2.01(c)
Recapitalization Recitals
Recapitalization Proposal Recitals
5
Term Section
---- -------
Relevant Information Section 3.01(b)
Rollover Indemnified Party Section 8.01(c)
Xxxxxxxx Preamble
SBIC Partners Preamble
Xxxxx Preamble
Xxxxx Option Section 2.01(h)
Xxxxx Option Agreement Section 2.01(h)
Solomon Preamble
Stock Incentive Plan Section 2.01(i)
Third Party Determination Section 3.01(b)
TP Conversion Recitals
TP LLC Preamble
TP LLC Agreement Section 2.01(a)
TP LLC Original Agreement Recitals
TP Management LLC Preamble
TP Partnership Recitals
Transfer Section 3.05
Xxxxxx Preamble
Value of the Options Section 2.01(i)
Withdrawal Amount Section 2.01(i)
Xxxx Preamble
WPC Preamble
ARTICLE 2
RECAPITALIZATION
SECTION 2.01. Conversion, Redemptions and Refinancing. The parties,
severally and not jointly, hereby agree to take, or cause to be taken, all
actions necessary, proper or advisable to consummate or make effective each of
the following actions, each of which shall be deemed to occur simultaneously at
the Effective Time, subject to and in accordance with the terms set forth in
this Agreement:
(a) Amendment of TP LLC Original Agreement. The Members (including the new
Members admitted to the TP LLC at the Effective Time) of TP LLC shall enter
into an amended and restated limited liability company agreement, the form of
which is attached hereto as Exhibit A (the "TP LLC Agreement"), which shall
replace the TP LLC Original Agreement in its entirety and set forth the rights
and obligations of the Members after the Effective Time.
6
(b) Conversion of MST into MST/TP Partners LLC. The partners of MST shall
enter into a limited liability company agreement, the form of which is attached
hereto as Exhibit B (the "MST LLC Agreement"), approving the conversion of MST
from a limited partnership into a limited liability company pursuant to Section
18-214 of the LLC Act and Section 17-219 of the Partnership Act ("MST LLC").
MST shall cause to be filed a Certificate of Formation and Certificate of
Conversion, and any other certificates or documents which are necessary to
effect the conversion, with the Secretary of State of the State of Delaware.
MST shall become a limited liability company upon filing of such documents
pursuant to Section 18-214(d) of the LLC Act.
(c) Admission of New Members in TP LLC. Each of XX Xxxxxx, WPC and certain
investors to be identified by WPC approved by WPC and Xxxxx shall (i) enter, or
have entered, into a purchase agreement in the form attached hereto as Exhibit
C (the "Purchase Agreement"), (ii) enter into the TP LLC Agreement, (iii) make
a capital contribution to TP LLC in the amount required by the relevant
Purchase Agreement and by the Initial Drawdown Notice (as defined in the TP LLC
Original Agreement) and (iv) be admitted as a Member of TP LLC as contemplated
by the TP LLC Original Agreement; provided, however, that, in the discretion of
WPC and Xxxxx, WPC or any other investor (other than XX Xxxxxx) bound by this
paragraph may invest in the Corporation through a newly formed limited
liability company, instead of through TP LLC, and the equity commitments made
to such newly formed limited liability company shall be aggregated to any
amounts made to TP LLC for purposes of this Agreement..
(d) Financing Arrangements. The Corporation shall have available to draw
down at the Effective Time at least $750 million in debt financing consisting
of one or more credit facilities or series of senior subordinated notes. A
portion of the $750 million financing shall be drawn down by the Corporation
and the Corporation shall use such funds to consummate the Recapitalization and
the unfunded portion (which shall be at least $100 million) shall be made
available to the Corporation after the Effective Time in the form of a
revolving credit facility. The parties hereto understand that the actual
capitalization structure of the Corporation and TP LLC shall be determined at
the discretion of WPC and Xxxxx.
(e) Repayment of Credit Facilities. The Corporation shall repay all
amounts outstanding under the $205 million Credit Agreement dated as of March
3, 1998, among the Corporation, Xxxxxx Guaranty Trust Company of New York, as
agent, and other parties thereto, which includes all amounts outstanding under
the Tranche A Term Loan, the Tranche B Term Loan and the Revolving Loan.
(f) Repayment of Senior Subordinated Notes due 2007. The Corporation shall
redeem all Senior Subordinated Notes due 2007 tendered by the holders thereof,
in accordance with the terms and conditions contained in the Bond Tender Offer
Statement; provided that holders of more than 50%, of the outstanding principal
amount of the
7
Senior Subordinated Notes due 2007 shall have tendered their notes and consented
to the modifications to the indenture governing such notes.
(g) Repayment of Senior Subordinated Notes due 2008. The Corporation shall
redeem all Senior Subordinated Notes due 2008 tendered by the holders thereof,
in accordance with the terms and conditions contained in the Bond Tender Offer
Statement; provided that holders of more than 50% of the outstanding principal
amount of the Senior Subordinated Notes due 2008 shall have tendered their
notes and consented to the modifications to the indenture governing such notes.
(h) Exercise of Xxxxx'x Option. Xxxxx shall exercise the entire option
(the "Xxxxx Option") granted under the Second Amended and Restated Option
Agreement dated as of April 4, 1997 between Xxxxx, XX Partnership and the
Corporation (the "Xxxxx Option Agreement"). TP LLC hereby waives the notice
required by Section 12(a) of the Xxxxx Option Agreement. TP LLC and Xxxxx
hereby agree that the payment of the exercise price required by Sections 2 and
12(a) of the Xxxxx Option Agreement for the exercise of the Xxxxx Option shall
be satisfied by deducting from Xxxxx'x Capital Account an amount equal to
$1,843,252.90 at the Effective Time. It is understood that immediately prior to
the TP Conversion and conversion of MST's Interests, the fair market value of
TP Partnership's assets was grossed up and each partner's Capital Account (as
defined in the TP Partnership's Agreement) was allocated its share (assuming
that Xxxxx had exercised his option prior to such allocation) of any change in
the fair market value of TP Partnership's assets since the last determination,
each pursuant to the TP Partnership Agreement. It is also understood that the
account balance of Xxxxx'x Capital Account indicated on Schedules D-1 and D-2
of the TP LLC Original Agreement already reflects the deduction for the
exercise price of the Xxxxx Option to be made at the Effective Time such that
no further deduction beyond that already reflected on Schedules D-1 and D-2 of
the TP LLC Original Agreement will be made to Xxxxx'x Capital Account balance
at the Effective Time as a result of the exercise of the Xxxxx Option.
(i) TP LLC Redemption. Each Member of TP LLC shall be entitled to request
that TP LLC redeem its membership interests in an amount not to exceed the
positive balance in such Member's Capital Account (each such Member shall be an
"Electing Person"). In such request, each Electing Person shall irrevocably
agree to sell all or a portion of the balance of such Member's Capital Account
(for each Electing Person, such amount shall be its "Withdrawal Amount") and to
surrender all redeemed Interests at the Effective Time. TP LLC shall redeem
from each Electing Person Interests equal to the Withdrawal Amounts; provided,
however, that TP LLC shall not be required to redeem (i) any Interests held by
Forrest, Binkley & Xxxxx X.X. in any event or (ii) more than 94% of the
aggregate Interests held by Existing WPC or its transferee. Notwithstanding the
foregoing, Xxxxx'x Withdrawal Amount shall not exceed Xxxxx'x Capital Account
(as defined in the TP LLC Original Agreement) at the Effective Time
8
plus the Value of the Options minus $80 million. "Value of the Options" means
(i) the sum of 37.97419 (the number of shares underlying all outstanding options
granted under the Corporation's Stock Incentive Plan) and 21.73223 (the number
of shares underlying Xxxxx'x option granted under the Amended and Restated Stock
Option Agreement dated as of April 4, 1997 between Xxxxx and the Corporation
(the "Xxxxx Option Agreement")) times (ii) the Share Price. "Stock Incentive
Plan" means the Corporation's stock option plan, effective as of December 31,
1997, created to promote the interests of the Corporation and its stockholders
by attracting and retaining exceptional executive personnel and other key
employees of the Corporation and its Subsidiaries.
(j) Transfers by SBIC Partners and Existing WPC. (i) The parties hereby
agree that SBIC Partners may distribute to its partners its Interests and such
partners will become substitute Members upon compliance with Section 9.02 of
the TP LLC Original Agreement. Forrest, Binkley & Xxxxx X.X. shall not be an
Electing Person.
(ii) The parties hereby agree that Existing WPC may transfer to a
newly formed limited liability company its Interests and such limited
liability company will become a substitute Member upon compliance with
Section 9.02 of the TP LLC Original Agreement.
(k) MST Management Agreements. The Corporation and MST Holding shall enter
into a purchase agreement in which the Corporation agrees to purchase and MST
Holding agrees to sell the letter agreement dated April 4, 1997 between MST
Holding and the Corporation in exchange for payments to MST Holding equal to
$1,027,711 and to Forrest, Binkley & Xxxxx X.X. equal to $46,392.50. Each of
XxXxxxx, Xxxxxxx and Xxxxxx, as holders of all of the outstanding capital stock
of MST Management Company, Inc., who are a party to the letter agreement dated
April 4, 1997 between MST Management Company, Inc. and the Corporation (the
"MST Management Agreement") shall enter into a stock purchase agreement in the
form attached here to as Exhibit D pursuant to which the Corporation will pay
to Forrest, Binkley & Xxxxx X.X. an amount equal to $46,392.50 and to XxXxxxx,
Xxxxxxx and Xxxxxx an aggregate amount equal to $2,590,892 and each of XxXxxxx,
Xxxxxxx and Xxxxxx shall together sell to the Corporation all of the capital
stock of MST Management Company, Inc.
(l) Investors' Agreement. Each of the Corporation, TP LLC, MST, TP
Management LLC, Xxxxx and Xxxxxxx X. Xxxxxx (or any of their respective
successors or transferees) shall enter into an Investors' Agreement in the form
attached hereto as Exhibit E (the "Investors' Agreement").
(m) Employment Agreements. The Corporation and each of Xxxxx and Xxxxx
shall enter into an amended and restated employment agreement which shall
contain the following terms:
9
(i) Xxxxx shall receive an initial annual salary of $5 million;
(ii) Xxxxx shall receive an initial annual salary of $2.5 million;
and
(iii) each of Xxxxx'x and Xxxxx'x salaries shall be increased on each
anniversary of the date of the Effective Time by 10%.
Such employment agreements shall not provide for any mandatory bonus
compensation.
(n) Redemption of MST/TP Partners. Each of MST Domestic Fund, MST Offshore
Fund and MST Holding shall sell, and the Corporation shall redeem, all shares
of Common Stock held by MST Domestic Fund, MST Offshore Fund and MST Holding at
the Effective Time. XxXxxxx hereby agrees to elect to receive interests in MST
LLC worth at least $5 million on the condition that the interests in MST LLC
for which he wishes to receive cash are bought by a new equity investor for an
amount of cash he would have received had MST redeemed him (subject to mutually
acceptable documentation) and in order to induce XxXxxxx to agree to such
election, all parties hereto agree to such condition. The price per share paid
by the Corporation for each redeemed share of Common Stock shall be equal to
the Share Price.
SECTION 2.02. Expenses. All costs and expenses, except as set forth in the
next sentence, shall be borne by the party incurring the same. If and only if
the Recapitalization is consummated, the Corporation shall pay (or reimburse
the party who has paid) the fees, expenses or costs (i) of Winthrop, Stimson,
Xxxxxx & Xxxxxxx and one firm advising on Netherlands Antilles law, each as
counsel to MST, which relate to the Recapitalization and not to the approval
referred to in Section 3.03(a) or other matters which relate only to MST and
not the other parties to this Agreement not to exceed $610,000 in the
aggregate, (ii) incurred by MST in order to obtain the fairness opinion of
Deutsche Bank Alex.Xxxxx pursuant to the engagement letter dated Xxxxx 00,
0000, (xxx) of WPC incurred in connection with raising equity capital which
will be committed to TP LLC and (iv) of Ropes and Xxxx, as counsel to WPC and
certain other investors. "Designated Expenses" means the expenses described in
clauses (i) and (ii) in the preceding sentence and the fees, expenses or costs
(A) of the Corporation which relate to the redemption of the Senior
Subordinated Notes due 2007 and Senior Subordinated Notes due 2008 (including
any hedging costs), (B) of JPMSI which relate to the Recapitalization and not
the debt financing referred to in Section 2.01(d), (C) of Xxxxx Xxxx & Xxxxxxxx
and Morris, Nichols, Arsht & Xxxxxxx, each as special counsel to the
Corporation, which relate to the Recapitalization and not the debt financing
referred to in Section 2.01(d), (D) of BDO Xxxxxxx LLP which relate to the
Recapitalization and not to general corporate purposes and (E) the payments
made in respect of the agreements
10
referred to in Section 2.01(k). Designated Expenses shall be paid by (or
reimbursed to the extent heretofore paid by another party) the Corporation.
Each party acknowledges that the Capital Account balances listed in
Schedules D-1 and D-2 of the TP LLC Original Agreement reflect deductions for
such party's allocation of the estimated Designated Expenses. It is understood
that at the Effective Time, members of management, including holders of
options, shall be allocated additional priority allocations in TP LLC or
awarded additional options by the Corporation in the amounts equal to the
Designated Expenses allocated to such Persons immediately prior to the
Conversion Time.
SECTION 2.03. Closing. The closing of the transactions contemplated by
this Article 2 (the "Closing") shall take place at the offices of Xxxxx Xxxx &
Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 a.m. when all of
the conditions in Article 6 have been satisfied or waived, or at such other
place and time as the parties may agree (the "Effective Time"); provided that
the Effective Time shall occur no earlier than (A) June 15, 2000 in any event
and (B) June 30, 2000 unless an Acceleration Event has occurred. Subject to the
preceding sentence, the parties hereto expect the Closing will occur promptly
after (i) the condition described in Section 6.04(f) has been satisfied and
(ii) the financing described in Section 2.01(d) shall have been secured.
ARTICLE 3
COVENANTS
SECTION 3.01. Exclusivity. (a) The parties agree, severally and not
jointly, subject only to the fiduciary duties of the Board of Directors and of
MST or its general partners under applicable law, that until this Agreement is
terminated, the parties will not, and will cause their respective Affiliates,
partners, directors, officers, employees, representatives and agents (including
financial advisors) not to, directly or indirectly, solicit or initiate or
enter into discussions or transactions with, or encourage, or provide any
information to, any corporation, partnership or other entity or group (other
than XX Xxxxxx, Existing WPC or WPC and its designees) concerning any sale of
stock by the stockholders of, or any merger, recapitalization, spin-off or sale
of securities or substantial assets of, or any similar transaction or
alternative to the Recapitalization involving, the Corporation or any of its
subsidiaries (the "Alternative Sale"); provided however, that any action which
would facilitate the transactions contemplated by the Transaction Agreements
shall be exempt from this Section. Each of the parties represents and warrants
that none of them or any affiliated party is party to or bound by any agreement
with respect to any such transaction other than as contemplated hereby.
11
(b) If an unsolicited indication of interest in acquiring the Corporation
is received by the Corporation, MST or any other party from a third party
otherwise than as a result of any breach of this Section, such party shall
inform in writing each member of the Committee and Xxxxx of this unsolicited
indication of interest. Then subject to good faith determination by either (i)
a majority of the disinterested directors of the Board of Directors, (ii) a
majority of the disinterested general partners of MST Management or (iii) with
the concurrence of either JPMSI or Xxxxxxxx, and any general partner of MST
Management, that such third party's interest is a bona fide interest in
acquiring the Corporation and is capable of resulting in an offer which would
satisfy the conditions of paragraph (c) (a "Third-Party Determination"), a
Committee consisting of Xxxxxxx, Xxxxxxx and Xxxxxx (the "Committee") will
direct the discussions with any such qualified third party and may provide
Relevant Information (the "Relevant Information") as it determines is
appropriate. Xxxxxxxx shall act as counsel to the Committee. Except as
otherwise provided herein, action by the Committee shall be approved by a
majority of the members of the Committee.
(c) The Corporation shall not enter into any agreement with any third
party regarding an Alternative Sale unless (i) the terms and conditions of such
Alternative Sale are no less favorable to the parties hereto than the
Recapitalization, (ii) such third party agrees to pay all reasonable fees,
expenses and costs (including proposed lenders and accounting, financial and
legal advisors) incurred by each party to this Agreement in connection with any
of the transactions contemplated by the Transaction Agreements, including those
related to hedging arrangements (including entering into and unwinding such
arrangements) entered into by the Corporation and (iii) such Alternative Sale
is priced based on an enterprise valuation of the Corporation in excess of $915
million.
(d) If a Third-Party Determination is made, then the Committee shall
promptly advise the limited partners of MST Domestic Fund and MST Offshore Fund
(the "Limited Partners") of the receipt of such indication of interest and of
any material changes in such indication of interest as discussions proceed
between such third party and the Committee.
(e) The Committee shall have full and complete access to the properties,
books and records, and other information of like kind and scope as the
information made available to the parties hereto. If a Third Party
Determination is made, the management of the Corporation shall cooperate and
participate in such discussions to the extent reasonably requested by the
Committee.
(f) Upon receipt of an executed confidentiality agreement in customary
form, such third party may, if the Committee so determines to be appropriate,
be provided access to the Relevant Information.
12
(g) The Committee may engage, at the Corporation's expense, such financial
and legal advisors as the Committee may select to assist it in the evaluation
of such third party indication of interest and to assist it in negotiating and
structuring an Alternative Sale.
(h) The Committee shall have the authority (subject to fiduciary
obligations of the Board of Directors) to direct, or take such other actions as
are necessary to cause, the Corporation and/or MST to enter into an agreement
with such third party providing for an Alternative Sale and to direct, or take
such other actions as are necessary to cause, the Corporation and/or MST to
terminate this Agreement in such event if it determines, applying the same
fiduciary standards to it as would apply to a board of directors of a Delaware
corporation in similar circumstances, that such action is required to discharge
its fiduciary obligations to the direct and indirect beneficial owners of the
Corporation.
(i) The authority of the Committee shall immediately terminate in the
event that Xxxxxxxx ceases to act as counsel to the Committee other than (x) as
a result of his removal as counsel to the Committee by a unanimous vote of the
Committee, or (y) by reason of Xxxxxxxx'x discontinuance of the practice of law
(each a "Qualifying Termination"). In the event of a Qualifying Termination,
Solomon shall, within 10 business days of the date of the Qualifying
Termination, appoint any other partner of Winthrop, Stimpson, Xxxxxx & Xxxxxxx
to act as counsel to the Committee and such Qualifying Termination shall have
no effect on the authority or powers of the Committee.
SECTION 3.02. Tax Treatment and Venture Capital Operating Company Status.
The parties hereto agree to take all reasonable actions as may be required to
structure the Recapitalization in a manner which (i) allows those direct or
indirect investors of the Corporation who receive cash in the Recapitalization
to treat such cash distributions as capital gains, (ii) allows direct or
indirect investors to preserve the exclusions permitted by Section 1202 of the
Code which are available to them on the date hereof and (iii) maintains the
Corporation's qualification as a venture capital operating company. Each party
agrees that the approval of MST, WPC, SBIC Partners and Xxxxx of such structure
referred to in the previous sentence of the Recapitalization shall be final and
binding on such party. "Code" means the United States Internal Revenue Code of
1986, as amended (or any corresponding provision of succeeding law). Nothing
contained herein shall be construed as a guarantee by any party hereto of the
Recapitalization having the effects described in the first sentence of this
Section.
SECTION 3.03. Further Actions. Each of the parties agrees to use its
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable to consummate and
make effective the transactions contemplated by the Transaction Agreements. In
addition to the foregoing, each of the parties agrees to the following:
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(a) Approval by MST. (i) In order for MST, MST Management and MST Offshore
Management to consummate the transactions contemplated by the Transaction
Agreements, MST Management and MST Offshore Management and the Limited Partners
holding 662/3% in interest of MST Domestic Fund and MST Offshore Fund must
approve the transactions contemplated hereby, including amendments to the
relevant partnership agreement permitting (x) the distribution to the Limited
Partners of the membership interests of MST as elected by such Limited Partner
as contemplated by the Transaction Agreements and (y) special allocations of
gain to those Limited Partners electing to be redeemed. It is understood that
the MST Domestic Fund is in the process of liquidation and the term of MST
Offshore Fund has expired and MST Offshore Fund is in the process of
liquidation.
(ii) MST Management and MST Offshore Management hereby approve the
transactions contemplated by the Transaction Agreements including the
amendments and special allocations referred to in Section 3.03(a)(i).
(iii) MST, MST Domestic Fund, MST Offshore Fund, MST Management and
MST Offshore Management shall cause, as soon as practicable and in
accordance with all applicable national and foreign securities laws, a
vote of the Limited Partners of each of MST Domestic Fund and MST Offshore
Fund to be taken in respect of the Recapitalization Agreement and the
Recapitalization and the amendments to the organizational documents
referred to in Section 3.03(a) (whether by a meeting or by written
consent, as may be permitted under the relevant organizational documents).
In connection with such vote, each of MST, MST Management and MST Offshore
Management agrees (A) to promptly prepare in accordance with all
applicable national and foreign securities laws and thereafter mail to the
Limited Partners no later than Friday, April 14, 2000 the information
statement/consent solicitation (the "Information Statement") and all other
materials for such vote (it is understood that the Corporation and its
advisors shall have an opportunity to review and comment on the
Information Statement and other related documents before its mailing) ,
(B) the limited partners shall return voting and election instructions
before Wednesday, May 31, 2000, (C) to cause, in the event a Limited
Partner makes an election to require the redemption of its equity interest
in the Corporation, such Limited Partner to also make an irrevocable and
binding election to sell all or a portion of such Limited Partner's equity
interests that it has so requested be redeemed, and (D) otherwise to
comply with all legal requirements applicable to such vote.
(iv) MST, MST Domestic Fund, MST Offshore Fund, MST Management and
MST Offshore Management shall cause to be included in the Information
Statement mailed to the Limited Partners pursuant to the previous
paragraph, the statements of all general partners of MST Management and
managing directors of MST Offshore Management which shall be in form and
substance identical
14
(except as may be necessary to comply with applicable law or to comply
with any fiduciary duties) to those attached hereto as Exhibit F (the "GP
Statements"). Each of MST, MST Domestic Fund, MST Offshore Fund, MST
Management and MST Offshore Management shall take such steps as are
reasonably necessary to obtain the necessary approvals by the Limited
Partners of the Transaction Agreements and the transactions contemplated
hereby and thereby except to the extent that the requirement to take any
such action (A) would be inconsistent with the relevant GP Statement or
(B) are prohibited by applicable law or would breach such party's
fiduciary duties. No general partner of MST Management or managing
director of MST Offshore Management (x) shall permit his GP Statement to
be modified or (y) communicate any statements contrary to his GP Statement
to the Limited Partners, unless doing so (1) would facilitate obtaining
the necessary approvals by the Limited Partners of the Transaction
Agreements and the transactions contemplated hereby and thereby or (2)
would be permitted by the following paragraph,
In the event a Third Party Determination has been made, the provisions of
this clause (iv) shall not prevent any party from taking any action necessary
to comply with applicable law or such party's fiduciary duties (in such party's
good faith determination). In the event a general partner or a managing
director desires to change his GP Statement, such Person shall give the
Corporation, the other general partners of MST Management and Existing WPC
written notice outlining the proposed changes at least three business days
prior to the circulation of any such changed GP Statement to the Limited
Partners (the "Changed GP Statement Notice Period") and such Person shall use
reasonable best efforts to be available (with such Person's legal counsel) to
meet at the offices of MST Management during regular business hours to meet
with the other general partners of MST Management and managing directors of MST
Offshore Management, Xxxxx and Existing WPC to discuss the proposed changes to
the GP Statement during such Changed GP Statement Notice Period; provided,
however, that during the period between May 24, 2000 and May 31, 2000, the
Changed GP Statement Notice Period shall be one business day. Each of the
parties hereto agree that during the Changed GP Statement Notice Period it will
not communicate with the Limited Partners.
(v) MST shall promptly notify the Corporation of the result of such
vote and the elections to retain or redeem by the Limited Partners
received by MST or any Affiliate of MST. The Information Statement shall
state that if the transactions contemplated by the Transaction Agreements
are approved, each equity owner not specifying an election or failing to
vote shall be deemed to elect to require redemption of all of such equity
owners' interests.
(b) Approval by Existing WPC and SBIC Partners. (i) Each of existing WPC
and SBIC Partners hereby approve the transactions contemplated by the
Transaction
15
Agreements, which approval shall satisfy the requirement of Section 5.01 of the
TP LLC Original Agreement.
(ii) Each of Existing WPC and SBIC Partners shall cause, as soon as
practicable and in accordance with all national and foreign securities
laws, a vote of the direct and indirect beneficial holders of equity in
such entities to be taken in respect of the transactions contemplated by
the Transaction Agreements (whether by a meeting or by written consent, as
may be permitted under the relevant organizational documents). The general
partners of such entities shall recommend approval of the Transaction
Agreements and the transactions contemplated by the Transaction Agreements
by the direct and indirect beneficial holders of equity in such
partnership. In connection with the vote, each of Existing WPC and SBIC
Partners agrees to (A) prior to such vote, promptly prepare in accordance
with all national and foreign securities laws and thereafter cause to be
delivered as promptly as practicable to its direct and indirect beneficial
holders of equity an information statement substantively similar to the
Information Statement except to the extent the disclosure in the
Information Statement deals specifically with issues related to MST only,
and all other materials for such vote, (B) use its best efforts to obtain
the necessary approvals by the direct and indirect beneficial holders of
equity of the Transaction Agreements and the transactions contemplated
thereby and (C) otherwise comply with all requirements applicable to such
vote.
(iii) Each of Existing WPC and SBIC Partners shall promptly notify
the Corporation of the result of such vote.
(c) Other Required Votes. Each party hereto shall obtain all approvals
necessary for it to take the actions and to consummate the transactions
contemplated by the Transaction Agreements.
(d) Filings and Approvals. Each of the parties, as applicable, shall make,
or cause to be made, all such filings and submissions under applicable law, as
may be required to consummate the transactions contemplated by the Transaction
Agreements.
(e) Engagement Letters. The Corporation shall prior to the Effective Time
deliver to MST and WPC a schedule of the fees expected to be paid by the
Corporation in connection with the transactions contemplated by the Transaction
Agreements and a copy of all executed engagement letters.
(f) Press Release. The Corporation shall issue as soon as practicable but
in any event no later than 5:30 p.m. Washington D.C. time on Friday, April 14,
2000 the press release attached hereto as Exhibit G (the "Announcement"). The
parties shall not, and shall cause the partners and members thereof not to,
circulate any statements, including
16
any press release of the Corporation, regarding the Recapitalization or any
transaction contemplated by the Transaction Agreements except Xxxxxxxx shall as
promptly as practicable after issuance of the Announcement circulate such
Announcement accompanied only by a fax cover sheet of Winthrop, Stimson, Xxxxxx
& Xxxxxxx without any explanatory notations to any person requested by any party
hereto or partner or member thereof.
Winthrop, Stimson, Xxxxxx & Xxxxxxx shall promptly provide copies of each
such delivery of the Announcement, including identification of the recipient,
to the Corporation, MST and Existing WPC and their respective counsel. None of
the parties hereto shall, and shall cause the partners and members thereof not
to, initiate any communication with any recipient of such Announcement and
shall refer such recipient to the Committee for discussion.
(g) Form 8-K. The Corporation shall file a Form 8-K disclosing that this
Agreement has been executed with the Securities and Exchange Commission as soon
as practicable after the date hereof but in any event no later than 5:30 p.m.
Washington D.C. time on Friday, April 14, 2000. This Agreement shall be filed
as an exhibit to such Form 8-K.
(h) Bridge Financing. MST agrees that it will not, and will not cause the
Corporation to enter into any bridge financing arrangement with respect to the
transactions contemplated hereby.
(i) Cooperation. Each of the parties will coordinate and cooperate with
the other parties in exchanging such information and supplying such reasonable
assistance as may be requested by other parties in connection with the
Recapitalization.
SECTION 3.04. Director and Officer Liability. (a) For six years after the
Effective Time, the Corporation shall continue to indemnify and hold harmless
the present and former officers and directors of the Corporation (each an
"Indemnified Officer/Director") in respect of acts or omissions occurring at or
prior to the Effective Time to the fullest extent permitted by Delaware law or
any other applicable laws or provided under the Corporation's certificate of
incorporation and bylaws in effect on the date hereof; provided that such
indemnification shall be subject to any limitation imposed from time to time
under applicable law.
(b) For six years after the Effective Time, the Corporation shall continue
to provide officers' and directors' liability insurance in respect of acts or
omissions occurring prior to the Effective Time covering each such Indemnified
Officer/Director currently covered by the Corporation's officers' and
directors' liability insurance policy on terms with respect to coverage and
amount no less favorable than those of such policy in effect on the date
hereof; provided that, in satisfying its obligation under this Section,
17
the Corporation shall not be obligated to pay premiums in excess of 200% of the
amount per annum the Corporation paid in its last full fiscal year.
SECTION 3.05. Transfer Restrictions. MST agrees not to, and to cause TP
LLC not to, make (a) a Transfer of any shares of Common Stock except a Transfer
of Common Stock to MST Domestic Fund, MST Offshore Fund and MST Holding by MST
and (b) a Transfer of Common Stock to a newly formed limited liability company
by TP LLC, in each case, immediately prior to the Effective Time. Each of MST
Domestic Fund, MST Offshore Fund and MST Holding hereby agrees to sell all the
shares of Common Stock it owns at the Effective Time to the Corporation.
"Transfer" means a sale, transfer, assignment, pledge, other disposal or
encumbrance, including any transfer of "beneficial ownership" as defined in
Regulation 13D promulgated under the Exchange Act.
SECTION 3.06. Existing WPC or SBIC Partners Right. Notwithstanding
anything contained in this Agreement to the contrary, MST may not take any
action relating to the Corporation without the prior written consent of either
Existing WPC or SBIC Partners, so long as such parties own Interests; provided,
however, that the Manager shall have the authority to execute, deliver and
cause TP LLC to perform its obligations under this Agreement and the other
Transaction Agreements.
SECTION 3.07. Election of Directors. Each of MST and TP LLC agree that it
will not vote its Common Stock for the election of any director of the Board of
Directors without the consent of the other party.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF ALL PARTIES
Each of the parties hereto represents and warrants to each other party as
follows:
SECTION 4.01. Existence and Power. With respect to MST Offshore Fund,
pursuant to the terms of the applicable partnership agreement, the term of MST
Offshore Fund has expired and MST Offshore Fund is in the process of
liquidation. With respect to MST Offshore Management, MST Offshore Management
is duly organized, validly existing and registered in the Trade Register of the
Chamber of Commerce at Curacao, Netherlands Antilles, and has all powers and
material governmental licenses, authorizations, permits, consents and approvals
required to carry on its business as now conducted.
18
With respect to all other parties, each Person, who is not an individual,
is duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all powers and all material governmental
licenses, authorizations, permits, consents and approvals required to carry on
its business as now conducted.
SECTION 4.02. Authorization. (a) The execution, delivery and performance
by each Person, who is not an individual, of the Transaction Agreements and the
consummation of the transactions contemplated hereby and thereby are within
such Person's powers and have been duly authorized by all necessary action on
the part of such Person (except for the approvals described in Section
3.03(a)(i) with respect to the approval of the consummation of the transactions
contemplated by this Agreement).
(b) Each Person who is an individual has the capacity to enter into the
Transaction Agreements.
(c) Notwithstanding the expiration of the term of MST Offshore Fund
referred to in Section 4.01, each Transaction Agreement constitutes, or will
constitute when executed by such Person, a valid and binding agreement of such
Person.
SECTION 4.03. Governmental Authorization. The execution, delivery and
performance by such Person of each Transaction Agreement and the consummation
of the transactions contemplated hereby and thereby require no action by or in
respect of, or filing with, any governmental body, agency or official other
than compliance with any applicable requirements of the Securities Act,
Exchange Act and ISRA.
SECTION 4.04. Noncontravention. The execution, delivery and performance by
such Person of this Agreement and the consummation of the transactions
contemplated by the Transaction Agreements do not and will not (i) assuming
compliance with Section 3.03(a)(i) with respect to the approval of the
consummation of the transactions contemplated by this Agreement, violate the
organizational documents of such Person, (ii) assuming compliance with the
matters referred to in Section 4.03, violate any applicable law, rule,
regulation, judgment, injunction, order or decree, (iii) except as provided in
Schedule 4.04, require any consent or other action by any Person under,
constitute a default under, or give rise to any right of termination,
cancellation or acceleration of any right or obligation of such Person or to a
loss of any benefit to which such Person is entitled under any provision of any
agreement or other instrument binding upon such Person.
SECTION 4.05. Finders' Fees. Except for JPMSI whose fees will be paid by
the Corporation and Deutsche Bank Alex.Xxxxx whose fees will be paid by MST,
there is no investment banker, broker, finder or other intermediary which has
been retained by or is authorized to act on behalf of such Person who might be
entitled to any fee or commission in connection with the transactions
contemplated by the Transaction
19
Agreements. Nothing in this Section 4.05 shall be construed to diminish the
effect of Section 2.02.
SECTION 4.06. Litigation. (a) With respect to MST Offshore Fund and MST
Offshore Management, no writ initiating an action, suit, investigation or
proceeding has been served upon MST Offshore Fund or MST Offshore Management
and, to such Person's knowledge, there is no action, suit, investigation or
proceeding pending, threatened against or affecting such Person before any
court or arbitrator or any governmental body, agency or official which in any
manner challenges or seeks to prevent, enjoin, alter or materially delay the
transactions contemplated by the Transaction Agreements,
(b) With respect to each other party, there is no action, suit,
investigation or proceeding pending, or to the knowledge of such Person
threatened against or affecting such Person, before any court or arbitrator or
any governmental body, agency or official which in any manner challenges or
seeks to prevent, enjoin, alter or materially delay the transactions
contemplated by the Transaction Agreements.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF INDIVIDUAL PARTIES
SECTION 5.01. Corporation. The Corporation represents and warrants to each
other party that:
(a) The Corporation is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where such
qualification is necessary, except for those jurisdictions where failure to be
so qualified would not, individually or in the aggregate, have a material
adverse effect on the business of the Corporation.
(b) The Corporation shall have sufficient cash or property at the
Effective Time so that the redemption contemplated by Section 2.01(n) shall not
impair the capital of the Corporation.
(c) As of the date hereof, the Corporation has not prepared in connection
with the Recapitalization any financial projections which are inconsistent in
material respects (taken as a whole) with the assumptions used in the Financial
Projections except for tax rate and net debt balance of the Corporation
estimated for the end of fiscal year 2000 used in the financial projections
delivered to Deutsche Bank Alex.Xxxxx.
SECTION 5.02. Foreign Law. Each of MST Offshore Fund and Existing WPC
hereby represents and warrants to the Corporation that (i) it has consulted
with its legal
20
counsel in the applicable jurisdiction of organization with respect to the legal
requirements under such jurisdiction for approval of this Agreement and the
transactions contemplated by the Transaction Agreements and (ii) the approval
required by this Agreement described in Section 6.02(a) or 6.03(d), as
applicable, is all the action necessary for the approval of this Agreement and
the transactions contemplated by the Transaction Agreements.
SECTION 5.03. Purchase for Investment. The parties understand that (a) the
membership interests of TP LLC have not been registered under the Securities
Act, or any state securities laws because TP LLC is issuing these membership
interests in reliance upon the exemptions from the registration requirements of
the Securities Act, and any state securities laws providing for issuance of
securities not involving a public offering, (b) TP LLC has relied upon the fact
that the membership interests are to be held by each party for investment and
that exemption from registration under the Securities Act, or any state
securities laws would not be available if the membership interests of TP LLC
were acquired by a party with a view to distribution.
Accordingly, each of the parties represents and warrants to each other
party that such party is acquiring its membership interests of TP LLC for such
party's own account, for investment and not with a view to the resale or
distribution thereof.
Prior to acquiring the membership interests of TP LLC, each party has made
an investigation of TP LLC and its business and TP LLC has had made available
to each such party all information with respect thereto which such party needed
to make an informed decision to acquire the membership interests of TP LLC.
Each party considers himself or itself to be a person possessing experience and
sophistication as an investor adequate to evaluate the merits and risk of such
party's investment in the membership interests of TP LLC.
ARTICLE 6
CONDITIONS PRECEDENT
SECTION 6.01. Conditions for all Parties. The consummation of the
transactions contemplated by the Transaction Agreements by each party is
subject to the satisfaction at or prior to the Closing Date of each of the
following conditions:
(a) Receipt of Licenses, Permits and Consents. The Corporation shall have
obtained evidence that any consent or approval required by ISRA for
consummation of the transactions contemplated by the Transaction Agreements
have been obtained;
(b) No Injunction, etc. Consummation of the transactions contemplated by
the Transaction Agreements shall not have been restrained, enjoined or
otherwise prohibited by any applicable law, including any order, injunction,
decree or judgment of any court or
21
other governmental authority, and no action or proceeding shall be pending or
threatened by any governmental authority at the Effective Time before any court
or other governmental authority to restrain, enjoin or otherwise prevent the
consummation of the transactions contemplated by the Transaction Agreements or
to recover any material damages or obtain other material relief as a result of
such transactions. There shall not have been promulgated, entered, issued, or
determined by any court or other governmental authority to be applicable to the
Transaction Agreements any applicable law making illegal the consummation of the
transactions contemplated hereby or thereby, and no proceeding with respect to
the application of any such applicable law shall be pending;
(c) Fraudulent Conveyance. The redemption of Common Stock held by MST
Domestic Fund, MST Offshore Fund and MST Holding shall not be a fraudulent
conveyance as defined by federal bankruptcy laws; and
(d) Representations and Warranties. The representations and warranties of
each of the other parties under Articles 4 and 5 shall be true at the Effective
Time as though such warranties and representations were made at and as of such
date.
SECTION 6.02. Conditions for MST. The consummation of the transactions
contemplated by the Transaction Agreements by MST is subject to the
satisfaction at or prior to the Closing Date of each of the following
conditions:
(a) Approval by MST's Direct or Indirect Investors. The Limited Partners
of each of MST Domestic Fund and MST Offshore Fund shall have approved,
pursuant to the organizational documents and applicable laws of each such
partnership, (i) the distribution of the membership interests or other non-cash
assets of MST to such Limited Partners in the form elected by such Limited
Partners as set forth in Section 3.03(a), (ii) the Recapitalization Agreement
and the Recapitalization and (iii) the amendments referred to in 3.03(a)(i);
(b) Elections by Investors. The direct or indirect beneficial owners of
MST holding at least 20% of all equity interests of MST shall have made binding
elections to require MST to redeem their interests;
(c) Alternative Sale Procedures. Each other party shall have performed in
all material respects all of its obligations under Section 3.01;
(d) Sufficient Funds. The Corporation shall have sufficient funds from
whatever source to consummate the redemption of the Common Stock held by MST
Domestic Fund, MST Offshore Fund and MST Holding at the Effective Time. On the
date hereof, in connection with the Recapitalization, the Corporation expects
to incur debt of approximately $750 million and equity commitments of
approximately $250 million in
22
TP LLC are expected to be received at the Effective Time. MST and the other
parties hereto understand that the actual capitalization structure of the
Corporation and TP LLC shall be determined at the discretion of WPC and Xxxxx;
and
(e) Material Obligations. Each of the Corporation, Existing WPC, WPC,
Xxxxx and, with respect to Section 2.01(i), SBIC Partners shall have performed
and complied in all material respects with all material covenants and
agreements required by this Agreement and the Transaction Agreements to be
performed or complied with by such Person at or prior to the Effective Time.
SECTION 6.03. Conditions for WPC. The consummation of the transactions
contemplated by the Transaction Agreements by WPC is subject to the
satisfaction at or prior to the Closing Date of each of the following
conditions:
(a) Debt Financing. The terms and conditions of the financing arrangements
referred to in Section 2.01(d) shall be satisfactory in form and substance to
WPC;
(b) Bond Tender Offer Statement. The terms and conditions of Bond Tender
Offer Statement referred to in Sections 2.01(f) and 2.01(g) shall be
satisfactory in form and substance to WPC. The tender offer/consent
solicitations shall be conducted in a manner satisfactory to WPC;
(c) No Material Change in the Corporation's Business. There shall not have
been any material adverse change (which is not known by WPC or XX Xxxxxx on the
date hereof) in the business, assets, condition, income or prospects of the
Corporation from the condition of the Corporation as reflected in the Financial
Statements dated July 2, 1999 nor any material adverse change (which is not
known by WPC or XX Xxxxxx on the date hereof) in the ability of the Corporation
to operate its business in accordance with the Financial Projections.
"Financial Statements" means the audited balance sheets as of July 2, 1999 and
the related audited consolidated statements of income and cash flows for the
year ended July 2, 1999. "Financial Projections" means the financial
projections of the Corporation prepared by JPMSI, dated April 11, 2000
delivered to WPC and MST on or about April 12, 2000;
(d) Approval by Existing WPC's Investors. Existing WPC shall have
solicited and received from the direct and indirect beneficial holders of
equity in Existing WPC, approval and ratification (pursuant to its
organizational documents and applicable laws) of the transactions contemplated
by the Transaction Agreements, including all the terms of this Agreement; and
(e) Material Obligations. Each of the Corporation, MST, MST Domestic Fund,
MST Offshore Fund, Xxxxx and, with respect to Section 2.01(i), SBIC Partners
and, with respect to Section 2.01(n), XxXxxxx shall have performed and complied
in all material
23
respects with all material covenants and agreements required by this Agreement
and the Transaction Agreements to be performed or complied with by such Person
at or prior to the Effective Time.
SECTION 6.04. Conditions for the Corporation. The consummation of the
transactions contemplated by the Transaction Agreements by the Corporation is
subject to the satisfaction at or prior to the Closing Date of each of the
following conditions:
(a) Debt Financing. The terms and conditions of the financing arrangements
referred to in Section 2.01(d) shall be satisfactory in form and substance to
the Corporation;
(b) Debt Financing Available. The Corporation shall have available to draw
down at the Effective Time at least $750 million in debt financing consisting
of one or more credit facilities or series of senior subordinated notes and any
portion of the $750 million financing unfunded (which shall be at least $100
million) at the Effective Time shall be made available to the Corporation after
the Effective Time in the form of a revolving credit facility;
(c) Bond Tender Offer Statement. The price terms and conditions of Bond
Tender Offer Statement referred to in Sections 2.01(f) and 2.01(g) shall be
satisfactory in form and substance to the Corporation. The tender offer/consent
solicitations shall be conducted in a manner satisfactory to the Corporation;
(d) Minimum Bond Tender and Consent. The holders of more than 50% of the
outstanding principal amount of each of the Senior Subordinated Notes due 2007
and Senior Subordinated Notes due 2008 shall have tendered their notes and
consented to the modifications to the indenture governing the relevant series
of notes;
(e) Minimum MST Redemption. The direct or indirect beneficial owners of
MST holding at least 85% of all equity interests of MST shall have made binding
elections to require MST to redeem their interests;
(f) Approvals by MST, Existing WPC and SBIC Partners. Each of MST,
Existing WPC and SBIC Partners shall have solicited and received from the
direct and indirect beneficial holders of equity in such entities, approval and
ratification (pursuant to the organizational documents and applicable laws of
such entity) of the transactions contemplated by the Transaction Agreements,
including all the terms of this Agreement;
(g) Equity Commitment. Each of XX Xxxxxx, WPC and the investors identified
by WPC shall have made the Capital Contributions at the Effective Time equal to
the amount set forth for contribution to TP LLC by such entity in the Initial
Drawdown Notice (as defined in the TP LLC Original Agreement) delivered to such
entity. JP
24
Xxxxxx, WPC and investors to be identified by WPC shall in the aggregate have
committed Capital Contributions of at least $ 255 million to TP LLC of which a
maximum of $170 million shall be available at the Effective Time and all
remaining amounts (including any portion of the $170 million which remains
unfunded at the Effective Time) shall be available to TP LLC for future draw
downs for a period of at least 5 years after the Effective Time;
(h) Alternative Sale Procedures. Each other party shall have performed in
all material respects all of its obligations under Section 3.01;
(i) Recapitalization Accounting. The Corporation shall have received the
advice of BDO Xxxxxxx LLP, in writing and otherwise in form and substance
reasonably satisfactory to the Corporation, that the Recapitalization will
qualify for recapitalization accounting treatment under generally accepted
accounting principles; and
(j) Material Obligations. Each of MST, MST Domestic Fund, MST Offshore
Fund, Existing WPC, WPC, Xxxxx and, with respect to Section 2.01(i), SBIC
Partners and, with respect to Section 2.01(n), XxXxxxx shall have performed and
complied in all material respects with all material covenants and agreements
required by this Agreement and the Transaction Agreements to be performed or
complied with by such Person at or prior to the Effective Time.
SECTION 6.05. Condition for SBIC Partners. SBIC Partners shall have
solicited and received from the direct and indirect beneficial holders of
equity in SBIC Partners approval and ratification (pursuant to its
organizational documents and applicable laws) of the transactions contemplated
by the Transaction Agreements, including all the terms of this Agreement.
SECTION 6.06. Condition for Xxxxx. Xxxxx shall not be required to exercise
the Xxxxx Option unless all of the other conditions in this Article 6 have been
satisfied or waived at the Effective Time.
The consummation of the transactions contemplated by the Transaction
Agreements by Xxxxx is subject to the satisfaction at or prior to the Closing
Date of the following condition:
Each of the Corporation, Existing WPC, WPC, MST, MST Domestic Fund, MST
Offshore Fund and, with respect to Section 2.01(i), SBIC Partners and, with
respect to Section 2.01(n), XxXxxxx shall have performed and complied in all
material respects with all material covenants and agreements required by this
Agreement and the Transaction Agreements to be performed or complied with by
such Person at or prior to the Effective Time.
25
SECTION 6.07. Conditions for XX Xxxxxx. The consummation of the
transactions contemplated by the Transaction Agreements by XX Xxxxxx is subject
to the satisfaction at or prior to the Effective Time of each of the following
conditions:
(a) Capital Structure of the Corporation and TP LLC. The capital structure
of the Corporation and TP LLC shall not be materially inconsistent with that
contemplated by the Transaction Agreements on the date hereof; and
(b) No Material Change in the Corporation's Business. There shall not have
been any material adverse change (which is not known by WPC or XX Xxxxxx on the
date hereof) in the business, assets, condition, income or prospects of the
Corporation from the condition of the Corporation as reflected in the Financial
Statements dated July 2, 1999 nor any material adverse change (which is not
known by WPC or XX Xxxxxx on the date hereof) in the ability of the Corporation
to operate its business in accordance with the Financial Projections.
ARTICLE 7
TERMINATION
SECTION 7.01. Termination. This Agreement may be terminated at any time
prior to the Effective Time (i) by the written agreement of the parties hereto,
(ii) by MST, WPC or Xxxxx if a vote is taken pursuant to Section 3.03(a) and
the Limited Partners do not approve the transactions contemplated hereby, (iii)
by WPC or Xxxxx if the MST, MST Management or MST Offshore Management shall
have violated 3.03(a)(iv) or the vote pursuant to Section 3.03(a) does not
occur by June 1, 2000, (iv) by the Corporation if the Corporation or the
shareholders of the Corporation shall enter into a binding agreement in
connection with an Alternative Sale in accordance with the provisions of
Section 3.01 or (v) by MST, WPC, SBIC Partners or Xxxxx if any condition
specified in Article 6 shall not have been satisfied or waived prior to
September 30, 2000. Notice of terminations pursuant to clauses (ii), (iii),
(iv) or (v) shall be given to each other party and shall be effective upon
notice of all such other parties. In addition, notwithstanding anything else in
this Agreement, the Corporation may terminate this Agreement and abandon the
transactions contemplated by the Transaction Agreements, including the
Recapitalization, at any time prior to their consummation if it determines that
the consummation of such transactions is no longer in the best interests of the
Corporation.
SECTION 7.02. Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 7.01, this Agreement shall become void and
have no effect, without any liability to any Person in respect hereof or to the
transactions contemplated hereby on the part of any party hereto, or any of its
directors, officers, employees, agents, consultants, representatives, advisers,
stockholders or Affiliates;
26
provided that if such termination shall result from the (i) willful failure of a
party to fulfill a condition to the performance of the obligations of any other
party, (ii) failure to perform a covenant of this Agreement or (iii) breach by a
party hereto of any representation or warranty or agreement, on the date such
representation or warranty or agreement is made, contained herein, such party
shall be fully liable for any and all damages incurred or suffered by any other
party as a result of such failure or breach; provided further that no party
shall be liable for consequential damages. Notwithstanding the foregoing, for
purposes of this Section, none of the parties shall be liable under this Section
for a breach of the obligations set forth in the first sentence of Section 3.03
and in Section 3.03(d) unless and until the earlier of (A) any non-breaching
party shall have given the breaching party written notice describing the breach
and the action required to cure such breach, and the breaching party shall have
failed to have cured such breach within thirty (30) days after receipt of such
written notice or (B) such breach is not able to be cured.
SECTION 7.03. Survival. (a) The provisions of Section 9.14 shall survive
any termination hereof pursuant to Section 7.01. The representations and
warranties contained in Section 5.01(c) shall terminate at the Effective Time.
Sections 3.05, 3.06 and 3.07 shall survive the termination of this Agreement
for any reason.
ARTICLE 8
INDEMNIFICATION
SECTION 8.01. Indemnification. (a) If the Recapitalization is consummated,
the Corporation hereby indemnifies to the fullest extent permitted by law MST,
MST Domestic Fund, MST Offshore Fund, MST Management and MST Offshore
Management and each of their respective general partners, officers or directors
(each an "MST Indemnified Party" and collectively the "MST Indemnified
Parties") against and agrees to hold each of them harmless from any and all
damage, loss, liability and expense (including, without limitation, reasonable
expenses of investigation and reasonable attorneys' fees and expenses in
connection with any action, suit or proceeding) ("Damages") incurred or
suffered by such Indemnified Party related to any action, suit or proceeding
which arise out of the transactions contemplated by this Agreement; provided
that (i) the Corporation shall not be liable under this Section 8.01 unless the
aggregate amount of Damages for all such MST Indemnified Parties exceeds $1
million (the "Deductible") and then only to the extent of such excess and (ii)
the Corporation's maximum liability under this Section shall not exceed $5
million (the "Cap") (for purposes of calculating the $5 million in this clause
(ii) all amounts due to Deutsche Bank Alex.Xxxxx or to MST Indemnified Parties
in connection with the DBAB Letter shall be included in such Cap), and (iii)
the Corporation shall not indemnify any party for any Damages arising out of
the breach of, default of or failure to perform any of the
27
provisions of or obligations under the Transaction Agreements nor for any
Damages arising out of any claim involving any type of taxes.
(b) In the event the MST Indemnified Parties have not suffered Damages
sufficient to satisfy the Deductible and the Corporation has any liability
under the engagement letter among Deutsche Bank Alex.Xxxxx, MST Domestic Fund
and MST Offshore Fund dated April 12, 2000 (the "DBAB Letter"), the MST
Indemnified Parties shall make a DBAB Payment to Deutsche Bank Alex.Xxxxx on
behalf of the Corporation or to the Corporation, at the discretion of the
Corporation. "DBAB Payment" shall be equal to the greater of such liability
under the DBAB Letter and an amount equal to the Deductible minus all Damages
suffered by all MST Indemnified Parties; provided, however, that in no event
shall the DBAB Payment exceed the Deductible.
(c) If the Recapitalization is consummated, the Corporation hereby
indemnifies, to the fullest extent permitted by law, Existing WPC, its general
partners or officers, Xxxxx, Xxxxx and Xxxx (each an "Rollover Indemnified
Party") against and agrees to hold each of them harmless from any and all
Damages incurred or suffered by such Rollover Indemnified Party which arise out
of the transactions contemplated by this Agreement; provided that the
Corporation shall not indemnify any party for any Damages arising out of the
breach of, default of or failure to perform any of the provisions of or
obligations under the Transaction Agreements nor for any Damages arising out of
any claim involving any type of taxes.
SECTION 8.02. Procedures. (a) Each MST Indemnified Party and Rollover
Indemnified Party (each an "Indemnified Party") agrees to give prompt notice to
the Corporation of the assertion of any claim, or the commencement of any suit,
action or proceeding ("Claim") in respect of which indemnity may be sought
under such Section and will provide the Corporation such information with
respect thereto that the Corporation may reasonably request. The failure to so
notify the Corporation shall not relieve the Corporation of its obligations
hereunder, except to the extent such failure shall have adversely prejudiced
the Corporation.
(b) The Corporation (i) shall be entitled to participate in the defense of
any Claim and, (ii) subject to the limitations set forth in this Section, shall
be entitled to control and appoint lead counsel for such defense, in each case
at its expense. Notwithstanding the foregoing, the Indemnified Party and the
Corporation shall be entitled to share control and appoint lead counsel
mutually accepted for the defense of any Claim which if decided in favor of the
plaintiff in accordance with the complaint and aggregated with all Damages,
other Claims and amounts for which such Indemnified Party is seeking
indemnification would not exceed the Deductible. The Indemnified Party shall
also be entitled to control and appoint lead counsel for the defense of any
Claim with the Corporation's consent or without Corporation's consent if the
Indemnified Party agrees that the Corporation shall not be liable for any
Damages pertaining to such
28
Claim except that the Indemnified Party may apply the Damages toward its
Deductible to the extent remaining. At such time as all Damages for an
Indemnified Party equals or exceeds its Deductible, such Indemnified Party
agrees to cede control of any defense of any Claim if so requested by the
Corporation.
(c) If the Corporation shall assume the control of the defense of any
Claim in accordance with the provisions of this Section, the Corporation shall
obtain the prior written consent of the Indemnified Party (which shall not be
unreasonably withheld) before entering into any settlement of such Claim if the
settlement does not release the Indemnified Party from all liabilities and
obligations with respect to such Claim. The Indemnified Party shall be entitled
to participate in the defense of such Claim and to employ separate counsel of
its choice for such purpose. The fees and expenses of such separate counsel
shall be paid by the Indemnified Party. The Indemnified Party shall obtain the
prior written consent of the Corporation (which shall not be unreasonably
withheld) before entering into any settlement of a Claim.
(d) Each party shall cooperate, and cause their respective Affiliates to
cooperate, in the defense or prosecution of any Claim and shall furnish or
cause to be furnished such records, information and testimony, and attend such
conferences, discovery proceedings, hearings, trials or appeals, as may be
reasonably requested in connection therewith.
SECTION 8.03. Calculation of Damages. (a) The amount of any Damages
payable under Section 8.02 by the Corporation shall be net of any amounts
recovered or recoverable by the Indemnified Party under any other indemnity or
exculpation available to the Indemnified Party under any agreement or by law,
applicable insurance policies (unless the Indemnified Party is unable to
collect on any applicable insurance policy due to the Corporation's refusal to
subrogate its right to control litigation in Section 8.02(b) to the relevant
insurance company), tax cost incurred by the Indemnified Party arising from the
receipt of indemnity payments and tax benefit realized by the Indemnified Party
arising from the incurrence or payment of any such Damages. The Corporation
shall not be liable under Section 8.01 for any consequential or punitive
Damages.
SECTION 8.04. Waiver and Release; Exclusivity. Each party hereto (other
than Xxxxxxxx) waives any rights and claims such party may have against, and
releases from all liability of, any other party or its partners, members,
officers or directors, whether in law or in equity, arising from the
transactions contemplated by the Transaction Agreements, including a claim that
the Share Price is lower than a price that would have been obtained under a
sale of the Corporation under an alternative structure or that the
Recapitalization should have been achieved through a different structure or any
rights to bring a derivative shareholder action but excluding any claim for
breach of, default of or failure to perform any provision of or obligation
under the Transaction Agreements. After the Effective Time, subject to the
indemnification provided for in Section 3.04, Section 8.01 will provide the
exclusive remedy for any indemnification claim arising out of this
29
Agreement or the transactions contemplated by the Transaction Agreements. Each
signatory of this Agreement is also signing in his individual capacity in
addition to his other capacity as partner, managing director, officer or
director for purposes of this Section 8.04.
SECTION 8.05. Termination. Article 8 shall terminate on the sixth
anniversary of the Effective time.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Remedies. Each party hereto acknowledges that it will be
impossible to measure the damages that would be suffered by the other parties
if such party fails to comply with the covenants set forth in this Agreement
and that, in the event of any such failure, the other parties will not have an
adequate remedy at law. Each party shall, therefore, be entitled in addition to
any other rights and remedies to obtain equitable relief in the form of
specific performance, a temporary restraining order, a temporary or permanent
injunction or any other equitable remedy which may then be available without
having to post a bond. No party shall assert, as a defense to any proceeding
for such specific performance or injunctive relief, that the other parties have
an adequate remedy at law.
SECTION 9.02. Binding Effect; Benefit. Except as otherwise provided
herein, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, successors, legal
representatives and permitted assigns. Nothing in this Agreement, expressed or
implied, shall confer on any Person other than the parties hereto, and their
respective heirs, successors, legal representatives and permitted assigns, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
SECTION 9.03. Assignability. This Agreement shall not be assignable by any
party without the written consent of the other parties.
SECTION 9.04. Waivers. No waiver of any breach or default hereunder shall
be considered valid unless in writing and signed by the party giving such
waiver. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent, same
or different breach.
SECTION 9.05. Entire Agreement. The Transaction Agreements constitute the
entire agreement among the parties hereto and supersede any and all prior
agreements and understandings, oral or written, among the parties hereto with
respect to the subject matter hereof.
30
SECTION 9.06. Headings. The headings in this Agreement are inserted for
convenience of reference only and shall not be a part of or control or affect
the meaning hereof.
SECTION 9.07. Severability. To the extent possible, each provision of this
Agreement shall be interpreted in a manner as to be valid, legal and
enforceable. Any determination that any provision of this Agreement or any
application thereof is invalid, illegal or unenforceable in any respect or in
any instance shall be effective only to the extent of such invalidity,
illegality or unenforceability and shall not affect the validity, legality or
enforceability of any other provision of this Agreement.
SECTION 9.08. Amendments. This Agreement may be amended at any time only
upon the prior unanimous written consent of MST, WPC, SBIC Partners and Xxxxx.
SECTION 9.09. Governing Law; Submission to Jurisdiction. (a) This
Agreement shall be subject to, governed by and construed in accordance with the
internal laws of the State of Delaware, without giving effect to any conflicts
or choice of law provisions that would make applicable the substantive laws of
any other jurisdiction. Each of the parties hereto agrees (1) that this
Agreement involves at least $100,000 and (2) that this Agreement has been
entered into by the parties hereto in express reliance upon 6 Del. C. Section
2708.
(b) Each party hereby irrevocably and unconditionally agrees (1) to be
subject to the jurisdiction of the courts of the State of Delaware and the
federal courts sitting in the State of Delaware or in the County of New York in
the State of New York, and (2) to the fullest extent permitted by applicable
law, service of process may also be made on such party by prepaid certified
mail with a validated proof of mailing receipt constituting evidence of valid
service, and that service made pursuant to (2) above shall have the same legal
force and effect as if served upon said party personally within the State of
Delaware.
SECTION 9.10. Waiver of Jury Trial. Each of the parties hereto hereby
irrevocably waives any and all right to trial by jury in any legal proceeding
arising out of or related to this Agreement or the transactions contemplated
hereby.
SECTION 9.11. Counterparts. This Agreement may be executed simultaneously
in multiple counterparts, each of which shall be deemed to be an original, but
all of which shall be and constitute one and the same instrument.
SECTION 9.12. Notices. All notices, demands, solicitations of consent or
approval, and other communications made pursuant hereto or pursuant to any
other agreement among the parties, unless otherwise specified, shall be in
writing and shall be deemed to have been given and received by the recipient at
the address set forth on the signature page on the date of receipt by the
recipient thereof if received prior to 5:00 p.m.
31
in the place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, demand, solicitation of consent or approval or other
communication shall be deemed not have been received until the next succeeding
business day in the place of receipt.
Any such notice, demand, solicitation of consent or approval or other
communication may be sent by fax transmission to the recipient at the fax
number set forth on the signature pages hereto and shall be deemed to have been
received when the sender receives a confirmation of the transmission.
SECTION 9.13. Interpretation. When a reference is made in this Agreement
to a Section or Exhibit, such reference will be to a Section of, or an Exhibit
to, this Agreement unless otherwise indicated. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they will be deemed to be
followed by the words "without limitation." The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement will refer
to this Agreement as a whole and not to any particular provision of this
Agreement. The terms used in this Agreement are applicable to the singular as
well as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument that is
referred to herein means such agreement, instrument or statute as from time to
time amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession
of comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. References to any Person are also to its
permitted successors and assigns.
SECTION 9.14. Confidentiality. Prior to the Closing and after any
termination of this Agreement, the parties will hold, and will use their best
efforts to cause their respective officers, directors, employees, accountants,
counsel, consultants, advisors and agents to hold, in confidence, unless
compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information concerning the
transactions contemplated by this Agreement, except to the extent that such
information can be shown to have been (i) previously known on a
non-confidential basis by such party, (ii) in the public domain through no
fault of such party or (iii) later lawfully acquired by such party from other
sources; provided that the parties may disclose such information to their
officers, directors, employees, accountants, counsel, consultants, advisors and
agents in connection with the transactions contemplated by this Agreement so
long as such Persons are informed by such parties of the confidential nature of
such information and are directed by such parties to treat such information
confidentially. Such parties shall be responsible for any failure to treat such
information confidentially by such Persons.
32
SECTION 9.15. Public Announcements. The parties may make announcements
about the transaction to the public, to the Company's customers or employees,
or to any other person or entity; provided, however, that each such
announcement shall have received the prior unanimous written approval of the
Committee, Existing WPC and Xxxxx, such approval not to be unreasonably
withheld, or shall be required by law.
SECTION 9.16. Conduct of Business. Prior to the Closing, the Corporation
will conduct its business only in the ordinary course of business, consistent
with past practice, and will use its reasonable best efforts to maintain the
value of its business as a going concern. The Corporation will not, without the
written consent of Existing WPC and a majority of the Board of Directors, (a)
enter into or perform any transactions with Affiliates, or into transactions
other than on an arm's length basis (in each case, other than transactions
between the Corporation or any wholly owned subsidiary or among wholly owned
subsidiaries), (b) increase any compensation or benefit arrangement for any
employee or officer other than in the ordinary course of business, or (c) pay
any dividends, purchase any stock or make any other distributions to
shareholders of the Corporation.
SECTION 9.17. Recapitalization Proposal Superseded. This Agreement shall
replace and supersede the Recapitalization Proposal in its entirety.
33
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the date first above written.
Each signatory hereto (other than Xxxxxxxx) is also signing in his
individual capacity as well as his capacity as a partner, managing director,
officer or director for purposes of Sections 8.04 and 9.10.
TEKNI-PLEX, INC.
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Facsimile Number: (000) 000-0000
By: /s/ Dr. F. Xxxxxxx Xxxxx
-------------------------------------
Name: Dr. F. Xxxxxxx Xxxxx
Title: Chief Executive Officer
TEKNI-PLEX PARTNERS LLC
c/o MST/TP PARTNERS L.P.
000 Xxxxxxxx Xxxxx 000
Xxx Xxxx, XX 00000
Facsimile Number: (000) 000-0000
By: MST/TP PARTNERS L.P.,
its Manager
By: MST PARTNERS, L.P.,
its Co-General Partner
By: MST MANAGEMENT, L.P.,
its General Partner
By: /s/ J. Xxxxxx XxXxxxx
---------------------------
Name: J. Xxxxxx XxXxxxx
Title: Co-General Partner
By: /s/ Xxxxx X. Xxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxx
Title: Co-General Partner
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Co-General Partner
By: MST OFFSHORE PARTNERS C.V.,
its Co-General Partner
By: MST MANAGEMENT, L.P.,
its Co-General Partner
By: /s/ J. Xxxxxx XxXxxxx
--------------------------------
Name: J. Xxxxxx XxXxxxx
Title: Co-General Partner
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Co-General Partner
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Co-General Partner
By: MST OFFSHORE MANAGEMENT
N.V., its Co-General Partner
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
MST/TP PARTNERS L.P.
000 Xxxxxxxx Xxxxx 000
Xxx Xxxx, XX 00000
Facsimile Number: (000) 000-0000
By: MST PARTNERS, L.P.,
its Co-General Partner
By: MST MANAGEMENT, L.P.,
its General Partner
By: /s/ J. Xxxxxx XxXxxxx
--------------------------------
Name: J. Xxxxxx XxXxxxx
Title: Co-General Partner
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Co-General Partner
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Co-General Partner
By: MST OFFSHORE PARTNERS C.V.,
its Co-General Partner
By: MST MANAGEMENT, L.P.,
its Co-General Partner
By: /s/ J. Xxxxxx XxXxxxx
--------------------------------
Name: J. Xxxxxx XxXxxxx
Title: Co-General Partner
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Co-General Partner
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Co-General Partner
By: MST OFFSHORE MANAGEMENT
N.V., its Co-General Partner
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
MST/TP HOLDING, INC.
00000 Xxxxxxxx Xxxx., Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Facsimile Number: (000) 000-0000
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
MST PARTNERS, L.P.
000 Xxxxxxxx Xxxxx 000
Xxx Xxxx, XX 00000
Facsimile Number: (000) 000-0000
By: MST MANAGEMENT, L.P.,
its General Partner
By: /s/ J. Xxxxxx XxXxxxx
--------------------------------
Name: J. Xxxxxx XxXxxxx
Title: Co-General Partner
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Co-General Partner
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Co-General Partner
MST OFFSHORE PARTNERS C.V.
With a copy to:
Xxxxxxxxxx 00
X.X. Xxx 0000
Xxxxxxx, Xxxxxxxxxxx Antilles
By: MST MANAGEMENT, L.P.,
its Co-General Partner
By: /s/ J. Xxxxxx XxXxxxx
--------------------------------
Name: J. Xxxxxx XxXxxxx
Title: Co-General Partner
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Co-General Partner
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Co-General Partner
By: MST OFFSHORE MANAGEMENT N.V., its
Co-General Partner
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
MST MANAGEMENT, L.P.
000 Xxxxxxxx Xxxxx 000
Xxx Xxxx, XX 00000
Facsimile Number: (000) 000-0000
By: /s/ J. Xxxxxx XxXxxxx
--------------------------------------
Name: J. Xxxxxx XxXxxxx
Title: Co-General Partner
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Co-General Partner
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Co-General Partner
MST OFFSHORE MANAGEMENT N.V.
With a copy to:
Xxxxxxxxxx 00
X.X. Xxx 0000
Xxxxxxx, Xxxxxxxxxxx Antilles
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
WESTON PRESIDIO OFFSHORE
CAPITAL C.V.
Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Facsimile Number: (000) 000-0000
By: WESTON PRESIDIO CAPITAL
MANAGEMENT, L.P., its General Partner
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: General Partner
WESTON PRESIDIO CAPITAL III L.P.
Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Facsimile Number: (000) 000-0000
By: WESTON PRESIDIO CAPITAL
MANAGEMENT III, LLC, its General Partner
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Member
WPC ENTREPRENEUR FUND L.P.
Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Facsimile Number: (000) 000-0000
By: WESTON PRESIDIO CAPITAL
MANAGEMENT III, LLC, its General Partner
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Member
SBIC PARTNERS L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, XX 00000
Facsimile Number: (000) 000-0000
By: XXXXXXX XXXXXXX & XXXXX X.X.
By: XXXXXXX XXXXXXX & XXXXX
VENTURE CO., its General Partner
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Office of the President
By: SL-SBIC PARTNERS, L.P.
By: FW-SBIC, INC., its General Partner
By:
--------------------------------
Name:
Title:
X.X. XXXXXX CAPITAL CORPORATION
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile Number: (000) 000-0000
By: /s/ Xxxxx Xxxxx
-------------------------------------------
Name: Xxxxx Xxxxx
Title: Vice-President
TEKNI-PLEX MANAGEMENT LLC
c/o Dr. F. Xxxxxxx Xxxxx
Tekni-Plex, Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Facsimile Number: (000) 000-0000
By: /s/ Dr. F. Xxxxxxx Xxxxx
-------------------------------------------
Name: Dr. F. Xxxxxxx Xxxxx
Title: Authorized Person
Individuals:
/s/ DR. F. XXXXXXX XXXXX
----------------------------------
DR. F. XXXXXXX XXXXX
c/o Tekni-Plex, Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Facsimile Number: (000) 000-0000
/s/ XXXXXXX X.X. XXXXX
----------------------------------
XXXXXXX X.X. XXXXX
c/o Tekni-Plex, Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Facsimile Number: (000) 000-0000
/s/ XXXXXX X. XXXX
----------------------------------
XXXXXX X. XXXX
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Facsimile Number: (000) 000-0000
/s/ XXXXXXX X. XXXXXXXXX
----------------------------------
XXXXXXX X. XXXXXXXXX
0000 Xxxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000
Facsimile Number: (000) 000-0000
For purposes of Section 2.01(k):
/s/ J. XXXXXX XxXXXXX
----------------------------------
J. XXXXXX XxXXXXX
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile Number: (000) 000-0000
/s/ XXXXX X. XXXXXXX
----------------------------------
XXXXX X. XXXXXXX
000 Xxxx Xxxxxx Xxxxx, Xxx. 00X
Xxx Xxxx, XX 00000
Facsimile Number: (000) 000-0000
/s/ XXXXXXX X. XXXXXX
----------------------------------
XXXXXXX X. XXXXXX
0 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Facsimile Number: (000) 000-0000
For purposes of Section 2.01(n):
/s/ J. XXXXXX XxXXXXX
----------------------------------
J. XXXXXX XxXXXXX
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile Number: (000) 000-0000
For purposes of Section 3.01:
/s/ XXXXXXX X. XXXXXXX
----------------------------------
XXXXXXX X. XXXXXXX
c/o Xxxxxxx Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Facsimile Number: (000) 000-0000
/s/ XXXXX X. XXXXXXX
----------------------------------
XXXXX X. XXXXXXX
000 Xxxx Xxxxxx Xxxxx, Xxx. 00X
Xxx Xxxx, XX 00000
Facsimile Number: (000) 000-0000
/s/ XXXXXXX X. XXXXXX
----------------------------------
XXXXXXX X. XXXXXX
0 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Facsimile Number: (000) 000-0000
/s/ XXXXXXX X. XXXXXXXX
----------------------------------
XXXXXXX X. XXXXXXXX
x/x Xxxxxxxx, Xxxxxxx, Xxxxxx & Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Facsimile Number: (000) 000-0000
For purposes of Section 3.03(a)(iv)
/s/ J. XXXXXX XxXXXXX
----------------------------------
J. XXXXXX XxXXXXX
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile Number: (000) 000-0000
/s/ XXXXX X. XXXXXXX
----------------------------------
XXXXX X. XXXXXXX
000 Xxxx Xxxxxx Xxxxx, Xxx. 00X
Xxx Xxxx, XX 00000
Facsimile Number: (000) 000-0000
/s/ XXXXXXX X. XXXXXX
----------------------------------
XXXXXXX X. XXXXXX
0 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Facsimile Number: (000) 000-0000
