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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NUMBER 1
on
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JANUARY 20, 1998
THERMADYNE HOLDINGS CORPORATION
(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-23378 74-2482571
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
101 SOUTH HANLEY ROAD 63105
ST. LOUIS, MISSOURI (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (314) 721-5573
------------------------
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EXPLANATORY NOTE
This Amendment Number 1 on Form 8-K/A of Thermadyne Holdings Corporation,
a Delaware corporation (the "Company"), is filed solely for the purpose of
filing a corrected version of the Agreement and Plan of Merger, dated as of
January 20, 1998, between the Company and Mercury Acquisition Corporation.
Accordingly, this Amendment Number 1 on Form 8-K/A consists solely of the
Form 8-K/A cover page, Item 7 and an exhibit to the Form 8-K/A.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Exhibits.
---------
2.1 - Agreement and Plan of Merger, dated as of January 20, 1998,
between Thermadyne Holdings Corporation and Mercury
Acquisition Corporation.*
2.2 - Voting Agreement, dated January 20, 1998, among Thermadyne
Holdings Corporation, Mercury Acquisition Corporation and
Fidelity Capital & Income Fund.+
2.3 - Voting Agreement, dated January 20, 1998, among Thermadyne
Holdings Corporation, Mercury Acquisition Corporation and
Magten Asset Management Corp.+
99.1 - First Amendment to Rights Agreement, dated January 20, 1998,
between Thermadyne Holdings Corporation and BankBoston, N.A.
99.2 - Press Release dated January 21, 1998.+
------------
* - Filed herewith.
+ - Incorporated by reference to exhibit of same number filed with the
Company's Current Report on Form 8-K dated January 20, 1998.
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THERMADYNE HOLDINGS
CORPORATION
Date: February 23, 1998 By: /s/ JAMES H. TATE
-----------------------------------
James H. Tate
Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibits.
- ---------
2.1 - Agreement and Plan of Merger, dated as of January 20, 1998,
between Thermadyne Holdings Corporation and Mercury
Acquisition Corporation.*
2.2 - Voting Agreement, dated January 20, 1998, among Thermadyne
Holdings Corporation, Mercury Acquisition Corporation and
Fidelity Capital & Income Fund.+
2.3 - Voting Agreement, dated January 20, 1998, among Thermadyne
Holdings Corporation, Mercury Acquisition Corporation and
Magten Asset Management Corp.+
99.1 - First Amendment to Rights Agreement, dated January 20, 1998,
between Thermadyne Holdings Corporation and BankBoston, N.A.
99.2 - Press Release dated January 21, 1998.+
- ------------
* - Filed herewith.
+ - Incorporated by reference to exhibit of same number filed with the
Company's Current Report on Form 8-K dated January 20, 1998.
<PAGE> 1
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
dated as of
January 20, 1998
between
THERMADYNE HOLDINGS CORPORATION
and
MERCURY ACQUISITION CORPORATION
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TABLE OF CONTENTS
<TABLE>
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ARTICLE 1 THE MERGER
SECTION 1.01. The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02. Conversion (or Retention) of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.03. Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.04. Proration of Election Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 1.05. Surrender and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 1.06. Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 1.07. Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 1.08. Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 2 THE SURVIVING CORPORATION
SECTION 2.01. Certificate of Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.02. Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.03. Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.02. Corporate Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.03. Governmental Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.04. Non-contravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.05. Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.06. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.07. SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.08. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.09. Disclosure Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.10. Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.11. No Undisclosed Material Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.12. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.13. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.14. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
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(1)The Table of Contents is not a part of this Agreement.
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SECTION 3.15. [Intentionally Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.16. Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.17. Compliance with Laws and Court Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.18. Licenses and Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.19. Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.20. Finders' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.21. Inapplicability of Certain Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.22. Rights Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.23. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF MERGERSUB
SECTION 4.01. Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.02. Corporate Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.03. Governmental Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.04. Non-contravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.05. Disclosure Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.06. Finders' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 4.07. Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 4.08. Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 5 COVENANTS OF THE COMPANY
SECTION 5.01. Conduct of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 5.02. Stockholder Meeting; Proxy Material . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 5.03. Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.04. Other Offers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.05. Notices of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.06. Resignation of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.07. Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.08. Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.09. Formation of Operating Co . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.10. Outstanding Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.11. Solvency Advice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.12. Transfers by Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
</TABLE>
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ARTICLE 6 COVENANTS OF MERGERSUB
SECTION 6.01. SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.02. Voting of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.03. Director and Officer Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.04. Employee Plans and Benefit Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.05. Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.06. NASDAQ Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE 7 COVENANTS OF MERGERSUB AND THE COMPANY
SECTION 7.01. Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 7.02. Certain Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 7.03. Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 7.04. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE 8 CONDITIONS TO THE MERGER
SECTION 8.01. Conditions to the Obligations of Each Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 8.02. Conditions to the Obligations of MergerSub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 8.03. Conditions to the Obligation of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE 9 TERMINATION
SECTION 9.01. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 9.02. Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE 10 MISCELLANEOUS
SECTION 10.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 10.02. Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 10.03. Amendments; No Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 10.04. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 10.05. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 10.06. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 10.07. Counterparts; Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "AGREEMENT") dated as of January 20, 1998
between Thermadyne Holdings Corporation, a Delaware corporation (the "COMPANY")
and Mercury Acquisition Corporation, a Delaware corporation ("MERGERSUB").
W I T N E S S E T H:
WHEREAS, as of the date of execution of this Agreement, all of the outstanding
capital stock of, or other ownership interest in, MergerSub is owned, in the
aggregate, by DLJ Merchant Banking Partners II, L.P., DLJ Merchant Banking
Partners II - A, L.P., DLJ Offshore Partners II, C.V., DLJ Diversified
Partners, L.P., DLJ Diversified Partners - A, L.P., DLJ Millennium Partners,
L.P., DLJ Millennium Partners - A, L.P., DLJMB Funding II, Inc., UK Investment
Plan 1997 Partners, DLJ EAB Partners, L.P., DLJ ESC II, L.P. and DLJ First ESC,
L.P.;
WHEREAS, MergerSub is unwilling to enter into this Agreement unless,
contemporaneously with the execution and delivery of this Agreement, certain
beneficial and record stockholders of the Company have entered into a Voting
Agreement providing for certain actions relating to certain of the shares of
common stock of the Company owned by them;
WHEREAS, MergerSub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger (as defined in Section 1.01) and also to prescribe certain conditions to
the Merger;
WHEREAS, it is intended that the Merger be recorded as a
recapitalization for financial reporting purposes;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
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ARTICLE 1
THE MERGER
SECTION 1.1. The Merger. (a) At the Effective Time, MergerSub shall
be merged (the "MERGER") with and into the Company in accordance with the
Delaware Law (as defined in Section 1.01(d)), and in accordance with the terms
and conditions hereof, whereupon the separate existence of MergerSub shall
cease, and the Company shall be the surviving corporation (the "SURVIVING
CORPORATION").
(b) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, the Company and
MergerSub will file a certificate of merger with the Secretary of State of the
State of Delaware and make all other filings or recordings required by the
Delaware Law in connection with the Merger. The Merger shall become effective
at such time as the certificate of merger is duly filed with the Secretary of
State of the State of Delaware or at such later time as is specified in the
certificate of merger (the "EFFECTIVE TIME").
(c) From and after the Effective Time, the Surviving Corporation
shall possess all the rights, privileges, powers and franchises and be subject
to all of the restrictions, disabilities and duties of the Company and
MergerSub, all as provided under Delaware Law.
(d) The Company hereby represents that its Board of Directors, at a
meeting duly called and held and acting on the unanimous recommendation of the
Board of Directors of the Company, other than Company management directors, has
(i) unanimously determined that this Agreement and the transactions
contemplated hereby, including the Merger, are fair to and in the best interest
of the Company's stockholders, (ii) unanimously approved this Agreement and the
transactions contemplated hereby, including the Merger, which approval
satisfies in full the requirements of the General Corporation Law of the State
of Delaware (the "DELAWARE LAW"), and (iii) unanimously resolved to recommend
approval and adoption of this Agreement and the Merger to its stockholders.
The Company further represents that Gleacher NatWest & Co. has delivered to the
Company's Board of Directors its written opinion that the consideration to be
paid in the Merger is fair to the holders of shares (each, a "SHARE") of common
stock of the Company, par value $0.01 per share ("COMMON STOCK") from a
financial point of view.
SECTION 1.2. Conversion (or Retention) of Shares. At the Effective
Time:
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(a) each Share held by the Company as treasury stock or owned by
MergerSub immediately prior to the Effective Time shall be canceled, and no
payment shall be made with respect thereto;
(b) each share of common stock, par value $0.01 per share, of
MergerSub ("MERGERSUB COMMON STOCK") outstanding immediately prior to the
Effective Time shall be converted into and become one share of common stock of
the Surviving Corporation with the same rights, powers and privileges
(including those granted under the Rights Agreement (as defined in Section
3.23)) as the shares so converted;
(c) each share of preferred stock, par value $0.01 per share, of
MergerSub ("MERGERSUB PREFERRED STOCK"), if any, outstanding immediately prior
to the Effective Time shall be converted into and become one share of preferred
stock of the Surviving Corporation with the same rights, powers and privileges
as the shares of preferred stock so converted;
(d) each outstanding warrant to purchase shares of MergerSub Common
Stock (each, a "MERGERSUB WARRANT") shall be automatically amended to
constitute a warrant to acquire shares of common stock of the Surviving
Corporation on the same terms and conditions as the MergerSub Warrant; and
(e) each Share outstanding immediately prior to the Effective Time
shall, except as otherwise provided in Section 1.02(a)-(d) or as provided in
Section 1.06 with respect to Shares as to which appraisal rights have been
exercised, be converted into the following (the "MERGER CONSIDERATION"):
(i) for each such Share with respect to which an
election to retain Company Stock (as defined below) has been
effectively made and not revoked or lost pursuant to Sections
1.03(c), (d) and (e) and Section 1.04(b) ("STOCK ELECTING
SHARES"), or is deemed made pursuant to Section 1.04(d)(ii), as
the case may be, the right to retain one Share of Common Stock
(the "STOCK ELECTION PRICE"), par value $0.01 per share ("COMPANY
STOCK"); and
(ii) for each such Share (other than Stock
Electing Shares and Shares as to which an election to retain
Company Stock is deemed made pursuant to Section 1.04(d)(ii)), the
right to receive in cash an amount equal to $34.50 (the "CASH
ELECTION PRICE").
3
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For purposes of this Section, references to outstanding Shares include
the Rights (as defined in Section 3.22) associated with such Shares.
SECTION 1.3. Elections. (a) Each person who, on or prior to the
Election Date referred to in (c) below, is a record holder of Shares will be
entitled, with respect to such Shares, to make an unconditional election on or
prior to such Election Date to retain the Stock Election Price (a "STOCK
ELECTION"), on the basis hereinafter set forth. For purposes of this Agreement,
"ELECTION" means a Stock Election.
(b) Prior to the mailing of the Company Proxy Statement (as defined
in Section 3.09), MergerSub shall appoint an agent (the "EXCHANGE AGENT") for
the purpose of exchanging certificates representing Shares for the Merger
Consideration. MergerSub will make available to the Exchange Agent, as needed,
the Merger Consideration to be paid in respect of the Shares.
(c) MergerSub shall prepare and mail a form of election, which form
shall be subject to the reasonable approval of the Company (the "FORM OF
ELECTION"), with the Company Proxy Statement to the record holders of Shares as
of the record date for the Company Stockholder Meeting (as defined in Section
5.02), which Form of Election shall be used by each record holder of Shares who
makes an Election with respect to any or all its Shares. The Company will use
its best efforts to make the Form of Election and the Company Proxy Statement
available to all persons who become holders of Shares during the period between
such record date and the Election Date referred to below. Any such holder's
Election shall have been properly made only if the Exchange Agent shall have
received at its designated office, by 5:00 p.m., New York City time on the
business day (the "ELECTION DATE") next preceding the date of the Company
Stockholder Meeting, a Form of Election properly completed and signed and
accompanied by certificates for the Shares to which such Form of Election
relates, duly endorsed in blank or otherwise in form acceptable for transfer on
the books of the Company (or by an appropriate guarantee of delivery of such
certificates as set forth in such Form of Election from a firm which is a
member of a registered national securities exchange or of the National
Association of Securities Dealers, Inc. or a commercial bank or trust company
having an office or correspondent in the United States, provided such
certificates are in fact delivered to the Exchange Agent within three Nasdaq
Stock Market trading days after the date of execution of such guarantee of
delivery).
(d) Any Form of Election may be revoked by the holder submitting it
to the Exchange Agent only by written notice received by the Exchange Agent (i)
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prior to 5:00 p.m., New York City time on the Election Date or (ii) after the
date of the Company Proxy Statement, if (and to the extent that) the Exchange
Agent is legally required to permit revocations and the Effective Time shall
not have occurred prior to such date. In addition, all Forms of Election shall
automatically be revoked if the Exchange Agent is notified in writing by
MergerSub that the Merger has been abandoned. If a Form of Election is revoked,
the certificate or certificates (or guarantees of delivery, as appropriate) for
the Shares to which such Form of Election relates shall be promptly returned to
the stockholder submitting the same to the Exchange Agent.
(e) The determination of the Exchange Agent shall be binding whether
or not Elections have been properly made or revoked pursuant to this Section
1.03 with respect to Shares and when Elections and revocations were received by
it. If the Exchange Agent determines that any Election either (x) was not
properly made or (y) was not submitted to or received by the Exchange Agent
with respect to any Shares, such Shares shall be converted into Merger
Consideration in accordance with Section 1.02(e). The Exchange Agent shall also
make all computations as to the allocation and the proration contemplated by
Section 1.04, and any such computation shall be conclusive and binding on the
holders of Shares. The Exchange Agent may, with the mutual agreement of
MergerSub and the Company, make such rules as are consistent with this Section
1.03 for the implementation of the Elections provided for herein as shall be
necessary or desirable fully to effect such Elections.
SECTION 1.4. Proration of Election Price. (a) Notwithstanding
anything in this Agreement to the contrary but subject to Sections 1.02(a) and
1.06, the number of Shares to be converted into the right to retain Company
Stock at the Effective Time (the "STOCK ELECTION NUMBER") shall be 485,010
(excluding for this purpose any Shares to be canceled pursuant to Section
1.02(a)).
(b) If the number of Stock Electing Shares exceeds the Stock
Election Number, then such Stock Electing Shares shall be converted into the
right to retain the Stock Election Price or the right to receive cash in
accordance with the terms of Section 1.02(e) in the following manner:
(i) A stock proration factor (the "STOCK
PRORATION FACTOR") shall be determined by dividing the Stock
Election Number by the total number of Stock Electing Shares.
(ii) The number of Stock Electing Shares covered
by each Stock Election to be converted into the right to retain
the Stock Election Price
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shall be determined by multiplying the Stock Proration Factor by
the total number of Stock Electing Shares covered by such Stock
Election.
(iii) All Stock Electing Shares, other than those
Shares converted into the right to receive the Stock Election
Price in accordance with Section 1.04(b)(ii), shall be converted
into cash (on a consistent basis among stockholders who made the
Election referred to in Section 1.02(e)(i), pro rata to the number
of shares as to which they made such Election) as if such Shares
were not Stock Electing Shares in accordance with the terms of
Section 1.02(e)(ii).
(c) If the number of Stock Electing Shares is equal to the Stock
Election Number, then all Stock Electing Shares shall be converted into the
right to receive the Stock Election Price in accordance with the terms of
Section 1.02(e)(i), and all Shares (other than Stock Electing Shares, Shares to
be cancelled pursuant to Section 1.02(a) and Dissenting Shares) shall be
converted into cash.
(d) If the number of Stock Electing Shares is less than the Stock
Election Number, then:
(i) All Stock Electing Shares shall be converted
into the right to receive the Stock Election Price in accordance
with Section 1.02(e)(i).
(ii) Such number of Shares with respect to which a
Stock Election is not in effect, excluding Shares to be cancelled
pursuant to Section 1.02(a) and Dissenting Shares (as defined in
Section 1.06) ("NON-ELECTING SHARES"), shall be converted into the
right to retain the Stock Election Price (and a Stock Election
shall be deemed to have been made with respect to such Shares) in
accordance with Section 1.02(e) in the following manner:
(A) a cash proration factor (the
"CASH PRORATION FACTOR") shall be determined by
dividing (x) the difference between the Stock
Election Number and the number of Stock Electing
Shares, by (y) the total number of Non-Electing
Shares; and
(B) the number of Non-Electing
Shares of each stockholder to be converted into the
right to retain the Stock Election Price shall be
determined by multiplying the Cash Proration Factor
by the total number of Non-Electing Shares of
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such stockholder, so that the aggregate number of
Stock Electing Shares and Non-Electing Shares
converted into such right equals the Stock Election
Number.
SECTION 1.5. Surrender and Payment. (a) As soon as reasonably
practicable as of or after the Effective Time, MergerSub shall deposit with the
Exchange Agent, for the benefit of the holders of Shares, for exchange in
accordance with this Article 1, the Merger Consideration. For purposes of
determining the Merger Consideration to be made available, MergerSub shall
assume, subject to Section 1.04(d)(ii), that no holder of Shares will perfect
his right to appraisal of his Shares. Promptly after the Effective Time,
MergerSub will send, or will cause the Exchange Agent to send, to each holder
of Shares at the Effective Time a letter of transmittal for use in such
exchange (which shall specify that the delivery shall be effected, and risk of
loss and title shall pass, only upon proper delivery of the certificates
representing Shares to the Exchange Agent).
(b) Each holder of Shares that have been converted into a right to
receive the Merger Consideration, upon surrender to the Exchange Agent of a
certificate or certificates representing such Shares, together with a properly
completed letter of transmittal covering such Shares, will be entitled to
receive the Merger Consideration payable in respect of such Shares. Until so
surrendered, each such certificate shall, after the Effective Time, represent
for all purposes, only the right to receive such Merger Consideration. No
interest will be paid or will accrue on any cash payable as Merger
Consideration or in lieu of any fractional shares of Company Stock.
(c) If any portion of the Merger Consideration is to be paid to a
Person other than the registered holder of the Shares represented by the
certificate or certificates surrendered in exchange therefor, it shall be a
condition to such payment that the certificate or certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and that
the Person requesting such payment shall pay to the Exchange Agent any transfer
or other taxes required as a result of such payment to a Person other than the
registered holder of such Shares or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable. For purposes of
this Agreement, "PERSON" means an individual, a corporation, a limited
liability company, a partnership, an association, a trust or any other entity
or organization, including a government or political subdivision or any agency
or instrumentality thereof.
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(d) After the Effective Time, there shall be no further registration
of transfers of Shares. If, after the Effective Time, certificates representing
Shares are presented to the Surviving Corporation, they shall be canceled and
exchanged for the consideration provided for, and in accordance with the
procedures set forth, in this Article 1.
(e) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 1.05(a) that remains unclaimed by the
holders of Shares six months after the Effective Time shall be returned to
MergerSub, upon demand, and any such holder who has not exchanged his Shares
for the Merger Consideration in accordance with this Section prior to that time
shall thereafter look only to MergerSub for payment of the Merger Consideration
in respect of his Shares. Notwithstanding the foregoing, MergerSub shall not be
liable to any holder of Shares for any amount paid to a public official
pursuant to applicable abandoned property laws. Any amounts remaining unclaimed
by holders of Shares two years after the Effective Time (or such earlier date
immediately prior to such time as such amounts would otherwise escheat to or
become property of any governmental entity) shall, to the extent permitted by
applicable law, become the property of MergerSub free and clear of any claims
or interest of any Person previously entitled thereto.
(f) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 1.05(a) to pay for Shares for which
appraisal rights have been perfected shall be returned to MergerSub, upon
demand.
(g) No dividends or other distributions with respect to Company
Stock with a record date after the Effective Time shall be paid to the holder
of any unsurrendered certificate for Shares with respect to the shares of
Company Stock represented thereby and no cash payment in lieu of fractional
shares shall be paid to any such holder pursuant to Section 1.08 until the
surrender of such certificate in accordance with this Article 1. Subject to
the effect of applicable laws, following surrender of any such certificate,
there shall be paid to the holder of the certificate representing whole shares
of Company Stock issued in exchange therefor, without interest, (i) at the time
of such surrender or as promptly after the sale of the Excess Shares (as
defined in Section 1.08) as practicable, the amount of any cash payable in lieu
of a fractional share of Company Stock to which such holder is entitled
pursuant to Section 1.08 and the amount of dividends or other distributions
with a record date after the Effective Time theretofore paid with respect to
such whole shares of Company Stock, and (ii) at the appropriate payment date,
the amount of dividends or other distributions with a record date
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<PAGE> 13
after the Effective Time but prior to such surrender and a payment date
subsequent to such surrender payable with respect to such whole shares of
Company Stock.
SECTION 1.6. Dissenting Shares. Notwithstanding Section 1.02, Shares
which are issued and outstanding immediately prior to the Effective Time and
which are held by a holder who has not voted such shares in favor of the
Merger, who shall have delivered a written demand for appraisal of such Shares
in the manner provided by the Delaware Law and who, as of the Effective Time,
shall not have effectively withdrawn or lost such right to appraisal
("DISSENTING SHARES") shall not be converted into a right to receive the Merger
Consideration. The holders thereof shall be entitled only to such rights as
are granted by Section 262 of the Delaware Law. Each holder of Dissenting
Shares who becomes entitled to payment for such Shares pursuant to Section 262
of the Delaware Law shall receive payment therefor from the Surviving
Corporation in accordance with the Delaware Law; provided, however, that (i) if
any such holder of Dissenting Shares shall have failed to establish his
entitlement to appraisal rights as provided in Section 262 of the Delaware Law,
(ii) if any such holder of Dissenting Shares shall have effectively withdrawn
his demand for appraisal of such Shares or lost his right to appraisal and
payment for his Shares under Section 262 of the Delaware Law or (iii) if
neither any holder of Dissenting Shares nor the Surviving Corporation shall
have filed a petition demanding a determination of the value of all Dissenting
Shares within the time provided in Section 262 of the Delaware Law, such holder
shall forfeit the right to appraisal of such Shares and each such Share shall
be treated as if it had been a Non- Electing Share and had been converted, as
of the Effective Time, into a right to receive the Merger Consideration,
without interest thereon, from the Surviving Corporation as provided in Section
1.02 hereof. The Company shall give MergerSub prompt notice of any demands
received by the Company for appraisal of Shares, and MergerSub shall have the
right to participate in all negotiations and proceedings with respect to such
demands. The Company shall not, except with the prior written consent of
MergerSub, make any payment with respect to, or settle or offer to settle, any
such demands.
SECTION 1.7. Stock Options. (a) Except as set forth on Schedule
1.07(a), immediately prior to the Effective Time, each outstanding option to
acquire Shares granted to employees (the "EMPLOYEE OPTIONS") and directors (the
"DIRECTOR OPTIONS" and, together with the Employee Options, the "OPTIONS")
shall be canceled and, in lieu thereof, as soon as reasonably practicable as of
or after the Effective Time, the holders of such Options shall receive a cash
payment from the Company equal to the product of (i) the total number of Shares
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<PAGE> 14
previously subject to such Option and (ii) the excess of $34.50 over the
exercise price per Share subject to such Option, subject to any required
withholding of taxes.
(b) Prior to the Effective Time, the Company shall (i) obtain any
consents from holders of options to purchase Shares granted under the Company's
stock option or compensation plans or arrangements and (ii) make any amendments
to the terms of such stock option or compensation plans or arrangements that
are necessary to give effect to the transactions contemplated by Section
1.07(a). Notwithstanding any other provision of this Section, payment may be
withheld in respect of any employee stock option until necessary or appropriate
consents are obtained.
SECTION 1.8. Fractional Shares. (a) No certificates or scrip
representing fractional shares of Company Stock shall be issued upon the
surrender for exchange of certificates representing Shares, and such fractional
share interests will not entitle the owner thereof to vote or to any rights of
a stockholder of the Surviving Corporation; and
(b) Notwithstanding any other provision of this Agreement, each holder
of Shares exchanged pursuant to the Merger who would otherwise have been
entitled to receive a fraction of a share of Company Stock (after taking into
account all Shares delivered by such holder) shall receive, in lieu thereof, a
cash payment (without interest) representing such holder's proportionate
interest in the net proceeds from the sale by the Exchange Agent (following the
deduction of applicable transaction costs), on behalf of all such holders, of
the shares (the "EXCESS SHARES") of Company Stock representing such fractions.
Such sale shall be made as soon as practicable after the Effective Time.
ARTICLE 2
THE SURVIVING CORPORATION
SECTION 2.1. Certificate of Incorporation. The certificate of
incorporation of the Company in effect immediately prior to the Effective Time
shall be amended as of the Effective Time as set forth in Exhibit A, and, as so
amended, shall be the certificate of incorporation of the Surviving Corporation
until amended in accordance with applicable law.
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SECTION 2.2. Bylaws. The bylaws of MergerSub in effect at the
Effective Time shall be the bylaws of the Surviving Corporation until amended
in accordance with applicable law.
SECTION 2.3. Directors and Officers. From and after the Effective
Time, until successors are duly elected or appointed and qualified in
accordance with applicable law, (a) the directors of MergerSub at the Effective
Time shall be the directors of the Surviving Corporation, and (b) the officers
of the Company at the Effective Time shall be the officers of the Surviving
Corporation.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to MergerSub that:
SECTION 3.1. Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and has all corporate powers required to carry
on its business as now conducted. The Company is duly qualified to do business
as a foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where the
failure to be so qualified would not, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect. The Company has
heretofore delivered to MergerSub true and complete copies of the Company's
certificate of incorporation and bylaws as currently in effect. For purposes
of this Agreement, "MATERIAL ADVERSE EFFECT" means any material adverse effect
on the condition (financial or otherwise), business, assets, or results of
operations of the Company and the Subsidiaries taken as a whole but excluding
(i) any change resulting from general economic conditions and (ii) with respect
to the agreements set forth on Schedule 3.04(c), any changes arising out of the
transactions contemplated by this Agreement and the public announcement
thereof.
SECTION 3.2. Corporate Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby are within the Company's
corporate powers and, except for any required approval by the Company's
stockholders by majority vote in connection with the consummation of the
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<PAGE> 16
Merger, have been duly authorized by all necessary corporate and stockholder
action. This Agreement constitutes a valid and binding agreement of the
Company.
SECTION 3.3. Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation of the Merger
by the Company require no action by or in respect of, or filing with, any
governmental body, agency, official or authority other than (a) the filing of a
certificate of merger in accordance with Delaware Law; (b) compliance with any
applicable requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
1976 (the "HSR ACT"); (c) compliance with any applicable requirements of the
Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder (the "EXCHANGE ACT"); (d) compliance with the applicable
requirements of the Securities Act of 1933 and the rules and regulations
promulgated thereunder (the "SECURITIES ACT"); (e) compliance with any
applicable foreign or state securities or Blue Sky laws; and (f) required
filings under Italian law.
SECTION 3.4. Non-contravention. The execution, delivery and
performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby do not and will not (a)
contravene or conflict with the certificate of incorporation or bylaws of the
Company, (b) assuming compliance with the matters referred to in Section 3.03,
contravene or conflict with or constitute a violation of any provision of any
law, regulation, judgment, writ, injunction, order or decree of any court or
governmental authority binding upon or applicable to the Company or any
Subsidiary or any of their properties or assets, (c) except as set forth on
Schedule 3.04(c), constitute a default under or give rise to a right of
termination, cancellation or acceleration of any right or obligation of the
Company or any Subsidiary or to a loss of any benefit to which the Company or
any Subsidiary is entitled under any provision of any agreement, contract or
other instrument binding upon the Company or any Subsidiary or any license,
franchise, permit or other similar authorization held by the Company or any
Subsidiary, or (d) result in the creation or imposition of any Lien on any
asset of the Company or any Subsidiary, except, in the case of clauses (b), (c)
and (d), for any such violation, failure to obtain any such consent or other
action, default, right, loss or Lien that would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect. For purposes
of this Agreement, "LIEN" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset.
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SECTION 3.5. Capitalization. The authorized capital stock of the
Company consists of 25,000,000 shares of Common Stock, of which as of January
19, 1998, there were outstanding 11,073,150 shares of Common Stock and there
were employee and director stock options to purchase an aggregate of not more
than 1,053,717 shares of Common Stock outstanding (of which options to purchase
an aggregate of 481,199 shares of Common Stock were exercisable). All
outstanding shares of capital stock of the Company have been duly authorized
and validly issued and are fully paid and nonassessable. Except as set forth
in this Section and except for changes since January 19, 1998 resulting from
the exercise of employee and director stock options outstanding on such date or
purchases under the 1997 and 1998 Employee Stock Purchase Plans, which
purchases shall not exceed 150,000 shares of Common Stock in the aggregate,
there are outstanding (a) no shares of capital stock or other voting securities
of the Company, (b) no securities of the Company convertible into or
exchangeable for shares of capital stock or voting securities of the Company,
and (c) no options or other rights to acquire from the Company, and no
obligation of the Company to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of the Company (the items in clauses (a), (b) and (c) being referred
to collectively as the "COMPANY SECURITIES"). There are no outstanding
obligations of the Company or any Subsidiary to repurchase, redeem or otherwise
acquire any Company Securities.
SECTION 3.6. Subsidiaries. (a) Each Subsidiary is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted and is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where
failure to be so qualified would not, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect. For purposes of this
Agreement, "SUBSIDIARY" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar
functions are directly or indirectly owned by the Company and/or one or more
Subsidiaries. All Subsidiaries and their respective jurisdictions of
incorporation are identified in Schedule 3.06(a).
(b) Except for Liens, limitations and restrictions under the Amended
and Restated Credit Agreement among the Company, various lending institutions
and Bankers Trust Company, as agent (the
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"BT Credit Agreement") and the Sixth Variation Agreement, Syndicated Credit
Agreement, dated January 18, 1996, between Comweld Group Pty. Ltd., Duxtech
Pty. Limited, Quetack Pty. Limited, Thermadyne Australia Pty. Limited, various
financial institutions and BT Management Services Pty. Ltd., all of the
outstanding capital stock of, or other ownership interests in, each Subsidiary
(other than directors' qualifying shares), is owned by the Company, directly or
indirectly, free and clear of any Lien and free of any other limitation or
restriction (including any restriction on the right to vote, sell or otherwise
dispose of such capital stock or other ownership interests). All such capital
stock has been duly authorized and validly issued and is fully paid and
non-assessable. There are no outstanding (i) securities of the Company or any
Subsidiary convertible into or exchangeable for shares of capital stock or
other voting securities or ownership interests in any Subsidiary, and (ii)
options or other rights to acquire from the Company or any Subsidiary, and no
other obligation of the Company or any Subsidiary to issue, any capital stock,
voting securities or other ownership interests in, or any securities
convertible into or exchangeable for any capital stock, voting securities or
ownership interests in, any Subsidiary (the items in clauses (i) and (ii) being
referred to collectively as the "SUBSIDIARY SECURITIES"). There are no
outstanding obligations of the Company or any Subsidiary to repurchase, redeem
or otherwise acquire any outstanding Subsidiary Securities.
SECTION 3.7. SEC Filings. (a) The Company has made available to
MergerSub (i) the Company's annual report on Form 10-K for the year ended
December 31, 1996 (the "COMPANY 10-K") , (ii) its quarterly reports on Form
10-Q for its fiscal quarters ended March 31, 1997, June 30, 1997 and September
30, 1997 and its current reports on Form 8-K dated May 12, 1997 and October 8,
1997 (together with the Company 10-K, the "CURRENT SEC REPORTS"), (iii) its
proxy or information statements relating to meetings of, or actions taken
without a meeting by, the stockholders of the Company held since January 1,
1996, and (iv) all of its other reports, statements, schedules and registration
statements filed with the Securities and Exchange Commission (the "SEC") since
January 1, 1996 (collectively, the "SEC DOCUMENTS").
(b) As of its filing date, each such report or statement filed
pursuant to the Exchange Act did not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading.
(c) Each such registration statement, as amended or supplemented, if
applicable, filed pursuant to the Securities Act as of the date such statement
or amendment became effective did not contain any untrue statement of a
material
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fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
SECTION 3.8. Financial Statements. The audited consolidated
financial statements and unaudited consolidated interim financial statements of
the Company included in the Company 10-K and the quarterly reports on Form 10-Q
referred to in Section 3.07(a)(ii) fairly present in all material respects, in
conformity with generally accepted accounting principles applied on a
consistent basis (except as may be indicated in the notes thereto), the
consolidated financial position of the Company and its consolidated
subsidiaries as of the dates thereof and their consolidated results of
operations and changes in financial position for the periods then ended
(subject to normal year-end adjustments in the case of any unaudited interim
financial statements). For purposes of this Agreement, "BALANCE SHEET" means
the consolidated balance sheet of the Company and its subsidiaries as of
December 31, 1996 (and the notes thereto) set forth in the Company 10-K,
"BALANCE SHEET DATE" means December 31, 1996 and "1997 BALANCE SHEET" means the
consolidated balance sheet of the Company and its subsidiaries as of December
31, 1997.
SECTION 3.9. Disclosure Documents. (a) Each document required to be
filed by the Company with the SEC in connection with the transactions
contemplated by this Agreement (the "COMPANY DISCLOSURE DOCUMENTS"), including,
without limitation, the proxy or information statement of the Company
containing information required by Regulation 14A under the Exchange Act, and,
if applicable, Rule 13e-3 and Schedule 13E-3 under the Exchange Act (the
"COMPANY PROXY STATEMENT"), to be filed with the SEC in connection with the
Merger, and any amendments or supplements thereto will, when filed, comply as
to form in all material respects with the applicable requirements of the
Exchange Act. The representations and warranties contained in this Section
3.09(a) will not apply to statements or omissions included in the Company
Disclosure Documents based upon information furnished to the Company in writing
by MergerSub specifically for use therein.
(b) At the time the Company Proxy Statement or any amendment or
supplement thereto is first mailed to stockholders of the Company and, at the
time such stockholders vote on adoption of this Agreement, the Company Proxy
Statement, as supplemented or amended, if applicable, will not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. At the time of the
filing of any Company Disclosure Document other than the Company Proxy
Statement and at the time of
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any distribution thereof, such Company Disclosure Document will not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. The representations and warranties
contained in this Section 3.09(b) will not apply to statements or omissions
included in the Company Disclosure Documents based upon information furnished
to the Company in writing by MergerSub specifically for use therein.
(c) The information with respect to the Company or any Subsidiary
that the Company furnishes to MergerSub in writing specifically for use in the
MergerSub Disclosure Documents (as defined in Section 6.01) will not, at the
time of the filing thereof, at the time of any distribution thereof and at the
time of the meeting of the Company's stockholders, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in the light
of the circumstances under which they were made, not misleading.
SECTION 3.10. Absence of Certain Changes. Except as set forth on
Schedule 3.10 attached hereto, since the Balance Sheet Date, the Company and
Subsidiaries have conducted their business in the ordinary course consistent
with past practice and there has not been:
(a) any event, occurrence or development of a state of circumstances
or facts which has had or reasonably would be expected to have a Material
Adverse Effect;
(b) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of the Company,
or any repurchase, redemption or other acquisition by the Company or any
Subsidiary of any outstanding shares of capital stock or other securities of,
or other ownership interests in, the Company or any Subsidiary;
(c) except as disclosed in the Current SEC Reports or as
contemplated by this Agreement, any amendment of any material term of any
outstanding security of the Company or any Subsidiary;
(d) except as disclosed in the Current SEC Reports or the 1997
Balance Sheet, any incurrence, assumption or guarantee by the Company or any
Subsidiary of any indebtedness for borrowed money other than in the ordinary
course of business and in amounts and on terms consistent with past practices,
but in any event not in excess of $25,000,000;
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(e) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of the Company or any
Subsidiary which, individually or in the aggregate, has had or would reasonably
be expected to have a Material Adverse Effect;
(f) any material change in any method of accounting or accounting
practice by the Company or any Subsidiary, except for any such change required
by reason of a concurrent change in generally accepted accounting principles;
(g) except as disclosed in the Current SEC Reports, any (i) grant of
any severance or termination pay to any director or executive officer of the
Company or any Subsidiary, (ii) entering into of any employment, deferred
compensation or other similar agreement (or any amendment to any such existing
agreement) with any director or executive officer of the Company or any
Subsidiary, (iii) increase in benefits payable under any existing severance or
termination pay policies or employment agreements other than in the ordinary
course of business consistent with past practice or (iv) increase in
compensation, bonus or other benefits payable to directors, officers or
employees of the Company or any Subsidiary, other than in the ordinary course
of business consistent with past practice; or
(h) any cancellation of any licenses, sublicenses, franchises,
permits or agreements to which the Company or any Subsidiary is a party, or any
notification to the Company or any Subsidiary that any party to any such
arrangements intends to cancel or not renew such arrangements beyond its
expiration date as in effect on the date hereof, which cancellation or
notification, individually or in the aggregate, has had or reasonably could be
expected to have a Material Adverse Effect.
SECTION 3.11. No Undisclosed Material Liabilities. There are no
liabilities of the Company or any Subsidiary of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, which
individually or in the aggregate would be reasonably likely to have a Material
Adverse Effect, other than:
(a) liabilities disclosed or provided for in the Balance Sheet or
the balance sheets (and the notes thereto) included in the Company's reports on
Form 10-Q referred to in Section 3.07(a)(ii);
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(b) liabilities incurred in the ordinary course of business
consistent with past practice since the Balance Sheet Date or as otherwise
specifically contemplated by this Agreement; and
(c) liabilities under this Agreement.
SECTION 3.12. Litigation. Except as set forth in the Current SEC
Reports, there is no action, suit, investigation or proceeding (or any basis
therefor) pending against, or to the knowledge of the Company threatened
against or affecting, the Company or any Subsidiary or any of their respective
properties before any court or arbitrator or any governmental body, agency or
official which, if determined or resolved adversely to the Company or any
Subsidiary in accordance with the plaintiff's demands, would reasonably be
expected to have a Material Adverse Effect or which in any manner challenges or
seeks to prevent, enjoin, alter or materially delay the Merger or any of the
other transactions contemplated hereby.
SECTION 3.13. Taxes. Except as set forth in the Schedule 3.13:
(a) all material tax returns, statements, reports and forms
(including estimated tax returns and reports and information returns and
reports) required to be filed with any taxing authority with respect to any tax
period (or portion thereof) ending on or before the Effective Time (a
"PRE-CLOSING TAX PERIOD") by or on behalf of the Company or any Subsidiary of
the Company (collectively, the "RETURNS"), were filed when due (including any
applicable extension periods) in accordance with all applicable laws in all
material respects.
(b) The Company and its Subsidiaries have timely paid, or withheld
and remitted to the appropriate taxing authority, all taxes shown as due and
payable on the Returns that have been filed.
(c) The charges, accruals and reserves for taxes with respect to the
Company and any Subsidiary for any Pre- Closing Tax Period (including any
Pre-Closing Tax Period for which no Return has yet been filed) reflected on the
books of the Company and its Subsidiaries (excluding any provision for deferred
income taxes) are adequate to cover such taxes.
(d) There is no material claim (including under any indemnification
or tax-sharing agreement), audit, action, suit, proceeding, or investigation
now pending or threatened in writing against or in respect of any tax or "tax
asset" of the Company or any Subsidiary. For purposes of this Section 3.13,
the term "TAX ASSET" shall include any net operating loss, net capital loss,
investment tax credit,
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foreign tax credit, charitable deduction or any other credit or tax attribute
which could reduce taxes.
(e) There are no Liens for taxes upon the assets of the Company or
its Subsidiaries except for Liens for current taxes not yet due.
(f) Neither the Company nor any of its Subsidiaries has been a
United States real property holding corporation within the meaning of Section
897(c)(2) of the Internal Revenue Code of 1986, as amended (the "CODE") during
the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
SECTION 3.14. ERISA. (a) Schedule 3.14(a) sets forth a list
identifying each "EMPLOYEE BENEFIT PLAN", as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974 ("ERISA"), which (i) is subject
to any provision of ERISA and which is not already listed as an International
Plan on Schedule 3.14(i) and (ii) is maintained, administered or contributed to
by the Company or any affiliate (as defined below) and covers any employee or
former employee of the Company or any affiliate or under which the Company or
any affiliate has any liability. The most recent copies of such plans (and, if
applicable, related trust agreements) and all amendments thereto have been made
available to MergerSub together with (A) the most recent annual reports (Form
5500 including, if applicable, Schedule B thereto) prepared in connection with
any such plan and (B) the most recent actuarial valuation report prepared in
connection with any such plan. Such plans are referred to collectively herein
as the "EMPLOYEE PLANS". For purposes of this Section, "AFFILIATE" of any
Person means any other Person which, together with such Person, would be
treated as a single employer under Section 414 of the Code. The only Employee
Plans which individually or collectively would constitute an "employee pension
benefit plan" as defined in Section 3(2) of ERISA (the "PENSION PLANS") are
identified as such in the list referred to above.
(b) No Employee Plan constitutes a "MULTIEMPLOYER PLAN", as defined
in Section 3(37) of ERISA (a "MULTIEMPLOYER PLAN"), and no Employee Plan is
maintained in connection with any trust described in Section 501(c)(9) of the
Code. The only Employee Plan that is subject to Title IV of ERISA (the
"RETIREMENT PLAN") is the Thermadyne Group, Inc. Retirement Plan. As of the
January 1, 1997 actuarial valuation report, the liabilities on a Retirement
Protection Act of 1994 basis exceeded the fair market value of the assets of
such plan by less than $3,500,000. No "ACCUMULATED FUNDING DEFICIENCY", as
defined in Section 412 of the Code, exists with respect to any Pension Plan,
whether or
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not waived. The Company knows of no "REPORTABLE EVENT", within the meaning of
Section 4043 of ERISA, and no event described in Section 4041, 4042, 4062 or
4063 of ERISA has occurred in connection with any Employee Plan, other than a
"REPORTABLE EVENT" that will not have a Material Adverse Effect. No condition
exists and no event has occurred that would be reasonably likely to result in
termination of the Retirement Plan with a liability greater than the liability
disclosed in this Section and neither the Company nor any of its affiliates has
incurred any liability under Title IV of ERISA arising in connection with the
termination of, or complete or partial withdrawal from, any plan covered or
previously covered by Title IV of ERISA, which liability has not been
satisfied. Nothing done or omitted to be done and no transaction or holding of
any asset under or in connection with any Employee Plan has or will make the
Company or any Subsidiary, any officer or director of the Company or any
Subsidiary subject to any liability under Title I of ERISA or liable for any
tax pursuant to Section 4975 of the Code that could have a Material Adverse
Effect.
(c) Each Employee Plan which is intended to be qualified under
Section 401(a) of the Code is so qualified (other than with respect to a
disqualifying event the correction of which would not have a Material Adverse
Effect) and has been so qualified during the period from its adoption to date,
and each trust forming a part thereof is exempt from tax pursuant to Section
501(a) of the Code. The Company has made available to MergerSub copies of the
most recent Internal Revenue Service determination letters with respect to each
such Plan. Each Employee Plan has been maintained in compliance with its terms
and with the requirements prescribed by any and all statutes, orders, rules and
regulations, including but not limited to ERISA and the Code, which are
applicable to such Plan other than any non-compliance which could not have a
Material Adverse Effect.
(d) Except as set forth in Schedule 3.14(d) there is no contract,
agreement, plan or arrangement covering any employee or former employee of the
Company or any affiliate that, individually or collectively, could give rise to
the payment of any amount that would not be deductible pursuant to the terms of
Section 280G of the Code.
(e) Schedule 3.14(e) sets forth a list of each material employment,
severance or other similar contract, arrangement or policy and each material
plan or arrangement (written or oral) providing for insurance coverage
(including any self-insured arrangements), workers' compensation, disability
benefits, supplemental unemployment benefits, vacation benefits, retirement
benefits or for
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deferred compensation, profit-sharing, bonuses, stock options, stock
appreciation or other forms of incentive compensation or post-retirement
insurance, compensation or benefits which (i) is not an Employee Plan, (ii) is
entered into, maintained or contributed to, as the case may be, by the Company
or any of its affiliates, (iii) covers any U.S. employee or former U.S.
employee of the Company or any of its affiliates and (iv) are currently in
effect. Such contracts, plans and arrangements as are described above, copies
or descriptions of all of which have been previously made available to
MergerSub are referred to collectively herein as the "BENEFIT ARRANGEMENTS".
Each Benefit Arrangement has been maintained in compliance with its terms and
with the requirements prescribed by any and all statutes, orders, rules and
regulations that are applicable to such Benefit Arrangement, other than any
non-compliance which could not have a Material Adverse Effect.
(f) The excess of the present value of the accumulated
post-retirement benefit obligation in respect of post-retirement life, health
and medical benefits for retired employees of the Company and its affiliates,
determined using assumptions that are reasonable in the aggregate in accordance
with FAS 106 as of January 1, 1997, over the fair market value of any fund,
reserve or other assets segregated for the purpose of satisfying such liability
(including for such purposes any fund established pursuant to Section 401(h) of
the Code) does not in the aggregate exceed $17,00,000.
(g) Except as disclosed in writing to MergerSub in Schedule 3.14(g),
there has been no amendment to, written interpretation or announcement (whether
or not written) by the Company or any of its affiliates relating to, or change
in employee participation or coverage under, any Employee Plan or Benefit
Arrangement which would increase materially the expense of maintaining such
Employee Plan or Benefit Arrangement above the level of the expense incurred in
respect thereof for the fiscal year ended on the Balance Sheet Date.
(h) Except as disclosed in Schedule 3.14(h), neither the Company nor
any Subsidiary is a party to or subject to any union contract or any employment
contract or arrangement providing for annual future compensation of $200,000 or
more with any officer, consultant, director or employee.
(i) Schedule 3.14(i) identifies each material International Plan (as
defined below). The Company has made available to MergerSub copies of each
such International Plan. Each International Plan has been maintained in
substantial compliance with its terms and with the requirements prescribed by
any
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and all applicable statutes, orders, rules and regulations (including any
special provisions relating to qualified plans where such Plan was intended to
so qualify and any funding requirements and accounting principles with regard
to reserves) and has been maintained in good standing with applicable
regulatory authorities, other than any non-compliance which could not have a
Material Adverse Effect. There has been no amendment to, written
interpretation of or announcement (whether or not written) by the Company or
any Subsidiary relating to, or change in employee participation or coverage
under, any International Plan that would increase materially the expense of
maintaining such International Plan above the level of expense incurred in
respect thereof for the most recent fiscal year ended prior to the date hereof.
From and after the Closing Date, MergerSub and its Affiliates will get the full
benefit of any funds available under such plans to pay benefits and any
accruals or reserves with respect thereto.
"INTERNATIONAL PLAN" means any material employment, severance or
similar contract or arrangement (whether or not written) or any material plan,
policy, fund, program or arrangement or contract providing for severance,
insurance coverage (including any self-insured arrangements), workers'
compensation, disability benefits, supplemental unemployment benefits, vacation
benefits, pension or retirement benefits or for deferred compensation,
profit-sharing, bonuses, stock options, stock appreciation rights or other
forms of incentive compensation or post-retirement insurance, compensation or
benefits that (i) is not an Employee Plan or a Benefit Arrangement, (ii) is
entered into, maintained, administered or contributed to by the Company or any
Subsidiary, (iii) covers any employee or former employee of the Company or any
Subsidiary and (iv) are currently in effect.
SECTION 3.15. [Intentionally Omitted].
SECTION 3.16. Labor Matters. The Company is in compliance with all
currently applicable laws respecting employment practices, terms and conditions
of employment and wages and hours, and is not engaged in any unfair labor
practice, failure to comply with which or engagement in which, as the case may
be, would reasonably be expected to have a Material Adverse Effect. There is
no unfair labor practice complaint pending or, to the knowledge of Company,
threatened against the Company before the National Labor Relations Board or
otherwise which if adversely resolved is likely to have a Material Adverse
Effect. Except as set forth in Schedule 3.16, there are no strikes, slowdowns,
union organizational campaigns or other protected concerted activity under the
National Labor Relations Act or, to the knowledge of Company, threats thereof,
by or with
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respect to any employees of the Company which could have a Material Adverse
Effect.
SECTION 3.17. Compliance with Laws and Court Orders. Neither the
Company nor any Subsidiary is in violation of, or has since January 1, 1996
violated, and to the knowledge of the Company none is under investigation with
respect to or has been threatened to be charged with or given notice of any
violation of, any applicable law, rule, regulation, judgment, injunction, order
or decree , except for violations that have not had and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
SECTION 3.18. Licenses and Permits. As used herein, the term
"Permits" shall mean any licenses, franchises, permits, certificates, approvals
or other similar authorizations affecting, or relating in any way to, the
assets or business of the Company and its Subsidiaries. Except as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, (i) the Company or its Subsidiaries own, hold or possess
adequate right to use all Permits required in connection with the operation of
the business of the Company and its Subsidiaries, (ii) the Permits are valid
and in full force and effect, (iii) neither the Company nor any Subsidiary is
in default under, and no condition exists that with notice or lapse of time or
both would constitute a default under, the Permits and (iv) none of the Permits
will be terminated or impaired or become terminable, in whole or in part, as a
result of the transactions contemplated hereby.
SECTION 3.19. Intellectual Property. The Company and the
Subsidiaries own or possess adequate licenses or other rights to use all
Intellectual Property Rights necessary to conduct the business now operated by
them, except where the failure to own or possess such licenses or rights would
not be reasonably likely to have a Material Adverse Effect. To the knowledge of
the Company, the Intellectual Property Rights of the Company and the
Subsidiaries do not conflict with or infringe upon any Intellectual Property
Rights of others to the extent that, if sustained, such conflict or
infringement would be reasonably likely to have a Material Adverse Effect.
For purposes of this Agreement, "INTELLECTUAL PROPERTY RIGHT" means any
trademark, service mark, trade name, mask work, copyright, patent, software
license, other data base, invention, trade secret, know-how (including any
registrations or applications for registration of any of the foregoing) or any
other similar type of proprietary intellectual property right.
SECTION 3.20. Finders' Fees. With the exception of fees payable to
Gleacher NatWest & Co., a copy of whose engagement agreement has been provided
to MergerSub, there is no investment banker, broker, finder or other
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intermediary which has been retained by or is authorized to act on behalf, of
the Company or any Subsidiary who might be entitled to any fee or commission
from the Company or any Subsidiary or any of its affiliates upon consummation
of the transactions contemplated by this Agreement.
SECTION 3.21. Inapplicability of Certain Restrictions. The Company's
certificate of incorporation contains a provision in which the Company
expressly elects not to be governed by Section 203 of the Delaware Law, and
therefore Section 203 does not in any way restrict the consummation of the
Merger or the other transactions contemplated by this Agreement. The adoption
of this Agreement by the affirmative vote of the holders of Shares entitling
such holders to exercise at least a majority of the voting power of the Shares
is the only vote of holders of any class or series of the capital stock of the
Company required to adopt this Agreement, or to approve the Merger or any of
the other transactions contemplated hereby and no higher or additional vote is
required pursuant to of the Company's Certificate of Incorporation or
otherwise.
SECTION 3.22. Rights Plan. The Company and its Board of Directors
have amended the Shareholder Rights Agreement dated May 1, 1997 (the "RIGHTS
AGREEMENT") (without redeeming the Rights (as defined therein)) so that neither
the execution or delivery of this Agreement nor the consummation of the Merger
will (i) cause any Rights issued pursuant to the Rights Agreement to become
exercisable or to separate from the Shares to which they are attached, (ii)
cause the MergerSub or any of its Affiliates to be an Acquiring Person (as each
such term is defined in the Rights Agreement) or (iii) trigger other provisions
of the Rights Agreement, including giving rise to a Distribution Date (as such
term is defined in the Rights Agreement), and such amendment shall be in full
force and effect from and after the date hereof.
SECTION 3.23. Environmental Matters. (a) Except as set forth in the
Company 10-K or Schedule 3.23:
(i) except as would not be reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect,
no notice, notification, demand, request for information, citation,
summons, complaint or order has been received by, or, to the knowledge
of the Company or any Subsidiary, is pending or threatened by any
Person against, the Company or any Subsidiary nor has any material
penalty been assessed against the Company or any Subsidiary with
respect to any (A) alleged violation of any Environmental Law or
liability thereunder, (B) alleged failure to have any permit,
certificate, license, approval, registration or authorization
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required under any Environmental Law, (C) generation, treatment,
storage, recycling, transportation or disposal of any Hazardous
Substance or (D) discharge, emission or release of any Hazardous
Substance;
(ii) no Hazardous Substance has been discharged, emitted,
released or is present at any property now or previously owned, leased
or operated by the Company or any Subsidiary, which circumstance,
individually or in the aggregate, would reasonably be likely to result
in a Material Adverse Effect; and
(iii) there are no Environmental Liabilities that have had
or would reasonably be likely to have a Material Adverse Effect.
(b) There has been no environmental investigation, study, audit,
test, review or other analysis conducted of which the Company has knowledge in
relation to the current or prior business of the Company or any property or
facility now or previously owned or leased by the Company or any Subsidiary
which has not been made available to MergerSub at least five days prior to the
date hereof.
(c) Neither the Company nor any Subsidiary owns or leases any real
property, or conducts any operations, in New Jersey or Connecticut.
(d) For purposes of this Section, the following terms shall have the
meanings set forth below:
(i) "ENVIRONMENTAL LAWS" means any and all federal,
state, local and foreign statutes, laws, judicial decisions,
regulations, ordinances, rules, judgments, orders, decrees, codes,
injunctions, permits, concessions, grants, franchises, licenses,
legally binding agreements and governmental restrictions, relating to
the environment or to emissions, discharges or releases of pollutants,
contaminants or other hazardous substances or wastes into the
environment, including without limitation ambient air, surface water,
ground water or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of pollutants, contaminants or other hazardous substances
or wastes or the clean-up or other remediation thereof;
(ii) "ENVIRONMENTAL LIABILITIES" means any and all
liabilities of or relating to the Company and any Subsidiary, whether
contingent or fixed, actual or potential, known or unknown, which (i)
arise under or
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relate to matters covered by Environmental Laws and (ii) relate to
actions occurring or conditions existing on or prior to the Effective
Time; and
(iii) "HAZARDOUS SUBSTANCES" means any toxic, radioactive,
corrosive or otherwise hazardous substance, including petroleum, its
derivatives, by-products and other hydrocarbons, or any substance
having any constituent elements displaying any of the foregoing
characteristics, which in any event is regulated under Environmental
Laws.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF MERGERSUB
MergerSub represents and warrants to the Company that:
SECTION 4.1. Corporate Existence and Power. MergerSub is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted. Since the date of its incorporation,
MergerSub has not engaged in any activities other than in connection with or as
contemplated by this Agreement and the Merger or in connection with arranging
any financing required to consummate the transactions contemplated hereby.
SECTION 4.2. Corporate Authorization. The execution, delivery and
performance by MergerSub of this Agreement and the consummation by MergerSub of
the transactions contemplated hereby are within the corporate powers of
MergerSub and have been duly authorized by all necessary corporate action. This
Agreement constitutes a valid and binding agreement of MergerSub.
SECTION 4.3. Governmental Authorization. The execution, delivery and
performance by MergerSub of this Agreement and the consummation by MergerSub of
the transactions contemplated by this Agreement require no action by or in
respect of, or filing with, any governmental body, agency, official or
authority other than (a) the filing of a certificate of merger in accordance
with the Delaware Law, (b) compliance with any applicable requirements of the
HSR Act; (c) compliance with any applicable requirements of the Exchange Act;
(d) compliance with the applicable requirements of the Securities Act; (e)
compliance with any applicable foreign or state securities or Blue Sky laws;
and (f) required filings under Australian and Italian law.
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SECTION 4.4. Non-contravention. The execution, delivery and
performance by MergerSub of this Agreement and the consummation by MergerSub of
the transactions contemplated hereby do not and will not (a) contravene or
conflict with the certificate of incorporation or bylaws of MergerSub, (b)
assuming compliance with the matters referred to in Section 4.03, contravene or
conflict with any provision of law, regulation, judgment, order or decree
binding upon MergerSub, or (c) constitute a default under or give rise to any
right of termination, cancellation or acceleration of any right or obligation
of MergerSub or to a loss of any benefit to which MergerSub is entitled under
any agreement, contract or other instrument binding upon MergerSub.
SECTION 4.5. Disclosure Documents. (a) The information with respect
to MergerSub that MergerSub furnishes to the Company in writing specifically
for use in any Company Disclosure Document will not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading (i) in the case of the Company Proxy
Statement at the time the Company Proxy Statement or any amendment or
supplement thereto is first mailed to stockholders of the Company, at the time
the stockholders vote on adoption of this Agreement and at the Effective Time,
and (ii) in the case of any Company Disclosure Document other than the Company
Proxy Statement, at the time of the filing thereof and at the time of any
distribution thereof.
(b) The MergerSub Disclosure Documents (as defined in Section 6.01),
when filed, will comply as to form in all material respects with the applicable
requirements of the Securities Act and will not at the time of the filing
thereof, at the time of any distribution thereof or at the time of the meeting
of the Company's stockholders, contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading, provided, that this representation and warranty will not apply to
statements or omissions in the MergerSub Disclosure Documents based upon
information furnished to MergerSub in writing by the Company specifically for
use therein.
SECTION 4.6. Finders' Fees. Except for Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJSC"), whose fees will be paid by MergerSub, there
is no investment banker, broker, finder or other intermediary who might be
entitled to any fee or commission from MergerSub or any of its affiliates upon
consummation of the transactions contemplated by this Agreement.
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SECTION 4.7. Financing. The Company has received copies of (a) a
commitment letter dated January 20, 1998 from DLJ Merchant Banking Partners II,
L.P., DLJ Merchant Banking Partners II - A, L.P., DLJ Offshore Partners II,
C.V., DLJ Diversified Partners, L.P., DLJ Diversified Partners - A, L.P., DLJ
Millennium Partners, L.P., DLJ Millennium Partners - A, L.P., DLJMB Funding II,
Inc., UK Investment Plan 1997 Partners, DLJ EAB Partners, L.P., DLJ ESC II,
L.P. and DLJ First ESC, L.P. pursuant to which each of the foregoing has
committed, subject to the terms and conditions set forth therein, to purchase
securities of MergerSub for an aggregate amount equal to $140,000,012, (b) a
letter dated January 20, 1998 from DLJ Bridge Fund Inc. ("DLJ BRIDGE FUND")
pursuant to which DLJ Bridge Fund has committed, subject to the terms and
conditions set forth therein, to purchase Senior Subordinated Notes of a
newly-formed Delaware corporation ("OPERATING CO.") in the amount of
$205,000,000 and Senior PIK Notes of MergerSub in the amount of $95,000,000 and
(c) a commitment letter dated January 20, 1998 from DLJ Capital Funding, Inc.
("DLJ SENIOR DEBT FUND") pursuant to which DLJ Senior Debt Fund has committed,
subject to the terms and conditions set forth therein, to enter into one or
more credit agreements providing for loans to Operating Co. of up to
$430,000,000. As used in this Agreement, the aforementioned entities shall
hereinafter be referred to as the "FINANCING ENTITIES." The aforementioned
credit agreements and commitments to purchase debt and equity securities of
MergerSub or Operating Co. shall be referred to as the "FINANCING AGREEMENTS"
and the financing to be provided thereunder shall be referred to as the
"FINANCING." The aggregate proceeds of the Financing are in an amount
sufficient to pay the Merger Consideration, to repay the Company's and its
Subsidiaries' indebtedness (excluding certain capital lease obligations)
together with any interest, premium or penalties payable in connection
therewith, to provide a reasonable amount of working capital financing and to
pay related fees and expenses (collectively, the "REQUIRED AMOUNTS"). As of
the date hereof, none of the commitment letters relating to the Financing
Agreements referred to above has been withdrawn and MergerSub does not know of
any facts or circumstances that may reasonably be expected to result in any of
the conditions set forth in the commitment letters relating to the Financing
Agreements not being satisfied. MergerSub believes that the Financing will not
create any liability to the directors and stockholders of the Company under any
federal or state fraudulent conveyance or transfer law. MergerSub further
believes that, upon the consummation of the transactions contemplated hereby,
including, without limitation, the Financing, the Surviving Corporation (i)
will not become insolvent, (ii) will not be left with unreasonably small
capital, (iii) will not have incurred debts beyond its ability to pay such
debts as they mature, and (iv) the capital of the Company will not become
impaired. As
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of the date of this Agreement, MergerSub knows of no reason why the Merger will
not be recorded as a "recapitalization" for financial reporting purposes.
SECTION 4.8. Capitalization. The authorized capital stock of
MergerSub consists of (i) 30,000,000 shares of MergerSub Common Stock, of which
as of the date hereof, there were outstanding 58,000 shares and (ii) 15,000,000
shares of MergerSub Preferred Stock, of which as of the date hereof no shares
were outstanding. All outstanding shares of capital stock of MergerSub have
been duly authorized and validly issued and are fully paid and nonassessable.
As of the moment immediately prior to the Effective Time, 2,608,696 shares of
MergerSub Common Stock and 2,000,000 shares of MergerSub Preferred Stock, and
MergerSub Warrants to acquire 353,428 shares of MergerSub Common Stock at an
exercise price of not less than $0.01 per share, will be outstanding; except as
set forth in this Section, there will be, at the Effective Time, (a) no shares
of capital stock or other voting securities of MergerSub, (b) no securities of
MergerSub convertible into or exchangeable for shares of capital stock or
voting securities of MergerSub and (c) no options or other rights to acquire
from MergerSub, and no obligation of MergerSub to issue any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of MergerSub (the items referred to in clauses (a),
(b) and (c) being referred to collectively as the "MERGERSUB SECURITIES").
There are no outstanding obligations of MergerSub to repurchase, redeem or
otherwise acquire any MergerSub Securities.
ARTICLE 5
COVENANTS OF THE COMPANY
The Company agrees that:
SECTION 5.1. Conduct of the Company. Except as otherwise
specifically provided in this Agreement, from the date hereof to the Effective
Time, the Board of Directors of the Company shall not approve or authorize any
action that would allow the Company and its Subsidiaries to carry on their
respective businesses other than in the ordinary and usual course of business
and consistent with past practice or any action that would prevent the Company
and its Subsidiaries from using their reasonable best efforts to (i) preserve
intact its present business organization, (ii) maintain in effect all federal,
state and local licenses, approvals and authorizations, including, without
limitation, all permits that are required for
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the Company or any of its Subsidiaries to carry on their business, (iii) keep
available the services of its key officers and employees and (iv) maintain
satisfactory relationships with its customers, lenders, suppliers and others
having business relationships with it. Without limiting the generality of the
foregoing, and except as otherwise specifically provided in this Agreement,
without the prior written consent of MergerSub, prior to the Effective Time,
the Board of Directors of the Company shall not, nor shall it authorize or
direct the Company or any Subsidiary, directly or indirectly, to:
(a) adopt or propose any change in its certificate of incorporation
or bylaws;
(b) except pursuant to existing agreements or arrangements or as set
forth on Schedule 5.01(b), (i) acquire (by merger, consolidation or acquisition
of stock or assets) any material corporation, partnership or other business
organization or division thereof, or sell, lease or otherwise dispose of a
material subsidiary or a material amount of assets or securities; (ii) waive,
release, grant, or transfer any rights of material value; (iii) modify or
change in any material respect any existing material license, lease, contract,
or other document; (iv) except to refund or refinance commercial paper, incur,
assume or prepay an amount of long-term or short-term debt, except in the
ordinary course of business, consistent with past practice; (v) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person, except in
the ordinary course of business, consistent with past practice; (vi) make any
loans, advances or capital contributions to, or investments in, any other
person, except in the ordinary course of business, consistent with past
practice; or purchase any property or assets of any other individual or entity,
except in the ordinary course of business, consistent with past practice; or
(vii) authorize any new capital expenditures which, in the aggregate, are in
excess of $15,000,000;
(c) take any action that would make any representation and warranty
of the Company hereunder inaccurate in any respect at, or as of any time prior
to, the Effective Time, or omit to take any action necessary to prevent any
such representation or warranty from being inaccurate in any respect at any
such time;
(d) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock,
other than cash dividends and distributions by a wholly owned subsidiary of the
Company to the Company or to a subsidiary all of the capital stock which is
owned directly or
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indirectly by the Company, or redeem, repurchase or otherwise acquire or offer
to redeem, repurchase, or otherwise acquire any of its securities or any
securities of its subsidiaries;
(e) except as expressly as contemplated by this Agreement, adopt or
amend any bonus, profit sharing, compensation, severance, termination, stock
option, pension, retirement, deferred compensation, employment or employee
benefit plan, agreement, trust, plan, fund or other arrangement for the benefit
and welfare of any director, officer or employee, or (except for normal
increases in the ordinary course of business that are consistent with past
practices and that, in the aggregate, do not result in a material increase in
benefits or compensation expense to the Company) increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay any
benefit not required by any existing plan or arrangement (including, without
limitation, the granting of stock options or stock appreciation rights or the
removal of existing restrictions in any benefit plans or agreements);
(f) revalue in any material respect any of its assets, including,
without limitation, writing down the value of inventory in any material manner
or write-off of notes or accounts receivable in any material manner;
(g) pay, discharge or satisfy any material claims, liabilities or
obligations (whether absolute, accrued, asserted or unasserted, contingent or
otherwise) other than the payment, discharge or satisfaction in the ordinary
course of business, consistent with past practices, of liabilities reflected or
reserved against in the consolidated financial statements of the Company or
incurred in the ordinary course of business, consistent with past practices;
(h) make any tax election or settle or compromise any material
income tax liability;
(i) take any action other than in the ordinary course of business
and consistent with past practices with respect to accounting policies or
procedures; or
(j) agree or commit to do any of the foregoing.
SECTION 5.2. Stockholder Meeting; Proxy Material. The Company shall
cause a meeting of its stockholders (the "COMPANY STOCKHOLDER MEETING") to be
duly called and held as soon as reasonably practicable for the purpose of
voting on the approval and adoption of this Agreement and the Merger. The
Board of
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Directors of the Company shall, subject to its fiduciary duties as advised by
counsel, recommend approval and adoption of this Agreement and the Merger by
the Company's stockholders. In connection with such meeting, the Company (a)
will promptly prepare and file with the SEC, will use its best efforts to have
cleared by the SEC and will thereafter mail to its stockholders as promptly as
practicable the Company Proxy Statement and all other proxy materials for such
meeting, (b) will use its best efforts to obtain the necessary approvals by its
stockholders of this Agreement and the transactions contemplated hereby and (c)
will otherwise comply with all legal requirements applicable to such meeting.
SECTION 5.3. Access to Information. From the date hereof until the
Effective Time, the Company will give MergerSub, its counsel, financial
advisors, auditors and other authorized representatives full access to the
offices, properties, books and records of the Company and the Subsidiaries,
will furnish to MergerSub, their counsel, financial advisors, auditors and
other authorized representatives such financial and operating data and other
information as such Persons may reasonably request and will instruct the
Company's employees, counsel and financial advisors to cooperate with MergerSub
in its investigation of the business of the Company and the Subsidiaries;
provided that no investigation pursuant to this Section shall affect any
representation or warranty given by the Company to MergerSub hereunder; and
provided, further that any information provided to MergerSub pursuant to this
Section 5.03 shall be subject to the Confidentiality Agreement dated as of
November 6, 1997 between the Company and DLJ Merchant Banking II, Inc. (the
"CONFIDENTIALITY AGREEMENT").
SECTION 5.4. Other Offers. (a) Neither the Company nor any of its
Subsidiaries shall (whether directly or indirectly through advisors, agents or
other intermediaries), nor shall the Company or any of its Subsidiaries
authorize or permit any of its or their officers, directors, agents,
representatives, advisors or Subsidiaries to (x) solicit, initiate or take any
action knowingly to facilitate the submission of inquiries, proposals or offers
from any Third Party (as defined below) (other than MergerSub) relating to (i)
any acquisition or purchase of 20% or more of the consolidated assets of the
Company and its Subsidiaries or of over 20% of any class of equity securities
of the Company or any of its Subsidiaries, (ii) any tender offer (including a
self tender offer) or exchange offer that if consummated would result in any
Third Party beneficially owning 20% or more of any class of equity securities
of the Company or any of its Subsidiaries, (iii) any merger, consolidation,
business combination, sale of substantially all assets, recapitalization,
liquidation, dissolution or similar transaction involving the
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Company or any of its Subsidiaries whose assets, individually or in the
aggregate, constitute more than 20% of the consolidated assets of the Company
other than the transactions contemplated by this Agreement, or (iv) any other
transaction the consummation of which would or could reasonably be expected to
impede, interfere with, prevent or materially delay the Merger or which would
or could reasonably be expected to materially dilute the benefits to MergerSub
of the transactions contemplated hereby (collectively, "ACQUISITION
PROPOSALS"), or agree to or endorse any Acquisition Proposal, (y) enter into or
participate in any discussions or negotiations regarding any of the foregoing,
or furnish to any Third Party any information with respect to its business,
properties or assets or any of the foregoing or (z) grant any waiver or release
under any standstill or similar agreement with respect to any class of equity
securities of the Company or any of its Subsidiaries; provided, however, that
the foregoing shall not prohibit the Company (either directly or indirectly
through advisors, agents or other intermediaries) from (i) furnishing
information pursuant to an appropriate confidentiality letter (which letter
shall not be less favorable to the Company in any material respect than the
Confidentiality Agreement, and a copy of which shall be provided for
informational purposes only to MergerSub) concerning the Company and its
businesses, properties or assets to a Third Party who has made a bona fide
Acquisition Proposal, (ii) engaging in discussions or negotiations with such a
Third Party who has made a bona fide Acquisition Proposal, (iii) following
receipt of a bona fide Acquisition Proposal, taking and disclosing to its
stockholders a position contemplated by Rule 14e-2(a) under the Exchange Act or
otherwise making disclosure to its stockholders, (iv) following receipt of a
bona fide Acquisition Proposal, failing to make or withdrawing or modifying its
recommendation referred to in Section 5.02 and/or (v) taking any
non-appealable, final action ordered to be taken by the Company by any court of
competent jurisdiction but in each case referred to in the foregoing clauses
(i) through (iv) only to the extent that the Board of Directors of the Company
shall have concluded in good faith on the basis of advice from outside counsel
that such action is required to prevent the Board of Directors of the Company
from breaching its fiduciary duties to the stockholders of the Company under
applicable law; provided, further, that (A) the Board of Directors of the
Company shall not take any of the foregoing actions referred to in clauses (i)
through (iv) until after giving reasonable notice to MergerSub with respect to
its intent to take such action and (B) if the Board of Directors of the Company
receives an Acquisition Proposal, to the extent it may do so without breaching
its fiduciary duties as advised by counsel and as determined in good faith and
without violating any of the conditions of such Acquisition Proposal, then the
Company shall promptly inform MergerSub of the terms and conditions of such
proposal and the identity of
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the person making it. The Company will immediately cease and cause its
advisors, agents and other intermediaries to cease any and all existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing. As used in this Agreement, the term
"THIRD PARTY" means any person, corporation, entity or "GROUP," as defined in
Section 13(d) of the Exchange Act, other than MergerSub or any of its
affiliates.
(b) If a Payment Event (as hereinafter defined) occurs, the Company
shall pay to MergerSub, within two business days following such Payment Event,
a fee of $16,732,853.
(c) "PAYMENT EVENT" means (w) the termination of this Agreement
pursuant to Section 9.01(e); (x) the termination of this Agreement pursuant to
Section 9.01(f) in contemplation of a merger agreement or a tender or exchange
offer or any transaction of the type listed in clause (z) below, on financial
terms more favorable to the Company's stockholders than the Merger; (y) the
termination of this Agreement by MergerSub pursuant to Section 9.01(c) but only
if the breach of covenant or warranty or misrepresentation in question arises
out of the bad faith or wilful misconduct of the Company; or (z) the occurrence
of any of the following events within 12 months of the termination of this
Agreement pursuant to Section 9.01(g) whereby stockholders of the Company
receive, pursuant to such event, cash, securities or other consideration having
an aggregate value, when taken together with the value of any securities of the
Company or its Subsidiaries otherwise held by the stockholders of the Company
after such event, in excess of $34.50 per Share: the Company is acquired by
merger or otherwise by a Third Party; a Third Party acquires more than 50% of
the total assets of the Company and its Subsidiaries, taken as a whole; a
Third Party acquires more than 50% of the outstanding Shares or the Company
adopts and implements a plan of liquidation, recapitalization or share
repurchase relating to more than 50% of the outstanding Shares or an
extraordinary dividend relating to more than 50% of the outstanding Shares or
50% of the assets of the Company and its Subsidiaries, taken as a whole.
(d) Upon the termination of this Agreement for any reason other than
(i) a termination by either the Company or MergerSub pursuant to Section
9.01(a), (ii) a termination by the Company pursuant to Section 9.01(c) or (iii)
a termination that follows a failure of the conditions set forth in Sections
8.01(b), 8.01(c), 8.01(d),8.02(b), 8.02(c),8.02(d), 8.02(e) or 8.03 to be
satisfied, the Company shall reimburse MergerSub and its affiliates not later
than two business days after submission of reasonable documentation thereof for
100% of their documented out-of-pocket fees and expenses (including, without
limitation, the
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reasonable fees and expenses of their counsel and investment banking fees),
actually incurred by any of them or on their behalf in connection with this
Agreement and the transactions contemplated hereby and the arrangement of,
obtaining the commitment to provide or obtaining the Financing for the
transactions contemplated by this Agreement (including fees payable to the
Financing Entities and their respective counsel) provided that the aggregate
amount payable pursuant to this Section 5.04(d) shall not exceed $7,000,000.
(e) The Company acknowledges that the agreements contained in this
Section 5.04 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, MergerSub would not enter into
this Agreement; accordingly, if the Company fails to promptly pay any amount
due pursuant to this Section 5.04, and, in order to obtain such payment, the
other party commences a suit which results in a judgment against the Company
for the fee or fees and expenses set forth in this Section 5.04, the Company
shall also pay to MergerSub its costs and expenses incurred in connection with
such litigation.
(f) This Section 5.04 shall survive any termination of this
Agreement, however caused.
SECTION 5.5. Notices of Certain Events. The Company shall promptly
notify MergerSub of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge threatened against, relating to or
involving or otherwise affecting the Company or any Subsidiary which, if
pending on the date of this Agreement, would have been required to have been
disclosed pursuant to Section 3.12 or which relate to the consummation of the
transactions contemplated by this Agreement.
SECTION 5.6. Resignation of Directors. Prior to the Effective Time,
the Company shall deliver to MergerSub evidence satisfactory to MergerSub of
the
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resignation of all directors of the Company (other than Randall E. Curran and
James H. Tate) effective at the Effective Time.
SECTION 5.7. Rights Agreement. The Company covenants and agrees that
it will not (i) redeem the Rights, (ii) amend the Rights Agreement or (iii)
take any action which would allow any Person (as defined in the Rights
Agreement) other than the MergerSub to acquire beneficial ownership of 10% or
more of the Common Shares without causing a Distribution Date (as such term is
defined in the Rights Agreement) to occur.
SECTION 5.8. Preferred Stock. Provided that MergerSub shall have
provided to Company reasonably in advance of the first mailing to stockholders
of the Company Proxy Statement the terms thereof, prior to the Effective Time,
the Board of Directors of the Company shall take all necessary action to
establish the terms of the Mirror Preferred Stock and file the Certificate of
Designation with respect thereto with the Delaware Secretary of State, all in
accordance with the applicable provisions of Delaware Law. The "MIRROR
PREFERRED STOCK" shall be Preferred Stock of the Company, the terms of and
certificate of designations of which shall be identical in all respects (except
the name of the Company) to the terms of the MergerSub Preferred Stock and the
certificate of designations therefor.
SECTION 5.9. Formation of Operating Co. Prior to the Effective Time,
the Company shall take all necessary action to incorporate Operating Co., a
direct, wholly-owned subsidiary of the Company, in accordance with the
applicable provisions of Delaware Law. Operating Co. shall be the holder,
directly or indirectly, of all the capital stock of each other Subsidiary.
SECTION 5.10. Outstanding Debt Securities. (a) Upon the occurrence
of the Effective Time, the Company shall call for redemption and redeem all of
its outstanding 10.25% Senior Notes due May 1, 2002 (the "OUTSTANDING SENIOR
NOTES") so that, as promptly as practicable after the Effective Time, all such
Outstanding Senior Notes shall be redeemed. (b) Prior to the Effective Time,
the Company shall make a tender offer and consent solicitation to all holders
of its outstanding 10.75% Senior Subordinated Notes due November 1, 2003 (the
"OUTSTANDING SUBORDINATED NOTES") for the purchase of all of the Outstanding
Subordinated Notes (and the amendment of the related indenture to eliminate
financial covenants therein), such that the scheduled closing date for such
tender offer shall be the Effective Time and the Company shall purchase all
Outstanding Subordinated Notes validly tendered thereunder.
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SECTION 5.11. Solvency Advice. The Company shall request an
independent advisor to deliver the advice contemplated by Section 8.03(b) as
promptly as practicable.
SECTION 5.12. Transfers by Affiliates. The Company shall use its
reasonable best efforts to obtain and provide to MergerSub prior to the Closing
undertakings in writing from each person, if any, who according to counsel for
the Company might reasonably be considered "affiliates" of the Company within
the meaning of Rule 145(c) of the SEC pursuant to the Securities Act (each, an
"AFFILIATE"), in each case in form and substance satisfactory to counsel for
MergerSub providing (i) such Affiliate will notify MergerSub in writing before
offering for sale or selling or otherwise disposing of any shares of Company
Stock owned by such Affiliate and (ii) no such sale or other disposition shall
be made unless and until the Affiliate has supplied to MergerSub an opinion of
counsel for the Affiliate (which opinion and counsel shall be reasonably
satisfactory to MergerSub) to the effect that such transfer is not in violation
of the Securities Act.
ARTICLE 6
COVENANTS OF MERGERSUB
MergerSub agrees that:
SECTION 6.1. SEC Filings. As soon as practicable after the date of
announcement of the execution of the Merger Agreement, MergerSub shall file
(separately, or as part of the Company Proxy Statement) with the SEC, if
required, a Rule 13E-3 Transaction Statement ("TRANSACTION STATEMENT") with
respect to the Merger (together with any supplements or amendments thereto,
collectively the "MERGERSUB DISCLOSURE DOCUMENTS"). MergerSub and the Company
each agrees to correct any information provided by it for use in the MergerSub
Disclosure Documents if and to the extent that it shall have become false or
misleading in any material respect. MergerSub agrees to take all steps
necessary to cause the MergerSub Disclosure Documents as so corrected to be
filed with the SEC and to be disseminated to holders of Shares, in each case as
and to the extent required by applicable federal securities laws. The Company
and its counsel shall be given an opportunity to review and comment on each
MergerSub Disclosure Document prior to its being filed with the SEC.
SECTION 6.2. Voting of Shares. MergerSub agrees to vote all Shares
beneficially owned by it in favor of adoption of this Agreement at the Company
Stockholder Meeting.
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SECTION 6.3. Director and Officer Liability. For a period of 6 years
after the Effective Time, MergerSub will cause the Surviving Corporation to
indemnify and hold harmless the present and former officers and directors of
the Company in respect of acts or omissions occurring prior to the Effective
Time to the extent provided under the Company's certificate of incorporation
and bylaws in effect on the date hereof; provided that such indemnification
shall be subject to any limitation imposed from time to time under applicable
law. For a period of 6 years after the Effective Time, MergerSub will cause
the Surviving Corporation to use its best efforts to provide officers' and
directors' liability insurance in respect of acts or omissions occurring prior
to the Effective Time covering each such Person currently covered by the
Company's officers' and directors' liability insurance policy on terms with
respect to coverage and amount no less favorable than those of such policy in
effect on the date hereof, provided that in satisfying its obligation under
this Section, MergerSub shall not be obligated to cause the Surviving
Corporation to pay premiums in excess of 125% of the amount per annum the
Company paid in its last full fiscal year, which amount has been disclosed to
MergerSub.
SECTION 6.4. Employee Plans and Benefit Arrangements. (a) From and
after the Effective Time, subject to applicable law, the Surviving Corporation
and its subsidiaries will honor obligations of the Company and its subsidiaries
incurred prior to the Effective Time under all existing Employee Plans and
Benefit Arrangements and International Plans (as defined in Section 3.14).
(b) MergerSub agrees that, for at least one year from the Effective
Time, subject to applicable law, the Surviving Corporation and its Subsidiaries
will provide benefits to their employees which will, in the aggregate, be
comparable to those currently provided by the Company and its subsidiaries to
their employees. Notwithstanding the foregoing, nothing herein shall obligate
or require the Surviving Corporation or any of its subsidiaries to provide its
employees with a plan or arrangement similar to the equity-based compensation
plans currently maintained by the Company and nothing herein shall limit the
Surviving Corporation's right to amend, modify or terminate any Employee Plan
or Benefit Arrangement, as defined in Section 3.14.
(c) It is MergerSub's current intention to maintain the Surviving
Corporation's headquarters at its present location or another location in the
greater St. Louis area.
SECTION 6.5. Financing. MergerSub shall use its reasonable best
efforts to obtain the Financing. In the event that any portion of such
Financing becomes
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unavailable, regardless of the reason therefor, MergerSub will use its
reasonable best efforts to obtain alternative financing on substantially
comparable or more favorable terms from other sources.
SECTION 6.6. NASDAQ Listing. MergerSub will not take any action, for
at least three years after the Effective Time of the Merger, to cause the
Company Stock to be de-listed from The NASDAQ National Market System
("NASDAQ"); provided, however, that the MergerSub may cause or permit the
Company Stock to be de-listed in connection with a transaction which results in
the termination of registration of such securities under Section 12 of the
Exchange Act, and provided, further, that nothing in this Section 6.06 shall
require the Company to take any affirmative action to prevent the Company Stock
from being de-listed by NASDAQ if the Company Stock ceases to meet the
applicable listing standards.
ARTICLE 7
COVENANTS OF MERGERSUB AND THE COMPANY
The parties hereto agree that:
SECTION 7.1. Best Efforts. Subject to the terms and conditions of
this Agreement, each party will use its reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement. Each party shall
also refrain from taking, directly or indirectly, any action contrary to or
inconsistent with the provisions of this Agreement, including action which
would impair such party's ability to consummate the Merger and the other
transactions contemplated hereby. Without limiting the foregoing, the Company
and its Board of Directors shall use their reasonable best efforts to (a) take
all action necessary so that no state takeover statute or similar statute or
regulation is or becomes applicable to the Merger or any of the other
transactions contemplated by this Agreement and (b) if any state takeover
statute or similar statute or regulation becomes applicable to any of the
foregoing, take all action necessary so that the Merger and the other
transactions contemplated by this Agreement may be consummated as promptly as
practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the Merger and the other
transactions contemplated by this Agreement.
SECTION 7.2. Certain Filings. (a) The Company and MergerSub shall
use their respective reasonable best efforts to take or cause to be taken, (i)
all
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actions necessary, proper or advisable by such party with respect to the prompt
preparation and filing with the SEC of a Form S-4 registration statement (the
"REGISTRATION STATEMENT"), the Company Disclosure Documents and the MergerSub
Disclosure Documents, (ii) such actions as may be required to have the
Registration Statement declared effective under the Securities Act and to have
the Company Proxy Statement cleared by the SEC, in each case as promptly as
practicable, and (iii) such actions as may be required to have to be taken
under state securities or applicable Blue Sky laws in connection with the
issuance of the securities contemplated hereby.
(b) The Company agrees to provide, and will cause its Subsidiaries and
its and their respective officers, employees and advisors to provide, (i) prior
to the Closing, all documents that MergerSub may reasonably request relating to
the existence of the Company and the Subsidiaries and the authority of the
Company for this Agreement, all in form and substance reasonably satisfactory
to MergerSub, and (ii) all necessary cooperation in connection with the
arrangement of any financing to be consummated contemporaneous with or at or
after the Closing in respect of the transactions contemplated by this
Agreement, including without limitation, (x) participation in meetings, due
diligence sessions and road shows, (y) the preparation of offering memoranda,
private placement memoranda, prospectuses and similar documents, and (z) the
execution and delivery of any commitment letters, underwriting or placement
agreements, pledge and security documents, other definitive financing
documents, or other requested certificates or documents, including a
certificate of the chief financial officer of the Company with respect to
solvency matters, comfort letters of accountants and legal opinions as may be
requested by MergerSub; provided that the form and substance of any of the
material documents referred to in clause (y) , and the terms and conditions of
any of the material agreements and other documents referred to in clause (z),
shall be substantially consistent with the terms and conditions of the
financing required to satisfy the condition precedent set forth in Section
8.02(c).
(c) The Company and MergerSub shall cooperate with one another (i) in
determining whether any action by or in respect of, or filing with, any
governmental body, agency or official, or authority is required, or any
actions, consents, approvals or waivers are required to be obtained from
parties to any material contracts, in connection with the consummation of the
transactions contemplated by this Agreement and (ii) in seeking any such
actions, consents, approvals or waivers or making any such filings, furnishing
information required in connection therewith or with the Company Disclosure
Documents and MergerSub Disclosure Documents and seeking timely to obtain any
such actions, consents, approvals or waivers.
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SECTION 7.3. Public Announcements. MergerSub and the Company will
consult with each other before issuing any press release or making any public
statement with respect to this Agreement and the transactions contemplated
hereby and, except for any press release or public statement as may be required
by applicable law or any listing agreement with any national securities
exchange or the Nasdaq Stock Market, will not issue any such press release or
make any such public statement prior to such consultation.
SECTION 7.4. Further Assurances. At and after the Effective Time,
the officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or MergerSub, any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of the Company or MergerSub, any other actions and things to
vest, perfect or confirm of record or otherwise in the Surviving Corporation
any and all right, title and interest in, to and under any of the rights,
properties or assets of the Company acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Merger.
ARTICLE 8
CONDITIONS TO THE MERGER
SECTION 8.1. Conditions to the Obligations of Each Party. The
obligations of the Company and MergerSub to consummate the Merger are subject
to the satisfaction of the following conditions:
(a) This Agreement shall have been adopted by the stockholders of
the Company in accordance with Delaware law;
(b) Any applicable waiting period under the HSR Act relating to the
Merger shall have expired or been terminated;
(c) No provision of any applicable law or regulation and no
judgment, order, decree or injunction shall prohibit or restrain the
consummation of the Merger; provided, however, that the Company and MergerSub
shall each use its reasonable best efforts to have any such judgment, order,
decree or injunction vacated;
(d) All consents, approvals and licenses of any governmental or
other regulatory body required in connection with the execution, delivery and
performance of this Agreement and for the Surviving Corporation to conduct the
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business of the Company in substantially the manner now conducted, shall have
been obtained, unless the failure to obtain such consents, authorizations,
orders or approvals would not have a Material Adverse Effect after giving
effect to the transactions contemplated by this Agreement (including the
Financing); and
(e) The Registration Statement shall have been declared effective
and no stop order suspending the effectiveness of the Registration Statement
shall be in effect and no proceedings for such purpose shall be pending before
or threatened by the SEC.
SECTION 8.2. Conditions to the Obligations of MergerSub. The
obligations of MergerSub to consummate the Merger are subject to the
satisfaction of the following further conditions:
(a) The Company shall have performed in all material respects all of
its obligations hereunder required to be performed by it at or prior to the
Effective Time, the representations and warranties of the Company contained in
this Agreement and in any certificate or other writing delivered by the Company
pursuant hereto shall be true in all material respects at and as of the
Effective Time (provided that representations made as of a specific date shall
be required to be true as of such date only) as if made at and as of such time
and MergerSub shall have received a certificate signed by the Chief Executive
Officer of the Company to the foregoing effect;
(b) There shall not be instituted or pending (x) any action or
proceeding by any government or governmental authority or agency or (y) any
action or proceeding by any other person, in any case referred to in clauses
(x) and (y), before any court or governmental authority or agency that has
reasonable likelihood of success (i) challenging or seeking to make illegal, to
delay materially or otherwise directly or indirectly to restrain or prohibit
the consummation of the Merger or seeking to obtain material damages or
otherwise directly or indirectly relating to the transactions contemplated by
this Agreement, (ii) seeking to restrain or prohibit MergerSub's (including its
Subsidiaries and affiliates) ownership or operation of all or any material
portion of the business or assets of the Company and its Subsidiaries, taken as
a whole, or to compel MergerSub or any of its Subsidiaries or affiliates to
dispose of or hold separate all or any material portion of the business or
assets of the Company and its Subsidiaries, taken as a whole, (iii) seeking to
impose or confirm material limitations on the ability of MergerSub or any of
its Subsidiaries or affiliates to effectively control the business or
operations of the Company and its Subsidiaries, taken as a whole, or
effectively to exercise full rights of ownership of the Shares
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or Company Stock, including, without limitation, the right to vote any Shares
or Company Stock acquired or owned by MergerSub or any of its Subsidiaries or
affiliates on all matters properly presented to the Company's stockholders, or
(iv) seeking to require divestiture by MergerSub or any of its Subsidiaries or
affiliates of any Shares or Company Stock, and no court, arbitrator or
governmental body, agency or official shall have issued any judgment, order,
decree or injunction, and there shall not be any statute, rule or regulation,
that, in the sole judgment of MergerSub is likely, directly or indirectly, to
result in any of the consequences referred to in the preceding clauses (i)
through (iv);
(c) The funds in an amount at least equal to the Required Amounts
shall have been made available to MergerSub and/or Operating Co. as
contemplated in Section 4.07;
(d) The holders of not more than 6% of the outstanding Shares shall
have demanded appraisal of their Shares in accordance with Delaware Law;
(e) No change in accounting practice or policies after the date
hereof shall cause MergerSub reasonably to conclude that the Merger will not be
recorded as a "recapitalization" for financial reporting purposes;
(f) The certificate of designation for the Mirror Preferred Stock
shall have been accepted for filing by the Delaware Secretary of State; and
(g) Total indebtedness (long and short term) of the Company and its
Subsidiaries as of the Effective Time shall not exceed $410,000,000, excluding
for purposes hereof any indebtedness incurred in connection with the proposed
acquisitions set forth in Schedule 5.01(b) hereof, but including the aggregate
amount of participation interests outstanding under the Company's trade
accounts receivable securitization agreement.
SECTION 8.3. Conditions to the Obligation of the Company. The
obligation of the Company to consummate the Merger is subject to the
satisfaction of the following further condition:
(a) MergerSub shall have performed in all material respects all of
its obligations hereunder required to be performed by it at or prior to the
Effective Time, the representations and warranties of MergerSub contained in
this Agreement and in any certificate or other writing delivered by either of
them pursuant hereto shall be true in all material respects at and as of the
Effective Time (provided that representations made as of a specific date shall
be required to
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be true as of such date only) as if made at and as of such time and the Company
shall have received a certificate signed by the President or any Vice President
of MergerSub to the foregoing effect.
(b) The Board of Directors of the Company shall have received
advice, reasonably satisfactory to the Board, from an independent advisor
confirming the belief of MergerSub set forth in the second to last sentence of
Section 4.07.
ARTICLE 9
TERMINATION
SECTION 9.1. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of this Agreement by the stockholders of the
Company):
(a) by mutual written consent of the Company on the one hand and
MergerSub on the other hand;
(b) by either the Company or MergerSub, if the Merger has not been
consummated by June 30, 1998, provided that the party seeking to exercise such
right is not then in breach in any material respect of any of its obligations
under this Agreement;
(c) by either the Company or MergerSub, if MergerSub (in the case of
termination by the Company), or the Company (in the case of termination by
MergerSub) shall have breached in any material respect any of its obligations
under this Agreement or any representation and warranty of MergerSub (in the
case of termination by the Company) or the Company (in the case of termination
by MergerSub) shall have been incorrect in any material respect when made or at
any time prior to the Closing;
(d) by either the Company or MergerSub, if there shall be any law or
regulation that makes consummation of the Merger illegal or otherwise
prohibited or if any judgment, injunction, order or decree enjoining MergerSub
or the Company from consummating the Merger is entered and such judgment,
injunction, order or decree shall become final and nonappealable;
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(e) by MergerSub if the Board of Directors of the Company shall have
withdrawn or modified or amended, in a manner adverse to MergerSub, its
approval or recommendation of this Agreement and the Merger or its
recommendation that stockholders of the Company adopt and approve this
Agreement and the Merger, or approved, recommended or endorsed any proposal for
a transaction other than the Merger (including a tender or exchange offer for
Shares) or if the Company has failed to call the Company Stockholders Meeting
or failed as promptly as practicable after the Registration Statement is
declared effective to mail the Company Proxy Statement to its stockholders or
failed to include in such statement the recommendation referred to above;
(f) by the Company if prior to the Effective Time the Board of
Directors of the Company shall have withdrawn or modified or amended, in a
manner adverse to MergerSub, its approval or recommendation of this Agreement
and the Merger or its recommendation that stockholders of the Company adopt and
approve this Agreement and the Merger in order to permit the Company to execute
a definitive agreement providing for the acquisition of the Company or in order
to approve a tender or exchange offer for any or all of the Shares, in either
case, that is determined by the Board of Directors of the Company to be on
financial terms more favorable to the Company's stockholders than the Merger,
provided that the Company shall be in compliance with Section 5.04;
(g) by either the Company or MergerSub if, at a duly held
stockholders meeting of the Company or any adjournment thereof at which this
Agreement and the Merger is voted upon, the requisite stockholder adoption and
approval shall not have been obtained.
The party desiring to terminate this Agreement pursuant to Sections
9.01(b)-(g) shall give written notice of such termination to the other party in
accordance with Section 10.01.
SECTION 9.2. Effect of Termination. If this Agreement is terminated
pursuant to Section 9.01, this Agreement shall become void and of no effect
with no liability on the part of any party hereto, except that the agreements
contained in Sections 5.04 and 10.04 shall survive the termination hereof.
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ARTICLE 10
MISCELLANEOUS
SECTION 10.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including telecopy
or similar writing) and shall be given,
if to MergerSub, to:
Peter T. Grauer
c/o DLJ Merchant Banking II, Inc.
277 Park Avenue
New York, New York 10172
Telecopy: 212-892-7552
with a copy to:
George R. Bason, Jr.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopy: (212) 450-4800
if to the Company, to:
James H. Tate
Stephanie N. Josephson
101 S. Hanley Rd., Ste. 300
St. Louis, MO 63105
Telecopy: (314) 746-2374
with a copy to:
R. Scott Cohen
Weil Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201
Telecopy: (314) 746-7777
or such other address or telecopy number as such party may hereafter specify
for the purpose by notice to the other parties hereto. Each such notice,
request or other communication shall be effective (a) if given by telecopy,
when such telecopy is transmitted to the telecopy number specified in this
Section and the
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appropriate telecopy confirmation is received or (b) if given by any other
means, when delivered at the address specified in this Section.
SECTION 10.2. Survival of Representations and Warranties. The
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Effective Time or the termination of this Agreement except for the agreements
set forth in Sections 6.03, 6.04 and 6.06 which will survive the Effective
Time and Sections 5.04 and 10.04 which will survive any termination hereof.
SECTION 10.3. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived prior to the Effective Time if, and only if,
such amendment or waiver is in writing and signed, in the case of an amendment,
by the Company and MergerSub or in the case of a waiver, by the party against
whom the waiver is to be effective; provided that after the adoption of this
Agreement by the stockholders of the Company, no such amendment or waiver
shall, without the further approval of such stockholders, alter or change (i)
the amount or kind of consideration to be received in exchange for any shares
of capital stock of the Company, (ii) any term of the certificate of
incorporation of the Surviving Corporation or (iii) any of the terms or
conditions of this Agreement if such alteration or change would adversely
affect the holders of any shares of capital stock of the Company.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 10.4. Expenses. Except as provided in Section 5.04, all
costs and expenses incurred in connection with this Agreement shall be paid by
the party incurring such cost or expense.
SECTION 10.5. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other parties hereto.
SECTION 10.6. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of Delaware.
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SECTION 10.7. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
THERMADYNE HOLDINGS CORPORATION
By: /s/ RANDALL E. CURRAN
------------------------------
Name:
Title:
MERCURY ACQUISITION CORPORATION
By: /s/ PETER T. GRAUER
------------------------------
Name:
Title:
