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Exhibit 1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
among
JOHNS MANVILLE CORPORATION,
HB MERGER LLC
and
HB FINANCE LLC
dated as of
June 22, 2000
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TABLE OF CONTENTS
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ARTICLE I THE MERGER ............................................................... 1
Section 1.1 The Merger .......................................................... 1
Section 1.2 Effective Time ...................................................... 2
Section 1.3 Closing ............................................................. 2
Section 1.4 Certificate of Incorporation; By-laws ............................... 2
Section 1.5 Directors and Officers of the Surviving Corporation and
Certain Subsidiaries ................................................ 3
ARTICLE II CONVERSION OF SHARES ..................................................... 3
Section 2.1 Conversion of Capital Stock ......................................... 3
Section 2.2 Exchange of Certificates ............................................ 4
Section 2.3 Company Awards ...................................................... 7
Section 2.4 Dissenter's Rights .................................................. 9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY ............................ 9
Section 3.1 Organization ........................................................ 9
Section 3.2 Capitalization ...................................................... 10
Section 3.3 Authorization; Validity of Agreement ................................ 11
Section 3.4 No Violations; Approvals ............................................ 11
Section 3.5 SEC Reports and Financial Statements ................................ 12
Section 3.6 Absence of Certain Changes .......................................... 13
Section 3.7 Absence of Undisclosed Liabilities .................................. 14
Section 3.8 Information in Disclosure Documents ................................. 14
Section 3.9 Employee Benefit Plans; ERISA ....................................... 15
Section 3.10 Litigation; Compliance with Law ..................................... 17
Section 3.11 Intellectual Property ............................................... 18
Section 3.12 Identified Contracts ................................................ 19
Section 3.13 Real Property ....................................................... 20
Section 3.14 Taxes ............................................................... 22
Section 3.15 Environmental Matters ............................................... 24
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Section 3.16 Labor Matters ....................................................... 27
Section 3.17 Required Vote by Company Stockholders ............................... 28
Section 3.18 Board Recommendation ................................................ 28
Section 3.19 Brokers ............................................................. 28
Section 3.20 Opinion of Financial Advisor ........................................ 28
Section 3.21 Injunction .......................................................... 28
Section 3.22 Annual Plan ......................................................... 28
Section 3.23 No Other Representations or Warranties .............................. 28
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF MERGER
COMPANY AND FINANCE COMPANY .............................................. 29
Section 4.1 Organization ........................................................ 29
Section 4.2 Capitalization ...................................................... 29
Section 4.3 Authorization; Validity of Agreement ................................ 29
Section 4.4 Consents and Approvals; No Violations ............................... 30
Section 4.5 Information in Disclosure Documents ................................. 30
Section 4.6 Financing ........................................................... 31
Section 4.7 Beneficial Ownership of Shares ...................................... 31
Section 4.8 Brokers ............................................................. 31
Section 4.9 Surviving Corporation after the Merger .............................. 32
Section 4.10 Employment Agreement ................................................ 32
Section 4.11 No Prior Activities ................................................. 32
Section 4.12 No Other Representations or Warranties .............................. 32
ARTICLE V COVENANTS ................................................................ 32
Section 5.1 Interim Operations of the Company ................................... 32
Section 5.2 Acquisition Proposals ............................................... 35
Section 5.3 Access to Information ............................................... 37
Section 5.4 Further Action; Commercially Reasonable Efforts ..................... 38
Section 5.5 Employee Benefits ................................................... 40
Section 5.6 Stockholders Meeting; Proxy Statement ............................... 42
Section 5.7 Directors' and Officers' Insurance and Indemnification .............. 43
Section 5.8 Environmental Assessments ........................................... 44
Section 5.9 Environmental Transfer Laws ......................................... 45
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Section 5.10 Solvency Letter ..................................................... 45
Section 5.11 Indemnity ........................................................... 45
Section 5.12 Listing for Surviving Corporation Preferred Stock ................... 46
Section 5.13 Stockholders Agreement .............................................. 47
Section 5.14 Exchange of Certain Company Common Stock ............................ 47
Section 5.15 Charter Amendment ................................................... 47
ARTICLE VI CONDITIONS ............................................................... 47
Section 6.1 Conditions to Each Party's Obligation to Effect the Merger .......... 47
Section 6.2 Conditions to the Obligation of the Company to Effect the Merger .... 48
Section 6.3 Conditions to Obligations of Merger Company to Effect the Merger .... 49
Section 6.4 Frustration of Closing Conditions ................................... 51
ARTICLE VII TERMINATION .............................................................. 51
Section 7.1 Termination ......................................................... 51
Section 7.2 Effect of Termination ............................................... 53
ARTICLE VIII MISCELLANEOUS ............................................................ 54
Section 8.1 Fees and Expenses ................................................... 54
Section 8.2 Amendment; Waiver ................................................... 56
Section 8.3 Survival ............................................................ 57
Section 8.4 Notices ............................................................. 57
Section 8.5 Interpretation ...................................................... 58
Section 8.6 Headings; Disclosure Letter ......................................... 60
Section 8.7 Counterparts ........................................................ 60
Section 8.8 Entire Agreement .................................................... 60
Section 8.9 Parties in Interest ................................................. 60
Section 8.10 Severability ........................................................ 60
Section 8.11 Governing Law ....................................................... 61
Section 8.12 Assignment .......................................................... 61
Section 8.13 Publicity ........................................................... 61
Section 8.14 Enforcement ......................................................... 61
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TABLE OF DEFINED TERMS
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1954 Code ...................................................................................... 23
accumulated funding deficiency ................................................................. 16
Acquisition Corp ............................................................................... 1
Acquisition Corp. Common Stock ................................................................. 3
Acquisition Proposal ........................................................................... 37
affiliates ..................................................................................... 58
Agreement ...................................................................................... 1
Antitrust Division ............................................................................. 39
Appraiser ...................................................................................... 45
Assertion ...................................................................................... 44
Assertion Against HB ........................................................................... 46
associates ..................................................................................... 58
Balance Sheets ................................................................................. 14
beneficial ownership ........................................................................... 58
beneficially owns .............................................................................. 31
Benefit Plans .................................................................................. 8
blue sky ....................................................................................... 12
Board .......................................................................................... 11
Bonus Plan ..................................................................................... 41
Business Day ................................................................................... 58
By-Laws ........................................................................................ 10
Capital Budget ................................................................................. 14
CERCLA ......................................................................................... 26
Certificate of Merger .......................................................................... 2
Certificates ................................................................................... 5
Charter Amendment .............................................................................. 1
Class TM Certificates .......................................................................... 4
Class TM Merger Consideration .................................................................. 4
Class TM Preferred Stock ....................................................................... 3
Class TM Shares ................................................................................ 3
Closing ........................................................................................ 2
Closing Date ................................................................................... 2
Code ........................................................................................... 15
Commitment Letters ............................................................................. 31
Common Stock Certificates ...................................................................... 3
Common Stock Merger Consideration .............................................................. 3
Company ........................................................................................ 1
Company Common Stock ........................................................................... 3
Company Employee ............................................................................... 41
Company Properties ............................................................................. 20
Company Property ............................................................................... 20
Company SEC Documents .......................................................................... 13
Company Trust Agreements ....................................................................... 20
Competition Laws ............................................................................... 39
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Confidentiality Agreement: ..................................................................... 38
controlled corporation ......................................................................... 23
Convertible Preferred Stock .................................................................... 10
Court .......................................................................................... 48
Cumulative Preferred Stock ..................................................................... 10
Deemed Shares .................................................................................. 8
Deferred Compensation Plans: ................................................................... 8
Deferred Stock ................................................................................. 8
Delaware Act ................................................................................... 1
Designated Settlement Fund ..................................................................... 24
DGCL ........................................................................................... 1
Disclosure Letter .............................................................................. 7
Dissenting Shares .............................................................................. 9
distributing corporation ....................................................................... 23
EBITDA ......................................................................................... 58
Effective Time ................................................................................. 2
Elected Deemed Share ........................................................................... 9
Elected Deferred Share ......................................................................... 8
Election Form .................................................................................. 8
employee benefit plan .......................................................................... 15, 16
Environmental Claim ............................................................................ 26
Environmental Costs and Liabilities ............................................................ 26
Environmental Laws ............................................................................. 26
Environmental Property Transfer Laws ........................................................... 27
ERISA .......................................................................................... 15
ERISA Affiliate ................................................................................ 15
ERISA Plan ..................................................................................... 16
Exchange Act ................................................................................... 12
Exchange Agent ................................................................................. 4
Exchange Fund .................................................................................. 5
Expenses ....................................................................................... 54
Finance Company ................................................................................ 1
Foreign Plan ................................................................................... 17
Fractional Securities Fund ..................................................................... 7
Free Cash Flow ................................................................................. 58
FTC ............................................................................................ 39
GAAP ........................................................................................... 13
Good Reason .................................................................................... 17
Governmental Entity ............................................................................ 12
Hazardous Substance ............................................................................ 27
HSR Act ........................................................................................ 39
Identified Contracts ........................................................................... 19
include ........................................................................................ 58
includes ....................................................................................... 58
including ...................................................................................... 58
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Indemnified Liability .......................................................................... 43
Indemnified Litigation Matter .................................................................. 46
Indemnified Merger Parties ..................................................................... 46
Indemnified Merger Party ....................................................................... 46
Indemnified Parties ............................................................................ 43
Indemnified Party .............................................................................. 43
Indemnitors .................................................................................... 44
Intellectual Property .......................................................................... 18
interest similar to an option .................................................................. 23
Leased Properties .............................................................................. 20
Leased Property ................................................................................ 20
Liens .......................................................................................... 11
made available ................................................................................. 58
Management ..................................................................................... 59
mass layoff .................................................................................... 27
Material Adverse Effect ........................................................................ 59
Merger ......................................................................................... 1
Merger Company Membership Interests ............................................................
Merger Consideration ........................................................................... 4
Merger Party Indemnitor ........................................................................ 45
MF Disclosure Letter ........................................................................... 3
multiemployer pension plan ..................................................................... 16
not stock ...................................................................................... 23
Option ......................................................................................... 7
Option Plans ................................................................................... 7
Owned Properties ............................................................................... 20
Owned Property ................................................................................. 20
PBGC ........................................................................................... 16
Permitted Exceptions ........................................................................... 59
Person ......................................................................................... 60
Plans .......................................................................................... 15
plant closing .................................................................................. 27
Proxy Statement: ............................................................................... 42
qualified ...................................................................................... 16
RCRA ........................................................................................... 26
Real Property Lease ............................................................................ 20
Real Property Leases ........................................................................... 20
Release ........................................................................................ 27
Reorganization Plan ............................................................................ 28
Required Vote .................................................................................. 28
Restated Certificate of Incorporation .......................................................... 2
Return ......................................................................................... 23
S-4 ............................................................................................ 14
SAR ............................................................................................ 7
SEC: ........................................................................................... 12
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Secretary of State ............................................................................. 2
Securities Act: ................................................................................ 12
Shares ......................................................................................... 3, 4
single employer ................................................................................ 15
Solvency Letter ................................................................................ 45
Special Meeting ................................................................................ 42
Spread ......................................................................................... 7
Subsidiaries ................................................................................... 60
Superior Proposal .............................................................................. 37
Surviving Corporation .......................................................................... 1
Surviving Corporation Common Stock ............................................................. 4
Surviving Corporation Junior Preferred Stock ................................................... 4
Surviving Corporation Preferred Stock .......................................................... 3
Tax ............................................................................................ 23
Tax Matters Agreement .......................................................................... 60
Taxes .......................................................................................... 23
Termination Fee ................................................................................ 54
TM Exchange Agreement .......................................................................... 47
Trust .......................................................................................... 1
Trust Merger Agreements ........................................................................ 48
Trust Voting Agreement ......................................................................... 1
U.S. real property holding corporation ......................................................... 23
without limitation ............................................................................. 58
Year ........................................................................................... 41
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AGREEMENT AND PLAN OF MERGER
----------------------------
AGREEMENT AND PLAN OF MERGER, among Johns Manville
Corporation, a Delaware corporation (the "Company"), HB Merger LLC, a Delaware
limited liability company ("Merger Company"), and HB Finance LLC, a Delaware
limited liability company ("Finance Company"), dated as of June 22, 2000 (the
"Agreement").
WHEREAS, the respective members or Boards of Directors, as the
case may be, of Merger Company, Finance Company and the Company have approved
this Agreement and deemed this Agreement to be advisable and have approved the
transactions contemplated hereby, including the recapitalization of the Company
through the merger of Merger Company with and into the Company (the "Merger") in
accordance with the terms of this Agreement, the General Corporation Law of the
State of Delaware (the "DGCL") and the Delaware Limited Liability Company Act
(the "Delaware Act"); and
WHEREAS, the Board (as defined herein) has approved the form
of Amendment to the Company's Restated Certificate of Incorporation attached as
Exhibit A hereto (the "Charter Amendment") and determined it to be advisable;
and
WHEREAS, contemporaneously with the execution and delivery of
this Agreement, as a condition and an inducement to the willingness of Merger
Company to enter into this Agreement, Merger Company is entering into a voting
agreement (the "Trust Voting Agreement") with Manville Personal Injury
Settlement Trust (the "Trust"), pursuant to which, on the terms and subject to
the conditions thereof, the Trust has agreed to vote in favor of the adoption of
this Agreement and approval of the transactions contemplated hereby, including
the Charter Amendment;
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, the parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the
conditions of this Agreement and in accordance with the DGCL and the Delaware
Act, at the Effective Time (as defined in Section 1.2 hereof), Merger Company
shall be merged with and into the Company. Upon the Merger, the separate
existence of Merger Company shall cease and the Company shall continue as the
surviving corporation (sometimes hereinafter referred to as the "Surviving
Corporation"). The Merger shall have the effect as provided in the applicable
provisions of the DGCL and the Delaware Act. Without
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limiting the generality of the foregoing, upon the Merger, all the rights,
privileges, immunities, powers and franchises of the Company and Merger Company
shall vest in the Surviving Corporation and all obligations, duties, debts and
liabilities of the Company and Merger Company shall be the obligations, duties,
debts and liabilities of the Surviving Corporation.
Section 1.2 Effective Time. Subject to the provisions of this
Agreement, on the Closing Date (as defined in Section 1.3 below), Merger Company
and the Company will cause an appropriate Certificate of Merger (the
"Certificate of Merger") to be executed and filed with the Secretary of State of
the State of Delaware (the "Secretary of State") in such form and executed as
provided in the DGCL and the Delaware Act. The Merger shall become effective on
the date and at the time when the Certificate of Merger has been duly filed with
the Secretary of State or, subject to the DGCL and the Delaware Act, such time
as is agreed upon by the parties and specified in the Certificate of Merger, and
such time is hereinafter referred to as the "Effective Time."
Section 1.3 Closing. Unless this Agreement shall have been
terminated and the transactions contemplated herein abandoned pursuant to
Section 7.1 and subject to the satisfaction or waiver of the conditions set
forth in Article VI, the closing of the Merger (the "Closing") will take place
at 10:00 a.m., New York city time, on a date to be specified by the parties,
which shall be no later than the second Business Day (as defined in Section 8.5)
after satisfaction or waiver (by the party entitled to waive the condition) of
all of the conditions set forth in Article VI hereof (except for the conditions
set forth in Sections 6.1(a) and 6.1(f) which cannot be waived and those
conditions that by their nature cannot be satisfied until the Closing, but
subject to all such conditions having been satisfied or waived at the time of
the Closing) (the "Closing Date"), at the offices of Skadden, Arps, Slate,
Meagher & Flom LLP, Four Times Square, New York, New York 10036, unless another
date and/or place is agreed to in writing by the parties hereto.
Section 1.4 Certificate of Incorporation; By-laws. Pursuant to
the Merger, (i) the Restated Certificate of Incorporation of the Company, as
amended (the "Restated Certificate of Incorporation"), as in effect immediately
prior to the Merger shall be amended and restated in its entirety in the form
attached as Exhibit B hereto (including the terms of the Surviving Corporation
Preferred Stock (as defined in Section 2.1(a) below) attached thereto as Annex A
and the terms of the Surviving Corporation Junior Preferred Stock (as defined in
Section 2.1(b) below) attached thereto as Annex B), and as so amended shall be
the certificate of incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law, and (ii) the
by-laws of the Company, attached as Exhibit C hereto, shall be the by-laws of
the Surviving Corporation until thereafter changed or amended as provided
therein or by applicable law.
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Section 1.5 Directors and Officers of the Surviving
Corporation and Certain Subsidiaries.
(a) The persons listed on Section 1.5(a) of the
disclosure letter separately delivered by Merger Company and Finance Company to
the Company on or prior to the date hereof (the "MF Disclosure Letter") shall,
from and after the Effective Time, be the directors of the Surviving Corporation
until their successors shall have been duly elected or appointed and qualified
or until their earlier death, resignation or removal in accordance with the
Surviving Corporation's certificate of incorporation and by-laws.
(b) The officers of the Company immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation and
shall hold office until their respective successors are duly elected and
qualified, or their earlier death, resignation or removal.
ARTICLE II
CONVERSION OF SHARES
Section 2.1 Conversion of Capital Stock. At the Effective
Time, by virtue of the Merger and without any action on the part of the Company,
Merger Company, the holders of any shares of common stock, par value $.01 per
share, of the Company (referred to herein as "Common Shares" or "Company Common
Stock"), the holders of any shares of the Company Class TM Preferred Stock, par
value $.01 per share (referred to herein as "Class TM Shares" or "Class TM
Preferred Stock"), or the holders of any membership interests of Merger Company
(the "Merger Company Membership Interests"):
(a) Each issued and outstanding share of Company Common
Stock (other than Common Shares to be cancelled in accordance with Section
2.1(d) and the Dissenting Shares covered by Section 2.4) shall be converted into
the right to receive, payable upon surrender of the certificate or certificates
which immediately prior to the Effective Time represented issued and outstanding
shares of Company Common Stock (the "Common Stock Certificates") in the manner
provided in Section 2.2, $13.625 per share in cash, payable to the holder
thereof without interest, and 0.02 of a fully paid and nonassessable share of
Series A Redeemable PIK Preferred Stock, par value $.01 per share, of the
Surviving Corporation, the terms of which are set forth in Annex A of Exhibit B
hereto (the "Surviving Corporation Preferred Stock"). Such consideration is
referred to herein as the "Common Stock Merger Consideration." All such shares
of Company Common Stock, when so converted, shall no longer be outstanding and
shall automatically be cancelled and retired and shall cease to exist, and each
holder of a Common Stock Certificate shall cease to have any rights with respect
thereto, except the right to receive the Common Stock Merger Consideration for
each share of Company Common Stock upon the surrender of such certificate in
accordance with Section 2.2.
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Any payment made pursuant to this Section 2.1(a) shall be made net of applicable
withholding taxes to the extent such withholding is required by law.
(b) Each issued and outstanding share of Class TM
Preferred Stock, the terms of which are set forth in Exhibit A hereto shall be
converted at the Effective Time into the right to receive, payable upon
surrender of the certificate or certificates which immediately prior to the
Effective Time represented issued and outstanding shares of Class TM Preferred
Stock (the "Class TM Certificates") in the manner provided in Section 2.2, 0.6
of a fully paid and nonassessable share of common stock of the Surviving
Corporation (the "Surviving Corporation Common Stock") and 0.4 of a fully paid
and nonassessable share of Series B Junior Redeemable Convertible Preferred
Stock, par value $.01 per share, of the Surviving Corporation, the terms of
which are set forth in Annex B to Exhibit B hereto (the "Surviving Corporation
Junior Preferred Stock"). Such consideration is referred to herein as the "Class
TM Merger Consideration", and references to such consideration or the Common
Stock Merger Consideration, as applicable, are referred to hereby as the "Merger
Consideration". All such Class TM Shares, when so converted, shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to
exist, and each holder of a Class TM Certificate shall cease to have any rights
with respect thereto, except the right to receive the Class TM Merger
Consideration for each share of Class TM Preferred Stock upon the surrender of
the Class TM Certificates in accordance with Section 2.2. Any payment made
pursuant to this Section 2.1(b) shall be made net of applicable withholding
taxes to the extent such withholding is required by law.
(c) Each issued and outstanding Merger Company Membership
Interest shall be converted into and become 0.6 of a fully paid and
nonassessable share of Surviving Corporation Common Stock and 0.4 of a fully
paid and nonassessable share of Surviving Corporation Junior Preferred Stock.
(d) All shares of Company Common Stock that are held by
the Company as treasury stock and all shares of Company Common Stock owned by
Merger Company or any Subsidiary of Merger Company shall be cancelled and
retired and shall cease to exist and no Merger Consideration shall be delivered
in exchange therefor.
Section 2.2 Exchange of Certificates.
(a) At least five Business Days prior to the Effective
Time, Merger Company shall designate the Company's registrar and transfer agent,
or such other bank or trust company as is reasonably satisfactory to the
Company, to act as exchange agent for the holders of Common Shares and Class TM
Shares (collectively, the "Shares") in connection with the Merger, pursuant to
an agreement providing for the matters set forth in this Section 2.2 and such
other matters as may be appropriate and the terms of which are reasonably
satisfactory to the Company (the "Exchange Agent"), for the payment of the
applicable Merger Consideration. Immediately prior to the Effective Time,
Finance Company and the Company will cause to be deposited in trust with the
Exchange Agent for the benefit of holders of the Shares, as applicable, (i) the
amount of cash, (ii)
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certificates representing the number of whole shares of Surviving Corporation
Preferred Stock, (iii) certificates representing the number of whole shares of
Surviving Corporation Junior Preferred Stock and (iv) certificates representing
the number of whole shares of Surviving Corporation Common Stock necessary to
complete the transactions contemplated by this Section 2.2 on a timely basis
(the "Exchange Fund").
At the Effective Time, the Surviving Corporation will instruct
the Exchange Agent to promptly, and in any event not later than three Business
Days following the Effective Time, mail (and to make available for collection by
hand) to each holder of record of Common Stock Certificates or Class TM
Certificates (collectively, the "Certificates"), whose shares were converted
pursuant to Section 2.1 into the right to receive the applicable Merger
Consideration (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to such Certificates shall pass,
only upon delivery of such Certificates to the Exchange Agent and shall be in
such form and have such other provisions as Merger Company and the Company may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for payment of the applicable Merger Consideration
(which shall provide that, at the election of the surrendering holder,
Certificates may be surrendered, and the applicable Merger Consideration
therefor collected, by hand delivery). At least two Business Days prior to the
Effective Time, Merger Company will cause the Exchange Agent to make available
for collection by hand at its offices in New York, New York, the letter of
transmittal and instructions referred to in the immediately preceding sentence.
Upon surrender of a Certificate for cancellation to the Exchange Agent or to
such other agent or agents as may be appointed by the Company, together with
such letter of transmittal, duly executed, the holder of such Certificate shall
be entitled to receive in exchange therefor the applicable Merger Consideration
for each share of Company Common Stock or Class TM Preferred Stock, as the case
may be, formerly represented by such Certificate, to be mailed within three
Business Days of receipt thereof (and made available for collection by hand
immediately following the Effective Time if the completed letter of transmittal
is received at least one Business Day prior to the Effective Time), and the
Certificate so surrendered shall forthwith be cancelled. If payment of the
applicable Merger Consideration is to be made to a person or stock certificates
are to be issued to a person other than the person in whose name the surrendered
Certificate is registered, it shall be a condition of payment or issuance that
the Certificate so surrendered shall be properly endorsed or shall be otherwise
in proper form for transfer and that the person requesting such payment shall
have paid any transfer and other taxes required by reason of the payment of the
applicable Merger Consideration to a person other than the registered holder of
the Certificate surrendered or shall have established to the satisfaction of the
Surviving Corporation that such tax either has been paid or is not applicable.
In the event of a transfer of ownership of Company Common Stock which is not
registered in the transfer records of the Company, the applicable Merger
Consideration and a check in the proper amount of cash in lieu of any fractional
shares of Surviving Corporation Preferred Stock pursuant to Section 2.2(d) and
any dividends or other distributions to which such holder is entitled, may be
issued with respect to such Company Common Stock to such a transferee if the
Certificates representing such
5
<PAGE> 14
Company Common Stock are presented to the Exchange Agent (or if lost, stolen or
destroyed, the procedures set forth in Section 2.2(e) are complied with),
accompanied by all documents required to evidence and effect such transfer and
to evidence that any applicable stock transfer taxes have been paid.
(b) Until surrendered as contemplated by this Section
2.2, each Certificate (other than Certificates representing Company Common Stock
held by Merger Company, or any Subsidiary of Merger Company, or Dissenting
Shares (as defined in Section 2.4)) shall be deemed at any time after the
Effective Time to represent only the right to receive the applicable Merger
Consideration as contemplated by this Section 2.2. No interest or dividends
shall be paid or will accrue on any Merger Consideration payable to holders of
Certificates pursuant to the provisions of this Article II (other than
dividends, if any, accruing on the Surviving Corporation Preferred Stock,
Surviving Corporation Junior Preferred Stock or Surviving Corporation Common
Stock from the Effective Time pursuant to the terms thereof).
Notwithstanding the foregoing, neither the Exchange Agent nor
any party hereto shall be liable to a holder of any such shares for any
Surviving Corporation Preferred Stock, Surviving Corporation Junior Preferred
Stock or Surviving Corporation Common Stock or dividends thereon, or, in
accordance with Section 2.2(d), cash in lieu of fractional shares thereof,
delivered to a public official pursuant to applicable escheat law. The Exchange
Agent shall not be entitled to vote or exercise any rights of ownership with
respect to the Surviving Corporation Preferred Stock, Surviving Corporation
Junior Preferred Stock or Surviving Corporation Common Stock held by it from
time to time hereunder, except that it shall receive and hold all dividends or
other distributions paid or distributed with respect to such Surviving
Corporation Preferred Stock, Surviving Corporation Junior Preferred Stock and
Surviving Corporation Common Stock for the account of the persons entitled
thereto.
(c) Any portion of the Exchange Fund and the Fractional
Securities Fund (as defined in Section 2.2(d)) which remains unclaimed by the
former stockholders of the Company for one year after the Effective Time shall
be delivered to Surviving Corporation, upon demand of Surviving Corporation, and
any former stockholders of the Company shall thereafter look only to Surviving
Corporation for payment of their claim for the Merger Consideration for the
shares or for any cash in lieu of fractional shares of Surviving Corporation
Preferred Stock, Surviving Corporation Junior Preferred Stock or Surviving
Corporation Common Stock.
(d) No fractional shares of Surviving Corporation
Preferred Stock, Surviving Corporation Junior Preferred Stock or Surviving
Corporation Common Stock shall be issued in the Merger. Each holder of shares of
Surviving Corporation Preferred Stock, Surviving Corporation Junior Preferred
Stock or Surviving Corporation Common Stock to which such holder otherwise would
have been entitled pursuant to Section 2.2 (after taking into account all Shares
then held of record by such holder) shall receive in lieu thereof, a cash
payment in an amount equal to the product of (i) in the case of Surviving
Corporation Preferred Stock the fractional interest of each such share to which
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such holder otherwise would have been entitled, multiplied by $100 and (ii) in
the case of Surviving Corporation Junior Preferred Stock or Surviving
Corporation Common Stock, as applicable, the fractional interest of each such
share to which such holder otherwise would have been entitled, multiplied by
$15.625 (the cash comprising such aggregate payments in lieu of such fractional
shares being hereinafter referred to as the "Fractional Securities Fund"). The
Company shall, immediately prior to the Effective Time, make available to the
Exchange Agent cash in an amount sufficient to make the payments in lieu of such
fractional shares as aforesaid.
(e) In the event any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the Person
(as defined in Section 8.5) claiming such Certificate to be lost, stolen or
destroyed, the Exchange Agent will issue in exchange for such lost, stolen or
destroyed Certificate the applicable Merger Consideration deliverable in respect
thereof as determined in accordance with this Article II, provided that the
Person to whom the Merger Consideration is paid shall, as a condition precedent
to the payment thereof, give the Surviving Corporation a bond in such sum as the
Surviving Corporation may direct or otherwise indemnify the Surviving
Corporation in a manner satisfactory to it against any claim that may be made
against the Surviving Corporation with respect to the Certificate claimed to
have been lost, stolen or destroyed.
(f) After the Effective Time, the stock transfer books of
the Company shall be closed and there shall be no transfers on the stock
transfer books of the Surviving Corporation of shares of Company Common Stock
and Class TM Preferred Stock which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
Surviving Corporation, they shall be cancelled and exchanged for the Merger
Consideration as provided in this Article II, subject to Section 262 of the
DGCL.
Section 2.3 Company Awards.
(a) Immediately prior to the Effective Time, each
outstanding option (each, an "Option") to purchase shares of Company Common
Stock (other than Elected Management Options as defined in Section 2.3(c) below)
and each outstanding stock appreciation right with respect to Company Common
Stock (each, an "SAR") granted by the Company pursuant to the Company's benefit
plans (the "Option Plans") identified in Section 2.3 of the disclosure letter
separately delivered by the Company to Merger Company and Finance Company on or
prior to the date hereof (the "Disclosure Letter"), whether or not exercisable,
which is outstanding and unexercised at such time, shall be cancelled and each
holder thereof shall be entitled to receive, immediately prior to the Effective
Time, an amount in cash computed by multiplying (i) the excess, if any, of (A)
the greater of (x) $15.625 and (y) the highest Fair Market Value (as defined in
the Company's 1996 Executive Incentive Compensation Plan) per Common Share at
any time during the 60-day period preceding the Effective Time, over (B) the
exercise price per share of Company Common Stock subject to such Option or grant
price per share in respect of such SAR, as applicable (the "Spread"), by (ii)
the number of such shares of
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<PAGE> 16
Company Common Stock then subject to such Option or SAR; provided, that any such
payment shall be net of all withholding taxes required to be withheld by the
Company.
(b) Immediately prior to the Effective Time, each share
of deferred stock ("Deferred Stock") awarded under the Option Plans (other than
an Elected Deferred Share as defined in Section 2.3(c) below) shall be cancelled
and each holder thereof shall be entitled to receive, immediately prior to the
Effective Time, with respect to each share of Deferred Stock so cancelled, an
amount in cash equal to the greater of (x) $15.625 and (y) the highest Fair
Market Value (as defined in the Company's 1996 Executive Incentive Plan) per
share of Company Common Stock at any time during the 60-day period preceding the
Effective Time (net of all withholding taxes required to be withheld by the
Company).
(c) (i) Each member of Management (as defined in Section
8.5(iii)) shall have the right to elect, prior to the Special Meeting, pursuant
to an election form reasonably acceptable to the parties ("Election Form"),
that, in lieu of receiving the Spread, with respect to each Option owned by such
member of Management for which an election is made, the Spread on such option
will be converted into the right to receive (i) that number of shares of
Surviving Corporation Common Stock equal to the product of (a) the Spread
divided by $15.625 and (b) 0.6 and (ii) that number of shares of Surviving
Corporation Junior Preferred Stock equal to the product of (x) the Spread
divided by $15.625 and (y) 0.4, in each case on the terms and conditions set
forth in the applicable Election Form; provided, that any such payment shall be
net of all withholding taxes required to be withheld by the Company.
(ii) Each member of Management shall have the right to
elect, prior to the Special Meeting, that, in lieu of receiving the
corresponding cash payment as set forth in Section 2.3(b) with respect to each
share of Deferred Stock owned by such member (each share for which an election
is made, an "Elected Deferred Share"), such Elected Deferred Share be converted
into the Class TM Merger Consideration, on the terms and subject to the
conditions set forth in this Section 2.3(c) and the applicable election form.
(d) Immediately prior to the Effective Time, (i) each
unit in the Company Deferred Compensation Plan deemed invested in assets other
than in Company Common Stock shall be converted into the right to receive cash
in an amount equal to the value of such unit, payable to the holder thereof
without interest, and (ii) each unit deemed invested in shares of Company Common
Stock in the Deferral Account (as defined in the Company's Deferred Compensation
Plan and the Non-Employee Directors' Deferred Compensation Plan (together, the
"Deferred Compensation Plans") (together with the Option Plans, the "Benefit
Plans")), including those Deferral Accounts with respect to which one or more
installment payments have previously been made, shall be settled in a cash
amount equal to $15.625 per share provided that any such payment shall be net of
all withholding taxes required to be withheld by the Company. To the extent
that, at the Effective Time, a member of Management has any portion of his
Deferral Account deemed invested in shares of the Company Common Stock (the
"Deemed Shares"), such member shall have the right to elect, prior to the
Special
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<PAGE> 17
Meeting, pursuant to an election form that, in lieu of receiving a cash payment
set forth in the Deferred Compensation Plan with respect to each Deemed Share
owned by such member (each, an "Elected Deemed Share"), that such Elected Deemed
Share will be converted into the Class TM Merger Consideration, on the terms and
subject to the conditions set forth in this Section 2.3(d) and the applicable
election form (net of all withholding taxes required to be withheld by the
Company).
Notwithstanding anything in this Section 2.3 to the contrary,
in no event will the Company have an obligation hereunder that violates the
terms of the applicable Benefit Plans. Prior to the Effective Time, the Company
shall use its commercially reasonable efforts to (i) obtain all required
consents from, and provide any required notices to, the holders of Options and
Deferred Stock and (ii) amend the terms of the applicable Benefit Plans, in each
case as is necessary to give effect to the provisions of paragraphs (a), (b),
(c) and (d) of this Section 2.3; provided however, that the Company shall not be
required to make any payment in respect of the foregoing (other than as set
forth in Sections 2.3(a), (b), (c) and (d)).
Section 2.4 Dissenter's Rights. Notwithstanding anything in
this Agreement to the contrary, Common Shares outstanding immediately prior to
the Effective Time and held by a holder who has not voted in favor of the Merger
and who has delivered a written demand for appraisal of such shares in
accordance with Section 262 of the DGCL, if such Section 262 provides for
appraisal rights for such Common Shares in the Merger ("Dissenting Shares"),
shall not be converted into the right to receive the Common Stock Merger
Consideration, as provided in Section 2.1 hereof, unless and until such holder
fails to perfect or effectively withdraws or otherwise loses his right to
appraisal and payment under the DGCL. If, after the Effective Time, any such
holder fails to perfect or effectively withdraws or loses his right to
appraisal, such Dissenting Shares shall thereupon be treated as if they had been
converted as of the Effective Time into the right to receive the Common Stock
Merger Consideration to which such holder is entitled, without interest or
dividends thereon (except dividends in respect of the Surviving Corporation
Preferred Stock).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Merger Company and
Finance Company that:
Section 3.1 Organization. Each of the Company and its
Subsidiaries (as defined in Section 8.5(vii)) is a corporation or other entity
duly incorporated or organized, as the case may be, validly existing, and in
good standing (but, with respect to Subsidiaries not organized in the United
States, only to the extent such concept is applicable) under the laws of the
jurisdiction of its incorporation or organization, has all requisite corporate
power and authority to own, lease and operate its properties and to
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<PAGE> 18
carry on its business as it is now being conducted, and is qualified or licensed
to do business as a foreign corporation and is in good standing in each
jurisdiction in which the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure to be so
organized, existing and in good standing or to have such power and authority, or
to be so qualified or licensed would not have a Material Adverse Effect (as
defined in Section 8.5(iv)). The Company has previously delivered to Merger
Company a complete and correct copy of each of its Restated Certificate of
Incorporation and by-laws, as currently in effect (the "By-Laws").
Section 3.2 Capitalization.
(a) The authorized capital stock of the Company consists
of 300,000,000 shares of Company Common Stock, 7,200,000 shares of Convertible
Preferred Stock, Series A, par value $1.00 per share (the "Convertible Preferred
Stock") and 11,109,170 shares of Cumulative Preference Stock, Series B, par
value $1.00 per share (the "Cumulative Preferred Stock") and prior to the
Effective Time will also consist of 5,000,000 shares of Class TM Preferred
Stock. As of the date hereof, (i) 147,699,913 shares of Company Common Stock are
issued and outstanding, (ii) 17,013,046 shares of Company Common Stock are
issued and held in the treasury of the Company, and (iii) there are no shares of
Convertible Preferred Stock or Cumulative Preferred Stock issued and outstanding
or held in treasury and (iv) 12,804,482 shares of Company Common Stock are
reserved for issuance upon exercise of Options, SARs or Deferred Stock under the
Option Plans or Deferred Compensation Plans. No bonds, debentures, notes or
other indebtedness having the right to vote (or convertible into or exchangeable
for securities having the right to vote) on any matters on which stockholders of
the Company may vote are issued or outstanding. All the outstanding shares of
the Company's capital stock are, and all shares of Class TM Preferred Stock and
all shares which may be issued or granted pursuant to the exercise of Options,
SARs, or Deferred Stock will be, when issued or granted in accordance with the
respective terms thereof, duly authorized, validly issued, fully paid and
non-assessable. Except as set forth in Section 3.2(a) of the Disclosure Letter
as of the date hereof and for the transactions contemplated hereby, there are no
existing (i) options, warrants, calls, pre-emptive rights, subscriptions or
other rights, convertible securities, agreements or commitments of any character
obligating the Company or any of its Subsidiaries to issue, transfer or sell any
shares of capital stock or other equity interest in, the Company or any of its
Subsidiaries or securities convertible into or exchangeable for such shares or
equity interests, (ii) contractual obligations of the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any capital stock of the
Company or any Subsidiary of the Company or (iii) voting trusts or similar
agreements to which the Company is a party with respect to the voting of the
capital stock of the Company. Schedule 3.2 (a) of the Disclosure Letter sets
forth (A) with respect to each Option, Deferred Stock or other such rights or
obligations referred to in this Section 3.2(a) owned by a director-level
employee or higher, including with respect to each Option owned by a
director-level employee or higher, the name of the holder thereof, the number of
securities or underlying securities associated therewith, the exercise or strike
price associated therewith, the vesting
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<PAGE> 19
schedule, if any, the termination date thereof and any other pricing information
relating thereto and (B) the aggregate number of securities or underlying
securities associated therewith and the price terms with respect to all other
Options, SARs, Deferred Stock or other such rights or obligations referred to in
this Section 3.2(a).
(b) Except as set forth in Section 3.2(b) of the
Disclosure Letter, all of the outstanding shares of capital stock (or equivalent
equity interests of entities other than corporations) of each of the Company's
Subsidiaries are beneficially owned, directly or indirectly, by the Company free
and clear of any mortgage, lien, pledge, charge, encumbrance or other security
interest (including any restriction on the right to vote, sell or otherwise
dispose of such capital stock or ownership interests) (collectively, "Liens"),
other than such restrictions as may exist under applicable statute and all such
shares or other ownership interests have been duly authorized, validly issued
and are fully paid and non-assessable.
Section 3.3 Authorization; Validity of Agreement.
(a) The Company has the requisite corporate power and
authority to execute and deliver this Agreement and, subject to approval of its
stockholders as contemplated by Section 5.6 hereof, to consummate the
transactions contemplated hereby. The execution and delivery by the Company of
this Agreement and the consummation of the transactions contemplated hereby have
been duly approved and authorized by the Board of Directors of the Company (the
"Board") and, other than adoption of this Agreement by the holders of a majority
of the outstanding shares of Company Common Stock, no other corporate
proceedings on the part of the Company are necessary to approve and authorize
the execution and delivery of this Agreement and approval of the Charter
Amendment by the Company and the consummation by it of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Company and, assuming due authorization, execution and delivery of this
Agreement by Merger Company and Finance Company, is a valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except that such enforcement may be subject to or limited by (i)
bankruptcy, insolvency or other similar laws, now or hereafter in effect,
affecting creditors' rights generally, and (ii) the effect of general principles
of equity (regardless of whether enforceability is considered in a proceeding at
law or in equity).
(b) The Board has adopted such resolutions as are
necessary so that the provisions of Section 203 of the DGCL are inapplicable to
the transactions contemplated by this Agreement.
Section 3.4 No Violations; Approvals.
(a) Neither the execution and delivery of this Agreement
by the Company nor the consummation by the Company of the transactions
contemplated hereby will (i) violate any provision of the Restated Certificate
of Incorporation or By-laws of the Company or violate any provision of the
certificate of incorporation or
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<PAGE> 20
bylaws (or other organizational documents with respect to non-incorporated
entities) of its Subsidiaries, (ii) except as set forth in Section 3.4(a) of the
Disclosure Letter, result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, amendment, cancellation, acceleration or the creation of a
Lien, other than a Permitted Exception, pursuant to), or require any consent of
any third party pursuant to, any of the terms, conditions or provisions of any
material note, bond, mortgage, indenture, guarantee, other evidence of
indebtedness, lease, license, contract, collective bargaining agreement,
agreement or other instrument or obligation to which the Company or any of its
Subsidiaries is a party or by which any of them or any of their assets may be
bound or (iii) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Company, any of its Subsidiaries or any of their
properties or assets; except in the case of clauses (ii) or (iii) for such
violations, breaches, defaults, rights, creation of Liens or failure to obtain
consents which would not have a Material Adverse Effect.
(b) No filing or registration with, notification to, or
authorization, consent or approval of, any court, legislative, executive or
regulatory authority or agency (a "Governmental Entity") is legally required in
connection with the execution and delivery of this Agreement by the Company or
the consummation by the Company of the transactions contemplated hereby, except
(i) applicable requirements under Competition Laws (as defined in Section
5.4(c)), (ii) with respect to the issuance of Surviving Corporation Common
Stock, Surviving Corporation Preferred Stock and Surviving Corporation Junior
Preferred Stock in the Merger, the applicable requirements under the Securities
Act of 1933, as amended (the "Securities Act"), (iii) applicable requirements
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (iv)
the filing of the Certificate of Merger with the Secretary of State, including
the amendments to the Restated Certificate of Incorporation that will become
effective as of the Effective Time set forth in Exhibit B hereto, and the
Charter Amendment, (v) applicable requirements under corporation, takeover or
"blue sky" laws of various states or non-United States change-in-control or
investment laws or regulations, (vi) applicable requirements under Environmental
Laws (as defined in Section 3.15) and (vii) such other consents, approvals,
orders, permits, authorizations, notifications, registrations, declarations and
filings the failure of which to be obtained or made would not either
individually, or in the aggregate, have a Material Adverse Effect.
Section 3.5 SEC Reports and Financial Statements. The Company
has filed with the Securities and Exchange Commission (the "SEC") all forms and
documents required to be filed by it since January 1, 1997 under the Exchange
Act and has heretofore made available to Merger Company (i) its Annual Reports
on Form 10-K for the years ended December 31, 1997, December 31, 1998 and
December 31, 1999, respectively, (ii) all proxy statements relating to meetings
of stockholders of the Company since January 1, 1997 (in the form mailed to
stockholders), (iii) its quarterly report on Form 10-Q for the quarter ended
March 31, 2000, and (iv) all other forms, reports and registration statements
filed by the Company with the SEC since January 1, 1997 (other than registration
statements on Form S-8 or preliminary materials and
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<PAGE> 21
registration statements in forms not declared effective). The documents
described in clauses (i)-(iv) above, as amended, are referred to in this
Agreement collectively as the "Company SEC Documents". As of their respective
dates, the Company SEC Documents, including the financial statements and
schedules provided therein or incorporated by reference therein, (a) did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading and (b) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act, as the case may be, and
the applicable rules and regulations of the SEC thereunder. The consolidated
financial statements included or incorporated by reference in the Company SEC
Documents have been prepared in accordance with United States generally accepted
accounting principles ("GAAP") applied on a consistent basis during the periods
involved (except as otherwise noted therein and except that the quarterly
financial statements are subject to year end adjustment and do not contain all
footnote disclosures required by GAAP) and fairly present in all material
respects the consolidated financial position and the consolidated results of
operations and cash flows of the Company and its consolidated Subsidiaries as at
the dates thereof or for the periods presented therein.
Section 3.6 Absence of Certain Changes. Except as disclosed in
the Company SEC Documents or as disclosed in Section 3.6 of the Disclosure
Letter, from March 31, 2000 until the date of this Agreement, (i) the Company
and its Subsidiaries have conducted their operations in the ordinary course,
(ii) there has not been a Material Adverse Effect and (iii) the Company and its
Subsidiaries have not taken any of the following actions:
(a) declared, set aside or paid (other than dividends
paid by Subsidiaries to the Company or other wholly-owned Subsidiaries of the
Company) any dividend or other distribution payable in cash, stock or property
with respect to its capital stock, other than regular quarterly dividends
consistent with past practice;
(b) incurred any material indebtedness for money borrowed
or issued or sold any debt securities or warrants or rights to acquire any debt
securities of the Company or its Subsidiaries or guaranteed any material
indebtedness for money borrowed other than under credit facilities in the
ordinary course of business and other than borrowings in the ordinary course of
business that can be repaid at any time without prepayment penalty or other
similar fees;
(c) granted any material increase in the fringe benefits
or compensation payable or to become payable by the Company to any officer or
director of the Company, except for normal increases in the ordinary course of
business consistent with past practice or to reflect promotions or new hires;
(d) entered into any significant new line of business
outside of the buildings products industry, or incurred or committed to any
capital expenditures, or any obligations or liabilities in connection with any
capital expenditures, other than capital
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expenditures and obligations or liabilities incurred or committed to that are no
greater than the amount designated therefor in the Company's current capital
budget approved by the Board in December, 1999, the amount of which has been
furnished to Merger Company prior to the date hereof (the "Capital Budget");
(e) other than in the ordinary course of business
consistent with past practice, sold, leased, mortgaged, encumbered or otherwise
disposed of, any material assets (including capital stock of Subsidiaries);
(f) merged or consolidated with, or purchased an equity
interest in all or substantially all of the assets (which assets shall be
material to the Company) of, any Person or other business organization or any
division or business thereof; or
(g) agreed to take any of the foregoing actions
identified in subparagraphs (a) through (f) above.
Section 3.7 Absence of Undisclosed Liabilities. Except as
expressly identified in the Company SEC Documents, or as reflected or reserved
against in the balance sheet dated as of December 31, 1999 or the balance sheet
dated as of March 31, 2000 constituting a portion of the financial statements
included in the Company's Annual Report on Form 10-K for the term ended December
31, 1999 and the Company's quarterly report filed on Form 10-Q, respectively
(the "Balance Sheets") or in the notes thereto and except for liabilities in
respect of Litigation (which are the subject of Section 3.10) and liabilities
under Environmental Laws (which are the subject of Section 3.15), neither the
Company nor any of its Subsidiaries had as of that date any liabilities which
were material to the Company and its Subsidiaries taken as a whole and which
were required to be set forth in the Balance Sheets or the notes thereto in
accordance with GAAP. Except as disclosed in the Company SEC Documents, since
the date of the Balance Sheet, the Company has not incurred any liabilities that
would be required to be reflected or reserved against in a consolidated balance
sheet of the Company and its Subsidiaries prepared in accordance with GAAP,
except for such liabilities as would not have a Material Adverse Effect,
liabilities resulting from the execution and delivery of this Agreement or
relating to the transactions contemplated hereby and except for liabilities in
respect of Litigation (which are the subject of Section 3.10) and liabilities
under Environmental Laws (which are the subject of Section 3.15).
Section 3.8 Information in Disclosure Documents. None of (i)
the registration statement on Form S-4 to be filed with the SEC by the Company
in connection with the issuance of Surviving Corporation Preferred Stock as
required by the terms of this Merger (the "S-4"), (ii) the Proxy Statement (as
defined in Section 5.6(b)) (and any amendment thereof or supplement thereto) or
(iii) any information to be supplied by the Company in any other statement or
schedule required to be filed by either the Company or the Merger Company with
the SEC in connection with the transaction contemplated hereby will contain, at
the date mailed to Company stockholders and at the time of the Special Meeting
(as defined in Section 5.6(a)), any untrue statement of a material fact or omit
to state any material fact required to be stated
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therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading and the S-4, the Proxy
Statement and any other statement or schedule filed by the Company will comply
in all material respects with the applicable provisions of the Exchange Act and
the rules and regulations thereunder; except that no representation is made by
the Company with respect to statements made in the S-4, the Proxy Statement or
such statement or schedule based on information supplied by Merger Company for
inclusion in the S-4 or the Proxy Statement.
Section 3.9 Employee Benefit Plans; ERISA.
(a) Section 3.9(a) of the Disclosure Letter contains a
true and complete list of each material "employee benefit plan" as defined in
Section 3(3) of ERISA and each bonus, deferred compensation, incentive
compensation, stock purchase, stock option, stock award, severance or
termination benefit, hospitalization or other medical, life or other insurance,
supplemental unemployment benefits, profit-sharing, pension, or retirement plan,
program, agreement or arrangement, each employment, retention or severance
agreement or arrangement which cannot be terminated in fewer than three months
or without liability exceeding the greater of one month's salary or one week of
salary for each year of service and each other material employee benefit plan,
program, agreement or arrangement, sponsored, maintained or contributed to by
the Company or by any trade or business, whether or not incorporated (an "ERISA
Affiliate"), that together with the Company would be deemed a "single employer"
within the meaning of Section 4001 of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), for the benefit of any employee or former
employee or director of the Company or any ERISA Affiliate employed in the
United States (the "Plans").
(b) With respect to each Plan, the Company has heretofore
delivered or made available to Merger Company true and complete copies of each
of the following documents:
(i) the Plan;
(ii) the most recent annual report and actuarial
report;
(iii) the most recent Summary Plan Description
required under ERISA with respect thereto;
(iv) if the Plan is funded through a trust or
third party funding vehicle, the trust or other funding agreement and
the latest financial statements thereof; and
(v) the most recent determination letter
received from the Internal Revenue Service with respect to each Plan
intended to qualify under Section 401(a) of the Internal Revenue Code
of 1986, as amended (the "Code")
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and each voluntary employee benefit association intended to qualify
under Section 501(c)(9) of the Code.
(c) No liability under Title IV of ERISA has been
incurred by the Company or any ERISA Affiliate that has not been satisfied in
full, and no condition exists that presents a material risk to the Company or
any ERISA Affiliate of incurring a liability under such Title, other than
liability for contributions due in the ordinary course and premiums due the
Pension Benefit Guaranty Corporation ("PBGC") (which contributions and premiums
have been paid when due) except for such liabilities that would not have a
Material Adverse Effect.
(d) No Plan that is an "employee benefit plan," as
defined in Section 3(3) of ERISA (an "ERISA Plan"), is a "multiemployer pension
plan," as defined in Section 3(37) of ERISA, nor is any ERISA Plan a plan
described in Section 4063(a) of ERISA.
(e) No ERISA Plan or any trust established thereunder has
incurred any "accumulated funding deficiency" (as defined in Section 302 of
ERISA and Section 412 of the Code), whether or not waived, as of the last day of
the most recent fiscal year of each ERISA Plan ended prior to the Closing Date.
Each ERISA Plan intended to be "qualified" within the meaning of Section 401(a)
of the Code has been determined by the Internal Revenue Service to be so
qualified (or timely application has been made therefor); no event has occurred
since the date of such determination that would materially adversely affect such
qualification; and each trust maintained thereunder has been determined by the
Internal Revenue Service to be exempt from taxation under Section 501(a) of the
Code. All contributions or other payments required to have been made by Company
and its Subsidiaries to or under any Plan by applicable law or the terms of such
Plan have been timely and properly made. Each Plan has been operated and
administered in all material respects in accordance with its terms and
applicable law, including but not limited to ERISA and the Code except where a
failure to so operate or administer would not have a Material Adverse Effect.
There are no pending, or to the knowledge of the Company, threatened, material
claims by or on behalf of any Plan, by any employee or beneficiary covered under
any such Plan, or otherwise involving any such Plan (other than routine claims
for benefits).
(f) Except as disclosed in Schedule 3.9(f) of the
Disclosure Letter or in connection with equity compensation or otherwise
disclosed or referred to in Section 3.9 (or in Section 3.9 of the Disclosure
Letter), neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will, without further
action (i) result in any payment becoming due to any current or former employee
or director of Company and its Subsidiaries, (ii) increase any benefits under
any Plan, (iii) result in the acceleration of the time of payment or vesting of
any benefits, (iv) satisfy any condition or requirement entitling any current or
former employee or director of Company and its Subsidiaries to additional rights
or features with respect to any benefits, or (v) result in any payment becoming
due by the Company or any of its
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Subsidiaries or the Merger Company that would be subject to Sections 162(m),
280G or 4999 of the Code.
(g) Section 3.9(g) of the Disclosure Letter identifies
each Employment Agreement containing a provision for "Good Reason" or similar
terms relating to the potential termination of the employee's employment with
the Company in connection with the consummation of the Merger. Neither the
Company nor its Subsidiaries has taken any corporate action acknowledging that
an individual party to a Listed Employee Agreement will have, upon consummation
of the Merger, "Good Reason" or a similar right (as that term is defined in such
Listed Employee Agreement) to terminate his or her employment thereunder with
the Company.
(h) With respect to each Plan that is not subject to
United States law (a "Foreign Plan"):
(i) Except as disclosed in Schedule 3.9(h) of
the Disclosure Letter, with respect to each Foreign Plan, any liability
for accrued benefit obligations has been funded (through insurance or
otherwise) or a book reserve account has been established (in each case
sufficient to procure or provide for the accrued benefit obligations in
accordance with GAAP), and each such account is reflected on the
Balance Sheets except for such liability for accrued benefit
obligations incurred in the ordinary course of business consistent with
past practice since December 31, 1998 or otherwise disclosed in the
Company SEC Documents; and
(ii) each Foreign Plan required to be registered
has been registered and has been maintained in good standing with
applicable regulatory authorities.
Section 3.10 Litigation; Compliance with Law.
(a) Except as expressly identified in the Company SEC
Documents or Section 3.10 of the Disclosure Letter and except for claims under
Environmental Laws (which are the subject of Section 3.15), (i) as of the date
hereof, there is no suit, claim, action, proceeding or investigation pending or,
to the knowledge of the Company, threatened, against the Company or any of its
Subsidiaries which would reasonably be expected to result in a liability greater
than $5,000,000, whether or not covered by insurance, and (ii) there is no suit,
claim, action, proceeding or investigation pending or, to the knowledge of the
Company, threatened, against the Company or any of its Subsidiaries which would
have a Material Adverse Effect.
(b) Except as expressly identified in the Company SEC
Documents and except for Environmental Laws (which are the subject of Section
3.15), the operations of the Company and its Subsidiaries are not being
conducted in violation of any law, statute, regulation, judgment, decree, order
or injunction of any Governmental Entity, except where such violations would not
have a Material Adverse Effect.
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(c) The Company and its Subsidiaries hold all licenses, permits,
variances and approvals of Governmental Entities necessary for the lawful
conduct of their respective businesses as currently conducted except for
licenses, permits, variances or approvals under Environmental Laws (which are
the subject of Section 3.15) and except where the failure to hold such licenses,
permits, variances or approvals would not have a Material Adverse Effect.
(d) Except as set forth in Schedule 3.10(d) of the Disclosure Letter,
or as set forth in the Balance Sheets, neither the Company nor any of its
Subsidiaries has, as of the date therein, any liabilities associated with the
matters contemplated by this Section 3.10 which would be required to be
reflected or reserved against in a consolidated balance sheet of the Company and
its Subsidiaries prepared in accordance with GAAP, except for such liabilities
as were incurred in the ordinary course of business or would not have a Material
Adverse Effect.
Section 3.11 Intellectual Property. Section 3.11 of the Company
Disclosure Letter sets forth a list of all registered and pending applications
for Intellectual Property (as hereinafter defined) of the Company or its
Subsidiaries material to the Company taken as a whole. The Company and its
Subsidiaries own free and clear of any Lien, other than Permitted Exceptions, or
possess licenses or other valid rights to use, all patents, patent rights,
domain names, trademarks (registered or unregistered), trade dress, trade names,
copyrights (registered or unregistered), service marks, trade secrets, know-how
and other confidential or proprietary rights and information, inventions,
processes, formulae, as well as all goodwill symbolized by any of the foregoing
(collectively, "Intellectual Property") necessary in connection with the
business of the Company and its Subsidiaries as currently conducted, except
where the failure to possess such rights or licenses would not have a Material
Adverse Effect. Except as disclosed in Section 3.11 of the Disclosure Letter,
(i) the conduct, products or services of the business of the Company and its
Subsidiaries as currently conducted do not infringe upon any Intellectual
Property of any third party except where such infringement would not reasonably
be expected to create a liability in excess of $2,000,000 or otherwise would not
have a Material Adverse Effect, (ii) there are no claims or suits pending or for
which written notice has been provided or, to the knowledge of the Company,
threatened (A) alleging that the Company's or its Subsidiaries' conduct,
products or services infringe upon any Intellectual Property of any third party
except where such infringement would not reasonably be expected to create a
liability in excess of $2,000,000 or otherwise have a Material Adverse Effect,
or (B) challenging the Company's or its Subsidiaries' ownership of, right to
use, or the validity or enforcement of any license or other agreement relating
to, the Company's and its Subsidiaries' Intellectual Property, and (ii) to the
knowledge of the Company, no Person is infringing upon any Intellectual Property
of the Company or its Subsidiaries except where such infringement would not have
a Material Adverse Effect. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not result in the loss
of, or any encumbrance on, the rights of the Company or any Subsidiary with
respect to the Intellectual Property owned or used by them, except where such
loss or encumbrance
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would not reasonably be expected to create a liability in excess of $2,000,000
or otherwise have a Material Adverse Effect. All Intellectual Property necessary
in connection with the business of the Company and its Subsidiaries is valid,
subsisting, enforceable and, where applicable, has been properly maintained,
except as would not have a Material Adverse Effect.
Section 3.12 Identified Contracts.
(a) Other than the contracts or agreements of the Company included as
exhibits to the Company's Annual Report on Form 10-K for the year ended December
31, 1999 and contracts or agreements between the Company and its wholly-owned
Subsidiaries or between wholly-owned Subsidiaries of the Company, Section
3.12(a) of the Disclosure Letter lists each of the contracts and agreements of
the following types to which the Company or any of its Subsidiaries is a party
as of the date of this Agreement (such contracts and agreements described below
being "Identified Contracts"):
(i) contracts, agreements and commitments for the purchase of
products or inventories by, or for the furnishing of services to, the
Company or its Subsidiaries that (A) require remaining payments by the
Company or its Subsidiaries in excess of $2,500,000 and (B) are not
terminable by the Company or its Subsidiaries, as the case may be, on
notice of one year or less without penalty;
(ii) contracts, agreements and commitments for the sale of
products or inventories, or for the furnishing of services, by the
Company or its Subsidiaries that (A) require remaining payments to the
Company or its Subsidiaries in excess of $2,500,000 and (B) are not
terminable by the Company or its Subsidiaries, as the case may be, on
notice of one year or less;
(iii) manufacturer's representative, sales agency and
distribution contracts and agreements under which there were in 1999 or
there are projected to be in 2000 annual sales in excess of $2,500,000;
(iv) mortgages, indentures, security agreements, notes, loan
agreements, guarantees and other contracts and agreements governing the
terms of indebtedness of the Company or its Subsidiaries to third
parties in excess of $5,000,000 principal amount;
(v) material contracts and agreements between the Company and
any of its affiliates;
(vi) shareholder, voting trust or similar contracts and
agreements relating to the voting of shares or other equity interests
of the Company or its Subsidiaries;
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(vii) contracts and agreements entered into since January 1,
1991, providing for the acquisition or disposition of assets or direct
or indirect acquisition or disposition of 10% or more of any class of
equity securities of any Person having a value in excess of $5,000,000,
other than sales of inventories in the ordinary course of business and
sales of obsolete equipment;
(viii) capitalized leases which pursuant to their terms, are
reasonably expected to involve an aggregate payment obligation greater
than $5,000,000; and
(ix) agreements, contracts, understandings or arrangements
between the Company or any of its Subsidiaries and the Trust or the
Manville Property Damage Settlement Trust (collectively, "Company Trust
Agreements").
(b) Each Identified Contract is in full force and effect (subject to
termination in accordance with its terms following the date hereof) and neither
the Company nor any of its Subsidiaries nor, to the knowledge of the Company as
of the date hereof, any other party thereto, is in material breach of, or
material default under, any such Identified Contract, except for such failures
to be in full force and effect, breaches or defaults which would not have a
Material Adverse Effect.
Section 3.13 Real Property.
(a) Section 3.13(a) of the Disclosure Letter sets forth a complete list
of (i) all real property and interests in real property owned in fee by the
Company and its Subsidiaries (individually, an "Owned Property" and
collectively, the "Owned Properties"), and (ii) all real property and interests
in real property leased, subleased, or otherwise occupied by the Company and its
Subsidiaries as lessee with annual lease payment obligations in excess of
$500,000 (individually, a "Leased Property" and collectively, the "Leased
Properties," such Leased Properties, together with the Owned Properties, being
referred to herein individually as a "Company Property" and collectively as the
"Company Properties").
(b) Owned Properties. Except as set forth in Section 3.13(b) of the
Disclosure Letter, the Company and its Subsidiaries have good, marketable and
valid fee simple title to all Owned Properties and all buildings, structures and
other improvements located thereon, free and clear of all Liens, except the
Permitted Exceptions.
(c) Leases.
(i) Except as set forth in Section 3.13(c)(i) of the
Disclosure Letter, the Company and its Subsidiaries have valid and
binding leasehold interests in and to the Leased Properties and all
buildings, structures or other improvements located thereon pursuant to
the leases, licenses and occupancy agreements listed on Section
3.13(a)(ii) of the Disclosure Letter (each, a "Real Property Lease" and
collectively, the "Real Property Leases"), subject to
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applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and
subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or
in equity);
(ii) Except as set forth in Section 3.13(c)(ii) of the
Disclosure Letter, each of the Real Property Leases is in full force
and effect; the Company or a Subsidiary thereof holds good and valid
leasehold title to, and actual possession of, the Leased Properties
subject thereto, free and clear of all Liens of any nature whatsoever,
except the Permitted Exceptions. Except for the non-disturbance
agreements listed in Section 3.13(c)(ii) of the Disclosure Letter, the
Company is aware of no other non-disturbance agreements to which it is
a party.
(iii) Except as set forth in Section 3.13(c)(iii) of the
Disclosure Letter, there are no material leases or subleases executed
by the Company, as lessor, with respect to any of the Company
Properties;
(iv) Each of the Real Property Leases entitles the Company or
its Subsidiary, as the case may be, to the use, occupancy and
possession of the Leased Properties specified therein for the purposes
such Leased Properties are now being used; and
(v) Neither the Company nor any of its Subsidiaries is in
material default, and to the knowledge of the Company and any of its
Subsidiaries no other material default exists, under any Real Property
Lease with a term extending more than one year from the date hereof and
an annual lease payment obligation in excess of $2,000,000.
(d) Except as set forth in Section 3.13(d) of the Disclosure Letter,
all of the buildings, fixtures and improvements included on or in the Company
Properties and owned or leased by the Company and its Subsidiaries are in
satisfactory condition and repair for the continued use of the Company
Properties in the ordinary course of business consistent with past practices
except to the extent that instances of noncompliance with the preceding
provisions of this sentence, individually or in the aggregate, do not have a
Material Adverse Effect.
(e) Except as set forth in Section 3.13(e) of the Disclosure Letter,
the Permitted Exceptions do not adversely affect, in any material respect, the
use, management or operation of the Company Properties except to the extent that
instances of noncompliance with the preceding provisions of this sentence,
individually or in the aggregate, do not have a Material Adverse Effect.
(f) Except as set forth in Section 3.13(f) of the Disclosure Letter,
all certificates of occupancy necessary for the current use and operation of
each Company Property have been issued and are in full force and effect, the use
of the Company Properties is in conformity with such certificates of occupancy
except to the extent that
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instances of noncompliance with the preceding provisions of this sentence,
individually or in the aggregate, do not have a Material Adverse Effect.
(g) Except as set forth in Section 3.13(g) of the Disclosure Letter,
there does not exist any actual or, to the knowledge of the Company, threatened
or contemplated condemnation or eminent domain proceedings that affect any
Company Property or any material part thereof except to the extent that
instances of noncompliance with the preceding provisions of this sentence,
individually or in the aggregate, do not have a Material Adverse Effect.
(h) Except as set forth in Section 3.13(h) of the Disclosure Letter,
(x) no person or entity has any option or right of first refusal to acquire
title to the Company Properties or any material portion thereof or interest
therein; and (y) neither the Company nor any of its Subsidiaries has entered
into a contract to sell any material real estate interest except in the ordinary
course of business.
(i) The current use and occupancy of the Company Properties and the
improvements located thereon are not in violation of any recorded or unrecorded
covenants, conditions, restrictions, reservations, easements or agreements
affecting the Company Properties except to the extent that instances of
noncompliance with the preceding provisions of this sentence, individually or in
the aggregate, do not have a Material Adverse Effect.
(j) All Company Properties have sufficient access to public roads.
(k) All water, gas and other utilities are sufficient to enable the
Company Properties to continue to be used and operated in the ordinary course of
business consistent with past practices.
Section 3.14 Taxes.
(a) Except as set forth in Section 3.14 of the Disclosure Letter: (i)
All material Returns (as defined in Section 3.14(b) below) required to be filed
with any taxing authority by the Company and its Subsidiaries have been filed in
accordance with all applicable laws; (ii) the Company and its Subsidiaries have
timely paid all Taxes (as defined in Section 3.14(b) below) shown as due and
payable on the Returns and as of the time of filing the Returns correctly
reflected the facts regarding the income, business, assets, operations,
activities and the status of the Company and its Subsidiaries in all material
respects; (iii) the Company and its Subsidiaries have made provision for all
material Taxes payable by the Company, its Subsidiaries and the Trust, insofar
as the Company is responsible for the Taxes of the Trust, for which no Return
has yet been filed or in respect of which a final determination has not yet been
made; (iv) the charges, accruals and reserves for Taxes with respect to the
Company, its Subsidiaries and the Trust, insofar as the Company is responsible
for the Taxes of the Trust reflected in the Balance Sheet are adequate under
GAAP to cover the Tax liabilities accruing through the date thereof; (v) to the
knowledge of the Company there is no action, suit, proceeding,
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investigation, audit or claim pending or threatened, against or with respect to
the Company or any of its Subsidiaries in respect of any Tax; (vi) no material
deficiencies for any Taxes have been proposed, asserted or assessed against the
Company or any of its Subsidiaries that have not been fully paid or are not
adequately reserved for in the most recent financial statements contained in the
Company SEC Documents; (vii) none of the Company or any of the Company's
Subsidiaries has waived any statute of limitations or agreed to any extension of
time within which to file any Return, or to pay any material Taxes which such
statute of limitations has not expired or Return or Taxes have not since been
timely filed or paid; (viii) none of the Company or any of the Company's
Subsidiaries is party to or is bound by any Tax sharing, Tax indemnity or
similar agreement with respect to Taxes pursuant to which it will have any
obligation to make any payment after the Closing Date; (ix) since January 1,
1995 none of the Company nor any of the Company's Subsidiaries has entered into
a closing agreement pursuant to Section 7121 of the Code or any predecessor
provision or any similar provision of state, local or foreign Tax law; (x) each
of the Company and the Company's Subsidiaries has withheld and paid over all
material Taxes required to be withheld in connection with any amounts paid over
or owing to any employee, creditor, independent contractor or other third party;
(xi) no claim has been made in writing by a Taxing authority in a jurisdiction
where any of the Company or the Company's Subsidiaries does not file Returns to
the effect that the Company or the Company's Subsidiaries is or may be subject
to Taxation by that jurisdiction; (xii) since January 1, 1996 neither the
Company nor any of its Subsidiaries has constituted either a "distributing
corporation" or a "controlled corporation" (within the meaning of Section
355(a)(1)(A) of the Code) in a distribution of stock qualifying for tax-free
treatment under Section 355 of the Code; (xiii) the Company has not made an
election described in Notice 88-67 to treat the Convertible Preferred Stock as
"not stock" and an "interest similar to an option"; (xiv) on its 1987
consolidated federal income Tax Return, the Company elected under Section 468B
of the Internal Revenue Code of 1954, as amended (the "1954 Code") to treat the
Designated Settlement Fund (as defined in Section 3.14(b) below) as a designated
settlement fund within the meaning of Section 468B of the 1954 Code; (xv) each
of PLR 9146049 and PLR 9534031 remains in full force and effect and neither the
Company nor any of its Subsidiaries is aware of any facts that may affect the
continuing validity of such rulings; (xvi) all transfers of money or property to
the Designated Settlement Fund were pursuant to a court order; and (xvii) the
Company is not (and has not been for five years) a "U.S. real property holding
corporation" within the meaning of Section 897 of the Code.
(b) As used in this Agreement:
(i) the term "Return" shall mean any return, declaration,
report, claim for refund, or information return or statement relating
to Taxes or any amendment thereto, and including any schedule or
attachment thereto;
(ii) the term "Tax" or "Taxes" shall mean all federal, state,
local or foreign taxes, assessments, duties, levies or similar charges
of any kind including, without limitation, all income, payroll,
withholding, unemployment insurance, social security, sales, use,
service, leasing, excise, franchise, gross
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receipts, value added, alternative or add-on minimum, estimated,
occupation, real and personal property, stamp, duty, transfer, workers'
compensation, severance, windfall profits, or other Tax, charge, fee,
levy or assessment of the same or of a similar nature, including any
interest, penalty or addition thereto, whether disputed or not; and
(iii) the term "Designated Settlement Fund" shall mean the
non-grantor trust portion of the settlement fund established for
claimants against the Company which filed a petition for reorganization
under chapter 11 of title 11, United States Code, on August 26, 1982
pursuant to Section 180 7(a)(7)(c) of the Tax Reform Act of 1986.
Section 3.15 Environmental Matters.
(a) Except as expressly identified in the Company SEC Documents or as
disclosed in Section 3.15(a) of the Disclosure Letter or conditions which both
(i) do not, as of the date hereof, constitute Environmental Costs and
Liabilities (as defined in this Section 3.15) in excess of $1,000,000
individually or $5,000,000 in the aggregate that are not expressly currently
identified on the Company's environmental reserves and (ii) would not have a
Material Adverse Effect, the Company and its Subsidiaries have been during the
past five years and are in compliance in all material respects with all
applicable Environmental Laws (as hereinafter defined) which compliance includes
the possession of material permits, licenses and governmental authorizations
required under applicable Environmental Laws and compliance with the terms and
conditions thereof and the Company is not aware of any facts, circumstances or
conditions that would reasonably be expected to interfere with such continued
compliance with existing Environmental Laws or require material capital
expenditures to maintain such compliance with existing Environmental Laws.
(b) Except as expressly identified in the Company SEC Documents or as
disclosed in Section 3.15(b) of the Disclosure Letter or conditions which both
(i) do not, as of the date hereof, constitute Environmental Costs and
Liabilities in excess of $1,000,000 individually or $5,000,000 in the aggregate
that are not currently reflected on the Company's environmental reserves and
(ii) would not have a Material Adverse Effect, there are no Environmental Claims
(as hereinafter defined) pending or, to the knowledge of the Company,
threatened, against the Company or its Subsidiaries.
(c) Except as disclosed in Section 3.15(c) of the Disclosure Letter,
and except for costs associated with ongoing environmental management of the
Company's operations in the ordinary course of business, including those costs
reflected in the Company's environmental reserves, the Company is not subject to
any outstanding Environmental Costs and Liabilities and, there are not, to the
knowledge of the Company, any facts, circumstances or conditions relating to,
arising from, associated with or attributable to the operations of the Company
or any Subsidiary or any real property currently or formerly owned, operated or
leased by or on behalf of the Company or any Subsidiary, including any Release
(as defined in this Section 3.15) of Hazardous
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Substances (as defined in this Section 3.15), that in each case, both (i) as of
the date hereof, constitute Environmental Costs and Liabilities in excess of
$1,000,000 individually or $5,000,000 in the aggregate and (ii) would have a
Material Adverse Effect.
(d) Except as disclosed in Section 3.15(d) of the Disclosure Letter,
none of the Company or its Subsidiaries has (i) entered into or agreed to any
consent decree, order or agreement with any third-party or governmental agency
under any Environmental Law or (ii) is subject to any judgment, decree, or order
issued pursuant to Environmental Laws and requiring the Company to undertake any
investigation, remediation or monitoring as a result of Hazardous Substances in
the soil or groundwater, which in either case are both outstanding and would
have a Material Adverse Effect.
(e) Except as disclosed in Section 3.15(e) of the Disclosure Letter, to
the knowledge of the Company, there are not now on, in or under any real
property owned or operated by the Company or any Subsidiary (x) any underground
storage tanks, above-ground storage tanks, dikes or impoundments containing
Hazardous Substances, (y) any exposed friable asbestos-containing materials, or
(z) any polychlorinated biphenyls, the presence of which both (i) as of the date
hereof constitutes Environmental Costs and Liabilities in excess of $1,000,000
individually or $5,000,000 in the aggregate and (ii) would have a Material
Adverse Effect.
(f) The Company has made available to Merger Company copies of all
current material environmental or health and safety related audits or
assessments involving the Company or any Subsidiary or any real property
currently owned, operated or leased by the Company and that are in the Company's
possession, custody or control.
(g) Except as disclosed on Schedule 3.15(g) of the Disclosure Letter,
the transactions contemplated under this Agreement do not require the filing of
any notice with or the approval of any Governmental Entity with jurisdiction
over environmental or health or safety matters under any Environmental Property
Transfer Law except where the failure to make such filings would not have a
Material Adverse Effect.
(h) Except as set forth in Schedule 3.15(i) of the Disclosure Letter,
or as set forth in the Balance Sheets, neither the Company nor any of its
Subsidiaries has, as of the date therein, any liabilities associated with the
matters contemplated by this Section 3.15 which would be required to be
reflected or reserved against in a consolidated balance sheet of the Company and
its Subsidiaries prepared in accordance with GAAP except for such liabilities as
were incurred in the ordinary course of business or would not have a Material
Adverse Effect.
(i) Merger Company acknowledges that the representations and warranties
contained in this Section 3.15 are the only representations and warranties being
made by the Company with respect to compliance with, or liability or claims
under, Environmental Laws or with respect to permits issued or required under
Environmental
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Laws, that no other representation by the Company contained in this Agreement
shall apply to any such matters and that no other representation or warranty,
express or implied, is being made with respect thereto.
As used in this Agreement:
(i) the term "Environmental Claim" means any claim, lien,
action, demand, proceeding, investigation or written notice to the
Company or its Subsidiaries by any person or entity alleging
non-compliance with or potential liability (including potential
liability for investigatory costs, clean-up costs, governmental
response costs, natural resource damages, personal injuries, or
penalties) arising out of, based on, or resulting from (a) the
presence, or Release into the environment, of any Hazardous Substance
(as hereinafter defined) at any location, whether or not owned or
operated by the Company or its Subsidiaries or (b) circumstances
forming the basis of any violation, or alleged violation of any
applicable Environmental Law;
(ii) the term "Environmental Costs and Liabilities" means any
and all losses, Liabilities, obligations, damages, fines, penalties,
judgments, actions, claims, costs and expenses (including fees,
disbursements and expenses of legal counsel, experts, engineers and
consultants and the costs of investigation and feasibility studies and
remedial action) arising from or under any Environmental Law or any
agreement with any Governmental Entity or other Person thereunder or
pursuant thereto;
(iii) the term "Environmental Laws" means all federal, state,
local and foreign laws including statutes, codes, ordinances, rules,
regulations or other legal requirements, as in effect and as
interpreted as of the date hereof, relating to pollution or protection
of the environment or natural resources, including, laws and
regulations relating to emissions, discharges, releases or threatened
releases of Hazardous Substances, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Substances; and includes
the Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA"), 42 U.S.C. Section 9601 et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 et seq., the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section 6901 et seq.,
the Clean Water Act, 33 U.S.C. Section 1251 et seq., the Clean Air Act,
33 U.S.C. Section 2601 et seQ., the Toxic Substances Control Act, 15
U.S.C. Section 2601 et seq., the Federal Insecticide, Fungicide, And
Rodenticide Act, 7 U.S.C. Section 136 et seq., the Oil Pollution Act of
1990, 33 U.S.C. Section 2701 Et seq. and the Occupational Safety and
Health Act, 29 U.S.C. Section 651 et seq., to the extent it regulaTed
exposure to Hazardous Substances, as such laws have been amended or
supplemented, and the regulations promulgated pursuant thereto, and all
analogous state or local statutes;
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(iv) the term "Environmental Property Transfer Laws" means any
federal, state, local or foreign laws, statutes, codes, ordinances,
rules, regulations or other legal requirements relating to the
environment or natural resources, which condition the transfer of
assets, real estate, or stock on the approval of or the need to notify
a Governmental Authority having jurisdiction over the environment or
natural resources, including, but not limited to the New Jersey
Industrial Site Recovery Act, the Connecticut Property Transfer Law,
the Indiana Responsible Property Transfer Law, and the Illinois
Responsible Property Transfer Act;
(v) the term "Hazardous Substance" means any and all
substances, wastes or materials regulated as hazardous, toxic,
radioactive, a pollutant, contaminant or words of similar import under
any Environmental Law, including, but not limited to, oil and petroleum
products, asbestos and asbestos-containing materials or polychlorinated
biphenyls; and
(vi) the term "Release" means any release, spill, emission,
migration, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, or leaching into the environment.
Section 3.16 Labor Matters.
(a) Except as set forth in Section 3.16(a) of the Disclosure Letter,
the Company and its Subsidiaries are not a party to any labor or collective
bargaining agreement, and no employees of the Company or any of its Subsidiaries
are represented by any labor organization.
(b) Except as set forth in Section 3.16(b) of the Disclosure Letter:
(i) to the knowledge of the Company, there are no strikes, work stoppages,
slowdowns, lockouts, arbitrations or grievances or other labor disputes pending
or threatened in writing against or involving the Company or any Subsidiary that
would, individually or in the aggregate, have a Material Adverse Effect; (ii)
within the three years prior to the date hereof, there have been no
representation or certification proceedings, or petitions seeking a
representation proceeding, pending or, to the knowledge of the Company,
threatened in writing to be brought or filed with the National Labor Relations
Board or any other labor relations tribunal or authority; and (iii) within the
three years prior to the date hereof, to the knowledge of the Company, there
have been no organizing activities involving the Company and its Subsidiaries
with respect to any group of employees of the Company or any of its
Subsidiaries.
(c) Except as set forth in Section 3.16(c) of the Disclosure Letter:
there has been no "mass layoff" or "plant closing" as defined by Worker
Adjustment Retraining and Notification Act with respect to the Company and its
Subsidiaries within the six (6) months prior to Closing.
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Section 3.17 Required Vote by Company Stockholders. The affirmative
vote of the holders of a majority of the outstanding Common Shares entitled to
vote hereon is the only vote of any class of capital stock of the Company
required by the DGCL, the Restated Certificate of Incorporation or the By-Laws
of the Company to adopt this Agreement ("Required Vote") or approve the Charter
Amendment.
Section 3.18 Board Recommendation. On the date hereof, the Board, at a
meeting duly called and held, by the vote of the directors present at such
meeting, (i) approved this Agreement, the Merger and the other transactions
contemplated hereby, (ii) determined that this Agreement and the Merger and the
Charter Amendment are advisable and (iii) resolved to recommend that the holders
of shares of Company Common Stock vote to adopt this Agreement and approve the
Charter Amendment.
Section 3.19 Brokers. Except for J.P. Morgan & Co. Incorporated, no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Company. The
Company is solely responsible for the fees and expenses of J.P. Morgan & Co.
Incorporated which fees and expenses shall be paid by the Company at the
Closing. The Company's arrangements with J.P. Morgan & Co. Incorporated have
been disclosed to Merger Company prior to the date hereof.
Section 3.20 Opinion of Financial Advisor. The Company has received the
opinion of J.P. Morgan Securities Inc., as of the date hereof, to the effect
that the Common Stock Merger Consideration to be received pursuant to this
Agreement is fair, from a financial point of view, to the holders of the shares
of Company Common Stock entitled to receive such consideration.
Section 3.21 Injunction. The Injunction (as such term is defined in the
Manville Corporation Seconded Amended and Restated Plan of Reorganization, dated
November 28, 1988 ("Reorganization Plan")) has not been vacated or modified in
whole or in part, and is valid, binding and enforceable against any and all
Claims (as such term is defined in the Reorganization Plan), including any and
all AH Claims and Other Asbestos Claims (as each such term is defined in the
Reorganization Plan).
Section 3.22 Annual Plan. The Annual Plan approved by the Board in
December 1999 with respect to its business and provided by the Company to Merger
Company and its advisors was prepared in good faith and was based on reasonable
assumptions and nothing has come to the attention of the Company that would
indicate that the projected results set forth in the Annual Plan are no longer
achievable.
Section 3.23 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article III, neither the
Company nor any other Person makes any other express or implied representation
or warranty on behalf of the Company or any of its affiliates.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MERGER COMPANY AND
FINANCE COMPANY
Each of Merger Company and Finance Company represents and warrants to
the Company as follows:
Section 4.1 Organization. Each of Merger Company, Finance Company and
their respective Subsidiaries is a limited liability company, corporation or
other entity duly incorporated or organized, as the case may be, validly
existing, and in good standing (but, with respect to Subsidiaries not organized
in the United States, only to the extent such concept is applicable) under the
laws of the jurisdiction of its incorporation or organization, has all requisite
corporate power and authority and all necessary governmental approvals to own,
lease and operate its properties and to carry on its business as it is now being
conducted, and is qualified or licensed to do business as a foreign corporation
and is in good standing in each jurisdiction in which the nature of the business
conducted by it makes such qualification or licensing necessary, except where
the failure to be so organized, existing and in good standing or to have such
power and authority, or to be so qualified or licensed would not have a material
adverse effect on the business, results of operations or financial condition
transactions contemplated by this Agreement. The Merger Company has previously
delivered to Company a complete and correct copy of each of its Certificate of
Formation and Limited Liability Company Agreement, as currently in effect.
Section 4.2 Capitalization. Assuming consummation of the Merger as
contemplated by the Merger Agreement, Schedule 4.2 of the MF Disclosure Letter
sets forth the percentage equity ownership of the Surviving Corporation that the
members of Merger Company, the Trust, Management and the other shareholders of
the Surviving Corporation will own immediately following the Closing, based on
the equity participation of Management as set forth therein.
Section 4.3 Authorization; Validity of Agreement. Each of Merger
Company and Finance Company has the requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery by Merger Company and Finance
Company of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by the members of Merger Company and Finance
Company and no other corporate proceedings on the part of Merger Company or
Finance Company is necessary to authorize the execution and delivery of this
Agreement by Merger Company and Finance Company and the consummation of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Merger Company and Finance Company and, assuming due authorization,
execution and delivery of this Agreement by the Company, is a valid and binding
obligation of each of Merger Company and Finance Company enforceable against
each of them in accordance with its terms, except that such enforcement may be
subject to or limited by (i) bankruptcy, insolvency or other similar
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laws, now or hereafter in effect, affecting creditors' rights generally, and
(ii) the effect of general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
Section 4.4 Consents and Approvals; No Violations.
(a) Neither the execution and delivery of this Agreement by Merger
Company or Finance Company nor the consummation by Merger Company or Finance
Company of the transactions contemplated hereby will (i) violate any provision
of such company's certificate of formation or limited liability company
agreement, (ii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any material note, bond, mortgage, indenture,
guarantee, other evidence of indebtedness, license, lease, contract, agreement
or other instrument or obligation to which such company or any of its
Subsidiaries is a party or by which any of them or any of their assets may be
bound or (iii) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to such company, any of its Subsidiaries or any of its
properties or assets; except in the case of clauses (ii) and (iii) for
violations, breaches or defaults which would not have a material adverse effect
on the business, results of operations or financial condition of such company
and its Subsidiaries, taken as a whole, or materially impair or delay the
consummation of the transactions contemplated by this Agreement.
(b) No filing or registration with, notification to, or authorization,
consent or approval of, any Governmental Entity is required in connection with
the execution and delivery of this Agreement by Merger Company and Finance
Company or the consummation by Merger Company or Finance Company of the
transactions contemplated hereby, except (i) applicable requirements under
Competition Laws, (ii) applicable requirements under the Securities Act and
Exchange Act, (iii) the filing of the Certificate of Merger with the Secretary
of State, (iv) applicable requirements under corporation or "blue sky" laws of
various states or non-United States change-in-control laws or regulations, (v)
applicable requirements under Environmental Laws and (vi) such other consents,
approvals, orders, authorizations, notifications, registrations, declarations
and filings the failure of which to be obtained or made would not have a
material adverse effect on the business, results of operations or financial
condition of such company or and its Subsidiaries, taken as a whole, or
materially impair or delay the consummation of the transactions contemplated by
this Agreement.
Section 4.5 Information in Disclosure Documents. None of the
information supplied by Merger Company or Finance Company in writing for
inclusion in the S-4, Proxy Statement (including any amendments or supplements
thereto), or any other statement or schedule filed with the SEC by the Company,
Merger Company or Finance Company will contain, at the date mailed to
stockholders and at the time of the Special Meeting, any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading and any statement or
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schedule filed by Merger Company and Finance Company will comply in all material
respects with the applicable provisions of the Exchange Act and the rules and
regulations thereunder; except that no representation is made by either Merger
Company or Finance Company with respect to statements made in such statement or
schedule based on information supplied to Merger Company or Finance Company by
the Company for inclusion in such statement or schedule.
Section 4.6 Financing. Finance Company has delivered to the Company on
or prior to the date hereof executed commitment letters (the "Commitment
Letters") with respect to the financing arrangements for the transactions
contemplated hereby (the financing arrangements so described in the Commitment
Letters being referred to herein as the "Financing") from (i) Bear Stearns
Merchant Fund Corp. and HMTF Bridge Partners, L.P., committing to provide on the
terms and conditions described therein equity financing of $150 million, and
$350 million respectively (which are attached hereto as Exhibit D) and (ii) from
Bear Stearns Corporate Lending Inc. and Bear, Stearns & Co. Inc., committing to
provide on the terms and conditions described therein; debt financing of
$1,750,000,000 and from Bear Stearns Corporate Lending Inc. committing to
provide bridge financing of $600,000,000 (which are attached hereto as Exhibit E
and Exhibit F, respectively). As of the date of this Agreement, the Commitment
Letters are in full force and effect and have not been amended or rescinded.
Merger Company and Finance Company believe that the aggregate proceeds of the
Financing will be sufficient to (A) pay the Merger Consideration and any amounts
required to be paid in respect of cancellation of options, stock appreciation
rights and other Company Awards, deferred compensation amounts, and otherwise to
perform all of the obligations of Merger Company and Finance Company hereunder,
including the payment of all of the expenses of Merger Company and Finance
Company and (B) together with cash available to the Surviving Corporation,
perform the obligations of the Surviving Corporation under this Agreement.
Section 4.7 Beneficial Ownership of Shares. None of Merger Company, Finance
Company nor any of their affiliates or associates (as defined in Rule 12b-2
under the Exchange Act) "beneficially owns" (as defined in Rule 13d-3 under the
Exchange Act) more than 5% of the outstanding shares of Company Common Stock or
any securities convertible into or exchangeable for Company Common Stock.
Section 4.8 Brokers. Except for Bear Stearns Merchant Fund Corp. and
Hicks, Muse, Tate & Furst Incorporated, or their respective designees, no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Merger Company or
Finance Company. Finance Company is solely responsible for the fees and expenses
of Bear Stearns Merchant Fund Corp. and Hicks, Muse, Tate & Furst Incorporated
and affiliates to the extent that the Closing does not occur except to the
extent provided in Section 8.1, provided however that upon the Closing the
Surviving Corporation shall have sole responsibility for the payment of such
fees and expenses. Merger Company's and Finance Company's payment obligations to
Bear Stearns Merchant Fund Corp. and
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Hicks, Muse, Tate & Furst Incorporated and affiliates have been disclosed to the
Company prior to the date hereof.
Section 4.9 Surviving Corporation after the Merger. Merger Company and
Finance Company have engaged or will engage an appraisal firm to deliver a
letter at the Closing, the addressees of which will include the Company and the
Board and upon which such persons may rely, stating that at the Effective Time
and after giving effect to the Merger, the financing and the other transactions
contemplated in connection therewith (including the incurrence of the Financing)
and any changes in the Surviving Corporation's assets and liabilities as a
result thereof, the Surviving Corporation: (i) will be solvent (i.e., the fair
value of its assets will not be less than the sum of its debts and that the
present fair saleable value of its assets will not be less than the amount
required to pay its probable liabilities on its debts as they become absolute
and mature); (ii) will not have unreasonably small capital with which to engage
in its business; and (iii) will not have incurred and will not plan to incur
debts beyond its ability to pay as they become absolute and mature.
Section 4.10 Employment Agreement. Merger Company has previously
provided to the Company a copy of the executed letter agreement between Merger
Company and Charles L. Henry, providing for the execution of the Employment
Agreement between the Company and Charles L. Henry effective as of the Closing.
Section 4.11 No Prior Activities. Except for this Agreement and
transactions contemplated hereby or related hereto, Merger Company and its
Subsidiaries and Finance Company and its Subsidiaries (i) have not entered into
any agreements or arrangements with any Person or (ii) are not subject to or
bound by any obligation or undertaking. Except as contemplated by this
Agreement, Merger Company and its Subsidiaries and Finance Company and its
Subsidiaries have not engaged, directly or indirectly, in any business
activities of any type or kind.
Section 4.12 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article IV, neither Merger
Company nor Finance Company nor any other Person makes any other express or
implied representation or warranty on behalf of Merger Company, Finance Company
or any of their respective affiliates.
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company. The Company covenants
and agrees as to itself and its Subsidiaries that during the period from the
date of this Agreement until the Effective Time or the date, if any, on which
this Agreement is earlier terminated pursuant to Section 7.1 hereof, except as
(i) expressly contemplated by this Agreement, (ii) required by applicable law or
by any contract or agreement disclosed
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in the Disclosure Letter, (iii) described in Section 5.1 of the Disclosure
Letter or (iv) agreed to in writing by Merger Company, after the date hereof and
prior to the Effective Time:
(a) the business of the Company and its Subsidiaries will be conducted
only in the ordinary course and, to the extent consistent therewith, the Company
will use its commercially reasonable efforts to preserve intact its business
organization and goodwill and the business organization and goodwill of its
Subsidiaries and keep available the services of their current officers and
employees and preserve and maintain existing relations with customers,
suppliers, officers, employees and creditors;
(b) the Company will not, nor will it permit any of its Subsidiaries
to, enter into any significant new line of business outside the building
products industry, or incur or commit to any capital expenditures, or any
obligations or liabilities in connection with any capital expenditures other
than capital expenditures and obligations or liabilities incurred or committed
to in an amount not greater in the aggregate than the Capital Budget plus an
additional $5,000,000 in the aggregate;
(c) neither the Company nor its Subsidiaries will amend its certificate
of incorporation, by-laws or similar organizational documents, except as
contemplated by the transactions contemplated hereby;
(d) the Company shall not and shall not permit its Subsidiaries to
declare, set aside or pay (other than dividends paid by Subsidiaries to the
Company or other wholly-owned Subsidiaries of the Company) any dividend or other
distribution payable in cash, stock or property with respect to its capital
stock (other than the payment of regular quarterly dividends consistent with
past practice which dividends shall not in any quarter exceed the amount of
dividends paid per share of Company Common Stock in the first quarter of the
year 2000 and provided that the record date for the third quarter of the year
2000 dividend may not be earlier than September 25, 2000 and the record date for
the fourth quarter of the year 2000 dividend may not be earlier than December
26, 2000);
(e) except for the TM Exchange Agreement (as defined in Section 5.14),
neither the Company nor its Subsidiaries shall (i) adjust, split, combine or
reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of
or encumber any additional shares of, or securities convertible into or
exchangeable for, or options, warrants, calls, commitments or rights of any kind
to acquire, any shares of capital stock of any class of the Company or its
Subsidiaries, other than issuances of shares of Company Common Stock pursuant to
securities, options, warrants, calls, commitments or rights existing at the date
hereof and disclosed to Merger Company (including as disclosed in the Company
SEC Documents); (ii) incur any indebtedness for money borrowed or issue or sell
any debt securities or warrants or rights to acquire any debt securities of the
Company or its Subsidiaries or guarantee any indebtedness for money borrowed
other than under credit facilities existing on the date hereof in the ordinary
course of business and other borrowings in the ordinary course of business that
can be
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repaid at any time without prepayment penalty or other similar fees; or (iii)
redeem, purchase or otherwise acquire directly or indirectly any of its capital
stock;
(f) other than in the ordinary course of business consistent with past
practice, the Company shall not, nor shall it permit any of its Subsidiaries to,
sell, lease, mortgage, encumber or otherwise dispose of, any assets (including
capital stock of Subsidiaries) with an aggregate value of more than $5,000,000,
other than sales of obsolete assets;
(g) the Company shall not, nor permit any of its Subsidiaries to, merge
or consolidate with, or purchase any equity interest in all or substantially all
of the assets of, any Person or other business organization or any division or
business thereof, if the aggregate amount of the consideration paid or
transferred by the Company in connection with all such transactions would exceed
$5,000,000; provided however, this Section 5.1(g) shall not prohibit the Company
from purchasing inventory in the ordinary course of business;
(h) neither the Company nor its Subsidiaries shall (i) except for
normal increases in the ordinary course of business consistent with past
practice or to reflect promotions or new hires, grant any material increase in
the fringe benefits or compensation payable or to become payable by the Company
or any of its Subsidiaries to any officer or director; (ii) adopt, amend or
otherwise materially increase, or accelerate the payment or vesting of the
amounts payable or to become payable to any officer or director of the Company
or any of its Subsidiaries under any existing bonus, incentive compensation,
deferred compensation, severance, profit sharing, stock option, stock
appreciation right, restricted stock purchase, insurance, pension, retirement or
other employee benefit plan, agreement or arrangement; or (iii) enter into or
amend in any material respect any existing employment or severance agreement
with, or, except in accordance with the existing written policies of the Company
or existing contracts or agreements, grant any severance or termination pay to
any officer or director of the Company or any of its Subsidiaries;
(i) the Company shall file all reports required to be filed by it with
the SEC or New York Stock Exchange between the date of this Agreement and the
Effective Time;
(j) neither the Company nor its Subsidiaries shall change the
accounting principles used by it in effect as of the date hereof unless required
by GAAP (or, if applicable with respect to Subsidiaries, foreign generally
accepted accounting principles) or applicable law;
(k) except in the ordinary course of business consistent with past
practice, the Company shall not, nor shall it permit any of its Subsidiaries to,
(i) except as set forth in clause (iii) below, pay, discharge or satisfy any
material claims (including claims of stockholders), liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise) where such
payment, discharge or satisfaction would
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require any material payment except for the payment, discharge or satisfaction
of liabilities or obligations in accordance with the terms of Identified
Contracts as in effect on the date hereof, (ii) modify, amend or terminate any
Identified Contract in any material respect or waive or release any material
right or claim thereunder or (iii) settle or compromise any litigation (whether
or not commenced prior to the date of this Agreement) other than settlements or
compromises of litigation where the aggregate amount paid (after giving effect
to insurance proceeds) does not exceed $5,000,000;
(l) the Company shall not, nor shall it permit any of its Subsidiaries
to, enter into or commit to enter into, or assume, any operating or capital
lease, other than (i) any such lease contemplated by the Capital Budget or (ii)
any such operating lease which is not material to the Company and its
Subsidiaries, taken as a whole;
(m) except for the agreements listed in Section 5.1(m) of the
Disclosure Letter, the Company shall not, nor shall it permit any of its
Subsidiaries to, enter into or modify any collective bargaining agreement or any
successor collective bargaining agreement to any collective bargaining
agreement. With respect to the agreements listed on Section 5.1(m) of the
Disclosure Letter, the Company agrees to keep Merger Company reasonably informed
as to the status of negotiations with respect to any collective bargaining
agreements listed thereon;
(n) the Company shall not, nor shall it permit any of its Subsidiaries
to, engage in any transaction with, or enter into any agreement, arrangement, or
understanding with, directly or indirectly, any of the Company's affiliates,
including any transaction, agreement, arrangement or understanding with any
affiliate or other person covered under Item 404 of SEC Regulation S-K that
would be required to be disclosed under such Item 404 other than such
transactions of the same general nature, scope and magnitude as are disclosed in
the Company SEC Documents;
(o) other than in the ordinary course of business consistent with past
practice or as required by law, the Company and its Subsidiaries shall not make
any Tax election, amend any Return or settle or compromise any Tax liability or
make any Tax payments; and
(p) neither the Company nor its Subsidiaries will enter into an
agreement, contract, commitment or arrangement that if completed would be in
contravention of any of the foregoing.
Section 5.2 Acquisition Proposals.
(a) The Company agrees that, except as expressly contemplated by this
Agreement, neither it nor any of its Subsidiaries shall, and shall instruct
their respective officers or directors, investment bankers, attorneys,
accountants, financial advisors, agents or other representatives not to (i)
initiate, solicit, encourage or knowingly facilitate the making of any
Acquisition Proposal (as hereinafter defined) or (ii) except as permitted below,
engage in negotiations or discussions with, or furnish any non-public
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information or data to, any third party relating to an Acquisition Proposal
(other than the transactions contemplated by this Agreement). Notwithstanding
anything to the contrary contained in this Agreement, until the receipt of the
Required Vote, and subject to the provisions of Section 5.2(b) and (c), the
Company and the Board (i) may participate in negotiations or discussions
(including, as a part thereof, making any counterproposal) with or furnish
information or data to any third party pursuant to a confidentiality agreement
on terms no less favorable to the Company as the Confidentiality Agreement (as
defined hereinafter), if either (A) the Board determines in good faith, after
receiving the advice of its financial advisors, that a third party has made a
Superior Proposal after the date hereof or an Acquisition Proposal that the
Board concludes would be reasonably likely to constitute a Superior Proposal
(and such Acquisition Proposal was not solicited by the Company or any affiliate
or agent of the Company at the explicit or implicit direction of the Company) or
(B) the Board determines in good faith, after consultation with independent
counsel, that the failure to participate in such negotiations or discussions or
to furnish such information or data would be reasonably likely to constitute a
breach of the Board's fiduciary duties under applicable law, (ii) shall be
permitted to (X) take and disclose to the holders of the Company Common Stock a
position with respect to the Merger or another Acquisition Proposal (including a
Superior Proposal), or amend or withdraw such position, if, based on the advice
of independent counsel, the Board determines that such action is required
pursuant to Rules 14d-9 and 14e-2 under the Exchange Act and (Y) make disclosure
to stockholders as the Board determines after consultation with independent
counsel is necessary to comply with the Board's fiduciary duties under
applicable law and (iii) shall be permitted to request from any Person making an
Acquisition Proposal such information as may be necessary for the Board to
inform itself as to the material terms of the Acquisition Proposal. Immediately
after the execution and delivery of this Agreement, the Company and its
Subsidiaries will, and will instruct their respective officers, directors,
employees, investment bankers, attorneys, accountants and other agents to, cease
and terminate any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any possible Acquisition Proposal.
The Company agrees that it will take the necessary steps to promptly inform its
officers, directors, investments bankers, attorneys, accountants, financial
advisors, agents or other representatives involved in the transactions
contemplated by this Agreement of the obligations undertaken in this Section
5.2(a).
(b) In addition to the obligations of the Company set forth in
paragraph (a) above, the Company shall advise Merger Company orally and in
writing by the end of the next Business Day, but in no event more than 36 hours
after its receipt), of any written request for information or of any Acquisition
Proposal and the material terms and conditions of such request or Acquisition
Proposal and the identity of the person making any such request, or Acquisition
Proposal and any determination by the Board that an Acquisition Proposal is a
Superior Proposal. The Company will keep Merger Company reasonably informed as
to the status and material terms and conditions of any such request or
Acquisition Proposal.
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(c) If the Board is entitled to engage in negotiations or discussions
with, or furnish any information or data to, any third party on the terms
contemplated in Section 5.2(a), the Board may, prior to the Required Vote, (i)
(in addition to any other right that it may have to withdraw or modify its
recommendation in the exercise of its fiduciary duties) withdraw or modify, or
propose publicly to withdraw or modify, in a manner adverse to Merger Company,
the approval or recommendation by the Board of the Merger or this Agreement or
the Charter Amendment, (ii) approve or recommend, or propose publicly to approve
or recommend, any Acquisition Proposal or (iii) cause the Company to enter into
any letter of intent, agreement in principle, acquisition agreement or other
similar agreement related to any Acquisition Proposal. The Board may only take
the actions described in clauses (ii) and (iii) of this subparagraph (c) if the
Board determines in good faith, after receiving the advice of its financial
advisors, that it has received a Superior Proposal and this Agreement has
terminated in accordance with the procedures contemplated in Section 7.1(c),
including following the expiration of the five Business Day period contemplated
therein and the Company having paid any required Termination Fee and Expenses as
contemplated therein.
(d) For purposes of this Agreement, "Acquisition Proposal" shall mean
any bona fide proposal for the (i) direct or indirect acquisition or purchase of
a business or assets that constitutes 15% or more of the net revenues, net
income or the assets (based on the fair market value thereof) of the Company and
its Subsidiaries, taken as a whole, (ii) direct or indirect acquisition or
purchase of 15% or more of any class of equity securities or capital stock of
the Company or any of its Subsidiaries whose business constitutes 15% or more of
the net revenues, net income or assets of the Company and its Subsidiaries,
taken as a whole, or (iii) merger, consolidation, restructuring, transfer of
assets or other business combination, sale of shares of capital stock, tender
offer, exchange offer, recapitalization, stock repurchase program or other
similar transaction that if consummated would result in any person or persons
beneficially owning 15% or more of any class of equity securities of the Company
or any of its Subsidiaries whose business constitutes 15% or more of the net
revenues, net income or assets of the Company and its Subsidiaries, taken as a
whole, other than the transactions contemplated by this Agreement. The term
"Superior Proposal" shall mean any bona fide proposal, which was not solicited
by the Company or any affiliate or agent of the Company at the explicit or
implicit direction of the Company, to enter into an Acquisition Proposal made by
a third party on terms and conditions which the Board determines in its good
faith judgment, after receiving the advice of its financial advisors, to be more
favorable to the holders of the Company Common Stock from a financial point of
view than the transactions contemplated hereby (taking account of all of the
terms thereof, including price, likelihood of financing being available and
expected timing of consummation).
Section 5.3 Access to Information. From the date of this Agreement
until the Effective Time, the Company shall and shall cause each of its
Subsidiaries to afford to Merger Company and its officers, employees,
accountants, counsel and its authorized representatives (including environmental
consultants to the extent provided in
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Section 5.8) reasonable access during normal business hours upon reasonable
prior notice to all of its books, records, assets, properties (provided that
environmental testing may only be performed by or on behalf of Merger Company to
the extent set forth in Section 5.8) and operations and, during such period, the
Company shall furnish promptly to Merger Company (i) a copy of each report,
letter, registration statement and other document filed or received by it during
such period pursuant to the requirements of the Exchange Act, (ii) a copy of all
correspondence, including pleadings, relating to the obtaining of the order
contemplated in Section 6.1(f) and (iii) such other information used in the
operation of its business as Merger Company may reasonably request and the
provision of which is not inconsistent with applicable laws and would not breach
any agreements. Merger Company and its authorized representatives will conduct
all such inspections in a manner which will minimize any disruptions of the
business and operations of the Company and its Subsidiaries. Until the Effective
Time, Merger Company will hold any such information in accordance with the
provisions of the confidentiality agreement between the Company and Bear,
Stearns & Co., Inc., dated March 1, 2000 as if Merger Company were a party
thereto (the "Confidentiality Agreement"), and will cause such information to be
so held by their Representatives (as defined in the Confidentiality Agreement).
Upon a termination of this Agreement pursuant to Section 7.1, Merger Company and
its Representatives shall return (and hold confidential) all information
provided pursuant to this Section 5.3 and all other Evaluation Material (as
defined in the Confidentiality Agreement) pursuant to the procedures set forth
in the Confidentiality Agreement.
Section 5.4 Further Action; Commercially Reasonable Efforts.
(a) Upon the terms and subject to the conditions herein provided, each
of the parties hereto agrees to use its commercially reasonable efforts to take,
or cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement,
including using commercially reasonable efforts to satisfy the conditions
precedent to the obligations of any of the parties hereto, to obtain all
necessary authorizations, consents and approvals, and to effect all necessary
registrations and filings. Each of the parties hereto will furnish to the other
parties such necessary information and reasonable assistance as such other
parties may reasonably request in connection with the foregoing and will provide
the other parties with copies of all filings made by such party with any
Governmental Entity or any other information supplied by such party to a
Governmental Entity in connection with this Agreement and the transactions
contemplated hereby.
(b) The Company agrees to, and to cause its Subsidiaries and its and
their respective officers, employees, advisors and accountants to, reasonably
cooperate with Merger Company in connection with the arrangement of any
financing to be consummated prior to or contemporaneously with the Closing in
respect of the transactions contemplated by this Agreement, including
participation in meetings, due diligence sessions, road shows, the preparation
of offering memoranda, private placement memoranda, prospectuses and similar
documents and comfort letters of accountants, as
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may be reasonably requested by Merger Company. In conjunction with the obtaining
of any such financing, the Company agrees, at the reasonable request of Merger
Company, to call for prepayment or redemption, or to prepay or redeem, or to
attempt to renegotiate the terms of, any then existing indebtedness for borrowed
money of the Company; provided, however, that no such prepayment or redemption
or call for prepayment or redemption or renegotiated terms shall actually be
made or become effective (nor shall the Company be required to incur any
liability in respect of any such prepayment or redemption or call therefor or
renegotiation thereof) prior to the Effective Time. Merger Company will promptly
inform the Company of all material developments relating to arranging such
financing.
(c) Merger Company and the Company shall use their respective
commercially reasonable efforts to resolve such objections, if any, as may be
asserted with respect to the transactions contemplated hereby under the laws,
rules, guidelines or regulations of any Governmental Entity. Without limiting
the foregoing, the Company and Merger Company shall, as soon as practicable,
file Notification and Report Forms under the HSR Act (as defined below) with the
Federal Trade Commission (the "FTC") and the Antitrust Division of the
Department of Justice (the "Antitrust Division") and shall use commercially
reasonable efforts to respond as promptly as practicable to all inquiries
received from the FTC or the Antitrust Division for additional information or
documentation. "Competition Laws" means statutes, rules, regulations, orders,
decrees, administrative and judicial doctrines, and other laws that are designed
or intended to prohibit, restrict or regulate actions having the purpose or
effect of monopolization, lessening of competition or restraint of trade and
includes the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act") and, to the extent applicable, equivalent laws of the European
Union or the Member States thereof.
(d) The Company shall cooperate with Merger Company, and use its
commercially reasonable efforts to take all action necessary (including agreeing
to amend this Agreement and/or restructure the transactions contemplated hereby
prior to the Special Meeting), to cause the Surviving Corporation to be entitled
to recapitalization accounting treatment for the transactions contemplated
hereby for GAAP and SEC financial reporting purposes, provided that the Board
determines that any such action would not reasonably be expected to affect
adversely the Company or any of its stockholders.
(e) The Company shall cooperate with Merger Company in connection with
any decision by Merger Company to order, at the sole expense of Merger Company,
any title insurance commitment or commitments with respect to each parcel of
Owned Property. The Company shall cooperate with Merger Company in the event
that Merger Company elects to purchase, at the sole expense of Merger Company,
title insurance and/or order, at the sole expense of Merger Company, surveys
with respect to each parcel of Owned Property.
(f) Finance Company will use its commercially reasonable efforts to
obtain as promptly as practicable the Financing required to be obtained to
consummate
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the transactions contemplated hereby, as described in Section 4.6, provided that
Finance Company shall not be obligated to seek a waiver of the conditions to
such Financing. Neither Finance Company nor Merger Company will intentionally
take any action that would be reasonably likely to result in the failure of the
consummation of the Financing.
(g) In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and/or directors of the Surviving Corporation shall take or cause to be
taken all such necessary action.
(h) Each of the parties shall use commercially reasonable efforts to
prevent the entry of, and to cause to be discharged or vacated, any order or
injunction of a Governmental Entity precluding, restraining, enjoining or
prohibiting consummation of the Merger.
Section 5.5 Employee Benefits.
(a) Surviving Corporation hereby agrees to honor, and to make required
payments when due under, all contracts, agreements, arrangements, policies,
plans and commitments of the Company and its Subsidiaries in effect as of the
date hereof which are applicable with respect to any employee, officer, director
or executive or former employee, officer, director or executive of the Company
or any Subsidiary thereof, including the Benefit Plans in existence as of the
date hereof. Nothing herein shall be construed to prohibit the Surviving
Corporation from amending or terminating such contracts, agreements,
arrangements, policies, plans and commitments in accordance with the terms
thereof and with applicable law.
(b) Surviving Corporation hereby agrees to assume, each employment,
retention, consulting or severance agreement or arrangement that was entered
into by and between the Company and any employee, officer, director or executive
or former employee, officer, director or executive of the Company or any
Subsidiary thereof and that is in effect as of the date hereof and has been
delivered to Merger Company as of the date hereof.
(c) Surviving Corporation hereby agrees that after the Effective Time,
it shall continue to maintain until the end of year 2001 the core benefits
identified on Schedule 5.5 of the Disclosure Letter for the benefit of employees
and former employees of the Company and its Subsidiaries which in the aggregate
provide benefits that are no materially less favorable taken as a whole (on a
value or cost basis) than those provided to them under the Benefit Plans on the
date hereof. In addition, Surviving Corporation hereby agrees that for a period
of eighteen months immediately following the Effective Time, it shall, or shall
cause the Surviving Corporation to, continue to maintain the Company Separation
Policy as in effect on the date hereof, without any amendment thereto which is
adverse to the participants therein.
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(d) For purposes of all employee benefit plans, programs and
arrangements maintained by or contributed to by Surviving Corporation and its
Subsidiaries, Surviving Corporation shall cause each such plan, program or
arrangement to treat the prior service with the Company and its affiliates of
each person who is an employee or former employee of the Company or its
Subsidiaries immediately prior to the Effective Time (a "Company Employee") (to
the same extent such service is recognized under analogous plans, programs or
arrangements of the Company or its affiliates prior to the Effective Time) as
service rendered to Surviving Corporation, for purposes of eligibility to
participate and vesting; provided, however, that any benefits provided by
Surviving Corporation under any (i) ERISA Plan, (ii) nonqualified employee
benefit or deferred compensation plans, stock option, bonus or incentive plans
or (iii) other employee benefit or fringe benefit programs, that may be in
effect generally for employees of Surviving Corporation or its Subsidiaries from
time to time, shall be reduced by benefits in respect of the same years of
service under analogous plans, programs and arrangements maintained by or
contributed to by the Company, the Surviving Corporation or their Subsidiaries.
Surviving Corporation shall (x) waive all limitations as to preexisting
conditions exclusions and waiting periods with respect to participation and
coverage requirements applicable to the Company Employees under any welfare
benefit plans that such Company Employees may be eligible to participate in
after the Effective Time, other than limitations or waiting periods that are
already in effect with respect to such employees and that have not been
satisfied as of the Effective Time under any welfare benefit plan maintained for
the Company Employees immediately prior to the Effective Time and (y) provide
each Company Employee with credit for any co-payments and deductibles paid prior
to the Effective Time in satisfying any applicable deductible or out-of-pocket
requirements under any welfare plans that such employees are eligible to
participate in after the Effective Time.
(e) Surviving Corporation shall pay (no later than the February 15th
following the Year for which the payment is due) to each individual who was a
participant in any of the Company's annual incentive compensation plans (each, a
"Bonus Plan") immediately prior to the Effective Time, a lump sum cash payment
equal to the product of (i) the bonus which such participant would have earned
in respect of the year (the "Year") in which the Effective Time occurs, based
upon the actual performance in such Year prior to the Effective Time, compared
to the target performance levels for the period in such Year prior to the
Effective Time and (ii) a fraction, the numerator of which is the number of days
in such Year prior to the Effective Time and the denominator of which is 365;
provided that such individual will only be entitled to such payment if still
employed at the end of such Year except for individuals previously identified to
Merger Company in writing to whom such requirement shall be inapplicable. Merger
Company may permit each member of Management as it shall designate to elect,
prior to the Effective Time, to invest such deferred bonus amount in shares of
Surviving Corporation Common Stock and Surviving Corporation Junior Preferred
Stock. In the event of such election, the shares will be issued no later than
the February 15th following the Year for which payment is due to those
individuals employed at the end of such Year. The number of shares of Surviving
Corporation
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Common Stock and Surviving Corporation Junior Preferred Stock to be issued will
be determined by dividing the amount that would otherwise be payable as a bonus
that is elected to be converted by $15.625 and multiplying such amount by the TM
Merger Consideration. Notwithstanding anything in any employee agreement to the
contrary, the payment under this Section 5.5(e) shall offset any payment under
such employee agreement with respect to the prorated bonus which may be payable
under such employee agreement with respect to the year in which the Effective
Time occurs. Surviving Corporation shall implement a replacement annual
incentive compensation plan similar to the existing plan except with respect to
the targets thereunder for the remainder of the year in which the Effective Time
occurs.
Section 5.6 Stockholders Meeting; Proxy Statement.
(a) The Company shall, in accordance with applicable law and the
Restated Certificate of Incorporation and the By-laws of the Company duly call,
give notice of, convene and hold a meeting of its stockholders (the "Special
Meeting") as promptly as reasonably practicable after the date hereof for the
purpose of considering and taking action upon this Agreement, the Charter
Amendment and such other matters as may be appropriate at the Special Meeting.
(b) As soon as reasonably practicable following the date of this
Agreement, the Company shall prepare and file with the SEC, and Merger Company
and Finance Company shall cooperate with the Company in such preparation and
filing, an S-4 and a preliminary proxy statement and the parties shall file, if
necessary, any other statement or schedule relating to this Agreement and the
transactions contemplated hereby and use their respective commercially
reasonable efforts to furnish the information required to be included by the SEC
in the S-4, the Proxy Statement (as hereinafter defined) and any such statement
or schedule. After consultation with Merger Company, the Company shall respond
promptly to any comments made by the SEC with respect to the S-4 or the
preliminary proxy statement and cause a definitive proxy statement (the "Proxy
Statement") to be mailed to its stockholders and the parties shall respond
promptly to any comments with respect to any other statement or schedule filed
by them. No filing of, or amendment or supplement to, the S-4, or the Proxy
Statement or any other statement or schedule will be made by the Company without
providing Merger Company a reasonable opportunity to review and comment thereon,
and no filing of any statement or schedule will be made by Merger Company or
Finance Company without providing the Company a reasonable opportunity to review
and comment thereon. If at any time after the date the S-4 is declared effective
by the SEC or otherwise becomes effective and prior to the Special Meeting any
information relating to the Company, Merger Company or Finance Company, or any
of their respective affiliates, officers or directors, should be discovered by
the Company, Merger Company or Finance Company which is required to be set forth
in an amendment or supplement to the S-4, the Proxy Statement or any other
statement or schedule, so that none of the S-4, the Proxy Statement and any such
statement or schedule will include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
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misleading, the party which discovers such information shall promptly notify the
other party hereto and an appropriate amendment or supplement describing such
information shall be promptly filed with the SEC and, to the extent required by
law, disseminated to the stockholders of the Company. Subject to the fiduciary
obligations of the Board and applicable law, the Company shall include in the
Proxy Statement the recommendation of the Board that stockholders of the Company
adopt this Agreement.
(c) Merger Company and Finance Company agree that (i) they will provide
the Company with all information concerning Merger Company and Finance Company
and their affiliates necessary or appropriate to be included in the Proxy
Statement and (ii) at the Special Meeting or any postponement or adjournment
thereof (or at any other meeting at which the Merger or this Agreement are
considered by stockholders), they will vote, or cause to be voted, all of the
Shares then owned by them, or any of their Subsidiaries and affiliates, if any,
in favor of the approval and adoption of this Agreement.
Section 5.7 Directors' and Officers' Insurance and Indemnification.
(a) The certificate of incorporation and by-laws of the Surviving
Corporation shall contain the provisions with respect to indemnification set
forth in Article VIII of the Restated Certificate of Incorporation and Article
IV of the Company's By-laws on the date of this Agreement and such additional
provisions relating thereto as are described in Exhibit B and Exhibit C attached
hereto and shall provide for indemnification to the fullest extent permitted by
and in accordance with the DGCL, which provisions shall not be amended, repealed
or otherwise modified for a period of six years after the Effective Time (or, in
the case of matters occurring prior to the Effective Time which have not been
resolved prior to the sixth anniversary of the Effective Time, until such
matters are finally resolved) in any manner that would adversely affect the
rights thereunder of individuals who at any time prior to the Effective Time
were directors or officers of the Company in respect of actions or omissions
occurring at or prior to the Effective Time (including the transactions
contemplated by this Agreement).
(b) The Surviving Corporation and its Subsidiaries shall indemnify at
all times after the Effective Time each person who is now, or has been at any
time prior to the date hereof, an employee, agent, director or officer of the
Company or of any of the Company's Subsidiaries (individually an "Indemnified
Party" and collectively the "Indemnified Parties"), to the fullest extent
permitted by applicable law, with respect to any claim, liability, loss, damage,
cost or expense, whenever asserted or claimed ("Indemnified Liability"), based
in whole or in part on, or arising in whole or in part out of, any matter
existing or occurring at or prior to the Effective Time. The Surviving
Corporation shall maintain in effect for not less than six years after the
Effective Time policies of directors' and officers' liability insurance
equivalent in all material respects to those maintained by or on behalf of the
Company and its Subsidiaries on the date hereof (and having at least the same
coverage and containing terms and conditions which are no less advantageous to
the persons currently covered by such policies as insured) with respect to
matters existing or occurring at or prior to the Effective Time; provided,
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however, that if the aggregate annual premiums for such insurance at any time
during such period shall exceed 200% of the per annum rate of premium currently
paid by the Company and its Subsidiaries for such insurance on the date of this
Agreement, then Surviving Corporation shall provide the maximum coverage that
shall then be available at an annual premium equal to 200% of such rate. Without
limiting the foregoing, in the event any Indemnified Party becomes involved in
any capacity in any action, proceeding or investigation based in whole or in
part on, or arising in whole or in part out of, any matter, including the
transactions contemplated hereby, existing or occurring at or prior to the
Effective Time, then to the extent permitted by law, Surviving Corporation shall
periodically advance to such Indemnified Party its legal and other expenses
(including the cost of any investigation and preparation incurred in connection
therewith), subject to the provision by such Indemnified Party of an undertaking
to reimburse the amounts so advanced in the event of a final determination by a
court of competent jurisdiction that such Indemnified Party is not entitled
thereto. Promptly after receipt by an Indemnified Party of notice of the
assertion (an "Assertion") of any claim or the commencement of any action
against him in respect to which indemnity or reimbursement may be sought against
the Company, the Surviving Corporation or a subsidiary of the Company or the
Surviving Corporation ("Indemnitors") hereunder, such Indemnified Party shall
notify any Indemnitor in writing of the Assertion, but the failure to so notify
any Indemnitor shall not relieve any Indemnitor of any liability it may have to
such Indemnified Party hereunder except to the extent that such failure shall
have materially and irreversibly prejudiced Indemnitor in defending against such
Assertion. Indemnitors shall be entitled to participate in and, to the extent
Indemnitors elect by written notice to such Indemnified Party within 30 days
after receipt by any Indemnitor of notice of such Assertion, to assume the
defense of such Assertion, at their own expense, with counsel chosen by
Indemnitors and reasonably satisfactory to such Indemnified Party.
Notwithstanding that Indemnitors shall have elected by such written notice to
assume the defense of any Assertion, such Indemnified Party shall have the right
to participate in the investigation and defense thereof, with separate counsel
chosen by such Indemnified Party, but in such event the fees and expenses of
such counsel shall be paid by such Indemnified Party unless such separate
counsel is required due to a conflict of interest, in which case the Indemnitors
shall be responsible for the fees and expenses of one separate counsel. No
Indemnified Party shall settle any Assertion without the prior written consent
of Surviving Corporation, nor shall Surviving Corporation settle any Assertion
without either (i) the written consent of all Indemnified Parties against whom
such Assertion was made, or (ii) obtaining an unconditional general release from
the party making the Assertion for all Indemnified Parties as a condition of
such settlement. The provisions of this Section 5.7 are intended for the benefit
of, and shall be enforceable by, the respective Indemnified Parties.
Section 5.8 Environmental Assessments.
In the event the Company or Merger Company receives
information after the date hereof as a result of which it concludes in good
faith that a site or sites owned or operated by the Company has associated with
it Environmental Costs and Liabilities that
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would have a Material Adverse Effect, Merger Company shall have the right to
arrange at its sole cost and expense, upon reasonable notice to the Company, for
an independent environmental professional, possessing reasonable levels of
insurance and skills, to conduct tests at such sites; provided, that such
testing shall be conducted upon reasonable notice to the Company, in such a
manner as to minimize disruption to the Company's operations, and in accordance
with a sampling procedure approved in advance by the Company. Merger Company
will, at the Company's option, provide the Company with split samples from such
testing and copies of any reports prepared in connection therewith.
Section 5.9 Environmental Transfer Laws. Prior to the Closing, the
Company shall use its commercially reasonable efforts to ensure compliance with
all Environmental Property Transfer Laws, including the New Jersey Industrial
Site Recovery Act.
Section 5.10 Solvency Letter.
(a) Merger Company shall at its sole cost and expense engage, and use
commercially reasonable efforts to cause, a reputable appraisal firm selected by
Merger Company and reasonably satisfactory to the Company (the "Appraiser") to
deliver to the Company and the Board at the Closing a letter addressed to Merger
Company, the Company and the Board (the "Solvency Letter") to the effect that,
immediately after the Effective Time and after giving effect to the Merger, the
Financing and the other transactions contemplated in connection therewith (and
any changes in the Surviving Corporation's assets and liabilities as a result
thereof), the Surviving Corporation: (i) will be solvent (i.e., in that both the
fair value of its assets will not be less than the sum of its debts and that the
present fair saleable value of its assets will not be less than the amount
required to pay its probable liability on its debts as they become absolute and
matured); (ii) will not have unreasonably small capital with which to engage in
its business; and (iii) will not have incurred and does not plan to incur debts
beyond its ability to pay as they become absolute and matured.
Merger Company will request the Appraiser to deliver a form of the
Solvency Letter as promptly as practicable but in no event later than five
Business Days prior to the Closing Date. The parties agree to cooperate with the
Appraiser in connection with the preparation of the Solvency Letter, including,
providing the Appraiser with any information reasonably available to them
necessary for the Appraiser's preparation of such letter.
Section 5.11 Indemnity. The Company, if prior to the Effective Time,
and the Surviving Corporation, at all times after the Effective Time (each, a
"Merger Party Indemnitor"), shall indemnify Merger Company, Finance Company,
their respective affiliates and each person who is now, or has been at any time
prior to the date hereof, an employee, agent, director or officer of Merger
Company or Finance Company, or of any of Merger Company's or Finance Company's
Subsidiaries and affiliates (including Bear Stearns Merchant Fund Corp., Hicks,
Muse, Tate & Furst Incorporated
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and their respective affiliates) (individually an "Indemnified Merger Party" and
collectively the "Indemnified Merger Parties"), to the fullest extent permitted
by applicable law, with respect to any claim, liability, loss, damage, cost or
expense, asserted against, or incurred by, an Indemnified Merger Party which is
primarily based on an allegation that an Indemnified Merger Party has induced or
acted in concert with the Company or any of its directors to act contrary to or
in violation of any contract, duty or applicable law, to which the Company and
the directors are subject, to the extent such allegation relates to the
negotiation, execution or delivery of this Agreement or the Trust Voting
Agreement by the parties hereto and thereto or the performance of the
obligations of the parties hereunder or thereunder (an "Indemnified Litigation
Matter"). Promptly after receipt by an Indemnified Merger Party of notice of the
assertion of any claim or the commencement of any action against such
Indemnified Merger Party in respect to which indemnity or reimbursement may be
sought against under this Section 5.11 (an "Assertion Against HB"), such
Indemnified Merger Party shall notify the Merger party Indemnitor in writing of
the Assertion Against HB, but the failure to so notify shall not relieve of any
liability it may have to such Indemnified Merger Party hereunder except to the
extent that such failure shall have actually prejudiced in defending against
such Assertion Against HB. In the event that following receipt of notice from
the Indemnified Merger Party, a Merger Party Indemnitor notifies the Indemnified
Merger Party that it desires to defend the Indemnified Merger Party against such
Assertion Against HB, such Merger Party Indemnitor shall have the right to
defend the Indemnified Merger Party by appropriate proceedings and shall have
the sole power to direct and control such defense. If any Indemnified Merger
Party desires to participate in any such defense it may do so at its sole cost
and expense, provided, however, that if the defendants in any such action shall
include the Company and/or its officers or directors as well as an Indemnified
Merger Party and such Indemnified Merger Party shall have received the advice of
counsel that there exist defenses to such Indemnified Merger Party that are
different from or additional to those available to the Company and/or such
officers or directors, the Indemnified Merger Parties shall have the right to
select one separate counsel (and one local counsel in such jurisdictions as are
necessary) reasonably acceptable to the Company to participate in the defense of
such action on its behalf, at the expense of the Company. If the Indemnified
Merger Parties retain such counsel, then to the extent permitted by law, the
Merger Party Indemnitor shall periodically advance to such Indemnified Merger
Parties their reasonable legal and other out-of-pocket expenses relating to the
Indemnified Litigation Matter (including the reasonable cost of any
investigation and preparation incurred in connection therewith). No Indemnified
Merger Party shall settle any Assertion Against HB without the prior written
consent of the Merger Party Indemnitor, nor shall the Merger Party Indemnitor
settle any Assertion Against HB without either (i) the written consent of all
Indemnified Merger Parties against whom such Assertion Against HB was made, or
(ii) obtaining an unconditional general release from the party making the
Assertion Against HB for all Indemnified Merger Parties as a condition of such
settlement. The provisions of this 5.11 are intended for the benefit of, and
shall be enforceable by, the respective Indemnified Merger Parties.
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Section 5.12 Listing for Surviving Corporation Preferred Stock. Merger
Company agrees to use its commercially reasonable efforts to have the Surviving
Corporation Preferred Stock eligible for trading on the Nasdaq National Market.
If the Surviving Corporation Preferred Stock is not eligible for trading on the
Nasdaq National Market as of the Closing Date, Merger Company will use its
commercially reasonable efforts to arrange for an established securities dealer
or dealers to make a market in the Surviving Corporation Preferred Stock.
Section 5.13 Stockholders Agreement. On or prior to the Closing Date,
the Company will execute and deliver, and Merger Company shall cause the members
thereof to execute and deliver, to the Trust the Stockholders Agreement among
the Company, the members of the Merger Company, Management and the Trust, in the
form attached hereto as Exhibit G.
Section 5.14 Exchange of Certain Company Common Stock. Immediately
prior to the Closing (and after the Required Vote), the Company shall issue the
Class TM Preferred Stock to the Trust and Management, in accordance with the
terms of the exchange agreement among the Company, the Trust and Management
regarding the exchange of certain Company Common Stock to Class TM Preferred
Stock, in the form attached hereto as Exhibit H (the "TM Exchange Agreement").
Section 5.15 Charter Amendment. On or prior to the Closing Date, the
Company shall file with the Secretary of State a certificate of amendment to the
Restated Certificate of Incorporation giving effect to the Charter Amendment.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligation of each party to effect the Merger shall be subject to
the satisfaction on or prior to the Closing Date of each of the following
conditions:
(a) This Agreement shall have been adopted and the Charter Amendment
shall have been approved by the affirmative vote of the holders of a majority of
the outstanding shares of Company Common Stock;
(b) No statute, rule, order, decree or regulation shall have been
enacted or promulgated and no other action shall have been taken by any
Governmental Entity of competent jurisdiction which permanently restrains,
enjoins or otherwise prohibits the consummation of the Merger or makes the
Merger illegal;
(c) There shall be no order or injunction of a Governmental Entity of
competent jurisdiction in effect precluding, restraining, enjoining or
prohibiting
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consummation of the Merger and there shall be no suit, action or proceeding by a
Governmental Entity seeking to restrain, enjoin or prohibit the Merger;
(d) The applicable waiting period under the HSR Act shall have expired
or been terminated;
(e) Other than filing the Certificate of Merger and the Restated
Certificate of Incorporation in accordance with the DGCL, all authorizations,
consents and approvals of all Governmental Entities required to be obtained
prior to consummation of the Merger shall have been obtained, except for such
authorizations, consents and approvals the failure of which to be obtained would
not have a Material Adverse Effect;
(f) The Federal Bankruptcy Court of the Southern District of New York
(the "Court") shall have issued an order (i) approving of the Trust's execution
of and performance of the Trust Voting Agreement and the transactions
contemplated thereby; (ii) approving the Trust's execution and performance of
the TM Exchange Agreement, the Stockholders' Agreement, the Escrow Agreement
(provided that the Order shall not be deemed not to have been obtained if the
provisions therein regarding the separate order referred to therein shall not
have been obtained) and the Tax Matters Agreement and the transactions
contemplated thereby, including the Merger and the execution and performance of
the Amended Supplemental Agreement and the Trust Amendment (as defined in the
Tax Matters Agreement, and together with the Trust Voting Agreement, the TM
Exchange Agreement, the Stockholders' Agreement, the Escrow Agreement and the
Amended Supplemental Agreement, the "Trust Merger Agreements"); (iii)
discharging fully the Trustees of the Trust from any and all liabilities
relating to or arising from the execution and delivery of and performance of
their obligations under the Trust Merger Agreements and discharging fully the
Trustees of the Trust from any and all liabilities relating to or arising from
the consummation of the transactions contemplated the Trust Merger Agreements
(other than the Trustees' obligations to the parties under the Trust Merger
Agreements); (iv) approving the transfer of all assets of the grantor trust
portion of the Trust that would constitute Qualified Payments (as defined in
Section 468B(d) of the Code) (as defined in the Tax Matters Agreement) to the
Designated Settlement Fund (as defined in the Tax Matters Agreement) immediately
following the receipt of such amount (and from time to time thereafter as
Qualified Payments are received as provided in Section 2.6 of the Tax Matters
Agreement), all in a form reasonably acceptable to the Trust, which order shall
be in full force and effect; and
(g) The S-4 shall have been declared effective under the Securities Act
and no stop order suspending the effectiveness of the S-4 shall be in effect and
no proceeding for such purpose shall be pending before or threatened by the SEC.
Section 6.2 Conditions to the Obligation of the Company to Effect the
Merger. The obligation of the Company to effect the Merger is further subject to
the satisfaction or waiver at or prior to the Closing Date of the following
conditions:
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(a) The representations and warranties of Merger Company and Finance
Company set forth in this Agreement (i) to the extent qualified by material
adverse effect shall be true and correct, and (ii) to the extent not qualified
by material adverse effect shall be true and correct, except that this clause
(ii) shall be deemed satisfied so long as any failures of such representations
and warranties to be true and correct do not individually or in the aggregate
have a material adverse effect on the business, results of operations or
financial condition of Merger Company and/or Finance Company and their
respective Subsidiaries, taken as a whole, or materially impair the consummation
of the transactions contemplated by this Agreement, in each of cases (i) and
(ii), as of the date of this Agreement and as of the Closing Date as though made
on and as of the Closing Date (except to the extent such representations and
warranties are made as of a specific date), and the Company shall have received
a certificate to such effect signed on behalf each of Merger Company and Finance
Company by the Chief Executive Officer of each of Merger Company and Finance
Company to such effect.
(b) Each of Merger Company and Finance Company shall have performed in
all material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date, and Company shall have received a
certificate signed on behalf of each of Merger Company and Finance Company by
the Chief Executive Officer of each of Merger Company and Finance Company to
such effect.
(c) The amount of cash necessary to complete the transactions
contemplated by the Agreement as set forth in 2.2(a) and (d) shall be deposited
with the Exchange Agent concurrently with the Closing.
(d) The Company shall have received the Solvency Letter as referred to
in Section 5.10, in form and substance reasonably satisfactory to it.
(e) The members of Merger Company shall have executed and delivered the
Stockholders Agreement to the Company.
Section 6.3 Conditions to Obligations of Merger Company to Effect the
Merger. The obligation of Merger Company to effect the Merger is further subject
to the satisfaction or waiver at or prior to the Closing Date of the following
conditions:
(a) The representations and warranties of the Company set forth in this
Agreement (i) to the extent qualified by Material Adverse Effect shall be true
and correct, and (ii) to the extent not qualified by Material Adverse Effect
shall be true and correct, except that this clause (ii) shall be deemed
satisfied so long as any failures of such representations and warranties to be
true and correct do not individually or in the aggregate have a Material Adverse
Effect, in each of cases (i) and (ii), as of the date of this Agreement and as
of the Closing Date as though made on and as of the Closing Date (except to the
extent such representations and warranties are made as of a specific date) and
Merger Company shall have received a certificate to such effect signed on behalf
of the Company by the Chief Executive Officer of the Company to such effect.
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(b) The Company shall have performed in all material respects all
material obligations required to be performed by it under this Agreement at or
prior to the Closing Date, and Merger Company shall have received a certificate
to such effect signed on behalf of the Company by its Chief Executive Officer or
Chief Financial Officer.
(c) The consents, approvals, authorizations, qualifications and orders
of Governmental Entities that are necessary to consummate the transactions
contemplated hereby shall have been obtained, other than those the failure of
which to be obtained, individually or in the aggregate, would not have a
Material Adverse Effect.
(d) There shall not be pending any suit, action or proceeding brought
by any Governmental Entity seeking to prohibit or limit in any material respect
the ownership or operation by the Company, Merger Company or any of their
respective affiliates of a substantial portion of the business or assets of the
Company and its Subsidiaries, taken as a whole, or to require any such person to
dispose of or hold separate any material portion of the business or assets of
the Company and its Subsidiaries, taken as a whole, as a result of the Merger or
any of the other transactions contemplated by this Agreement.
(e) The proceeds of the Financing from the lenders identified in the
Commitment Letters, on the terms and conditions set forth therein shall be
available to the borrower under the Commitment Letters simultaneously with the
Closing.
(f) Since the date hereof, no Material Adverse Effect shall have
occurred nor shall have there occurred any event, development, change or
circumstance that would have a Material Adverse Effect (including an adverse
development in any litigation pending against the Company), and the Company
shall have delivered to Merger Company at the Closing a certificate signed by
its Chief Executive Officer or Chief Financial Officer, dated the Closing Date,
to the foregoing effect.
(g) The senior executive identified in Section 6.3(g) of the Disclosure
Letter who has entered into an employment arrangement regarding his employment
with the Company after the Closing shall not have terminated his employment.
(h) The Tax Matters Agreement shall be in full force and effect.
(i) The exchange of shares of Company Common Stock for shares of Class
TM Preferred Stock pursuant to the TM Exchange Agreement shall have been
consummated.
(j) There shall not have occurred, after the date hereof, any public
announcement by any of the following any commissioner of the SEC; the chief
accountant, any deputy chief accountant, any associate chief accountant; or the
director of the Division of Corporation Finance; in any such case stating that
the SEC has revised or intends to revise any of its published interpretations in
effect as of the date hereof concerning the availability of "recapitalization
accounting" treatment in a manner which
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would adversely affect the Surviving Corporation's ability to qualify for such
treatment as a result of the transactions contemplated hereby.
Section 6.4 Frustration of Closing Conditions. Neither Merger Company
nor the Company may rely on the failure of any condition set forth in Section
6.2 (other than Section 6.2(c)) or 6.3, as the case may be, to be satisfied if
such failure was caused by such party's failure to fulfill in any material
respects its obligations under this Agreement.
ARTICLE VII
TERMINATION
Section 7.1 Termination. Notwithstanding anything herein to the
contrary, this Agreement may be terminated and the Merger may be abandoned at
any time prior to the Effective Time, whether before or after stockholder
adoption of this Agreement, except for clause (c) below which cannot be
effectuated after the adoption of this Agreement by the stockholders of the
Company by the Required Vote:
(a) By the mutual consent of the Members of Merger Company and the
Board.
(b) By either the Company or Merger Company if:
(i) the Merger shall not have been consummated on or
prior to November 30, 2000; provided, however, that
such date shall automatically be extended to December
28, 2000 if the Special Meeting shall not have been
held on or prior to November 1, 2000; and provided
further that if the Special Meeting shall not have
been held on or prior to December 1, 2000 such date
shall automatically be extended to the later of
December 28, 2000 or that date which is 15 Business
Days after the Special Meeting is held but in no
event shall such date extend beyond January 31, 2001
or such other date, if any, as Merger Company and the
Company shall agree in writing (provided that the
right to terminate this Agreement under this Section
7.1(b)(i) shall not be available to a party whose
failure to fulfill in any material respect any
obligation under this Agreement has been the cause of
or resulted in the failure of the Effective Time to
occur on or before such date); or
(ii) the stockholders of the Company fail to adopt this
Agreement by the Required Vote or fail to approve the
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Charter Amendment at the Special Meeting (including
any postponement or adjournment thereof); or
(iii) any Governmental Entity shall have issued a statute,
order, decree or regulation or taken any other action
(which statute, order, decree, regulation or other
action the parties hereto shall have used their
commercially reasonable efforts to lift), in each
case permanently restraining, enjoining or otherwise
prohibiting consummation of the Merger or making the
Merger illegal and such statute, order, decree,
regulation or other action shall have become final
and non-appealable; or
(iv) the other party is in material breach of its
representations or warranties or fails to perform in
any material respect its covenants or other
agreements hereunder to the extent required to have
been performed at such time, which breach or failure
to perform (A) would give rise to the failure of a
condition set forth in Section 6.2 in the case of
such a breach or failure to perform on the part of
the Merger Company or Section 6.3 in the case of such
a breach or failure to perform on the part of Company
and (B) is incapable of being cured by the party so
breaching or failing to perform prior to November 30,
2000 (or such later date as may be applicable as set
forth in Section 7.1(b)(i)) or, if capable of being
cured by such date, is not cured within 30 days after
the terminating party gives written notice of such
breach to the other party; or
(v) the Trust Voting Agreement is terminated pursuant to
Section 5(b) or Section 5(c) thereof provided that if
the Trust Voting Agreement terminates pursuant to
Section 5(b)(iii) thereof, the Company may not effect
such termination unless contemporaneously therewith
the Company pays or causes to be paid to Merger
Company, or its designee, in immediately available
funds the Termination Fee and any Expenses required
to be paid pursuant to Section 8.1.
(c) By the Company if (i) the Board authorizes the Company, subject to
complying with the terms of this Agreement, to enter into a binding written
agreement with respect to a transaction that constitutes a Superior Proposal and
the Company has notified Merger Company in writing that it intends to enter into
such an agreement and terminate this Agreement pursuant to this clause (c),
attaching the most current version of such agreement to such notice, and (ii)
during the five Business Day period after the Company's notice, the Company
shall have negotiated with Merger Company regarding
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the terms and conditions of a revised proposal by Merger Company and if the
Board of Directors of the Company shall have concluded, after considering any
revised proposal made by Merger Company during such period that any Superior
Proposal giving rise to the Company's notice, as then revised, continues to be a
Superior Proposal. The Company may not effect such termination unless
contemporaneously therewith the Company pays or causes to be paid to Merger
Company, or its designee, in immediately available funds the Termination Fee and
Expenses required to be paid pursuant to Section 8.1. The Company agrees (x)
that it will not enter into a binding agreement referred to in clause (ii) above
until at least five Business Days after it has provided the notice to Merger
Company required by the first sentence of this Section 7.1(c) and has made the
payments required by the immediately preceding sentence and (y) to notify Merger
Company promptly if the Board determines not to enter into a binding agreement
with respect to the Superior Proposal as to which notification was given.
(d) By Merger Company if (i) the Company enters into a written
agreement for a Superior Proposal, (ii) the Board shall have withdrawn or
adversely modified its approval or recommendation of this Agreement or the
Merger and the Trust shall have terminated the Trust Voting Agreement in
accordance with Section 5(b)(i) thereof, (iii) the Company continues to engage
in negotiations or discussions with, or furnish any information or data to, any
third party relating to an Acquisition Proposal for a period of 45 days after
the earliest of (x) the signing of a confidentiality agreement with such third
party, (y) the giving of notice to Merger Company of such Acquisition Proposal
as required by Section 5.2 or (z) the commencement of negotiations with such
third party or (iv) the Special Meeting has not been held on or prior to January
15, 2001, unless Merger Company has materially contributed to the failure to
hold such meeting or the Company has been restrained, enjoined or otherwise
prohibited by a Governmental Entity from holding the Special Meeting.
Section 7.2 Effect of Termination. In the event of the termination of
this Agreement as provided in Section 7.1, written notice thereof shall
forthwith be given to the other party specifying the provision hereof pursuant
to which such termination is made, and this Agreement shall forthwith become
null and void after the expiration of any applicable period following such
notice. In the event of such termination, there shall be no liability on the
part of Merger Company or the Company except as set forth in Section 8.1 hereof,
except with respect to the requirement to comply with the Confidentiality
Agreement and return or hold evaluation materials pursuant to the procedures set
forth therein and in Section 5.3 and except for any intentional breach of this
Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Fees and Expenses. Whether or not the Merger is
consummated, all costs and expenses incurred in connection with this Agreement
and the
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transactions contemplated hereby shall be paid by the party incurring such costs
or expenses, except as provided in Sections 5.7 and 5.11.
(a) In the event that
(i) this Agreement is terminated by the Company
pursuant to Section 7.1(c), or by the
Company pursuant to Section 7.1(b)(v) due to
the Trust Voting Agreement being terminated
pursuant to Section 5(b)(i) or 5(b)(iii)
thereof, or
(ii) this Agreement is terminated by Merger
Company pursuant to Section 7.1(d)(i) or
Section 7.1 (d)(ii) or by Merger Company
pursuant to Section 7.1(b)(v) due to the
Trust Voting Agreement being terminated
pursuant to Section 5(b)(i) or 5(c)(ii)
thereof
then in each such case the Company shall pay, or cause to be
paid,
A. to Merger Company or its designee a
fee (the "Termination Fee") of
$53,000,000. Acceptance of payment
of the Termination Fee by Merger
Company shall constitute conclusive
evidence that this Agreement has
been validly terminated, and upon
such payment, each of the Company,
Merger Company and Finance Company
shall be fully released and
discharged from any liability under
this Agreement; and
B. to Merger Company and Finance
Company as reimbursement, the
amount of their documented
out-of-pocket fees and expenses
including commitment and other fees
and expenses contemplated by the
Commitment Letters and those fees
and expenses for environmental
testing, reasonably incurred
thereby in connection with this
Agreement and the transactions
contemplated hereby (including
those which may be incurred in
connection with enforcing the terms
of this Section 8.1), provided that
in no event shall such expense
reimbursement exceed in the
aggregate $12,500,000 (the
"Expenses").
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(b) In the event that
(i) this Agreement is terminated by Merger
Company pursuant to Section 7.1(d)(iii) or
7.1(d)(iv) or by the Company or Merger
Company pursuant to Section 7.1(b)(v) due to
the Trust Voting Agreement being terminated
pursuant to Section 5(b)(ii) or 5(c)(i)
thereof or by Merger Company pursuant to
Section 7.1(b)(iv) as a result of a willful
breach of a representation or a willful
breach of a covenant, or
(ii) this Agreement is terminated pursuant to
Section 7.1(b)(ii):
then in each such case the Company shall pay, or cause to be
paid,
A. to Merger Company or its designee
the Expenses; and
B. if prior to the first anniversary
of such termination the Company
enters into a definitive agreement
with respect to, or consummates, an
Acquisition Proposal, the
Termination Fee; provided, however,
that if this Agreement is
terminated as a result of the Trust
Voting Agreement being terminated
pursuant to Section 5(b)(ii) or
5(c)(i) thereof, then such
Termination Fee shall only be
required to be paid to Merger
Company if (prior to such first
anniversary) the Company enters
into definitive documentation or
consummates an Acquisition Proposal
with (i) a Person that made an
Acquisition Proposal after the date
of the Confidentiality Agreement
and prior to the time at which the
Court entered its decision with
respect to the Court Approval or
(ii) any other Person if the
consideration to be paid to the
holders of the capital stock of the
Company by such other Person is of
equal or greater value than the
consideration to be paid to such
holders under this Agreement.
(c) In the event that this Agreement is terminated by
Merger Company pursuant to Section 7.1(b)(iv) other than as a result of a
willful breach of a covenant, the Company shall pay or cause to be paid the
Expenses to Merger Company or its designee.
(d) The Company shall pay the Termination Fee to Merger
Company or its designee concurrently with or prior to a termination referred to
in clause 8.1(a)(i) above. The Company shall pay the Termination Fee to Merger
Company or its designee within 24 hours of a termination referred to clause
8.1(a)(ii) above. The Company shall pay the Termination Fee to Merger Company or
its designee promptly (and in any event within two Business Days) after the
first to occur of the execution of an agreement
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relating to an Acquisition Proposal or the consummation of an agreement relating
to an Acquisition Proposal referred to in clauses 8.1(b)(i) and 8.1(b)(ii)
above.
(e) With respect to the Termination Fee required to be
paid on or prior to the termination of the Agreement, the Company shall
reimburse the Expenses to Merger Company on the later of (i) the day that is two
Business Days after such termination and (ii) the day that is two Business Days
after the delivery by Merger Company to the Company of documents reflecting
expenses incurred.
(f) In the event that this Agreement is terminated
pursuant to Section 7.1(b)(ii), 7.1(b)(iv), 7.1(b)(v) (other than as provided in
Section 8.1(a)(i)), 7.1(d)(iii) or 7.1(d)(iv) in circumstances where Section 8.1
requires the payment of Expenses, then the Company shall reimburse Merger
Company for the Expenses incurred to the date of termination on the later of (i)
the day that is two Business Days after such termination and (ii) the day that
is two Business Days after the delivery by Merger Company to the Company of
documents reflecting Expenses incurred. Merger Company shall be entitled to be
reimbursed for Expenses, if any, thereafter incurred by it in connection with
enforcing their right to receive a Termination Fee or reimbursement of Expenses
pursuant to this Section 8.1, with such additional Expenses to be reimbursed
concurrently with the payment of any Termination Fee that may be due pursuant to
Section 8.1.
Section 8.2 Amendment; Waiver.
(a) This Agreement may be amended by the parties hereto,
by action taken or authorized by their respective members or Boards of
Directors, at any time before or after approval by the stockholders of the
Company of the matters presented in connection with the Merger, but after any
such approval no amendment shall be made without the approval of such
stockholders if such amendment alters or changes (i) the Merger Consideration,
(ii) any term of the certificate of incorporation of the Surviving Corporation
or (iii) any terms or conditions of this Agreement if such alteration or change
would adversely affect the holders of any shares of capital stock of the
Company. This Agreement may not be amended, supplemented or modified except by
an instrument in writing signed on behalf of each of the parties hereto.
(b) At any time prior to the Effective Time, the parties
may (i) extend the time for the performance of any of the obligations or other
acts of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties of the other parties contained herein or in any
document, certificate or writing delivered pursuant hereto or (iii) waive
compliance with any of the agreements or conditions of the other parties hereto
contained herein. Any agreement on the part of any party to any such extension
or waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party.
Section 8.3 Survival. The respective representations and
warranties of Merger Company, Finance Company and the Company contained herein
or in any certificates or other documents delivered prior to or as of the
Effective Time shall not
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survive beyond the Effective Time. The covenants and agreements of the parties
hereto (including the Surviving Corporation after the Merger) shall survive the
Effective Time without limitation (except for those which, by their terms,
contemplate a shorter survival period).
Section 8.4 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given upon (a) transmitter's
confirmation of a receipt of a facsimile transmission, (b) confirmed delivery by
a standard overnight carrier or when delivered by hand or (c) the expiration of
five Business Days after the day when mailed in the United States by certified
or registered mail, postage prepaid, addressed at the following addresses (or at
such other address for a party as shall be specified by like notice):
(a) if to the Company, to:
Johns Manville Corporation
717 17th Street 80202
Denver, Colorado 80217-5108
Telephone: (303) 978-2000
Facsimile: (303) 978-4842
Attention: Corporate Secretary
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Telephone: (212) 735-3000
Facsimile: (212) 735-2000
Attention: Franklin M. Gittes, Esq.
and a copy to:
Manville Personal Injury Settlement Trust
143 Bedford Road, Suite 200
Katonah, New York 10536
Telephone: (914) 767-3700
Facsimile: (914) 767-0377
Attention: Chairman and Managing Trustee
and
(b) if to Merger Company or Finance Company:
HB Merger LLC / HB Finance LLC
c/o Hicks Muse Tate & Furst Incorporated
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200 Crescent Court, Suite 1600
Dallas, TX 75201
Telephone: (214) 740-7300
Facsimile: (214) 720-7888
Attention: Lawrence D. Stuart, Jr.
with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201
Telephone: (214) 746-7700
Facsimile: (214) 746-7777
Attention: Glenn D. West, Esq.
Section 8.5 Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this Agreement
unless otherwise indicated. Whenever the words "include", "includes" or
"including" are used in this Agreement they shall be deemed to be followed by
the words "without limitation". The phrase "made available" when used in this
Agreement shall mean that the information referred to has been provided in a
data room in connection with the due diligence review conducted by Merger
Company or has been otherwise made available if requested by the party to whom
such information is to be made available. The words "affiliates" and
"associates" when used in this Agreement shall have the respective meanings
ascribed to them in Rule 12b-2 under the Exchange Act. The phrase "beneficial
ownership" and words of similar import when used in this Agreement shall have
the meaning ascribed to it in Rule 13d-3 under the Exchange Act.
The following terms have the following definitions,
(i) "Business Day" means any day other than
Saturday and Sunday and any day on which banks are not required or authorized to
close in the State of Delaware or New York.
(ii) "EBITDA" shall mean gross revenue (other
than gains or losses from the sale of assets) less operating expenses (including
direct and indirect expenses and corporate overhead expenses, but excluding
depreciation and amortization and all other non-cash expenses). For the purpose
of this Agreement "Free Cash Flow" shall mean EBITDA minus the sum of the
following: (a) cash expenditures that are required to be capitalized in
accordance with GAAP, (b) cash interest expenses, net of cash interest income,
plus cash dividends on preferred stock, (c) local, state and federal corporate
income and other taxes accrued in accordance with GAAP, and (d) the amount of
any increase in working capital determined in accordance with GAAP (with working
capital being comprised of current assets minus current liabilities, except the
current portion of long-term debt) with any change in working capital being
determined
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based upon a comparison with the balance sheet at the beginning of the fiscal
period being analyzed. In addition, for the purpose of determining Free Cash
Flow, EBITDA shall be increased by the amount of any decrease in working capital
determined as contemplated above.
(iii) "Management" means those persons listed in
Section 8.5(iv) of the Disclosure Letter and any additional persons that may be
agreed to after the date hereof by Merger Company and the Company.
(iv) "Material Adverse Effect" shall mean any
result, occurrence, fact, change, event or effect (whether or not (i)
foreseeable or known as of the date of this Agreement, (ii) covered by
insurance, or (iii) constituting a breach of a representation, warranty or
covenant set forth in this Agreement) that, individually or in the aggregate
with any such other results, occurrences, facts, changes, events or effects, is
or would reasonably be expected to be (whether or not such result, occurrence,
fact, change, event or effect has, during the period or at the time in question,
manifested itself in the Company's historical financial statements) (a)
materially adverse to the Company's historical or near-term or long-term
projected (i) business, (ii) operations, (iii) assets, (iv) liabilities, (v)
financial condition or (vi) results of operations (including EBITDA or Free Cash
Flow), in each case, of the Company and its Subsidiaries taken as a whole, or
(b) materially adverse to the ability of any person to perform on a timely basis
any material obligation under this Agreement or the Trust Voting Agreement or to
consummate the transactions contemplated thereby. For purposes of this
paragraph, a Material Adverse Effect shall be determined in light of Finance
Company's intended capital structure for this transaction as reflected in the
Commitment Letters.
(v) "Permitted Exceptions" means (i) statutory
Liens for current taxes, assessments or other governmental charges not yet
delinquent or the amount or validity of which is being contested in good faith
by appropriate proceedings, provided an appropriate reserve is established
therefor; (ii) mechanics', carriers', workers', repairers', warehousemen's and
similar Liens arising or incurred in the ordinary course of business that are
not material to the business, operations and financial condition of the property
so encumbered or the Company and its Subsidiaries; (iii) zoning, entitlement and
other land use and environmental regulations by any Governmental Entity,
provided that such regulations have not been violated; and (iv) agreements with
utility companies which have no Material Adverse Effect on the continued use of
any Company Property in the ordinary course of business consistent with past
practices; (v) Liens arising or resulting from any action taken by Merger
Company; (vi) any other covenants, conditions, restrictions, reservations,
rights, Liens, easements and other matters affecting title, which do not
individually or in the aggregate materially adversely affect the value or use of
any of the Real Property as same has been used by the Company or any of its
Subsidiaries consistent with past practices; and (vii) matters set forth in
Section 3.13 of the Disclosure Letter.
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(vi) "Person" shall mean an individual, limited
or general partnership, limited liability company, joint venture, trust,
association, joint-stock company) corporation, unincorporated entity or
Governmental Entity.
(vii) "Subsidiaries" shall mean with respect to
any Person, any other Person of which more than 50% of the securities or other
interests having by their terms ordinary voting power to elect a majority of the
board of directors or others performing similar functions are owned by such
Person.
(viii) "Tax Matters Agreement" shall mean the Tax
Matters and Amended Trust Relationship Agreement dated as of June, 2000 between
the Company and the Trust, the form of which is attached hereto as Exhibit I.
Section 8.6 Headings; Disclosure Letter. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Any matter disclosed
pursuant to any Section of the Disclosure Letter shall be deemed to be disclosed
for all purposes under this Agreement but such disclosure shall not be deemed to
be an admission or representation as to the materiality of the item so
disclosed.
Section 8.7 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original but all of
which shall be considered one and the same agreement;
Section 8.8 Entire Agreement. This Agreement, together with
the Confidentiality Agreement, constitutes the entire agreement, and supersedes
all prior agreements and understandings (written and oral), among the parties
with respect to the subject matter hereof.
Section 8.9 Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and (other
than Section 5.7, 5.11 and 8.9) nothing in this Agreement, express or implied,
is intended to or shall confer upon any other person any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement. Without
limiting the foregoing, except with respect to the obligations of the Trust
under the Trust Voting Agreement, no direct or indirect holder of any equity
interests or securities of either party hereto (whether such holder is a limited
or general partner, member, stockholder or otherwise), nor any affiliate of any
party hereto, nor any director, officer, employee, representative, agent or
other controlling person of each of the parties hereto and their respective
affiliates shall have any liability or obligation arising under this Agreement
or the transactions contemplated hereby.
Section 8.10 Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
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Section 8.11 Governing Law. This Agreement shall be governed
and construed in accordance with the laws of the State of Delaware without
giving effect to the principles of conflicts of law thereof.
Section 8.12 Assignment. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties; provided, however, that each of Merger
Company and Finance Company shall be permitted to assign its rights under this
Agreement to any newly formed wholly-owned subsidiaries of the members thereof
and provided further that any such assignment will not relieve such party of its
obligations hereunder. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by, the parties and
their respective successors and assigns, and except to the extent necessary to
enforce the provisions of Section 5.7, 5.11 and 8.9, the provisions of this
Agreement are not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.
Section 8.13 Publicity. Except as otherwise permitted by this
Agreement or required by law or stock exchange rules, so long as this Agreement
is in effect, neither the Company nor Merger Company shall, or shall permit any
of its affiliates to, issue or cause the publication of any press release or
other public announcement with respect to this Agreement or the transactions
contemplated hereby without first obtaining the consent of the other parties
hereto, which consent shall not be unreasonably withheld. The parties agree that
the initial press release to be issued with respect to the transactions
contemplated by this Agreement shall be in the form heretofore agreed to by the
parties.
Section 8.14 Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any Federal court
located in the State of Delaware or in any Delaware state court, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of any Federal court located in the State of Delaware or
any Delaware state court in the event any dispute arises, out of this Agreement
or any of the transactions contemplated by this Agreement and (b) agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court and (c) agrees that such forum is not an
inconvenient forum.
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IN WITNESS WHEREOF, Johns Manville Corporation, HB Merger LLC
and HB Finance LLC have caused this Agreement to be signed by their respective
officers hereunto duly authorized as of the date first written above.
JOHNS MANVILLE CORPORATION
By: /s/William E. Mayer
Name: William E. Mayer
Title: Director
HB MERGER LLC
By: /s/Andrew Rosen
Name: Andrew Rosen
Title: Vice President and Assistant
Secretary
HB FINANCE LLC
By: /s/Douglas R. Korn
Name: Douglas R. Korn
Title: Vice President and Assistant
Secretary
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EXHIBIT A
FORM OF CERTIFICATE OF AMENDMENT TO
RESTATED CERTIFICATE OF INCORPORATION
OF
JOHNS MANVILLE CORPORATION
The undersigned, [ ], certifies that he is the [ ] of Johns
Manville Corporation (the "Company"), a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware (the
"DGCL"), in accordance with the provisions of Section 242 thereof, DOES HEREBY
CERTIFY:
That the following amendment was adopted in accordance with
the provisions of Sections 242 of the DGCL:
1. The name of the Company is Johns Manville
Corporation.
2. This certificate of amendment was approved by the
Board of Directors of the Company and thereafter duly adopted by the
stockholders thereof, in accordance with the provisions of Section 242 of the
DGCL.
3. Article FOURTH of the Restated Certificate of
Incorporation is amended by deleting said Article in its entirety and
substituting the following in lieu thereof:
"FOURTH: The total number of shares of all classes of capital
stock which the Company shall have authority to issue is three hundred five
million (305,000,000) shares, of which three hundred million (300,000,000)
shares shall be common stock with a par value of $.01 per share ("Common Stock")
and five million (5,000,000) shares shall be Class TM Preferred Stock with a par
value of $.01 per share. A description of the different classes of stock of the
Company and a statement of the designations and the powers, preferences and
special rights, and the qualifications, limitations or restrictions thereof, of
the various classes of stock are as follows:
A. Provisions Relating to Class TM Preferred Stock. The rights,
preferences, privileges, restrictions and other matters relating to the Class TM
Preferred Stock are as follows:
(1) Designation and Amount. The shares of such series
shall be designated as Class TM Preferred Stock (the "TM Preferred Stock") and
the number of shares constituting the TM Preferred Stock shall be five million
(5,000,000).
(2) Rank. The TM Preferred Stock shall, with respect to
dividend distributions and distributions upon the liquidation, winding-up and
dissolution of the Company, rank prior to all classes of common stock of the
Company, and to each other class of capital stock or series of preferred stock
hereafter created by the Board, the terms of which do not expressly provide that
it ranks prior to or pari passu with the TM
<PAGE> 72
Preferred Stock as to dividend distributions or distributions upon the
liquidation, winding-up and dissolution of the Company. The TM Preferred Stock
shall, with respect to dividend distributions and distributions upon the
liquidation, winding-up and dissolution of the Company, rank pari passu with any
class of capital stock or series of preferred stock hereafter created by the
Board, the terms of which expressly provide that it ranks pari passu with the TM
Preferred Stock as to dividend distributions and distributions upon the
liquidation, winding-up and dissolution of the Company.
(3) Dividends and Distributions. The holders of shares of
TM Preferred Stock shall be entitled to receive dividends and distributions in
an amount and at the time payable as any dividends and distributions that are
declared on the Common Stock, as if each share of TM Preferred Stock is equal to
one share of Common Stock.
(4) Voting Rights. The holders of shares of the TM
Preferred Stock shall have the following voting rights:
Each share of TM Preferred Stock shall entitle the holder
thereof to one vote on all matters submitted to a vote of the stockholders of
the Company. Except as otherwise provided herein or by law, the holders of
shares of TM Preferred Stock and the holders of shares of Common Stock shall
vote together as one class on all matters submitted to a vote of stockholders of
the Company; provided, however, that the affirmative vote of the holders of a
majority of the outstanding shares of TM Preferred Stock on the relevant record
date, voting separately as a class, shall be required for any amendment,
alteration or exchange or similar transaction, of any of the provisions of this
Certificate which would alter or change the powers, preferences or special
rights of the shares of TM Preferred Stock so as to adversely affect them.
Except as set forth herein or otherwise required by law,
holders of TM Preferred Stock shall have no special voting rights and their
consent as a class shall not be required for taking any corporate action.
(5) Reacquired Shares. Any shares of TM Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever
(including by reclassification) shall be retired and cancelled promptly after
the acquisition thereof. All such shares shall, upon their retirement, become
authorized but unissued shares of preferred stock without designation as to
series and may be reissued as part of a new series of preferred stock to be
created by resolution or resolutions of the Board of Directors or as otherwise
permitted under the DGCL
(6) Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Company, no distribution shall be
made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the TM Preferred
Stock unless, prior thereto, the holders of shares of TM Preferred Stock shall
have received $15.625 per share, or (2) to the holders of stock ranking on a
parity (either as to dividends or distributions upon liquidation, dissolution or
winding up) with the TM Preferred Stock, except distributions made
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ratably on the TM Preferred Stock and all other such parity stock in proportion
to the total amounts to which the holders of all such shares are entitled as to
dividends or upon such liquidation, dissolution or winding up.
For purposes of this Article Fourth, Section 6 only, neither
the sale, lease, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Company nor the consolidation or merger of the Company with or
into one or more corporations shall be deemed to be a liquidation, dissolution
or winding-up of the affairs of the Company (unless such sale, conveyance,
exchange or transfer is in connection with a dissolution or winding up of the
business of the Company).
(7) Redemption. The shares of TM Preferred Stock are not
redeemable.
(8) Conversion. The shares of TM Preferred Stock shall be
automatically converted into an equal number of validly issued, fully paid and
non-assessable shares of Common Stock in the event that the merger (the
"Merger") contemplated by the Agreement and Plan of Merger among HB Merger LLC,
HB Finance LLC and the Company, dated as of June 22, 2000 (the "Merger
Agreement"), shall not have been consummated by the Business Day after the
transactions contemplated by the Exchange Agreement, among the Company, Manville
Personal Injury Settlement Trust and certain individuals party thereto, dated as
of June 22, 2000 (the "Exchange Agreement"), are consummated. If the Merger is
not so consummated, or if the Merger Agreement is terminated, each holder of a
certificate representing TM Preferred Stock shall, after the earlier to occur of
such events, be entitled to receive certificates representing Common Stock upon
presentation of certificates representing TM Preferred Stock as provided for in
the Exchange Agreement.
(9) Restriction on Transferability. Except as
contemplated by the Merger Agreement and the Exchange Agreement, the shares of
TM Preferred Stock may not be transferred or pledged in any manner whatsoever.
(10) Reports. So long as any shares of TM Preferred Stock
are outstanding, the Company will furnish holders thereof by first class mail,
postage prepaid, at such holder's address as the same appears on the stock
register of the Company, with the quarterly and annual financial reports that
the Company is required to file with the Securities and Exchange Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934,
as amended, or, in the event that the Company is not required to file such
reports, reports containing the same financial information as would be required
in such reports.
(11) General Provisions.
(a) If any of the TM Preferred Stock
certificates shall be mutilated, lost, stolen or destroyed, the Company
shall issue, in exchange and in
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substitution for and upon cancellation of the mutilated TM Preferred
Stock certificate, or in lieu of and substitution for the TM Preferred
Stock certificate lost, stolen or destroyed, a new TM Preferred Stock
certificate of like tenor and representing an equivalent amount of
shares of TM Preferred Stock, but only upon receipt of evidence of such
loss, theft or destruction of such TM Preferred Stock certificate and
indemnity, if requested, satisfactory to the Company.
(b) The term "outstanding," when used in
reference to shares of a specific series or class of capital stock of
the Company, shall mean issued shares, excluding shares held by the
Company or a subsidiary.
(c) No holder of shares of TM Preferred Stock
will, except as otherwise provided in subparagraph (8) above, by virtue
of such holder's holding such shares, possess any preemptive rights to
subscribe for or acquire any unissued shares of capital stock of the
Company (whether now or hereafter authorized) or securities of the
Company convertible into, or exercisable or exchangeable for, shares of
capital stock of the Company.
(d) Each holder of TM Preferred Stock, by
acceptance thereof, acknowledges and agrees that payments of dividends
on or liquidation preference of TM Preferred Stock, and exchange,
redemption and repurchase of TM Preferred Stock, by the Company are
subject to restrictions on the Company contained in certain credit and
financing agreements binding on the Company or certain of its
subsidiaries.
(e) If any payment, redemption, exchange or
other action shall be required by the terms hereof to be made or taken
on a day that is not a Business Day, such payment, redemption, exchange
or other action shall be made or taken on the immediately succeeding
Business Day. "Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in the State of Delaware or the
State of New York are authorized by law to close.
B. Provisions Relating to Common Stock. The rights, preferences,
privileges, restrictions and other matters relating to the Common Stock are as
follows:
No holder of Common Stock of the Company shall be entitled as
of right to purchase or subscribe for any part of the unissued stock of the
Company or of any stock of the Company to be issued by reason of any increase of
the authorized capital stock of the Company or of the number of its shares, or
of bonds, certificates of indebtedness, debentures, or other securities
convertible into stock of the Company or of any stock of the Company purchased
by it or its nominee or nominees.
The holders of the Common Stock shall have the right to one
vote per share on all questions to the exclusion of all other classes or classes
of stock, except as by law expressly provided or as otherwise herein expressly
provided with respect to the holders of any other class or classes of stock."
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IN WITNESS WHEREOF, the Company has caused this Certificate of
Amendment to be signed by [ ], its [ ], this _____ day of ____________, 2000.
JOHNS MANVILLE CORPORATION
By:
------------------------------------
Name:
Title:
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<PAGE> 76
EXHIBIT B
FORM OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
JOHNS MANVILLE CORPORATION
Johns Manville Corporation, a corporation organized and
existing under the laws of the State of Delaware (the "Company"), does hereby
certify that:
1. The name of this corporation is Johns Manville
Corporation. The original Certificate of Incorporation of the Company was filed,
under the original name of the Company, Manville Corporation, with the Office of
the Secretary of State of Delaware on August 21, 1981. A Restated Certificate of
Incorporation was filed with the Secretary of State of Delaware on November 28,
1988.
2. This Amended and Restated Certificate of
Incorporation has been duly adopted in accordance with Sections 242 and 245 of
the General Corporation Law of the State of Delaware (the "DGCL"), and amends
the provisions of the Certificate of Incorporation, as amended and restated to
date, of the Company.
3. The text of the Certificate of Incorporation is
hereby amended and restated to read in its entirety as follows:
FIRST: The name of the Corporation is Johns Manville
Corporation.
SECOND: The address of the registered office of the Company in
the State of Delaware is 9 East Loockerman Street, in the City of Dover, County
of Kent, State of Delaware. The name of the registered agent of the Company in
the State of Delaware at such address is National Corporate Research, Ltd.
THIRD: The purpose of the Company is to engage in any lawful
act or activity for which corporations may be organized under the DGCL, as it
may from time to time be amended.
FOURTH: The total number of shares of all classes of capital
stock which the Company shall have the authority to issue is seventy million
(70,000,000) shares, of which: (i) forty million (40,000,000) shares shall be
shares of common stock, with a par value of $.01 per share ("Common Stock"); and
(ii) thirty million (30,000,000) shares shall be shares of preferred stock, with
a par value of $.01 per share ("Preferred Stock"), with eight million
(8,000,000) shares designated as Series A Redeemable PIK Preferred Stock ("PIK
Preferred Stock") with the terms as set forth in Annex A to this Amended and
Restated Certificate of Incorporation and with sixteen million (16,000,000)
<PAGE> 77
shares designated as Series B Convertible Preferred Stock ("Junior Preferred
Stock") with the terms set forth in Annex B to this Amended and Restated
Certificate of Incorporation.
A description of the different classes of stock of the Company
and a statement of the designations and the powers, preferences and special
rights, and the qualifications, limitations or restrictions thereof, of the
various classes of stock are as follows:
A. Provisions Relating to Preferred Stock
The Preferred Stock may be issued from time to time in one or
more series. The Board of Directors is hereby authorized, within the limitations
and restrictions stated in this Certificate of Incorporation, including the
terms of any Preferred Stock set forth on Annex A or Annex B hereto, to fix or
alter the dividend rights, dividend rate, conversion rights, voting rights,
rights and terms of redemption (including sinking fund provisions), the
redemption price or prices, the liquidation preferences of any wholly unissued
series of Preferred Stock, and the number of shares constituting any such series
and the designation thereof, or any of them; and to increase or decrease the
number of shares of any series subsequent to the issue of shares of that series
shall be so decreased, the shares constituting such decrease shall resume the
status which they had prior to the adoption of the resolution originally fixing
the number of shares of such series. The authority of the Board of Directors
with respect to each such series will include, without limiting the generality
of the foregoing, the determination of any or all of the following:
(1) The number of shares of any series and the
designation to distinguish the shares of such series from the shares of all
other series;
(2) Whether dividends, if any, will be cumulative or
noncumulative, the dividend rate of such series, and the dates and preferences
of dividends on such series;
(3) The right or obligation, if any, of the Company to
redeem shares of the particular series of Preferred Stock at the option of the
Company, at the option of the holder, or both, and, if redeemable, the price,
terms, conditions and manner of such redemption;
(4) The special and relative rights and preferences, if
any, and the amount or amounts per share, which the shares of such series of
Preferred Stock shall be entitled to receive upon any voluntary or involuntary
liquidation, dissolution or winding up of the Company or in the event of any
merger or consolidation of or sale of assets by the Company;
(5) The right, if any, of the holders of such series of
Preferred Stock to convert the same into, or exchange the same for, shares of
any other class or series of
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<PAGE> 78
stock of the Company, and the terms and conditions of such conversion or
exchange, including the price or prices or the rate or rates of conversion or
exchange and the terms of adjustment, if any;
(6) The terms of any sinking fund or redemption or
repurchase or purchase account, if any; the obligation, if any, of the Company
to retire, redeem, repurchase or purchase shares of such series pursuant to such
fund or account; and the terms and conditions of such obligation;
(7) The voting powers, if any, and whether such voting
powers are full or limited in such series;
(8) Limitations, if any, on the issuance of additional
shares of such series or any shares of any other class or series of stock of the
Company or other entity; and
(9) Such other preferences, powers, and special,
participating, optional, relative or other rights, and the qualifications,
limitations and restrictions thereof, as the Board of Directors shall determine;
all as may be determined from time to time by the Board of Directors and stated
in the resolution or resolutions providing for the issuance of such Preferred
Stock (collectively, a "Preferred Stock Designation").
B. Provisions Relating to Common Stock. The holders of the Common
Stock will be entitled to one vote on each matter submitted to a vote at a
meeting of stockholders for each share of Common Stock held of record by such
holder as of the record date for such meeting and shall be entitled to all other
statutory rights as provided for by law under the DGCL, but shall not be
entitled to vote the shares of Common Stock cumulatively.
FIFTH: Election of directors need not be by written ballot.
SIXTH: (a) Except as provided below, no director of the
Company shall be liable to the Company or its stockholders for monetary damages
arising from a breach of any duty. Nothing in this Article Sixth shall eliminate
or limit the liability of any director for any act, omission or transaction or
under any statutory provision if and to the extent that the DGCL does not permit
such elimination or limitation. Neither amendment nor repeal of this paragraph
(a) nor the adoption of any provision of the Certificate of Incorporation
inconsistent with this paragraph (a) in respect of any matter occurring, or any
cause of action, suit or claim that, but for this paragraph (a) of this Article,
would accrue or arise, prior to such amendment, repeal or adoption of an
inconsistent provision.
(b) The Company shall indemnify any person who is or was
a party to any threatened, pending or completed action, suit or proceeding
(regardless of whether commenced before or after the date of the merger of HB
Merger LLC into the Company
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<PAGE> 79
which occurred on [ ], 2000), whether civil, criminal, administrative or
investigative (including, without limitation, any action, suit or proceeding by
or in the right of the Company or any partnership, corporation, joint venture,
trust or other enterprise with respect to which such person serves or has served
as a director, officer, fiduciary, employee or agent) by reason of the fact that
such person is or was at any time a director, officer, fiduciary, employee or
agent of the Company, including any predecessor thereto or constituent thereof,
or is or was serving at the request of the Company, including any predecessor
thereto or constituent thereof, as a director, officer, fiduciary, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise and irrespective of when the acts or omissions involved in such
action, suit or proceeding occurred or allegedly occurred, against all expenses
(including attorneys' fees and expenses), judgments, fines and amounts paid in
settlement, whenever paid or payable, to the fullest extent and in the manner
(including by way of advancement of costs and expenses) that a corporation
organized under Delaware law is from time to time permitted to indemnify its
directors, officers, fiduciaries, employees and agents.
SEVENTH: Special meetings of stockholders for the transaction
of such business as may properly come before the meeting may be called by order
of the Board of Directors, by the Secretary of the Company, by stockholders
holding together at least a majority of all the shares of the Company entitled
to vote at the meeting or, with respect to the matters set forth in Section 4 or
Section 5 of Annex A to this Amended and Restated Certificate of Incorporation
of the Company, relating to the PIK Preferred Stock, as provided in such Annex
A, or with respect to the matters set forth in Section 4(b) of Annex B to this
Amended and Restated Certificate of Incorporation of the Company, relating to
the Junior Preferred Stock, as provided in such Annex B, and shall be held at
such date and time, within or without the State of Delaware, as may be specified
by such order.
IN WITNESS WHEREOF, the undersigned has executed this Amended
and Restated Certificate of Incorporation and hereby acknowledges that the facts
stated herein are true, this ________ day of __________________________ ,2000
By:
-----------------------------------
Name:
Title:
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<PAGE> 80
ANNEX A
FORM OF TERMS, PREFERENCES, RIGHTS AND LIMITATIONS
of
SERIES A REDEEMABLE PIK PREFERRED STOCK
of
JOHNS MANVILLE CORPORATION
The rights, preferences, privileges, restrictions and other matters
relating to the Series A Redeemable PIK Preferred Stock are as follows:
(1) Designation and Amount. The shares of such series of
preferred stock, par value $.01 per share, of Johns Manville Corporation (the
"Company") shall be designated as Series A Redeemable PIK Preferred Stock (the
"PIK Preferred Stock"), and the number of shares constituting the PIK Preferred
Stock shall be 8,000,000. Such number of shares may be increased or decreased
by resolution of the Board of Directors of the Company (the "Board"); provided,
however, that: (i) in no event shall shares of PIK Preferred Stock be issued
other than pursuant to the Agreement and Plan of Merger dated as of June 22,
2000 among HB Merger LLC, HB Finance LLC and the Company (the "Merger
Agreement"), or as pay-in-kind dividends on outstanding shares of PIK Preferred
Stock; (ii) no decrease shall reduce the number of shares of PIK Preferred
Stock to a number less than the number of shares then outstanding plus the
number of shares issuable as pay-in-kind dividends on the PIK Preferred Stock
through the Scheduled Redemption Date (as hereinafter defined); and (iii) the
Board shall, from time to time, increase such number of reserved shares to the
extent, if any, that the number of previously reserved shares shall be
inadequate for the issuance of such pay-in-kind dividends.
(2) Rank. The PIK Preferred Stock shall, with respect to
dividends and distributions upon the liquidation, winding-up and dissolution of
the Company, rank prior to all classes of common stock of the Company, to the
Series B Convertible Preferred Stock, par value $.01 per share, of the Company
(the "Junior Preferred Stock") and to each other class of capital stock or
series of preferred stock hereafter created by the Board not in violation of
the terms hereof, the terms of which do not expressly provide that it ranks
prior to or pari passu with the PIK Preferred Stock as to dividends and
distributions upon the liquidation, winding-up and dissolution of the Company
(collectively referred to with the common stock of the Company and the Junior
Preferred Stock as "Junior Securities"). The PIK Preferred Stock shall, with
respect to dividends and distributions upon the liquidation, winding-up and
dissolution of the Company, rank pari passu with any class of capital stock or
series of preferred stock hereafter created by the Board not in violation of
the terms hereof, the terms of which expressly provide that it ranks pari passu
with the PIK Preferred Stock as to the dividends and distributions upon the
liquidation, winding-up and dissolution of the Company ("Parity Securities").
The PIK Preferred Stock shall, with respect to dividends and distributions upon
the liquidation,
<PAGE> 81
winding-up and dissolution of the Company, rank junior to each class of capital
or series of preferred stock hereafter created by the Board which has been
approved by the holders of the PIK Preferred Stock in accordance herewith, the
terms of which expressly provide that it ranks prior to the PIK Preferred Stock
as to dividends and distributions upon the liquidation, winding-up and
dissolution of the Company ("Senior Securities"); provided, however, that no
such approval by the holders of the PIK Preferred Stock shall be required with
respect to such liquidation preference or stated amount of shares of any class
of capital stock or series of preferred stock of the Company or any of its
direct or indirect subsidiaries (including any pay-in-kind dividends paid
thereon) as shall be issued in lieu of up to $600,000,000 of initial proceeds
from the sale of debt securities as part of the Permanent Debt Financing (as
hereinafter defined) and the first refinancing (if any) of the Permanent Debt
Financing.
(3) Dividends and Distributions. The holders of shares
of PIK Preferred Stock, in preference to the holders of shares of any Junior
Securities, shall be entitled to receive, when, as and if declared by the Board
out of funds legally available therefor, cumulative dividends, at a rate of
13.0% per annum (as such rate may be increased in accordance with the terms
hereof, the "Dividend Rate") of the Liquidation Preference (as hereinafter
defined) (computed on the basis of a 360-day year and taking into account the
different dividend rates, if any, during the course of such year) payable in
cash on [insert date which is six-month anniversary of Effective Date] and
[insert date which is twelve-month anniversary of Effective Date] of each year
(each a "Dividend Payment Date"), or at the option of the Company, on each
Dividend Payment Date on or prior to the seventh anniversary of the Effective
Date (as hereinafter defined), by validly issuing fully paid and non-assessable
shares of PIK Preferred Stock with an aggregate Liquidation Preference equal to
the amount of dividends to be paid. All undeclared dividends and declared but
unpaid dividends shall compound on a semi-annual basis at the then applicable
Dividend Rate, without any duplication when and if the dividends are actually
paid. In the event (i) that the Company fails to redeem the PIK Preferred Stock
on the Scheduled Redemption Date, pursuant to Section 8(a) hereof, or (ii) of a
Change of Control (as hereinafter defined) and the failure of the Company to
redeem the PIK Preferred Stock pursuant to Section 8(c) hereof, the Dividend
Rate then applicable shall be increased to 15.0% per annum.
(a) The Company shall take all action permitted
under applicable law to permit the payment of dividends, including through
revaluation of assets to make funds legally available for such payment.
(b) All dividends and distributions paid with
respect to shares of PIK Preferred Stock shall be paid pro rata to the holders
of the PIK Preferred Stock. All shares of PIK Preferred Stock issued in respect
of any Dividend Payment Date shall be deemed issued on the applicable Dividend
Payment Date, and will thereupon be duly authorized, validly issued, fully paid
and non-assessable and free and clear of all liens and charges. On and after a
Dividend Payment Date, until certificates representing additional shares of PIK
Preferred Stock shall have been issued, the certificates representing such
shares held by a holder on the Dividend Record Date shall represent
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not only such existing shares, but also the additional shares of PIK Preferred
Stock issued to such holder pursuant to such dividend. "Dividend Record Date"
means with respect to the dividend payable on [insert date which is six-month
anniversary of Effective Date] and [insert date which is twelve-month
anniversary of Effective Date] of each year, the immediately preceding [insert
date which is fifteen days after five-month anniversary of Effective Date] and
[insert date which is fifteen days after eleven-month anniversary of Effective
Date].
(4) Voting Rights. The holders of PIK Preferred Stock shall not be
entitled to any voting rights except as hereinafter provided in this Section 4
or in Section 5 hereof or as otherwise provided by law.
(a) If and whenever: (i) three dividends on the PIK Preferred Stock
have not been paid in full; (ii) any bankruptcy, insolvency, arrangement,
reorganization, receivership or similar proceedings under any federal or state
law shall be commenced by or against the Company and, in the case of any such
involuntary proceeding, such proceeding remains undismissed or unstayed for
sixty (60) days following the commencement thereof, or the Company shall take
any corporate action authorizing any such proceedings; (iii) if, for any reason
(including the reason that funds are not legally available for a redemption),
the Company shall have failed to discharge its scheduled redemption obligation
on the Scheduled Redemption Date pursuant to Section 8(a) hereof or shall have
failed to discharge its redemption obligation based on the occurrence of a
Change of Control pursuant to Section 8(c) hereof; or (iv) the Company shall
have failed to comply in any material respect with any of the covenants set
forth in Section 5 or 6 hereof and such noncompliance shall continue for a
period of thirty (30) days (any such event referred to in clauses (i), (ii),
(iii) or (iv) above being hereinafter referred to as a "Triggering Event"), the
number of directors then constituting the Board shall be increased by two, and
the holders of PIK Preferred Stock then outstanding shall be entitled to elect
two additional directors to serve on the entire Board at any annual meeting of
the stockholders or special meeting held in place thereof; provided, however,
that if (A) the Liquidation Preference of the outstanding PIK Preferred Stock
as of the date of the Triggering Event is 50% or less of the
aggregate Liquidation Preference of PIK Preferred Stock issued to that date,
including as pay-in-kind dividends on the PIK Preferred Stock, or (B) the
amount of outstanding Liquidation Preference of PIK Preferred Stock as of the
date of the Triggering Event shall thereafter be reduced by 50% or more, from
the time after which the holders of the PIK Preferred Stock first have the
right hereunder to elect directors, the right to elect such additional
directors shall be reduced to the right to elect one additional director. In
any case, such election shall occur ninety (90) days after one of the
Triggering Events has occurred if such Triggering Event has not then been
cured; provided, however, that once such Triggering Event has been cured, the
right to elect such additional directors or director, as the case may be, shall
automatically cease (but subject always to the same provisions for the vesting
of such voting rights in the case of the occurrence of any subsequent Triggering
Event) and the term of office of one director elected pursuant to such election
shall forthwith terminate and the size of the entire Board shall be reduced
accordingly. At any time after such
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voting power shall have been so vested in the holders of PIK Preferred Stock,
the secretary of the Company (the "Secretary") may, and upon the written request
of any holder of PIK Preferred Stock (addressed to the Secretary at the
principal office of the Company) shall, call a special meeting of the holders of
the PIK Preferred Stock for the election of the directors or director, as the
case may be, to be elected by them as herein provided, such call to be made by
notice similar to that provided in the Amended and Restated Certificate of
Incorporation or by-laws of the Company for a special meeting of the
stockholders or as required by law. If any such special meeting required to be
called as above provided shall not be called by the Secretary within 20 days
after receipt of any such request, then any holder of PIK Preferred Stock may
call such meeting, by providing notice thereof, and for that purpose shall have
access to the stock-record books of the Company. The directors or director, as
the case may be, elected at any such special meeting shall hold office until the
next annual meeting of the stockholders or special meeting held in lieu thereof,
if such office shall not have been terminated as provided above. If any vacancy
shall occur among the directors or director, as the case may be, elected by the
holders of PIK Preferred Stock or the successor of such remaining directors or
director, as the case may be, the remaining director elected by the holders of a
majority of the outstanding shares of PIK Preferred Stock or, if there is no
such director, the holders of a majority of the outstanding shares of PIK
Preferred Stock shall be entitled to fill such vacancy, and any person entitled
shall serve until the next annual meeting of the stockholders or special meeting
held in place thereof if such office shall not have previously terminated as
provided above. Except for cause, directors appointed by the holders of the PIK
Preferred Stock may only be removed by the holders of a majority of the
outstanding shares of PIK Preferred Stock as set forth in the following
sentence. Holders of a majority of the outstanding shares of PIK Preferred Stock
may remove Directors that have been elected on their behalf with or without
cause.
(b) So long as any shares of PIK Preferred Stock remain outstanding,
without the written consent of the holders of a majority of the outstanding
shares of PIK Preferred Stock or the approval of holders of a majority of the
outstanding shares of PIK Preferred Stock at a meeting of such holders called
for such purpose, the Company shall not amend, alter or repeal any provision of
the Amended and Restated Certificate of Incorporation of the Company including,
without limitation, this Annex A relating to the PIK Preferred Stock (by merger
or otherwise) so as to adversely affect the specified preferences, rights,
privileges, powers or voting rights of the PIK Preferred Stock; provided,
however, that any such amendment that reduces the dividend payable on or the
Liquidation Preference of the PIK Preferred Stock shall require the approval of
each holder of PIK Preferred Stock adversely affected thereby. So long as any
shares of PIK Preferred Stock remain outstanding, without the written consent
of the holders of a majority of the outstanding shares of PIK Preferred Stock
or the approval of holders of a majority of the outstanding shares of PIK
Preferred Stock at a meeting of such holders called for such purpose, the
Company shall not, except with respect to such liquidation preference or stated
amount of shares of any class of capital stock or series of preferred stock of
the Company or any of its direct or indirect subsidiaries (including
any pay-in-kind dividends paid thereon) as shall be issued in lieu of up to
$600,000,000 of initial
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proceeds from the sale of debt securities as part of the Permanent Debt
Financing and the first refinancing (if any) of the Permanent Debt Financing:
(i) create, authorize or issue any Senior Securities, or increase the authorized
number of shares of any such class or series, or reclassify any authorized stock
of the Company into any Senior Securities or create, authorize or issue any
obligation or security convertible into or evidencing the right to purchase any
Senior Securities; (ii) issue any Parity Securities, directly or indirectly, to
any Affiliate of the Company or its officers or directors; (iii) issue any
Parity Securities so long as Manville Personal Injury Settlement Trust holds a
majority of the outstanding shares of PIK Preferred Stock; provided, however,
that no such consent or approval of the holders of PIK Preferred Stock shall be
required with respect to the issuance of any shares of Parity Securities (the
"Basket Parity Securities") otherwise in compliance with this Section 4(b)(A)
having an initial liquidation preference (excluding pay-in-kind dividends) not
exceeding $150,000,000 in the aggregate at any time outstanding and (B) on which
the Company shall not, either on a mandatory basis or at its option, pay any
dividends in cash or other property (other than payment in equity securities of
the Company that may be issued in compliance with this Section 4(b)) unless the
Company is then paying semi-annual cash (rather than pay-in-kind) dividends on
the PIK Preferred Stock; or (iv) issue any capital stock with a scheduled
redemption date prior to the Scheduled Redemption Date (as hereinafter defined)
or redeem, repurchase, pay dividends or make other distributions in cash or
other property on capital stock following the Scheduled Redemption Date if the
PIK Preferred Stock has not been redeemed in full. Except as set forth above in
this Section 4(b) or in Section 5 hereof, (x) the creation, authorization or
issuance of any Junior Securities or any Parity Securities, (y) a decrease in
the amount of authorized capital stock of any class, including any preferred
stock (other than as set forth in Section 1 hereof), or (z) an increase in the
amount of authorized capital stock of any class of Junior Securities or Parity
Securities shall not require the consent of the holders of PIK Preferred Stock
and shall be deemed not to affect adversely the specified preferences, rights,
privileges, powers or voting rights of holders of PIK Preferred Stock.
(c) In exercising the voting rights set forth in this Section 4 or
in Section 5 hereof, each share of PIK Preferred Stock shall have one vote per
share. Except as otherwise required by applicable law or as set forth herein,
the shares of PIK Preferred Stock shall not have any relative, participating,
optional or other special voting rights and powers and the consent of the
holders thereof shall not be required for the taking of any corporate action.
(5) Certain Restrictions. Except with respect to such liquidation
preference or stated amount of shares of any class of capital stock or series
of preferred stock of the Company or any of its direct or indirect subsidiaries
(including any pay-in-kind dividends paid thereon) as shall be issued in lieu
of up to $600,000,000 of initial proceeds from the sale of debt securities as
part of the Permanent Debt Financing and the first refinancing (if any) of the
Permanent Debt Financing, so long as any shares of PIK Preferred Stock remain
outstanding, without the written consent of the holders of a majority of the
outstanding shares of PIK Preferred Stock or the approval of holders of a
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majority of the outstanding shares of PIK Preferred Stock at a meeting of such
holders called for such purpose:
(a) the Company shall not:
(i) declare or pay dividends on, or make any other distributions
on, any shares of Junior Securities (other than dividends payable solely in
Junior Securities of the same class and/or a different class);
(ii) declare or pay dividends on or make any other
distributions on any Parity Securities, except: (A) dividends paid on
Basket Parity Securities in accordance with the proviso to Section
4(b)(iii) hereof; provided, however, that after the seventh anniversary of
the Effective Date, no cash dividends shall be paid by the Company on
Basket Parity Securities at any time when there shall be any unpaid cash
dividends due on the PIK Preferred Stock; and (B) dividends paid ratably
on shares of the PIK Preferred Stock and all other Parity Securities on
which dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(iii) redeem, purchase, repurchase or otherwise acquire for
value any Junior Securities; provided, however, that the Company may at any
time redeem, purchase, repurchase or otherwise acquire shares of any such
Junior Securities (A) in exchange for shares of any Junior Securities or
(B) utilizing cash in an amount not greater than the proceeds of any
offering by the Company of Junior Securities effected substantially
contemporaneously with the applicable redemption, purchase, repurchase or
other acquisition; or
(iv) redeem, purchase, repurchase or otherwise acquire for value
any Parity Securities except in accordance with a purchase offer made in
writing or by publication (as determined by the Board) to all holders of
such shares (including shares of the PIK Preferred Stock) upon such terms
as the Board, after consideration of the respective annual dividend rates
and other relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(b) The Company shall not permit any direct or indirect subsidiary
of the Company to purchase or otherwise acquire for value any shares of the
capital stock of the Company unless the Company could, under paragraph (a) of
this Section 5, purchase or otherwise acquire such shares at such times and in
such manner.
(c) The Company shall not permit any direct or indirect subsidiary
of the Company to (i) redeem, purchase, repurchase or otherwise acquire for
value any equity securities of any direct or indirect subsidiary of the Company;
provided, however, that any such subsidiary may acquire any such equity
securities (A) in exchange for any equity securities of the Company or any
equity securities of any of its direct or
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indirect subsidiaries that may be issued in compliance with Section 4(b) hereof
and this Section 5 or (B) utilizing cash in an amount not greater than the
proceeds of any offering by the Company or any of its direct or indirect
subsidiaries of equity securities effected substantially contemporaneously with
the applicable redemption, purchase, repurchase or other acquisition; or (ii)
issue any equity securities to any Person; provided, however, that any such
subsidiary may issue, to any Person that is not an Affiliate of the Company or
its officers or directors, equity securities which do not by their terms provide
for (A) the payment of dividends or other distributions in cash or other
property (other than payments in equity securities that may be issued in
compliance with Section 4(b) hereof and this Section 5) or (B) the mandatory
redemption, on a date when any shares of the PIK Preferred Stock remain
outstanding, of such equity securities for cash or other property (other than
redemption payments in equity securities that may be issued in compliance with
Section 4(b) hereof and this Section 5); or (iii) pay any dividend or other
distribution on any equity securities in cash or other property (other than
payments in equity securities that may be issued in compliance with Section 4(b)
hereof and this Section 5; provided, however, that none of the restrictions set
forth in this Section 5(c) shall apply to any redemption, purchase, repurchase
or other acquisition of equity securities from, or any issuance of equity
securities to, or the payment of any dividend or other distribution to, the
Company or any of its direct or indirect wholly owned subsidiaries.
(d) The Company shall not allow any encumbrance or restrictions on
the ability of any of its direct or indirect wholly-owned subsidiaries to: (1)
pay dividends, in cash or otherwise, or make any other distributions on or in
respect of its capital stock to the Company or any other subsidiary; (2) make
loans or advances to the Company or any other subsidiary; or (3) transfer any
of its properties or assets to the Company or any other subsidiary, except for
such encumbrances or restrictions imposed under or by reason of:
(i) applicable law;
(ii) this Annex A relating to the PIK Preferred Stock;
(iii) customary non-assignment provisions of any lease governing
a leasehold interest of the Company or any subsidiary;
(iv) any instrument governing Acquired Indebtedness (as
hereinafter defined) or Acquired Preferred Stock (as hereinafter defined),
which encumbrance or restriction is not applicable to any Person (as
hereinafter defined), or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired;
(v) any agreements of the Company or its subsidiaries existing
on the date hereof as such agreements are from time to time in effect;
provided, however, that any amendments or modifications of such agreements
that affect the encumbrances or restrictions of the types subject to this
covenant
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shall not result in such encumbrances or restrictions being less favorable
to the Company in any material respect, as determined in good faith by the
Board, than the provision as in effect before giving effect to the
respective amendment or modification;
(vi) any restriction with respect to such a subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of all or
substantially all of the capital stock or assets of such subsidiary pending
the closing of such sale or disposition;
(vii) an agreement effecting a refinancing, replacement,
substitution or restructuring of indebtedness issued, assumed or incurred
pursuant to an agreement referred to in clause (iv) or (v) in this Section
5(d); provided, however, that the provisions relating to such encumbrance
or restriction contained in any such refinancing, replacement, substitution
or restructuring agreement or any such other agreement are no less
favorable to the Company in any material respect as determined in good
faith by the Board than the provisions relating to such encumbrance or
restriction contained in agreements referred to in such clause (iv) or (v);
(viii) restrictions on the transfer of assets subject to any
lien imposed by the holder of such lien;
(ix) any licensing agreement to the extent such restrictions or
encumbrances limit the transfer of property subject to such licensing
agreement;
(x) restrictions relating to preferred stock issued by a
subsidiary of the Company in compliance with Section 5(c)(ii) hereof that
requires due and payable pay-in-kind dividends (or dividends of equity
securities that otherwise are issued in compliance with Section 5(c)(ii)
hereof and this Section 5(d)(x)) thereon to be paid in full prior to the
payment of dividends on such subsidiary's common stock; or
(xi) any agreement or instrument evidencing indebtedness of the
Company or any of its subsidiaries including, without limitation, the
Bridge Loan (as hereinafter defined) (if any) and the Permanent Debt
Financing.
(e) The Company shall not, and shall not permit any of its
subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (as hereinafter defined) of the Company (each of the
foregoing, an "Affiliate Transaction"), unless such Affiliate Transaction shall
have been approved by a majority of the members of the Board;
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provided, however, that if such Affiliate Transaction or series of related
Affiliate Transactions involve aggregate consideration in excess of
$10,000,000, such Affiliate Transaction shall be approved by a majority of the
Board and evidenced in a resolution of the Board certifying that the terms of
such Affiliate Transaction are at least as favorable to the Company or the
relevant subsidiary as might reasonably have been obtained in a comparable
arm's length transaction with an unaffiliated third party; and provided
further, the foregoing restrictions shall not apply to such Affiliate
Transactions as are exempted from any covenant or restriction relating to
transactions between the Company and its Affiliates set forth in the agreements
representing the Bridge Loan, the Permanent Debt Financing and the first
refinancing (if any) of the Permanent Debt Financing.
(6) REACQUIRED SHARES. Any shares of PIK Preferred Stock purchased or
otherwise acquired by the Company in any manner whatsoever (including by
redemption or reclassification) shall be retired and cancelled promptly after
the acquisition thereof. All such shares shall upon their retirement become
authorized but unissued shares of preferred stock without designation as to
series and may be reissued either as PIK Preferred Stock subject to the
limitations hereof or as part of a new series of preferred stock to be created
by resolution or resolutions of the Board or as otherwise permitted under the
DGCL.
(7) LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation,
dissolution or winding up of the Company, no distribution shall be made: (a) to
the holders of Junior Securities unless, prior thereto, the holders of shares
of PIK Preferred Stock shall have received a liquidation preference of $100 per
full share of PIK Preferred Stock (the "Liquidation Preference"), plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared and including for any partial semi-annual period, to the date
of payment; or (b) to the holders of Parity Securities, except distributions
made ratably on the PIK Preferred Stock and all other such Parity Securities in
proportion to the total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up.
For purposes of this Section 7 only, neither the sale, lease,
conveyance, exchange or transfer (for cash, shares of stock, securities or
other consideration) of all or substantially all of the property or assets of
the Company nor the consolidation or merger of the Company with or into one or
more corporations shall be deemed to be a liquidation, dissolution or
winding-up of the affairs of the Company (unless such sale, conveyance,
exchange or transfer is in connection with a dissolution or winding up of the
business of the Company).
(8) REDEMPTION.
(a) Scheduled Redemption. Subject to the extent that the Company
has funds legally available therefor, each outstanding share of PIK Preferred
Stock shall be redeemed by the Company on the twelfth anniversary of the
Effective Date
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(the "Scheduled Redemption Date") at the Liquidation Preference plus accrued
and unpaid dividends, if any, to the Scheduled Redemption Date.
(b) Redemption at the Option of the Company. All outstanding shares of
PIK Preferred Stock shall be redeemable at the option of the Company, at any
time as a whole or from time to time in part (any such partial redemption to be
effected pro rata among the holders of outstanding shares of PIK Preferred
Stock), on not less than 30 nor more than 60 days' notice to the holders of the
PIK Preferred Stock at the following prices (expressed as percentages of the
Liquidation Preference) (each such percentage hereinafter referred to as the
"Redemption Price") plus accrued and unpaid dividends and distributions
thereon, whether or not declared and including for any partial semi-annual
period, to the date of redemption, if redeemed during the following periods as
indicated below:
<TABLE>
<CAPTION>
PERIOD REDEMPTION PRICE
------ ----------------
<S> <C>
Effective Date to (but not including) first anniversary thereof 106.5%
thereafter to (but not including) second anniversary thereof 105.2%
thereafter to (but not including) third anniversary thereof 103.9%
thereafter to (but not including) fourth anniversary thereof 102.6%
thereafter to (but not including) fifth anniversary thereof 101.3%
and thereafter 100.0%
</TABLE>
(c) Redemption in the Event of a Change in Control. In the event of a
Change in Control (as hereinafter defined), the Company shall send a notice of
the occurrence of such Change in Control (the "Notice of Occurrence"), by first
class mail, postage prepaid, not more than thirty (30) days following the
occurrence of such Change in Control, to each record holder of outstanding
shares of PIK Preferred Stock. Such Notice of Occurrence shall specify (i) that
a Change in Control has occurred; (ii) that such holder has the right to
require the Company to redeem its outstanding shares of PIK Preferred Stock,
but only on the terms and subject to the conditions set forth in this Section
8(c); (iii) the date, not less than thirty (30) days after date of the Notice
of Occurrence, by which such holder must notify the Company of such holder's
intent to exercise such redemption right; (iv) that the redemption price shall
be 101% of the Liquidation Preference of the PIK Preferred Stock, in cash, plus
accrued and unpaid dividends and distributions thereon, whether or not declared
and including for any partial semi-annual period, to the date of redemption;
and (v) that dividends on the shares the holder elects to require the Company
to redeem will cease to accrue on such date of redemption. Upon receipt of
such Notice of Occurrence, any holder of PIK Preferred Stock may, within the
time period specified by the Company, notify the Company, by first class mail,
postage prepaid, as to whether such holder elects to exercise the redemption
right. If the holders of a majority of the outstanding shares of PIK Preferred
Stock elect to require such redemption, the Company shall, subject to the
extent that it has funds legally available therefor, redeem all of the
outstanding shares of PIK Preferred Stock at such redemption price within sixty
(60) days of receiving such majority election in accordance with the procedures
set forth in Section 8(e) hereof. If the holders of less
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than a majority of the outstanding shares of PIK Preferred Stock elect to
require such redemption, no shares of PIK Preferred Stock shall be redeemed as a
result of the occurrence of such Change in Control. For purposes of this Section
8(c), a "Change in Control" shall be defined as: (i) the acquisition of more
than 50% of the outstanding shares of Common Stock by any one holder other than
the holders of Common Stock immediately following the Merger (each, an "Initial
Holder") or (ii) the acquisition by a Person that is not an Initial Holder or an
Affiliate thereof of a number of shares of Common Stock that is more than the
aggregate number of shares of Common Stock then held by the Initial Holders and
their Affiliates.
(d) Status of Redeemed Shares. At the time of redemption specified in the
resolution of the Board authorizing such redemption, the rights of the holders
of the PIK Preferred Stock redeemed shall cease, except for the right to
receive the redemption price specified in Sections 8(a), 8(b) and 8(c) hereof,
as the case may be, without interest, plus accrued and unpaid dividends and
distributions thereon, whether or not declared and including for any partial
semi-annual period, to the date of redemption.
(e) Notice of Redemption, etc. Except as otherwise provided herein, the
Company shall (i) mail written notice of each redemption of any PIK Preferred
Stock, by first class mail, postage prepaid, to each record holder thereof not
more than sixty (60) nor less than thirty (30) days prior to the date on which
such redemption is to be made and (ii) pay the amount specified in Section
8(a), 8(b) or 8(c) hereof, as the case may be, to the applicable holder of PIK
Preferred Stock, against delivery by such holder to the Company of those
certificates representing PIK Preferred Stock held by such holder which have
then been so redeemed. In case fewer than the total number of shares of PIK
Preferred Stock represented by any certificate are redeemed, a new certificate
representing the number of unredeemed shares of PIK Preferred Stock shall be
issued to the holder thereof without cost to such holder within five (5)
Business Days (as hereinafter defined) after surrender of the certificate
representing the redeemed shares of PIK Preferred Stock.
(9) Reports. So long as any shares of the PIK Preferred Stock are
outstanding, the Company shall furnish each holder thereof by first class mail,
postage prepaid, at such holder's address as the same appears on the stock
register of the Company, with (a) the annual financial reports that the Company
is required to file with the Securities and Exchange Commission (the "SEC")
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), or (b) in the event that the Company is not
required to file such reports, (i) annual reports containing the same financial
information as would be required in reports so filed and (ii) quarterly
financial reports containing the same financial information as would be required
in quarterly reports filed with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act.
(10) General Provisions.
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(a) If any of the PIK Preferred Stock certificates shall be mutilated,
lost, stolen or destroyed, the Company shall issue, in exchange and in
substitution for and upon cancellation of the mutilated PIK Preferred Stock
certificate, or in lieu of and substitution for the PIK Preferred Stock
certificate lost, stolen or destroyed, a new PIK Preferred Stock certificate of
like tenor and representing an equivalent number of shares of PIK Preferred
Stock, but only upon receipt of evidence of such loss, theft or destruction of
such PIK Preferred Stock certificate and indemnity, if requested, satisfactory
to the Company.
(b) The term "Acquired Indebtedness" shall mean indebtedness of a Person
or any of its subsidiaries existing at the time such Person becomes a subsidiary
of the Company or at the time it merges or consolidates with the Company or any
of its subsidiaries or assumed in connection with the acquisition of assets from
such Person and not incurred by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a subsidiary of the
Company or such merger, consolidation or acquisition.
(c) The term "Acquired Preferred Stock" shall mean the preferred stock of
any Person at such time as such Person becomes a subsidiary of the Company or
at the time it merges or consolidates with the Company or any of its
subsidiaries and not issued by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a subsidiary of the
Company or such merger, consolidation or acquisition.
(d) The term "Affiliate" shall mean, with respect to any specified
Person, a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such specified Person.
(e) The term "Bridge Loan" shall mean the bridge loan issued in
connection with the Merger by Bear Stearns Corporate Lending Inc. as
contemplated, by the certain bridge loan commitment letter dated June 22, 2000.
(f) The term "Effective Date" shall mean the date on which the Merger is
effective pursuant to Section 1.2 of the Merger Agreement.
(g) The term "Merger" shall mean the merger of HB Merger LLC into the
Company which occurred on [ ], 2000.
(h) The term "outstanding," when used in reference to shares of a specific
series or class of capital stock of the Company, shall mean issued shares,
excluding shares held by the Company or a subsidiary of the Company.
(i) The term "Permanent Debt Financing" shall mean any senior and
subordinated unsecured notes, and any preferred equity securities issued in
lieu thereof, issued by the Company or any subsidiary of the Company in
connection with
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the Merger or issued by the Company or any subsidiary of the Company to repay
all or part of the of the Bridge Loan.
(j) The term "Person" shall mean an individual, partnership, corporation,
limited liability company, unincorporated organization, trust or joint venture,
or a governmental agency of political subdivision thereof.
(k) No holder of shares of PIK Preferred Stock shall, by virtue of such
holder's holding such shares, possess any preemptive rights to subscribe for or
acquire any unissued shares of capital stock of the Company (whether now or
hereafter authorized) or securities of the Company convertible into, or
exercisable or exchangeable for, shares of capital stock of the Company.
(l) The headings of the sections, subsections, clauses and subclauses
hereof are for convenience of reference only and shall not define, limit or
affect any of the provisions hereof.
(m) Each holder of PIK Preferred Stock, by acceptance thereof,
acknowledges and agrees that payments of dividends and premium on and
Liquidation Preference of PIK Preferred Stock, and exchange, redemption and
repurchase of PIK Preferred Stock, by the Company are subject to restrictions
on the Company contained in certain credit and financing agreements binding on
the Company or certain of its subsidiaries.
(n) If any payment, redemption, exchange or other action shall be
required by the terms hereof to be made or taken on a day that is not a
Business Day, such payment, redemption, exchange or other action shall be made
or taken on the immediately succeeding Business Day. "Business Day" means any
day except a Saturday, Sunday or other day on which commercial banks in the
State of Delaware or the State of New York are authorized by law to close.
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<PAGE> 93
ANNEX B
FORM OF TERMS, PREFERENCES, RIGHTS AND LIMITATIONS
of
SERIES B CONVERTIBLE PREFERRED STOCK
of
JOHNS MANVILLE CORPORATION
The rights, preferences, privileges, restrictions and other
matters relating to the Series B Convertible Preferred Stock are as follows:
(1) Designation and Amount. The shares of such series of
preferred stock, par value $.01 per share, of Johns Manville Corporation (the
"Company") shall be designated as Series B Convertible Preferred Stock (the
"Junior Preferred Stock"), and the number of shares constituting the Junior
Preferred Stock shall be 16,000,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors of the Company (the "Board");
provided, however, that no decrease shall reduce the number of shares of Junior
Preferred Stock to a number less than the number of shares then outstanding plus
the number of shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any outstanding securities
issued by the Company convertible into Junior Preferred Stock.
(2) Rank. The Junior Preferred Stock shall rank, with respect
to distributions upon the liquidation, winding-up and dissolution of the
Company, prior to all classes of common stock, par value $.01 per share, of the
Company (the "Common Stock") and prior to each other class of capital stock or
series of preferred stock hereafter created by the Board, the terms of which do
not expressly provide that it ranks prior to or pari passu with the Junior
Preferred Stock as to Dividends (as hereinafter defined) and distributions upon
the liquidation, winding-up and dissolution of the Company (the "Junior
Securities"). The Junior Preferred Stock shall rank: (a) with respect to
Dividends, pari passu with the Common Stock; and (b) with respect to Dividends
and distributions upon the liquidation, winding-up and dissolution of the
Company, pari passu with any class of capital stock or series of preferred stock
hereafter created by the Board, the terms of which expressly provide that it
ranks pari passu with the Junior Preferred Stock as to Dividends and
distributions upon the liquidation, winding-up and dissolution of the Company
(the "Parity Securities"). The Junior Preferred Stock shall rank, with respect
to Dividends and distributions upon the liquidation, winding-up and dissolution
of the Company, junior to the Series A Redeemable PIK Preferred Stock (the "PIK
Preferred Stock") and junior to any class of capital stock or series of
preferred stock hereafter created by the Board, the terms of which expressly
provide that it ranks prior to the Junior Preferred Stock as to Dividends and
distributions upon the liquidation,
<PAGE> 94
winding-up and dissolution of the Company (collectively referred to with the PIK
Preferred Stock as the "Senior Securities").
(3) Dividends and Distributions. Subject to the prior and
superior rights of the holders of shares of the Senior Securities, the holders
of shares of Junior Preferred Stock shall be entitled to receive, when, as and
if declared by the Board out of funds legally available therefor, dividends or
distributions in cash, securities or other property (individually a "Dividend"
and collectively "Dividends"), but only when, as and if Dividends are declared
and paid on the Common Stock, payable with respect to each share of Junior
Preferred Stock as if each such share were converted into the number of shares
of Common Stock into which such share of Junior Preferred Stock would be
converted if such share was converted immediately prior to the record date for
such Dividend. Dividends shall not be deemed to include any securities which are
to be taken into account in adjusting the Conversion Ratio (as hereinafter
defined) as set forth in Section 7(d) hereof.
(4) Voting Rights. The holders of shares of the Junior
Preferred Stock shall have the following voting rights:
(a) Each share of Junior Preferred Stock shall
entitle the holder thereof to vote, on all matters submitted to a vote of the
stockholders of the Company, the number of votes equal to the number of shares
of Common Stock into which such share of the Junior Preferred Stock would be
converted if converted immediately prior to the record date for such vote.
Except as otherwise provided herein or in any Certificate of Designations
creating another series of Senior Securities or Parity Securities, or by law,
the holders of shares of Junior Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to a vote
of stockholders of the Company.
(b) So long as any shares of Junior Preferred Stock
remain outstanding, without the written consent of the holders of at least 85%
of the outstanding shares of Junior Preferred Stock or the approval of holders
of at least 85% of the outstanding shares of Junior Preferred Stock at a meeting
of such holders called for such purpose, the Company shall not amend, alter or
repeal any provision of the Amended and Restated Certificate of Incorporation of
the Company including, without limitation, this Annex B relating to the Junior
Preferred Stock (by merger or otherwise) so as to adversely affect the specified
preferences, rights, privileges, powers or voting rights of the Junior Preferred
Stock; provided, however, that any such amendment that reduces the Liquidation
Preference (as hereinafter defined) of the Junior Preferred Stock shall require
the approval of each holder of Junior Preferred Stock adversely affected
thereby.
(c) Except as set forth herein or as required by law,
holders of Junior Preferred Stock shall have no special voting rights and their
consent or vote as a class shall not be required for taking any corporate
action.
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(5) Reacquired Shares. Any shares of Junior Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever
(including by redemption or reclassification) shall be retired and cancelled
promptly after the acquisition thereof. All such shares shall upon their
retirement become authorized but unissued shares of preferred stock without
designation as to series and may be reissued either as Junior Preferred Stock or
as part of a new series of preferred stock to be created by resolution or
resolutions of the Board or as otherwise permitted under the DGCL.
(6) Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Company, no distribution shall be
made (a) to the holders of shares of Junior Securities (either as to Dividends
or distributions upon liquidation, dissolution or winding up) or the Common
Stock (as to distributions upon liquidation, dissolution or winding up) unless,
prior thereto, the holders of shares of Junior Preferred Stock shall have
received a liquidation preference of $15.625 per share (the "Liquidation
Preference"), or (b) to the holders of Parity Securities (either as to Dividends
or distributions upon liquidation, dissolution or winding up) and Common Stock
(as to Dividends), except distributions made ratably on the Junior Preferred
Stock and all other such Parity Securities or Common Stock, as applicable, in
proportion to the total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up.
For purposes of this Section 6 only, neither the sale, lease,
conveyance, exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of the
Company nor the consolidation or merger of the Company with or into one or more
corporations shall be deemed to be a liquidation, dissolution or winding-up of
the affairs of the Company (unless such sale, conveyance, exchange or transfer
is in connection with a dissolution or winding up of the business of the
Company).
(7) Conversion Rights.
(a) Optional Conversion. Each outstanding share of
Junior Preferred Stock shall be converted into, subject to adjustment as set
forth in Section 7(d) hereof, one fully paid and non-assessable share of Common
Stock (such share-for-share conversion ratio, as adjusted from time to time,
being hereinafter referred to as the "Conversion Ratio") if the holders of a
majority of the outstanding shares of Junior Preferred Stock, voting as a class,
approve such conversion; provided, however, that such holders may elect, from
time to time, to require the conversion of less than all of the shares of Junior
Preferred Stock then outstanding, in which case such partial conversion will be
made on an equal basis such that, immediately following such conversion, each
holder of Junior Preferred Stock will hold the same percentage of the issued and
outstanding Junior Preferred Stock as it held immediately prior to such
conversion. Following written notice to the Company of any such election, the
Company shall establish a record date for such conversion (which shall be no
earlier than the date of the Company's receipt of such notice and no later than
20 days after the Company's receipt of such notice) and shall notify each holder
of record (as of such record date), by first
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class mail, postage prepaid, of the full or partial conversion of the Junior
Preferred Stock in accordance with this Section 7(a) and that the issuance of
certificates representing the shares of Common Stock issued as a result of
conversion (and any Junior Preferred Stock remaining outstanding after such
conversion) shall be effected in accordance with the procedures set forth in
Section 7(c) hereof. Failure to give such notice to any such holder shall in no
way affect the full or partial, as applicable, conversion of such Junior
Preferred Stock into Common Stock. The conversion effected pursuant to this
Section 7(a) shall be deemed to have occurred on the record date established as
set forth above and the shares of Junior Preferred Stock converted on such
conversion shall be automatically converted at such time. Immediately following
such conversion, the rights of the holders of converted Junior Preferred Stock
shall cease and the persons entitled to receive the Common Stock upon the
conversion of Junior Preferred Stock shall be treated for all purposes as having
become the owners of such Common Stock.
(b) Mandatory Conversion. All outstanding shares of
Junior Preferred Stock shall automatically be converted, at the Conversion
Ratio, into fully paid and non-assessable shares of Common Stock at such time as
the Company consummates a Qualified Initial Public Offering (as hereinafter
defined), in which the aggregate per share offering price is at least $15.625
per share (provided that in the event the Company shall effect any stock
dividend, stock split, reverse stock split or other combination of shares of
common stock, recapitalization, reclassification, merger, consolidation or
exchange offer, or similar events and transactions, then, and in each such case,
such minimum price per share in effect immediately prior to such event or
transaction or the record date therefor, whichever is earlier, shall be
appropriately adjusted as determined in good faith by the Board); provided,
however, that such outstanding shares of Junior Preferred Stock shall not be
converted if, and to the extent that, shares of Junior Preferred Stock shall
have been called for redemption pursuant to Section 8(b) hereof on or prior to
the date of consummation of the Qualified Initial Public Offering; and provided
further that, notwithstanding the immediately preceding proviso, such
unconverted shares of Junior Preferred Stock shall nevertheless automatically be
converted on the date that the applicable redemption payment is due pursuant to
Section 8(e) hereof if and to the extent that such redemption payment shall not
be made. The term "Qualified Initial Public Offering" shall mean one or a series
of firm commitment underwritten public offerings of newly issued Common Stock
pursuant to a registration statement under the Securities Act of 1933, as
amended, where (i) the proceeds to the Company (prior to deducting any
underwriters' discounts and commissions) equal or exceed $100,000,000 and (ii)
upon consummation of such offering, the Common Stock is listed on the New York
Stock Exchange or American Stock Exchange or authorized to be traded on the
Nasdaq National Market. The Company shall notify each record holder of Junior
Preferred Stock, by first class mail, postage prepaid, on the date of
consummation of the Qualified Initial Public Offering, of the mandatory
conversion of all outstanding shares of Junior Preferred Stock in accordance
with this Section 7(b) and that the issuance of certificates representing the
shares of Common Stock issued on conversion thereof shall be effected in
accordance with the procedures set forth in Section 7(c) hereof. Failure to give
such notice to any such holder shall in no way affect the mandatory conversion
of such Junior
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Preferred Stock into Common Stock. Immediately following such conversion, the
rights of the holders of all Junior Preferred Stock shall cease and the persons
entitled to receive the Common Stock upon the conversion of Junior Preferred
Stock shall be treated for all purposes as having become the owners of such
Common Stock.
(c) Mechanics; Transfer Tax; Conversion Price.
(i) As soon as practicable after the
conversion of any shares of Junior Preferred Stock into Common Stock
under Section 7(a) or 7(b) above, the Company shall deliver to the
applicable holder of Junior Preferred Stock a certificate for the
number of shares of Common Stock issuable upon the conversion (and a
new certificate representing the unconverted portion, if any, of the
shares of Junior Preferred Stock represented by the certificate or
certificates surrendered for conversion), against delivery by such
holder to the Company of those certificates representing Junior
Preferred Stock held by such holder which have been converted in such
conversion. The person in whose name the Common Stock certificate is
registered shall be treated as the stockholder of record on and after
the Conversion Date. No payment or adjustment shall be made for accrued
and unpaid Dividends, if any, on converted shares of Junior Preferred
Stock or for Dividends on any Common Stock issued upon such conversion.
The holder of record of a share of Junior Preferred Stock at the close
of business on a record date with respect to the payment of Dividends
on the Junior Preferred Stock in accordance with Section 3 hereof shall
be entitled to receive such Dividends with respect to such share of
Junior Preferred Stock on the corresponding dividend payment date,
notwithstanding the conversion of such share after such record date and
prior to such dividend payment date.
(ii) Upon conversion of shares of Junior
Preferred Stock, the Company shall pay any documentary, stamp or
similar issue or transfer tax due on the issue of shares of Common
Stock upon the conversion; provided, however, the holder shall pay any
such tax that is due because the shares are issued in a name other than
the holder's name.
(iii) The Company has reserved and shall
continue to reserve out of its authorized but unissued Common Stock or
its Common Stock held in treasury sufficient shares of Common Stock to
permit the conversion, in full, of all of the Junior Preferred Stock to
Common Stock. All shares of Common Stock that may be issued upon
conversion of the Junior Preferred Stock shall be fully paid and
non-assessable.
(d) Conversion Ratio Adjustments.
(i) If, at any time after the issuance of
the Junior Preferred Stock, the outstanding shares of the Common Stock
shall be increased by a stock dividend payable in shares of Common
Stock or by a stock split, subdivision or split-up of shares of Common
Stock, then, following the record
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date for the determination of holders of Common Stock entitled to
receive such Common Stock pursuant to such stock dividend, stock split,
subdivision or split-up, the Conversion Ratio shall be proportionately
adjusted so that the number of shares of Common Stock issuable upon
conversion of each share of Junior Preferred Stock shall be increased
to the number of shares of Common Stock the holder of each such share
of Junior Preferred Stock would have held after such stock dividend,
stock split, subdivision or split-up, if such holder had converted each
such share of Junior Preferred Stock immediately prior thereto, in
accordance with the provisions hereof.
(ii) If, at any time after the issuance of
the Junior Preferred Stock, the outstanding shares of Common Stock
shall be decreased by a combination (including, without limitation, any
reverse stock split) of the outstanding shares of Common Stock, then,
following the record date for such combination, the Conversion Ratio
shall be proportionately adjusted so that the number of shares of
Common Stock issuable upon conversion of each share of Junior Preferred
Stock shall be decreased to the number of shares of Common Stock the
holder of each such share of Junior Preferred Stock would have held
after such combination, if such holder had converted each such share of
Junior Preferred Stock immediately prior thereto, in accordance with
the provisions hereof.
(iii) In the case of any consolidation of
the Company, the merger of the Company with or into any other entity,
statutory share exchange or other reorganization or similar transaction
or the sale or transfer of all or substantially all the assets of the
Company, in any such case pursuant to which the Common Stock is
converted into other securities, cash or assets, then, upon
consummation of such transaction, each share of Junior Preferred Stock
shall automatically become convertible into the kind or amount of
securities, cash and other assets receivable upon the consolidation,
merger, statutory share exchange or other reorganization, sale,
transfer or similar transaction, by a holder of the number of shares of
Common Stock into which such share of Junior Preferred Stock would have
been converted if such share of Junior Preferred Stock was converted
immediately prior to such consolidation, merger, statutory share
exchange or other reorganization, sale, transfer or similar transaction
(assuming such holder of Common Stock failed to exercise any rights of
election and received per share the kind and amount of consideration
receivable per share by a plurality of non-electing shares).
Appropriate adjustment (as determined in good faith by the Board) shall
be made in the application of the provisions herein set forth with
respect to the rights and interests thereafter of the holders of Junior
Preferred Stock, to the end that the provisions set forth herein
(including provisions with respect to changes in and other adjustment
of the Conversion Ratio) shall thereafter be applicable, as nearly as
reasonably possible, in relation to any shares of stock or other
securities or property thereafter deliverable upon
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the conversion of Junior Preferred Stock. If this Section 7(d)(iii)
applies, Sections 7(d)(i) and 7(d)(ii) do not apply.
(iv) If the Company takes any action that
would require an adjustment in the Conversion Ratio pursuant to Section
7(d)(i), (ii) or (iii) above, the Company shall mail to the holders of
Junior Preferred Stock a notice stating the proposed record or
effective date, as the case may be, and such adjustment shall become
effective immediately after the record date of the event triggering the
adjustment. The Company shall mail such notice, by first class mail,
postage prepaid, at least ten (10) days before such date. However,
failure to mail the notice or any defect in it shall not affect the
validity of any such action.
(8) Redemption.
(a) Scheduled Redemption. Subject to the extent that
the Company has funds legally available therefor, each outstanding share of
Junior Preferred Stock shall be redeemed by the Company on _________, 2021 [the
date which is six months after the twentieth anniversary of the date of
issuance] (the "Scheduled Redemption Date") at the Liquidation Preference
(subject to the right each such record holder to receive Dividends due on a
dividend payment date).
(b) Redemption at the Option of the Company. All
outstanding shares of Junior Preferred Stock shall be redeemable at the option
of the Company, at any time as a whole or from time to time in part (any such
partial redemption to be effected pro rata among the holders of outstanding
shares of Junior Preferred Stock), on not less than thirty (30) nor more than
sixty (60) days' notice to the holders of the Junior Preferred Stock at the
Liquidation Preference (subject to the right of each such record holder to
receive Dividends due on a dividend payment date) on the payment date specified
in such notice which date shall not be less than thirty (30) nor more than sixty
(60) days after the date of such notice.
(c) Redemption in the Event of a Change in Control.
In the event of a Change in Control (as hereinafter defined), the Company shall
send a notice of the occurrence of such Change in Control (the "Notice of
Occurrence"), by first class mail, postage prepaid, not more than thirty (30)
days following the occurrence of such Change in Control, to each record holder
of outstanding shares of Junior Preferred Stock. The Notice of Occurrence shall
specify (i) that a Change in Control has occurred; (ii) that such holder has the
right to require the Company to redeem outstanding shares of Junior Preferred
Stock, but only on the terms and subject to the conditions set forth in this
Section 8(c); (iii) the date, not less than thirty (30) days after date of the
Notice of Occurrence, by which such holder must notify the Company of such
holder's intent to exercise such redemption right; and (iv) that the redemption
price shall be 100% of the Liquidation Preference of the Junior Preferred Stock,
in cash (subject to the right of each such record holder to receive Dividends
due on a dividend payment date). Upon receipt of such Notice of Occurrence, any
holder of Junior Preferred Stock may, within the time period specified by the
Company, notify the Company, by first class mail, postage
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prepaid, as to whether such holder elects to exercise the redemption right. If
the holders of a majority of the outstanding shares of Junior Preferred Stock
elect to require such redemption, the Company shall, subject to the extent that
it has funds legally available therefor, redeem all of the outstanding shares of
Junior Preferred Stock at such redemption price within sixty (60) days after
receiving such majority election in accordance with the procedures set forth in
Section 8(e) hereof; provided, however, that in order for the Company to effect
such redemption, no shares of PIK Preferred Stock may be outstanding; and
provided further that if the holders of a majority of the outstanding shares of
Junior Preferred Stock elect to exercise their redemption right pursuant to this
Section 8(c), such redemption shall be deferred until such time that no shares
of PIK Preferred Stock are outstanding. If the holders of less than a majority
of the outstanding shares of Junior Preferred Stock elect to require such
redemption, no shares of Junior Preferred Stock shall be redeemed as a result of
the occurrence of such Change in Control. For purposes of this Section 8(c), a
"Change in Control" shall be defined as: (i) the acquisition of more than 50% of
the outstanding shares of Common Stock by any one holder other than the holders
of Common Stock immediately following the Merger (as hereinafter defined; each
such holder being hereinafter referred to as an "Initial Holder") or (ii) the
acquisition by a Person that is not an Initial Holder or an Affiliate thereof of
a number of shares of Common Stock that is more than the aggregate number of
shares of Common Stock then held by the Initial Holders and their Affiliates.
(d) Status of Redeemed Shares. At the time of
redemption specified in the resolution of the Board authorizing such redemption,
the rights of the holders of the Junior Preferred Stock redeemed shall cease,
except for the right to receive the Liquidation Preference without interest
(subject to the right each such record holder to receive Dividends due on a
dividend payment date).
(e) Notice of Redemption, Etc. Except as otherwise
provided herein, the Company shall (i) mail written notice of each redemption of
any Junior Preferred Stock, by first class mail, postage prepaid, to each record
holder thereof not more than sixty (60) nor less than thirty (30) days prior to
the date on which such redemption is to be made and (ii) pay the amount
specified in Section 8(a), 8(b) or 8(c), as the case may be, to the applicable
holder of Junior Preferred Stock, against delivery by such holder to the Company
of those certificates representing Junior Preferred Stock held by such holder
which have then been so redeemed. In case fewer than the total number of shares
of Junior Preferred Stock represented by any certificate are redeemed, a new
certificate representing the number of unredeemed shares of Junior Preferred
Stock shall be issued to the holder thereof without cost to such holder within
five (5) Business Days (as hereinafter defined) after surrender of the
certificate representing the redeemed shares of Junior Preferred Stock.
(9) General Provisions.
(a) If any of the Junior Preferred Stock certificates
shall be mutilated, lost, stolen or destroyed, the Company shall issue, in
exchange and in substitution for and upon cancellation of the mutilated Junior
Preferred Stock certificate,
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or in lieu of and substitution for the Junior Preferred Stock certificate lost,
stolen or destroyed, a new Junior Preferred Stock certificate of like tenor and
representing an equivalent number of shares of Junior Preferred Stock, but only
upon receipt of evidence of such loss, theft or destruction of such Junior
Preferred Stock certificate and indemnity, if requested, satisfactory to the
Company.
(b) The term "Merger" shall mean the merger of HB
Merger LLC into the Company which occurred on [ ], 2000.
(c) The term "outstanding," when used in reference to
shares of a specific series or class of capital stock of the Company, shall mean
issued shares, excluding shares held by the Company or a subsidiary of the
Company.
(d) No holder of shares of Junior Preferred Stock
shall, by virtue of such holder's holding such shares, possess any preemptive
rights to subscribe for or acquire any unissued shares of capital stock of the
Company (whether now or hereafter authorized) or securities of the Company
convertible into, or exercisable or exchangeable for, shares of capital stock of
the Company.
(e) The headings of the sections, subsections,
clauses and subclauses hereof are for convenience of reference only and shall
not define, limit or affect any of the provisions hereof.
(f) Each holder of Junior Preferred Stock, by
acceptance thereof, acknowledges and agrees that payments of Dividends on and
Liquidation Preference of Junior Preferred Stock, and exchange, redemption and
repurchase of Junior Preferred Stock, by the Company are subject to restrictions
on the Company contained in certain credit and financing agreements binding on
the Company or certain of its subsidiaries.
(g) If any payment, redemption, exchange or other
action shall be required by the terms hereof to be made or taken on a day that
is not a Business Day, such payment, redemption, exchange or other action shall
be made or taken on the immediately succeeding Business Day. "Business Day"
means any day except a Saturday, Sunday or other day on which commercial banks
in the State of Delaware or the State of New York are authorized by law to
close.
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EXHIBIT C
FORM OF
BY-LAWS
OF
JOHNS MANVILLE CORPORATION
(a Delaware corporation)
Amended and Restated as of [ ], 2000
ARTICLE I
Stockholders
SECTION 1. Annual Meetings. The annual meeting of stockholders
for the election of directors and for the transaction of such other business as
may properly come before the meeting shall be held each year at such date and
time, within or without the State of Delaware, as the Board of Directors shall
determine.
SECTION 2. Notice of Meetings. Written notice of all meetings
of the stockholders, stating the place, date and hour of the meeting and name
and capacity of the person issuing the notice, shall be mailed or delivered to
each stockholder not less than 10 nor more than 60 days prior to the meeting.
Notice of any special meeting shall state in general terms the purpose or
purposes for which the meeting is to be held.
SECTION 3. Stockholder Lists. The officer who has charge of
the stock ledger of the Company shall prepare and make, at least 10 days before
every meeting of stockholders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, and showing the address of
each stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger, the list required by this
section or the books of the Company, or to vote in person or by proxy at any
meeting of stockholders.
SECTION 4. Quorum. Except as otherwise required by law or the
Certificate of Incorporation, a quorum for the transaction of business at any
meeting of stockholders shall consist of the holders of record of a majority of
the issued and
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outstanding shares of the capital stock of the Company (or of a separate class,
if a class shall have a separate class vote) entitled to vote at the meeting,
present in person or by proxy. At all meetings of the stockholders at which a
quorum is present, all matters, except as otherwise provided by law or the
Certificate of Incorporation, shall be decided by the vote of the holders of a
majority of the shares entitled to vote thereat present in person or by proxy.
If there be no such quorum, the holders of a majority of such shares so present
or represented by proxy may adjourn the meeting from time to time, without
further notice, until a quorum shall have been obtained. When a quorum is once
present it is not broken by the subsequent withdrawal of any stockholder.
SECTION 5. Organization. Meetings of stockholders shall be
presided over by the Chairman, if any, or if none or in the Chairman's absence
the Vice-Chairman, if any, or if none or in the Vice-Chairman's absence the
President, if any, or if none or in the President's absence a Vice-President,
or, if none of the foregoing is present, by a chairman to be chosen by the
stockholders entitled to vote who are present in person or by proxy at the
meeting. The Secretary of the Company (the "Secretary"), or in the Secretary's
absence an Assistant Secretary, shall act as secretary of every meeting, but if
neither the Secretary nor an Assistant Secretary is present, the presiding
officer of the meeting shall appoint any person present to act as secretary of
the meeting.
SECTION 6. Voting; Proxies; Required Vote. (a) At each meeting
of stockholders, every stockholder shall be entitled to vote in person or by
proxy appointed by instrument in writing, subscribed by such stockholder or by
such stockholder's duly authorized attorney-in-fact (but no such proxy shall be
voted or acted upon after three years from its date, unless the proxy provides
for a longer period), and, unless the Certificate of Incorporation provides
otherwise, shall have one vote for each share of stock entitled to vote
registered in the name of such stockholder on the books of the Company on the
applicable record date fixed pursuant to these By-laws. At all elections of
directors the voting may but need not be by ballot and a plurality of the votes
cast there shall elect. Except as otherwise required by law or the Certificate
of Incorporation, any other action shall be authorized by a majority of the
votes cast.
(b) Any action required or permitted to be taken at any
meeting of stockholders may, except as otherwise required by law or the
Certificate of Incorporation, be taken without a meeting, without prior notice
and without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of record of the issued and outstanding capital
stock of the Company having a majority of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted, and the writing or writings are filed with the
permanent records of the Company. Prompt notice of the taking of corporate
action without a meeting by less than unanimous written consent shall be given
to those stockholders who have not consented in writing.
(c) Where a separate vote by a class or classes, present in
person or represented by proxy, shall constitute a quorum entitled to vote on
that matter, the affirmative vote of the majority of shares of such class or
classes present in person or
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represented by proxy at the meeting shall be the act of such class, unless
otherwise provided in the Certificate of Incorporation.
SECTION 7. Inspectors. The Board of Directors, in advance of
any meeting, shall appoint one or more inspectors of election to act at the
meeting or any adjournment thereof. If an inspector or inspectors so appointed
are unable to act at the meeting, the person presiding at the meeting shall
appoint one or more other inspectors. In case any person who may be appointed as
an inspector fails to appear or act, the vacancy may be filled by appointment
made by the directors in advance of the meeting or at the meeting by the person
presiding thereat. Each inspector, if any, before entering upon the discharge of
his or her duties, shall take and sign an oath faithfully to execute the duties
of inspector at such meeting with strict impartiality and according to the best
of his ability. The inspectors shall determine the number of shares of stock
outstanding and the voting power of each, the shares of stock represented at the
meeting, the existence of a quorum, and the validity and effect of proxies, and
shall receive votes, ballots or consents, hear and determine all challenges and
questions arising in connection with the right to vote, count and tabulate all
votes, ballots or consents, determine the result, and do such acts as are proper
to conduct the election or vote with fairness to all stockholders. On request of
the person presiding at the meeting, the inspector or inspectors shall make a
report in writing of any challenge, question or matter determined by such
inspector or inspectors and execute a certificate of any fact found by such
inspector or inspectors.
SECTION 8. Certain Stockholder Approval Matters.
Notwithstanding anything to the contrary contained herein, the provisions of
Article 6 of that certain Stockholders' Agreement dated as of _______________
among the Company and certain stockholders of the Company (the "Stockholders'
Agreement") are hereby incorporated by reference for all purposes.
ARTICLE II
Board of Directors
SECTION 1. General Powers. The business, property and affairs
of the Company shall be managed by, or under the direction of, the Board of
Directors.
SECTION 2. Qualification; Number; Term; Remuneration. (a) Each
director shall be at least 18 years of age. A director need not be a
stockholder, a citizen of the United States, or a resident of the State of
Delaware. The number of directors constituting the entire Board shall be as may
be fixed from time to time as set forth in the Stockholders' Agreement. The use
of the phrase "entire Board" herein refers to the total number of directors
which the Company would have if there were no vacancies on the Board of
Directors.
(b) Directors who are elected at an annual meeting of
stockholders, and directors who are elected in the interim to fill vacancies and
newly created
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directorships, shall hold office until the next annual meeting of stockholders
and until their successors are elected and qualified or until their earlier
resignation or removal.
(c) Directors may be paid their expenses, if any, of
attendance at each meeting of the Board of Directors and may be paid a fixed sum
for attendance at each meeting of the Board of Directors or a stated salary as
director. No such payment shall preclude any director from serving the Company
in any other capacity and receiving compensation therefor. Members of special or
standing committees may be allowed like compensation for attending committee
meetings.
SECTION 3. Quorum and Manner of Voting. Except as otherwise
provided by law, a majority of the entire Board shall constitute a quorum. A
majority of the directors present, whether or not a quorum is present, may
adjourn a meeting from time to time to another time and place without notice.
The vote of the majority of the directors present at a meeting at which a quorum
is present shall be the act of the Board of Directors.
SECTION 4. Places of Meetings. Meetings of the Board of
Directors may be held at any place within or without the State of Delaware, as
may from time to time be fixed by resolution of the Board of Directors, or as
may be specified in the notice of meeting.
SECTION 5. Annual Meeting. Following the annual meeting of
stockholders, the newly elected Board of Directors shall meet for the purpose of
the election of officers and the transaction of such other business as may
properly come before the meeting. Such meeting may be held without notice
immediately after the annual meeting of stockholders at the same place at which
such stockholders' meeting is held.
SECTION 6. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times and places as the Board of Directors shall
from time to time by resolution determine. Notice need not be given of regular
meetings of the Board of Directors held at times and places fixed by resolution
of the Board of Directors.
SECTION 7. Special Meetings. Special meetings of the Board of
Directors shall be held whenever called by the Chairman or President or by a
majority of the directors then in office.
SECTION 8. Notice of Meetings. A notice of the place, date and
time and the purpose or purposes of each special meeting of the Board of
Directors shall be given to each director by mailing and telecopying or
telephoning the same at least two days before the special meeting, or by
telecopying or telephoning the same, or by delivering the same personally not
later than the day before the day of the meeting.
SECTION 9. Organization. At all meetings of the Board of
Directors, the Chairman, if any, or if none or in the Chairman's absence or
inability to act the
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President, or in the President's absence or inability to act any Vice-President
who is a member of the Board of Directors, or in such Vice-President's absence
or inability to act a chairman chosen by the directors, shall preside. The
Secretary of the Company shall act as secretary at all meetings of the Board of
Directors when present, and, in the Secretary's absence, the presiding officer
may appoint any person to act as secretary.
SECTION 10. Resignation. Any director may resign at any time
upon written notice to the Company and such resignation shall take effect upon
receipt thereof by the President or Secretary, unless otherwise specified in the
resignation. Except as otherwise provided in the Certificate of Incorporation,
any or all of the directors may be removed, with or without cause, by the
holders of a majority of the shares of stock outstanding and entitled to vote
for the election of directors.
SECTION 11. Vacancies. Unless otherwise provided in these
By-laws or the Certificate of Incorporation, vacancies on the Board of
Directors, whether caused by resignation, death, disqualification, removal, an
increase in the authorized number of directors or otherwise, may be filled by
the affirmative vote of a majority of the remaining directors, although less
than a quorum, or by a sole remaining director, or at a special meeting of the
stockholders, by the holders of shares entitled to vote for the election of
directors.
SECTION 12. Action by Written Consent. Any action required or
permitted to be taken at any meeting of the Board of Directors may be taken
without a meeting if all the directors consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Board of
Directors.
ARTICLE III
Committees
SECTION 1. Appointment. From time to time the Board of
Directors by a resolution adopted by a majority of the entire Board may appoint
any committee or committees for any purpose or purposes, to the extent lawful,
which shall have powers as shall be determined and specified by the Board of
Directors in the resolution of appointment.
SECTION 2. Procedures, Quorum and Manner of Acting. Each
committee shall fix its own rules of procedure, and shall meet where and as
provided by such rules or by resolution of the Board of Directors. Except as
otherwise provided by law, the presence of a majority of the then appointed
members of a committee shall constitute a quorum for the transaction of business
by that committee, and in every case where a quorum is present the affirmative
vote of a majority of the members of the committee present shall be the act of
the committee. Each committee shall keep minutes of its proceedings, and actions
taken by a committee shall be reported to the Board of Directors.
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SECTION 3. Action by Written Consent. Any action required or
permitted to be taken at any meeting of any committee of the Board of Directors
may be taken without a meeting if all the members of the committee consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the committee.
SECTION 4. Term; Termination. In the event any person shall
cease to be a director of the Company, such person shall simultaneously
therewith cease to be a member of any committee appointed by the Board of
Directors.
ARTICLE IV
Officers
SECTION 1. Election and Qualifications. The Board of Directors
shall elect the officers of the Company, which shall include a President and a
Secretary, and may include, by election or appointment, one or more
Vice-Presidents (any one or more of whom may be given an additional designation
of rank or function), a Treasurer and such assistant secretaries, such Assistant
Treasurers and such other officers as the Board may from time to time deem
proper. Each officer shall have such powers and duties as may be prescribed by
these By-laws and as may be assigned by the Board of Directors or the President.
Any two or more offices may be held by the same person except the offices of
President and Secretary.
SECTION 2. Term of Office and Remuneration. The term of office
of all officers shall be one year and until their respective successors have
been elected and qualified, but any officer may be removed from office, either
with or without cause, at any time by the Board of Directors. Any vacancy in any
office arising from any cause may be filled for the unexpired portion of the
term by the Board of Directors. The remuneration of all officers of the Company
may be fixed by the Board of Directors or in such manner as the Board of
Directors shall provide.
SECTION 3. Resignation; Removal. Any officer may resign at any
time upon written notice to the Company and such resignation shall take effect
upon receipt thereof by the President or Secretary, unless otherwise specified
in the resignation. Any officer shall be subject to removal, with or without
cause, at any time by vote of a majority of the entire Board.
SECTION 4. Chairman of the Board. The Chairman of the Board of
Directors, if there be one, shall preside at all meetings of the Board of
Directors and shall have such other powers and duties as may from time to time
be assigned by the Board of Directors.
SECTION 5. President and Chief Executive Officer. The
President shall be the chief executive officer of the Company, and shall have
such duties as customarily pertain to that office. The President shall have
general management and supervision of
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the property, business and affairs of the Company and over its other officers;
may appoint and remove assistant officers and other agents and employees, other
than officers referred to in Section 1 of this Article IV; and may execute and
deliver in the name of the Company powers of attorney, contracts, bonds and
other obligations and instruments.
SECTION 6. Vice-President. A Vice-President may execute and
deliver in the name of the Company contracts and other obligations and
instruments pertaining to the regular course of the duties of said office, and
shall have such other authority as from time to time may be assigned by the
Board of Directors or the President.
SECTION 7. Treasurer. The Treasurer shall in general have all
duties incident to the position of Treasurer and such other duties as may be
assigned by the Board of Directors or the President.
SECTION 8. Secretary. The Secretary shall in general have all
the duties incident to the office of Secretary and such other duties as may be
assigned by the Board of Directors or the President.
SECTION 9. Assistant Officers. Any assistant officer shall
have such powers and duties of the officer such assistant officer assists as
such officer or the Board of Directors shall from time to time prescribe.
ARTICLE V
Indemnification
SECTION 1. Indemnification. The Company shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Company) by reason of the fact that he is or was a Director,
officer, employee or agent of the Company, or is or was serving at the request
of the Company as a Director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Company, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his conduct was
unlawful.
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The Company shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Company to procure a judgment in its
favor by reason of the fact that he is or was a Director, officer, employee or
agent, of the Company as a Director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Company and except that no indemnification shall be made
in respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable for negligence or misconduct in the performance of his
duty to the Company unless and only to the extent that the Court of Chancery of
the State of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of chancery
of the State of Delaware or such other court shall deem proper.
To the extent that a Director, officer, employee or agent of
the Company has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in the first two paragraphs of this
Section 1 of Article V or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
Any indemnification under the first two paragraphs of this
Section 1 of Article V (unless ordered by a court) shall be made by the Company
only as authorized in the specific case upon a determination that
indemnification of the Director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in
the first two paragraphs of this Section 1 of Article V. Such determination
shall be made (1) by the Board of Directors by a majority vote of a quorum
consisting of Directors who were not parties to such action, suit or proceeding,
or (2) if such a quorum is not obtainable, or even if obtainable a quorum of
disinterested Directors so directs, by independent legal counsel in a written
opinion, or (3) by the shareholders.
Expenses incurred in defending a civil or criminal action,
suit or proceeding shall be paid by the Company in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of the Director, officer, employee or agent to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the Company as authorized in this Section 1 of Article V.
The indemnification provided by this Section 1 of Article V
shall not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any by-law, agreement, vote of
shareholders or disinterested Directors or otherwise, both as to action in their
official capacity and as to action in another capacity
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while holding such office, and shall continue as to a person who has ceased to
be a Director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
The Company shall have power to purchase and maintain
insurance on behalf of any person who is or was a Director, officer, employee or
agent of the Company, or is or was serving at the request of the Company as a
Director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Company would have the power to indemnify him against such
liability under the provisions of this Section 1 of Article V.
For purposes of this Section 1 of Article V, references to
"the Company" shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent) absorbed in
a consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its Directors, officers, and
employees, or agents, so that any person who is or was a Director, officer,
employee or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a Director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise shall stand in the same position under the provisions of this Section
1 of Article V with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
For purposes of this Section 1 of Article V, references to
"other enterprises" shall include employee benefit plans; references to "fines"
shall include any excise taxes assessed on a person with respect to an employee
benefit plan; and references to "serving at the request of the corporation"
shall include any service as a Director, officer, employee or agent of the
Company which imposes duties on, or involves services by, such Director,
officer, employee, or agent with respect to an employee benefit plan, its
participants, or beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the Company" as referred to in this
Section 1 of Article V.
ARTICLE V
Books and Records
SECTION 1. Location. The books and records of the Company may
be kept at such place or places within or outside the State of Delaware as the
Board of Directors or the officers in charge thereof may from time to time
determine. The record books containing the names and addresses of all
stockholders, the number and class of shares of stock held by each and the dates
when they respectively became the owners of
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record thereof shall be kept by the Secretary as prescribed in the By-laws and
by such officer or agent as shall be designated by the Board of Directors.
SECTION 2. Addresses of Stockholders. Notices of meetings and
all other corporate notices may be delivered personally or mailed to each
stockholder at the stockholder's address as it appears on the records of the
Company.
SECTION 3. Fixing Date for Determination of Stockholders of
Record. (a) In order that the Company may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted by
the Board of Directors and which record date shall not be more than 60 nor less
than 10 days before the date of such meeting. If no record date is fixed by the
Board of Directors, the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to any adjournment
of the meeting; provided, however, that the Board of Directors may fix a new
record date for the adjourned meeting.
(b) In order that the Company may determine the stockholders
entitled to consent to corporate action in writing without a meeting, the Board
of Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors and which date shall not be more than 10 days after the date upon
which the resolution fixing the record date is adopted by the Board of
Directors. If no record date has been fixed by the Board of Directors, the
record date for determining stockholders entitled to consent to corporate action
in writing without a meeting, when no prior action by the Board of Directors is
required, shall be the first date on which a signed written consent setting
forth the action taken or proposed to be taken is delivered to the Company by
delivery to its registered office in this State, its principal place of
business, or an officer or agent of the Company having custody of the book in
which proceedings of meetings of stockholders are recorded. Delivery made to the
Company's registered office shall be by hand or by certified or registered mail,
return receipt requested. If no record date has been fixed by the Board of
Directors and prior action by the Board of Directors is required by this
chapter, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting shall be at the close of business
on the day on which the Board of Directors adopts the resolution taking such
prior action.
(c) In order that the Company may determine the stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the stockholders entitled to exercise any rights in respect of
any change, conversion or exchange of stock, or for the purpose of any other
lawful action, the Board of Directors may fix a record date, which record date
shall not precede the date upon which the
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<PAGE> 112
resolution fixing the record date is adopted and which record date shall be not
more than 60 days prior to such action. If no record date is fixed, the record
date for determining stockholders for any such purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto.
ARTICLE VII
Certificates Representing Stock
SECTION 1. Certificates; Signatures. The shares of the Company
shall be represented by certificates, provided that the Board of Directors of
the Company may provide by resolution or resolutions that some or all of any or
all classes or series of its stock shall be uncertificated shares. Any such
resolution shall not apply to shares represented by a certificate until such
certificate is surrendered to the Company. Notwithstanding the adoption of such
a resolution by the Board of Directors, every holder of stock of the Company
represented by certificates and upon request every holder of uncertificated
shares shall be entitled to have a certificate, signed by or in the name of the
Company by the Chairman or Vice-Chairman of the Board of Directors, or the
President or Vice-President, and by the Treasurer or an Assistant Treasurer, or
the Secretary or an Assistant Secretary of the Company, representing the number
of shares registered in certificate form. Any and all signatures on any such
certificate may be facsimiles. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Company with the same effect as
if he were such officer, transfer agent or registrar at the date of issue. The
name of the holder of record of the shares represented thereby, with the number
of such shares and the date of issue, shall be entered on the books of the
Company.
SECTION 2. Transfers of Stock. Upon compliance with provisions
restricting the transfer or registration of transfer of shares of stock, if any,
shares of capital stock shall be transferable on the books of the Company only
by the holder of record thereof in person, or by duly authorized attorney, upon
surrender and cancellation of certificates for a like number of shares, properly
endorsed, and the payment of all taxes due thereon.
SECTION 3. Fractional Shares. The Company may, but shall not
be required to, issue certificates for fractions of a share where necessary to
effect authorized transactions, or the Company may pay in cash the fair value of
fractions of a share as of the time when those entitled to receive such
fractions are determined, or it may issue scrip in registered or bearer form
over the manual or facsimile signature of an officer of the Company or of its
agent, exchangeable as therein provided for full shares, but such scrip shall
not entitle the holder to any rights of a stockholder except as therein
provided.
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The Board of Directors shall have power and authority to make
all such rules and regulations as it may deem expedient concerning the issue,
transfer and registration of certificates representing shares of the Company.
SECTION 4. Lost, Stolen or Destroyed Certificates. The Company
may issue a new certificate of stock in place of any certificate, theretofore
issued by it, alleged to have been lost, stolen or destroyed, and the Board of
Directors may require the owner of any lost, stolen or destroyed certificate, or
his legal representative, to give the Company a bond sufficient to indemnify the
Company against any claim that may be made against it on account of the alleged
loss, theft or destruction of any such certificate or the issuance of any such
new certificate.
ARTICLE VIII
Dividends
Subject to applicable law and the Certificate of
Incorporation, the Board of Directors shall have full power to determine whether
any, and, if any, what part of any, funds legally available for the payment of
dividends shall be declared as dividends and paid to stockholders; the division
of the whole or any part of such funds of the Company shall rest wholly within
the lawful discretion of the Board of Directors, and it shall not be required at
any time, against such discretion, to divide or pay any part of such funds among
or to the stockholders as dividends or otherwise; and before payment of any
dividend, there may be set aside out of any funds of the Company available for
dividends such sum or sums as the Board of Directors from time to time, in its
absolute discretion, thinks proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the Company, or for such other purpose as the Board of Directors
shall think conducive to the interest of the Company, and the Board of Directors
may modify or abolish any such reserve in the manner in which it was created.
ARTICLE IX
Ratification
Any transaction, questioned in any law suit on the ground of
lack of authority, defective or irregular execution, adverse interest of
director, officer or stockholder, non-disclosure, miscomputation, or the
application of improper principles or practices of accounting, may be ratified
before or after judgment, by the Board of Directors or by the stockholders, and
if so ratified shall have the same force and effect as if the questioned
transaction had been originally duly authorized. Such ratification shall be
binding upon the Company and its stockholders and shall constitute a bar to any
claim or execution of any judgment in respect of such questioned transaction.
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ARTICLE X
Corporate Seal
The corporate seal shall have inscribed thereon the name of
the Company and the year of its incorporation, and shall be in such form and
contain such other words and/or figures as the Board of Directors shall
determine. The corporate seal may be used by printing, engraving, lithographing,
stamping or otherwise making, placing or affixing, or causing to be printed,
engraved, lithographed, stamped or otherwise made, placed or affixed, upon any
paper or document, by any process whatsoever, an impression, facsimile or other
reproduction of said corporate seal.
ARTICLE XI
Fiscal Year
The fiscal year of the Company shall be fixed, and shall be
subject to change, by the Board of Directors. Unless otherwise fixed by the
Board of Directors, the fiscal year of the Company shall be the calendar year.
ARTICLE XII
Waiver of Notice
Whenever notice is required to be given by these By-laws or by
the Certificate of Incorporation or by law, a written waiver thereof, signed by
the person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent to notice.
ARTICLE XIII
Bank Accounts, Drafts, Contracts, Etc.
SECTION 1. Bank Accounts and Drafts. In addition to such bank
accounts as may be authorized by the Board of Directors, the primary financial
officer or any person designated by said primary financial officer, whether or
not an employee of the Company, may authorize such bank accounts to be opened or
maintained in the name and on behalf of the Company as he may deem necessary or
appropriate, payments from such bank accounts to be made upon and according to
the check of the Company in accordance with the written instructions of said
primary financial officer, or other person so designated by the Treasurer.
SECTION 2. Contracts. The Board of Directors may authorize any
person or persons, in the name and on behalf of the Company, to enter into or
execute
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and deliver any and all deeds, bonds, mortgages, contracts and other obligations
or instruments, and such authority may be general or confined to specific
instances.
SECTION 3. Proxies; Powers of Attorney; Other Instruments. The
Chairman, the President or any other person designated by either of them shall
have the power and authority to execute and deliver proxies, powers of attorney
and other instruments on behalf of the Company in connection with the rights and
powers incident to the ownership of stock by the Company. The Chairman, the
President or any other person authorized by proxy or power of attorney executed
and delivered by either of them on behalf of the Company may attend and vote at
any meeting of stockholders of any company in which the Company may hold stock,
and may exercise on behalf of the Company any and all of the rights and powers
incident to the ownership of such stock at any such meeting, or otherwise as
specified in the proxy or power of attorney so authorizing any such person. The
Board of Directors, from time to time, may confer like powers upon any other
person.
SECTION 4. Financial Reports. The Board of Directors may
appoint the primary financial officer or other fiscal officer to cause to be
prepared and furnished to stockholders entitled thereto any special financial
notice and/or financial statement, as the case may be, which may be required by
any provision of law.
ARTICLE XIV
Amendments
These By-laws may only be amended, modified or repealed, and new
By-laws adopted, by the vote of the stockholders of the Company. In addition to
the vote required by Section 6 of Article I of these By-laws, the affirmative
vote of the Required Holders (as defined in the Stockholders' Agreement) shall
be required to adopt, amend, modify or repeal these By-laws. Amendment,
modification, repeal or adoption of the By-laws shall not be made by any other
means.
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EXHIBIT G
STOCKHOLDERS' AGREEMENT
JOHNS MANVILLE CORPORATION
____________________
Dated as of _____________, ____
____________________
<PAGE> 117
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE 1 DEFINITIONS............................................ 1
1.1 Definitions............................................... 1
1.2 Rules of Construction..................................... 10
ARTICLE 2 MANAGEMENT OF THE COMPANY AND CERTAIN ACTIVITIES....... 11
2.1 Board of Directors........................................ 11
2.1.1 Board Representation................................ 11
2.1.2 Vacancies........................................... 11
2.1.3 Termination of Rights............................... 12
2.1.4 Costs and Expenses.................................. 12
2.2 Other Activities of the Holders; Fiduciary Duties......... 12
2.3 Request for Sale of Company by HMTF....................... 13
ARTICLE 3 REGISTRATION RIGHTS.................................... 13
3.1 Demand Registration....................................... 13
3.1.1 Request for Registration of Registrable
Shares.............................................. 13
3.1.2 Request for Registration of PIK Preferred........... 14
3.1.3 Company S-3 Obligation.............................. 15
3.1.4 Effective Registration and Expenses................. 15
3.1.5 Selection of Underwriters........................... 15
3.1.6 Priority on Demand Registrations.................... 16
3.1.7 Rights of Nonrequesting Holders..................... 16
3.1.8 Deferral of Filing.................................. 16
3.2 Piggyback Registrations................................... 17
3.2.1 Right to Piggyback.................................. 17
3.2.2 Priority on Registrations........................... 18
3.3 Shelf Registration........................................ 18
3.3.1 Obligation to File.................................. 18
3.3.2 Maintenance of Effectiveness........................ 19
3.3.3 Certain Limitations on Sales........................ 19
3.4 Holdback Agreement........................................ 20
</TABLE>
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TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
<S> <C>
3.5 Registration Procedures................................... 20
3.6 Suspension of Dispositions................................ 24
3.7 Registration Expenses..................................... 25
3.8 Indemnification........................................... 25
ARTICLE 4 TRANSFERS OF SECURITIES................................ 28
4.1 Preemptive Rights......................................... 28
4.1.1 Rights to Participate in Future Sales............... 28
4.1.2 Exceptions to Preemptive Rights..................... 29
4.2 Drag Along Rights......................................... 29
4.2.1 Applicability....................................... 29
4.2.2 Notice of Significant Drag Sale..................... 30
4.3 Tag Along Rights.......................................... 30
4.3.1 Applicability....................................... 30
4.3.2 Terms of Participation Offer........................ 31
4.4 Certain Events Not Deemed Transfers....................... 31
4.5 Transfer and Exchange..................................... 31
4.6 Replacement Securities.................................... 32
4.7 Concurrent Transfer of Securities......................... 32
ARTICLE 5 LIMITATION ON TRANSFERS................................ 32
5.1 Restrictions on Transfer.................................. 32
5.2 Restrictive Legends....................................... 32
5.2.1 Securities Act Legend............................... 32
5.2.2 Other Legends....................................... 33
5.3 Notice of Proposed Transfers.............................. 33
5.4 Termination of Certain Restrictions....................... 33
CERTAIN STOCKHOLDER APPROVAL MATTERS.................................. 34
6.1 Transactions Requiring Affirmative Vote of the
Required Holders.......................................... 34
6.2 Suspension and Termination of Special Stockholder
Voting Rights............................................. 35
COMPANY CALL; COMPANY COVENANT........................................ 35
7.1 IPO Rights; Sale Rights;.................................. 35
</TABLE>
ii
<PAGE> 119
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
<S> <C>
7.1.1 IPO Rights.......................................... 35
7.1.2 Sale Rights......................................... 35
7.2 Company Call; Purchase Price.............................. 36
7.2.1 Company Call........................................ 36
7.2.2 Purchase Price...................................... 37
7.3 Trust Liquidity Right..................................... 37
7.4 Company Covenant.......................................... 37
ARTICLE 8 TERMINATION............................................ 37
8.1 Termination............................................... 37
8.2 Termination of Certain Provisions......................... 38
ARTICLE 9 MISCELLANEOUS.......................................... 38
9.1 Notices................................................... 38
9.2 Governing Law............................................. 39
9.3 Successors and Assigns.................................... 39
9.4 Certain Waivers........................................... 40
9.5 Duplicate Originals....................................... 40
9.6 Severability.............................................. 40
9.7 No Waivers; Amendments.................................... 40
9.8 Furnishing Information; Confidentiality................... 40
</TABLE>
iii
<PAGE> 120
STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT (this "Stockholders' Agreement") dated
as of ______ ___, ____ (the "Effective Date"), is entered into by and among
Johns Manville Corporation, a Delaware corporation (including its successors,
the "Company"), and the securityholders listed on the signature pages hereof.
In consideration of the premises, mutual covenants and agreements
hereinafter contained and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions.
"ACCREDITED INVESTOR" means an "Accredited Investor," as
defined in Regulation D, or any successor rule then in effect.
"ACCREDITED OFFEREE" shall have the meaning provided in
Section 4.1 hereof.
"ADVICE" shall have the meaning provided in Section 3.6
hereof.
"AFFILIATE" shall have the meaning set forth in the Exchange
Act.
"ANNUAL BUDGET" means with respect to any fiscal year of the
Company, the budget prepared by the management of the Company and
approved by the Board reflecting costs and expenses projected to be
incurred by the Company for such fiscal year.
"BENEFICIALLY-OWNED" shall have the meaning set forth in the
Exchange Act.
"BOARD" means the Board of Directors of the Company as in
office from time to time.
"BSMB" means Bear Stearns Merchant Fund Corp., a Delaware
corporation.
"BSMB CONTROL GROUP" means those Persons listed in clause (a)
of the definition of "BSMB Group".
"BSMB DEMAND GROUP" means any group of Holders of twenty-five
percent (25%) of the Securities Beneficially Owned by the BSMB
Group.
<PAGE> 121
"BSMB GROUP" means (a) BSMB and its Affiliates, including any
investment fund formed and controlled by BSMB or any Affiliate of
BSMB, and its and their respective officers, directors, partners and
employees (and members of their respective families and trusts for
the primary benefit of such family members) and (b) its Initial
Permitted Transferees.
"BSMB TRANSFEREE" means any member of the BSMB Group to which
any Securities Beneficially Owned by either the BSMB Group or the
HMTF Group are Transferred after the Effective Date.
"BUSINESS DAY" means a day that is not a Legal Holiday. A
"Legal Holiday" used with respect to a particular place of payment
is a Saturday, a Sunday or a day on which banking institutions at
such place are not required to be open.
"COMMON STOCK" means shares of the Common Stock, $.01 par
value per share, of the Company, and any capital stock of any Person
for which such Common Stock hereafter may be exchanged.
"COMMON STOCK EQUIVALENTS" means the Junior Preferred Stock
and any other rights, warrants, options, convertible securities or
indebtedness, exchangeable securities or indebtedness, or other
rights to purchase, exercisable for or convertible or exchangeable
into, directly or indirectly, Common Stock and securities
convertible or exchangeable into Common Stock, whether at the time
of issuance or upon the passage of time or the occurrence of some
future event.
"COMPANY" shall have the meaning set forth in the introductory
paragraph hereof.
"COMPANY CALL" shall have the meaning set forth in Section
7.2.1(a) hereof.
"CONTROL" shall have the meaning set forth in the Exchange
Act.
"CO-SELLER" shall have the meaning set forth in Section 4.2.1
hereof.
"CREDIT AGREEMENT" [DESCRIBE]
"DEMAND REGISTRATION" means a PIK Demand Registration or R/S
Demand Registration, as applicable.
"DEMAND REQUEST" means a PIK Demand Request or R/S Demand
Request, as applicable.
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"DGCL" means the Delaware General Corporation Law, as amended
from time to time.
"EFFECTIVE DATE" shall have the meaning set forth in the
introductory paragraph hereof.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in
Section 3.3.1 hereof.
"EXERCISE DATE" shall have the meaning set forth in Section
7.2.1(d) hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC
thereunder.
"EXCLUDED REGISTRATION" means a registration under the
Securities Act of securities registered on Form S-4 or Form S-8 or
any successor form.
"FAIR MARKET VALUE" shall have the meaning set forth in
Section 7.2.2(a) hereof.
"FAMILY TRANSFER" shall have the meaning set forth in Section
4.4 hereof.
"FIXED CHARGES RATIO" means the fixed charge coverage
financial covenant set forth in Section [___] of the Credit
Agreement as in effect from time to time.
"FULLY-DILUTED COMMON STOCK" means, at any time, the then
outstanding Common Stock plus (without duplication) all shares of
Common Stock issuable, whether at such time or upon the passage of
time or the occurrence of some future event, upon the exercise,
conversion or exchange of all then outstanding Common Stock
Equivalents assuming exercise, conversion or exchange at such time.
"GROUP TRANSFEREE" means a BSMB Transferee or an HMTF
Transferee, as the case may be.
"HENRY" means C.L. "Jerry" Henry.
"HENRY EMPLOYMENT AGREEMENT" means that certain employment
agreement dated ______ __, ____ by and among Henry and the Company.
"HENRY FAMILY MEMBER" means, to the extent provided for in
Securities Act Form S-8, any child, stepchild, grandchild, parent,
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stepparent, grandparent, spouse, former spouse, sibling, niece,
nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships,
any person sharing Henry's household (other than a tenant or
employee), a trust in which these persons have more than 50% of the
beneficial interest, a foundation in which these persons (or the
employee) control the management of assets, and any other entity in
which these persons (or Henry) own more than 50% of the voting
interests or as otherwise defined in Securities Act Form S-8.
"HMTF" means Hicks, Muse, Tate & Furst Incorporated, a Texas
corporation.
"HMTF CONTROL GROUP" means those Persons listed in clause (a)
of the definition of "HMTF Group".
"HMTF DEMAND GROUP" means any group of Holders of twenty-five
percent (25%) of the Securities Beneficially Owned by the HMTF
Group.
"HMTF GROUP" means (a) HMTF and its Affiliates, including any
investment fund formed and controlled by HMTF or any Affiliate of
HMTF, and its and their respective officers, directors, partners and
employees (and members of their respective families and trusts for
the primary benefit of such family members) and (b) its Initial
Permitted Transferees.
"HMTF TRANSFEREE" means any member of the HMTF Group to which
any Securities Beneficially Owned by either the BSMB Group or the
HMTF Group are Transferred after the Effective Date.
"HOLDER" means (i) a Person listed on the signature page
hereof, (ii) any direct or indirect transferee of any such Person
who shall become a party to this Stockholders' Agreement pursuant to
Section 5.1, (iii) an Initial Permitted Transferee and (iv) any
Management Holder who shall become a party to this Stockholders'
Agreement after the Effective Date.
"INFORMATION" shall have the meaning set forth in Section
9.8.2 hereof.
"INITIAL PERMITTED TRANSFEREE" means any Person to whom any
Securities Beneficially Owned by either the BSMB Group or the HMTF
Group is transferred or sold after the Effective Date; provided that
such Person will constitute an "Initial Permitted Transferee" under
this Stockholders' Agreement only to the extent (x) such Person
shall have granted to BSMB or HMTF, as applicable, an irrevocable
proxy to vote such Securities and (y) after giving effect to such
transfer or sale, the BSMB Control Group or the HMTF Control Group,
as applicable, shall
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own more than fifty percent (50%) of the Securities Beneficially
Owned by it on the Effective Date; provided further that a Person
shall cease to be deemed an Initial Permitted Transferee if the
irrevocable proxy referred to above ceases to be in effect, lapses
or is withdrawn.
"INSPECTORS" shall have the meaning set forth in Section
3.5(x) hereof.
"IPO NOTICE" shall have the meaning set forth in Section
7.1.1(a) hereof.
"JUNIOR PREFERRED STOCK" means the Series B Convertible
Preferred Stock, par value $.01 per share, of the Company.
"LEVERAGE RATIO" means the maximum total leverage financial
covenant as set forth in Section [___] of the Credit Agreement as in
effect from time to time.
"LIQUIDITY NOTICE" shall have the meaning provided in Section
7.3 hereof.
"MANAGEMENT HOLDER" means any of the Persons listed on
Schedule 1.1 hereto and any other Person who becomes a party to this
Stockholders' Agreement pursuant to the terms of his/her option
agreement with the Company.
"MANAGEMENT SECURITIES" means, with respect to any Management
Holder, (a) any Securities which are issued upon the required
exercise and payment by the Management Holder of the required
exercise price of any outstanding options upon termination of such
Management Holder's employment with the Company and (b) any
Securities of the Company or rights to receive Securities of the
Company pursuant to Section 2.3(c)(1) of the Merger Agreement.
"MATERIAL ADVERSE EFFECT" shall have the meaning provided in
Section 3.1.6 hereof.
"MERGER AGREEMENT" means that certain Merger Agreement dated
as of June 22, 2000, among the Company, HB Finance LLC, a Delaware
limited liability company and HB Merger LLC, a Delaware limited
liability company ("Mergerco") pursuant to which Mergerco will merge
with and into the Company (the "Merger").
"MOODY'S" shall have the meaning provided in Section 7.3
hereof.
"NASD" shall have the meaning provided in Section 3.7 hereof.
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"NOMINATING HOLDER" shall have the meaning provided in Section
2.1.1 hereof.
"OFFER NOTICE" shall have the meaning provided in Section 4.1
hereof.
"OFFERED SECURITIES" shall have the meaning provided in
Section 4.1 hereof.
"PARTICIPATION OFFER" shall have the meaning provided in
Section 4.3 hereof.
"PARTY DESIGNEE" shall have the meaning provided in Section
2.1.1 hereof.
"PERFORMANCE HURDLES" means, for any fiscal quarter, the time
at which (a) the Leverage Ratio is less than 95% of the maximum
Leverage Ratio permitted under the Credit Agreement and (b) the
Fixed Charges Ratio is greater than 105% of the minimum Fixed
Charges Ratio permitted under the Credit Agreement.
"PERSON" or "person" means any individual, corporation,
partnership, limited liability company, joint venture, association,
joint-stock company, trust, unincorporated organization or
government or other agency or political subdivision thereof.
"PIK PREFERRED STOCK" means the Series A Redeemable PIK
Preferred Stock, par value $.01 per share, of the Company.
"PIK DEMAND REQUEST" shall have the meaning set forth in
Section 3.1.2(a) hereof.
"PIK DEMAND REGISTRATION" shall have the meaning set forth in
Section 3.1.2(a) hereof.
"PIK REQUIRED FILING DATE" shall have the meaning set forth in
Section 3.1.2(b) hereof.
"PIK S-3 REGISTRATION" shall have the meaning set forth in
Section 3.1.2(c) hereof.
"PREEMPTIVE RIGHTS OFFER" shall have the meaning set forth in
Section 4.1 hereof.
"PREEMPTIVE RIGHTS TRANSACTION" shall have the meaning set
forth in Section 4.1 hereof.
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"QUALIFIED HOLDER" means (a) a Holder owning five percent (5%)
or more of the Fully-Diluted Common Stock and (b) Henry so long as
he is employed by the Company or is a director of the Company.
"QUALIFIED IPO" means one or a series of firm commitment
underwritten public offerings of newly issued Common Stock pursuant
to a registration statement under the Securities Act where (i) the
proceeds to the Company (prior to deducting any underwriters'
discounts and commissions) equal or exceed One Hundred Million
Dollars ($100,000,000) and (ii) following consummation of such
offering or offerings, the Common Stock is listed on the New York
Stock Exchange or American Stock Exchange or authorized to be traded
on the Nasdaq National Market.
"RATING" shall have the meaning set forth in Section 7.3
hereof.
"RECORDS" shall have the meaning set forth in Section 3.5(x)
hereof.
"REGISTRABLE SECURITIES" means Registrable Shares or PIK
Preferred, as the case may be.
"REGISTRABLE SHARES" means at any time (a) the Common Stock
owned by the Holders, whether owned on the date hereof or acquired
hereafter and (b)(i) the shares of Common Stock issuable or issued
upon conversion of the Junior Preferred Stock and (ii) any other
shares of the Common Stock issued as (or issuable upon conversion or
exercise of any warrant, right or other security which is issued as)
a dividend or other distribution with respect to or in exchange for
or replacement of the Junior Preferred Stock; provided, however,
that Registrable Shares shall not include any shares (i) the sale of
which has been registered pursuant to the Securities Act and which
shares have been sold pursuant to such registration or (ii) which
have been sold pursuant to Rule 144 of the SEC under the Securities
Act.
"REGISTRATION EXPENSES" shall have the meaning provided in
Section 3.7 hereof.
"REGULATION D" means Regulation D promulgated under the
Securities Act by the SEC.
"REQUESTED IPO" shall have the meaning set forth in Section
7.1.1(a) hereof.
"REQUESTING HOLDERS" shall have the meaning set forth in
Section 3.1.7.
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"REQUIRED FILING DATE" shall mean the PIK Required Filing Date
or the R/S Required Filing Date, as applicable.
"REQUIRED HOLDERS" means Holders who then own beneficially
more than 50% of the aggregate number of shares of Securities
subject to this Stockholders' Agreement; provided however that (a)
so long as the HMTF Group owns at least fifty percent (50%) of the
Securities owned by it on the Effective Date and the HMTF Control
Group owns a majority of the Securities at any time owned by the
HMTF Group, no action permitted to be taken by the Required Holders
may be taken by the Required Holders unless a majority of the
Holders in the HMTF Group is included in the Required Holders and
has consented to such action, and (b) so long as the BSMB Group owns
at least fifty percent (50%) of the Securities owned by it on the
Effective Date and the BSMB Control Group owns a majority of the
Securities at any time owned by the BSMB Group, no action permitted
to be taken by the Required Holders may be taken by the Required
Holders unless a majority of the Holders in the BSMB Group is
included in the Required Holders and has consented to such action.
"REQUIRED PERCENTAGE" means (a) with respect to the HMTF
Group, twenty percent (20%), (b) with respect to the BSMB Group, ten
percent (10%) and (c) with respect to the Trust, five percent (5%);
provided, that if the Trust has not sold at least 20% of the
Securities Beneficially Owned by it on the Effective Date, the
Required Percentage with respect to the Trust from time to time
shall be a percentage equal to the percentage of the Fully Diluted
Common Stock then Beneficially Owned by the Trust (it being intended
the dilution from new issuances of Securities will not affect the
Trust under this definition unless and until Securities representing
at least 20% of the Securities Beneficially Owned by it on the
Effective Date have been Transferred by it).
"R/S DEMAND REQUEST" shall have the meaning set forth in
Section 3.1.1(a) hereof.
"R/S DEMAND REGISTRATION" shall have the meaning set forth in
Section 3.1.1(a) hereof.
"R/S DEMAND REQUESTING HOLDER" shall have the meaning set
forth in Section 3.1.1(a) hereof.
"R/S REQUIRED FILING DATE" shall have the meaning set forth in
Section 3.1.1(b) hereof.
"R/S S-3 REGISTRATION" shall have the meaning set forth in
Section 3.1.1(c) hereof.
"S-3 ELIGIBILITY" shall have the meaning provided in Section
3.1.3 hereof.
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"SALE OPTION" shall have the meaning set forth in Section
7.1.2 hereof.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means the Common Stock and the Junior Preferred
Stock.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"SELLER AFFILIATES" shall have the meaning provided in Section
3.8.1 hereof.
"SELLING HOLDER" shall have the meaning set forth in Section
4.3.1 hereof.
"SENIOR DEBT COVENANTS" means the Leverage Ratio and the Fixed
Charges Ratio.
"SHELF REGISTRATION" shall have the meaning set forth in
Section 3.3.1 hereof.
"SHELF REGISTRATION REQUEST" shall have the meaning set forth
in Section 3.3.1 hereof.
"SHELF SHARES" shall have the meaning set forth in Section
3.3.1 hereof.
"SIGNIFICANT DRAG SALE" shall have the meaning provided in
Section 4.2 hereof.
"SIGNIFICANT TAG SALE" shall have the meaning provided in
Section 4.3 hereof.
"STOCKHOLDERS' AGREEMENT" means this Stockholders' Agreement,
as such from time to time may be amended.
"SUBSIDIARY" of any Person means (i) a corporation a majority
of whose outstanding shares of capital stock or other equity
interests with voting power, under ordinary circumstances, to elect
directors, is at the time, directly or indirectly, owned by such
Person, and (ii) any other Person (other than a corporation) in
which such Person, directly or indirectly, at the date of
determination thereof, has (x) at least a majority ownership
interest or (y) the power to elect or direct the election of a
majority of the directors or other governing body of such Person.
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"SUSPENSION EVENT" means the earlier to occur of (a) the time
at which the Company reasonably expects to be in default of the
Senior Debt Covenants as certified in writing to BSMB by the chief
financial officer of the Company or (b) either, for any fiscal
quarter, (i) the Leverage Ratio exceeds 95% of the maximum Leverage
Ratio permitted under the Credit Agreement or (ii) the Fixed Charges
Ratio is less than 105% of the minimum Fixed Charges Ratio permitted
under the Credit Agreement.
"SUSPENSION NOTICE" shall have the meaning provided in Section
3.6 hereof.
"TAG CO-SELLER" shall have the meaning set forth in Section
4.3.1 hereof.
"TERMINATED MANAGEMENT HOLDER" shall have the meaning provided
in Section 7.2.1(a) hereof.
"TRANSFER" means any disposition of any Security or any
interest therein that would constitute a "sale" thereof within the
meaning of the Securities Act.
"TRANSFER NOTICE" shall have the meaning provided in Section
5.3 hereof.
"TRUST" shall mean the Manville Personal Injury Settlement
Trust, a New York Trust.
1.2 Rules of Construction. Unless the context otherwise requires
(1) a term has the meaning assigned to it;
(2) "or" is not exclusive;
(3) words in the singular include the plural, and words in the
plural include the singular;
(4) provisions apply to successive events and transactions;
and
(5) "herein," "hereof" and other words of similar import refer
to this Stockholders' Agreement as a whole and not to any particular
Article, Section or other subdivision.
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ARTICLE 2
MANAGEMENT OF THE COMPANY AND CERTAIN ACTIVITIES
2.1 Board of Directors.
2.1.1 Board Representation. Unless otherwise increased by a majority
of the Holders of the issued and outstanding Securities in accordance with the
DGCL, the Board shall consist of nine (9) directors, five being appointed by the
HMTF Group, two being appointed by the BSMB Group, one being appointed by the
Trust (each of HMTF Group, BSMB Group and the Trust, a "Nominating Holder," and
each such director so appointed, a "Party Designee") and one of whom shall be
the chief executive officer of the Company. To the extent that the Board is
increased as contemplated in the preceding sentence, the HMTF Group shall always
(subject to Section 2.1.3) have the right to appoint a majority of the Board
and, so long as the HMTF Group has the right to and does appoint a majority of
such increased Board, the BSMB Group shall have the right (subject to Section
2.1.3) to appoint that percentage of the members of the increased Board (and the
Board shall be further increased if reasonably required to so accomplish the
desired result) that is as close as practicable to the ratio of seven (7) board
members for the HMTF Group for every three (3) board members for the BSMB Group.
Each Holder shall vote his or its shares of Securities at any regular or special
meeting of stockholders of the Company or in any written consent executed in
lieu of such a meeting of stockholders and shall take all other actions required
by the DGCL to give effect to the agreements contained in this Stockholders'
Agreement (including without limitation the election of persons designated by
the Nominating Holders to be elected as directors as described in the preceding
sentence) and to ensure that the certificate of incorporation of the Company and
bylaws of the Company as in effect immediately following the Effective Date do
not, at any time thereafter, conflict in any respect with the provisions of this
Stockholders' Agreement. In order to effectuate the provisions of this Section
2.1, each of the HMTF Group or the BSMB Group hereby agrees that when any action
or vote is required to be taken by such Holder pursuant to this Stockholders'
Agreement, such Holder shall use his or its best efforts to call, or cause the
appropriate officers and directors of the Company to call, a special or annual
meeting of stockholders of the Company, as the case may be, and each Holder
agrees when any action or vote is required to be taken by such Holder pursuant
to this Agreement, such Holder shall execute or cause to be executed a consent
in writing in lieu of any such meetings pursuant to Section 228(a) of the DGCL
if requested by the Board. Any committee formed by the Board shall include one
(1) or more representatives of the HMTF Group and the BSMB Group unless
otherwise consented to by the Required Holders.
2.1.2 Vacancies. If, prior to his or her election to the Board
pursuant to Section 2.1.1 hereof, any Party Designee shall be unable or
unwilling to serve as a director of the Company, the respective Nominating
Holder appointing such Party Designee shall be entitled to nominate a
replacement who shall then be a Party Designee for purposes of this Section 2.
If, following an election to the Board pursuant to Section 2.1.1 hereof, any
Party Designee shall resign, be removed (which shall occur without cause, only
upon request of the Nominating Holder appointing such Party Designee, but with
cause may occur upon a vote of the Required Holders), or be unable to serve for
any
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reason prior to the expiration of his term as a director of the Company
(including disability or death), the respective Nominating Holder appointing
such Party Designee shall, within thirty (30) days of such event, notify the
Board in writing of a replacement Party Designee, and either (i) the Holders
shall vote their shares of Securities, at any regular or special meeting called
for the purpose of filling positions on the Board or in any written consent
executed in lieu of such a meeting of stockholders, and shall take all such
other actions necessary to ensure the election to the Board of such replacement
Party Designee to fill the unexpired term of the Party Designee who such new
Party Designee is replacing or (ii) the Nominating Holders shall cause their
respective Party Designees to elect such replacement Party Designee to fill the
unexpired term of the Party Designee who such new Party Designee is replacing.
If a Nominating Holder requests that their Party Designee be removed as a
Director (with or without cause) by written notice thereof to the Company, then
the Company shall take all actions necessary to effect, and each of the Holders
shall vote all its or his capital stock in favor of, such removal upon such
request (or, if applicable, provide a written consent).
2.1.3 Termination of Rights. The right of a Nominating Holder to
appoint directors under Section 2.1.1, but not the obligation of such Nominating
Holder to vote its shares of Securities as provided herein, shall terminate at
the time at which such Nominating Holder ceases to own its respective Required
Percentage of the Fully-Diluted Common Stock; provided that to the extent the
HMTF Group's rights under Section 2.1.1 terminate as provided in this Section
2.1.3, the HMTF Group shall have the right to appoint the number of directors
equal to the greater of (x) the number of directors which may be appointed by
the BSMB Group pursuant to Section 2.1.1 and (y) the number of directors
calculated in accordance with the following formula: an amount (which shall be
rounded up to the next whole number if such amount is not a whole number) equal
to (I) the percentage of Fully-Diluted Common Stock Beneficially Owned by the
HMTF Group multiplied by (II) the number of directors that exist immediately
prior to the occurrence of such event which may be appointed to the Board
pursuant to Section 2.1.1, rounded to the nearest whole number.
2.1.4 Costs and Expenses. The Company will pay all reasonable
out-of-pocket expenses incurred by the Party Designees in connection with their
participation in meetings of the Board (and committees thereof) and the Boards
of Directors (and committees thereof) of the Subsidiaries of the Company.
2.2 Other Activities of the Holders; Fiduciary Duties. It is understood
and accepted that the Holders and their Affiliates have interests in other
business ventures which may be in conflict with the activities of the Company
and its Subsidiaries and that, subject to applicable law, nothing in this
Stockholders' Agreement shall limit the current or future business activities of
the Holders whether or not such activities are competitive with those of the
Company and its Subsidiaries. Nothing in this Stockholders' Agreement, express
or implied, shall relieve any officer or director of the Company of any
fiduciary or other duties or obligations they may have to the Company's
stockholders.
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2.3 Request for Sale of Company by HMTF. Notwithstanding anything to the
contrary contained in this Stockholders' Agreement but subject to Section 8.2,
at any time after the Effective Date, HMTF may give written notice to the
Company and the Holders requiring a sale of the Company. Such sale may be
effected pursuant to a stock or asset disposition, as determined by HMTF in its
sole discretion. To the extent necessary in order to consummate such sale, each
Holder hereby agrees to vote all of its or his capital stock in favor of such
sale upon the request of HMTF. Notwithstanding anything to the contrary
contained herein, each of the Holders shall receive the same consideration for
each of the Securities it then Beneficially Owns as the HMTF Group in such sale.
If such sale is to be consummated pursuant to a stock purchase, all Holders
selling pursuant to this Section 2.3 shall be treated identically with the
Securities being sold by the HMTF Group in all respects; provided, that no
Holder other than the Holders in the HMTF Group shall be required to make any
representations or warranties in connection with such Transfer other than
representations and warranties as to (i) such Holder's ownership of his or its
Securities to be Transferred free and clear of all liens, claims and
encumbrances other than those arising hereunder, (ii) such Holder's power and
authority to effect such Transfer, and (iii) such matters pertaining to
compliance with securities laws as the purchaser may reasonably require. No
Holder not in the HMTF Group shall be required to agree to any matter other than
the foregoing representations and warranties and transfer of its Securities. Any
indemnity obligations of the Holders other than the HMTF Group arising under the
definitive documentation for such sale shall be several and shall relate solely
to the representations and warranties described above and shall be in proportion
to and in an amount no greater than the consideration received by such Holder in
such sale. In no event shall any Holder be required to sell any securities if
the sale thereof would be in violation of any law, rule, regulation, statute or
order of any governmental entity.
ARTICLE 3
REGISTRATION RIGHTS
3.1 Demand Registration.
3.1.1 Request for Registration of Registrable Shares.
(a) At any time after one hundred eighty (180) days after the
consummation of a Qualified IPO, either the HMTF Demand Group, on
behalf of the HMTF Group, the BSMB Demand Group, on behalf of the
BSMB Group, or the Trust (each, an "R/S Demand Requesting Holder")
may request the Company, in writing (an "R/S Demand Request"), to
effect the registration under the Securities Act of all or part of
its or their Registrable Shares which, in the aggregate, have an
offering value of at least Twenty-Five Million Dollars ($25,000,000)
or, if less, all of their Registrable Shares (an "R/S Demand
Registration").
(b) Each R/S Demand Request shall specify the number of
Registrable Shares proposed to be sold. Subject to Section 3.1.8,
the Company shall file the R/S Demand Registration as promptly as
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practicable but in no event later than ninety (90) days after
receiving an R/S Demand Request (the "R/S Required Filing Date") and
shall use all commercially reasonable efforts to cause the same to
be declared effective by the SEC as promptly as practicable after
such filing; provided, that the Company need effect only (i) five
(5) R/S Demand Registrations pursuant to an R/S Demand Request made
by the HMTF Demand Group, (ii) only three (3) R/S Demand
Registrations pursuant to an R/S Demand Request made by the BSMB
Demand Group, and (iii) only one (1) R/S Demand Registration
pursuant to an R/S Demand Request made by the Trust; provided,
further, that if more than twenty percent (20%) of any Registrable
Shares requested to be registered pursuant to an R/S Demand Request
made under paragraph (a) of this Section 3.1.1 are excluded from the
applicable R/S Demand Registration pursuant to Section 3.1.6 below,
the R/S Demand Requesting Holder or R/S Demand Requesting Holders
shall have the right, with respect to each such exclusion, to
request one (1) additional R/S Demand Registration under such
paragraph (a).
(c) Notwithstanding paragraph (b) of this Section 3.1.1, in
the event that the Company shall be eligible to effect a
registration under the Securities Act using Form S-3 (or other
comparable short-form registration statement) ("S-3 Eligibility"),
(i) any Qualified Holder shall be entitled to request an unlimited
number of R/S Demand Registrations of such Registrable Shares on
Form S-3 (or other comparable short-form registration statement) (an
"R/S S-3 Registration"), and (ii) the Company shall be required to
use its commercially reasonable efforts to effect such R/S S-3
Registrations, and such R/S S-3 Registrations shall not be
considered an R/S Demand Registration for purposes of the limits on
the number of R/S Demand Registrations contained in such paragraph
(b) nor be subject to the $25,000,000 threshold set forth in
paragraph (a) of this Section 3.1.1, but all such requests shall be
considered R/S Demand Requests for other purposes under this Article
III.
3.1.2 Request for Registration of PIK Preferred.
(a) At any time after the Effective Date, the Trust may
request the Company, in writing (a "PIK Demand Request"), to effect
the registration under the Securities Act of all or part of its
shares of PIK Preferred which, in the aggregate, have an offering
value of at least Twenty-Five Million Dollars ($25,000,000) (a "PIK
Demand Registration").
(b) Each PIK Demand Request shall specify the number of shares
of PIK Preferred proposed to be sold. Subject to Section 3.1.8, the
Company shall file the PIK Demand Registration as promptly as
practicable but in no event later than ninety (90) days after
receiving a PIK Demand Request (the "PIK Required Filing Date") and
shall use all commercially reasonable efforts to cause the same to
be declared effective
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by the SEC as promptly as practicable after such filing; provided,
that the Company need effect only four (4) PIK Demand Registrations
pursuant to PIK Demand Requests made by the Trust; provided,
further, that if more than twenty percent (20%) of any shares of PIK
Preferred requested to be registered pursuant to a PIK Demand
Request made under paragraph (a) of this Section 3.1.2 are excluded
from the applicable PIK Demand Registration pursuant to Section
3.1.6 below, the Trust shall have the right, with respect to each
such exclusion, to request one (1) additional PIK Demand
Registration under such paragraph (a).
(c) Notwithstanding paragraph (b) of this Section 3.1.2, in
the event that the Company has S-3 Eligibility, (i) the Trust shall
be entitled to request an unlimited number of PIK Demand
Registrations of shares of PIK Preferred on Form S-3 (or other
comparable short-form registration statement) (an "PIK S-3
Registration"), and (ii) the Company shall be required to use its
commercially reasonable efforts to effect such PIK S-3
Registrations, and such PIK S-3 Registrations shall not be
considered a PIK Demand Registration for purposes of the limits on
the number of PIK Demand Registrations contained in such paragraph
(b) nor be subject to the $25,000,000 threshold set forth in
paragraph (a) of this Section 3.1.2, but all such requests shall be
considered PIK Demand Requests for other purposes under this Article
III.
3.1.3 Company S-3 Obligation. The Company agrees to use all
reasonable efforts to make all required filings with the SEC that are within the
Company's control so as to maintain its S-3 Eligibility.
3.1.4 Effective Registration and Expenses. A registration will not
count as a Demand Registration until it has become effective (unless the
Requesting Holders withdraw all their Registrable Securities and the Company has
performed its obligations hereunder in all material respects, in which case such
demand will count as a Demand Registration unless the Requesting Holders pay all
Registration Expenses, as hereinafter defined, in connection with such withdrawn
registration); provided, that if, after it has become effective, an offering of
Registrable Securities pursuant to a registration is interfered with by any stop
order, injunction, or other order or requirement of the SEC or other
governmental agency or court, such registration will be deemed not to have been
effected and will not count as a Demand Registration.
3.1.5 Selection of Underwriters. The offering of Registrable
Securities pursuant to a Demand Registration shall be in the form of a "firm
commitment" underwritten offering if so requested by the Requesting Holders. The
Requesting Holders of a majority of the Registrable Securities to be registered
in a Demand Registration shall select the investment banking firm or firms to
manage the underwritten offering; provided that such selection shall be subject
to the consent of the Company, which consent shall not be unreasonably withheld.
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3.1.6 Priority on Demand Registrations. No securities to be sold for
the account of any Person (including the Company) other than a Requesting Holder
shall be included in a Demand Registration unless the managing underwriter or
underwriters shall advise the Company or the Requesting Holders in writing that
the inclusion of such securities will not materially and adversely affect the
price or completion of the offering (a "Material Adverse Effect"). Furthermore,
in the event the managing underwriter or underwriters shall advise the Company
or the Requesting Holders that the amount of Registrable Securities proposed to
be included in such Demand Registration by the Requesting Holders is
sufficiently large to cause a Material Adverse Effect (whether or not a Person
other than a Requesting Holder has requested registration), the Registrable
Securities of the Requesting Holders to be included in such Demand Registration
shall equal the number of shares which the Company is so advised can be sold in
such offering without a Material Adverse Effect and such shares shall be
allocated pro rata among the Requesting Holders on the basis of the number of
Registrable Securities in each class Beneficially Owned by each such Requesting
Holder. No Holder may participate in any registration statement hereunder unless
such Holder (x) agrees to sell such Holder's Registrable Securities on the basis
provided in any underwriting arrangements approved by the Company and (y)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements, and other documents, each in customary form, reasonably
required under the terms of such underwriting arrangements; provided, however,
that no such Holder shall be required to make any representations or warranties
in connection with any such registration other than representations and
warranties as to (i) such Holder's ownership of his or its Registrable
Securities to be sold or Transferred free and clear of all liens, claims, and
encumbrances, (ii) such Holder's power and authority to effect such Transfer,
and (iii) such matters pertaining to compliance with federal and state
securities laws as may be reasonably requested; provided further, however, that
the obligation of such Holder to indemnify pursuant to any such underwriting
arrangements shall be several, and the liability of each such Holder will be in
proportion to, and provided further that such liability will be limited to, the
net amount received by such Holder from the sale of his or its Registrable
Securities pursuant to such registration.
3.1.7 Rights of Nonrequesting Holders. Upon receipt of any Demand
Request, the Company shall promptly (but in any event within ten (10) days) give
written notice of such proposed Demand Registration to all other Holders, who
shall have the right, exercisable by written notice to the Company within twenty
(20) days after their receipt of the Company's notice, to elect to include in
such Demand Registration such portion of their Registrable Securities as they
may request. All Holders requesting to have their Registrable Securities
included in a Demand Registration in accordance with the preceding sentence
shall be deemed to be "Requesting Holders" for purposes of this Section 3.1.
3.1.8 Deferral of Filing. The Company may defer the filing (but not
the preparation) of a registration statement required by Section 3.1 until a
date not later than one hundred eighty (180) days after the Required Filing Date
(or, if longer, one hundred eighty (180) days after the effective date of the
registration statement contemplated by clause (ii) below) if (i) at the time the
Company receives the Demand Request, the
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Company or any of its Subsidiaries are engaged in confidential negotiations or
other confidential business activities, disclosure of which would, in the
reasonable judgment of the Company, be required in such registration statement
(but would not be required if such registration statement were not filed), and
the Board determines in good faith that such disclosure would be materially
detrimental to the Company and its stockholders, or (ii) prior to receiving the
Demand Request, the Board had determined to effect a registered underwritten
public offering of the Company's securities for the Company's account and the
Company had taken substantial steps (including, but not limited to, selecting a
managing underwriter for such offering) and is proceeding with reasonable
diligence to effect such offering. A deferral of the filing of a registration
statement pursuant to this Section 3.1.8 shall be lifted, and the requested
registration statement shall be filed forthwith, if, in the case of a deferral
pursuant to clause (i) of the preceding sentence, the negotiations or other
activities are disclosed or terminated, or, in the case of a deferral pursuant
to clause (ii) of the preceding sentence, the proposed registration for the
Company's account is abandoned. In order to defer the filing of a registration
statement pursuant to this Section 3.1.8, the Company shall promptly, upon
determining to seek such deferral, deliver to each Requesting Holder a
certificate signed by an executive officer of the Company stating that the
Company is deferring such filing pursuant to this Section 3.1.8 and a general
statement of the reason for such deferral and an approximation of the
anticipated delay. Within twenty (20) days after receiving such certificate, the
holders of a majority of the Registrable Securities Beneficially Owned by the
Requesting Holders and for which registration was previously requested may
withdraw such Demand Request by giving notice to the Company; if withdrawn, the
Demand Request shall be deemed not to have been made for all purposes of this
Agreement. The Company may defer the filing of a particular registration
statement pursuant to this Section 3.1.8 only once.
3.2 Piggyback Registrations.
3.2.1 Right to Piggyback. Each time the Company proposes to register
any of its equity securities at any time after a Qualified IPO (other than
pursuant to an Excluded Registration or a Demand Request) under the Securities
Act for sale to the public (whether for the account of the Company or the
account of any securityholder of the Company) and the form of registration
statement to be used permits the registration of Registrable Shares, the Company
shall give prompt written notice to each Holder of Registrable Shares (which
notice shall be given not less than thirty (30) days prior to the effective date
of the Company's registration statement), which notice shall offer each such
Holder the opportunity to include any or all of its or his Registrable Shares in
such registration statement, subject to the limitations contained in Section
3.2.2 hereof. Each Holder other than a Management Holder (including Henry until
such time as he ceases to be employed by the Company), and, to the extent
permitted by the underwriter, each Management Holder, who desires to have its or
his Registrable Shares included in such registration statement shall so advise
the Company in writing (stating the number of shares desired to be registered)
within twenty (20) days after the date of such notice from the Company. Any
Holder shall have the right to withdraw such Holder's request for inclusion of
such Holder's Registrable Shares in any registration statement pursuant to this
Section 3.2.1 by giving written notice to the Company of such withdrawal.
Subject
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to Section 3.2.2 below, the Company shall include in such registration statement
all such Registrable Shares so requested to be included therein; provided,
however, that the Company may at any time withdraw or cease proceeding with any
such registration if it shall at the same time withdraw or cease proceeding with
the registration of all other equity securities originally proposed to be
registered.
3.2.2 Priority on Registrations. If the managing underwriter advises
the Company in writing that the number of equity securities requested to be
included in a registration for which rights have been requested pursuant to
Section 3.2 by all Persons (including the Company) exceeds the number of shares
which can be sold in such offering without causing a Material Adverse Effect,
the Company will be obligated to include in such registration only (i) first,
any and all equity securities for sale by the Company, (ii) second, to the
extent of any remaining Registrable Shares which may be sold in such offering
without causing a Material Adverse Effect, each other Holder shall be entitled
to include any and all Registrable Shares Beneficially Owned by such Holder in
the registration (pro rata based on the total number of such Registrable Shares
Beneficially Owned by each such Holder), and (iii) third, to the extent of any
remaining equity securities which the Company is advised may be sold in such
offering without causing a Material Adverse Effect, pro rata among any other
Persons holding equity securities requested to be included pursuant to any other
registration rights that may have been, or may hereafter be, granted by the
Company (on the basis of the total number of equity securities that each holder
thereof Beneficially Owns) on the basis of the number of equity securities of
the Company Beneficially Owned by such Person. If as a result of the provisions
of this Section 3.2.2 any Holder shall not be entitled to include all
Registrable Shares in a registration that such Holder has requested to be so
included, such Holder may withdraw such Holder's request to include Registrable
Shares in such registration statement. No Holder may participate in any
registration statement hereunder unless such Holder (x) agrees to sell such
Holder's Registrable Shares on the basis provided in any underwriting
arrangements approved by the Company and (y) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements, and
other documents, each in customary form, reasonably required under the terms of
such underwriting arrangements; provided, however, that no such Holder shall be
required to make any representations or warranties in connection with any such
registration other than representations and warranties as to (i) such Holder's
ownership of his or its Registrable Shares to be sold or transferred free and
clear of all liens, claims, and encumbrances, (ii) such Holder's power and
authority to effect such transfer, and (iii) such matters pertaining to such
Person's compliance with securities laws as may be reasonably requested;
provided further, however, that the obligation of such Holder to indemnify
pursuant to any such underwriting arrangements shall be several, and the
liability of each such Holder will be in proportion to, and provided further
that such liability will be limited to, the net amount received by such Holder
from the sale of his or its Registrable Shares pursuant to such registration.
3.3 Shelf Registration.
3.3.1 Obligation to File. At any time after one hundred eighty (180)
days after the consummation of a Qualified IPO, either the HMTF Demand Group, on
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behalf of the HMTF Group, or the BSMB Demand Group, on behalf of the BSMB Group,
may request (the "Shelf Registration Request") the Company to file with the SEC,
as soon as practicable, a registration statement for a resale offering to be
made on a continuous basis pursuant to Rule 415 promulgated under the Securities
Act covering all of the Registrable Shares Beneficially Owned by the HMTF Group
or the BSMB Group, as the case may be (the "Shelf Registration"). The Shelf
Registration shall be on Form S-3 under the Securities Act or another
appropriate form permitting registration of all Registrable Shares Beneficially
Owned by the HMTF Group and the BSMB Group for resale (the "Shelf Shares") by
the Holders of such Shelf Shares in the manner or manners designated by them
(including, without limitation, one or more underwritten offerings). The Company
shall use its commercially reasonable efforts to cause the Shelf Registration to
be declared effective pursuant to the Securities Act as promptly as reasonably
practicable following the filing thereof, but in no event later than the 180th
day after the Shelf Registration Request, and to keep the Shelf Registration
continuously effective under the Securities Act for a one (1) year period
following the date of the effectiveness of such Shelf Registration, or such
shorter period ending when either (1) all Shelf Shares covered by the Shelf
Registration have been sold in the manner set forth and as contemplated in the
Shelf Registration or pursuant to Rule 144 promulgated under the Securities Act
or (2) there cease to be outstanding any Shelf Shares (the "Effectiveness
Period"). Notwithstanding anything to the contrary contained herein, at such
time as (a) the HMTF Control Group ceases to own a majority of the Securities
owned by the HMTF Group, it shall no longer be permitted to make a Shelf
Registration Request under this Section 3.3.1 and (b) the BSMB Control Group
ceases to own a majority of the Securities owned by the BSMB Group, it shall no
longer be permitted to make a Shelf Registration Request pursuant to this
Section 3.3.1.
3.3.2 Maintenance of Effectiveness. The Company shall use its
commercially reasonable efforts to keep the Shelf Registration continuously
effective for the Effectiveness Period, by supplementing and amending the Shelf
Registration if required by the rules, regulations or instructions applicable to
the registration form used for such Shelf Registration, if required by the
Securities Act or if reasonably requested by Holders of Shelf Shares covered by
such registration statement or by any underwriter of such Shelf Shares.
3.3.3 Certain Limitations on Sales. Notwithstanding anything to the
contrary in Section 3.3.1 or Section 3.3.2 hereof, the Company may, by
delivering written notice to the Holders of Shelf Shares, prohibit offers and
sales of Shelf Shares pursuant to the Shelf Registration until a date not later
than ninety (90) days after the date of such notice if (i) the Company or any of
its Subsidiaries is engaged in confidential negotiations or other confidential
business activities, disclosure of which would, in the reasonable judgment of
the Company, be required in such registration statement (but would not be
required if such registration statement were not filed), and the Board
determines in good faith that such disclosure would be materially detrimental to
the Company and its stockholders (provided, however, that upon the public
disclosure by the Company of the negotiations or business activities described
above, the suspension of the use of the Shelf Registration pursuant to this
Section 3.3.3 shall cease and the Company shall promptly notify Holders that
dispositions of Shelf Shares may be resumed) or (ii) the Company is
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required to file a post effective amendment to such Shelf Registration. In no
event may the Company prohibit offers and sales of Shelf Shares pursuant to the
Shelf Registration (i) for a period of more than ninety (90) days following the
delivery by the Company of the notice provided for in the first sentence of this
Section 3.3.3 or, (ii) more than twice in any 12-month period.
3.4 Holdback Agreement. Unless the managing underwriter otherwise agrees,
each of the Company, and the Holders agree (and the Company agrees, in
connection with any underwritten registration, to use its reasonable efforts to
cause its Affiliates to agree) not to effect any public sale or private offer or
distribution of any Securities or Common Stock Equivalents during the ten (10)
business days prior to the effectiveness under the Securities Act of any
underwritten registration and during such time period after the effectiveness
under the Securities Act of any underwritten registration (not to exceed one
hundred eighty (180) days) (except, if applicable, as part of such underwritten
registration) as the Company and the managing underwriter may agree.
3.5 Registration Procedures. Whenever any Holder has requested that any
Registrable Securities be registered pursuant to this Stockholders' Agreement,
the Company will use its commercially reasonable efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto the Company will in
addition to the other requirements set forth in this Article III as promptly as
practicable:
(i) prepare and file with the SEC a registration statement on
Form S-3 or any appropriate form under the Securities Act, together
with a prospectus, to be used in connection therewith, with respect
to such Registrable Securities and use its commercially reasonable
efforts to cause such registration statement to become effective;
(ii) prepare and file with the SEC such amendments,
post-effective amendments, and supplements to such registration
statement and the prospectus included therein as may be necessary to
keep such registration statement effective for a period of not less
than one hundred eighty (180) days (or such lesser period as is
necessary for the underwriters in an underwritten offering to sell
unsold allotments) or, in the case of a Shelf Registration, for the
period specified in Section 3.3.2, and comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement;
(iii) furnish to each seller of Registrable Securities and the
underwriters of the securities being registered such number of
copies of such registration statement, each amendment and supplement
thereto, the prospectus to be used in connection therewith
(including each preliminary prospectus), any documents incorporated
by reference therein and such other documents as such seller or
underwriters may reasonably request in
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order to facilitate the disposition of the Registrable Securities
owned by such seller or the sale of such securities by such
underwriters (it being understood that, subject to Section 3.6 and
the requirements of the Securities Act and applicable state
securities laws, the Company consents to the use of the prospectus
and any amendment or supplement thereto by each seller and the
underwriters in connection with the offering and sale of the
Registrable Securities covered by the registration statement of
which such prospectus, amendment or supplement is a part);
(iv) use its commercially reasonable efforts to register or
qualify such Registrable Securities under such other securities or
blue sky laws of such jurisdictions as the managing underwriter
reasonably requests (or, in the event the registration statement
does not relate to an underwritten offering, as the holders of a
majority of such Registrable Securities may reasonably request); use
its commercially reasonable efforts to keep each such registration
or qualification (or exemption therefrom) effective during the
period in which such registration statement is required to be kept
effective; and do any and all other acts and things which may be
reasonably necessary or advisable to enable each seller to
consummate the disposition of such Registrable Securities owned by
such seller in such jurisdictions (provided, however, that the
Company will not be required to (A) qualify generally to do business
in any jurisdiction where it would not otherwise be required to
qualify but for this subparagraph or (B) consent to general service
of process in any such jurisdiction);
(v) promptly notify each seller and each underwriter and (if
requested by any such Person) confirm such notice in writing (A)
when a prospectus or any prospectus supplement or post-effective
amendment has been filed and, with respect to a registration
statement or any post-effective amendment, when the same has become
effective, (B) of the issuance by any state securities or other
regulatory authority of any order suspending the qualification or
exemption from qualification of any of the Registrable Securities
under state securities or "blue sky" laws or the initiation of any
proceedings for that purpose, and (C) of the happening of any event
which makes any statement of a material fact made in a registration
statement or related prospectus untrue or which requires the making
of any changes in such registration statement, prospectus or
documents so that they will not contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made,
and, as promptly as practicable thereafter, prepare and file with
the SEC and furnish a supplement or amendment to such prospectus so
that, as thereafter deliverable to the purchasers of such
Registrable Securities, such prospectus will not contain any untrue
statement of a material fact or omit
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a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading;
(vi) make generally available to the Company's securityholders
an earnings statement satisfying the provisions of Section 11(a) of
the Securities Act no later than thirty (30) days after the end of
the twelve (12) month period beginning with the first day of the
Company's first fiscal quarter commencing after the effective date
of a registration statement, which earnings statement shall cover
said twelve (12) month period, and which requirement will be deemed
to be satisfied if the Company timely files complete and accurate
information on Forms 10-Q, 10-K and 8-K under the Exchange Act and
otherwise is in accordance with the definitions set forth in Rule
158 under the Securities Act;
(vii) if requested by the managing underwriter or any seller
promptly incorporate in a prospectus supplement or post-effective
amendment such information as the managing underwriter or any seller
reasonably requests to be included therein, including, without
limitation, with respect to the Registrable Securities being sold by
such seller, the purchase price being paid therefor by the
underwriters and with respect to any other terms of such
underwritten offering of the Registrable Securities to be sold in
such offering, and promptly make all required filings of such
prospectus supplement or post-effective amendment;
(viii) as promptly as reasonably practicable after filing with
the SEC of any document which is incorporated by reference into a
registration statement (in the form in which it was incorporated),
deliver a copy of each such document to each seller;
(ix) cooperate with the sellers and the managing underwriter,
if applicable, to facilitate the timely preparation and delivery of
certificates (which shall not bear any restrictive legends unless
required under applicable law) representing securities sold under
any registration statement, and enable such securities to be in such
denominations and registered in such names as the managing
underwriter, if applicable, or such sellers may request and keep
available and make available to the Company's transfer agent prior
to the effectiveness of such registration statement a supply of such
certificates;
(x) promptly make available after a request therefor, for
inspection by any seller, any underwriter participating in any
disposition pursuant to any registration statement, if applicable,
and any attorney, accountant or other agent or representative
retained by any such seller or underwriter (collectively, the
"Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the
"Records"), as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the
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Company's officers, directors and employees to supply all
information reasonably requested by any such Inspector in connection
with such registration statement; provided, that, unless the
disclosure of such Records is necessary to avoid or correct a
misstatement or omission in the registration statement or the
release of such Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction, the Company shall not
be required to provide any information under this subparagraph (x)
if (A) the Company believes, after consultation with counsel for the
Company, that to do so would cause the Company to forfeit an
attorney-client privilege that was applicable to such information or
(B) if either (1) the Company has requested and been granted from
the SEC confidential treatment of such information contained in any
filing with the SEC or documents provided supplementally or
otherwise or (2) the Company reasonably determines in good faith
that such Records are confidential and so notifies the Inspectors in
writing unless prior to furnishing any such information with respect
to (A) or (B) such Holder of Registrable Securities requesting such
information agrees to enter into a confidentiality agreement in
customary form and subject to customary exceptions; and provided,
further that each Holder of Registrable Securities agrees that it
will, upon learning that disclosure of such Records is sought in a
court of competent jurisdiction, give notice to the Company and
allow the Company, at its expense, to undertake appropriate action
and to prevent disclosure of the Records deemed confidential;
(xi) furnish to each seller and underwriter, if applicable, a
signed counterpart of (A) an opinion or opinions of counsel to the
Company, and (B) in the case of a "firm commitment" underwritten
offering, a comfort letter or comfort letters from the Company's
independent public accountants, each in customary form and covering
such matters of the type customarily covered by opinions or comfort
letters, as the case may be, as the sellers or managing underwriter
reasonably requests;
(xii) cause the Registrable Securities included in any
registration statement to be (A) listed on each securities exchange,
if any, on which the same class of securities of the Company are
then listed, or (B) , if not listed on a national securities
exchange, authorized to be quoted and/or listed for trading (to the
extent applicable) on the National Association of Securities
Dealers, Inc. ("NASD") Automated Quotation System or the Nasdaq
National Market if the Registrable Securities so qualify;
(xiii) provide a CUSIP number for the Registrable Securities
included in any registration statement not later than the effective
date of such registration statement;
(xiv) cooperate with each seller and each underwriter, if
applicable, participating in the disposition of such Registrable
Securities
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and their respective counsel in connection with any filings required
to be made with the NASD;
(xv) during the period when the prospectus is required to be
delivered under the Securities Act, promptly file all documents
required to be filed with the SEC pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act;
(xvi) notify each seller of Registrable Securities promptly of
any request by the SEC for the amending or supplementing of such
registration statement or prospectus or for additional information;
(xvii) prepare and file with the SEC promptly any amendments
or supplements to such registration statement or prospectus which,
in the opinion of counsel for the Company or the managing
underwriter, if applicable, is required in connection with the
distribution of the Registrable Securities;
(xviii) in the case of a "firm commitment" underwritten
offering, enter into such agreements (including underwriting
agreements in the managing underwriter's customary form) as are
customary in connection with an underwritten registration; and
(xix) advise each seller of such Registrable Securities, as
promptly as reasonably practicable after it shall receive notice or
obtain knowledge thereof, of the issuance of any stop order by the
SEC suspending the effectiveness of such registration statement or
the initiation or threatening of any proceeding for such purpose and
promptly use its best efforts to prevent the issuance of any stop
order or to obtain its withdrawal at the earliest possible moment if
such stop order should be issued.
3.6 Suspension of Dispositions. Each Holder agrees by acquisition of any
Registrable Securities that, upon receipt of any notice (a "Suspension Notice")
from the Company of the happening of any event of the kind described in Section
3.5(v)(C) such Holder will forthwith discontinue disposition of Registrable
Securities pursuant to a registration statement until such Holder's receipt of
the copies of the supplemented or amended prospectus, or until it is advised in
writing (the "Advice") by the Company that the use of the prospectus may be
resumed, and has received copies of any additional or supplemental filings which
are incorporated by reference in the prospectus, and, if so directed by the
Company, such Holder will deliver to the Company all copies, other than
permanent file copies then in such Holder's possession, of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice. In the event the Company shall give any such notice, the time period
regarding the effectiveness of registration statements set forth in Section
3.5(ii) hereof shall be extended by the number of days during the period from
and including the date of the giving of the Suspension Notice to and including
the date when each seller of Registrable Securities covered by
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such registration statement shall have received the copies of the supplemented
or amended prospectus or the Advice. The Company shall use its commercially
reasonable efforts and take such actions as are reasonably necessary to render
the Advice as promptly as practicable.
3.7 Registration Expenses. All expenses incident to the Company's
performance of or compliance with this Article 3 including, without limitation,
all registration and filing fees, all fees and expenses associated with filings
required to be made with the NASD (including, if applicable, the fees and
expenses of any "qualified independent underwriter" as such term is defined in
Schedule E of the By-Laws of the NASD, and of its counsel), as may be required
by the rules and regulations of the NASD, fees and expenses of compliance with
securities or "blue sky" laws (including reasonable fees and disbursements of
counsel in connection with "blue sky" qualifications of the Registrable
Securities), rating agency fees, printing expenses (including expenses of
printing certificates for the Registrable Securities in a form eligible for
deposit with Depository Trust Company and of printing prospectuses if the
printing of prospectuses is requested by a holder of Registrable Securities),
messenger and delivery expenses, the Company's internal expenses (including
without limitation all salaries and expenses of its officers and employees
performing legal or accounting duties), the fees and expenses incurred in
connection with any listing of the Registrable Securities, fees and expenses of
counsel for the Company and its independent certified public accountants
(including the expenses of any special audit or "cold comfort" letters required
by or incident to such performance), securities acts liability insurance (if the
Company elects to obtain such insurance), the fees and expenses of any special
experts retained by the Company in connection with such registration, and the
fees and expenses of other persons retained by the Company and reasonable fees
and expenses of one firm of counsel for the sellers (which shall be selected by
the holders of a majority of the Registrable Securities being included in any
particular registration statement) (all such expenses being herein called
"Registration Expenses") will be borne by the Company whether or not any
registration statement becomes effective; provided that in no event shall
Registration Expenses include any underwriting discounts, commissions, or fees
attributable to the sale of the Registrable Securities or any counsel (except as
provided above), accountants, or other persons retained or employed by the
Holders.
3.8 Indemnification.
3.8.1 The Company agrees to indemnify and reimburse, to the fullest
extent permitted by law, each seller of Registrable Securities, and each of its
employees, advisors, agents, representatives, partners, officers, trustees and
directors and each Person who controls (within the meaning of the Securities Act
or the Exchange Act) such seller and any agent or investment advisor thereof
(collectively, the "Seller Affiliates") (A) against any and all losses, claims,
damages, liabilities, and expenses, joint or several (including, without
limitation, attorneys' fees and disbursements except as limited by Section
3.8.3) based upon, arising out of, related to or resulting from any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement, prospectus, or preliminary prospectus or any amendment
thereof or supplement thereto, or any omission or alleged omission of a material
fact required to be
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stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made, and (B) against any and
all costs and expenses (including reasonable fees and disbursements of counsel)
as may be reasonably incurred in investigating, preparing, or defending against
any litigation, or investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon, arising out
of, related to or resulting from any such untrue statement or omission or
alleged untrue statement or omission, to the extent that any such expense or
cost is not paid under subparagraph (A) above; except insofar as the same are
made in reliance upon and in strict conformity with information furnished in
writing to the Company by such seller or any Seller Affiliate for use therein or
arise from such seller's or any Seller Affiliate's failure to deliver a copy of
the registration statement or prospectus or any amendments or supplements
thereto after the Company has furnished such seller or Seller Affiliate with a
sufficient number of copies of the same. The reimbursements required by this
Section 3.8.1 will be made by periodic payments during the course of the
investigation or defense, as and when bills are received or expenses incurred.
3.8.2 In connection with any registration statement in which a
seller of Registrable Securities is participating, each such seller will furnish
to the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any such registration statement
or prospectus and, to the fullest extent permitted by law, each such seller will
indemnify the Company and its directors and officers and each Person who
Controls the Company against any and all losses, claims, damages, liabilities,
and expenses (including, without limitation, reasonable attorneys' fees and
disbursements except as limited by Section 3.8.3) based upon, arising out of,
related to, or resulting from any untrue statement or alleged untrue statement
of a material fact contained in the registration statement, prospectus, or any
preliminary prospectus or any amendment thereof or supplement thereto, or any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the extent
that such untrue statement or alleged untrue statement or omission or alleged
omission is contained in any information or affidavit so furnished in writing by
such seller or any of its Seller Affiliates specifically for inclusion in the
registration statement; provided that the obligation to indemnify will be
several, not joint and several, among such sellers of Registrable Securities,
and the liability of each such seller of Registrable Securities will be in
proportion to, and provided further that such liability will be limited to, the
net amount received by such seller from the sale of Registrable Securities
pursuant to such registration statement; provided, however, that such seller of
Registrable Securities shall not be liable in any such case to the extent that
prior to the filing of any such registration statement or prospectus or
amendment thereof or supplement thereto, such seller has furnished in writing to
the Company information expressly for use in such registration statement or
prospectus or any amendment thereof or supplement thereto which corrected or
made not misleading information previously furnished to the Company.
3.8.3 Any Person entitled to indemnification hereunder will (A) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give such notice
shall not limit the
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rights of such Person unless the indemnifying party is materially prejudiced
thereby) and (B) unless in such indemnified party's reasonable judgment after
advice from independent counsel a conflict of interest between such indemnified
and indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided, however, that any person
entitled to indemnification hereunder shall have the right to employ separate
counsel and to participate in the defense of such claim, and the fees and
expenses of such counsel shall be at the expense of such person unless (X) the
indemnifying party has agreed to pay such fees or expenses, or (Y) the
indemnifying party shall have failed to assume the defense of such claim or
failed to employ counsel reasonably satisfactory to such person. If such defense
is not assumed by the indemnifying party as permitted hereunder, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its written consent (but such consent will not
be unreasonably withheld). If such defense is assumed by the indemnifying party
pursuant to the provisions hereof, such indemnifying party shall not settle or
otherwise compromise the applicable claim unless (1) such settlement or
compromise contains a full and unconditional release of the indemnified party
with respect to the claim or (2) the indemnified party otherwise consents in
writing. An indemnifying party who is not entitled to, or elects not to, assume
the defense of a claim will not be obligated to pay the fees and expenses of
more than one counsel for all parties indemnified by such indemnifying party
with respect to such claim, unless in the reasonable judgment of any indemnified
party, a conflict of interest may exist between such indemnified party and any
other of such indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the reasonable fees and
disbursements of such additional counsel or counsels.
3.8.4 Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 3.8.1 or Section 3.8.2 are
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims, damages, liabilities, or expenses (or actions in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities, or expenses (or actions in respect thereof) in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified party in connection with the actions
which resulted in the losses, claims, damages, liabilities or expenses as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The parties hereto agree that it
would not be just and equitable if contribution pursuant to this Section 3.8.4
were determined by pro rata allocation (even if the sellers or any underwriters
or all of them were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to in this Section 3.8.4. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities, or expenses (or
actions in respect thereof) referred to above shall be
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deemed to include any legal or other fees or expenses reasonably incurred by
such indemnified party in connection with investigating or, except as provided
in Section 3.8.3, defending any such action or claim. Notwithstanding the
provisions of this Section 3.8.4, no seller shall be required to contribute an
amount greater than the dollar amount by which the net proceeds received by such
seller with respect to the sale of any Registrable Securities exceeds the amount
of damages which such seller has otherwise been required to pay by reason of any
and all untrue or alleged untrue statements of material fact or omissions or
alleged omissions of material fact made in any registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto related to such sale of Registrable Securities. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. The sellers' obligations in this
Section 3.8.4 to contribute shall be several in proportion to the amount of
Registrable Securities registered by them and not joint.
If indemnification is available under this Section 3.8, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in Section 3.8.1 and Section 3.8.2 without regard to the relative fault
of said indemnifying party or indemnified party or any other equitable
consideration provided for in this Section 3.8.4 subject, in the case of the
Holders, to the limited dollar amounts set forth in Section 3.8.2.
3.8.5 The indemnification and contribution provided for under this
Stockholders' Agreement will remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any officer,
director, or controlling Person of such indemnified party and will survive the
transfer of securities.
ARTICLE 4
TRANSFERS OF SECURITIES
4.1 Preemptive Rights.
4.1.1 Rights to Participate in Future Sales. In case the Company
proposes to issue or sell (a) any shares of Common Stock or Common Stock
Equivalents to any Person, or (b) any other security of the Company to any one
or more members of the BSMB Control Group or the HMTF Control Group (the
"Offered Securities"), the Company shall, no later than thirty (30) days prior
to the consummation of such transaction (a "Preemptive Rights Transaction"),
give notice in writing of such Preemptive Rights Transaction (the "Offer
Notice") to each Qualified Holder. The Offer Notice shall describe the proposed
Preemptive Rights Transaction, identify the proposed purchaser, and contain an
offer (the "Preemptive Rights Offer") to sell to each Qualified Holder who
certifies (to the reasonable satisfaction of the Company) that such Qualified
Holder is an Accredited Investor (an "Accredited Offeree"), at the same price
and for the same consideration to be paid by the proposed purchaser, all or part
of such Accredited Offeree's pro rata portion of the Offered Securities (which
shall be the percentage ownership of the Fully-Diluted Common Stock Beneficially
Owned by such Qualified Holder, excluding, for the purposes of such calculation,
any shares of Common Stock
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issuable upon exercise of any Common Stock Equivalents granted pursuant to any
employee, officer or director benefit plan or arrangement multiplied by the
number of Offered Securities to be issued, and the number of Offered Securities
to be sold to the prospective purchaser shall be reduced by the number of
Offered Securities agreed to be purchased by each Qualified Holder pursuant to
this Section 4.1.1). If any such Qualified Holder fails to accept such offer by
written notice thirty (30) days after its receipt of the Offer Notice, the
Company may proceed with the proposed issue or sale of the Offered Securities,
free of any right on the part of such Qualified Holder under this Section 4.1.1
in respect thereof. In the event any Subsidiary of the Company proposes to issue
or sell any security of such Subsidiary to any Holder or its Affiliates, the
Company shall use its reasonable best efforts to cause such Subsidiary to offer
pre-emptive rights with respect to such security to the other Qualified Holders
on terms and conditions substantially similar to those contained in this Section
4.1.1.
4.1.2 Exceptions to Preemptive Rights. This Section 4.1 shall not
apply to (i) issuances or sales of Common Stock or Common Stock Equivalents to
employees, officers, and/or directors of the Company and/or any of its
Subsidiaries pursuant to employee benefit or similar plans or arrangements of
the Company and/or its Subsidiaries, (ii) issuances or sales of Common Stock or
Common Stock Equivalents upon exercise of any Common Stock Equivalent, (iii)
securities distributed or set aside ratably to all holders of Common Stock and
Common Stock Equivalents (or any class or series thereof) on a per share
equivalent basis, (iv) issuances or sales of Common Stock or Common Stock
Equivalents pursuant to a registered underwritten public offering or issuances
in, a merger of the Company or a Subsidiary of the Company into or with another
entity or an acquisition by the Company or a Subsidiary of the Company of
another business or corporation or (v) the issuance of the Securities in the
Merger. In the event of any issuances or sales of Common Stock or Common Stock
Equivalents as a unit with any other security of the Company or its
Subsidiaries, the preemptive rights under this Section 4.1 shall be applicable
to the entire unit rather than only the Common Stock or Common Stock Equivalent
included in the unit.
4.2 Drag Along Rights.
4.2.1 Applicability. In connection with any Transfer by members of
the HMTF Group of shares of Securities representing more than seventy-five
percent (75%) of the shares of Securities then Beneficially Owned by the HMTF
Group (a "Significant Drag Sale"), the HMTF Group shall have the right to
require all, but not less than all of the non-selling Holders (each, a
"Co-Seller") to Transfer a portion of its Securities which represents the same
percentage of the Fully Diluted Common Stock Beneficially Owned by such
Co-Seller as the shares being disposed of by the HMTF Group represent of the
Fully Diluted Common Stock Beneficially Owned by the HMTF Group. (For example,
if the HMTF Group is selling seventy-five percent (75%) of their Fully Diluted
Common Stock position, each Co-Seller shall be required to sell seventy-five
percent (75%) of its Fully Diluted Common Stock position.) All Securities
Transferred by Holders pursuant to this Section 4.2 shall be sold for the same
consideration, and otherwise treated identically with the Securities being sold
by the HMTF Group in all respects; provided, that (x) the Co-Seller shall not be
required to make any representations or warranties in
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connection with such Transfer other than representations and warranties as to
(i) such Co-Seller's ownership of his or its Securities to be Transferred free
and clear of all liens, claims and encumbrances, other than those arising
hereunder, (ii) such Co-Seller's power and authority to effect such Transfer,
and (iii) such matters pertaining to compliance with securities laws as the
Transferee may reasonably require and (y) any indemnity obligations of such
Co-Seller arising under the definitive documentation for such Transfer shall be
several, and shall relate solely to the representations and warranties described
above and shall be in an amount no greater than the consideration received by
the Co-Seller in such sale. No Co-Seller shall be required to agree to any other
matter other than the foregoing representations and warranties and Transfer of
its Securities. In no event shall any Co-Seller be required to sell any
Securities if the sale thereof would be in violation of any law, rule,
regulation, statute or order of any governmental entity.
4.2.2 Notice of Significant Drag Sale. HMTF, on behalf of the HMTF
Group, shall give each Co-Seller at least thirty (30) days' prior written notice
of any Significant Drag Sale as to which the HMTF Group intends to exercise its
rights under Section 4.2. If the HMTF Group elects to exercise its rights under
Section 4.2, the Co-Sellers shall take such actions as may be reasonably
required and otherwise cooperate in good faith with the HMTF Group in connection
with consummating the Significant Drag Sale (including, without limitation, the
voting of any Securities or other voting capital stock of the Company to approve
such Significant Drag Sale). At the closing of such Significant Drag Sale, each
Co-Seller shall deliver certificates for all shares of Securities to be sold by
such Co-Seller, duly endorsed for transfer, with the signature guaranteed, to
the purchaser against payment of the appropriate purchase price.
4.3 Tag Along Rights.
4.3.1 Applicability. In the event that any Holder alone or together
with its Affiliates including in the case of HMTF Group, all members of the HMTF
Group, and, in the case of BSMB Group, all members of the BSMB Group (the
"Selling Holder") desires to directly or indirectly effect a sale of shares of
Securities representing five percent (5%) of the shares of the Fully-Diluted
Common Stock in one or a series of transactions (a "Significant Tag Sale"), and,
in the case of the HMTF Group, if applicable, it does not elect to exercise its
rights (if any) under Section 4.2 hereof, then at least thirty (30) days prior
to the closing of such Significant Tag Sale, the Selling Holder shall make an
offer (the "Participation Offer") to each Holder (a "Tag Co-Seller") to include
in the proposed Significant Tag Sale a portion of its Securities which
represents the same percentage of such Tag Co-Seller's Fully-Diluted Common
Stock as the shares being sold by the Selling Holder represent of its
Fully-Diluted Common Stock; provided that, if the consideration to be received
by the Selling Holder includes any securities, only Tag Co-Sellers who have
certified to the reasonable satisfaction of the Selling Holder that they are
Accredited Investors shall be entitled to participate in such transfer, unless
the transferee consents otherwise. No Holder shall include terms in a
Significant Tag Sale deliberately included for the sole purpose of excluding a
Tag Co-Seller's participation in such Significant Tag Sale.
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4.3.2 Terms of Participation Offer. The Participation Offer shall
describe the terms and conditions of the proposed Significant Tag Sale and shall
be conditioned upon (i) the consummation of the transactions contemplated in the
Participation Offer with the Transferee named therein, and (ii) each Tag
Co-Seller's execution and delivery of all agreements and other documents as the
Selling Holder is required to execute and deliver in connection with such
Significant Tag Sale (provided that the Tag Co-Seller shall not be required to
make any representations or warranties in connection with such Transfer other
than representations and warranties as to (A) such Tag Co-Seller's ownership of
his or its Securities to be Transferred free and clear of all liens, claims, and
encumbrances, (B) such Tag Co-Seller's power and authority to effect such
transfer and (C) such matters pertaining to compliance with securities laws as
the transferee may reasonably require). If any Tag Co-Seller shall accept the
Participation Offer, the Selling Holder shall reduce, to the extent necessary,
the number of Securities it otherwise would have sold in the proposed transfer
so as to permit those Tag Co-Sellers who have accepted the Participation Offer
to sell the number of Securities that they are entitled to sell under this
Section 4.3, and the Selling Holder and such Tag Co-Sellers shall transfer the
number of Securities specified in the Participation Offer to the proposed
transferee in accordance with the terms of such transfer as set forth in the
Participation Offer.
4.4 Certain Events Not Deemed Transfers. In no event shall any exchange,
reclassification, or other conversion of shares into any cash, securities, or
other property pursuant to a merger or consolidation of the Company or any
Subsidiary with, or any sale or transfer by the Company or any Subsidiary of all
or substantially all its assets to, any Person constitute a Significant Drag
Sale of shares of Securities by the HMTF Group for purposes of Section 4.2 or a
Significant Tag Sale of shares of Securities by any Holder for purposes of
Section 4.3. In addition, Sections 4.2 and 4.3 hereof shall not apply to any
Transfer of shares of Securities (a) solely among members of the HMTF Group
and/or the BSMB Group, (b) by the BSMB Group or the HMTF Group to an Initial
Permitted Transferee as long as the BSMB Group or the HMTF Group, as the case
maybe, agrees with any Holder which would otherwise participate in such
Significant Tag Sale that it shall not permit the irrevocable proxy granted by
the Initial Permitted Transferee to be directly or indirectly exercised by any
other Person and that such proxy shall remain in force, or (c) by Henry to a
Henry Family Member (i) by will or the laws of descent and distribution or (ii)
by gift without consideration of any kind (a "Family Transfer").
4.5 Transfer and Exchange. When Securities are presented to the Company
with a request to register the transfer of such Securities or to exchange such
Securities for Securities of other authorized denominations, the Company shall
register the transfer or make the exchange as requested if the requirements of
this Stockholders' Agreement for such transaction are met; provided, however,
that the Securities surrendered for transfer or exchange shall be duly endorsed
or accompanied by a written instrument of transfer in form satisfactory to the
Company, duly executed by the Holder thereof or its attorney and duly authorized
in writing. No service charge shall be made for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith.
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4.6 Replacement Securities. If a mutilated Security is surrendered to the
Company or if the Holder of a Security claims and submits an affidavit or other
evidence, satisfactory to the Company, to the effect that the Security has been
lost, destroyed or wrongfully taken, the Company shall issue a replacement
Security if the Company's requirements are met. If required by the Company, such
Holder must provide an indemnity bond, or other form of indemnity, sufficient in
the judgment of the Company to protect the Company against any loss which may be
suffered. The Company may charge such Holder for its reasonable out-of-pocket
expenses in replacing a Security which has been mutilated, lost, destroyed, or
wrongfully taken.
4.7 Concurrent Transfer of Securities. A Transfer of Common Stock may only
be made by a Holder if such Holder Transfers a percentage of the Junior
Preferred Stock Beneficially Owned by such Holder to the same Transferee in such
transaction equal to the percentage of Common Stock Beneficially Owned by such
Holder being Transferred.
ARTICLE 5
LIMITATION ON TRANSFERS
5.1 Restrictions on Transfer. The Securities shall not be Transferred or
otherwise conveyed, assigned or hypothecated before satisfaction of (i) the
conditions specified in Section 5.1, Section 5.2, and Section 5.3, which
conditions are intended to ensure compliance with the provisions of the
Securities Act with respect to the Transfer of any Security and (ii) if
applicable, Article 4 hereof. Any purported Transfer in violation of this
Article 5 and/or, if applicable, Article 4 hereof shall be void ab initio and of
no force or effect. Other than Transfers subject to Sections 4.2 or 4.3 hereof
and other than Transfers to the public pursuant to an effective registration
statement or sales to the public pursuant to Rule 144 under the Securities Act
otherwise permitted hereunder, each Holder will cause any proposed Transferee
(including any Initial Permitted Transferee, Henry Family Member or Group
Transferee) of any Security Beneficially Owned by it (other than a Group
Transferee) to agree to take and hold such Securities subject to the provisions
and upon the conditions specified in this Stockholders' Agreement, and to
execute and deliver to the Company an Instrument of Accession in the form of
Exhibit A hereto.
5.2 Restrictive Legends.
5.2.1 Securities Act Legend. Except as otherwise provided in Section
5.4 hereof, each Security Beneficially Owned by a Holder, and each Security
issued to any subsequent Transferee of such Security, shall be stamped or
otherwise imprinted with a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR PURSUANT TO THE
SECURITIES OR "BLUE SKY" LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE OFFERED,
SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED, EXCEPT PURSUANT
TO (i) A REGISTRATION STATEMENT WITH RESPECT TO
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SUCH SECURITIES WHICH IS EFFECTIVE UNDER SUCH ACT, (ii) RULE 144 UNDER SUCH ACT,
OR (iii) ANY OTHER EXEMPTION FROM REGISTRATION UNDER SUCH ACT.
5.2.2 Other Legends. Except as otherwise permitted by the last
sentence of Section 5.1, each Security issued to each Holder or a subsequent
transferee shall include a legend in substantially the following form:
THIS SECURITY IS SUBJECT TO RESTRICTIONS ON TRANSFER, VOTING AND
OTHER TERMS AND CONDITIONS SET FORTH IN THE STOCKHOLDERS' AGREEMENT DATED AS OF
_______________, ____, A COPY OF WHICH MAY BE OBTAINED FROM JOHNS MANVILLE
CORPORATION AT ITS PRINCIPAL EXECUTIVE OFFICES.
5.3 Notice of Proposed Transfers. Other than with respect to a Transfer to
(a) an Initial Permitted Transferee, (b) a Henry Family Member, (c) a Group
Transferee or (d) in accordance with Article 3, prior to any Transfer or
attempted Transfer of any Security, the Holder of such Security shall (i) give
at least ten (10) days' prior written notice (a "Transfer Notice") to the
Company of such Holder's intention to effect such Transfer, and (ii) either (A)
provide to the Company an opinion reasonably satisfactory to the Company from
counsel who shall be reasonably satisfactory to the Company (or supply such
other evidence reasonably satisfactory to the Company) that the proposed
Transfer of such Security may be effected without registration under the
Securities Act, or (B) unless the Securities to be Transferred are registered
under the Exchange Act certify to the Company that the Holder reasonably
believes the proposed transferee is a "qualified institutional buyer" and that
such Holder has taken reasonable steps to make the proposed transferee aware
that such Holder may rely on Rule 144A under the Securities Act in effecting
such Transfer. After receipt of the Transfer Notice and opinion (if required),
the Company shall, within five (5) days thereof, so notify the Holder of such
Security and such Holder shall thereupon be entitled to Transfer such Security
in accordance with the terms of the Transfer Notice. Each Security issued upon
such Transfer shall bear the restrictive legend set forth in Section 5.2.1,
unless in the opinion of such counsel such legend is not required in order to
ensure compliance with the Securities Act. The Holder of the Security giving the
Transfer Notice shall not be entitled to Transfer such Security until receipt of
the notice from the Company under this Section 5.3. Prior to a Transfer of any
Security to (x) an Initial Permitted Transferee or (y) a Henry Family Member
pursuant to a Family Transfer, the Holder of such Security shall certify to the
Company that the Holder reasonably believes such Initial Permitted Transferee or
Henry Family Member, as the case may be, is an Accredited Investor. In addition,
notwithstanding anything to the contrary contained herein, any Transfer to a
Group Transferee may be made without the necessity of satisfaction of the
conditions set forth in this Section 5.3 (other than the condition contained in
the third sentence of this Section 5.3).
5.4 Termination of Certain Restrictions. Notwithstanding the foregoing
provisions of this Section 5, the restrictions imposed by Section 5.2.1 upon the
transferability of the Securities and the legend requirements of Section 5.2.1
shall
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terminate as to any Security (i) when and so long as such Security shall have
been effectively registered under the Securities Act and disposed of pursuant
thereto or (ii) when the Company shall have received an opinion of counsel
reasonably satisfactory to it that such Security may be freely transferred at
any time without registration thereof under the Securities Act and that such
legend may be removed. Whenever the restrictions imposed by Section 5.2.1 shall
terminate as to any Security, the Holder thereof shall be entitled to receive
from the Company, at the Company's expense, a new Security not bearing the
restrictive legend set forth in Section 5.2.1.
ARTICLE 6
CERTAIN STOCKHOLDER APPROVAL MATTERS
6.1 Transactions Requiring Affirmative Vote of the Required HOLDERS. The
following actions may not be taken by the Company without the affirmative vote
of the Required Holders (which vote shall not be unreasonably withheld):
(a) engaging in any business substantially different
from or unrelated to the Company's present business;
(b) other than in connection with a sale of the Company (whether as
an asset or stock transaction, whether pursuant to Section 2.3,
Section 4.2 or otherwise), (i) disposing of a material portion of
its assets or properties or (ii) acquiring amounts material to it of
assets, properties or capital stock from another Person, including,
without limitation, by way of merger, consolidation, stock purchase,
asset purchase or otherwise;
(c) approving the Annual Budget of the Company or taking any action
which is materially inconsistent with the approved Annual Budget;
(d) issuing options or other consideration to members
of the Board or the Boards of Directors of any of its
Subsidiaries;
(e) entering into any transaction with an Affiliate of the Company
or causing a Subsidiary of the Company to enter into a transaction
with an Affiliate of the Company, other than (i) issuances of
Offered Securities contemplated by Section 4.1.1, (ii) the payment
of reasonable and customary fees and reimbursement of expenses
payable to the directors of the Company, (iii) the payment to HMTF
and BSMB or their respective Affiliates of fees and expenses
pursuant to a monitoring and oversight agreement and a financial
advisory agreement approved by the Board and (iv) employment
arrangements with respect to the procurement of services of officers
and employees in the ordinary course of business and the payment of
reasonable fees in connection therewith; or
(f) replacing the chief executive officer, chief financial officer
or president of the Company (items (a) through (f) of this Section
6.1 are referred to herein as the "Special Stockholder Voting
Rights").
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6.2 Suspension and Termination of Special Stockholder Voting Rights.
6.2.1 At the time a Suspension Event occurs, the Special Stockholder
Voting Rights granted to the Holders under Section 6.1 (other than clause (e)
thereof) shall be suspended. Such Special Stockholder Voting Rights shall be
reinstated (as to any action of the Company thereafter being proposed) at the
earlier of the time at which the Company (a) achieves the Performance Hurdles or
(b) no longer reasonably believes it will be in default of the Senior Debt
Covenants, as certified in writing to HMTF by the chief financial officer of the
Company.
6.2.2 The Special Stockholder Voting Rights shall terminate at the
time that either (i) each of the BSMB Group and the HMTF Group ceases to own at
least fifty percent (50%) of the Securities each owned on the Effective Date or
(ii) each of the BSMB Control Group and the HMTF Control Group ceases to own at
least a majority of the Securities owned by each of the HMTF Group and the BSMB
Group, respectively.
ARTICLE 7
CERTAIN IPO RIGHTS AND SALE RIGHTS;
COMPANY CALL; COMPANY COVENANT
7.1 IPO Rights; Sale Rights;.
7.1.1 IPO Rights.
(a) If a Qualified IPO does not occur by the fifth (5th) anniversary
of the Effective Date, BSMB shall have the right to request a Qualified
IPO (the "Requested IPO") by delivering a written notice (the "IPO
Notice") to the Company and HMTF requesting that the Company effect a
Qualified IPO and, subject to Section 7.1.2, the Company shall use
commercially reasonable efforts to effect the Requested IPO as soon as
practicable thereafter.
(b) The right of BSMB to require a Qualified IPO pursuant to this
Section 7.1.1 shall terminate at the earlier to occur of (i) the time at
which the Holders comprising the BSMB Group have transferred more than
twenty-five percent (25%) of the Securities Beneficially Owned by them on
the Effective Date or (ii) the time at which the BSMB Control Group shall
cease to own a majority of the Securities at any time owned by the BSMB
Group.
7.1.2 Sale Rights. In the event BSMB has exercised its right to
request a Qualified IPO under Section 7.1.1, HMTF shall have the right to cause
the Company to hire a nationally recognized investment bank for the purpose of
marketing the Company for sale (the "Sale Option"), but the Company shall not be
required to effect the Requested IPO until the time at which the Sale Option
terminates as contemplated in the proviso to the following sentence. If HMTF
elects to exercise the Sale Option, HMTF shall deliver a notice to BSMB, within
thirty (30) days following the delivery of the IPO Notice to HMTF by BSMB,
indicating its intent to exercise the Sale Option and the Company shall
thereafter use its reasonable best efforts to sell all of the equity securities
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or all or substantially all of the assets of the Company (including by way of
merger or consolidation); provided that in the event a definitive agreement for
the sale of the Company is not entered into within six (6) months after delivery
of the notice of Sale Option by HMTF to BSMB, under this Section 7.1.2, the
right of the Company to exercise the Sale Option shall terminate and BSMB shall
thereafter have the right to require the Company to effect a Qualified IPO in
accordance with the terms of Section 7.1.1.
7.2 Company Call; Purchase Price.
7.2.1 Company Call
(a) If any Management Holder (other than Henry) (i) voluntarily
terminates his employment with the Company, (ii) has his employment
terminated at any time by the Company for Cause (as defined in such
Management Holder's employment agreement), (iii) voluntarily terminates
his employment with the Company and executes and delivers to the Company a
non-compete agreement (A) in form and substance substantially similar to
the non-compete provisions set forth in such Management Holder's
employment agreement (without giving effect to any change of control
provision contained therein) or (B) if such Management Holder's employment
agreement does not contain such non-compete provisions, in form and
substance satisfactory to the Company or (iv) is terminated by the Company
without Cause (in each case, a "Terminated Management Holder"), then the
Company will have the option to purchase (the "Company Call"), and if the
Company Call is exercised by the Company, such Management Holder shall
sell to the Company, all or any portion (at the Company's option) of the
shares of Common Stock and Management Securities Beneficially Owned by
such Management Holder. For purposes of this Section 7.2.1(a), termination
of any Management Holder's employment with the Company as the result of
such Management Holder's death or permanent disability (as defined in the
Company's Board of Director-approved disability policy, as in effect from
time to time) shall be deemed to constitute termination of such Management
Holder's employment by the Company without Cause.
(b) If Henry (i) voluntarily terminates his employment with the
Company prior to the second anniversary of the Effective Date, or (ii) has
his employment terminated at any time by the Company for Cause (as defined
in the Henry Employment Agreement), then the Company will have a Company
Call, and if the Company Call is exercised by the Company, Henry (and any
Henry Family Member to whom Henry has transferred Securities pursuant to a
Family Transfer) shall sell to the Company, all or any portion (at the
Company's option) of the shares of Common Stock and Management Securities
Beneficially Owned by Henry and all such Henry Family Members.
(c) The Company shall give notice in writing to the Terminated
Management Holder or Henry, as the case may be, of the exercise of the
Company Call within one hundred eighty (180) days from the date of the
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termination of the Terminated Management Holder's or Henry's employment,
as applicable. If no notice is given within the time limit specified
above, the Company Call shall terminate.
7.2.2 Purchase Price
(a) In the case of any exercise by the Company of the Company Call
following termination of employment described in either clause of (a) or
(b) of Section 7.2.1, the purchase price payable by the Company for the
Common Stock and the Management Securities being purchased will be a cash
amount equal to the Fair Market Value of such Common Stock and Management
Securities. For purposes of this Section 7.2.2, "Fair Market Value" means
the fair market value of the Common Stock and Management Securities as
determined by the Board in good faith as of the date of such exercise of
the Company Call.
(b) The closing of a purchase under this Section 7.2.2 shall take
place at the Company's principal executive offices within thirty (30) days
after the purchase price has been determined in accordance with clause (a)
above. At such closing, the Management Holder shall deliver to the Company
the certificates or instruments evidencing the Common Stock and Management
Securities being purchased (free of all liens, claims and encumbrances),
duly endorsed (or accompanied by duly executed stock powers) and otherwise
in good form for delivery, against payment of the purchase price by the
Company.
7.3 Trust Liquidity Right. If, prior to the consummation of a Qualified
IPO, the most junior publicly traded debt security of the Company is
unconditionally rated (the "Rating") BBB- or higher by Standard & Poor's Rating
Group ("S&P") or Baa3 or higher by Moody's Investors Services, Inc. ("Moody's"),
the Trust may deliver a notice to HMTF and BSMB (the "Liquidity Notice")
requiring HMTF and BSMB for period of twelve (12) months after delivery of the
Liquidity Notice to use commercially reasonable efforts to assist the Trust in
consummating a Transfer of all of its Securities to Person. The obligation of
BSMB and HMTF under this Section 7.3 shall automatically terminate upon the
expiration of such twelve-month period. At any time during such twelve-month
period that the Rating has been placed under review or withdrawn by S&P or
Moody's, as the case may be, the Liquidity Notice shall be deemed to have been
automatically withdrawn by the Trust.
7.4 Company Covenant. The Company agrees to use all reasonable efforts to
cause each Person who is obligated to become a party to this Stockholders'
Agreement after the Effective Date pursuant to the terms of his/her option
agreement to execute and deliver to the Company an Instrument of Accession in
the form of Exhibit A hereto.
ARTICLE 8
TERMINATION
8.1 Termination.
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(a) The provisions of this Stockholders' Agreement shall terminate
on the tenth (10th) anniversary of the Effective Date; provided, however,
that Sections 2.1, 2.3, 4.1, 4.2, 4.3, 4.4, 4.7, Article 5 (other than
Sections 5.2 and 5.4), Article 6, Article 7 and Section 9.8 of this
Stockholders' Agreement shall terminate upon the consummation, prior to
the expiration of such ten (10) year period, of a Qualified IPO.
(b) The provisions of this Stockholders' Agreement shall terminate
with respect to any Holder at such time as such Holder no longer
Beneficially Owns any Securities or PIK Preferred Stock of the Company.
8.2 Termination of Certain Provisions. Sections 2.3 and 4.2 of this
Stockholders' Agreement shall terminate at the time at which the HMTF Group
ceases to Beneficially Own at least twenty-five and two-tenths percent (25.2%)
of the Fully-Diluted Common Stock unless the BSMB Group otherwise consents;
provided that such consent right shall terminate at such time as the BSMB Group
and the HMTF Group collectively Beneficially Own less Securities than the
Securities then Beneficially Owned by the Trust.
ARTICLE 9
MISCELLANEOUS
9.1 Notices. Any notices or other communications required or permitted
hereunder shall be in writing, and shall be sufficiently given if made by hand
delivery, by telex, by telecopier or registered or certified mail, postage
prepaid, return receipt requested, addressed as follows (or at such other
address as may be substituted by notice given as herein provided):
If to the Company:
Johns Manville Corporation
[_____________________]
[_____________________]
Attention: [_____________]
With copies to (which shall not constitute notice):
Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court, Suite 1600
Dallas, Texas 75201
Attention: Lawrence D. Stuart, Jr.
Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201
Attention: Glenn D. West, Esq.
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and
Bear Stearns Merchant Fund Corp.
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Attention: John D. Howard
Kirkland & Ellis
Citigroup Center
133 E. 53rd Street
New York, New York 10022
Attention: Frederick Tanne, Esq.
and
Manville Personal Injury Settlement Trust
143 Bedford Road, Suite 200
Katonah, NY 10536
Attention: Chairman and Managing Trustee
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Attention: Benjamin F. Stapleton, Esq.
If to any Holder, at its address listed on the signature pages
hereof.
Any notice or communication hereunder shall be deemed to have been
given or made as of the date so delivered if personally delivered; when answered
back, if telexed; when receipt is acknowledged, if telecopied; and five (5)
calendar days after mailing if sent by registered or certified mail (except that
a notice of change of address shall not be deemed to have been given until
actually received by the addressee).
Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
9.2 Governing Law. THIS STOCKHOLDERS' AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW.
9.3 Successors and Assigns. Assignments of a party's rights and
obligations hereunder shall only be made in strict conformity with this
Agreement.
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9.4 Certain Waivers. This Stockholders' Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Stockholders' Agreement, express or implied, is intended to or shall confer upon
any other person (except as set forth in Section 3.8 or this Section 9.4) any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Stockholders' Agreement. Without limiting the foregoing, no direct or indirect
holder of any equity interests or securities of any party hereto (whether such
holder is a limited or general partner, member, stockholder or otherwise), nor
any Affiliate of any party hereto, nor any director, officer, employee,
representative, agent or other controlling person of each of the parties hereto
and their respective Affiliates shall have any liability or obligation arising
under this Stockholders' Agreement or the transactions contemplated hereby.
9.5 Duplicate Originals. All parties may sign any number of copies of this
Stockholders' Agreement. Each signed copy shall be an original, but all of them
together shall represent the same agreement.
9.6 Severability. In case any provision in this Stockholders' Agreement
shall be held invalid, illegal or unenforceable in any respect for any reason,
the validity, legality and enforceability of any such provision in every other
respect and the remaining provisions shall not in any way be affected or
impaired thereby.
9.7 No Waivers; Amendments.
9.7.1 No failure or delay on the part of the Company or any Holder
in exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Company or
any Holder at law or in equity or otherwise.
9.7.2 Any provision of this Stockholders' Agreement may be amended
or waived if, but only if, such amendment or waiver is in writing and is signed
by the Company and the Required Holders; provided that no such amendment or
waiver shall, unless signed by all of the Holders affected, (i) amend the
provisions of this Section 9.7.2, (ii) change the number of Holders which shall
be required for the Holders or any of them to take any action under this Section
9.7.2 or any other provision of this Stockholders' Agreement or (iii) adversely
affect the rights granted to any specific Holder.
9.8 Furnishing Information; Confidentiality.
9.8.1 The Company hereby agrees to furnish to (i) each Qualified
Holder, within thirty (30) days after the end of each month, such monthly
financial statements of the Company as are furnished to the Company's senior
bank lenders, (ii) each Holder, within forty-five (45) days after the end of
each fiscal quarter of the Company, such quarterly financial statements of the
Company as are furnished to the Company's senior bank lenders, (iii) each
Holder, within one hundred twenty (120) days
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after the end of each fiscal year of the Company, such annual financial
statements and budgets of the Company as are furnished to the Company's senior
bank lenders. The Company's obligation under this Section 9.8.1 shall not
obligate the Company to furnish any Information (as hereinafter defined) that it
does not possess and (iv) BSMB, any financial covenant compliance certificates
delivered under the Credit Agreement. In addition, except as set forth in this
Section 9.8.1 (i) no Holder shall have the right to receive any such Information
following the time at which such Holder owns less than one percent of the number
of shares of Common Stock then issued and outstanding and (ii) Henry shall not
have the right to receive any such Information upon the initial date at which he
ceases to be employed by the Company.
9.8.2 No Holder (other than among the members of the HMTF Control
Group and/or the BSMB Control Group) shall, in any manner, either directly or
indirectly, divulge, disclose, or communicate to any person or entity (other
than among the members of the HMTF Control Group and/or the BSMB Control Group)
any non-public information, data and materials relating to the Company and its
operations, businesses and activities, (the "Information"), provided that the
foregoing confidentiality obligation shall not apply to any Information that has
previously become available to and known by the public for a period of at least
forty-eight (48) hours (other than as a result of a wrongful disclosure). The
foregoing provisions of this Section 9.8.2 shall not prohibit the disclosure of
Information by (a) any Holder to the extent required by applicable law, (b) by
BSMB or HMTF to an Initial Permitted Transferee to the extent such Initial
Permitted Transferee agrees in writing to be bound by this Section 9.8.2 or (c)
any Holder with the written consent of the Company which consent will not be
unreasonably withheld or delayed. Any Holder receiving such a demand for
disclosure shall give written notice thereof to the Company as promptly as is
reasonably practicable after such Holder learns of any such demand.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this
Stockholders' Agreement to be duly executed as of the date first written above.
JOHNS MANVILLE CORPORATION
By:__________________________________
Name:________________________________
Title:_______________________________
NAME OF HOLDER:
[HMTF ENTITY]
By:__________________________________
Name:________________________________
Title:_______________________________
Address:
c/o Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court, Suite 1600
Dallas, Texas 75201
Attention: Lawrence D. Stuart, Jr.
Copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201
Attention: Glenn D. West, Esq.
<PAGE> 162
NAME OF HOLDER:
[BSMB ENTITY]
By:__________________________________
Name:________________________________
Title:_______________________________
Address:
_____________________________________
_____________________________________
_____________________________________
Copy to:
_____________________________________
_____________________________________
_____________________________________
NAME OF HOLDER:
[MANAGEMENT STOCKHOLDERS]
By:__________________________________
Name:________________________________
Title:_______________________________
Address:
_____________________________________
_____________________________________
_____________________________________
Copy to:
_____________________________________
_____________________________________
_____________________________________
<PAGE> 163
NAME OF HOLDER:
MANVILLE PERSONAL INJURY
SETTLEMENT TRUST
By:__________________________________
Name:________________________________
Title:_______________________________
Address:
_____________________________________
_____________________________________
_____________________________________
Copy to:
_____________________________________
_____________________________________
_____________________________________
<PAGE> 164
EXHIBIT A
Instrument of Accession
Reference is made to that certain Stockholders' Agreement, dated as
of ________, ____, a copy of which is attached hereto (as amended and in effect
from time to time, the "Stockholders' Agreement"), among Johns Manville
Corporation, a Delaware corporation (the "Company"), and the persons signatory
thereto.
The undersigned, ________________________ [print name], in order to
become the owner or holder of ________ shares of ________ [Common Stock/Junior
Preferred Stock (as defined in the Stockholders' Agreement)], of the Company,
hereby agrees that by the undersigned's execution hereof the undersigned is a
party to the Stockholders' Agreement subject to all of the restrictions,
conditions and obligations applicable to Holders (as defined in the
Stockholders' Agreement) set forth in the Stockholders' Agreement. This
Instrument of Accession shall take effect and shall become a part of said
Stockholders' Agreement immediately upon execution.
Executed as of the date set forth below.
Signature:___________________________
Address:_____________________________
_____________________________
_____________________________
Date:________________________________
ACCEPTED:
JOHNS MANVILLE CORPORATION
By:________________________________
Name:______________________________
Title:_____________________________
Date:______________________________
