<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _____)*
Standard Brands Paint Company
(Name of Issuer)
Common Stock, par value $0.01
(Title of Class of Securities)
85 3156107
(CUSIP Number)
Jose Gregorio Garcia
Corimon, S.A.C.A., Calle Hans Neumann
Edificio Corimon, Los Cortijos de Lourdes
Caracas, Venezuela 0171 011 (582) 203-5560
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
February 15, 1995
(Date of Event which Requires Filing of this Statement)
If a filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this schedule because of
Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this
statement [X]. (A fee is not required only if the reporting
person: (1) has a previous statement on file reporting
beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five
percent or less of such class.) (See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent
amendment containing information which would alter disclosures
provided in a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of
Section 18 of the Securities Exchange Act of 1934 ("Act") or
otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act
(however, see the Notes).
<PAGE>
<PAGE> 2
- --------------------
CUSIP NO. 85 3156107
- --------------------
- ------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Corimon, S.A.C.A.
- ------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
- ------------------------------------------------------------
3. SEC USE ONLY
- ------------------------------------------------------------
4. SOURCE OF FUNDS
00
- ------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
[ ]
- ------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Venezuela
- ------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 12,509,360 shares (indirect)
SHARES ----------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY -0-
EACH ----------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON -0-
WITH ----------------------------------------
10. SHARED DISPOSITIVE POWER
-0-
- ------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
12,509,360 shares (possible indirect beneficial
ownership)
- ------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
- ------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
55.8% (possible indirect beneficial ownership)
- ------------------------------------------------------------
14. TYPE OF REPORTING PERSON
HC, CO
____________________________________________________________
<PAGE>
<PAGE> 3
- --------------------
CUSIP NO. 85 3156107
- --------------------
- ------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Corimon International Holdings Limited
- ------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
- ------------------------------------------------------------
3. SEC USE ONLY
- ------------------------------------------------------------
4. SOURCE OF FUNDS
00
- ------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
[ ]
- ------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
- ------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 12,509,360 shares (indirect)
SHARES ----------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY -0-
EACH ----------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON -0-
WITH ----------------------------------------
10. SHARED DISPOSITIVE POWER
-0-
- ------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
12,509,360 shares (possible indirect beneficial
ownership)
- ------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
- ------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
55.8% (possible indirect beneficial ownership)
- ------------------------------------------------------------
14. TYPE OF REPORTING PERSON
HC, CO
____________________________________________________________
<PAGE>
<PAGE> 4
- --------------------
CUSIP NO. 85 3156107
- --------------------
- ------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Corimon Corporation
- ------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
- ------------------------------------------------------------
3. SEC USE ONLY
- ------------------------------------------------------------
4. SOURCE OF FUNDS
00
- ------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
[ ]
- ------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 12,509,360 shares
SHARES ----------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY -0-
EACH ----------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON -0-
WITH ----------------------------------------
10. SHARED DISPOSITIVE POWER
-0-
- ------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
12,509,360 shares
- ------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
- ------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
55.8%
- ------------------------------------------------------------
14. TYPE OF REPORTING PERSON
CO
____________________________________________________________
<PAGE>
<PAGE> 5
ITEM 1. SECURITY AND ISSUER.
This statement relates to shares of the Common
Stock, $0.01 par value ("Common Stock"), and the 8% cumulative
convertible redeemable preferred stock, $0.01 par value
("Preferred Stock"), of Standard Brands Paint Company, a
Delaware corporation (the "Company"). The principal executive
offices of the Company are located at 4300 West 190th Street,
Torrance, CA 90509.
ITEM 2. IDENTITY AND BACKGROUND.
(a), (b), (c) and (f) This statement is filed on
behalf of Corimon Corporation, a Delaware corporation
("Corimon Corporation"), which is a wholly-owned subsidiary of
Corimon International Holdings Limited, a Cayman Islands
corporation ("Corimon International"), which is a wholly-owned
subsidiary of Corimon, S.A.C.A., a Venezuelan corporation
("CRM"). The principal executive offices of Corimon
Corporation, Corimon International and CRM are located at
Edificio Corimon, Calle Hans Neumann, Los Cortijos de Lourdes,
Caracas, Venezuela. Corimon Corporation, Corimon
International and CRM are herein referred to collectively as
the "Reporting Persons."
CRM is a Venezuelan holding company with
multinational operations principally in the paint, coatings
and related products industries, and regional operations
principally in the food and packaging industries.
Corimon International is a holding company whose
principal activity is holding stock in various subsidiaries of
CRM, its parent.
Corimon Corporation is a holding company whose
principal activity is holding stock in various subsidiaries of
CRM, its parent, which in the future will include shares of
Common Stock.
The names, business addresses, principal occupations
or employment (and the names, principal businesses and
addresses of any corporation or other organization in which
such occupations or employment are conducted) and citizenship
of the directors and executive officers of Corimon
Corporation, Corimon International and CRM are set forth in
Schedules A, B and C, respectively, attached hereto and are
incorporated herein by reference.
(d) None of the Reporting Persons nor any other
person controlling the Reporting Persons, nor to the best
knowledge of the Reporting Persons, any of the persons named
in Schedules A, B and C attached hereto has, during the last
five years, been convicted in any criminal proceeding
(excluding traffic violations or similar misdemeanors).
<PAGE>
<PAGE> 6
(e) None of the Reporting Persons nor any other
person controlling the Reporting Persons, nor to the best
knowledge of the Reporting Persons, any of the persons named
in Schedules A, B and C attached hereto was, during the last
five years, a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The interim loan and subsequent equity investment
were funded from the proceeds of the sale to Fidelity Capital
& Income Fund ("FCI") of 516,129 shares of Corimon
Corporation's Series A Preferred Stock at $15.50 per share and
$9,939,175 aggregate principal amount of Put Notes of Corimon
Corporation, at a purchase price of 100% of the principal
amount thereof, pursuant to the Stock and Note Purchase
Agreement, dated as of February 14, 1995, attached as Exhibit
1 hereto and incorporated herein by reference.
ITEM 4. PURPOSE OF TRANSACTION.
Presently Corimon Corporation has the sole power to
vote 12,509,360 shares of the Company's Common Stock, as more
fully described in Item 5 below, by virtue of the proxies
granted to it as contemplated by Section 2.3 of the Investment
Agreement described below. Corimon Corporation considers that
it has no pecuniary interest in such shares.
Corimon Corporation is purchasing a controlling
interest in the Company as part of the Company's restructuring
of its debt and equity capital (the "Restructuring") pursuant
to an Investment Agreement, dated as of February 15, 1995,
attached as Exhibit 2 hereto and incorporated herein by
reference. The principal elements of the Restructuring are:
A. Amendment to the Company's Restated Certificate
of Incorporation to increase the amount of authorized capital
stock of the Company, and to effect a 1-for-10 reverse stock
split ("Reverse Stock Split") pursuant to which each
stockholder will hold one share of the Company's post-split
shares for every ten shares presently held;
B. Sale to Corimon Corporation of 15,700,496 newly
issued shares of the Company's Common Stock, which will
constitute approximately 76.1% of the Company's outstanding
common stock, for $14 million (such issuance is
<PAGE>
<PAGE> 7
priced at $0.89 per share post-Reverse Stock Split or $0.089
per share pre-Reverse Stock Split, and the $14 million to be
paid by Corimon Corporation was previously advanced in the
form of an interim loan);
C. Exchange of $16 million of the Company's
outstanding debt (including approximately $2 million of debt
held by Corimon Corporation) into 2,242,928 newly issued
shares of Common Stock (at the same price per share as the CRM
shares under B above) and 1,570,049 newly issued shares of
Preferred Stock (priced at $8.92 per share of the Preferred
Stock and including a conversion price for the Common Stock of
$1.11 per share);
D. Transfer of 15 of the Company's real estate
properties to the real estate liquidating trust established on
July 12, 1994 ("Liquidating Property Trust"), in which the
Company currently has a residual interest; release of related
long-term debt; and sale of the Company's residual interest in
the Liquidating Property Trust to Corimon Corporation and to
FCI, Kodak Retirement Income Plan Trust Fund ("KRI"),
Transamerica Life Insurance and Annuity Co. ("TLIAC"),
Transamerica Occidental Life Insurance Co. ("TOLIC"), Sun Life
Insurance Company of America ("SAFI") and Anchor National Life
Insurance Company ("ANLIC"), for an additional $2 million
payable in cash by Corimon Corporation and in consideration of
their participation in the Restructuring; in the aggregate as
a result of the Restructuring, properties or property
interests having a book value as of October 31, 1994 of
approximately $95 million will be disposed of and consolidated
long term debt of approximately $77 million will be released.
Pursuant to the Stockholders Agreement described
below, three directors appointed by CRM were elected to the
Board of Directors of the Company (to be increased to five
directors at the Effective Date) and CRM has the right to
appoint seven of the Company's ten directors after the
Effective Date. After the Effective Date, Corimon
Corporation, through such directors, intends to participate
actively in the management of the Company.
The consummation of the Restructuring is subject to
a number of conditions, including approval by the stockholders
of the Company. The date of the closing under the Investment
Agreement, which is currently contemplated to occur in April
1995, is referred to herein as the "Effective Date".
ITEM 5. INTEREST IN SECURITIES OF THE COMPANY.
(a) and (b) Pursuant to the Investment Agreement,
FCI, KRI, TLIAC, TOLIC, SAFI and ANLIC have agreed with
Corimon Corporation, and have granted irrevocable proxies to
<PAGE>
<PAGE> 8
Corimon Corporation, to vote their shares, representing
12,509,360 shares or 55.8% of the voting capital of the
Company in the aggregate, (i) in favor of the Restructuring,
(ii) against any action or agreement that would compete with,
impede or interfere with or attempt to discourage or inhibit
the timely consummation of the Restructuring, (iii) except for
the Restructuring, against any merger, consolidation, business
combination, reorganization, recapitalization, liquidation or
sale or transfer of any material assets or securities of the
Company or its subsidiaries that would be inconsistent with
the Transactions and (iv) as to any matter related to the
election or removal of directors, as directed by Corimon
Corporation.
Pursuant to the Investment Agreement, such parties
have agreed not to transfer, sell, offer, exchange, pledge or
otherwise dispose of or encumber any of such party's shares of
Common Stock without the prior written consent of the Company
and Corimon Corporation and prior notice to the other parties,
except under limited circumstances. The Company and Corimon
Corporation will not unreasonably withhold such consent to
limited transfers (for example up to 5% of each party's
holdings on a pro rata basis) so long as their material
interests are not adversely affected thereby.
Pursuant to the Investment Agreement, each of the
parties agrees that such party will not purchase or otherwise
acquire beneficial ownership of any shares of Common Stock,
nor will any party acquire the right to vote or share in the
voting of any shares of Common Stock, unless such party agrees
to deliver to Corimon Corporation immediately after such
purchase or acquisition an irrevocable proxy substantially
similar to the proxies already delivered to Corimon
Corporation with respect to such new shares.
The foregoing number of shares and percentage are
calculated based on the 7,630,307, 1,433,413, 0, 2,139,940,
1,305,700 and 0 shares, respectively, of Common Stock that
FCI, KRI, TLIAC, TOLIC, SAFI and ANLIC have represented to CRM
and Corimon Corporation in the Investment Agreement that they
own as of February 15, 1995 and the 22,429,275 shares of
Common Stock that the Company has represented to CRM and
Corimon Corporation in the Investment Agreement as being
issued and outstanding as of February 15, 1995. Except as set
forth herein, none of the Reporting Persons has any sole or
shared power to vote or direct the vote of any Common Stock
nor sole or shared power to dispose of or direct the
disposition of any Common Stock.
By virtue of the relationships reported in Item 4
above and this Item 5, each of CRM, Corimon International and
Corimon Corporation may be deemed to be the indirect
<PAGE>
<PAGE> 9
beneficial owner of such shares and/or to be a members of a
"group" with the above-named persons who are parties to the
Investment Agreement. The filing of this statement on
Schedule 13D shall not be construed as an admission by CRM,
Corimon International or Corimon Corporation that it is the
direct or beneficial owner of such shares or a member of any
such group.
(c) Except as set forth herein, no transactions in
the Common Stock have been effected during the past 60 days by
the Reporting Persons nor any other person controlling the
Reporting Persons nor, to the best of their knowledge, any of
the persons named in Schedules A, B and C hereto.
(d) Upon the Effective Date, Corimon Corporation
will have the right to receive, and power to direct the
receipt of, dividends from, and proceeds from the sale of, the
15,972,332 shares of Common Stock and 190,288 shares of
Preferred Stock to be acquired by it. Except as set forth
herein, no other person is known to have the right to receive
or the power to direct the receipt of dividends from, or the
proceeds from the sale of, such shares of Common Stock or
Preferred Stock.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE
COMPANY.
As described herein, the Reporting Persons have
entered into the following contracts, arrangements,
understandings and relationships with respect to securities of
the Company:
The Investment Agreement provides for the
Restructuring, as described in Item 4 above, and the voting
provisions, as described in Item 5 above. Pursuant to the
Investment Agreement, Corimon Corporation will acquire (i)
15,972,332 newly issued shares of Common Stock of the Company,
representing approximately 77.4% of the outstanding shares of
Common Stock after the Restructuring and (ii) 190,288 newly
issued shares of Preferred Stock of the Company, representing
approximately 12.1% of the outstanding shares of Preferred
Stock after the Restructuring. The filing of this statement
on Schedule 13D shall not be construed as an admission by CRM,
Corimon International or Corimon Corporation that it is the
direct or beneficial owner of such shares. Except as set
forth herein, neither the Reporting Persons not, to the best
of their knowledge, any of the persons named in Schedules A, B
and C hereto beneficially owns any shares of Common Stock.
<PAGE>
<PAGE> 10
Pursuant to the Interim Loan Agreement, dated as of
February 15, 1995, attached hereto as Exhibit 3 and
incorporated herein by reference, Corimon Corporation provided
interim financing to the Company in contemplation of the
Restructuring. Pursuant to the Interim Loan Agreement,
Corimon Corporation purchased $14 million of notes from the
Company on substantially the same terms as the $10 million of
the Company's outstanding debt that will be exchanged as part
of the Restructuring. Such notes will be exchanged for Common
Stock of the Company at the Effective Date. Pursuant to an
intercreditor agreement, such loan shares pro rata in the
collateral securing other obligations of the Company, and the
Company has granted fourth mortgages to Corimon Corporation on
its real properties to secure the indebtedness.
Pursuant to the Note Purchase Agreement, dated as of
February 15, 1995, attached hereto as Exhibit 4 and
incorporated herein by reference, Corimon Corporation
purchased from Standard Brands Paint Collateral Trust
approximately $2 million of the Company's outstanding debt.
Such debt will be exchanged for Common Stock and Preferred
Stock of the Company at the Effective Date.
The Stockholders Agreement, dated as of February 15,
1995, attached hereto as Exhibit 5 and incorporated herein by
reference, provides (i) that the By-Laws of the Company were
amended, (ii) that three directors appointed by Corimon
Corporation were elected to the Board of Directors of the
Company (to be increased to five directors at the Effective
Date), (iii) that Corimon Corporation has the right to appoint
seven of the Company's ten directors after the Effective Date
and (iv) that TOLIC, TLIAC, SAFI and ANLIC have the right to
appoint one director of the Company.
The Registration Rights Agreement, dated as of
February 15, 1995, attached hereto as Exhibit 6 and
incorporated herein by reference, provides that the holders
(including Corimon Corporation) of the shares of Preferred
Stock and Common Stock acquired pursuant to the Restructuring
will have the right to have their shares registered under the
Securities Act of 1933, as amended, by the Company, and (ii)
"piggyback" registration rights, subject to standard
underwriters' cutback provisions. The holders of the shares
of Preferred Stock and Common Stock shall be entitled to
liquidated damages from the Company in the event that the
Company fails to timely file the registration statement or
fails to receive an effective order from the Securities and
Exchange Commission within a certain period of time after
filing. The Company will bear the registration expenses
(exclusive of underwriting discounts and commissions) of all
registrations.
The Put Agreement, dated as of February 15, 1995,
attached hereto as Exhibit 7 and incorporated herein by
<PAGE>
<PAGE> 11
reference, provides that the parties named therein have the
right to put (i) the shares of Common Stock that they acquired
pursuant to the Restructuring to CRM at a price of $0.89 per
share if such shares are not registered under the Securities
Act of 1933 in accordance with the Registration Rights
Agreement and (ii) the shares of Preferred Stock that they
acquired pursuant to the Restructuring to CRM at a price of
$4.46 per share if dividends have not been paid on such shares
for a period of six quarters.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 Stock and Note Purchase Agreement among
Corimon, S.A.C.A., Corimon Corporation
and Fidelity Capital & Income Fund,
dated as of February 14, 1995.
Exhibit 2 Investment Agreement among Corimon,
S.A.C.A., Corimon Corporation, Fidelity
Capital & Income Fund, Kodak Retirement
Income Plan Trust Fund, Transamerica
Life Insurance and Annuity Co.,
Transamerica Occidental Life Insurance
Co., Transamerica Life Insurance
Company, Sun Life Insurance Company of
America, Anchor National Life Insurance
Company and Standard Brands Paint
Collateral Trust and the Company, dated
as of February 15, 1995.
Exhibit 3 Interim Loan Agreement among Corimon
Corporation, the Company, Standard
Brands Paint Co. and Standard Brands
Realty Co., Inc., dated as of February
15, 1995
Exhibit 4 Note Purchase Agreement between Corimon
Corporation and Standard Brands Paint
Collateral Trust, dated as of February
15, 1995.
Exhibit 5 Stockholders Agreement between Corimon
Corporation and Standard Brands Paint
Company, dated as of February 15, 1995.
Exhibit 6 Registration Rights Agreement among
Corimon Corporation, Fidelity Capital &
Income Fund, Kodak Retirement Income
Plan Trust Fund, Transamerica Life
Insurance and Annuity Co., Transamerica
Occidental Life Insurance
<PAGE>
<PAGE> 12
Co., Transamerica Life Insurance
Company, Sun Life Insurance Company of
America, Anchor National Life Insurance
Company, Libra Investments, Inc. and the
Company, dated as of February 15, 1994.
Exhibit 7 Put Agreement among Corimon, S.A.C.A.
and Fidelity Capital & Income Fund,
Kodak Retirement Income Plan Trust Fund,
Transamerica Life Insurance and Annuity
Co., Transamerica Occidental Life
Insurance Co., Transamerica Life
Insurance Company, Sun Life Insurance
Company of America, Anchor National Life
Insurance Company and Libra Investments,
Inc., dated as of February 15, 1994.
<PAGE>
<PAGE> 13
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth
in this statement is true, complete and correct.
CORIMON CORPORATION
By: /s/ Arthur W. Broslat
Name: Arthur W. Broslat
Title: Director
Date: February 23, 1995
<PAGE>
<PAGE> 14
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth
in this statement is true, complete and correct.
CORIMON INTERNATIONAL HOLDINGS LIMITED
By: /s/ Arthur W. Broslat
Name: Arthur W. Broslat
Title: President
Date: February 23, 1995
<PAGE>
<PAGE> 15
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth
in this statement is true, complete and correct.
CORIMON, S.A.C.A.
By: /s/ Arthur W. Broslat
Name: Arthur W. Broslat
Title: Executive Vice President
By: /s/ Charles D. Codrea
Name: Charles D. Codrea
Title: Vice President and Chief
Financial Officer
Date: February 23, 1995
<PAGE>
<PAGE> 1
SCHEDULE A TO SCHEDULE 13D
CORIMON CORPORATION
DIRECTORS AND EXECUTIVE OFFICERS
The names, business addresses, principal occupations
or employment (and the names, principal businesses and
addresses of any corporation or other organization in which
such occupations or employment are conducted) of the directors
and executive officers of Corimon Corporation are set forth
below. The business address of each person whose principal
occupation or employment is with Corimon Corporation or
Corimon, S.A.C.A. is Edificio Corimon, Calle Hans Neumann, Los
Cortijos de Lourdes, Caracas, Venezuela. Each person against
whose name an asterisk appears is a director of Corimon
Corporation. Each person named below is a citizen of
Venezuela except Arthur W. Broslat, who is a citizen of the
United States of America.
Principal Occupation/Employment
Name and Business Address
Arthur W. Broslat* President and Director
Corimon Corporation
AND
Executive Vice President
Corimon, S.A.C.A.
Gustavo Mata-Borjas* Director
Corimon Corporation
AND
Vice President and General
Counsel
Corimon, S.A.C.A.
Bertha S. de Almeyda* Director
Corimon Corporation
AND
General Manager
Corimon, S.A.C.A.
Marta B. de Hernandez* Director
Corimon Corporation
AND
General Manager
Corimon, S.A.C.A.
<PAGE>
<PAGE> 1
SCHEDULE B TO SCHEDULE 13D
CORIMON INTERNATIONAL HOLDINGS LIMITED
DIRECTORS AND EXECUTIVE OFFICERS
The names, business addresses, principal occupations
or employment (and the names, principal businesses and
addresses of any corporation or other organization in which
such occupations or employment are conducted) of the directors
and executive officers of Corimon International Holdings
Limited are set forth below. The business address of each
person whose principal occupation or employment is with
Corimon International Holdings Limited or Corimon, S.A.C.A. is
Edificio Corimon, Calle Hans Neumann, Los Cortijos de Lourdes,
Caracas, Venezuela. Each person against whose name an
asterisk appears is a director of Corimon International
Holdings Limited. Arthur W. Broslat is a citizen of the
United States of America. Gustavo Mata-Borjas, Marta B. de
Hernandez and Jose Gregorio Garcia are citizens of Venezuela.
ATC Trustees (Cayman) Ltd. is a corporation organized under
the laws of the Cayman Islands whose principal business
activity consists of acting as a director for various
corporations, including Corimon International Holdings
Limited. The business address of ATC Trustees (Cayman) Ltd.
is set forth below.
Principal Occupation/Employment
Name and Business Address
Arthur W. Broslat* President and Principal Director
Corimon International Holdings
Limited
AND
Executive Vice President
Corimon, S.A.C.A.
Marta B. de Hernandez* Principal Director
Corimon International Holdings
Limited
AND
General Manager
Corimon, S.A.C.A.
<PAGE>
<PAGE> 2
Principal Occupation/Employment
Name and Business Address
Jose Gregorio Garcia* Principal Director
Corimon International Holdings
Limited
AND
Treasurer
Corimon, S.A.C.A.
Gustavo Mata-Borjas* Principal Director
Corimon International Holdings
Limited
AND
Vice President and General
Counsel
Corimon, S.A.C.A.
ATC Trustees S.M.B. Picadilly Center, 2nd
(Cayman) Ltd. floor
P.O. Box 30592, George Town
Grand Cayman, Cayman Islands
British West Indies
With respect to ATC Trustees (Cayman) Ltd., the
names, business addresses, principal occupations or employment
(and the names, principal businesses and addresses of any
corporation in which such occupations or employment are
conducted) of persons authorized as signatories for this
corporation are set forth below. Hans Sluyser, Michael Jones
and Robert Govaerts are directors of ATC Trustees (Cayman)
Ltd. Richard Gorther is a citizen of Australia, Hans Sluyser
is a citizen of The Netherlands, Michael Jones is a citizen of
Jamaica and Robert Govaerts is a citizen of Canada.
Principal Occupation/Employment
Name and Business Address
Hans Sluyser President
ATC Trustees (Curacao) N.V.
Chuchubiweg 117
Curacao, Netherlands Antilles
Michael Jones Senior Vice President
ATC Trustees (Curacao) N.V.
Chuchubiweg 117
Curacao, Netherlands Antilles
<PAGE>
<PAGE> 3
Principal Occupation/Employment
Name and Business Address
Robert Govaerts Managing Director
ATC Trustees (Cayman) Ltd.
S.M.B. Picadilly Center, 2nd Floor
P.O. Box 30592, George Town
Grand Cayman, Cayman Islands
British West Indies
<PAGE>
<PAGE> 4
SCHEDULE C TO SCHEDULE 13D
CORIMON, S.A.C.A.
DIRECTORS AND EXECUTIVE OFFICERS
The names, business addresses, principal occupations
or employment (and the names, principal businesses and
addresses of any corporation or other organization in which
such occupations or employment are conducted) of the directors
and executive officers of Corimon, S.A.C.A. are set forth
below. The business address of each person whose principal
occupation or employment is with Corimon, S.A.C.A. is Edificio
Corimon, Calle Hans Neumann, Los Cortijos de Lourdes, Caracas,
Venezuela. Each person against whose name an asterisk appears
is a director of Corimon, S.A.C.A. Each person named below is
a citizen of Venezuela, except Arthur W. Broslat who is a
citizen of the United States of America.
Principal Occupation/Employment
Name and Business Address
Philippe Erard* Chairman of the Board, President
and Chief Executive Officer
Corimon, S.A.C.A.
Jose Luis Gomez Gomez* Executive Vice President
Corimon, S.A.C.A.
Arthur W. Broslat* Executive Vice President
Corimon, S.A.C.A.
Gustavo Mata-Borjas* Vice President and General Counsel
Corimon, S.A.C.A.
Eduardo J. Borberg* Attorney
Member of D'Empaire, Reyna y
Bermudez
Edificio Polar
Plaza Venezuela
Caracas, Venezuela
Ramon Illaramendi Director
Ochoteco* Corimon, S.A.C.A.
Ramon Pinango* Academic Director
I.E.S.A.
Calle IESA
San Bernardino
Caracas, Venezuela
<PAGE>
<PAGE> 2
Principal Occupation/Employment
Name and Business Address
Henrique Machado President
Zuloaga* Sivensa S.A.I.C.A. S.A.C.A.
Torre America
Avenue Venezuela - Bello Monte
Caracas, Venezuela
Francisco G. President
Aguerrevere* Electricidad de Caracas, C.A.
Edificio La Electricidad
Avenue Vollmer
San Bernardino
Caracas, Venezuela
Samuel Berner* Advisor to Swiss Bank in Venezuela
Teodosio Brea* Attorney
Member of Allende & Brea
Argentina
Malcolm Caplan* Attorney
Member of Baker & McKenzie
Venezuela
Moises Naim* Senior Associate
Carnegie Endowment
Washington, D.C.
Luis Augusto Vegas- Chairman of the Board and
Benedetti* Chief Financial Officer
Benedetti & Co.
Charles D. Codrea Vice President and Chief Financial
Officer
Corimon, S.A.C.A.
Santos Cohen Vice President and General Manager
Corimon, S.A.C.A.
Rafael Lara Vice President
Corimon, S.A.C.A.
Enrique Permuy Vice President
Corimon, S.A.C.A.
<PAGE>
<PAGE> 3
EXHIBIT INDEX
Exhibit 1 Stock and Note Purchase Agreement
Exhibit 2 Investment Agreement
Exhibit 3 Interim Loan Agreement
Exhibit 4 Note Purchase Agreement
Exhibit 5 Stockholders Agreement
Exhibit 6 Registration Rights Agreement
Exhibit 7 Put Agreement
<PAGE>
Exhibit 1
Draft of February 14, 1995
STOCK AND NOTE PURCHASE AGREEMENT
Among
CORIMON, S.A.C.A.,
a Venezuelan corporation
CORIMON CORPORATION,
a Delaware corporation
and
FIDELITY CAPITAL & INCOME FUND
Dated as of February 14, 1995
<PAGE>
<PAGE> i
TABLE OF CONTENTS
Section Page
ARTICLE I
Definitions
1.1. Definitions . . . . . . . . . . . . . . . . . 1
1.2. Interpretation . . . . . . . . . . . . . . . . 3
ARTICLE II
Purchase and Sale of Shares and Notes
2.1. Purchase and Sale of Shares and Notes . . . . 4
2.2. Closing . . . . . . . . . . . . . . . . . . . 4
ARTICLE III
Representations and Warranties and Covenants
3.1. Representations and Warranties and Covenants
of Parent and Holdings . . . . . . . . . . . . 4
3.2. Representations and Warranties of Investor1 . 9
ARTICLE IV
Conditions to the Purchase and Sale
4.1. Conditions to the Purchase and Sale Relating
to Investor1. . . . . . . . . . . . . . . . . 11
4.2. Conditions to the Purchase and Sale Relating
to Parent and Holdings . . . . . . . . . . . . 11
ARTICLE V
Put and Call
5.1. Call . . . . . . . . . . . . . . . . . . . . . 12
5.2. Put and Call . . . . . . . . . . . . . . . . . 12
5.3. Procedure . . . . . . . . . . . . . . . . . . 13
5.4. Price Adjustment . . . . . . . . . . . . . . . 13
5.5. Notices . . . . . . . . . . . . . . . . . . . 19
5.6. Redemption or Purchase . . . . . . . . . . . . 19
Page
<PAGE>
<PAGE> ii
ARTICLE VI
Events of Default
6.1. Events of Default . . . . . . . . . . . . . . 19
6.2. Remedies on Default, Etc. . . . . . . . . . . 20
ARTICLE VII
General Provisions
7.1. Amendments; Waivers . . . . . . . . . . . . . 21
7.2. Notices . . . . . . . . . . . . . . . . . . . 21
7.3. Counterparts . . . . . . . . . . . . . . . . . 22
7.4. Entire Agreement; No Third-Party Beneficiaries 23
7.5. Assignment . . . . . . . . . . . . . . . . . . 23
7.6. Governing Law . . . . . . . . . . . . . . . . 23
7.7. Severability . . . . . . . . . . . . . . . . . 23
SCHEDULES
Schedule 3.1(c) Holdings Balance Sheet
EXHIBITS
Exhibit A Series A Certificate of Designations
Exhibit B Form of Put Note
Exhibit C Registration Rights Agreement
Exhibit D Third Party Registration Rights Agreement
Exhibit E Keepwell Agreement
Exhibit F Escrow Agreement
Exhibit G Pledge Agreement
Exhibit H Collateral Agency Agreement
<PAGE>
<PAGE> 1
STOCK AND NOTE PURCHASE AGREEMENT, dated as of
February 14, 1995 (this "Agreement"), among Corimon, S.A.C.A.,
a Venezuelan corporation ("Parent"), Corimon Corporation, a
Delaware corporation ("Holdings"), and Fidelity Capital &
Income Fund ("Investor1").
RECITALS
WHEREAS, Parent and Holdings desire to sell, and
Investor1 desires to purchase, Holdings Series A Preferred
Shares and Put Notes; and
WHEREAS, simultaneously with the execution and
delivery of this Agreement, Parent and Investor1 have entered
into the Registration Rights Agreement, dated the date hereof,
in the form of Exhibit C hereto (the "Registration Rights
Agreement").
NOW, THEREFORE, in consideration of the
representations, warranties, covenants and agreements
contained herein and for other good and valuable
consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
Definitions
1.1. Definitions. For purposes of this Agreement:
"Agreement" has the meaning set forth above.
"Annual Report" has the meaning set forth in
Section 3.1(b).
"Call" has the meaning set forth in Section 5.2(a).
"Closing" has the meaning set forth in Section 2.2
hereof.
"Collateral" has the same meaning as the term
"Pledged Securities" as specified in the Pledge Agreement.
"Collateral Agency Agreement" means the Collateral
Agency Agreement, dated as of the date hereof, in the Form of
Exhibit H hereto.
<PAGE>
<PAGE> 2
"Company" means Standard Brands Paint Company, a
Delaware corporation.
"Declaration" has the meaning set forth in
Section 6.2.
"Default Amount" has the meaning set forth in
Section 6.2.
"Escrow Agreement" means the Escrow Agreement, dated
as of the date hereof, in the form of Exhibit F hereto.
"Exchange Act" means the Securities Exchange Act of
1934 and the rules and regulations promulgated thereunder, as
amended.
"Fair Market Value" means, as of the date of
determination, the average of closing sales prices of the
Parent ADSs on the New York Stock Exchange during the 20-day
trading period immediately preceding such date of
determination.
"Holdings Series A Preferred Shares" has the meaning
set forth in Section 2.1(a).
"Holdings Series A Preferred Stock" means the
Preferred Stock of Holdings issued pursuant to the Series A
Certificate of Designations, as set forth in Exhibit A hereto.
"Keepwell Agreement" means the Keepwell Agreement
dated the date hereof, between Parent and Holdings in the form
of Exhibit E hereto.
"Parent ADSs" means American Depositary Shares
representing Parent Common Shares.
"Parent Common Shares" means common shares, nominal
value Bs. 10 each, of Parent.
"Pledge Agreement" means the Pledge Agreement, dated
as of the date hereof, in the form of Exhibit G hereto.
"Prime Rate" has the meaning set forth in the Put
Note.
"Purchase" has the meaning set forth in
Section 5.1(a).
<PAGE>
<PAGE> 3
"Purchase Feature" has the meaning set forth in
Section 5.1(a).
"Purchase Price" has the meaning set forth in
Section 5.1(b).
"Put" has the meaning set forth in Section 5.2(a).
"Put Notes" has the meaning set forth in
Section 2.1(b).
"Registration Rights Agreement" means the
Registration Rights Agreement, dated the date hereof, in the
form of Exhibit C hereto.
"Third Party" means Grow Group Inc., a Delaware
corporation.
"Third Party Common Stock" means common stock, par
value $.10 per share, of Third Party.
"Third Party Public Documents" has the meaning set
forth in Section 3.1(d).
"Third Party Registration Rights Agreement" has the
meaning set forth in Section 3.1(l).
"Third Party Shares" has the meaning set forth in
Section 3.1(k).
1.2. Interpretation. When a reference is made in
this Agreement to a Section, Exhibit or Schedule, such
reference shall be to a Section of, or an Exhibit or Schedule
to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for
reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the
words "include", "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words
"without limitation". For purposes of this Agreement, the
knowledge of any party shall mean the knowledge of such party
and its Subsidiaries after due inquiry.
<PAGE>
<PAGE> 4
ARTICLE II
Purchase and Sale of Shares and Notes
2.1. Purchase and Sale of Shares and Notes.
Subject to the terms and conditions herein set forth,
(a) Investor1 shall purchase from Holdings, and Holdings shall
sell to Investor1, 516,129 shares ("Holdings Series A
Preferred Shares") of Holdings Series A Preferred Stock at
$15.50 per share and (b) subject to the terms and conditions
herein, Investor1 shall purchase from Holdings, and Holdings
shall sell to Investor1, $9,939,175 aggregate principal amount
of Put Notes of Holdings (the "Put Note" or "Put Notes"), at a
purchase price of 100% of the principal amount thereof.
2.2. Closing. The closing of the purchase and sale
of the Holdings Series A Preferred Shares and the Put Notes
(the "Closing") shall take place at the time of execution and
delivery of this Agreement. At the Closing, (i) Investor1
shall deliver to Parent and Holdings $17,939,175 by wire
transfer of immediately available funds to Chase Manhattan
Bank, Account No. 949-2602942, (ii) Holdings shall deliver to
Investor1 certificates representing the Holdings Series A
Preferred Shares, (iii) Holdings shall deliver to Investor1
certificates representing the Put Notes and (iv) the parties
shall execute and deliver the Escrow Agreement, the Collateral
Agency Agreement and the Pledge Agreement and Holdings shall
deliver the Collateral and certain escrowed securities
thereunder.
ARTICLE III
Representations and Warranties and Covenants
3.1. Representations and Warranties and Covenants
of Parent and Holdings. Parent and Holdings represent and
warrant to and covenant with Investor1 as follows:
(a) Organization. Parent is a corporation duly
organized, validly existing and in good standing under the
laws of Venezuela. Holdings is a corporation duly organized,
validly existing and in good standing under the laws of
Delaware. To the best of Parent's and Holdings' knowledge,
Third Party is a corporation duly organized, validly existing
and in good standing under the laws of New York.
<PAGE>
<PAGE> 5
(b) Annual Report. Parent's annual report on
Form 20-F for the fiscal year ended March 31, 1994 (the
"Annual Report"), when such report was filed, conformed in all
material respects to the requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and the rules and
regulations thereunder and the Annual Report and, to the best
of Parent's and Holdings' knowledge, the Third Party Public
Documents (as defined below, did not include any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading.
(c) Business of Holdings. Holdings does not
conduct any business other than the ownership of Third Party
Common Stock and certain other subsidiaries and loans and
advances to and from affiliates of Holdings. A balance sheet
of Holdings is attached as Schedule 3.1(c) hereto. Holdings
does not have any employees. The authorized capital stock of
Holdings consists of 25,000 shares of its common stock and
750,000 shares of its preferred stock.
(d) Absence of Certain Change. Neither Parent nor
Holdings nor, to the best of Parent's and Holdings' knowledge,
Third Party has sustained since the date of the audited
financial statements included in the Parent's Annual Report or
Third Party's filings with the Securities and Exchange
Commission under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 ("Third Party Public
Documents") any material loss or interference with its
business from fire, explosion, flood or other calamity or from
any labor dispute or court or governmental action, order or
decree, otherwise than as set forth in, or contemplated by the
disclosures contained in, the Annual Report or the Third Party
Public Documents; and, since the respective dates as of which
information is given in the Annual Report or Third Party
Public Documents, there has not been any change in the capital
stock or long-term debt of Parent, Holdings or, to the best of
Parent's and Holdings' knowledge, Third Party or any material
adverse change in or affecting the general affairs,
management, financial position, shareholders' equity or
results of operations of Parent or Holdings or, to the best of
Parent's and Holdings' knowledge, Third Party, otherwise than
as set forth or contemplated in the Annual Report or the Third
Party Public Documents.
(e) Absence of Litigation and Governmental
Proceedings. Except as set forth in, or contemplated by the
disclosures contained in, the Annual Report or Third Party
Public Documents, there are no legal or governmental
proceedings pending to which Parent, Holdings or, to the
<PAGE>
<PAGE> 6
best of Parent's and Holdings' knowledge, Third Party is a
party or of which any property of Parent, Holdings or, to the
best of Parent's and Holdings' knowledge, Third Party is the
subject which, if determined adversely to Parent, Holdings or
Third Party, would individually or in the aggregate have a
material adverse effect on the consolidated financial
position, shareholders' equity or results of operations of
Parent, Holdings or Third Party; and, to the best of Parent's
and Holdings' knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others.
(f) Margin Regulations. No part of the proceed
from the sale of the Put Notes will be used for any purpose
which violates the provisions of Regulation G of the Board of
Governors of the Federal Reserve System as now and from time
to time hereafter in effect (provided that compliance with
Regulation G may be required on the part of Investor1).
Neither Parent nor Holdings nor, to the best of Parent's and
Holdings' knowledge, Third Party is engaged principally, or as
one of its important activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" any
"margin stock" within the respective meanings of each of the
quoted terms under Regulation U of the Board of Governors of
the Federal Reserve System.
(g) Environmental Regulations. Except as set forth
in, or contemplated by the disclosures contained in, the
Annual Report or the Third Party Public Documents, each of
Parent and Holdings and, to the best of Parent's and Holdings'
knowledge, Third Party is in compliance with all requirements
of law relating to pollution and environmental control in all
jurisdictions in which it is presently doing business, except
to the extent that the failure to comply therewith would not,
individually or in the aggregate, have a material adverse
effect on the business of Third Party or Parent and its
subsidiaries taken as a whole.
(h) Investment Company Act, Public Utility Holding
Company Act, Interstate Commerce Act. Neither Parent nor
Holdings nor, to the best of Parent's and Holdings' knowledge,
Third Party is an "investment company," or an investment
company for purposes of Section 12(d)(1) of such act, or a
company "controlled" by an "investment company" that is
registered under such act, within the meaning of the
Investment Company Act of 1940, as amended. Neither Parent
nor Holdings nor, to the best of Parent's and Holdings'
knowledge, Third Party is subject to any duty, obligation or
liability as a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company"
or of a "subsidiary
<PAGE>
<PAGE> 7
company" of a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(i) Validity. This Agreement and the Registration
Rights Agreement, the Pledge Agreement, the Escrow Agreement,
the Collateral Agency Agreement and the Keepwell Agreement
have been duly authorized, executed and delivered by Parent
and Holdings, as the case may be, and constitute valid and
legally binding agreements of Parent and Holdings enforceable
in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(j) Validity of Shares and Put Notes. When issued
and sold to Investor1, the Holdings Series A Preferred Shares
and Parent Common Shares will be duly authorized, validly
issued, fully paid and nonassessable and the Third Party
Shares and Parent ADSs will be approved for listing on the New
York Stock Exchange. The Put Notes constitute valid and
legally binding obligations of Holdings, enforceable in
accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(k) Third Party Common Stock. Holdings is the
beneficial owner of at least 4,025,841 shares of Third Party
Common Stock (which represents more than 25% of the total of
such securities outstanding). Holdings has good and valid
title to the shares ("Third Party Shares") of the Third Party
Common Stock to be transferred by it upon exchange of the
Holdings Series A Preferred Shares, and the Third Party Common
Stock to be pledged pursuant to the Pledge Agreement, free and
clear of all liens, encumbrances, equities and claims; and,
upon delivery of the Third Party Shares upon such exchange,
good and valid title to such Third Party Shares free and clear
of all liens, encumbrances, equities or claims, will pass to
Investor1.
(l) Third Party Agreements. Parent and Holdings
are parties to (i) a Stock Purchase Agreement, dated July 21,
1992, among Holdings, Parent and Third Party, (ii) a
Registration Rights Agreement, dated July __, 1992, between
Third Party and Parent (the "Third Party Registration Rights
Agreement") and (iii) a Standstill Agreement, dated July 21,
1992, among Third Party, Parent and Holdings. Certain
provisions of such agreements have been amended or waived in
connection with the transactions
<PAGE>
<PAGE> 8
contemplated by this Agreement. The pledge, escrow and
transfer of the Third Party Common Stock hereunder and
contemplated hereby does not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any such agreements, as so amended
or waived. Holdings agrees for the benefit of Investor1 that
Holdings will enforce its rights, and will not waive, amend or
terminate such rights, under the Keepwell Agreement.
(m) Registration Rights. Parent and Holdings have
taken all action necessary to give Investor1 the benefits of
its registration rights as set forth in the Third Party
Registration Rights Agreement, as set forth in Exhibit D
hereto. Parent hereby assigns to Investor1 its rights and
obligations under the Third Party Registration Rights
Agreement with respect to the Third Party Common Stock to be
delivered by it hereunder.
(n) Consents. All material consents, approvals,
orders, authorizations of or registrations, declarations or
filings in connection with the valid execution and delivery of
this Agreement by Parent and Holdings have been obtained or
made and they expect to receive on a timely basis all such
items necessary for the performance of their obligations
hereunder and in the agreements contemplated hereby. The
execution, delivery and performance of this Agreement and the
agreements contemplated hereby does not conflict with the
charter documents of Parent or Holdings.
(o) Compliance with Laws. Except as set forth in,
or contemplated by the disclosures contained in, the Annual
Report or the Third Party Public Documents, each of Parent,
Holdings and, to Parent's and Holdings' knowledge, Third Party
is in substantial compliance with all laws, regulations,
orders and decrees applicable to it, except in each case where
the failure to so comply would not have a material adverse
effect on Third Party or Parent and its Subsidiaries taken as
a whole.
(p) Private Placement. No form of general
solicitation or general advertising was used by Parent or
Holdings in connection with the sale of the Holdings Series A
Preferred Stock or the Put Notes being purchased under this
Agreement. Assuming the accuracy of the representations of
Investor1 as set forth in Section 3.2, the Company has not
taken and will not take any action which would subject the
issue and sale of the securities being sold under this
Agreement to the provisions of Section 5 of the Securities
Act.
<PAGE>
<PAGE> 9
(q) Foreign Assets Control Regulation. Neither the
issue and sale of the Holdings Series A Preferred Stock or the
Put Notes by Holdings nor the use of the proceeds thereof as
contemplated by this Agreement and the Investment Agreement
will violate the Foreign Assets Control Regulations, the
Transaction Control Regulations, the Cuban Assets Control
Regulations, the Foreign Funds Control Regulations, the
Iranian Assets Control Regulations, the Nicaraguan Trade
Control Regulations, the South African Control Regulations,
the Libyan Sanctions Regulations, the Soviet Gold Coin
Regulations, the Camamamian Transactions Regulations, the
Haitian Transactions Regulations or the Iraqi Sanctions
Regulations of the United States Treasury Department (31
C.F.R., Subtitle B, Chapter V, as amended) or Executive Orders
12722 and 12724 (transactions with Iraq); provided that Parent
and Holdings make no representations as to the sources or uses
of Investor1's funds.
(r) Rail Carrier. None of Parent, Holdings or, to
Parent's and Holdings' knowledge, Third Party or their
respective subsidiaries is not a "rail carrier", a person
controlled by a "rail carrier" with the meaning of Title 49,
U.S.C. or a "carrier" to which 49 U.S.C. Section 11301 (b)(1)
is applicable.
3.2. Representations and Warranties of Investor1.
Investor1 represents and warrants to Parent and Holdings as
follows:
(a) Legal Capacity and Right. Investor1 has the
requisite legal capacity and legal right to execute, deliver
and perform this Agreement.
(b) Validity. This Agreement has been duly
authorized, executed and delivered by Investor1 and
constitutes a valid and legally binding agreement of Investor1
enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity
principles.
(c) Investment Intent. Investor1 is purchasing or
acquiring the Holdings Series A Preferred Shares and Put Notes
for its own account for investment and not with a present view
to, or for sale in connection with, any distribution thereof
in violation of the Securities Act, provided that disposition
of Investor1's property shall at all times be within its
control. Investor1 does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or
grant participations to such
<PAGE>
<PAGE> 10
person or to any third person, with respect to any of the
Holdings Series A Preferred Shares. Investor1 is aware that
certificates evidencing the Holdings Series A Preferred Shares
and Put Notes shall bear substantially the following legend
relating to restrictions on resale under the Securities Act:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED EXCEPT IN ACCORDANCE THEREWITH."
(d) Acquisition for Investment and Rule 144.
Investor1 understands that the Holdings Series A Preferred
Shares and Put Notes will not be registered under the
Securities Act in reliance on a specific exemption from the
registration provision of the Securities Act which depends
upon, among other things, the bona fide nature of Investor1's
investment intent as expressed herein. Investor1 acknowledges
that the Holdings Series A Preferred Shares and Put Notes must
be held indefinitely unless they are subsequently registered
under the Securities Act or an exemption from such
registration is available. Investor1 has been advised or is
aware of the provisions of Rule 144 promulgated under the
Securities Act which permits limited resale of shares
purchased in a private placement subject to the satisfaction
of certain conditions.
(e) Legal Investment. The purchase of the Holdings
Series A Preferred Shares and Put Notes by Investor1 hereunder
is legally permitted by all laws and regulations to which
Investor1 is subject and all consents, approvals,
authorizations of or designations, declarations or filings in
connection with the valid execution and delivery of this
Agreement by Investor1 or the purchase of the Holdings Series
A Preferred Shares and Put Notes by Investor1 have been
obtained, or will be obtained prior to the Closing.
(f) Consents. All material consents, approvals,
orders, authorizations of or registrations, declarations or
filings in connection with the valid execution and delivery of
this Agreement by Investor1 and the performance of its
obligations hereunder have been obtained or made.
<PAGE>
<PAGE> 11
ARTICLE IV
Conditions to the Purchase and Sale
4.1. Conditions to the Purchase and Sale Relating
to Investor1. The obligation of Investor1 to consummate the
transactions contemplated hereby at the Closing shall be
subject to the satisfaction of or waiver in writing by
Investor1 on or prior to the Closing of each of the following
conditions:
(a) Each of the representations and warranties of
Parent and Holdings contained in this Agreement shall be true
in all material respects (except with respect to
representations and warranties made as of a specific time
which shall be true in all material respects as of such time
and except for changes expressly contemplated by this
Agreement), and each of the covenants and agreements of Parent
and Holdings be performed on or prior to the date of the
Closing shall have been performed in all material respects.
(b) Sullivan & Cromwell, counsel to Parent and
Holdings, and Gustavo Mata-Bajas, general counsel to Parent,
shall each have furnished to Investor1 their written opinion,
dated the Closing Date, in form and substance satisfactory to
Investor1.
4.2. Conditions to the Purchase and Sale Relating
to Parent and Holdings. The obligations of Parent and
Holdings to consummate the transactions contemplated hereby at
the Closing shall be subject to the satisfaction of or waiver
in writing by Parent and Holdings on or prior to the Closing
Date of each of the following conditions:
(a) Each of the representations and warranties of
Investor1 contained in this Agreement shall be true in all
material respects as of the Closing (except with respect to
representations and warranties made as of a specific time
which shall be true in all material respects as of such time
and except for changes expressly contemplated by this
Agreement), with the same effect as though such repre-
sentations and warranties had been made on and as of the
Closing, and each of the covenants and agreements of Investor1
to be performed on or prior to the Closing shall have been
performed in all material respects.
(b) No statute, rule or regulation or order, decree
or judgment of or in any court or tribunal of competent
jurisdiction shall be in effect that prohibits
<PAGE>
<PAGE> 12
Parent or Holdings from consummating the transactions
contemplated hereby.
(c) All consents, approvals, orders or clearances
of any governmental or regulatory authority, the granting of
which is required for the consummation of the transactions
contemplated hereby shall have been obtained and all waiting
periods specified under applicable law the expiration of which
is necessary for such consummation shall have passed.
ARTICLE V
Put and Call
5.1. Call. (a) Parent shall have the option to
purchase ("Purchase") the Put Note at any time (such date, the
"Purchase Date") prior to six months from the Funding Date, at
the option of Parent, for Parent Common Shares, valued for
this purpose at the Purchase Price, and equal to the principal
amount of the Put Note (the "Purchase Feature"). Notwith-
standing anything contained in the Put Note, Parent shall have
the option, in lieu of delivering Parent Common Shares upon
purchase, as to the whole or part of any purchase, of paying
to Investor1 a cash amount equal to the Current Market Price
(as determined below) of the number of shares of Parent Common
Shares otherwise issuable upon such purchase.
(b) As used herein, the term "Purchase Price" means
$.2089 per Parent Common Share and $7.3125 per Parent ADS,
subject to adjustment pursuant to Section 5.4.
5.2. Put and Call. (a) If Parent does not
purchase this Note in accordance with the Purchase Feature
within six months from the Funding Date, then at any time
thereafter (such date, the "Put or Call Date") Investor1 may
put ("Put") the Put Notes to Parent, or Parent may call
("Call") the Put Notes from Investor1 for Parent Common
Shares, valued for this purpose at the Put or Call Price, and
in an aggregate amount equal to the principal amount of the
Put Note. Notwithstanding anything contained in the Put Note,
Parent shall have the option, in lieu of delivering Parent
Common Shares upon such Put or Call, as to the whole or part
of any Put or Call of paying to Investor1 a cash amount equal
to the Current Market Price of the number of shares of Parent
Common Shares otherwise issuable upon such Put or Call.
(b) As used herein, the term "Put or Call Price"
means the lower of (i) the Purchase Price and (ii) an amount
<PAGE>
<PAGE> 13
per Parent Common Share such that Investor1 receives a total
investment return (including interest previously paid on the
Put Note) from the Funding Date to the Put or Call Date equal
to the Prime Rate plus 2% compounded monthly; provided that
the amount in clause (ii) shall be based on Prime Rate plus 4%
compounded monthly if the only reason for the failure of
Parent to effectuate the Purchase Feature is due to Parent's
bad faith or negligence in failing to cause the necessary
steps for delivery of Parent Common Shares to be accomplished.
5.3. Procedure. (a) Notice of every Purchase, Put
or Call of Put Notes shall be mailed by first class mail,
postage prepaid, addressed to Investor1, Parent or Holdings,
as applicable, at the address specified in this Agreement, and
specifying the Purchase Date or the Put or Call Date. Such
mailing shall be at least 10 days and not more than 30 days
prior to the date fixed for Purchase, Put or Call.
(b) In order to Purchase, Put or Call the Put Note
for cash or Parent Common Shares, Investor1 shall surrender at
a location in Boston or New York acceptable to Parent the Put
Note, duly endorsed or assigned to Parent in blank. Upon
purchase, Put or Call no allowance or adjustment shall be made
for dividends on the Parent Common Shares, except as provided
in Section 5.4.
(c) The Put Note shall be deemed to have been
purchased immediately prior to the close of business on the
Purchase Date or the Put or Call Date. As promptly as
practicable on or after the Purchase Date or Put or Call Date,
Parent shall deliver at said location (or by mail if so
requested by Investor1), cash or a certificate or certificates
for the number of full shares of Parent Common Shares
transferrable upon such purchase, Put or Call, together with
payment in lieu of any fraction of a share, as hereinafter
provided, to Investor1. Any purchase, Put or Call shall be in
whole and not in part.
(d) No fractional Parent Common Shares shall be
issued upon Purchase, Put or Call of Put Notes, but, instead
of any fraction which would otherwise be issuable, Parent
shall pay a cash adjustment in an amount equal to the same
fraction of the Closing Price (as hereinafter defined) on the
applicable date, or, if such date is not a Trading Day (as
hereinafter defined), on the next Trading Day.
5.4. Price Adjustment. (a) The Purchase Price
shall be adjusted from time to time as follows:
<PAGE>
<PAGE> 14
(A) In case Parent shall (i) pay a dividend or
make a distribution on its outstanding Parent Common
Shares in shares of its capital stock,
(ii) subdivide its outstanding Parent Common Shares,
(iii) combine its outstanding Parent Common Shares
into a smaller number of Parent Common Shares, (iv)
issue by reclassification of its Parent Common
Shares (whether pursuant to a merger or
consolidation or otherwise) any other shares of
Parent, or (v) in case of any other consolidation of
Parent with, or other merger of Parent into, any
other entity, any other merger of another entity
into Parent (other than a merger which does not
result in any reclassification, conversion, exchange
or cancellation of the Parent Common Shares) or any
sale or transfer of all or substantially all of the
assets of Parent, the holder of the Put Note
surrendered for exchange after the record date for
such dividend or distribution (which for this
purpose shall be at the close of business on the
date fixed by the Board of Directors of Parent as
the record date), or after the close of business on
the effective date of such subdivision, combination
or reclassification, or merger, consolidation or
sale of assets, as the case may be (the close of
business times being hereinafter in this clause (A)
referred to as "such record date"), shall be
entitled to receive the aggregate number and kind of
shares of capital stock of Parent, or other
securities, cash and other property, which, if the
Put Note had been purchased immediately prior to
such record date at the Purchase Price then in
effect, the holder would have been entitled to
receive by virtue of such dividend, distribution,
subdivision, combination or reclassification, or
merger, consolidation or sale of assets; and the
Purchase Price shall be deemed to have been adjusted
after such record date to apply to such aggregate
number and kind of shares, or other securities, cash
and other property. Such adjustment shall be made
whenever any of the events listed above shall occur.
If necessary, appropriate adjustment shall be made
in the application of the provisions set forth
herein with respect to the rights and interests
thereafter of the holder of the Put Note, to the end
that the provisions set forth herein shall
thereafter correspondingly be made applicable, as
nearly as may reasonably be, in relation to any
shares of stock or other securities or property
<PAGE>
<PAGE> 15
thereafter deliverable on the exchange (whether by
purchase, Put or Call) of the Put Note.
(B) In case Parent shall fix a record date for
issuing to all holders of Parent Common Shares
rights or warrants entitling them to subscribe for
or purchase Parent Common Shares at a price per
share less than the Current Market Price per share
(as determined pursuant to clause (D) below) on such
record date, the Purchase Price in effect from and
after such record date shall be adjusted so that it
shall be equal to the price determined by
multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, of which
the numerator shall be the number of Parent Common
Shares outstanding on such record date plus the
number of Parent Common Shares which the aggregate
offering price of the total number of Parent Common
Shares so offered for subscription or purchase would
purchase at such Current Market Price and of which
the denominator shall be the number of Parent Common
Shares outstanding on such record date plus the
number of additional Parent Common Shares so offered
for subscription or purchase. For the purpose of
this clause (B), the issuance of rights or warrants
to subscribe for or purchase securities convertible
into Parent Common Shares shall be deemed to be the
issuance of rights or warrants to purchase the
Parent Common Shares into which such securities are
convertible at an aggregate offering price equal to
the aggregate offering price of such securities plus
the minimum aggregate amount (if any) payable upon
conversion of such securities into Parent Common
Shares. Such adjustment shall be made successively
whenever such a record date is fixed. In the event
that such rights or warrants are not issued after
such a record date has been fixed, the Purchase
Price shall be retroactively adjusted to the
Purchase Price which would have been in effect if
such record date had not been fixed.
(C) In case Parent shall fix a record date for
the distribution to all holders of Parent Common
Shares (whether pursuant to a merger or
consolidation or otherwise) of evidence of its
indebtedness or assets (excluding cash dividends at
an annual rate not exceeding 1.5 times the annual
rate on the date of this Agreement), or rights to
subscribe (excluding those referred to
<PAGE>
<PAGE> 16
in clause (B) above), then in each such case the
Purchase Price in effect from and after such record
date shall be adjusted so that the same shall be
equal to the price determined by multiplying the
Purchase Price in effect immediately prior to such
record date by a fraction, of which the numerator
shall be the Current Market Price per share
(determined as provided in clause (D) below) of the
Parent Common Shares on such record date less the
fair market value (as reasonably determined in good
faith by the board of directors of Parent, provided
that if Investor1 deems such determination
unreasonable and the parties are unable to agree,
they will agree on an independent party to make such
determination) of the portion of the evidences of
indebtedness or assets so distributed or of such
rights to subscribe applicable to one Parent Common
Share and of which the denominator shall be such
Current Market Price per Parent Common Share. Such
adjustment shall be made whenever any such record
date is fixed. In the event that such distribution
is not made after such a record date has been fixed,
the Purchase Price shall be retroactively adjusted
to the Purchase Price which would have been in
effect if such record date had not been fixed.
(D) For the purpose of any computation under
clauses (B) and (C) above, the "Current Market
Price" per Parent Common Share on any date shall be
deemed to be the average of the daily Closing Prices
for 20 consecutive Trading Days before the date in
question.
(E) In any case in which this paragraph shall
require that an adjustment as a result of any event
become effective from and after a record date,
Parent may elect to defer until after the occurrence
of such event (i) issuing to the holder of the Put
Note sold after such record date and before the
occurrence of such event the additional Parent
Common Shares issuable upon such sale over and above
the shares issuable on the basis of the Purchase
Price in effect immediately prior to adjustment and
(ii) paying to such holder any amount in cash in
lieu of a fractional share of Parent Common Shares,
as described above. In lieu of the shares the
issuance of which is deferred pursuant to item (i)
above, Parent shall issue or cause one of its
transfer agents to issue due
<PAGE>
<PAGE> 17
bills or other appropriate evidence of the right to
receive such shares.
(F) Any adjustment in the Purchase Price
otherwise required by this paragraph to be made may
be postponed if such adjustment (plus any other
adjustments postponed pursuant to this clause (F)
and not theretofore made) would not require an
increase or decrease of more than 1% in such price.
All calculations under this subdivision (d) shall be
made to the nearest cent or to the nearest 1/100 of
a share, as the case may be.
(G) In the event that at any time, as a result
of an adjustment made pursuant to clause (A) above,
the holder of the Put Note thereafter surrendered
for exchange shall become entitled to receive any
shares of capital stock of Parent other than Parent
Common Shares, thereafter the number of such other
shares so receivable upon purchase of such Put Notes
shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the
Parent Common Shares contained in clauses (A) to
(F), inclusive, above, and the other provisions of
this paragraph with respect to the Parent Common
Shares shall apply on like terms to any such other
shares.
(b) Whenever the Purchase Price is adjusted as
herein provided Parent shall compute the adjusted Purchase
Price and shall cause to be prepared a certificate signed by
Parent's treasurer setting forth the adjusted Purchase Price
and a brief statement of the facts requiring such adjustment
and the computation thereof; such certificate shall forthwith
be delivered to Investor1.
(c) Parent will pay any and all security transfer
taxes that may be payable in respect of the issuance or
delivery of Parent Common Shares on purchase of Put Notes.
Parent shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the
issuance and delivery of Parent Common Shares in a name other
than that in which the Put Notes so converted were registered,
and no such issuance or delivery shall be made unless and
until the person requesting such issuance has paid to Parent
the amount of any such tax or has established to the
satisfaction of Parent that such tax has been paid.
<PAGE>
<PAGE> 18
(d) As of the date hereof the term "Parent Common
Shares" initially means the common shares, nominal value
Bs. 10 each, of Parent. All Parent Common Shares delivered
hereunder shall be in the form of American Depositary Receipts
for American Depositary Shares of Parent, unless delivery in
that form shall be impracticable. The term "Parent Common
Shares" shall include any shares of Parent of any class or
series which has no preference or priority in the payment of
dividends or in the distribution of assets upon any voluntary
or involuntary liquidation, dissolution or winding up of
Parent and which is not subject to redemption by Parent.
However, Parent Common Shares issuable upon purchase of Put
Notes shall include only shares of the class designated as
Parent Common Shares as of the date hereof or shares of Parent
of any classes or series resulting from any reclassification
or reclassifications thereof and which have no preference or
priority in the payment of dividends or in the distribution of
assets upon any voluntary or involuntary liquidation,
dissolution or winding up of Parent and which are not subject
to redemption by Parent, provided that if at any time there
shall be more than one such resulting class or series, the
shares of each such class and series then so issuable shall be
substantially in the proportion which the total number of
shares of such class and series resulting from all such
reclassifications bears to the total number of shares of all
such classes and series resulting from all such
reclassifications.
(e) As used in this Agreement, the term "Closing
Price" on any day shall mean the reported last sale price per
ADS (hereinafter defined) of Parent regular way on such day
or, in case no such sale takes place on such day, the average
of the reported closing bid and asked prices regular way, in
each case on the New York Stock Exchange, or, if the ADSs of
Parent are not listed or admitted to trading on such Exchange,
on the American Stock Exchange, or, if the ADSs of Parent are
not listed or admitted to trading on such Exchange, on the
principal national securities exchange on which the ADSs of
Parent are listed or admitted to trading, or, if the ADSs of
Parent are not listed or admitted to trading on any national
securities exchange, the average of the closing bid and asked
prices in the over-the-counter market as reported by the
National Association of Securities Dealers' Automated
Quotation System, or, if not so reported, as reported by the
National Quotation Bureau, Incorporated, or any successor
thereof, or, if not so reported, the average of the closing
bid and asked prices as furnished by any member of the
National Association of Securities Dealers, Inc. selected from
time to time by Parent for that purpose; the Closing Price
(and number of Parent Common
<PAGE>
<PAGE> 19
Shares if other than Parent ADSs) shall be adjusted as
necessary to take into consideration the ratio of Parent
Common Shares to one ADS; and the term "Trading Day" shall
mean a day on which the principal national securities exchange
on which the ADSs of Parent are listed or admitted to trading
is open for the transaction of business or, if the ADSs of
Parent are not listed or admitted to trading on any national
securities exchange, a Monday, Tuesday, Wednesday, Thursday or
Friday on which banking institutions in the Borough of
Manhattan, City and State of New York are not authorized or
obligated by law or executive order to close.
(f) The certificate of any independent firm of
public accountants of recognized standing selected by the
Board of Directors of Parent shall be presumptive evidence of
the correctness of any computation made under this Agreement.
5.5. Notices. Within three business days of
Holdings becoming aware that any significant event that would
require an adjustment to the Purchase Price, Holdings shall
send notice of such event to Investor1 which notice shall set
forth the notice of such event.
5.6. Redemption or Purchase. If Holdings gives
notice of a redemption of Holdings Series A Preferred Shares
or a Purchase of the Put Notes by Friday, February 17, 1995,
such redemption or purchase shall take place no later than
Tuesday, February 21, 1995.
ARTICLE VI
Events of Default
6.1. Events of Default. The occurrence of any one
of the following shall constitute an Event of Default
hereunder and under the Put Note:
(a) Holdings shall fail to pay any interest on the
Put Note when the same becomes due and payable and the
continuance of any such failure for a period of 10 days;
(b) Holdings shall fail to pay any principal of or
premium, if any, on the Put Note when and as the same becomes
due and payable at maturity, upon acceleration, at the
Purchase Date or Put or Call Date or otherwise;
(c) Holdings shall default in the performance of
any covenant or agreement contained in this Agreement, the
<PAGE>
<PAGE> 20
Pledge Agreement or the Escrow Agreement, and any such default
shall continue unremedied for a period of 30 days after
written notice from Investor1;
(d) Holdings shall (i) apply for or consent to the
appointment of a receiver, trustee or liquidator of it or of
all a substantial part of its assets; (ii) be adjudicated a
bankrupt or insolvent; (iii) file a voluntary petition in
bankruptcy or a petition or an answer seeking reorganization
or an arrangement with creditors to take advantage of any
insolvency law; or (iv) fail to obtain within 30 days
dismissal of any involuntary petition in bankruptcy filed or
any reorganization or insolvency proceeding commenced against
Holdings;
(e) an order, judgment or decree shall be entered,
without the application, approval or consent of Holdings, by
any court of competent jurisdiction, approving a petition
seeking reorganization or liquidation of Holdings or
appointing a receiver, trustee or liquidator of Holdings or of
all or a substantial part of its assets and such order,
judgment or decree shall remain unstayed and in effect for a
period of 30 days;
(f) any representation or warranty made by
Holdings in this Agreement, the Pledge Agreement or the Escrow
Agreement shall prove to have been false or incorrect in any
material respect when made;
(g) Holdings shall default under any mortgage,
indenture or instrument under which there may be incurred or
by which there may be secured or evidenced any indebtedness
for money borrowed by Holdings or any of its subsidiaries (or
the payment of which is guaranteed by Holdings or any of its
subsidiaries) whether such indebtedness now exists, or is
created after the date hereof, if such default results in the
acceleration of such indebtedness prior to its express
maturity; or
(h) there occurs any further attachment of, or any
voluntary or involuntary lien or encumbrance against, the
Pledge Securities Collateral.
6.2. Remedies on Default, Etc. After an Event of
Default has occurred, Holdings shall promptly notify Investor1
or any subsequent holder of the Put Note in writing of such
occurrence. Upon the occurrence of an Event of Default, and
at any time thereafter while such Event of Default is
continuing, Investor1 or any subsequent holder of the Put Note
by written notice to Holdings, may declare (a "Declaration")
due and payable an amount equal to all unpaid
<PAGE>
<PAGE> 21
principal of, premium, if any, and accrued interest on, the
Put Note (the "Default Amount"). If an Event of Default
specified in clause (d) or (e) above occurs, the Default
Amount shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of
Investor1 or any subsequent holder of the Put Note. The
holder of the Put Note by written notice to Holdings may
rescind any Declaration if all Events of Default then
continuing (other than any Events of Default with respect to
the nonpayment of principal of or interest on the Put Note
which has become due solely as a result of such Declaration)
have been cured.
In addition, Investor1 and any subsequent holder of
the Put Note may proceed to enforce its rights by suit in
equity, action at law and/or other appropriate means and may
exercise any and all rights under the Pledge Agreement, the
Escrow Agreement and any and all rights afforded a secured
creditor under the Uniform Commercial Code.
Holdings hereby agrees to pay on demand reasonable
costs and expenses, including without limitation reasonable
attorneys' fees, incurred or paid by Investor1 and any
subsequent holder of the Put Note in enforcing the Put Note
upon the occurrence of an Event of Default.
No delay or omission on the part of Investor1 or any
subsequent holder of the Put Note in exercising any right
hereunder shall operate as a waiver of such right of any other
right under the Put Note, and a waiver, delay or omission on
any one occasion shall not be construed as a bar to or waiver
of any such right on any future occasion.
ARTICLE VII
General Provisions
7.1. Amendments; Waivers. (a) This Agreement may
not be amended except by an instrument in writing signed on
behalf of each of the parties.
(b) Any agreement on the part of a party to any
waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any
party to assert any of its rights under this Agreement shall
not constitute a waiver of such rights.
7.2. Notices. All notices, requests, claims,
demands and other communications hereunder shall be in writing
and shall be given (and shall be deemed to have been
<PAGE>
<PAGE> 22
duly given upon receipt) by delivery in person, by cable,
facsimile transmission, telegram or telex or by registered or
certified mail (postage prepaid, return receipt requested) to
the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice
given in accordance with this Section 7.2):
(i) If to Parent or Holdings, to:
Corimon, S.A.C.A.
Calle Hans Neumann
Edificio Corimon
Los Castijos de Lourdes
Apartado 3654
Caracas 1010-A, Venezuela
Attention: Arthur W. Broslat
Facsimile: (582) 203-5757
with a copy to:
Sullivan & Cromwell
444 South Flower Street
Los Angeles, California 90071
Attention: Frank H. Golay, Jr.
Facsimile: (213) 683-0457
(ii) If to Investor1, to:
Fidelity Capital & Income Fund
c/o Fidelity Management and
Research Co.
82 Devonshire Street - F7E and F7D
Boston, Massachusetts 02109
Attention: Portfolio Manager and Robert M.
Gervis, Esq.
Facsimile: (617) 476-3316 and 476-7774
with a copy to:
Goodwin, Procter & Hoar
Exchange Place
53 State Street
Boston, Massachusetts 02109
Attention: Laura Hodges Taylor, P.C.
Facsimile: (617) 523-1231
7.3. Counterparts. This Agreement may be executed
in one or more counterparts, all of which shall be considered
one and the same agreement.
<PAGE>
<PAGE> 23
7.4. Entire Agreement; No Third-Party
Beneficiaries. This Agreement (a) constitutes the entire
agreement, and supersedes all prior agreements and
understandings, both written and oral, between the parties
hereto with respect to the subject matter hereof and (b) is
not intended to confer upon any person other than the parties
and their permitted successors and assigns any rights or
remedies.
7.5. Assignment. None of the parties to this
Agreement shall assign any of its rights or obligations
hereunder or under the Escrow Agreement, the Pledge Agreement
or the Collateral Agency Agreement, nor shall the Holdings
Series A Preferred Shares or the Put Notes be transferred, in
each case without the prior written consent of the other
parties hereto (provided that Parent and Holdings will not
unreasonably withhold any such consent); provided, further,
that Parent may assign its rights or obligations hereunder to
any of its Subsidiaries without, however, relieving Parent
from any of its obligations hereunder.
7.6. Governing Law. THIS AGREEMENT AND THE PUT
NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, REGARDLESS OF THE LAWS THAT
MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF
CONFLICTS OF LAWS THEREOF. All actions and proceedings
arising out of or relating to this Agreement shall be brought
by the parties and heard and determined only in a New York
state court or a federal court sitting in that State and the
parties hereto consent to jurisdiction before and waive any
objections of venue to the New York courts. The parties
hereto agree to accept service of process in connection with
any such action or proceeding in any manner permitted for a
notice hereunder.
7.7. Severability. If any term or provision of
this Agreement or the application thereof to either party or
set of circumstances shall, in any jurisdiction and to any
extent, be finally held invalid or unenforceable, such term or
provision shall only be ineffective as to such jurisdiction,
and only to the extent of such invalidity or unenforceability,
without invalidating or rendering unenforceable any other
terms or provisions of this Agreement or under any other
circumstances, and the parties shall negotiate in good faith a
substitute provision which comes as close as possible to the
invalidated or unenforceable term or provision, and which puts
each party
<PAGE>
<PAGE> 24
in a position as nearly comparable as possible to the position
it would have been in but for the finding of invalidity or
unenforceability, while remaining valid and enforceable.
<PAGE>
<PAGE> 25
STOCK AND NOTE PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
CORIMON, S.A.C.A.
By /s/ Arthur W. Broslat
Name: Arthur W. Broslat
Title:
CORIMON CORPORATION
By /s/ Arthur W. Broslat
Name: Arthur W. Broslat
Title:
<PAGE>
<PAGE> 26
STOCK AND NOTE PURCHASE AGREEMENT
FIDELITY CAPITAL & INCOME FUND
By /s/ David Breazzano
Name: David Breazzano
Title:
Investor1 is a portfolio of a Massachusetts business trust. A
copy of Investor1's Declaration of Trust is on file with the
Secretary of the Commonwealth of Massachusetts. Parent and
Holdings acknowledge and agree that this agreement is not
executed on behalf of or binding upon any of the trustees,
officers, directors or shareholders of Investor1 individually,
but is binding only upon the assets and property of Investor1.
With respect to all obligations of Investor1 arising out of
this Agreement, Parent and Holdings shall look for payment or
satisfaction of any claim solely to the assets and property of
Investor1. Parent and Holdings are expressly put on notice
that the rights and obligations of each series of shares of
Investor1 under its Declaration of Trust are separate and
distinct from those of any and all other series.
<PAGE>
Exhibit 2
INVESTMENT AGREEMENT
Among
CORIMON, S.A.C.A.
a Venezuelan corporation
CORIMON CORPORATION,
a Delaware corporation
FIDELITY CAPITAL & INCOME FUND, KODAK RETIREMENT INCOME PLAN
TRUST FUND, TRANSAMERICA LIFE INSURANCE AND ANNUITY CO.,
TRANSAMERICA OCCIDENTAL LIFE INSURANCE CO., SUN LIFE INSURANCE
COMPANY OF AMERICA, ANCHOR NATIONAL LIFE INSURANCE COMPANY,
STANDARD BRANDS PAINT COLLATERAL TRUST
and
STANDARD BRANDS PAINT COMPANY,
a Delaware corporation
Dated as of February 15, 1995
<PAGE>
<PAGE> i
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
1.1. Definitions . . . . . . . . . . . . . . . . . 2
1.2. Interpretation . . . . . . . . . . . . . . . 13
ARTICLE II
Interim Funding
2.1. Note Purchase Agreement . . . . . . . . . . . 13
2.2. Grantor Trust Transactions . . . . . . . . . 13
2.3. Investment Agreement and Ancillary
Funding Agreements . . . . . . . . . . . . . 14
2.4. Directors and By-Laws . . . . . . . . . . . . 14
2.5. Funding . . . . . . . . . . . . . . . . . . . 14
ARTICLE III
Purchase and Sale of Shares
3.1. Company Action . . . . . . . . . . . . . . . 15
3.2. Exchange of Debt and Issuance of Shares . . . 15
3.3. Advisor Fees . . . . . . . . . . . . . . . . 15
3.4. Fidelity Note Purchase Agreement. . . . . . . 16
3.5. Property Transfer . . . . . . . . . . . . . . 16
3.6. Leases and Other Ancillary Agreements . . . . 16
3.7. Closing . . . . . . . . . . . . . . . . . . . 16
ARTICLE IV
Conditions to Funding and Closing
4.1. Conditions of Parent and Holdings with
Respect to the Funding and Closing . . . . . 16
4.2. Conditions of Company with Respect to the
Funding and Closing . . . . . . . . . . . . . 18
4.3. Conditions of the Other Investors and Grantor
Trust with Respect to the Funding and Closing 20
<PAGE>
<PAGE> ii
ARTICLE V
Representations and Warranties
5.1. Representations and Warranties of Company . . 22
5.2. Representations and Warranties of Parent and
Holdings . . . . . . . . . . . . . . . . . . 39
5.3. Representations and Warranties of the
Other Investors . . . . . . . . . . . . . . . 41
ARTICLE VI
Covenants Relating to Conduct of Business
of Company
6.1. Conduct of Business . . . . . . . . . . . . . 43
ARTICLE VII
Additional Agreements
7.1. Preparation of the Proxy Statement;
Stockholders Meeting . . . . . . . . . . . . 47
7.2. Access to Information; Confidentiality . . . 47
7.3. Reasonable Efforts; Notification; Consent . . 48
7.4. Fees and Expenses . . . . . . . . . . . . . . 49
7.5. Public Announcements . . . . . . . . . . . . 50
7.6. Stockholder Litigation . . . . . . . . . . . 50
7.7. Employment Arrangements . . . . . . . . . . . 50
7.8. Reporting Company . . . . . . . . . . . . . . 50
7.9. NYSE Listing . . . . . . . . . . . . . . . . 50
7.10. Liquidating Property Trust Leases and
Property Transfer . . . . . . . . . . . . . . 51
7.11. Agreement to Vote Shares . . . . . . . . . . 51
7.12. No Voting Trusts . . . . . . . . . . . . . . 51
7.13. No Proxy Solicitations . . . . . . . . . . . 51
7.14. Transfer and Encumbrance . . . . . . . . . . 51
7.15. Additional Purchases . . . . . . . . . . . . 52
7.16. Covenants Relating to Post-Funding
Tax Matters . . . . . . . . . . . . . . . . . 52
7.17. Environmental Indemnity, Etc. . . . . . . . . 55
<PAGE>
<PAGE> iii
ARTICLE VIII
Termination, Amendment and Waiver
8.1. Termination . . . . . . . . . . . . . . . . . 56
8.2. Effect of Termination . . . . . . . . . . . . 57
8.3. Amendment . . . . . . . . . . . . . . . . . . 57
8.4. Extension; Waiver . . . . . . . . . . . . . . 57
8.5. Procedure for Termination, Amendment,
Extension or Waiver . . . . . . . . . . . . . 58
ARTICLE IX
General Provisions
9.1. Survival of Warranties and Certain Agreements 58
9.2. Notices . . . . . . . . . . . . . . . . . . . 58
9.3. Counterparts . . . . . . . . . . . . . . . . 61
9.4. Entire Agreement; No Third-Party
Beneficiaries . . . . . . . . . . . . . . . . 61
9.5. Assignment . . . . . . . . . . . . . . . . . 61
9.6. Severability . . . . . . . . . . . . . . . . 61
9.7. GOVERNING LAW . . . . . . . . . . . . . . . . 62
9.8. Enforcement . . . . . . . . . . . . . . . . . 62
<PAGE>
<PAGE> iv
SCHEDULES
Schedule 1.1 Financial Information
Schedule 3.2 Debt Exchange
Schedule 5.1(b) Subsidiaries
Schedule 5.1(c) Stock Equivalents
Schedule 5.1(d) Consents
Schedule 5.1(e) Balance Sheet
Schedule 5.1(g) Certain Changes
Schedule 5.1(h) Mortgaged Property
Schedule 5.1(i) Litigation
Schedule 5.1(k) Taxes
Schedule 5.1(m) Disqualified Individual Payments
Schedule 5.1(q) Material Contracts
Schedule 5.1(t) Affiliates
Schedule 5.1(aa) Grantor Trust Subsidiaries
EXHIBITS
Exhibit A Amendment to Certificate of
Incorporation
Exhibit B Certificate of Designations
Exhibit C Form of Proxy
Exhibit D Closing Memorandum
Exhibit E Allocation Schedule
Exhibit F Amended Liquidating Property Trust Agreement
Exhibit G Third Amended Agreement
Exhibit H Second Amended and Restated Trust Loan
Agreement
<PAGE>
<PAGE> 1
INVESTMENT AGREEMENT dated as of February 15, 1995
(this "Agreement"), among Corimon, S.A.C.A., a Venezuelan
corporation ("Parent"), Corimon Corporation, a Delaware
corporation and a wholly owned Subsidiary of Parent
("Holdings"), Fidelity Capital & Income Fund, ("Investor1"),
Kodak Retirement Income Plan Trust Fund, ("Investor2"),
Transamerica Life Insurance and Annuity Co., a North Carolina
corporation ("Investor3"), Transamerica Occidental Life
Insurance Co., a California corporation ("Investor4"), Sun
Life Insurance Company of America, an Arizona corporation
("Investor5"), Anchor National Life Insurance Company, a
California corporation ("Investor6" and, together with
Investor1, Investor2, Investor3, Investor4 and Investor5, the
"Other Investors"), Standard Brands Paint Collateral Trust, a
California trust ("Grantor Trust"), and Standard Brands Paint
Company, a Delaware corporation ("Company").
RECITALS
WHEREAS Parent, Holdings, the Other Investors,
Grantor Trust and Company desire to make the respective
investments in, and recapitalization of, Company on the terms
and subject to the conditions set forth in this Agreement;
WHEREAS Parent, Holdings, the Other Investors,
Grantor Trust and Company desire to make certain
representations, warranties, covenants and agreements and also
to prescribe various conditions in connection with the
Transactions contemplated hereby; and
WHEREAS, simultaneously with the execution and
delivery of this Agreement, each of Parent, Holdings, the
Other Investors, Grantor Trust and Company has entered into
the Ancillary Funding Agreements to which it is a party.
NOW, THEREFORE, in consideration of the represen-
tations, warranties, covenants and agreements contained in
this Agreement and in the Ancillary Agreements, and for other
good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties hereto hereby
agree as follows:
<PAGE>
<PAGE> 2
ARTICLE I
Definitions
1.1. Definitions. For purposes of this Agreement:
"Advisor Shares" has the meaning set forth in
Section 3.3.
"Affiliate" has the same meaning as in Rule 12b-2
promulgated under the Exchange Act.
"Allonges" means the Allonges delivered by Borrowers
to Servicing Agent pursuant to subsection 3.1A of the Second
Amended Agreement and substantially in the form of Exhibit II
to the Second Amended Agreement.
"Amended Liquidating Property Trust Agreement" means
the Amended and Restated Liquidating Property Trust Agreement
to be entered into among Company, Borrowers, Holdings, Newco,
the Insurance Company Lenders or their Affiliates and Bankers
Trust Company of California, as Trustee, in substantially the
form of Exhibit F hereto.
"Amendments" has the meaning set forth in
Section 3.1(b).
"Ancillary Agreements" means the Ancillary Funding
Agreements and the Ancillary Closing Agreements.
"Ancillary Closing Agreements" means (i) the
Beneficial Interest Purchase Agreement, (ii) the Liquidating
Property Trust Note Purchase Agreement, (iii) the Liquidating
Property Trust Amendment Documents and (iv) the Third Amended
Agreement, (v) the Liquidating Property Trust Lease Documents
and (vi) the South Warehouse Lease.
"Ancillary Funding Agreements" means (i) the
Stockholders Agreement, (ii) the Registration Rights
Agreement, (iii) the Proxies, (iv) the Put Agreement, (v) the
Interim Loan Agreement and (vi) the Intercreditor Agreement.
"Argosy" has the meaning set forth in
Section 4.1(f).
"Bankruptcy Code" means the United States Code, the
Federal Rules of Bankruptcy Procedure promulgated thereunder,
and the local Bankruptcy Rules for the Central District of
California.
<PAGE>
<PAGE> 3
"Bankruptcy Court" means the United States
Bankruptcy Court for the Central District of California.
"base amount" has the meaning set forth in
Section 5.1(m).
"Beneficial Interest Purchase Agreement" has the
meaning set forth in the Liquidating Property Trust Amendment
Documents.
"Board of Directors" means the Board of Directors of
Company except where the context requires otherwise.
"Borrower Notes" means the promissory notes of
Borrowers issued pursuant to subsection 2.1D of the Original
Agreement and substantially in the form of Exhibit II to the
Original Agreement, as modified pursuant to the Allonges, and
as such notes may be amended, supplemented or otherwise
modified from time to time.
"Borrowers" means Standard Brands Paint Co.,
Standard Brands Realty Co., Inc. and The Art Store.
"Business Day" means any day excluding Saturday,
Sunday and any day that is a legal holiday under the laws of
the State of California or New York or is a day on which
banking institutions located in the State of California or New
York are authorized by law or other governmental action to
close.
"Capital Lease", as applied to any Person, means any
lease of any property (whether real, personal, or mixed) by
that Person as lessee that would, in conformity with GAAP, be
required to be accounted for as a capital lease on the balance
sheet of that Person.
"Certificate of Designations" means the certificate
of designations of Company, in the form of Exhibit B hereto.
"Certificate of Incorporation" means the certificate
of incorporation of Company, and as amended in the form of
Exhibit A hereto.
"Closing" has the meaning set forth in Section 3.7.
"Closing Date" has the meaning set forth in
Section 3.7.
<PAGE>
<PAGE> 4
"Closing Documents" means the documents agreed to be
delivered at the Closing as set forth in the Closing
memorandum attached as Exhibit D hereto.
"Common Stock" means the common stock of Company,
par value $.01 per share, and as converted pursuant to the
Stock Split.
"Company" has the meaning set forth above.
"Contingent Obligation", as applied to any Person,
means any direct or indirect liability, contingent or
otherwise, of that Person with respect to any indebtedness,
lease, dividend, letter of credit, or other obligation of
itself or another, including, without limitation, any
obligation under any interest rate swap agreement or currency
swap agreement, any obligation directly or indirectly
guaranteed, endorsed (otherwise than for collection or deposit
in the ordinary course of business), co-made, or discounted or
sold with recourse by that Person, or in respect of which that
Person is otherwise directly or indirectly liable, including,
without limitation, any such obligation for which that Person
is in effect liable through any agreement (contingent or
otherwise) to purchase, repurchase, or otherwise acquire such
obligation or any security therefor, or to provide funds for
the payment or discharge of such obligation (whether in the
form of loans, advances, stock purchases, capital
contributions, or otherwise), or to maintain the solvency or
any balance sheet, income or other financial condition of the
obligor of such obligation, or to make payment for any
products, materials, or supplies or for any transportation,
services, or lease regardless of the non-delivery or non-
furnishing thereof, in any such case if the purpose or intent
of such agreement is to provide assurance that such obligation
will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against
loss in respect thereof. The amount of any Contingent
Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported.
"DGCL" means the General Corporation Law of the
State of Delaware.
"Director" means a member of the Board of Directors.
"disqualified individual" has the meaning set forth
in Section 5.1(m).
<PAGE>
<PAGE> 5
"Dollars" means the lawful money of the United
States of America.
"Effective Date" means the effective date of the
Plan, as provided therein.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time and any
successor statute.
"ERISA Affiliate", as applied to any Person, means
any trade or business (whether or not incorporated) that is a
member of a group of which that Person is also a member and
that is under common control within the meaning of the
regulations promulgated under Section 414 of the Internal
Revenue Code.
"Employee Stock Options" has the meaning set forth
in Section 5.1(c).
"excess parachute payment" has the meaning set forth
in Section 5.1(m).
"Exchange Act" means the Securities Exchange Act of
1934 and the rules and regulations promulgated thereunder, as
amended.
"Existing Grantor Trust Indebtedness" means
Indebtedness of Company or Borrowers to the Grantor Trust in
an aggregate principal amount not to exceed $6,000,000
pursuant to the Existing Grantor Trust Loan Agreements.
"Existing Grantor Trust Loan Agreements" means the
documents listed on Schedule 9 to the New Loan Agreement and
the Loan Agreement dated March 16, 1994 among Company, the New
Loan Borrowers and the Grantor Trust.
"Existing Insurance Company Indebtedness" means
indebtedness of Company and Interim Borrowers to the Insurance
Company Lenders pursuant to the Existing Insurance Company
Loan Agreement.
"Existing Insurance Company Loan Agreement" means
the Amended and Restated Loan Agreement dated as of June 14,
1993 among Company, Borrowers, Insurance Company Lenders and
Servicing Agent, as such Agreement may be amended, modified or
supplemented from time to time, including pursuant to the
Third Amended Agreement.
"Fidelity Limited Guaranty" means the limited
recourse guaranty by Company of up to $10,000,000 of the
<PAGE>
<PAGE> 6
obligations of the Grantor Trust under the Secured Fidelity
Note pursuant to the Plan, which amount has been reduced in
accordance with its terms to $2,500,000, as it may be amended,
supplemented or otherwise modified pursuant to Section 6.14 of
the New Loan Agreement.
"Fidelity Note Purchase Agreement" means a Note
Purchase Agreement for $5,000,000 or more of notes between
Company and one or more entities affiliated with Investor1 and
Investor2.
"Filed SEC Documents" has the meaning set forth in
Section 5.1(g).
"Funding" and "Funding Date" have the meanings set
forth in Section 2.5.
"GAAP" means generally accepted accounting
principles set forth in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of
Certified Public Accountants, including, without limitations,
adjustments prescribed in accordance with SOP 90-7 if elected
by the Company, and statements and pronouncements of the
Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a
significant segment of the accounting profession, that are
applicable to the circumstances as of the date of
determination.
"Governmental Entity" has the meaning set forth in
Section 4.1(b).
"Grantor Trust" has the meaning set forth above.
"Grantor Trust Documents" means the Grantor Trust
Asset Purchase Agreement (as defined in the Plan), the
Existing Grantor Trust Loan Agreements, the Secured Fidelity
Notes, the Fidelity Limited Guaranty and the "Grantor Trust
Documents" as defined in the Plan.
"Grantor Trust Subsidiaries" means The Art Store
Holding Company, The Art Store and SBP Properties Holding
Company.
"Holdings" has the meaning set forth above.
"HSR Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 and the rules and regulations
promulgated thereunder, as amended.
<PAGE>
<PAGE> 7
"Indebtedness", as applied to any Person, means
(i) all indebtedness for borrowed money, (ii) that portion of
obligations with respect to Capital Leases that is capitalized
on a balance sheet in conformity with GAAP, (iii) notes
payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred
purchase price of property or services which purchase price is
(y) due more than six months from the date of incurrence of
the obligation in respect thereof, or (z) evidenced by a note
or similar written instrument, and (v) all indebtedness
secured by any mortgage, pledge, Lien, security interest, or
vendor's interest under any conditional sale or other title
retention agreement existing on any property or asset owned or
held by that Person regardless whether the indebtedness
secured thereby shall have been assumed by that Person or is
non-recourse to the credit of that Person; provided that,
applied to Borrowers, "Indebtedness" shall not include the
Liquidating Property Trust Obligations.
"Insurance Company Lenders" means Investor3,
Investor4, Investor5 and Investor6.
"Intercreditor Agreement" means the Intercreditor
Agreement, dated as of the date hereof, among Holdings, the
Other Investors, Interim Borrowers and Company, in the form of
Exhibit C to the Interim Loan Agreement.
"Interim Borrowers" means Standard Brands Paint Co.
and Standard Brands Realty Co., Inc.
"Interim Loan Agreement" means the Interim Loan
Agreement, dated as of the date hereof, among Company, Interim
Borrowers and Holdings.
"Interim Notes" means the promissory notes of
Interim Borrowers issued pursuant to the Interim Loan
Agreement and substantially in the form of Exhibit A thereto,
and as such Interim Notes may be amended, supplemented, or
otherwise modified from time to time.
"Internal Revenue Code" means the Internal Revenue
Code of 1986, as amended to the date hereof and from time to
time hereafter. For purposes of this Agreement, all reference
to Sections of the Internal Revenue Code shall include any
applicable predecessor provisions to such Sections.
"Lender" and "Lenders" have the meanings set forth
in the New Loan Agreement.
<PAGE>
<PAGE> 8
"Lien" means any lien, mortgage, pledge, security
interest, charge, or encumbrance of any kind (including any
conditional sale or other title retention agreement, any lease
in the nature thereof, and any agreement to give any security
interest).
"Liquidating Property Trust" means the liquidating
property trust established pursuant to the Liquidating
Property Trust Documents.
"Liquidating Property Trust Agreement" means the
Trust Agreement dated as of July 12, 1994 among Company,
Standard Brands Paint Co., Standard Brands Realty Co. Inc., as
Depositors, and Bankers Trust Company of California, N.A., as
Trustee.
"Liquidating Property Trust Amendment Documents"
means the Amended Liquidating Property Trust Agreement and the
Second Amended and Restated Trust Loan Agreement.
"Liquidating Property Trust Documents" means the
Liquidating Property Trust Agreement and the Amended and
Restated Trust Loan Agreement dated as of July 12, 1994 among
the Liquidating Property Trust, Insurance Company Lenders and
Servicing Agent, as each such agreement may be amended,
supplemented or modified from time to time, including by the
Liquidating Property Trust Amendment Documents.
"Liquidating Property Trust Lease Documents" has the
same meaning as Depositors Leases in the Liquidating Property
Trust Amendment Documents.
"Liquidating Property Trust Leases" has the meaning
set forth in Section 4.1(k).
"Liquidating Property Trust Note Purchase Agreement"
means the Note Purchase Agreement among Holdings, an entity
organized by Investor1 and Investor2 and the Insurance Company
Lenders.
"Liquidating Property Trust Obligations" means all
of the obligations of the Liquidating Property Trust to
Insurance Company Lenders and Servicing Agent under the
Liquidating Property Trust Documents.
"material adverse change" or "material adverse
effect" means any change or effect (or any development that is
reasonably likely to result in any change or effect) that is
materially adverse to the business, properties, assets,
condition (financial or otherwise), results of operations or
<PAGE>
<PAGE> 9
prospects of Company and its Subsidiaries in each case taken
as a whole, or to the value of the Common Stock or the
Preferred Stock. By way of background, Schedule 1.1 sets
forth the most recent financial information of the Company.
"Material Contracts" has the meaning set forth in
Section 5.1(q).
"Mortgage" or "Mortgages" have the meanings set
forth in the New Loan Agreement and the Interim Loan
Agreement.
"Mortgaged Property" means real and personal
property subject to the lien of a Mortgage; but shall not
include the Mortgaged Properties which were transferred to the
Liquidating Property Trust pursuant to the Liquidating
Property Trust Documents.
"Multiemployer Plan" means a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA in which any employees
of Company or any ERISA Affiliate of Company participate or
from which any such employees may derive a benefit.
"New Borrower Notes" means the promissory notes of
New Loan Borrowers issued pursuant to subsection 2.1(D) of the
New Loan Agreement and substantially in the form of Exhibit II
annexed to the New Loan Agreement.
"New Loan Agreement" means that certain Loan
Agreement dated as of March 16, 1994 by and among Company, the
New Loan Borrowers, the lenders named therein, Transamerica
Occidental Life Insurance Company, as servicing and collateral
agent for lenders, as such New Loan Agreement may be amended,
restated, supplemented or otherwise modified from time to
time.
"New Loan Borrowers" means Standard Brands Paint Co.
and Standard Brands Realty Co., Inc.
"New Shares" has the meaning set forth in
Section 3.2.
"Note Purchase Agreement" means the Note Purchase
Agreement, dated as of the date hereof, between Holdings and
Grantor Trust.
"Obligations" means all obligations of every nature
of Company from time to time owed to Holdings under the
Interim Loan Agreement and the Interim Notes.
<PAGE>
<PAGE> 10
"Original Agreement" means the Loan Agreement, dated
as of November 30, 1987, among Company, Borrowers, Insurance
Company Lenders and Servicing Agent, as amended to the date
hereof.
"Other Investors" has the meaning set forth above.
"Party" means a Party to this Agreement.
"Pension Plan" means any employee plan that is
subject to the provisions of Title IV of ERISA in which any
employees of Company or any ERISA Affiliate of Company
participate or from which any such employees may derive a
benefit, other than a Multiemployer Plan.
"Person" means and includes natural persons,
corporations, limited partnerships, general partnerships,
joint stock companies, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts,
business trusts, or other organizations, whether or not legal
entities, and governments and agencies and political
subdivisions thereof.
"Plan" means Debtors' Fourth Amended Joint Plan of
Reorganization filed March 1993, filed by Company in the
Reorganization Cases on March 1993 and as it was amended
thereafter, was confirmed on May 14, 1993 and became effective
on June 14, 1993.
"Preferred Shares" has the meaning set forth in
Section 3.2.
"Preferred Stock" means the preferred stock of
Company issued pursuant to the Certificate of Designations.
"Property Transfer" has the meaning set forth in
Section 4.1(j).
"Proposals" has the meaning set forth in
Section 4.1(i).
"Proxy" means a Proxy contemplated by
Section 2.3(d), in the form of Exhibit C hereto.
"Proxy Statement" has the meaning set forth in
Section 7.1(a).
"Put Agreement" means the Put Agreement, dated the
date hereof, among Parent, Grantor Trust, the Other Investors
and Company.
<PAGE>
<PAGE> 11
"Registration Rights Agreement" means the
Registration Rights Agreement, dated the date hereof, among
Holdings, the Other Investors and Company.
"Reorganization Cases" means Company's and
Borrowers' (other than The Art Store) jointly administered
cases under the Bankruptcy Code.
"SARs" has the meaning set forth in Section 5.1(c)
"SEC" means the Securities and Exchange Commission.
"SEC Documents" has the meaning set forth in Section
5.1(e).
"Second Amended Agreement" means the Second Amended
and Restated Existing Loan Agreement, dated as of July 12,
1994, among Company, Borrowers, Insurance Company Lenders and
Servicing Agent.
"Second Amended and Restated Trust Loan Agreement"
means the Second Amended and Restated Trust Loan Agreement to
be entered into among the Liquidating Property Trust,
Insurance Company Lenders and Servicing Agent, in
substantially the form of Exhibit H hereto.
"Secured Fidelity Notes" means the Fixed Rate and
Floating Rate Senior Notes issued by the Grantor Trust to
Investor1 and Investor2.
"Securities Act" means the Securities Act of 1933
and the rules and regulations promulgated thereunder, as
amended.
"Servicing Agent" means Transamerica Occidental Life
Insurance Company, as servicing and collateral agent for
Lenders and Insurance Company Lenders.
"Share" has the meaning set forth in Section 3.1(a).
"Share Issuances" shall mean the issuances of the
New Shares, the Preferred Shares and the Advisor Shares
pursuant to Sections 3.2 and 3.3.
"South Warehouse" means the South Warehouse located
in Torrance, California and owned by the Liquidating Property
Trust.
<PAGE>
<PAGE> 12
"South Warehouse Lease" has the meaning set forth in
Section 4.1(l).
"Stock Equivalents" has the meaning set forth in
Section 5.1(c).
"Stock Split" has the meaning set forth in
Section 3.1(a).
"Stockholders Agreement" means the Stockholders
Agreement, dated as of the date hereof, between Holdings and
Company.
"Stockholders Meeting" has the meaning set forth in
Section 7.1(b).
"Subsidiary" has the same meaning as in Rule 12b-2
promulgated under the Exchange Act.
"Tax" or "Taxes" shall mean all federal, state,
local or foreign taxes, including but not limited to, income,
gross receipts, windfall profits, alternative minimum, value
added, severance, property, production, sales, use, license,
excise, franchise, employment, withholding or similar taxes,
together with and interest, additions or penalties with
respect thereto and any interest in respect of such additions
or penalties.
"Tax Return" shall mean all reports and returns
required to be filed with respect to Taxes.
"The Art Store Note" means the note dated May 31,
1993, from The Art Store to Standard Brands Paint Co. in the
principal amount of $5,000,000, such note having been endorsed
to Lewis C. Leighton as Trustee of the Grantor Trust on June
14, 1993.
"Third Amended Agreement" means the Third Amended
and Restated Existing Agreement, among Company, Borrowers,
Insurance Company Lenders and Servicing Agent, in the form of
Exhibit G hereto.
"Transactions" means the Transactions contemplated
by this Agreement and the Ancillary Agreements.
"Working Capital Notes" means the notes issued
pursuant to the Fidelity Note Purchase Agreement and purchased
by Investor1.
<PAGE>
<PAGE> 13
1.2. Interpretation. When a reference is made in
this Agreement to a Section, Exhibit or Schedule, such
reference shall be to a Section of, or an Exhibit or Schedule
to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for
reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the
words "include", "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words
"without limitation". For purposes of this Agreement, the
knowledge of any Party shall mean the knowledge of such Party
and its Subsidiaries after due inquiry.
ARTICLE II
Interim Funding
2.1. Note Purchase Agreement. Prior to the
execution and delivery of this Agreement, the Parties thereto
executed and delivered the Note Purchase Agreement and the
closing occurred thereunder.
2.2. Grantor Trust Transactions. The Transactions
in this Section 2.2 shall precede the Transactions in Sections
2.3 and 2.4; and the Transactions in this Section 2.2 shall
occur in the order stated. Grantor Trust shall pay $1,518,351
of Existing Insurance Company Indebtedness and Company shall
pay $237,374 of Existing Insurance Company Indebtedness.
Insurance Company Lenders shall release the cross-
collateralization and the guarantees with respect to the
Existing Insurance Company Indebtedness owed to Insurance
Company Lenders by The Art Store and discharge any deed of
trust or other security instrument encumbering real or
personal property owned by The Art Store. Grantor Trust shall
contribute the Art Store Note to The Art Store Holding
Company. The Art Store Holding Company shall contribute the
Art Store Note to The Art Store. The Art Store shall cancel
the Art Store Note. Investor1 and Investor2 shall exchange
the Secured Fidelity Notes with the Grantor Trust for
(i) $5,050,200 principal amount of Existing Grantor Trust
Indebtedness, (ii) $5,260,625 principal amount of New Borrower
Notes, (iii) the stock of The Art Store Holding Company, a
Delaware corporation, (iv) the stock of SBP Properties Holding
Company, a California corporation and (v) $594,824 in cash,
all in accordance with Exhibit E hereto. Investor1 and
Investor2 shall deliver the Fidelity Limited Guaranty to
Company for cancellation.
<PAGE>
<PAGE> 14
2.3. Investment Agreement and Ancillary Funding
Agreements. Concurrently with the execution and delivery of
this Agreement,
(i) the Parties thereto shall execute and deliver
each of the Ancillary Funding Agreements;
(j) Holdings shall loan $14,000,000 to Interim
Borrowers, by wire transfer to Company for their benefit, for
a like amount of Interim Notes issued under the Interim Loan
Agreement and all filings and recordings in connection with
the Interim Loan Agreement shall be made;
(k) All outstanding options, SARs and warrants for
the Common Stock shall be cancelled as of or prior to the
Funding Date and the Other Investors shall cancel and return
all options, SARs and warrants for Common Stock held by them;
and
(d) The Other Investors shall grant their
irrevocable proxies, each in the form of Exhibit C hereto, to
Holdings or its designees. Such proxies shall be irrevocable
during the term of this Agreement to the extent permitted
under Delaware law and coupled with an interest. Company and
Borrowers shall simultaneously pay all accrued and unpaid
payments to the Other Investors and all accrued and unpaid
rent due under the Master Lease (as defined in the Liquidating
Property Trust Agreement). Any defects in such proxies shall
be corrected by the Other Investor(s) concerned promptly after
the Funding according to the reasonable request of Holdings.
2.4. Directors and By-Laws. Concurrently with the
execution and delivery of this Agreement and the Stockholders
Agreement, Company will take all necessary action to appoint
to its Board of Directors the individuals set forth in
Schedule 2.1 to the Stockholders Agreement and to adopt the
By-Laws as set forth in Schedule 2.6 to the Stockholders
Agreement.
2.5. Funding. The interim funding which consists
of the Transactions referred to in Sections 2.1 through 2.4
(the "Funding") shall be held at the offices of Sullivan &
Cromwell, 444 South Flower Street, Los Angeles, California
90071 (provided that certain of the actions contemplated by
Section 2.1 may take place in New York or Boston) as of the
date of execution and delivery of this Agreement (the "Funding
Date"). At the Funding, Company, Parent, Holdings, Grantor
Trust and the Other Investors shall deliver such opinions,
certificates and documents as may be reasonably requested to
evidence such Funding.
<PAGE>
<PAGE> 15
ARTICLE III
Purchase and Sale of Shares
3.1. Company Action. (a) Prior to Closing,
Company will effect a 1 for 10 reverse stock split of its
Common Stock, pursuant to which each 10 outstanding shares of
its Common Stock, par value $.01 per share, will be converted
into one share (a "Share") of its new Common Stock, par value
$.01 per share (the "Stock Split"). The Company may, at its
option, pay cash for any fractional shares or round such
fractional shares up to the nearest whole number of Shares.
(b) Prior to or concurrently with Closing, Company
will amend its Certificate of Incorporation as set forth in
Exhibit A hereto (the "Amendments") and take all necessary
action to appoint to its Board of Directors the individuals
set forth in Schedule 2.1 to the Stockholders Agreement.
3.2. Exchange of Debt and Issuance of Shares.
Subject to the terms and conditions set forth herein,
Holdings, Investor1, Investor2, Investor3, Investor4,
Investor5 and Investor6 shall exchange $14,000,000 of Interim
Notes, $6,000,000 of Existing Grantor Trust Indebtedness and
$10,000,000 of New Borrower Notes (collectively, the "Exchange
Debt") held by them with the Company for 17,943,422 newly
issued Shares (the "New Shares") of Common Stock at an
exchange price of $0.89 (based on the principal amount of the
Exchange Debt) per New Share and 1,570,049 newly issued shares
(the "Preferred Shares") of Preferred Stock at an exchange
price of $8.92 (based on the principal amount of the Exchange
Debt) per Preferred Share, as set forth on Schedule 3.2.
Company shall simultaneously pay to the holders thereof all
interest accrued and unpaid on the Exchange Debt. Each Party
shall take all actions necessary to release any Liens,
security interests or guarantees in connection with the
Exchange Debt and discharge any deed of trust or other
security instrument encumbering real or personal property
securing such Exchange Debt.
3.3. Advisor Fees. As partial payment to Libra
Investments, Inc., Company shall issue to Libra Investments,
Inc. 448,586 newly issued Shares (the "Advisor Shares"). Such
partial payment of their advisory fees shall be credited at a
price of $0.89 per Share.
<PAGE>
<PAGE> 16
3.4. Fidelity Note Purchase Agreement. It is
presently contemplated that, concurrently or shortly after the
Closing, a closing shall occur under a Fidelity Note Purchase
Agreement.
3.5. Property Transfer. Concurrently with the
Closing, the Parties thereto shall execute and deliver the
Liquidating Property Trust Amendment Documents and the Third
Amended Agreement and the Property Transfer shall occur under
the Liquidating Property Trust Amendment Documents.
3.6. Leases and Other Ancillary Agreements.
Concurrently with the Closing, the Parties thereto shall
execute and deliver the Liquidating Property Trust Lease
Documents and to the extent not already done, the other
Ancillary Agreements.
3.7. Closing. The Closing of the Transactions
contemplated in Sections 3.2 through 3.6 (the "Closing") shall
be held at the offices of Sullivan & Cromwell, 444 South
Flower Street, Los Angeles, California 90071 (provided that
certain of the actions may take place in New York or Boston)
on the Business Day immediately following the Stockholders
Meeting or such other date mutually agreed upon by the
Parties. The date on which the Closing shall occur is herein-
after referred to as the "Closing Date". At the Closing,
Company, Parent, Holdings, and the Other Investors shall
deliver the Closing Documents.
ARTICLE IV
Conditions to Funding and Closing
4.1. Conditions of Parent and Holdings with Respect
to the Funding and Closing. The obligations of Parent and
Holdings to consummate the Transactions contemplated to occur
at the Funding and the Closing are subject to the satisfaction
(or waiver by Parent and Holdings) as of the Funding and the
Closing of the following conditions (it is understood that the
execution and delivery of this Agreement and the Funding shall
occur at the same time):
(a) The representations and warranties of Company,
Grantor Trust and the Other Investors set forth in this
Agreement and in the Ancillary Agreements qualified as to
materiality shall be true and correct, and those not so
qualified shall be true and correct in all material respects,
as of the date hereof and as of the time of the Funding and
the Closing as though made as of such time,
<PAGE>
<PAGE> 17
except to the extent such representations and warranties
expressly relate to an earlier date (in which case such
representations and warranties qualified as to materiality
shall be true and correct, and those not so qualified shall be
true and correct in all material respects, on and as of such
earlier date). Each of Company, Grantor Trust and the Other
Investors shall have performed or complied in all material
respects with all obligations and covenants required by this
Agreement and the Ancillary Agreements to be performed or
complied with by Company, the Grantor Trust and the Other
Investors by the time of the Funding and the Closing.
(b) No statute, rule, regulation, executive order,
decree, temporary restraining order, preliminary or permanent
injunction or other order enacted, entered, promulgated,
enforced or issued by any Federal, state, local or foreign
government or any court of competent jurisdiction,
administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign (a
"Governmental Entity") or other legal restraint or prohibition
preventing the Transactions shall be in effect.
(c) Each of Company, Grantor Trust and the Other
Investors shall have executed and delivered to Parent and
Holdings as applicable, each Ancillary Funding Agreement.
Each Ancillary Funding Agreement shall be in full force and
effect, subject to the conditions contained herein or therein,
and none of Company, Grantor Trust or the Other Investors
shall be in material default thereunder. The conditions
contained in the Ancillary Funding Agreements shall have been
satisfied or waived.
(d) The waiting periods under the HSR Act shall
have expired or been terminated and the consents, approvals,
orders, authorizations, registrations, declarations and
filings set forth on Schedule 5.1(d) shall have been obtained
or made.
(e) The New Shares shall have been approved for
quotation on the New York Stock Exchange.
(f) The Board of Directors of the Company (i) shall
have received an opinion of The Argosy Group L.P. ("Argosy")
to the effect that the Transactions contemplated hereby are
fair from a financial point of view to the stockholders of the
Company and (ii) shall have approved the Transactions and the
Proposals.
<PAGE>
<PAGE> 18
(g) The Proxy Statement shall have been filed, or
be in a form ready to file, with the SEC.
(h) The form of the Liquidating Property Trust
Amendment Documents and the form of the Liquidating Property
Trust Leases shall be satisfactory in form and substance to
Parent and Holdings.
The conditions set forth in subsections (i) through
(l) shall be applicable at Closing (but not at Funding).
(i) Proposals approving (i) this Agreement and the
Ancillary Agreements, (ii) the Stock Split, (iii) the
Amendments, (iv) the Property Transfer, (v) the Share
Issuances and (vi) the appointment of directors set forth in
Schedule 2.1 to the Stockholders Agreement, as well as any
other matters that the Company and the Parent may reasonably
consider advisable to effect the Transactions (the
"Proposals") shall have been approved, in person or by proxy,
by the stockholders of Company at the Stockholders Meeting, in
accordance with applicable law, the rules of The New York
Stock Exchange and the Certificate and By-Laws of Company.
(j) Company shall have transferred to the
Liquidating Property Trust the properties identified in the
Amended Liquidating Property Trust Agreement, together with
related Existing Insurance Company Indebtedness, and the
closing shall have occurred under the Third Amended Agreement
and the Liquidating Property Trust Amendment Documents (the
"Property Transfer").
(k) The Liquidating Property Trust shall have
leased to Company the stores owned by the Liquidating Property
Trust pursuant to leases that are satisfactory in form and
substance to Parent and Holdings (the "Liquidating Property
Trust Leases").
(l) The Liquidating Property Trust shall have
leased to Company the South Warehouse on terms that are
satisfactory to Parent and Holdings (the "South Warehouse
Lease").
4.2. Conditions of Company with Respect to the
Funding and Closing. The obligation of Company to consummate
the Transactions contemplated to occur at the Funding and the
Closing are subject to the satisfaction (or waiver by Company)
as of the Funding and the Closing of the following conditions
(it is understood that the execution
<PAGE>
<PAGE> 19
and delivery of this Agreement and the Funding shall occur at
the same time):
(a) The representations and warranties of Parent,
Holdings, Grantor Trust and the Other Investors set forth in
this Agreement and in the Ancillary Agreements qualified as to
materiality shall be true and correct, and those not so
qualified shall be true and correct in all material respects,
as of the date hereof and as of the time of the Closing as
though made as of such time, except to the extent such
representations and warranties expressly relate to an earlier
date (in which case such representations and warranties
qualified as to materiality shall be true and correct, and
those not so qualified shall be true and correct in all
material respects, on and as of such earlier date). Each of
Parent, Holdings, Grantor Trust and the Other Investors shall
have performed or complied in all material respects with all
obligations and covenants required by this Agreement and the
Ancillary Agreements to be performed or complied with by
Parent, Holdings, Grantor Trust and the Other Investors by the
time of the Funding and the Closing.
(b) No statute, rule, regulation, executive order,
decree, temporary restraining order, preliminary or permanent
injunction or other order enacted, entered, promulgated,
enforced or issued by any Governmental Entity or other legal
restraint or prohibition preventing the Transactions shall be
in effect.
(c) Each of Parent, Holdings, Grantor Trust and the
Other Investors shall have executed and delivered to Company
each Ancillary Funding Agreement to which it is a party. Each
Ancillary Funding Agreement shall be in full force and effect,
subject to the conditions contained herein or therein, and
none of the Parent, Holdings, Grantor Trust or the Other
Investors shall be in material default thereunder. The
conditions contained in the Ancillary Funding Agreements shall
have been satisfied or waived.
(d) The waiting periods under the HSR Act shall
have expired or been terminated and the consents, approvals,
orders, authorizations, registrations, declarations and
filings set forth on Schedule 5.1(d) (other than those within
the control of Company) shall have been obtained or made.
(e) The Board of Directors of the Company shall
have received an opinion of Argosy to the effect that the
Transactions contemplated hereby are fair from a financial
point of view to the stockholders of the Company.
<PAGE>
<PAGE> 20
The conditions set forth in subsections (f) through
(i) shall be applicable at Closing (but not at Funding).
(f) The Proposals shall have been approved by the
stockholders of Company at the Stockholders Meeting, in
accordance with applicable law, the rules of the New York
Stock Exchange and the Certificate and By-Laws of Company.
(g) The Property Transfer shall have occurred.
(h) The Liquidating Property Trust Leases shall be
in full force and effect.
(i) The South Warehouse Lease shall be in full
force and effect.
4.3. Conditions of the Other Investors and Grantor
Trust with Respect to the Funding and Closing. The obligation
of the Other Investors, and Grantor Trust in the case of the
Funding only, to consummate the Transactions contemplated to
occur at the Funding and the Closing are subject to the
satisfaction (or waiver by the Other Investors and Grantor
Trust) as of the Funding and the Closing of the following
conditions (it is understood that the execution and delivery
of this Agreement and the Funding shall occur at the same
time):
(a) The representations and warranties of Parent,
Holdings and Company set forth in this Agreement and in the
Ancillary Agreements qualified as to materiality shall be true
and correct, and those not so qualified shall be true and
correct in all material respects, as of the date hereof and as
of the time of the Funding and the Closing as though made as
of such time, except to the extent such representations and
warranties expressly relate to an earlier date (in which case
such representations and warranties qualified as to
materiality shall be true and correct, and those not so
qualified shall be true and correct in all material respects,
on and as of such earlier date). Each of Parent, Holdings and
Company shall have performed or complied in all material
respects with all obligations and covenants required by this
Agreement and the Ancillary Agreements to be performed or
complied with by Parent, Holdings, Investor and Company by the
time of the Funding and the Closing.
(b) No statute, rule, regulation, executive order,
decree, temporary restraining order, preliminary or permanent
injunction or other order enacted, entered, promulgated,
enforced or issued by any Governmental Entity
<PAGE>
<PAGE> 21
or other legal restraint or prohibition preventing the
Transactions shall be in effect.
(c) Each of the Parent, Holdings and Company shall
have executed and delivered to Grantor Trust and the Other
Investors, as applicable, each Ancillary Funding Agreement.
Each Ancillary Funding Agreement shall be in full force and
effect, subject to the conditions contained herein and
therein, and none of Parent, Holdings or Company shall be in
material default thereunder. The conditions contained in the
Ancillary Funding Agreements shall have been satisfied or
waived.
(d) The waiting periods under the HSR Act shall
have expired or been terminated and the consents, approvals,
orders, authorizations, registrations, declarations and
filings set forth on Schedule 5.1(d) shall have been obtained
or made.
(e) The New Shares shall have been approved for
quotation on the New York Stock Exchange.
(f) The Board of Directors of the Company (i) shall
have received an opinion of Argosy to the effect that the
Transactions contemplated hereby are fair from a financial
point of view to the stockholders of the Company and
(ii) shall have approved the Transactions and the Proposals.
(g) The Proxy Statement shall have been filed, or
be in a form ready to file, with the SEC.
(h) The form of the Liquidating Property Trust
Amendment Documents shall be satisfactory in form and
substance to Investor1 and Investor2.
The conditions set forth in subsections (i) through
(l) shall be applicable at Closing (but not at Funding).
(i) The Proposals shall have been approved in
person or by proxy, by the stockholders of Company at the
Stockholders Meeting, in accordance with applicable law, the
rules of the New York Stock Exchange and the Certificate and
By-Laws of Company.
(j) The Property Transfer shall have occurred.
(k) The Liquidating Property Trust Leases shall be
in full force and effect.
<PAGE>
<PAGE> 22
(l) The South Warehouse Lease shall be in full
force and effect.
ARTICLE V
Representations and Warranties
5.1. Representations and Warranties of Company.
Company represents and warrants to Parent, Holdings, Grantor
Trust and the Other Investors as follows:
(a) Organization, Standing and Corporate Power.
Company and each of its Subsidiaries is a corporation duly
organized, validly existing and in good standing under the
laws of the jurisdiction in which it is incorporated and has
the requisite corporate power and authority to carry on its
business as now being conducted. Company and each of its
Subsidiaries is duly qualified or licensed to do business and
is in good standing in each jurisdiction in which the nature
of its business or the ownership or leasing of its properties
makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or
licensed (individually or in the aggregate) would not have a
material adverse effect on Company. Company has delivered to
Parent complete and correct copies of its Certificate of
Incorporation and By-laws and the certificates of
incorporation and by-laws or other constitutive documents of
its Subsidiaries, in each case as amended to the date of this
Agreement. Grantor Trust is a trust duly organized, validly
existing and in good standing under the laws of the State of
California and has the requisite power and authority to enter
into this Agreement and the Ancillary Agreements and to
consummate the Transactions. The Liquidating Property Trust
is a trust duly organized and validly existing under the laws
of the State of California and has all requisite power and
authority to enter into the Liquidating Property Trust
Documents and to carry out the Transactions contemplated
thereby.
(b) Subsidiaries. Schedule 5.1(b) lists each
Subsidiary of Company. All the outstanding shares of capital
stock of each Subsidiary that is a corporation have been
validly issued and are fully paid and nonassessable. Except
as set forth in Schedule 5.1(b), the entire equity interest in
each Subsidiary of Company is owned by Company, by another
Subsidiary of Company or by Company and another such
Subsidiary, free and clear of all Liens. Except as permitted
under Section 6.3 of the New Loan Agreement, neither Company
nor any of its Subsidiaries owns or holds,
<PAGE>
<PAGE> 23
directly or indirectly, any capital stock or equity security
of, or any equity interest in, any corporation of business
other than Subsidiaries of Company.
(c) Capital Structure; New Shares; Preferred
Shares. The authorized capital stock of Company consists of
30,000,000 shares of Common Stock, par value $0.01 per share,
and 5,000,000 shares of preferred stock, par value $0.01 per
share. At the date hereof, (i) 22,429,275 shares of Common
Stock and no shares of preferred stock of Company were issued
and outstanding, (ii) 28,231 shares of Common Stock were held
by Company in its treasury, (iii) there are no outstanding
employee stock options to purchase shares of Common Stock
("Employee Stock Options") and no shares reserved for issuance
pursuant to any Employee Stock Option (although 1,500,000
shares of Common Stock are authorized in connection with the
relevant plans), and (iv) 750,000 shares of Common Stock were
reserved for issuance upon the exercise of outstanding
warrants, all of which warrants are held by one or more
Parties. Except as set forth above, at the date hereof, no
shares of capital stock or other voting securities of Company
were issued, reserved for issuance or outstanding and except
as set forth on Schedule 5.1(c), there are not any phantom
stock or other contractual rights the value of which is
determined in whole or in part by the value of any capital
stock of Company ("Stock Equivalents"). There are no
outstanding stock appreciation rights ("SARs") with respect to
Common Stock. Except for the approval of the Proposals as
contemplated by Section 4.1(i), no further approval of the
stockholders or the directors of Company or of any
Governmental Entity will be required by Company for the
issuance and sale of the New Shares and the Preferred Shares
as contemplated by this Agreement. When issued and sold to
Holdings or the Other Investors, as applicable, the New Shares
and the Preferred Shares will be duly authorized, validly
issued, fully paid and nonassessable and will be free and
clear of all claims, liens, encumbrances, security interests
and charges of any nature (arising from actions of the
Company) and are not subject to any preemptive right of any
stockholder of Company. Other than this Agreement and the
Ancillary Agreements, the New Shares and the Preferred Shares
are not subject to any voting trust agreement or other
contract, agreement, arrangement, commitment or understanding
to which the Company is a party, including any such agreement,
arrangement, commitment or understanding restricting or
otherwise relating to the voting or disposition of the New
Shares or the Preferred Shares. All outstanding shares of
capital stock of Company are, and all shares that may be
issued pursuant to the Employee Stock Options and the other
agreements and instruments listed above will be, when issued,
duly authorized, validly issued,
<PAGE>
<PAGE> 24
fully paid and nonassessable and not subject to preemptive
rights. There are not any outstanding bonds, debentures,
notes or other indebtedness of Company having the right to
vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which stockholders
of Company may vote. Except as set forth above, as of the
date of this Agreement, there are not any securities, options,
warrants, calls, rights, convertible or exchangeable
securities or commitments, agreements, arrangements or
undertakings of any kind to which Company or any of its
Subsidiaries is a party or by which any of them is bound
obligating Company or any of its Subsidiaries to issue,
deliver or sell or create, or cause to be issued, delivered or
sold or created, additional shares of capital stock or other
voting securities or Stock Equivalents of Company or of any of
its Subsidiaries or obligating Company or any of its
Subsidiaries to issue, grant, extend or enter into any such
security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. As of the date of this Agreement,
there are not any outstanding contractual obligations of
Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock of Company or
any of its Subsidiaries. Except in agreements to which any
Party is also a party, neither the Company nor any of its
Subsidiaries has entered into any agreement to register its
equity or debt securities under the Securities Act. Grantor
Trust is the record and beneficial owner of $6,250,000
principal amount of New Borrower Notes, $6,000,000 principal
amount of Existing Grantor Trust Indebtedness and all of the
capital stock of SBP Holding Company and The Art Store Holding
Company, to the best of Company's knowledge, is free and clear
of all Liens.
(d) Authority; Noncontravention. (i) Company, each
Interim Borrower and Grantor Trust has the requisite corporate
(or other) power and authority to enter into this Agreement
and the Ancillary Agreements and, subject to the Proposals
having been approved by the stockholders of Company at the
Stockholders Meeting, to consummate the Transactions. The
execution and delivery by the Company and each Interim
Borrower of this Agreement and each Ancillary Agreement by
Company, each Interim Borrower and Grantor Trust to which it
is a party and the consummation by Company, each Interim
Borrower and Grantor Trust of the Transactions have been duly
authorized by all necessary corporate (or other) action on the
part of Company, each Interim Borrower and Grantor Trust,
subject, in the case of this Agreement, to adoption of this
Agreement by the holders of a majority of the outstanding
shares of Common Stock. This Agreement and the Ancillary
Agreements to which it is a
<PAGE>
<PAGE> 25
party have been duly executed and delivered by Company, each
Interim Borrower and Grantor Trust and constitute valid and
legally binding agreements of Company, each Interim Borrower
and Grantor Trust enforceable against Company, each Interim
Borrower and Grantor Trust in accordance with their respective
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles.
(ii) The execution and delivery by Company and each
Interim Borrower of this Agreement and the Ancillary
Agreements did not, and the consummation of the Transactions
and compliance with the provisions of this Agreement and the
Ancillary Agreements without obtaining the consent of any
third party will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss by
Company or any of its Subsidiaries of a material benefit
under, or the creation of any material additional benefit to
any third party under, or result in the creation of any Lien
upon any of the properties or assets of Company or any of its
Subsidiaries under, (i) the Certificate of Incorporation or
By-laws of Company or the comparable charter or organizational
documents of any of its Subsidiaries, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or
license applicable to Company or any of its Subsidiaries or
their respective properties or assets or (iii) subject to the
governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Company or any of
its Subsidiaries or their respective properties or assets,
other than, in the case of clauses (ii) and (iii), any such
conflicts, violations, defaults, rights or Liens that
individually or in the aggregate could not reasonably be
expected to (x) have a material adverse effect on Company,
(y) impair the ability of Company and each Interim Borrower to
perform its obligations under this Agreement or any Ancillary
Agreement to which it is a party or (z) prevent the
consummation of any of the Transactions. No consent,
approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity or any
party to a Material Contract is required by or with respect to
Company or any of its Subsidiaries in connection with the
execution and delivery of this Agreement and the Ancillary
Agreements or the consummation by Company of the Transactions,
except for (i) the filing of a premerger notification and
report form by Company under the HSR Act
<PAGE>
<PAGE> 26
and any filings required pursuant to the statutes and
regulations listed on Schedule 5.1(d), (ii) the filing with
the SEC of (x) a proxy statement relating to the approval by
Company's stockholders of the Share Issuances and the other
Proposals (as amended or supplemented from time to time, the
"Proxy Statement") and (y) such reports under Sections 12 and
13(a) of the Exchange Act as may be required in connection
with this Agreement, the Ancillary Agreements and the
Transactions and (iii) such other consents, approvals, orders,
authorizations, registrations, declarations and filings as are
set forth on Schedule 5.1(d), which have been obtained prior
to the date hereof.
(e) SEC Documents; Undisclosed Liabilities.
Company has filed all required reports, schedules, forms,
statements and other documents with the SEC since January 31,
1993 (the "SEC Documents"). As of their respective dates, the
SEC Documents complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the
case may be, and none of the SEC Documents contained any
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Except to the extent that information contained in any SEC
Document has been revised or superseded by a later Filed SEC
Document, none of the SEC Documents contains any untrue
statement of a material fact or omits to state any material
fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances
under which they were made, not misleading. The financial
statements of Company included in the SEC Documents comply as
to form in all material respects with applicable accounting
requirements and the published rules and regulations of the
SEC with respect thereto, have been prepared in accordance
with generally accepted accounting principles (except, in the
case of unaudited statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and fairly
present the consolidated financial position of Company and its
Subsidiaries as of the dates thereof and their consolidated
statements of operations, stockholders equity and cash flows
for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). Except as
set forth in the Filed SEC Documents, neither Company nor any
of its Subsidiaries has any liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise)
required by generally accepted accounting principles to be set
forth on a consolidated balance sheet of Company and its
Subsidiaries or in the
<PAGE>
<PAGE> 27
notes thereto, other than liabilities and obligations incurred
in the ordinary course of business consistent with prior
practice and experience since October 31, 1994. Schedule
5.1(e) sets forth a balance sheet of The Art Store as of the
balance sheet date indicated on such Schedule. Such balance
sheet has not been prepared in accordance with generally
accepted accounting principles, among other things the
footnotes are omitted, but was rather prepared for internal
management purposes. Nevertheless, such balance sheet makes
reasonable disclosure of the financial condition of the
subject company as of such balance sheet date. Since such
balance sheet date, to the best knowledge of Company, there
has been no material adverse change in The Art Store.
(f) Proxy Statement. The Proxy Statement will not,
at the date it is first mailed to Company's stockholders or at
the time of the meeting of Company's stockholders held to vote
on approval of the Proposals, 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
therein, in light of the circumstances under which they are
made, not misleading. The Proxy Statement will comply as to
form in all material respects with the requirements of the
Exchange Act. No representation is made by Company with
respect to statements made or incorporated by reference in the
Proxy Statement based on information supplied by Parent,
Holdings or the Other Investors for inclusion or incorporation
by reference in the Proxy Statement.
(g) Absence of Certain Changes or Events. Except
as disclosed in the SEC Documents filed and publicly available
prior to the date of this Agreement (the "Filed SEC
Documents") or in Schedule 1.1, since January 31, 1994,
Company has conducted its business only in the ordinary
course, and there has not been (i) any material adverse change
in Company, (ii) any declaration, setting aside or payment of
any dividend or other distribution (whether in cash, stock or
property) with respect to any of Company's capital stock,
(iii) any split, combination or reclassification of any of its
capital stock or any issuance or the authorization of any
issuance of any other securities in respect of, in lieu of or
in substitution for shares of its capital stock (other than
pursuant to the Stock Split), (iv) except as set forth on
Schedule 5.1(g) (x) any granting by Company or any of its
Subsidiaries to any executive officer of Company or any of its
Subsidiaries of any increase in compensation, except in the
ordinary course of business consistent with prior practice or
as was required under employment agreements in effect on
January 31, 1994, (y) any granting by Company or any of its
Subsidiaries to
<PAGE>
<PAGE> 28
any such executive officer of any increase in severance or
termination pay, except as was required under any employment,
severance or termination agreements in effect on January 31,
1994, or (z) any entry by Company or any of its Subsidiaries
into any employment, severance or termination agreement with
any such executive officer, (v) any damage, destruction or
loss, whether or not covered by insurance, that has had or
could reasonably be expected to have a material adverse effect
on Company or (vi) any change in accounting methods,
principles or practices by Company materially affecting its
assets, liabilities or business, except insofar as may have
been required by a change in generally accepted accounting
principles.
(h) Title to Properties and Assets; Liens.
(i) Except as contemplated by this Agreement and the
Ancillary Agreements, Company and its Subsidiaries have good,
sufficient and legal title to all the properties and assets
reflected in the consolidated balance sheet as of October 31,
1994 included in Form 10-Q of Company except for assets
acquired or disposed of in the ordinary course of business
since the date of such consolidated balance sheet. All such
properties are free and clear of Liens, except as permitted
under Section 6.2 of the New Loan Agreement.
(ii) Schedule 5.1(h) hereto correctly sets forth the
following information with respect to each Mortgaged Property:
(a) store number (if applicable) and (b) street address. Each
Subsidiary has good and marketable fee title to each Mortgaged
Property identified in Schedule 5.1(h) as being owned by such
Subsidiary and each Mortgaged Property is free and clear of
Liens, except as permitted under Section 6.2 of the New Loan
Agreement.
(iii) Company has previously furnished to Parent true,
correct and complete copies of all ground leases, space
leases, subleases, easement agreements, reciprocal easement
agreements, two-party supplemental agreements, option
agreements, license agreements, and other agreements,
instruments, and documents (whether or not recorded) that
encumber, or otherwise affect in any material respect, its fee
interest in or to any Mortgaged Property or any portion
thereof.
(iv) No condemnation proceeding involving any
Mortgaged Property or portion of any thereof or parking
facility used in connection therewith has commenced or, to the
knowledge of any Subsidiary or Company, is contemplated by any
governmental authority.
<PAGE>
<PAGE> 29
(v) The operation of the Company, its Subsidiaries,
the Grantor Trust Subsidiaries and each Mortgaged Property
does not involve a violation of (i) any statutes, laws,
regulations, rules, ordinances, or orders of any kind
whatsoever (including, without limitation, zoning and building
laws, ordinances, codes, or approvals and environmental
protection orders, laws or regulations) other than violations
that would not result in any material change in the business,
operations, properties, assets or condition (financial or
otherwise) of any Subsidiary, Grantor Trust Subsidiary or
Company and would not materially adversely affect such
Mortgaged Property or the ability of Company or any of its
Subsidiaries or the Grantor Trust to perform their respective
Obligations or consummate the Transactions, (ii) any building
permits, restrictions of record, or any agreement affecting
any such Mortgaged Property or portion thereof other than
violations that would not result in any material change in the
business, operations, properties, assets or condition
(financial or otherwise) of any Subsidiary, Grantor Trust
Subsidiary or Company and would not materially adversely
affect such Mortgaged Property or the ability of Company or
any of its Subsidiaries or the Grantor Trust to perform their
respective Obligations or consummate the Transactions.
(vi) Each Mortgaged Property has adequate water, gas,
telephone, electrical supply, storm and sanitary sewage
facilities, and means of access to and from public highways,
and has fire and police protection to the fullest extent
available in the jurisdiction in which such Mortgaged Property
is located.
(vii) Except as disclosed in writing to Parent on
Schedule 5.1(h), (x) the operations of Company and each of its
Subsidiaries and the Grantor Trust Subsidiaries comply with
all applicable environmental, health, and safety statutes and
regulations except to the extent that noncompliance would not
result in any material change in the business, operations,
properties, assets, or condition (financial or otherwise) of
any Subsidiary, Grantor Trust Subsidiary or Company, and that
would not materially adversely affect any Mortgaged Property
or the ability of Company or any of its Subsidiaries to
perform their respective Obligations or consummate the
Transactions; (y) none of the Mortgaged Properties or the
operations to the Company or any of its Subsidiaries or the
Grantor Trust Subsidiaries is the subject of any private
claims or any federal or state investigation evaluating
whether any remedial action is needed in response to a release
of any hazardous waste (as such term is defined in any
applicable state or federal or environmental law or
regulations) or
<PAGE>
<PAGE> 30
other hazardous material into the environment except to the
extent that such claims or remedial action would not result in
any material change in the business, operations, properties,
assets, or condition (financial or otherwise) of any
Subsidiary, Grantor Trust Subsidiary or the Company and that
would not materially adversely affect any Mortgaged Property
or the ability of Company or any of its Subsidiaries to
perform their respective Obligations or consummate the
Transactions; and (z) neither Company nor any of its
Subsidiaries nor any Grantor Trust Subsidiary has any material
contingent liability in connection with any release of any
hazardous waste or hazardous material into the environment
including, without limitation, any contingent liability
arising in connection with a failure, or alleged failure, to
comply with the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C.
SS 9601, et seq.), or the Federal Resource Conservation and
Recovery Act, as amended (42 U.S.C. SS 6901 et seq.), except
for such contingent liabilities that would not result in a
material change in the business, operations, properties,
assets, or condition (financial or otherwise) of any
Subsidiary, Grantor Trust Subsidiary or Company and that would
not materially adversely affect any Mortgaged Property or the
ability of Company or any of its Subsidiaries to perform their
respective Obligations or consummate the Transactions.
(i) Litigation; Adverse Facts. There is no action,
suit, proceeding or arbitration (whether or not purportedly on
behalf of Company or any of its Subsidiaries or the
Liquidating Property Trust or the Grantor Trust Subsidiaries
at law or in equity or before or by any federal, state,
municipal or other government department, commission, board,
bureau, agency, or instrumentality, domestic or foreign)
pending (except as otherwise disclosed on Schedule 5.1(i)
hereto) or, to the knowledge of Company or any Subsidiary,
threatened against or affecting Company or any of its Subsidi-
aries or the Liquidating Property Trust or the Grantor Trust
Subsidiaries or any of Company's or such Subsidiary's or the
Liquidating Property Trust's or the Grantor Trust
Subsidiaries' properties not provided for in the Plan that
would (i) result in any material adverse change in the
business, operations, properties, assets, or condition
(financial or otherwise) of Company and its Subsidiaries,
taken as a whole, or the Grantor Trust, (ii) materially
adversely affect any Mortgaged Property, (iii) impair the
ability of Company or Grantor Trust to perform its obligations
under this Agreement or any Ancillary Agreement or
(iv) prevent the consummation of any of the Transactions, and
there is no basis known to Company for any such action, suit
or proceeding. Neither Company
<PAGE>
<PAGE> 31
nor any of its Subsidiaries nor the Liquidating Property Trust
nor the Grantor Trust Subsidiaries is (i) in violation of any
applicable law that materially adversely affects or may
materially adversely affect any Mortgaged Property, the
business, operations, properties, assets or condition
(financial or otherwise) of Company and its Subsidiaries,
taken as a whole, or the Grantor Trust, or the ability of
Company, the Grantor Trust or any of its Subsidiaries to
perform their respective Obligations or consummate the
Transactions, or (ii) subject to or in default with respect to
any final judgment, writ, injunction, decree, rule or
regulation of any court or any federal, state, municipal, or
other governmental department, commission, board, bureau,
agency, or instrumentality, domestic or foreign, that would
have a material adverse affect any Mortgaged Property, the
business, operations, properties, assets or condition
(financial or otherwise) of Company and its Subsidiaries,
taken as a whole, or the Grantor Trust, or the ability of
Company or any of its Subsidiaries or the Grantor Trust to
perform their respective Obligations or consummate the
Transactions. There is no action, suit, proceeding, or
investigation pending or, to the knowledge of Company, the
Grantor Trust or any Subsidiary, threatened against or
affecting Company or any of its Subsidiaries or the
Liquidating Property Trust or the Grantor Trust Subsidiaries
that questions the validity or enforceability of this
Agreement or any of the Ancillary Agreements or challenges the
Transactions.
(j) Absence of Changes in Benefit Plans.
(i) Company and each of its ERISA Affiliates is in
compliance in all material respects with any applicable
provisions of ERISA and the regulations and published
interpretations thereunder with respect to all Pension Plans
and Multiemployer Plans, except to the extent that all such
noncompliances would result in the loss of the deductibility
of contributions to any Pension Plan or Multiemployer Plan, or
would result in the incurrence by Company and its ERISA
Affiliates of any civil penalty assessed pursuant to Section
502(i) of ERISA or a tax imposed by Section 4975 of Internal
Revenue Code in an aggregate amount not in excess of $100,000.
(ii) Except for the termination of Company's LESOP
and PAYSOP, as defined and described in the Plan and the
contemplated "freezing" of Company's three Pension Plans by
ceasing the accrual of benefits under such Pension Plans, no
event or condition which presents a material risk of plan
termination or any other event that may cause the Company or
any ERISA Affiliate to incur liability or have a lien
<PAGE>
<PAGE> 32
imposed on its assets under title IV of ERISA has occurred or
is reasonably expected to occur with respect to any Pension
Plan; and none of the events described above might result in
the imposition of any lien or incurrence by Company or any of
its ERISA Affiliates of any liability under any Pension Plan
or to the Pension Benefit Guaranty Corporation (or any
successor thereto) or any other party under Sections 4062,
4063, and 4064 of ERISA or any other law in excess of
$100,000.
(iii) Vested liabilities (as defined in Section 3(25)
of ERISA) under all Pension Plans (with assets less than
vested liabilities only) do not exceed the assets thereunder
by more than $100,000.
(iv) Neither Company nor any of its ERISA Affiliates
has incurred or reasonably expects to incur any withdrawal
liability under ERISA to any Multiemployer Plan in excess of
$100,000.
(k) Payment of Taxes. Except as set forth in
Schedule 5.1(k), as of the date of this agreement and on the
Closing Date, (i) all Tax Returns that are required to be
filed by or with respect to the Company and each of its
Subsidiaries have been duly filed, (ii) all Taxes due with
respect to the periods covered by the Tax Returns referred to
in clause (i) have been timely paid, (iii) no adjustments or
deficiencies relating to the Tax Returns referred to in
clause (i) have been proposed, asserted or assessed by the
Internal Revenue Service or the appropriate state, local or
foreign taxing authority, (iv) no extension of time with
respect to any date on which a Tax Return was or is to be
filed by the Company or any Subsidiary is in force, and there
are no pending or threatened actions or proceedings for the
assessment or collection of Taxes against the Company or any
of its Subsidiaries, (v) each adjustment, deficiency, action
or proceeding set forth in Schedule 5.1(k) is being contested
or handled in good faith, (vi) there are no outstanding
waivers or agreements extending the applicable statute of
limitations for any period with respect to any Taxes of the
Company or any of its Subsidiaries, (vii) the Company and the
Subsidiaries income Tax Returns have been examined by the
Internal Revenue Service or the appropriate state, local or
foreign tax authority, (viii) no closing agreement pursuant to
Section 7121 of the Internal Revenue Code, or similar
provision of any state, local, or foreign law, has been
entered into by or with respect to the Company or any of its
Subsidiaries, (ix) there are no tax sharing agreements or
similar contracts or arrangements to which the Company or any
of its Subsidiaries is a party, (x) the Company or any
<PAGE>
<PAGE> 33
of its Subsidiaries has not been a member of an affiliated
group (within the meaning of Section 1504 of the Internal
Revenue Code) filing a consolidated federal income Tax Return,
other than a group the common parent of which is the Company,
(xi) no powers of attorney with respect to Taxes granted by
the Company or any of its Subsidiaries are in effect, (xii) no
claim has ever been made by an authority in a jurisdiction
where the Company or any Subsidiary does not file Tax Returns
that the Company or such Subsidiary is or may be subject to
taxation by that jurisdiction, (xiii) no audit of any Tax
Return filed by the Company or any Subsidiary is in progress,
and neither the Company nor any Subsidiary has been notified
by any tax authority that any such audit is contemplated or
pending, and (xiv) there are no security interests on any of
the assets of the Company or any Subsidiary that arose in
connection with any failure (or alleged failure) to pay any
Taxes.
(l) Officers. Except as set forth on
Schedule 5.1(g), there are no severance or other payment
obligations triggered as a result of the Transactions. No
action, suit, proceeding or arbitration relating to any
officer of the Company is pending or threatened against the
Company.
(m) No Excess Parachute Payments. No amount that
could be received (whether in cash or property or the vesting
of property) as a result of any of the Transactions by any
employee, officer or director of Company or any of its
affiliates who is a "disqualified individual" (as such term is
defined in proposed Treasury Regulation Section 1.280G-1)
under any employment, severance or termination agreement,
other compensation arrangement or Benefit Plan currently in
effect would be characterized as an "excess parachute payment"
(as such term is defined in Section 280G(b)(1) of the Internal
Revenue Code). Set forth in Schedule 5.1(m) is (i) the
maximum amount that could be paid to each such disqualified
individual as a result of the Transactions under all
employment, severance and termination agreements, other
compensation arrangements and Benefit Plans currently in
effect and (ii) the "base amount" (as such term is defined in
Section 280G(b)(3) of the Internal Revenue Code) for each such
disqualified individual calculated as of the date of this
Agreement.
(n) Voting Requirements. The affirmative vote of a
majority of the Company's issued and outstanding stock with
respect to the Proposals is the only vote of the holders of
any class or series of Company's capital stock necessary to
approve this Agreement, the Ancillary Agreements and the
Transactions. This Agreement and the
<PAGE>
<PAGE> 34
Ancillary Agreements and the Transactions have been approved
by a vote of the directors as required by Company's
Certificate of Incorporation and By-laws.
(o) State Takeover Statutes. The Board of
Directors has approved this Agreement and the Ancillary
Agreements, and such approval is sufficient to render
inapplicable to this Agreement, the Ancillary Agreements and
the Transactions the provisions of Section 203 of the DGCL.
To the best of Company's knowledge, no other state takeover
statute or similar statute or regulation applies or purports
to apply to this Agreement, any Ancillary Agreement or any of
the Transactions.
(p) Brokers. No broker, investment banker,
financial advisor or other person, other than Libra
Investments, Inc., Pinnacle Partners and Argosy, the fees and
expenses of which will be paid by Company, is entitled to any
broker's, finder's, financial advisor's or other similar fee
or commission in connection with the Transactions based upon
arrangements made by or on behalf of Company. A complete and
correct copy of Company's engagement letters with Libra
Investments, Inc., Pinnacle Partners and Argosy has been
delivered to Parent prior to the execution of this Agreement.
Company has not, and will not, increase any such fees and
expenses prior to Closing.
(q) Material Contracts. All contracts, leases and
other agreements to which Company or any of its Subsidiaries
is a party and that are material to the business, properties,
assets, condition (financial or otherwise), results of
operations or prospects of Company and its Subsidiaries, taken
as a whole (the "Material Contracts") have been filed as
exhibits to the SEC Documents or are listed on
Schedule 5.1(q). Except as disclosed in Schedule 5.1(q), each
Material Contract is in full force and effect; Company and its
Subsidiaries have performed in all material respects all the
obligations required to be performed thereby under each
Material Contract; neither Company nor any of its Subsidiaries
has received any written assertion of default under any
Material Contract; neither Company nor any of its Subsidiaries
expects any termination or material change to, or receipt of a
proposal with respect to, any of the Material Contracts as a
result of the Transactions; and neither Company nor any of its
Subsidiaries has knowledge of any material breach or
anticipated material breach by any other party to any Material
Contract. Company has filed as an exhibit to an SEC Document
or has furnished Parent with true, complete and unredacted
copies of each Material Contract, together with all
amendments, waivers or other changes thereto. Company
<PAGE>
<PAGE> 35
does not have any Material Contract or any other contract or
agreement with the United States Department of Energy, the
United States Department of Defense or any of the armed forces
of the United States.
(r) Governmental Regulation. Neither Company nor
any of its Subsidiaries is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power
Act, the Interstate Commerce Act, or the Investment Company
Act of 1940 or to any federal or state statute or regulation,
limiting its ability to (i) issue the New Shares or the
Preferred Shares, (ii) incur Indebtedness for money borrowed,
(iii) to create Liens on any of its properties to secure such
Indebtedness or (iv) otherwise to consummate the Transactions.
SBP Transportation Co., Inc., a California corporation, is
subject to the Interstate Commerce Act, but such act does not
limit the actions described above.
(s) Disclosure. No representation or warranty of
Company or any Subsidiary contained in this Agreement or any
Ancillary Agreement, or any other document, certificate, or
written statement furnished to Parent, Holdings or the Other
Investors by or on behalf of the Company or any Subsidiary for
use in connection with the Transactions contains any untrue
statement of a material fact or omits to state a material fact
(known to Company or any Subsidiary in the case of any
document not furnished by it) necessary in order the make the
statements contained herein or therein not misleading. The
term "material" in the preceding sentence shall be interpreted
in accordance with Section 10(b) of the Exchange Act. There
is no fact known to Company or any Subsidiary (other than
matters of general economic nature) that materially adversely
affects any Mortgaged Property, the business, operations,
property, assets, or condition (financial or otherwise) of
Company and its Subsidiaries, taken as a whole, or the ability
of Company or any Subsidiary to perform their respective
obligations that have not been disclosed herein or in such
other documents, certificates and statements furnished to
Parent, Holdings, Grantor Trust and the Other Investors for
use in connection with the Transactions.
(t) Affiliates. Company hereby certifies to
Fidelity Management Trust Company ("Fidelity") both in its
individual capacity and its capacity as a fiduciary (as
defined in Section 3(21)(A) of the Employee Retirement Income
Security Act of 1974, as amended) of the Kodak Retirement
Income Plan (the "Plan"), that, to the best of its knowledge,
Company is not an affiliate (as defined in Section V(C) of the
U.S Department of Labor Prohibited Class Exemption 84-14, 49
Fed. Reg. 9494 (March 13, 1984)
<PAGE>
<PAGE> 36
("PTCE 84-14")), and during the one-year period ending on the
Closing Date was not such an affiliate, of any person
identified on Schedule 5.1(t) hereto. Company hereby
acknowledges and agrees that the foregoing certification will
be relied upon by Fidelity in causing the Plan to enter into
the Transactions contemplated by this Agreement.
(u) Licenses. The Company and its Subsidiaries
hold all material licenses, franchises, permits, consents,
registrations, certificates and other approvals (including,
without limitation, those relating to environmental matters,
public and worker health and safety, buildings, highways or
zoning) (individually, a "License" and collectively,
"Licenses") required for the conduct of its business as now
being conducted, and is operating in substantial compliance
therewith, except where the failure to hold any such License
or to operate in compliance therewith would not have a
material adverse effect on the Company and its Subsidiaries.
(v) Private Offerings. No form of general
solicitation or general advertising was used by the Company or
any of its Subsidiaries or any of the Company's or such
Subsidiary's representatives, or, to the knowledge of the
Company, any other Person acting on behalf of the Company or
any of its Subsidiaries, in connection with the offering of
the securities being purchased under this Agreement or under
any other document. Neither the Company, any of its
Subsidiaries nor any person acting on the Company's or such
Subsidiary's behalf has directly or indirectly offered the
Interim Notes, New Shares or Preferred Shares, or any part
thereof or any other similar securities or the securities
being purchased under any other document, for sale to, or sold
or solicited any offer to buy any of the same from, or
otherwise approached or negotiated in respect thereof with any
Person or Persons other than the Parties. Assuming the
accuracy of the representations of the Parties as set forth in
Sections 5.2 and 5.3, neither the Company, any of its
Subsidiaries nor any person acting on the Company's or such
Subsidiary's behalf has taken or will take any action which
would subject the issue and sale of the securities being
purchased under this Agreement to the provisions of Section 5
of the Securities Act.
(w) Foreign Assets Control Regulation, Etc.
Neither the issue and sale of the Interim Notes, the New
Shares or the Preferred Shares by the Company nor its use of
the proceeds thereof as contemplated by this Agreement will
violate the Foreign Assets Control Regulations, the Control
Regulations, the Cuban Assets Control Regulations, the Foreign
Funds Control Regulations, the Iranian Assets Control
Regulations, the Nicaraguan Trade Control
<PAGE>
<PAGE> 37
Regulations, the South African Transactions Control
Regulations, the Libyan Sanctions Regulations, the Soviet Gold
Coin Regulations, the Panamanian Transactions Regulations, the
Haitian Transactions Regulations or the Iraqi Sanctions
Regulations of the United States Treasury Department
(31 C.F.R., Subtitle B, Chapter V, as amended) or Executive
Orders 12722 and 12724 (Transactions with Iraq).
(x) Federal Reserve Regulations and Other Matters.
Neither the Company nor any of its Subsidiaries will, directly
or indirectly, use any of the proceeds from the sale of the
Interim Notes for the purpose, whether immediate, incidental
or ultimate, of buying any "margin stock," or of maintaining,
reducing or retiring any indebtedness originally incurred to
purchase any stock that is currently a "margin stock," or for
any other purpose which might constitute the Transactions a
"purpose credit," in each case within the meaning of
Regulation G or U of the Board of Governors of the Federal
Reserve System (12 C.F.R. 207 and 221, as amended,
respectively), or otherwise take or permit to be taken any
action which would involve a violation of such Regulation G or
Regulation U or of Regulations T or X of the Board of
Governors of the Federal Reserve System (12 C.F.R. 220 and
224, as amended, respectively) or any other regulation of such
Board. No indebtedness that may be maintained, reduced or
retired with the proceeds from the sale of the Interim Notes
was incurred for the purpose of purchasing or carrying any
"margin stock" and neither the Company nor any of its
Subsidiaries own any such "margin stock" or have any present
intention of acquiring, directly or indirectly any such
"margin stock."
(y) Insurance. After the Funding Date, Company
will provide to each Party, if so requested in writing, a list
of all insurance policies and fidelity bonds covering the
assets, business, equipment, properties, operations,
employees, officers and directors under which the Company or
any of its Subsidiaries may derive any material benefit, the
term and deductible for each such policy, the agency and
company providing such insurance and the name of each person
scheduled as having an interest therein as loss payee, pledgee
or otherwise. There is no claim by the Company or any of its
Subsidiaries pending under any of such policies or bonds as to
which coverage has been questioned, reserved, denied or
disputed by the underwriters of such policies or bonds or
their agents where such question, reservation, denial or
dispute, in each case, would have a material adverse effect on
the Company and its Subsidiaries on a consolidated basis. All
premiums due and payable under all such policies and bonds
have been paid, and the Company and its Subsidiaries are
otherwise in full compliance with the
<PAGE>
<PAGE> 38
terms and conditions of all such policies and bonds, except in
each case where the failure would not have a material adverse
effect on the Company and its subsidiaries on a consolidated
basis. Such policies of insurance and bonds (or other
policies and bonds providing substantially similar insurance
coverage) are and have been in full force and effect for at
least the last year or since the inception of the Company or
any of its Subsidiaries, as the case may be, and remain in
full force and effect. Such policies of insurance and bonds
are of the type and in amounts customarily carried by persons
conducting business similar to that presently conducted by the
Company and its Subsidiaries. The Company knows of no
threatened termination of any such policies or bonds that
would be material to the Company and its Subsidiaries taken as
a whole.
(z) Intellectual Property. The Company and its
Subsidiaries have ownership of, or license to use, all patent,
copyright, trade secret, trademark, or other proprietary
rights used or to be used in the business of the Company or
any of its Subsidiaries and which are material to the Company
and its Subsidiaries on a consolidated basis (collectively,
"Intellectual Property"). There are no claims or demands of
any other person pertaining to any of such Intellectual
Property and no proceedings have been instituted, or are
pending or, to the knowledge of the Company, threatened, which
challenge the rights of the Company or any of its Subsidiaries
in respect thereof, except those that would not have a
material adverse effect on the Company and its Subsidiaries on
a consolidated basis. The Company and its Subsidiaries have
the right to use all customer lists, designs, manufacturing or
other processes, computer software, systems, data
compilations, research results and other information required
for or incident to its products or their business as presently
conducted or contemplated and which are material to the
Company and its Subsidiaries on a consolidated basis.
(aa) Grantor Trust Subsidiaries. (i) The Art
Store, a California corporation has good, sufficient and legal
fee title to all the properties listed on Schedule 5.1(h) as
being owned by The Art Store free and clear of Liens, except
as disclosed on Schedule 5.1(h) or as permitted under
Section 6.2 of the New Loan Agreement.
(ii) The Art Store has a good, sufficient and legal
leasehold interest in all of the properties listed on Schedule
5.1(h) as being leased by The Art Store and such leasehold
interest is free and clear of all Liens, except as disclosed
on Schedule 5.1(h).
<PAGE>
<PAGE> 39
(iii) Schedule 5.1(aa) sets forth the following
information with respect to each of the Grantor Trust
Subsidiaries as of the most recent practicable date through
the Funding: (A) the basis of the Grantor Trust Subsidiary in
its assets; (B) the basis of The Art Store Holding Company in
the Stock of The Art Store; and (C) the amount of any net
operating loss, net capital loss, unused investment or other
credit, unused foreign tax, or excess charitable contribution
allocable to such Grantor Trust Subsidiary.
(iv) As of the Funding, the adjusted basis of The
Art Store Holding Company in the stock of The Art Store will
be at least $7,000,000; the excess of the adjusted basis of
The Art Store in its assets over its liabilities will be at
least $7,000,000; and the excess of the adjusted basis of SBP
Properties Holding Company in its assets over its liabilities
will be at least $1,500,000.
(v) Except as disclosed on Schedule 5.1(aa), none
of the Grantor Trust Subsidiaries has any liability for the
Taxes of any other Person (other than the Grantor Trust
Subsidiaries and other than Taxes of the consolidated group,
the common parent of which is Company) (A) under Treasury
Regulations Section 1.1502-6 (or any similar provision of
state, local or foreign law), (B) as a transferee or
successor, (C) by contract or (D) otherwise.
5.2. Representations and Warranties of Parent and
Holdings. Each of Parent and Holdings represents and warrants
to Company and the Other Investors as follows:
(a) Authority. Each of Parent and Holdings has the
requisite power and authority to enter into this Agreement and
the Ancillary Agreements and to consummate the Transactions.
(b) Validity. This Agreement and the Ancillary
Agreements have been duly authorized, executed and delivered
by Parent and Holdings and constitute valid and legally
binding agreements of Parent and Holdings enforceable against
such Party in accordance with their respective terms, subject
to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles.
(c) Information Supplied. None of the information
supplied or to be supplied by Parent or Holdings about Parent
or Holdings in writing for inclusion or incorporation by
reference in the Proxy Statement will, at the date the Proxy
Statement is first mailed to the Company's
<PAGE>
<PAGE> 40
stockholders or at the time of the meeting of the Company's
stockholders held to vote on adoption of this Agreement,
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 therein, in light of
the circumstances under which they are made, not misleading.
(d) Brokers. No broker, investment banker,
financial advisor or other person is entitled to any broker's,
finder's, financial advisor's or other similar fee or
commission in connection with the Transactions based upon
arrangements made by or on behalf of Parent or Holdings,
except as described in Section 5.1(p), which would be or
become the responsibility of any other Party.
(e) Ownership of Company Securities. Neither
Parent nor Holdings is the record or beneficial owner of any
shares of Common Stock, principal amount of New Borrower Notes
or Grantor Trust Notes, warrants to purchase shares of Common
Stock or any other equity or debt securities of the Company,
except as contemplated by this Agreement or the Ancillary
Agreements.
(f) Investment Intent. Holdings is purchasing or
acquiring the New Shares and Preferred Shares for its own
account for investment and not with a present view to, or for
sale in connection with, any distribution thereof in violation
of the Securities Act. Holdings does not have any contract,
undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any
third person, with respect to any of the New Shares or
Preferred Shares. Holdings is aware that the certificates
evidencing the New Shares and Preferred Shares shall bear
substantially the following legend relating to restrictions on
resale under the Securities Act:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED EXCEPT IN ACCORDANCE THEREWITH."
(g) Acquisition for Investment and Rule 144.
Holdings has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits
and risks of the prospective investment. Holdings understands
that the New Shares and Preferred Shares will not be
registered under the Securities Act in reliance on a specific
exemption from the registration provision of the Securities
Act which depends upon, among other things, the
<PAGE>
<PAGE> 41
bona fide nature of Holdings' investment intent as expressed
herein. Holdings acknowledges that the New Shares and
Preferred Shares must be held indefinitely unless they are
subsequently registered under the Securities Act or an
exemption from such registration is available. Holdings has
been advised or is aware of the provisions of Rule 144 and
Rule 144A promulgated under the Securities Act which permits
limited resale of shares purchased in a private placement
subject to the satisfaction of certain conditions.
(h) Consents. All material consents, approvals,
orders, authorizations of or registrations, declarations or
filings in connection with the valid execution and delivery of
this Agreement and the Ancillary Agreements by Parent and
Holdings or the purchase of the New Shares and the Preferred
Shares by Holdings have been obtained or made, or will be
obtained or made prior to the Closing Date.
5.3. Representations and Warranties of the Other
Investors. Each of the Other Investors and Grantor Trust
represents and warrants, with respect to such Person only,
severally and jointly, to Company, Parent and Holdings as
follows:
(a) Authority. Investor1 has the requisite power
and authority to enter into this Agreement and the Ancillary
Agreements and to consummate the Transactions. Investor2 has
the requisite power and authority to enter into this Agreement
and the Ancillary Agreements and to consummate the
Transactions. Each of Investor3, Investor4, Investor5 and
Investor6 is a corporation duly organized, validly existing
and in good standing under the laws of its respective
jurisdiction of incorporation and has the requisite power and
authority to enter into this Agreement and the Ancillary
Agreements and to consummate the Transactions.
(b) Validity. This Agreement and the Ancillary
Agreements have been duly authorized, executed and delivered
by such Person and constitute valid and legally binding
agreements of such Person enforceable against such Party in
accordance with their respective terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(c) Information Supplied. None of the information
supplied or to be supplied by such Person about such Person in
writing for inclusion or incorporation by reference in the
Proxy Statement will, at the date the Proxy Statement is first
mailed to Company's stockholders or at
<PAGE>
<PAGE> 42
the time of the Stockholders Meeting, 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 therein, in light of the circumstances
under which they are made, not misleading.
(d) Brokers. No broker, investment banker,
financial advisor or other person is entitled to any broker's,
finder's, financial advisor's or other similar fee or
commission in connection with the Transactions based upon
arrangements made by or on behalf of such Person, except as
set forth in Section 5.1(p), which would be or become the
responsibility of any other Party.
(e) Ownership of Company Securities. Investor1 is
the beneficial owner of 7,630,307 shares of Common Stock and
warrants to purchase 394,547 shares of Common Stock.
Investor2 is the beneficial owner of 1,433,413 shares of
Common Stock and warrants to purchase 74,203 shares of Common
Stock. Investor3 is the beneficial owner of no shares of
Common Stock, $937,500 principal amount of New Borrower Notes
and warrants to purchase 70,312 shares of Common Stock.
Investor4 is the beneficial owner of 2,139,940 shares of
Common Stock, $937,500 principal amount of New Borrower Notes
and warrants to purchase 70,312 shares of Common Stock.
Investor5 is the beneficial owner of 1,305,700 shares of
Common Stock, $937,500 principal amount of New Borrower Notes
and warrants to purchase 70,312 shares of Common Stock.
Investor6 is the beneficial owner of no shares of Common
Stock, $937,500 principal amount of New Borrower Notes and
warrants to purchase 70,312 shares of Common Stock. Except
for such ownership, as of the date of this Agreement, such
Person does not beneficially own any shares of Common Stock,
principal amount of Existing Grantor Trust Indebtedness,
Borrower Notes or New Borrower Notes, warrants to purchase
shares of Common Stock or any other equity or debt securities
of Company, except as contemplated by this Agreement, the
Ancillary Agreements or the Existing Loan Agreement.
(f) Investment Intent. Such Person is purchasing
or acquiring the New Shares and the Preferred Shares for its
own account for investment and not with a present view to, or
for sale in connection with, any distribution thereof in
violation of the Securities Act, provided that disposition of
such Person's property shall at all times be within its
control. Such Person does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or
grant participations to such person or to any third person,
with respect to any of the New Shares or Preferred Shares.
Such Person is aware that the
<PAGE>
<PAGE> 43
certificates representing the New Shares and the Preferred
Shares will bear such legends relating to restrictions on
resale under the Securities Act as provided in Section 5.2(f).
(g) Acquisition for Investment and Rule 144. Such
Person has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits
and risks of the proposed Investment. Such Person understands
that the New Shares and the Preferred Shares will not be
registered under the Securities Act in reliance on a specific
exemption from the registration provision of the Securities
Act which depends upon, among other things, the bona fide
nature of such Person's investment intent as expressed herein.
Such Person acknowledges that the New Shares and the Preferred
Shares must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such
registration is available. Such Person has been advised or is
aware of the provisions of Rule 144 and Rule 144A promulgated
under the Securities Act which permits limited resale of
shares purchased in a private placement subject to the
satisfaction of certain conditions.
(h) Legal Investment; Consents. The purchase of
the New Shares and the Preferred Shares by such Person
hereunder is legally permitted in all material respects by all
laws and regulations to which such Person is subject and all
material consents, approvals, orders, authorizations of or
registrations, declarations or filings in connection with the
valid execution and delivery of this Agreement and the
Ancillary Agreements by such Person or the purchase of the New
Shares and the Preferred Shares by such Person have been
obtained or made, or will be obtained or made prior to the
Closing Date.
ARTICLE VI
Covenants Relating to Conduct of Business
of Company
6.1. Conduct of Business. (a) Conduct of Business
by Company. Except as otherwise contemplated by this
Agreement and the Ancillary Agreements, during the period from
the date of this Agreement to the earlier of (x) the Closing
and (y) the first day on which each of the five persons
designated as Holding Directors on Schedule 2.1 of the
Stockholders Agreement shall have become Directors of Company,
Company shall, and shall cause its Subsidiaries to, carry on
their respective businesses in the usual, regular
<PAGE>
<PAGE> 44
and ordinary course in substantially the same manner as
heretofore conducted and, to the extent consistent therewith,
use its best efforts to preserve intact their current business
organizations, keep available the services of their current
officers and other employees and preserve their relationships
with customers, suppliers, licensors, licensees, distributors
and others having business dealings with them. By way of
background, Schedule 1.1 sets forth the most recent financial
information of Company. Without limiting the generality of
the foregoing, without the prior written consent of Parent,
during the period from the date of this Agreement to the
Closing, Company shall not, and shall not permit any of its
Subsidiaries to:
(i) take any action in violation of the covenants
contained in Company's loan agreements (except to the
extent such covenants have already been violated and no
waivers have been obtained);
(ii) (x) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in
substitution for shares of its capital stock or
(y) purchase, redeem or otherwise acquire any shares of
capital stock of Company or any of its Subsidiaries or
any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities
(other than in accordance with the Stock Split) or (z)
declare, set aside or pay any dividend (whether in cash,
capital stock or property);
(iii) issue, deliver, sell, pledge or otherwise
encumber any shares of its capital stock, any other
voting securities or any securities convertible into, or
any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities
(other than (x) the issuance of Common Stock upon the
exercise or conversion of Employee Stock Options
outstanding on the date of this Agreement and in
accordance with their present terms and (y) the issuance
and sale of the New Shares and Preferred Shares in
accordance with the terms hereof);
(iv) amend its Certificate of Incorporation, By-Laws
or other comparable charter or organizational documents
(other than in accordance with the Amendments);
(v) acquire or agree to acquire any assets in
excess of $100,000;
<PAGE>
<PAGE> 45
(vi) sell, lease, license, mortgage or otherwise
encumber or subject to any Lien or otherwise dispose of
any of its properties or assets in excess of $10,000, or
waive or release any rights, or compromise, release or
assign any indebtedness owed to it or any claims held by
it;
(vii) (x) incur any indebtedness for borrowed money
or guarantee any such indebtedness of another person,
issue or sell any debt securities or warrants or other
rights to acquire any debt securities of Company or any
of its Subsidiaries, guarantee any debt securities of
another person, enter into any "keep well" or other
agreement to maintain any financial statement condition
of another person or enter into any arrangement having
the economic effect of any of the foregoing, (y) make any
loans, advances or capital contributions to, or
investments in, any other person, other than to Company
or any direct or indirect wholly owned Subsidiary of
Company or (z) incur any other debt, liability or
obligation, direct or indirect, whether accrued,
absolute, contingent or otherwise, other than current
liabilities incurred in the ordinary course of business
consistent with past practice;
(viii) make or agree to make any new capital expendi-
ture or expenditures which, individually or in the
aggregate, are in excess of $10,000;
(ix) pay, discharge or satisfy any claims, liabili-
ties or obligations (absolute, accrued, contingent or
otherwise), other than the payment, discharge or
satisfaction, in the ordinary course of business
consistent with past practice or in accordance with their
terms, of liabilities reflected or reserved against in,
or contemplated by, the most recent consolidated
financial statements (or the notes thereto) of Company
included in the Filed SEC Documents or incurred in the
ordinary course of business consistent with past
practice;
(x) provide any discounts on sales of inventory
other than discounts consistent with past practice;
(xi) enter into, terminate or substantially amend or
supplement any contract, lease or other agreement unless
the same is done in the ordinary and usual course of
business and the contract, lease or other agreement in
question does not provide for any party thereto to make
payment or deliver goods or services
<PAGE>
<PAGE> 46
(or any combination thereof) aggregating more than
$10,000 over the term thereof;
(xii) increase in any manner the compensation or
fringe benefits of any of its officers, directors or
employees or pay or agree to pay any severance, pension,
retirement allowance or other similar benefit not
required by any previously existing plan or agreement to
any such officers, directors or employees, or commit
itself to any severance, pension, retirement or profit-
sharing loan or agreement or employment agreement with or
for the benefit of any officer, director, employee or
other person;
(xiii) permit any insurance policy (excluding,
however, those policies for which no replacement is
available at a cost comparable to that currently in
effect) naming it as a beneficiary or a loss payable
payee to be cancelled or terminated or any of the
coverage thereunder to lapse, unless simultaneously with
such termination, cancellation or lapse replacement
policies providing substantially the same coverage are in
full force and effect;
(xiv) change any accounting policy or procedure; or
(xv) authorize any of, or commit or agree to take
any of, the foregoing actions.
(b) Other Actions. Except as required by law,
regulation, or contemplated by this Agreement or the Ancillary
Agreements, the Company, Parent, Holdings, the Grantor Trust
and the Other Investors shall use all reasonable efforts not
to, and shall use all reasonable efforts not to permit any of
their respective Subsidiaries to, take any action that would,
or that could reasonably be expected to, result in (i) any of
the representations and warranties of such Party set forth in
this Agreement or the Ancillary Agreements that are qualified
as to materiality becoming untrue, (ii) any of such
representations and warranties that are not so qualified
becoming untrue in any material respect or (iii) any of the
conditions set forth in Article IV not being satisfied.
Company, Parent, Holdings and the Other Investors
shall promptly notify the other Parties of any change or event
causing, or that, insofar as can reasonably be foreseen, would
cause, any of the conditions with respect to such Person set
forth in Article IV not being satisfied.
<PAGE>
<PAGE> 47
ARTICLE VII
Additional Agreements
7.1. Preparation of the Proxy Statement;
Stockholders Meeting. (a) Company shall have prepared and
given Parent, Holdings, Grantor Trust and the Other Investors
a reasonable opportunity to comment on the Proxy Statement to
be filed by Company with the Securities and Exchange
Commission (the "Proxy Statement"). If the Proxy Statement
has not been filed with the SEC, Company shall file with the
SEC the Proxy Statement within 7 days after the date hereof.
After giving Parent, Holdings, Grantor Trust and the Other
Investors a reasonable opportunity to comment, Company shall
file with the SEC any amendments or supplements to the Proxy
Statement that may be necessary in response to SEC comments or
otherwise. Company shall use reasonable efforts to cause the
Proxy Statement to be mailed to the Company's stockholders as
promptly as practicable. Company shall provide to Parent,
Holdings and the Other Investors promptly any comments or
other correspondence it receives from the SEC staff with
respect to the Proxy Statement.
(b) Company shall, as soon as practicable following
the date of this Agreement, duly call, give notice of, convene
and hold a meeting of its stockholders (the "Stockholders
Meeting") for the purpose of approving the Proposals and
shall, through its Board of Directors, recommend to its
stockholders approval of the Proposals. The obligations of
Company pursuant to Section 7.1(a) and the first sentence of
this Section 7.1(b) shall not be affected by the commencement,
public proposal, public disclosure or communication to Company
of any takeover proposal by any third party.
7.2. Access to Information; Confidentiality.
Company shall, and shall cause each of its Subsidiaries to,
afford to Parent and to the officers, employees, accountants,
counsel, financial advisors and other representatives of the
Parent, reasonable access during normal business hours during
the period prior to the Closing to all their respective
properties, books, contracts, commitments, personnel and
records and, during such period, Company shall, and shall
cause each of its Subsidiaries to, furnish promptly to the
Parent (a) a copy of each report, schedule, registration
statement and other document filed by it during such period
pursuant to the requirements of Federal or state securities
laws and (b) all other information concerning its business,
properties and personnel as such other Party may reasonably
request.
<PAGE>
<PAGE> 48
7.3. Reasonable Efforts; Notification; Consent.
(a) Upon the terms and subject to the conditions set forth in
this Agreement, each of the Parties shall use all reasonable
efforts (in the case of Investor1 and Investor2, within the
context of its fiduciary obligations, if any, and applicable
regulatory restrictions) to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and
cooperate with the other Parties in doing, all things
necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the
Transactions, including (i) the obtaining of all necessary
actions or nonactions, waivers, consents and approvals from
Governmental Entities and the making of all necessary
registrations and filings (including filings with Governmental
Entities, if any) and the taking of all reasonable steps as
may be necessary to obtain an approval or waiver from, or to
avoid an action or proceeding by, any Governmental Entity,
including those set forth on Schedule 5.1(d), to the extent
necessary to consummate its obligations as part of the
Transactions, (ii) the obtaining or granting of all necessary
consents, approvals or waivers from third parties or Parties,
including those set forth on Schedule 5.1(d), to the extent
necessary to consummate its obligations as part of the
Transactions, (iii) the defending of any lawsuits or other
legal proceedings, whether judicial or administrative, against
it and challenging this Agreement or any of the Ancillary
Agreements or the consummation of the Transactions, including
seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or
reversed, and (iv) the execution and delivery of any
additional instruments necessary to consummate the
Transactions contemplated by, and to fully carry out the
purposes of, this Agreement and the Ancillary Agreements,
including the satisfaction of all conditions set forth in
Article IV and completion of the Funding and the Closing on a
timely basis, provided that nothing in this Article VII shall
be construed to require any Party to waive any right or
condition to any obligation it may have pursuant to this
Agreement or any Ancillary Agreement. In connection with and
without limiting the foregoing, Company and its Board of
Directors shall (i) take all action necessary to ensure that
no state takeover statute or similar statute or regulation is
or becomes applicable to this Agreement, the Ancillary
Agreements or any future transactions between or among the
Parties solely as a result of the Transactions and (ii) if any
state takeover statute or similar statute or regulation
becomes applicable to this Agreement, any Ancillary Agreement
or any contemplated by this Agreement or any Ancillary
Agreement, take all action necessary to ensure that the
Transactions may be consummated as promptly as practicable on
the terms
<PAGE>
<PAGE> 49
contemplated by this Agreement and the Ancillary Agreements
and otherwise to minimize the effect of such statute or
regulation on the Transactions.
(b) Each Party shall give prompt notice to the
other Parties of (i) any representation or warranty made by it
contained in this Agreement or any Ancillary Agreement
becoming untrue or inaccurate in any respect (ii) the failure
by it to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or
satisfied by it under this Agreement or any Ancillary
Agreement; provided, however, that no such notification shall
affect the representations, warranties, covenants or
agreements of the Parties or the conditions to the obligations
of the Parties under this Agreement or the Ancillary
Agreements.
(c) In order to induce each of the Parties to enter
into the Transactions, and anything in the agreements with the
Company to which such Party is a Party to the contrary
notwithstanding, each Party hereby consents to the
Transactions and, subject to satisfaction of the conditions to
Funding or Closing, as applicable, hereby waives all defaults
and events of default relating to any existing agreement
between or among any of the Parties and which include Company,
any of its Subsidiaries, any of the Grantor Trust
Subsidiaries, Interim Borrowers or Grantor Trust as a Party or
Parties thereto, that, to such Party's knowledge, occurred
prior to and are continuing as of the date hereof; provided,
that if Closing does not occur by December 31, 1995 or the
Investment Agreement terminates prior to Closing, the Parties
will have the right to rescind such waiver except with respect
to actions and events that are taken in connection with the
Transactions. All terms, conditions and provisions of such
agreements are and shall remain in effect (except as otherwise
contemplated by this Agreement and the Ancillary Agreements)
and, except as set forth above, nothing herein shall operate
as a consent to or waiver of any other or further matter or
any other right, power or remedy of such Party under such
agreements.
7.4. Fees and Expenses. (a) Except as provided
below or in the Existing Insurance Company Loan Agreement, all
fees and expenses incurred in connection with this Agreement
and the Transactions shall be paid by the Party incurring such
fees or expenses, whether or not the sale of the New Shares or
the Preferred Shares on the terms contemplated hereby is
consummated. Company agrees to reimburse Investor1 and
Investor2 for their reasonable out-of-pocket expenses in
connection with this Agreement, the
<PAGE>
<PAGE> 50
Ancillary Agreements and the Transactions in an amount not to
exceed $100,000.
(b) If a direct or indirect acquisition of, or
merger or other business combination with, Company or any
substantial portion of Company's business or assets, or the
sale or other disposition of a majority of the capital stock
of Company (any of such transactions, a "Disposition") is
consummated by Company with any person other than Parent after
the date hereof, then upon the consummation of such Company
shall pay to Parent in immediately available funds, an amount
equal to Parent's and Holdings' out-of-pocket costs and
expenses (including legal fees and expenses). This Section
7.4(b) shall not apply to any Disposition undertaken through
an involuntary bankruptcy of Company.
7.5. Public Announcements. Parent, Holdings,
Grantor Trust, the Other Investors and Company shall consult
with each other before issuing, and provide each other the
opportunity to review and comment upon, any press release or
other public statements with respect to the Transactions and
shall not issue any such press release or make any such public
statement prior to such consultation, except as may be
required by applicable law, court process, regulatory
authority or by obligations pursuant to any listing agreement
with any national securities exchange.
7.6. Stockholder Litigation. Company shall give
Parent the opportunity to participate in the defense or
settlement of any stockholder litigation against the Company
and its directors relating to the Transactions; provided,
however, that no such settlement shall be agreed to without
Parent's consent, which consent shall not be unreasonably
withheld.
7.7. Employment Arrangements. The Company shall
not enter into any employment agreement or implement any
severance arrangement with or with respect to any employee of
the Company.
7.8. Reporting Company. Company shall use its best
efforts to remain a reporting company under the Exchange Act
prior to and upon consummation of the Transactions
contemplated by this Agreement and the Ancillary Agreements.
7.9. NYSE Listing. Company shall use its best
efforts to cause the outstanding shares of Common Stock and
the New Shares to remain listed on the New York Stock Exchange
prior to and upon consummation of the Transactions
contemplated by this Agreement and the Ancillary Agreements.
<PAGE>
<PAGE> 51
7.10. Liquidating Property Trust Leases and Property
Transfer. Company shall use its best efforts to obtain from
the Liquidating Property Trust the Liquidating Property Trust
Leases and cause the Property Transfer to occur.
7.11. Agreement to Vote Shares. Each of the Parties
agrees that during the term of this Agreement to vote such
Party's shares of Common Stock, and to cause any holder of
record of such shares to vote (a) in favor of the Proposals
and the Transactions, (b) against any action or agreement that
would compete with, impede, interfere with or attempt to
discourage or inhibit the timely consummation of the
Transactions, (c) except for the Transactions, against any
merger, consolidation, business combination, reorganization,
recapitalization, liquidation or sale or transfer of any
material assets or securities of Company or its Subsidiaries
that would be inconsistent with the Transactions and (d) as to
any matter related to the election or removal of directors, as
directed by Holdings.
7.12. No Voting Trusts. Each of the Parties agrees
that they will not, nor will they permit any entity under
their control to, deposit any of their shares of Common Stock
in a voting trust or subject any of their shares of Common
Stock to any arrangement with respect to the voting of such
Shares other than agreements entered into with Holdings.
7.13. No Proxy Solicitations. Each of the Parties
agrees that such Party will not, nor will such Party permit
any entity under such Party's control to, (a) solicit proxies
or become a "participant" in a "solicitation" (as such terms
are defined in Regulation 14A under the 1934 Act) in
opposition to or competition with the consummation of the
Transactions or otherwise encourage or assist any party in
taking or planning any action which would compete with,
impede, interfere with or attempt to discourage or inhibit the
timely consummation of the Transactions, (b) directly or
indirectly encourage, initiate or cooperate in a stockholders'
vote or action by consent of the Company's stockholders in
opposition to or in competition with the consummation of the
Transactions, or (c) become a member of a "group" (as such
term is used in Section 13(d) of the 1934 Act) with respect to
any voting securities of the Company for the purpose of
opposing or competing with the consummation of the
Transactions.
7.14. Transfer and Encumbrance. On or after the
date hereof and during the term of this Agreement until the
Closing, except pursuant to this Agreement and the Ancillary
<PAGE>
<PAGE> 52
Agreements, each of the Parties agrees not to transfer, sell,
offer, exchange, pledge or otherwise dispose of or encumber
any of such Party's shares of Common Stock or any Interim
Notes, Existing Grantor Trust Indebtedness or New Borrower
Notes, without the prior written consent of Company and
Holdings and prior notice to the Other Parties, except that
(i) each of the Parties (other than Company) may make such a
transfer to any Affiliate (other than Company) of such Party
who agrees in writing to be bound by the terms of this
Agreement and the Ancillary Agreements, but no such transfer
shall relieve such Party of any of its obligations under this
Agreement and the Ancillary Agreements (except that such
relief will be granted in the case of Investor1 or Investor2
upon any transfer by them to a fund or account managed or
advised by Fidelity Management and Research Co. or Fidelity
Management Trust Co.). Company and Holdings will not
unreasonably withhold such consent to limited transfers (for
example up to 5% of each Party's holdings on a pro rata basis)
so long as their material interests are not adversely affected
thereby.
7.15. Additional Purchases. Each of the Parties
agrees that such Party will not purchase or otherwise acquire
beneficial ownership of any shares of Common Stock after the
execution of this Agreement, nor will any Party voluntarily
acquire the right to vote or share in the voting of any shares
of Common Stock, unless such Party agrees to deliver to
Holdings immediately after such purchase or acquisition an
irrevocable proxy substantially in the form attached hereto as
Exhibit C with respect to such new shares. Each of the
Parties also severally agrees that any new shares acquired or
purchased by him or her shall be subject to the terms of this
Agreement to the same extent as if they constituted shares of
Common Stock held by such Party as set forth in Article V
hereof.
7.16. Covenants Relating to Post-Funding Tax
Matters.
(a) Tax Sharing Agreements. Any Tax sharing
agreement between the Company and any of the Grantor
Trust Subsidiaries is terminated as of the Funding
and will have no further effect for any taxable
year, whether current, future or past.
(b) Tax Returns. Company will include the
income of the Grantor Trust Subsidiaries on the
Company's consolidated income Tax Returns for all
periods through the Funding and pay income Taxes
attributable to such income. Grantor Trust
Subsidiaries will pay income Taxes attributable to
<PAGE>
<PAGE> 53
their income for all periods following the Funding. Upon
reasonable request, Grantor Trust Subsidiaries and
Company will provide tax information to each other for
the purpose of preparing Tax Returns. Company will take
no position that relates to Grantor Trust Subsidiaries on
its consolidated income Tax Returns for periods through
the Funding that is not in accordance with past practice,
without the prior written consent of Investor1 and
Investor2, which consent will not be unreasonably
withheld. The Grantor Trust Subsidiaries will take no
position that relates to Company on their Tax Returns for
periods after the Funding that is not in accordance with
past practice, without the prior written consent of
Company, which consent will not be unreasonably withheld.
(c) Audits. Company on the one hand and
Investor1, Investor2 and Grantor Trust Subsidiaries
on the other will each provide reasonable notice to
the other party regarding audits of any Tax Returns,
to the extent that such audits may affect the other
party's liability for Taxes. Company and the
Grantor Trust Subsidiaries will permit each other
and their respective counsel to participate in any
such audits. None of Company or the Grantor Trust
Subsidiaries will settle any audit in a manner that
would adversely affect the Tax liability of the
other party, without the prior written consent of
Investor1 and Investor2 or Company, respectively.
(d) Sale of Stock. Company, Investor1, Investor2
and the Grantor Trust Subsidiaries shall, upon Company
request, make a joint election under Section 338(h)(10)
of the Internal Revenue Code and any corresponding
elections under state and local tax laws (the "Election")
with respect to the stock of each Grantor Trust
Subsidiary, and as promptly as practicable following the
Funding Date, cooperate with each other to take all
actions necessary and appropriate (including filing such
forms, returns, elections, schedules and other documents
as may be required) to effect and preserve a timely
Election in accordance with Section 338(h)(10) of the
Internal Revenue Code and the Treasury Regulations
thereunder or any successor provisions and the
corresponding provisions of state and local tax laws.
However, the agreement in this subsection (d) is made
subject to the condition that the making of the Election
will not have a
<PAGE>
<PAGE> 54
material adverse effect on Investor1, Investor2 or their
investment in the Grantor Trust Subsidiaries, as such
material adverse effect is defined in a side letter
between Investor1 and Investor2, on the one hand, and
Holdings and the Company, on the other hand, which side
letter such parties agree to negotiate in good faith.
(e) Refunds. The Grantor Trust Subsidiaries will
promptly pay to Company any net Tax refund (or net
reduction in Tax liability ) with respect to Taxes
for periods through the Funding when such refund is
received or such reduction is realized, by the
Grantor Trust Subsidiaries or any of their
Affiliates. The Grantor Trust Subsidiaries will
cooperate with Company, at Company's expense, in
obtaining such refunds or reductions. Company will
indemnify each of the Grantor Trust Subsidiaries for
any Taxes resulting from the subsequent disallowance
of any such refund or reduction.
(f) Indemnifications by Company. Company agrees
subsequent to the Funding to indemnify and hold the
Grantor Trust Subsidiaries and their respective
Subsidiaries and Affiliates and persons serving as
officers, directors, partners or employees thereof
(the "Grantor Trust Indemnified Parties") harmless
from and against any liability of the Grantor Trust
Indemnified Parties for Taxes (i) arising with
respect to periods which end on or prior to the
Funding Date or as a result of the Funding, or (ii)
arising out of or based upon any breach of the
representations and warranties contained in Sections
5.1(k) or 5.1(aa), including without limitation any
liability for Taxes of Company or any member of its
consolidated group other than the Grantor Trust
Subsidiaries (A) under Treasury Regulation Section
1.1502-6 (or any similar provision of state, local
or foreign law), (B) as a transferee or successor,
(C) by contract or (D) otherwise. For purpose of
this subsection and subsection (g) below, "Taxes"
includes any related costs, fines, penalties,
interest and expenses with respect thereto
(including, without limitation, reasonable fees of
counsel) of any kind and nature whatsoever (whether
or not arising out of third-party claims and
including any reasonable amounts paid in
investigation, defense or settlement of the
foregoing) which will be sustained or suffered by
the Indemnified Parties.
<PAGE>
<PAGE> 55
(g) Indemnification by Grantor Trust
Subsidiaries. The Grantor Trust Subsidiaries agree
subsequent to the Funding to indemnify and hold
Company and its Subsidiaries and Affiliates and
persons serving as officers, directors, partners or
employees thereof (the "Company Indemnified
Parties") harmless from and against any liability of
the Company Indemnified Parties for Taxes imposed
with respect to the Grantor Trust Subsidiaries for
periods, or portions thereof, beginning after the
Funding Date (other than Taxes imposed as a result
of the Funding). For purposes of this subsection
"Taxes has the meaning set forth in subsection (f)
above.
(h) Sole Remedy. The indemnification provided in
Section 7.16(e) and (f) above shall be the sole and
exclusive remedy of the Grantor Trust Subsidiaries
with respect to the matters set forth in Section
7.16(e) and (f). The indemnification provided in
Section 7.16(g) above shall be the sole and
exclusive remedy of the Company with respect to the
matters set forth in Section 7.16(g).
7.17. Environmental Indemnity, Etc. (a) Company
agrees subsequent to the Funding to indemnify and hold
Investor1, Investor2 and the Grantor Trust Subsidiaries
("Indemnitees") harmless from and against any losses, damages,
liabilities or expenses (including reasonable expenses of
counsel) that result from any breach of the representations
and warranties of the Company contained in Section 5.1(h)(vii)
to the extent, but only to the extent, that such breach
relates to the Grantor Trust Subsidiaries, and subject to a
maximum aggregate indemnification liability of Company under
this provision of $2.5 million.
(b) Promptly after becoming aware of or receiving
notice of any such breach, each Indemnitee shall, if the
Indemnitee believes that indemnification with respect thereto
may be sought from Company under this Agreement, notify
Company in writing and specify with reasonable particularity
the circumstances thereof. The right to indemnification shall
terminate as to any matter for which such notice has not been
given within two years from the date hereof. In addition,
Indemnitee shall give Company such information and cooperation
as it may reasonable require and as shall be within
Indemnitee's power. Any delay in such notification, if within
such two year period, will not relieve Company from any such
liability unless the
<PAGE>
<PAGE> 56
delay in notice materially prejudiced Company. This right of
indemnification is not transferrable.
(c) If the Indemnitee is entitled to
indemnification on some claims, issues or matters, but not on
others, involved in a legal or administrative proceeding, the
Company shall indemnify the Indemnitee against an appropriate
proportion of the overall losses, damages, liabilities or
expenses (and no more), based on the matters for which the
Indemnitee is entitled to be indemnified hereunder in relation
to any other matters involved therein.
(d) The expenses incurred by Indemnitee in
investigating, defending, or appealing any legal or
administrative proceeding covered by this indemnity shall be
paid by Company in advance, with the understanding and
agreement hereby made by Indemnitee, or made by its acceptance
of any such advancement, that in the event it shall ultimately
be determined that Indemnitee was not entitled to be
indemnified, or was not entitled to be fully indemnified, that
the Indemnitee shall repay to Company such amount, or the
appropriate portion thereof, so paid or advanced.
(e) Company shall be entitled to assume the defense
of any legal or administrative proceeding for which
indemnification is owing under this Section 7.17. Company
will not be liable for any settlement effected without its
prior written consent, which will not be unreasonably
withheld.
ARTICLE VIII
Termination, Amendment and Waiver
8.1. Termination. (a) Anything contained herein
to the contrary notwithstanding, this Agreement may be
terminated and the Transactions contemplated hereby abandoned
at any time prior to the Closing Date:
(i) by mutual written consent of Parent, Holdings,
the Other Investors and the Company;
(ii) by Parent and Holdings if any of the conditions
set forth in Section 4.1 shall have become incapable of
fulfillment, and shall not have been waived by Parent and
Holdings;
(iii) by Company if any of the conditions set forth
in Section 4.2 shall have become incapable of
<PAGE>
<PAGE> 57
fulfillment, and shall not have been waived by the
Company;
(iv) by the Other Investors if any of the conditions
set forth in Section 4.3 shall have become incapable of
fulfillment, and shall not have been waived by the Other
Investors; or
(v) by any Party if Closing shall not have occurred
on or prior to December 31, 1995;
provided, however, that the Party seeking termination pursuant
to clause (ii), (iii) or (iv) is not in material breach of any
of its representations, warranties, covenants or agreements
contained in this Agreement.
(b) In the event of termination pursuant to this
Section 8.1, written notice thereof shall forthwith be given
to the other Parties and the Transactions shall be terminated,
without further action by any Party.
8.2. Effect of Termination. In the event of
termination of this Agreement as provided in Section 8.1, the
Parties shall no longer have any further liabilities or
obligations under this Agreement, except under Section 7.4,
Section 7.5 (which shall terminate one year from the
termination of this Agreement), this Section 8.2 and
Article IX and except to the extent that such termination
results from the wilful and material breach by a Party of any
of its representations, warranties, covenants or agreements
set forth in this Agreement or any of the Ancillary
Agreements. Upon such termination the warrants held by the
Parties that were cancelled pursuant to Section 2.3(c) shall
be reissued and a proportionate amount of warrants shall be
issued to Holdings based on the amount of Interim Notes, New
Borrower Notes and Existing Grantor Trust Indebtedness then
outstanding.
8.3. Amendment. This Agreement may be amended by
the Parties at any time before or after any required approval
of matters presented in connection with this Agreement by the
stockholders of the Company; provided, however, that, after
any such approval, there shall be made no amendment that by
law requires further approval by such stockholders without the
further approval of such stockholders. This Agreement may not
be amended except by an instrument in writing signed on behalf
of each of the parties.
8.4. Extension; Waiver. At any time prior to the
Closing, the Parties may (a) extend the time for the
<PAGE>
<PAGE> 58
performance of any of the obligations or other acts of the
other Parties, (b) waive any inaccuracies in the representa-
tions and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement or (c) subject
to the proviso of Section 8.3, waive compliance with any of
the agreements or conditions contained in this Agreement. Any
agreement on the part of a Party to any such extension or
waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such Party. The failure of any
Party to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of such rights.
8.5. Procedure for Termination, Amendment,
Extension or Waiver. A termination of this Agreement pursuant
to Section 8.1, an amendment of this Agreement pursuant to
Section 8.3 or an extension or waiver pursuant to Section 8.4
shall, in order to be effective, require in the case of
Parent, Holdings, Grantor Trust or the Other Investors, action
by its board of directors, trustees or authorized officers or
the duly authorized designee of its board of directors,
trustees or authorized officers or, in the case of the
Company, action by a majority of its entire Board of
Directors.
ARTICLE IX
General Provisions
9.1. Survival of Warranties and Certain Agreements.
(a) All agreements, representations, and warranties made
herein shall survive the execution and delivery of this
Agreement and the consummation of the Transactions.
(b) Notwithstanding anything in this Agreement or
implied by law to the contrary, the agreements of the parties
set forth in Sections 7.4 shall survive the consummation of
the Transactions and the termination of this Agreement.
9.2. Notices. All notices, requests, claims,
demands and other communications hereunder shall be in writing
and shall be given (and shall be deemed to have been duly
given upon receipt) by delivery in person, by cable, facsimile
transmission, telegram or telex or by registered or certified
mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice
given in accordance with this Section 9.2):
<PAGE>
<PAGE> 59
(i) If to Parent or Holdings, to:
Corimon, S.A.C.A.
Calle Hans Neumann
Edificio Corimon
Los Cortijos de Lourdes
Apartado 3654
Caracas 1010-A, Venezuela
Attention: Arthur W. Broslat
Facsimile: (582) 203-5757
with a copy to:
Sullivan & Cromwell
444 South Flower Street
Los Angeles, California 90071
Attention: Frank H. Golay, Jr.
Facsimile: (213) 683-0457
(ii) If to Grantor Trust, to:
Standard Brands Paint Collateral Trust
c/o Karl Savryn, Trustee
Dornbush, Mensch, Mandelstam & Schaeffer
74 Third Avenue, 11th Floor
New York, New York 10017
Facsimile: (212) 753-7673
(iii) If to Investor1, to:
Fidelity Capital & Income Fund
c/o Fidelity Management and Research Co.
82 Devonshire Street - F7E and F7D
Boston, Massachusetts 02109
Attention: Portfolio Manager and
Robert M. Gervis, Esq.
Facsimile: (617) 476-3316 and 476-7774
If to Investor2, to:
Kodak Retirement Income Plan Trust Fund
c/o Fidelity Management Trust Company
82 Devonshire Street - F7E and F7D
Boston, Massachusetts 02109
Attention: Portfolio Manager and
Robert M. Gervis, Esq.
Facsimile: (617) 476-3316 and 476-7774
<PAGE>
<PAGE> 60
with a copy to:
Goodwin Procter & Hoar
Exchange Place
53 State Street
Boston, Massachusetts 02109
Attention: Laura Hodges Taylor
Facsimile: (617) 523-1231
(iv) If to Investor3, to:
Transamerica Life Insurance and Annuity Co.
c/o Transamerica Realty Services, Inc.
1150 South Olive Street, Suite 2200
Los Angeles, CA 90015
Attention: Lyman Lokken
Facsimile: (213) 741-6917
(v) If to Investor4, to:
Transamerica Occidental Insurance Co.
c/o Transamerica Realty Services, Inc.
1150 South Olive Street, Suite 2200
Los Angeles, CA 90015
Attention: Lyman Lokken
Facsimile: (213) 741-6917
(vi) If to Investor5, to:
Sun Life Insurance Co.
1 Sun America Center
Century City, CA 90067
Attention: Robert Sydow
Facsimile: (310) 772-6150
(vii) If to Investor6, to:
Anchor National Life Insurance Co.
1 Sun America Center
Century City, CA 90067
Attention: Robert Sydow
Facsimile: (310) 772-6150
(viii) If to the Company, to:
Standard Brands Paint Company
4300 West 190th Street
Torrance, CA 90509-2956
Attention: Ronald I. Scharman
Facsimile: (310) 371-8770
<PAGE>
<PAGE> 61
9.3. Counterparts. This Agreement may be executed
in one or more counterparts, all of which shall be considered
one and the same agreement.
9.4. Entire Agreement; No Third-Party
Beneficiaries. This Agreement and the Ancillary Agreements,
and the other agreements and instruments referred to herein
and therein, (a) constitute the entire agreement, and
supersede all prior agreements and understandings, both
written and oral, among the parties hereto with respect to the
subject matter of this Agreement and the Ancillary Agreements
and (b) are not intended to confer upon any person other than
the parties and their permitted successors and assigns any
rights or remedies.
9.5. Assignment. None of the Parties shall assign
this Agreement or any of its rights, interests or obligations
hereunder, in whole or in part (including by operation of law
in connection with a merger, or sale of substantially all the
assets, of Company, Parent, Holdings, the Other Investors or
otherwise), without the prior written consent of the other
Parties, except that each of the Parties (other than Company)
may assign, in its sole discretion, any or all of its rights,
interests and obligations under this Agreement to any
Affiliate (other than Company) of such Party who agrees in
writing to be bound by the terms of this Agreement and the
Ancillary Agreements, but no such assignment shall relieve
such Party of any of its obligations under this Agreement and
except that each of Investor1, Investor2 and the Grantor Trust
Subsidiaries may assign, in its sole discretion, any or all of
its rights, interests and obligations under this Agreement as
they relate to Sections 5.1(k), 5.1(aa) and 7.16, but no such
assignment shall relieve any of Investor1, Investor2 or the
Grantor Trust Subsidiaries of any of their obligations under
this Agreement. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and
be enforceable by, the parties and their respective successors
and assigns. Any attempted assignment in violation of this
Section 9.5 shall be void.
9.6. Severability. If any term or provision of
this Agreement or the application thereof to any party or set
of circumstances shall, in any jurisdiction and to any extent,
be finally held invalid or unenforceable, such term or
provision shall only be ineffective as to such jurisdiction,
and only to the extent of such invalidity or unenforceability,
without invalidating or rendering unenforceable any other
terms or provisions of this Agreement or under any other
circumstances, and the parties shall negotiate in good faith a
substitute provision which
<PAGE>
<PAGE> 62
comes as close as possible to the invalidated or unenforceable
term or provision, and which puts each party in a position as
nearly comparable as possible to the position it would have
been in but for the finding of invalidity or unenforceability,
while remaining valid and enforceable.
9.7. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE
GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS
THEREOF.
9.8. Enforcement. The Parties agree that
irreparable damage would occur in the event that any of the
provisions of this Agreement or any of the Ancillary
Agreements were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly
agreed that the Parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and the
Ancillary Agreements and to enforce specifically the terms and
provisions of this Agreement and the Ancillary Agreements in
any Federal or state court located in the State of New York,
this being in addition to any other remedy to which they are
entitled at law or in equity. In addition, each of the
parties hereto (a) consents to submit itself to the personal
jurisdiction of any Federal or state court located in the
State of New York in the event any dispute arises out of this
Agreement, any of the Ancillary Agreements or any of the
Transactions, (b) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request
for leave from any such court and (c) agrees that it will not
bring any action relating to this Agreement, any of the
Ancillary Agreements or any of the Transactions in any court
other than a Federal or state court sitting in the State of
New York. The Parties agree to accept service of process in
connection with any such action or proceeding in any manner
permitted for a notice hereunder.
However, anything in this Agreement to the contrary
notwithstanding, in the case of any legal proceeding
specifically relating to one of the Ancillary Agreements,
which itself contains specific choice of law, forum selection
or jurisdiction provisions, which is or would be inconsistent
with this Section 9.8, then in such case the provisions
contained in such Ancillary Agreement shall control, and this
Section 9.8 shall not be applicable thereto.
<PAGE>
<PAGE> 63
INVESTMENT AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
STANDARD BRANDS PAINT COMPANY
By /s/ Howard Schwartz
Name: Howard Schwartz
Title:
CORIMON, S.A.C.A.
By /s/ Arthur W. Broslat
Name: Arthur W. Broslat
Title:
CORIMON CORPORATION
By /s/ Arthur W. Broslat
Name: Arthur W. Broslat
Title:
TRANSAMERICA LIFE INSURANCE AND
ANNUITY CO.
By /s/ Lyman K. Lokken
Name: Lyman K. Lokken
Title:
TRANSAMERICA OCCIDENTAL LIFE
INSURANCE COMPANY
By /s/ Lyman K. Lokken
Name: Lyman K. Lokken
Title:
<PAGE>
<PAGE> 64
SUN LIFE INSURANCE COMPANY OF AMERICA
By /s/ Robert E. Sydow
Name: Robert E. Sydow
Title:
ANCHOR NATIONAL LIFE INSURANCE
COMPANY
By /s/ Robert E. Sydow
Name: Robert E. Sydow
Title:
STANDARD BRANDS PAINT COLLATERAL
TRUST
By /s/ Karl Savryn
Name: Karl Savryn
Title:
KODAK RETIREMENT INCOME PLAN TRUST
FUND
By /s/ David Breazzano
Name: David Breazzano
Title:
FIDELITY CAPITAL & INCOME FUND
By /s/ David Breazzano
Name: David Breazzano
Title:
<PAGE>
<PAGE> 65
Investor1 is a portfolio of a Massachusetts business trust. A
copy of Investor1's Declaration of Trust is on file with the
Secretary of the Commonwealth of Massachusetts. Each of the
Parties acknowledges and agrees that this agreement is not
executed on behalf of or binding upon any of the trustees,
officers, directors or shareholders of Investor1 or Investor2
individually, but is binding only upon the assets and property
of Investor1 and Investor2. With respect to all obligations
of Investor1 arising out of this Agreement, each of the
Parties shall look for payment or satisfaction of any claim
solely to the assets and property of Investor1 and Investor2.
Each of the Parties are expressly put on notice that the
rights and obligations of each series of shares of each of
Investor1 and Investor2 under its Declaration of Trust are
separate and distinct from those of any and all other series.
<PAGE>
<PAGE> 66
SCHEDULE 3.2
DEBT EXCHANGE
New Preferred
Name Shares Shares
Holdings 15,972,332 190,288
Investor1 1,216,595 851,616
Investor2 228,807 160,165
Investor3 131,422 91,995
Investor4 131,422 91,995
Investor5 131,422 91,995
Investor6 131,422 91,995
---------- ---------
17,943,422 1,570,049
<PAGE>
<PAGE> 67
SCHEDULE 5.1(t)
Kodak Retirement Income Plan or the Committee established
thereunder.
<PAGE>
<PAGE> 68
EXHIBIT A TO INVESTMENT AGREEMENT
AMENDMENT TO
CERTIFICATE OF INCORPORATION
OF
STANDARD BRANDS PAINT COMPANY
The first paragraph of Article IV of the Certificate
of Incorporation of Standard Brands Paint Company is amended
such that said paragraph shall read as follows:
"The Corporation is authorized to issue two classes
of shares of stock to be designated, respectively,
"Common Stock" and "Preferred Stock." The total number
of shares which the Corporation shall have authority to
issue is one hundred five million (105,000,000) shares,
consisting of one hundred million (100,000,000) shares of
common stock having $.01 par per share ("Common Stock")
and five million (5,000,000) shares of preferred stock
having $.01 par value per share ("Preferred Stock").
Upon the amendment of this Article IV effected by this
Amendment, each 10 outstanding shares of Common Stock
will be converted into 1 share of Common Stock, provided
that no fractional shares may be issued pursuant to such
change. The Corporation may, at its option, pay cash for
any fractional shares or round such fractional shares up
to the nearest whole number of shares."
<PAGE>
<PAGE> C-1
EXHIBIT C TO INVESTMENT AGREEMENT
FORM OF PROXY
The undersigned, for consideration received, hereby
appoints Arthur W. Broslat and Roland F. Breault and each of
them as proxies (the "Proxy Holders"), with power of
substitution and resubstitution, to vote all shares of Common
Stock, par value $.01 per share, of Standard Brands Paint
Company, a Delaware corporation ("Company"), owned by the
undersigned (i) at the special meeting (the "Special Meeting")
of Stockholders of Company to be held to act on the Proposals
and the Transactions and at any adjournment thereof, and (ii)
at any other meeting of Stockholders of Company or consent in
lieu of meeting held or effected prior to completion of the
Special Meeting, FOR approval and adoption of the Proposals
and the Transactions, as described and defined in the
Investment Agreement, dated as of February 15, 1995 (the
"Investment Agreement"), by and among Company, the undersigned
and the other parties thereto, and AGAINST any action or
agreement that would compete with, impede, interfere with or
attempt to discourage or inhibit the timely consummation of
the Transactions or any merger, consolidation, business
combination, reorganization, recapitalization, liquidation or
sale or transfer of any material assets or securities of
Company or its Subsidiaries that would be inconsistent with
the Transactions, and AS TO ANY MATTER related to the election
or removal of directors, in the discretion of the Proxy
Holders. This proxy is coupled with an interest, revokes all
prior proxies granted by the undersigned and is irrevocable
until such time as the Investment Agreement terminates or is
terminated in accordance with its terms or the Closing occurs
thereunder. Terms used herein but not otherwise defined have
their respective meanings set forth in Section 1.1 of the
Investment Agreement.
Dated February 15, 1995
__________________________________
(Signature)
<PAGE>
Exhibit 3
INTERIM LOAN AGREEMENT
Among
CORIMON CORPORATION,
a Delaware corporation
STANDARD BRANDS PAINT CO.
a California corporation
STANDARD BRANDS REALTY CO., INC.
a California corporation
and
STANDARD BRANDS PAINT COMPANY,
a Delaware Corporation
Dated as of February 15, 1995
<PAGE>
<PAGE> i
TABLE OF CONTENTS
Section Page
ARTICLE I
Definitions
1.1. Definitions . . . . . . . . . . . . . . . . . . 1
1.2. Accounting Terms . . . . . . . . . . . . . . . 3
1.3. Other Definitions . . . . . . . . . . . . . . . 3
1.4. Interpretation . . . . . . . . . . . . . . . . 3
ARTICLE II
Amount and Terms of Interim Loans; Interim Notes
2.1. Interim Loans and Interim Notes . . . . . . . . 3
2.2. Interest . . . . . . . . . . . . . . . . . . . 4
2.3. Payments . . . . . . . . . . . . . . . . . . . 4
ARTICLE III
Representations And Warranties
3.1. Representations and Warranties . . . . . . . . 4
ARTICLE IV
Covenants
4.1. Loan Covenants . . . . . . . . . . . . . . . . 5
4.2. Agreement Covenants . . . . . . . . . . . . . . 5
4.3. Equal Security for Interim Loans
and Interim Notes . . . . . . . . . . . . . . 5
4.4. Independence of Covenants . . . . . . . . . . . 6
ARTICLE V
Events Of Default
5.1. Breach of Certain Covenants . . . . . . . . . . 6
5.2. Default in Loan Agreements . . . . . . . . . . 6
5.3. Defaults in Investment Agreement
and Ancillary Agreements . . . . . . . . . . 6
<PAGE>
<PAGE> ii
Section Page
5.4. Directors . . . . . . . . . . . . . . . . . . . 6
5.5. Investment Agreement . . . . . . . . . . . . . 6
ARTICLE VI
General Provisions
6.1. Expenses . . . . . . . . . . . . . . . . . . . 7
6.2. Indemnity . . . . . . . . . . . . . . . . . . . 8
6.3. Amendment . . . . . . . . . . . . . . . . . . . 10
6.4. Waiver . . . . . . . . . . . . . . . . . . . . 10
6.5. Survival of Warranties and Certain
Agreements . . . . . . . . . . . . . . . . . 10
6.6. Notices . . . . . . . . . . . . . . . . . . . . 11
6.7. Counterparts . . . . . . . . . . . . . . . . . 11
6.8. Severability . . . . . . . . . . . . . . . . . 12
6.9. GOVERNING LAW . . . . . . . . . . . . . . . . . 12
6.10. Assignment . . . . . . . . . . . . . . . . . 12
6.11. Consent to Jurisdiction; Waiver of
Jury Trial . . . . . . . . . . . . . . . . . 12
EXHIBITS
Exhibit A Interim Note
Exhibit B Form of Opinion of Company Counsel
Exhibit C Intercreditor Agreement
Exhibit D Mortgage
Exhibit E Company Guaranty
<PAGE>
<PAGE> 1
INTERIM LOAN AGREEMENT dated as of February 15, 1995
(this "Agreement"), among Corimon Corporation, a Delaware
corporation ("Holdings"), Standard Brands Paint Company, a
Delaware corporation ("Company"), Standard Brands Paint Co., a
California corporation and Standard Brands Realty Co., Inc., a
California corporation (individually referred to herein as
"Interim Borrower" and collectively as "Interim Borrowers").
RECITALS
WHEREAS simultaneously with the execution and
delivery of this Agreement, Holdings, Company, Interim
Borrowers and certain other parties have entered into the
Investment Agreement, dated as of the date hereof (the
"Investment Agreement"); and
WHEREAS, in connection with the transactions
contemplated by the Investment Agreement, Holdings desires to
make a loan to Interim Borrowers pursuant to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the represen-
tations, warranties, covenants and agreements contained
herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I
Definitions
1.1. Definitions. For purposes of this Agreement:
"Collateral" means all monies, accounts, instruments
and other property (including all rent, revenue, issues,
proceeds, profits, security and other monies payable or
receivable thereunder or with respect thereto) described as
Collateral in the Mortgages.
"Company Guaranty" means the Guaranty executed and
delivered by Company pursuant to subsection 2.1(d),
substantially in the form of Exhibit E annexed hereto, as such
Guaranty may be amended, supplemented, or otherwise modified
from time to time.
"Event of Default" means each of the events set
forth in Article V.
<PAGE>
<PAGE> 2
"Existing Grantor Trust Indebtedness" means
Indebtedness of Company to the Grantor Trust in an aggregate
principal amount not to exceed $6,000,000 pursuant to the
Existing Grantor Trust Loan Agreements.
"Existing Grantor Trust Loan Agreements" means the
documents listed on Schedule 9 to the New Loan Agreement and
the Loan Agreement dated March 16, 1994 among Company, SBPCO,
Standard Brands Realty Co., Inc. and the Grantor Trust.
"Intercreditor Agreement" means the Intercreditor
Agreement, dated the date hereof, among Holdings, the Other
Investors, Grantor Trust, Borrowers and Company, in the form
of Exhibit C.
"Interim Loan" means the Loan made to Interim
Borrowers by Holdings pursuant to Section 2.1 of this
Agreement.
"Interim Loan Documents" means, collectively, this
Agreement, the Mortgages, the Interim Notes and the Inter-
creditor Agreement.
"Interim Notes" means the promissory notes of
Interim Borrowers issued pursuant to subsection 2.1(b) of this
Agreement and substantially in the form of Exhibit A hereto,
and as such Notes may be amended, supplemented, or otherwise
modified from time to time.
"Lender Parties" has the meaning set forth in the
Intercreditor Agreement.
"Mortgaged Property" means real and personal
property subject to the Lien of a Mortgage.
"Mortgages" means one or more of the Deeds of Trust
and Assignments of Rents executed, acknowledged and filed for
the benefit of Holdings pursuant to Section 2.1(c).
"Obligations" means all obligations of every nature
of Company and the Interim Borrowers from time to time owed to
the Lenders under the Interim Loan Documents and the Notes.
"Potential Event of Default" means a condition or
event that, after notice or lapse of time or both, would
constitute an Event of Default if that condition or event were
not cured or removed within any applicable grace or cure
period.
<PAGE>
<PAGE> 3
"Termination Date" means the date the Investment
Agreement is terminated in accordance with its terms.
1.2. Accounting Terms. For purposes of this
Agreement, all accounting terms not otherwise defined herein
shall have the meanings assigned to them in conformity with
GAAP.
1.3. Other Definitions. For purposes of this
Agreement, terms used herein but not otherwise defined shall
have the meaning set forth in Section 1.1 of the Investment
Agreement.
1.4. Interpretation. The rules of interpretation
set forth in Section 1.2 of the Investment Agreement shall
apply to this Agreement, and the provisions thereof shall be
deemed to be incorporated by reference herein.
ARTICLE II
Amount and Terms of Interim Loans; Interim Notes
2.1. Interim Loans and Interim Notes.
(a) Interim Loans. In accordance with the terms of
the Investment Agreement and the transactions contemplated
therein, and subject to the terms and conditions of this
Agreement and in reliance upon the representations and
warranties of Company and Interim Borrowers herein and in the
Investment Agreement and the Lender Parties in the
Intercreditor Agreement, Holdings agrees to loan $14,000,000
to Company and Interim Borrowers.
(b) Interim Notes. Each Interim Borrower shall
execute and deliver to Holdings on the Funding Date an Interim
Note substantially in the form of Exhibit A annexed hereto,
with appropriate insertions, to evidence Holdings' Interim
Loan to such Borrower contemplated herein.
(c) Mortgages. Interim Borrowers shall execute and
file the Mortgages.
(d) Company Guaranty. The Company shall execute
and deliver to Holdings on the Funding Date the Company
Guaranty substantially in the form of Exhibit E amended
hereto, as such Guaranty may be amended, supplemented or
otherwise modified from time to time.
<PAGE>
<PAGE> 4
2.2. Interest.
(a) Accrual of Interest. The Interim Loan shall
accrue interest on the unpaid principal amount thereof from
the date made through maturity (whether by acceleration or
otherwise) at a rate of .7973% per month (which rate shall
yield an effective rate of 10% per annum), compounded monthly
and payable as provided in subsection 2.3(a).
(b) Post-Maturity Interest. Any principal payments
on the Interim Loan not paid when due and, to the extent
permitted by applicable law, any interest payments on the
Interim Loan not paid when due, in each case whether at stated
maturity, by notice of prepayment, by acceleration or
otherwise, shall thereafter bear interest payable upon demand
at a rate that is 14% per annum.
(c) Computation of Interest. Interest on the
Interim Loan shall be computed on the basis of a 360-day year
composed of 12 months of 30 days each.
2.3. Payments.
(a) Interim Borrowers shall pay the outstanding
principal amount of the Interim Loan and accrued and unpaid
interest thereon on the Termination Date or, if earlier, on
December 31, 1995. It is contemplated that on the Closing
Date the Interim Note will be exchanged pursuant to the
Investment Agreement.
(b) Manner and Time of Payment. If not exchanged
pursuant to Section 2.3(a), all payments of principal,
interest and other amounts payable hereunder and under the
Interim Note shall be in same day funds and delivered to
Holdings not later than 10:00 A.M. (Los Angeles time) or
11:00 A.M. if payment is made by wire transfer in immediately
available funds to an account designated by Holdings on the
date due.
[(c) Joint and Several Liability. Each Interim
Borrower shall be jointly and severally liable for all
payments of principal, interest and other amounts payable
hereunder and under the Interim Note.]
ARTICLE III
Representations And Warranties
3.1. Representations and Warranties. Company and
each Interim Borrower hereby make the same representations
<PAGE>
<PAGE> 5
and warranties to Holdings as Company made in the Investment
Agreement, all of which representations and warranties are
incorporated in this Agreement by this reference with the same
effect as if set forth in their entirety herein.
ARTICLE IV
Covenants
Each Interim Borrower and Company jointly and
severally covenant and agree that, until payment in full of
all of the Interim Loan, and the Interim Note, unless Holdings
shall otherwise give prior written consent, each Interim
Borrower and Company shall perform or cause to be performed
all covenants in this Article IV.
4.1. Loan Covenants. Each Interim Borrower and
Company will comply with all of the covenants contained in the
Existing Grantor Trust Loan Agreements and the New Loan
Agreement, all of which covenants are incorporated in this
Agreement by this reference with the same effect as though set
forth in their entirety herein and all notices to be delivered
to parties thereunder shall also be delivered to Holdings
hereunder.
4.2. Agreement Covenants. Each Interim Borrower
and Company will comply with all of the covenants contained in
the Investment Agreement and the Ancillary Agreements, all of
which covenants are incorporated in this Agreement by this
reference with the same effect as though set forth in their
entirety herein.
4.3. Equal Security for Interim Loans and Interim
Notes. If Company or either Interim Borrower or any of their
Subsidiaries shall create or assume any Lien upon any of their
property or assets, whether now owned or hereafter acquired,
other than Liens excepted by the provisions of Section 5.3 of
the New Loan Agreement (unless prior written consent to the
creation or assumption thereof shall have been obtained from
Holdings), they shall make or cause to be made effective
provision whereby the Interim Loan and the Interim Note will
be secured by such Lien equally and ratably with any and all
other Indebtedness thereby secured as long as any such other
Indebtedness shall be so secured; provided that this covenant
shall not be construed as consent by Holdings to any violation
by Company or either Interim Borrower or any of their
Subsidiaries of the provisions of Section 5.3 of the New Loan
Agreement.
<PAGE>
<PAGE> 6
4.4. Independence of Covenants. All covenants
hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another
covenant shall not avoid the occurrence of an Event of Default
or Event of Default if such action is taken or condition
exists.
ARTICLE V
Events Of Default
If any of the following conditions or events
("Events of Default") shall occur:
5.1. Breach of Certain Covenants. Failure of
Company or either Interim Borrower to perform or comply with
any term or condition contained in this Agreement or any Loan
Document; or
5.2. Default in Loan Agreements. Company or either
Interim Borrower or any of their Subsidiaries shall fail to
pay or default in the payment of any principal or interest on
any other Indebtedness or in the payment of any Contingent
Obligations beyond any period of grace provided; or there
shall occur a breach, default or event of default with respect
to any other term of any evidence of any other Indebtedness or
of any loan agreement, mortgage, indenture, or other agreement
relating thereto, including the Existing Grantor Trust Loan
Agreements or the New Loan Agreement; or
5.3. Defaults in Investment Agreement and Ancillary
Agreements. Company or either Interim Borrower shall default
in the performance of or compliance with any term contained in
the Investment Agreement or any Ancillary Agreement; or
5.4. Directors. Any person nominated or designated
by Holdings to serve on Company's Board of Directors in
accordance with the provisions of the Investment Agreement and
the Ancillary Agreements, having legal capacity to so serve,
is not appointed to serve as a director of Company; or
5.5. Investment Agreement. The Closing under the
Investment Agreement shall not have occurred by December 31,
1995.
<PAGE>
<PAGE> 7
THEN, (i) upon the occurrence of any Event of
Default described in Section 7.5 or 7.6 of the New Loan
Agreement the unpaid principal amount of and accrued interest
on the Interim Loans shall automatically become immediately
due and payable, without presentment, demand, protest or other
requirements of any kind, all of which are hereby expressly
waived by Company and each Interim Borrower, and (ii) upon the
occurrence of any other Event of Default, Holdings may, by
written notice to Company, declare all of the Interim Loan to
be, and the same shall forthwith become due and payable,
together with accrued interest thereon. Nevertheless, if at
any time after acceleration of the maturity of any Interim
Loan, either Interim Borrower shall pay all arrears of
interest and all payments on account of the principal which
shall have become due otherwise than by acceleration (with
interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement or
the Interim Notes) and all Events of Default and Potential
Events of Default (other than non-payment of principal of and
accrued interest on the Interim Loan and the Interim Note, due
and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to Section 6.4, then Holdings by
written notice to Company may, but except as otherwise
expressly required by applicable law shall have no obligation
to, rescind and annul the acceleration and its consequences;
but such action shall not affect any subsequent Event of
Default or impair any right consequent thereon.
ARTICLE VI
General Provisions
6.1. Expenses. Company and each Interim Borrower
jointly and severally agree to pay all of the costs and
expenses in connection with the transactions contemplated by
this Agreement, including (i) all the actual and reasonable
costs of furnishing all opinions by counsel for Company and
each Interim Borrower (including, without limitation, any
opinions requested by Holdings as to any legal matters arising
hereunder), and of Company's and each Interim Borrower's
performance of and compliance with all agreements and
conditions contained herein on their part to be performed or
complied with; (ii) all the costs of Company's and each
Interim Borrower's performance of and compliance with all
agreements and conditions contained herein on its part to be
performed or complied with; (iii) all the actual costs and
expenses incurred in connection with the delivery of
documents, reports and other materials required thereunder;
and (iv) after the occurrence of an Event of
<PAGE>
<PAGE> 8
Default, all costs and expenses, including attorneys' fees and
costs of settlement, incurred by Holdings in enforcing any
obligations of or in collecting any payments due from Company
or such Interim Borrower hereunder or under any other Loan
Document or under the Interim Note by reason of such Event of
Default.
6.2. Indemnity.
(a) In addition to the payment of expenses pursuant
to Section 6.1, whether or not the Closing Date occurs,
Company and each Interim Borrower jointly and severally agrees
to indemnify, pay, and hold Holdings and the officers,
directors, employees, and agents of Holdings (collectively
called the "Indemnitees") harmless from and against, any and
all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses,
and disbursements of any kind or nature whatsoever (including,
without limitation, fees and disbursements of counsel for such
Indemnitees in connection with any investigative,
administrative, or judicial proceeding, whether or not such
Indemnitee shall be designated a party thereto), that may be
imposed on, incurred by, or asserted against such Indemnitee,
in any manner relating to or arising out of the actions of
Company or any Interim Borrower in connection with this
Agreement and the other Loan Documents, from the use by
Company or any Interim Borrower or its agents of any materials
furnished by Holdings or from any of the statements contained
in any Loan Document, or from the use or intended use of the
proceeds of Interim Loans (the "indemnified liabilities");
provided that neither Company nor any Interim Borrower shall
have any obligation hereunder to a particular indemnitee with
respect to indemnified liabilities arising from the gross
negligence or willful misconduct of such person. To the
extent that the undertaking to indemnify, pay, and hold
harmless set forth in the preceding sentence or in
subsection 6.2(b) or 6.2(c) may be unenforceable because it is
violative of any law or public policy, Company and each
Interim Borrower shall contribute the maximum portion that it
is permitted to pay and satisfy under applicable law, to the
payment and satisfaction of all indemnified liabilities
incurred by the Indemnitees or any of them.
(b) Company and each Interim Borrower hereby agrees
to indemnify and hold harmless Holdings, and the directors,
officers, employees, and agents of Holdings, from and against
any and all claims, losses, damages, liabilities, fines,
penalties, charges, administrative, and judicial proceedings
and orders, judgments, remedial action requirements,
enforcement actions of any kind, and all costs
<PAGE>
<PAGE> 9
and expenses incurred in connection therewith (including, but
not limited to, attorneys' fees and expenses), arising
directly or indirectly, in whole or in part, out of (i) the
presence on or under any Mortgaged Property of any Hazardous
Substances (as defined in any of the Mortgages), or any
releases or discharges of any such Hazardous Substances on,
under or from such properties, or (ii) any activity carried on
or undertaken on or off such Mortgaged Properties, whether
prior to or during the term of this Agreement, and whether by
Company, Interim Borrowers or any predecessor in title or any
employees, agents, contractors or subcontractors of Company,
Interim Borrowers or any predecessor in title, or any third
persons at any time occupying or present on such Mortgaged
Properties, in connection with the handling, treatment,
removal, storage, decontamination, clean-up, transport, or
disposal of any such Hazardous Substances at any time located
or present on or under such Mortgaged Properties. The
foregoing indemnity shall further apply to any residual
contamination on or under such properties, or affecting any
natural resources arising in connection with the generation,
use, handling, storage, transport, or disposal of any such
Hazardous Substances, and irrespective of whether any of such
activities were or will be undertaken in accordance with
applicable laws, regulations, codes, and ordinances.
(c) Company and each Interim Borrower hereby agrees
to indemnify and hold harmless each of the Surviving
Indemnitees (as defined below) from and against any and all
losses, claims, damages, penalties, liabilities, response
costs, and expenses (including, without limitation, all out-
of-pocket litigation costs and attorneys' fees and
expenses) arising out of any lawsuit brought or threatened,
settlement reached, or governmental order, relating to the
presence, disposal, release, or threatened release of any such
Hazardous Substance on, from, or under any of such properties,
(i) if such presence, disposal, release, or threatened release
of any such Hazardous Substance is or was attributable to
Company's or Interim Borrower's activities, the activities of
Company's or Interim Borrower's agents or contractors, or to
activities of third parties (regardless of whether Company or
any Interim Borrower was aware or unaware of such activities),
during the period of Company's or Interim Borrower's ownership
of such Mortgaged Properties or, (ii) if such presence,
disposal, release, or threatened release of any such Hazardous
Substance occurred prior to the time of Company's or Interim
Borrower's ownership of any of such Mortgaged Properties and
Company or any Interim Borrower had knowledge of this fact and
did not disclose such to Holdings in writing prior to January
31, 1995. This agreement to indemnify and hold harmless shall
be in
<PAGE>
<PAGE> 10
addition to any other obligations or liabilities Company or
any Interim Borrower may have at common law or otherwise, and
shall survive any transfer of title to any of such Mortgaged
Properties in any manner described in the definition below of
the term "Surviving Indemnitees". Company and each Interim
Borrower expressly agrees that the indemnities stated herein
are not personal to Holdings, and, so long as Company is given
written notice thereof by a Surviving Indemnitee, the benefits
hereunder may be assigned to subsequent Surviving Indemnitees,
which subsequent Surviving Indemnitees may proceed directly
against Company and each Interim Borrower to recover pursuant
to this indemnity. For the purposes of this Section 6.2,
"Surviving Indemnitees", shall mean (i) Holdings, their
directors, officers, employees, and agents if, and to the
extent that, Holdings acquires any or all of the Collateral
(as defined in the Mortgages) whether through foreclosure,
deed-in-lieu thereof or otherwise and (ii) any successors to
any interest of Company or Holdings in the chain of title to
such Collateral (and the directors, officers, employees, and
agents of such successor), if, and to the extent that, such
successor acquired title to such collateral (1) through a
foreclosure of any lien or security interest held by Holdings
or any of them or their agents as security for the
Obligations, (2) from Holdings after Holdings acquired title
to such Collateral from Company or Interim Borrowers, whether
through foreclosure, deed-in-lieu thereof, or otherwise, or
(3) from any person who acquired title either directly, or
indirectly by mesne conveyances, from a person who acquired
title in the manner described in the immediately preceding
clauses (1) and (2). Notwithstanding any provision to the
contrary of the Mortgages or any other security instrument
securing all or any portion of the Obligations, Company's and
each Interim Borrower's Obligations under this
subsection 6.2(c) shall not be secured by the Mortgages or any
such security instruments.
6.3. Amendment. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of
the parties.
6.4. Waiver. Any agreement on the part of a party
to any waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. The
failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute
a waiver of such rights.
<PAGE>
<PAGE> 11
6.5. Survival of Warranties and Certain Agreements.
(a) All agreements, representations, and warranties
made herein shall survive the execution and delivery of this
Agreement, the making of the Interim Loan hereunder and the
execution and delivery of the Interim Note.
(b) Notwithstanding anything in this Agreement or
implied by law to the contrary, the agreements of Company and
each Interim Borrower set forth in Sections 6.1 and 6.2 shall
survive the payment or exchange of the Interim Loan and the
Interim Note and the termination of this Agreement.
6.6. Notices. All notices, requests, claims,
demands and other communications hereunder shall be in writing
and shall be given (and shall be deemed to have been duly
given upon receipt) by delivery in person, by cable, facsimile
transmission, telegram or telex or by registered or certified
mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice
given in accordance with this Section 6.6):
(i) If to Company or Interim Borrowers, to:
Standard Brands Paint Company
4300 West 190th Street
Torrance, CA 90509-2956
Attention: Ronald I. Sharman
Facsimile: (310) 371-8770
(ii) If to Holdings, to:
Corimon, S.A.C.A.
Calle Hans Neumann
Edificio Corimon
Los Cortijos de Lourdes
Apartado 3154
Caracas 1010-A, Venezuela
Attention: Arthur W. Broslat
Facsimile: (582) 203-5757
<PAGE>
<PAGE> 12
with a copy to:
Sullivan & Cromwell
444 South Flower Street
Los Angeles, California 90071
Attention: Frank H. Golay, Jr.
Facsimile: (213) 683-0457
6.7. Counterparts. This Agreement may be executed
in one or more counterparts, all of which shall be considered
one and the same agreement.
6.8. Severability. If any term or provision of
this Agreement or the application thereof to any party or set
of circumstances shall, in any jurisdiction and to any extent,
be finally held invalid or unenforceable, such term or
provision shall only be ineffective as to such jurisdiction,
and only to the extent of such invalidity or unenforceability,
without invalidating or rendering unenforceable any other
terms or provisions of this Agreement or under any other
circumstances, and the parties shall negotiate in good faith a
substitute provision which comes as close as possible to the
invalidated or unenforceable term or provision, and which puts
each party in a position as nearly comparable as possible to
the position it would have been in but for the finding of
invalidity or unenforceability, while remaining valid and
enforceable.
6.9. GOVERNING LAW. THIS AGREEMENT, THE NOTES AND
THE LEGAL RELATIONS AMONG THE PARTIES SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE
GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS
THEREOF.
6.10. Assignment. Neither this Agreement nor any
of the rights, interests or obligations under this Agreement
shall be assigned or transferred, in whole or in part
(including by operation of law in connection with a merger, or
sale of substantially all the assets, of Company, Holdings or
otherwise), by any of the parties without the prior written
consent of the other parties, except that Holdings may assign,
in its sole discretion, any or all of its rights, interests
and obligations under this Agreement to any direct or indirect
wholly owned Subsidiary of Parent or Holdings but no such
assignment shall relieve Holdings of any of its obligations
under this Agreement. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and
be enforceable by, the parties
<PAGE>
<PAGE> 13
and its successors and assigns. Any attempted assignment in
violation of this Section 6.10 shall be void.
6.11. Consent to Jurisdiction; Waiver of Jury
Trial. Except as otherwise provided in the Mortgages, all
judicial proceedings brought against either Interim Borrower
with respect to this Agreement, any other Loan Document or any
Note may be brought in any state or federal court of competent
jurisdiction in the State of California, and by execution and
delivery of this Agreement, each Interim Borrower accepts for
itself and in connection with its properties, generally and
unconditionally, the nonexclusive jurisdiction of the
aforesaid courts, and irrevocably agrees to be bound by any
judgment rendered thereby in connection with this Agreement.
All parties to this Agreement hereby irrevocably waive any and
all right to trial by jury in any judicial proceeding arising
out of or relating to this Agreement, any other Loan Document,
or any Note or other Obligation.
<PAGE>
<PAGE> 14
INTERIM LOAN AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
CORIMON CORPORATION
By /s/ Arthur W. Broslat
Name: Arthur W. Broslat
Title:
STANDARD BRANDS PAINT COMPANY
By /s/ Howard Schwartz
Name: Howard Schwartz
Title:
<PAGE>
<PAGE> 15
INTERIM LOAN AGREEMENT
STANDARD BRANDS PAINT CO.
By /s/ Howard Schwartz
Name: Howard Schwartz
Title:
STANDARD BRANDS REALTY
CO., INC.
By /s/ Howard Schwartz
Name: Howard Schwartz
Title:
<PAGE>
<PAGE> 1
EXHIBIT A TO INTERIM LOAN AGREEMENT
[FORM OF INTERIM NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED EXCEPT IN ACCORDANCE THEREWITH.
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT
IN ACCORDANCE WITH THE INTERIM LOAN AGREEMENT
AND THE INTERCREDITOR AGREEMENT AS DEFINED IN
THE INTERIM LOAN AGREEMENT DEFINED BELOW
$14,000,000
Los Angeles, California
February 15, 1995
[NAME OF BORROWER], a ________ corporation (the
"Borrower"), for value received, hereby promises to pay to the
order of Corimon Corporation (the "Holder"), at Calle Hans
Neumann, Edificio Corimon, Los Cortijos de Lourdes,
Apartado 3154, Caracas 1010-A, Venezuela, in lawful money of
the United States, the principal sum of Fourteen Million
Dollars, on the Termination Date (as defined in the Interim
Loan Agreement) or, if earlier, on December 31, 1995.
This Interim Note shall bear interest as set forth
in the Interim Loan Agreement (hereinafter defined).
This Interim Note is one of the Interim Notes
referred to in the Interim Loan Agreement, dated as of
February 15, 1995 (the "Interim Loan Agreement"), among
Standard Brands Paint Company, a Delaware corporation,
Standard Brands Realty Co., Inc., a California corporation
<PAGE>
<PAGE> 2
and Holdings named therein, and is subject to prepayment in
whole or in part and its maturity is subject to acceleration
upon the terms provided in the Interim Loan Agreement.
This Interim Note is secured by certain deeds of
trust, mortgages, other security agreements and other
documents delivered pursuant to the Interim Loan Agreement.
This Interim Note shall be governed by, and
construed and interpreted in accordance with, the laws of the
State of New York.
Upon the occurrence of an Event of Default, the
unpaid balance of the principal amount of this Interim Note
may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in
the Interim Loan Agreement.
The terms of this Interim Note are subject to
amendment only in the manner provided in the Interim Loan
Agreement.
No reference herein to the Interim Loan Agreement
and no provision of this Interim Note or the Interim Loan
Agreement shall alter or impair the obligation of Borrower,
which is absolute and unconditional, to pay the principal of
and interest on this Interim Note at the place, at the
respective times, and in the currency herein prescribed.
Borrower promises to pay all costs and expenses,
including reasonable attorneys' fees, incurred in the
collection and enforcement of this Interim Note. Borrower
<PAGE>
<PAGE> 3
and endorsers of this Interim Note hereby consent to renewals
and extensions of time at or after the maturity hereof,
without notice, and hereby waive diligence, presentment,
protest, demand and notice (except as provided in the Interim
Loan Agreement) of every kind and, to the full extent
permitted by law, the right to plead any statute of
limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, Borrower has caused this Interim
Note to be executed and delivered by its duly authorized
officer, as of the day and year and the place first above
written.
NAME OF BORROWER
By__________________________
Title:
<PAGE>
<PAGE> 1
EXHIBIT B TO INTERIM LOAN AGREEMENT
[Form of Opinion of Counsel to Borrower]
February __, 1995
Corimon, S.A.C.A.
Corimon Corporation
Fidelity Capital & Income Fund
Kodak Employees Retirement Income Plan Trust Fund
Transamerica Life Insurance and Annuity Company
Transamerica Occidental Life Insurance Company
Sun Life Insurance Company of America
Anchor National Life Insurance Company
Standard Brands Paint Collateral Trust
Ladies and Gentlemen:
We have acted as general counsel to Standard Brands
Paint Company, a Delaware corporation ("Company"), Standard
Brands Paint Co., a California corporation ("Paint") and
Standard Brands Realty Co., Inc., a California corporation
("Realty," and together with Paint and Company, the "Interim
Loan Parties"), in connection with the following documents,
all dated as of February 15, 1995:
Investment Agreement among Company,
Corimon, S.A.C.A. ("Parent"), Corimon
Corporation ("Holdings"), Fidelity Capital
& Income Fund ("Investor1"), Kodak
Employees Retirement Income Plan Trust
Fund ("Investor2"), Transamerica Life
Insurance and Annuity Company
("Investor3"), Transamerica Occidental
Life Insurance Company ("Investor4"), Sun
Life Insurance Company of America
("Investor5"), Anchor National Life
Insurance Company ("Investor6")
(collectively, the "Other Investors"), and
Standard Brands Paint Collateral Trust
("Grantor Trust"); and
The Ancillary Agreements as defined in the
Investment Agreement.
This opinion is provided to the Parties pursuant to
the terms of the Investment Agreement and the Ancillary
Agreements. All initially capitalized terms used herein
<PAGE>
<PAGE> 2
shall have the meanings as defined in the Investment Agreement
and the Ancillary Agreements.
In rendering the opinions set forth herein, we have
examined executed originals, or photocopies or facsimiles of
executed originals, of the Investment Agreement and the
Ancillary Agreements. We have also examined such other
records, documents, certificates and other instruments as we
have deemed necessary to enable us to render the opinions
contained herein.
In our examination, we have assumed (1) the due
authorization, execution and delivery of all documents by all
parties and the validity and binding effect thereof (other
than the authorization, execution and delivery of such
documents by the Interim Loan Parties and the validity and
binding effect thereof on the Interim Loan Parties), (2) the
genuineness of all signatures and the legal capacity of
natural persons, (3) the authenticity of all documents
submitted to us as originals, and (4) the conformity to the
originals of all documents submitted to us as certified copies
or photocopies and the authenticity of the originals of such
copies. As to any factual matters material to our opinion
that we did not independently establish or verify, we have
relied upon the written representations and certifications of
public officials and of officers, directors, and employees of
the Interim Loan Parties, including the representations and
warranties contained in the Investment Agreement and the
Ancillary Agreements.
As used herein, the phrase "to the best of our
knowledge" means that nothing to the contrary has come to the
attention of the attorneys of our firm who regularly handle
substantive matters for the Interim Loan Parties or who have
worked on the transactions contemplated by the Investment
Agreement and the Ancillary Agreements, but that we have not
conducted any due diligence or independent investigation with
respect to the opinion given.
The attorneys within our firm involved in the
preparation of this opinion are admitted to practice in the
State of California only, and we do not express an opinion
hereby concerning any laws other than the laws of the State of
California and the Delaware General Corporation Law and any
applicable Federal laws. However, for purposes of passing on
the Investment Agreement and the Ancillary Agreements, certain
of which are by their terms governed by the laws of other
jurisdictions, we have, with your approval, assumed that the
laws of such other jurisdictions are identical to the laws of
the State of California, notwithstanding that the laws of
various jurisdictions
<PAGE>
<PAGE> 3
within the United States routinely vary in significant
respects, or in the alternative assumed that such agreements
are governed by California law, notwithstanding the choice of
law provisions therein, and therefore the opinions as to such
matters expressed below are expressed on the basis as if such
agreements were governed by the laws of the State of
California.
Based upon and subject to the foregoing and the
other assumptions and limitations contained herein, we are of
the opinion that:
1. Company is a duly organized and validly
existing corporation in good standing under the laws of the
State of Delaware and has the corporate power to enter into
and perform its obligations under the Investment Agreement and
the Ancillary Agreements and to carry out the transactions
contemplated thereby and to own its properties and to transact
its business as currently conducted.
2. Paint is a duly organized and validly existing
corporation in good standing under the laws of the State of
Delaware and has the corporate power to enter into and perform
its obligations under the Investment Agreement and the
Ancillary Agreements and to carry out the transactions
contemplated thereby and to own its properties and to transact
its business as currently conducted.
3. Realty is a duly organized and validly existing
corporation in good standing under the laws of the State of
Delaware and has the corporate power to enter into and perform
its obligations under the Investment Agreement and the
Ancillary Agreements and to carry out the transactions
contemplated thereby and to own its properties and to transact
its business as currently conducted.
4. The execution, delivery and performance of the
Investment Agreement and the Ancillary Agreements have been
duly authorized by the directors of Company. The Investment
Agreement and the Ancillary Agreements have been duly executed
and delivered on behalf of Company.
5. The Investment Agreement and the Ancillary
Agreements to which each of the Interim Loan Parties is a
party constitute the legal, valid, and binding obligations of
each such Interim Loan Party enforceable against such Interim
Loan Party in accordance with their respective terms, except
that the enforcement thereof may be limited by (a) bankruptcy,
reorganization, insolvency, liquidation, fraudulent
conveyance, moratorium and other laws of general applicable
relating to or affecting the enforcement of
<PAGE>
<PAGE> 4
creditors' rights and remedies generally, and (b) general
principles of equity (regardless of whether such
enforceability is adjudicated in a proceeding in equity or at
law).
6. The execution, delivery and performance by each
of the Interim Loan Parties of the Investment Agreement and
the Ancillary Agreements to which each of the Interim Loan
Parties is a party will not (a) violate or contravene or be in
conflict with (i) any provisions of such Interim Loan Party's
Articles or Certificate of Incorporation or Bylaws, (ii) any
provision of any law, rule or regulation applicable to such
Interim Loan Party, (iii) to the best of our knowledge, any
term of any agreement, contract, undertaking, indenture or
instrument by which such Interim Loan Party or its property is
bound and the parties thereto, or (iv) any order, judgment or
decree of any court or other agency which is binding on such
Interim Loan Party; or (b) result in the creation of any lien,
mortgage, pledge, charge, security interest or other
encumbrance on any of the property or assets of such Interim
Loan Party other than as provided in the Investment Agreement
and the Ancillary Agreements.
7. No further governmental or judicial consents,
approvals, authorizations, registrations, declarations or
recordings are required to be made by such Interim Loan Party
in order to execute, deliver or perform its obligations under
the Investment Agreement and the Ancillary Agreements except
any governmental consents, approvals, or authorizations which
may be required to comply with the transfers contemplated by
the Property Transfer.
8. None of the Interim Loan Parties is a "public
utility company" or a "holding company" within the meaning of
the Public Utility Holding Company Act of 1935, or is subject
to current regulations thereunder. None of the Interim Loan
Parties is an "investment company" within the meaning of the
Investment Company Act of 1940, or is subject to current
regulation thereunder. Approximately 34.98% of the Common
Stock of Company is owned by Fidelity Capital & Income Fund,
an "investment company", which may or may not be deemed to be
a "controlling person" of Company as a result of such
ownership.
9. It is not necessary in connection with the
execution and delivery of the Notes to Holdings to register
the Interim Notes under the Securities Act of 1933, as
amended, or to qualify an indenture in respect thereof under
the Trust Indenture Act of 1939, as amended.
<PAGE>
<PAGE> 5
10. The issuance of the Interim Notes and the
application of the proceeds thereof by the Interim Borrowers
as provided in the Interim Loan Agreement do not violate
Regulation G, Regulation T, Regulation U or Regulation X of
the Board of Governors of the Federal Reserve System.
11. To the best of our knowledge, other than the
actions, suits and proceedings disclosed in Company's Proxy
Statement, most recent Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, or in the Investment Agreement and the
Ancillary Agreements, there are no actions, suits, or
proceedings pending against or affecting Company before any
court or before any governmental commission, arbitrator, board
or authority which, if determined adversely to any or all of
the Interim Loan Parties, would have a material adverse effect
on any or all of the Interim Loan Parties or their respective
businesses.
12. The Proxy Statement complies as to form in all
material respects with the requirements of the Securities
Exchange Act of 1934 and nothing has come to our attention in
the course of our review has caused us to believe that the
Proxy Statement, as of the date hereof, contains any untrue
statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading.
13. The Interim Notes are valid and binding
obligations of each of the Interim Loan Parties, enforceable
in accordance with the terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
The opinion expressed above concerning the validity,
binding effect and enforceability of the Investment Agreement
and the Ancillary Agreements is further limited as follows:
a. The enforceability of the Investment Agreement
and the Ancillary Agreements is subject to the effect of
California court decisions, invoking statutes or principles of
equity, which have held that certain covenants and provisions
of agreements are unenforceable where: (i) the breach of such
covenants or provisions imposes restrictions or burdens upon
the debtor, including the acceleration of indebtedness due
under debt instruments, and it cannot be demonstrated that the
enforcement of such restrictions or burdens is reasonably
necessary for the protection of the creditor; or (ii) the
creditor's
<PAGE>
<PAGE> 6
enforcement of such covenants or provisions under the
circumstances would violate the creditor's implied covenant of
good faith and fair dealing. We wish to advise you that
California law implies a covenant of good faith and fair
dealing in every contract, and California courts are active in
interpreting and enforcing this implied covenant.
b. We advise you that California courts have been
reluctant to enforce provisions requiring one party to
indemnify the other party for loss or damage resulting in part
from the second party's wrongful or negligent acts. We do not
express an opinion concerning the enforceability of any
provision in the Investment Agreement or the Ancillary
Agreements which require any of the Interim Loan Parties to
indemnify the Parties, their successors or assigns for loss or
damage resulting in part from the wrongful or negligent acts
of Parties, their successors or assigns.
c. We do not express an opinion with respect to
the provisions in the Interim Loan Agreement providing for
Post-Maturity Interest.
The opinions provided herein are as of the date
hereof. We do not assume any obligation to update or
supplement this opinion to reflect any facts or circumstances
that may hereafter come to our attention or any changes in
laws which may hereafter occur. Except as set forth in the
next paragraph, this opinion letter may not be used or relied
upon by or published or communicated to any person or entity
other than the addressees for any purpose whatsoever without
our prior written consent in each instance.
This opinion may not be relied upon for any other
purpose, or relied upon by any other person, firm or
corporation for any purpose, without our prior written
consent; provided, however, that each of the Parties may
provide this opinion (i) to regulatory authorities should they
so request or in connection with their normal examinations,
(ii) to its respective independent auditors and attorneys,
(iii) pursuant to order or legal process of any court or
governmental agency or (iv) in connection with any action to
which it is a party arising out of the transactions
contemplated by the Investment Agreement and the Ancillary
Agreements.
Very truly yours,
<PAGE>
Exhibit 4
NOTE PURCHASE AGREEMENT
Between
CORIMON CORPORATION,
a Delaware corporation
and
STANDARD BRANDS PAINT COLLATERAL TRUST
Dated as of February 15, 1995
<PAGE>
<PAGE> i
TABLE OF CONTENTS
Section Page
ARTICLE I
Definitions
1.1. Definitions . . . . . . . . . . . . . . . . . 1
1.2. Other Definitions . . . . . . . . . . . . . . 1
1.3. Interpretation . . . . . . . . . . . . . . . . 1
ARTICLE II
Purchase and Sale of Purchased Debt
2.1. Purchase and Sale of Purchased Debt . . . . . 2
2.2. Closing . . . . . . . . . . . . . . . . . . . 2
ARTICLE III
Representations and Warranties
3.1. Representations and Warranties of Holdings . . 2
3.2. Representations and Warranties of Grantor
Trust . . . . . . . . . . . . . . . . . . . . 2
ARTICLE IV
General Provisions
4.1. Amendments; Waivers . . . . . . . . . . . . . 3
4.2. Notices . . . . . . . . . . . . . . . . . . . 3
4.3. Counterparts . . . . . . . . . . . . . . . . . 4
4.4. Entire Agreement; No Third-Party Beneficiaries 4
4.5. Assignment . . . . . . . . . . . . . . . . . . 4
4.6. Severability . . . . . . . . . . . . . . . . . 4
4.7. Governing Law . . . . . . . . . . . . . . . . 5
<PAGE>
<PAGE> 1
NOTE PURCHASE AGREEMENT, dated as of February 10,
1995 (this "Agreement"), between Corimon Corporation, a
Delaware corporation ("Holdings"), and Standard Brands
Collateral Trust, a California trust ("Grantor Trust").
RECITALS
WHEREAS, simultaneously with the execution and
delivery of this Agreement, each of Holdings, Grantor Trust,
Standard Brands Paint Company, a Delaware corporation
("Company"), and certain other parties have entered into an
Investment Agreement, dated as of the date hereof (the
"Investment Agreement");
WHEREAS, the Boards of Directors of Holdings and the
trustee of the Grantor Trust have approved the respective
transactions contemplated by the Investment Agreement and this
Agreement; and
WHEREAS, Grantor Trust desires to sell, and Holdings
desires to purchase, Existing Grantor Trust Indebtedness and
New Borrower Notes in order to facilitate the transactions
contemplated by the Investment Agreement.
NOW, THEREFORE, in consideration of the
representations, warranties, covenants and agreements
contained herein and for other good and valuable
consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
Definitions
1.1. Definitions. For purposes of this Agreement:
"Purchased Debt" has the meaning set forth in
Section 2.1.
1.2. Other Definitions. For purposes of this Agreement,
terms used herein but not otherwise defined shall have the
meaning set forth in Section 1.1 of the Investment Agreement.
1.3. Interpretation. The rules of interpretation set
forth in Section 1.2 of the Investment Agreement shall
<PAGE>
<PAGE> 2
apply to this Agreement, and the provisions thereof shall be
deemed to be incorporated by reference herein.
ARTICLE II
Purchase and Sale of Purchased Debt
2.1. Purchase and Sale of Purchased Debt. Subject to the
terms and conditions herein set forth, Holdings shall purchase
from Grantor Trust, and Grantor Trust shall sell to Holdings,
$949,800 principal amount of Existing Grantor Trust
Indebtedness and $989,375 principal amount of New Borrower
Notes (together, the "Purchased Debt").
2.2. Closing. The closing of the purchase and sale of
the Purchased Notes (the "Closing") shall take place
simultaneously with the Funding under the Investment
Agreement. At the Closing, (i) Holdings shall deliver to
Grantor Trust $1,939,175 by wire transfer of immediately
available funds to [bank account] and (ii) Grantor Trust shall
deliver to Holdings the Purchased Debt.
ARTICLE III
Representations and Warranties
3.1. Representations and Warranties of Holdings. Holdings
represents and warrants to Grantor Trust as follows:
(a) Organization. Holdings is a corporation duly
organized, validly existing and in good standing under the
laws of Delaware.
(b) Validity. This Agreement has been duly authorized,
executed and delivered by Holdings and constitutes a valid and
legally binding agreement of Holdings enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
3.2. Representations and Warranties of Grantor Trust.
Grantor Trust represents and warrants to Holdings as follows:
<PAGE>
<PAGE> 3
(a) Organized and Standing. Grantor Trust is a trust
duly organized, validly existing and in good standing under
the laws of the State of California.
(b) Validity. This Agreement has been duly authorized,
executed and delivered by Grantor Trust and constitutes a
valid and legally binding agreement of Grantor Trust
enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity
principles.
(c) Ownership of Purchased Debt. Grantor Trust is the
owner of at least $949,800 principal amount of Existing
Grantor Trust Indebtedness and at least $989,375 principal
amount of New Borrower Notes. Grantor Trust has good and
valid title to the Purchased Debt to be sold by it hereunder,
free and clear of all liens, encumbrances, equities and
claims; and, upon delivery of the Purchased Debt and payment
therefor pursuant to Section 2.2 hereof, good and valid title
to such Purchased Debt free and clear of all liens,
encumbrances, equities or claims, will pass to Holdings.
ARTICLE IV
General Provisions
4.1. Amendments; Waivers. (a) This Agreement may not be
amended except by an instrument in writing signed on behalf of
each of the parties.
(b) Any agreement on the part of a party to any waiver
shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to
assert any of its rights under this Agreement shall not
constitute a waiver of such rights.
4.2. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall
be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by cable, facsimile
transmission, telegram or telex or by registered or certified
mail (postage prepaid, return receipt requested) to the
respective parties at the following
<PAGE>
<PAGE> 4
addresses (or at such other address for a party as shall be
specified in a notice given in accordance with this
Section 4.2):
(i) If to Holdings, to:
Corimon, S.A.C.A.
Calle Hans Neumann
Edificio Corimon
Los Cortijos de Lourdes
Apartado 3654
Caracas 1010-A, Venezuela
Attention: Arthur W. Broslat
Facsimile: (582) 203-5757
with a copy to:
Sullivan & Cromwell
444 South Flower Street
Los Angeles, California 90071
Attention: Frank H. Golay, Jr.
Facsimile: (213) 683-0457
(ii) If to Grantor Trust, to:
Standard Brands Paint Collateral Trust
c/o Karl Savryn, Trustee
Dornbush, Mandelstam & Schaeffer
74 Third Avenue, 11th Floor
New York, New York 10017
Facsimile:
4.3. Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and
the same agreement.
4.4. Entire Agreement; No Third-Party Beneficiaries.
This Agreement (a) constitutes the entire agreement, and
supersedes all prior agreements and understandings, both
written and oral, between the parties hereto with respect to
the subject matter hereof and (b) is not intended to confer
upon any person other than the parties and their permitted
successors and assigns any rights or remedies.
4.5. Assignment. None of the parties to this Agreement
shall assign any of its rights or obligations hereunder
without the prior written consent of the other parties hereto.
<PAGE>
<PAGE> 5
4.6. Severability. If any term or provision of this
Agreement or the application thereof to either party or set of
circumstances shall, in any jurisdiction and to any extent, be
finally held invalid or unenforceable, such term or provision
shall only be ineffective as to such jurisdiction, and only to
the extent of such invalidity or unenforceability, without
invalidating or rendering unenforceable any other terms or
provisions of this Agreement or under any other circumstances,
and the parties shall negotiate in good faith a substitute
provision which comes as close as possible to the invalidated
or unenforceable term or provision, and which puts each party
in a position as nearly comparable as possible to the position
it would have been in but for the finding of invalidity or
unenforceability, while remaining valid and enforceable.
4.7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER
APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS THEREOF. All
actions and proceedings arising out of or relating to this
Agreement shall be brought by the parties and heard and
determined only in Federal or state court located in the State
of New York and the parties hereto consent to jurisdiction
before and waive any objections of venue to the New York
courts.
<PAGE>
<PAGE> 6
NOTE PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
CORIMON CORPORATION
By /s/ Arthur W. Broslat
Name: Arthur W. Broslat
Title:
STANDARD BRANDS PAINT
COLLATERAL TRUST
By /s/ Karl Savryn
Name: Karl Savryn
Title:
<PAGE>
Exhibit 5
STOCKHOLDERS AGREEMENT
Between
CORIMON CORPORATION,
a Delaware corporation
and
STANDARD BRANDS PAINT COMPANY,
a Delaware corporation
Dated as of February 15, 1995
<PAGE>
<PAGE> i
TABLE OF CONTENTS
Section Page
ARTICLE I
Definitions
1.1. Definitions . . . . . . . . . . . . . . . . . 1
1.2. Other Definitions. . . . . . . . . . . . . . . 3
1.3. Interpretation . . . . . . . . . . . . . . . . 3
ARTICLE II
Corporate Governance
2.1. Composition of the Board of Directors . . . . 3
2.2. Solicitation and Voting of Shares . . . . . . 5
2.3. Committees . . . . . . . . . . . . . . . . . . 6
2.4. Material Transactions . . . . . . . . . . . . 7
2.5. Enforcement of this Agreement . . . . . . . . 7
2.6. Certificate of Incorporation and By-laws . . . 7
ARTICLE III
General Provisions
3.1. Effectiveness; Termination . . . . . . . . . . 8
3.2. Amendments; Waivers . . . . . . . . . . . . . 8
3.3. Notices . . . . . . . . . . . . . . . . . . . 8
3.4. Counterparts . . . . . . . . . . . . . . . . . 9
3.5. Entire Agreement; Insurance Companies;
Otherwise No Third-Party Beneficiaries . . . . 9
3.6. Assignment . . . . . . . . . . . . . . . . . . 9
3.7. Severability . . . . . . . . . . . . . . . . . 10
3.8. Governing Law . . . . . . . . . . . . . . . . 10
3.9. Specific Performance . . . . . . . . . . . . . 10
SCHEDULES
Schedule 2.1 Board of Directors
Schedule 2.6 By-Laws
<PAGE>
<PAGE> 1
STOCKHOLDERS AGREEMENT dated as of February 15, 1995
(this "Agreement"), between Corimon Corporation, a Delaware
corporation ("Holdings"), and Standard Brands Paint Company, a
Delaware corporation ("Company").
RECITALS
WHEREAS, simultaneously with the execution and
delivery of this Agreement, each of Holdings, Company and
certain other parties have entered into the Investment
Agreement, dated as of the date hereof (the "Investment
Agreement");
WHEREAS the respective boards of directors of
Holdings and Company have approved the respective transactions
contemplated by the Investment Agreement pursuant to which
Holdings initially will own 77.4%, and Investor3, Investor4,
Investor5 and Investor6 (together, the "Insurance Companies")
initially will own in the aggregate approximately 4.2% of the
then outstanding shares of Common Stock of Company, and the
Insurance Companies will own approximately $15 million of debt
of the Company; and
WHEREAS Holdings and Company desire to establish in
this Agreement certain terms and conditions concerning the
corporate governance of Company and certain related matters.
NOW, THEREFORE, in consideration of the
representations, warranties, covenants and agreements
contained herein and for other good and valuable
consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
Definitions
1.1. Definitions. For purposes of this Agreement:
"Affiliate" has the same meaning as in Rule 12b-2
promulgated under the Exchange Act.
"Agreement" has the meaning set forth above.
"Associate" has the same meaning as in Rule 12b-2
promulgated under the Exchange Act.
<PAGE>
<PAGE> 2
"Board of Directors" means the Board of Directors of
Company except where the context requires otherwise.
"Director" means a member of the Board of Directors.
"Equity Security" means (i) any Common Stock or
other Voting Stock, (ii) any securities of Company convertible
into or exchangeable for Common Stock or other Voting Stock or
(iii) any options, rights or warrants (or any similar
securities) issued by Company to acquire Common Stock or other
Voting Stock.
"Fair Market Value" means, as of any date of
determination, (i) in the case of a security, the average of
the closing sale prices of such security during the 30-day
period immediately preceding such date of determination on the
principal United States securities exchange registered under
the Exchange Act on which such security is listed or, if such
security is not listed on any such exchange, the average of
the closing sale prices or the closing bid quotations of such
security during the 30-day period preceding such date of
determination on the Nasdaq National Market or any comparable
system then in use or, if no such quotations are available,
the fair market value of such security as of such date of
determination as determined in good faith by a majority of the
Independent Directors; and (ii) in the case of property other
than cash or a security, the fair market value of such
property on such date of determination as determined in good
faith by a majority of Independent Directors.
"Holdings Director" means a Director who is
designated for such position by Holdings in accordance with
Section 2.1 who is not an Independent Director.
"Holdings/Insurance Companies Director" means a
Director who is designated for such position by Holdings or
the Insurance Companies in accordance with Section 2.1 and
who, in the case of any Holdings Director, is not an
Independent Director.
"Independent Director" means a Director of Company
(i) who is not and has never been an officer or employee of
Company, any Affiliate or Associate of Company or of an entity
that derived 10% or more of its revenues or earnings in its
most recent fiscal year from transactions involving Company or
any Affiliate or Associate of Company, (ii) who is not and has
never been an officer, employee or director of Parent,
Holdings or any Affiliate or Associate of Parent or Holdings,
or of an entity that derived more than 10% of
<PAGE>
<PAGE> 3
its revenues or earnings in its most recent fiscal year from
transactions involving Parent, Holdings or any Affiliate or
Associate of Parent or Holdings, and (iii) has no affiliation,
compensation, consulting or contracting arrangement with
Company, Parent, Holdings or their respective Affiliates such
that a reasonable person would regard such Director as likely
to be unduly influenced by management of Company, Parent or
Holdings.
"Insurance Companies Director" means a Director who
is designated for such position by Insurance Companies in
accordance with Section 2.1 and who may be an Independent
Director.
"Investment Agreement" has the meaning set forth
above.
"Nominating Committee" shall mean the Nominating
Committee of the Board as described in Section 2.3(b)(ii).
"Other Director" means a director that is not a
Holdings Director, Insurance Companies Director or Independent
Director.
"Unaffiliated Stockholders" means stockholders of
Company other than Parent or Affiliates of Parent.
"Voting Power" means the ability to vote or to
control, directly or indirectly, by proxy or otherwise the
vote of any Voting Stock.
"Voting Stock" means securities having the right to
vote generally in any election of Directors of Company.
1.2. Other Definitions. For purposes of this
Agreement, terms used herein but not otherwise defined shall
have the meanings set forth in Section 1.1 of the Investment
Agreement.
1.3. Interpretation. The rules of interpretation
set forth in Section 1.2 of the Investment Agreement shall
apply to this Agreement, and the provisions thereof shall be
deemed to be incorporated by reference herein.
<PAGE>
<PAGE> 4
ARTICLE II
Corporate Governance
2.1. Composition of the Board of Directors.
Subject to this Article II, the fundamental policies and
strategic direction of Company shall be determined by its
Board of Directors as provided in this Article II. The
composition and manner of selecting Directors shall be as
follows:
(a) At and after the Funding Date, the Board of
Directors shall be comprised of eight (8) Directors. At and
after the Closing Date, the Board of Directors shall be
comprised of ten (10) Directors. The composition of the Board
of Directors, first, after the Funding Date and, second, after
the Closing Date, shall be as set forth in Schedule 2.1
hereto, and the parties hereto shall take all necessary action
to elect to the Board of Directors the individuals so listed;
provided that Holdings may replace a Holdings Director until
such time prior to Closing as it would be impracticable for
inclusions in the Proxy Statement.
For purpose of the foregoing, the Directors of the
Company have been classified as "Holdings Directors", in which
case they will be designated by Holdings, as "Insurance
Companies Director", in which case he or she will be
designated by Insurance Companies, and as "Independent
Directors" or "Other Directors," in which case they will be
designated by Holdings, Insurance Companies or the Nominating
Committee. In case any individual in any such category is
unable or unwilling to serve, the replacement shall be
similarly designated. At all times, the Company will comply
with the rules and policies of the New York Stock Exchange in
respect of the composition of its Board of Directors,
including committees thereof and the requirement that certain
directors be independent.
(c) Except as otherwise provided herein, commencing
with the first election of Directors after the Closing Date,
the Directors shall be designated as follows (it being
understood that such designation shall include any designation
of any incumbent Director for reelection to the Board):
(i) Holdings shall have the right to designate at
least seven Directors (who may also be Independent
Directors or Other Directors);
<PAGE>
<PAGE> 5
(ii) Insurance Companies (acting together under such
procedures as they determine) shall have the right to
designate one Insurance Companies Director so long as
they shall beneficially own in the aggregate at least
$1 million of debt and/or Equity Securities of the
Company (valued for this purpose at Fair Market Value or
at principal amount in the case of debt); and
(iii) unless otherwise required pursuant to any
agreement with a creditor of the Company, the Nominating
Committee shall designate the remaining Directors, each
of whom shall be an Independent Director or an Other
Director.
(d) In connection with each annual meeting of the
stockholders of Company, Holdings and Insurance Companies
shall have the right to designate a number of nominees for
Director equal to the number of Holdings/Insurance Companies
Directors that Holdings and Insurance Companies are entitled
to designate pursuant to this Section 2.1 as of the date of
such annual meeting. Each person so designated shall be
included in management's slate of nominees for such annual
meeting.
(e) Holdings, Insurance Companies and the
Nominating Committee, respectively, shall have the right to
designate any replacement for a Director designated in
accordance with this Section 2.1 by Holdings, Insurance
Companies or the Nominating Committee, respectively, upon the
death, resignation, retirement, disqualification, removal from
office for other cause. Such replacement for any Independent
Director shall also be (or, in the case of an Independent
Director who is also a Director nominated by Holdings, may
also be) an Independent Director. The Board of Directors
shall elect each person so designated.
(f) Notwithstanding anything herein to the
contrary, no individual who is an officer, director, partner
or principal stockholder of any competitor of Company or any
of its Subsidiaries (other than Holdings and its Affiliates)
or any competitor of Holdings or any of its Subsidiaries
(other than Company) shall serve as a Director. Also,
notwithstanding anything herein to the contrary, no provision
of this agreement is intended to prevent the Company from
adopting a "staggered" board of directors in accordance with
applicable Delaware law in the future and, to the extent
necessary, appropriate changes to this agreement shall be made
to reflect any such adoption, the form of which shall be
prepared by the Company and Holdings, and unless reasonably
objected to by the Insurance
<PAGE>
<PAGE> 6
Companies, shall become effective upon their execution by the
Company and Holdings.
2.2. Solicitation and Voting of Shares.
(a) Company shall use its best efforts to solicit
from the stockholders of Company eligible to vote for the
election of Directors proxies in favor of the nominees
designated by Holdings, Insurance Companies and the Nominating
Committee in accordance with Section 2.1.
(b) In any election of Directors or any meeting of
the stockholders of Company called expressly for the removal
of Directors, so long as the Board of Directors includes (and
will include after any such removal) the number of
Holdings/Insurance Companies Directors contemplated by
Section 2.1, Holdings and its Affiliates shall be present for
purposes of establishing a quorum and shall vote all their
shares of Voting Stock (i) in favor of any nominee or Director
designated by Holdings, Insurance Companies or the Nominating
Committee in accordance with Section 2.1 and (ii) otherwise
against the removal of any Director designated in accordance
with Section 2.1. In any other matter submitted to a vote of
the stockholders of Company, Holdings may vote any or all of
its shares in its sole discretion.
(c) Holdings agrees that it will, and will cause
any of its Subsidiaries (other than Company and its
Subsidiaries) to, take all action as a stockholder of Company
or as is otherwise reasonably within its control, as necessary
to effect the provisions of this Agreement.
2.3. Committees. (a) Subject to the general
oversight and authority of the full Board of Directors, the
Board of Directors shall establish, empower and maintain the
committees of the Board of Directors contemplated by this
Section 2.3.
(b) The following committees shall be established,
empowered and maintained by the Board of Directors at all
times during the term of this Agreement:
(i) an Audit Committee, consisting solely of
Independent Directors;
(ii) a Nominating Committee, responsible, among
other things, for the designation of Independent
Directors, all pursuant to Section 2.1;
<PAGE>
<PAGE> 7
(iii) a Stock Option Plan Administration Committee,
responsible, among other things, for (A) recommending to
the Board of Directors, for approval by a majority of the
Board of Directors, the adoption and amendment of all
stock option plans of Company and (B) the administration
of such plans, and consisting solely of Independent
Directors and Holdings/Insurance Companies Directors who
constitute disinterested persons (as such term is defined
in Rule 16b-3(d) under the Exchange Act); and
(iv) such other committees as the Board of Directors
deems necessary or desirable; provided that such
committees are established in accordance with the terms
of this Agreement.
(c) The number of Holdings/Insurance Companies
Directors on each committee of the Board of Directors (other
than the Audit Committee, the composition of which shall be as
provided above) shall be the same proportion (rounded to the
nearest whole number if necessary) of the total membership of
such committee as the number of Holdings/Insurance Companies
Directors, as the case may be, is of the entire Board of
Directors.
(d) No action by any committee of the Board of
Directors shall be valid unless taken at a meeting for which
adequate notice has been duly given or waived by the members
of such committee. Any committee member unable to participate
in person at any meeting shall be given the opportunity to
participate by telephone. The Board of Directors or the
remaining committee members shall designate a
Holdings/Insurance Companies Director to replace any absent or
disqualified Holdings/Insurance Companies Director member of
any committee. Each of the committees established by the
Board of Directors pursuant to this Section 2.3 shall
establish such other rules and procedures for its operation
and governance (consistent with the terms of this Agreement)
as it shall see fit and may seek such consultation and advice
as to matters within its purview as it shall require.
2.4. Material Transactions. After the Closing,
Company shall not enter into any contract, agreement or
transaction with Holdings or any of its Affiliates described
in Item 404 of Regulation S-K promulgated by the SEC unless a
majority of the Independent Directors or holders of a majority
of the Voting Power of the Voting Stock which is held by
Unaffiliated Stockholders approve such contract, agreement or
transaction; provided, however, that the restrictions
contained in this Section 2.4 shall not apply to any contract,
agreement or transaction that is (i)
<PAGE>
<PAGE> 8
expressly contemplated by the Investment Agreement, this
Agreement or any other Ancillary Agreement or (ii) entered
into and approved by the Board of Directors under
circumstances that do not violate applicable Delaware law.
2.5. Enforcement of this Agreement. The approval
of a majority of the Independent Directors shall be all that
is required for Company to seek to enforce the terms of this
Agreement.
2.6. Certificate of Incorporation and By-laws.
Company and Holdings shall take or cause to be taken all
lawful action necessary to ensure at all times that Company's
Certificate of Incorporation and By-laws are not at any time
inconsistent with the provisions of this Agreement. Not later
than the Funding Date, the Board of Directors shall amend
Company's By-laws to include the By-laws set forth in Schedule
2.6. At Holdings' request the Board of Directors shall adopt
(and if necessary submit and recommend for approval by
stockholders) other amendments to Company's Certificate of
Incorporation or By-laws reasonably necessary to implement
such provisions.
ARTICLE III
General Provisions
3.1. Effectiveness; Termination. This Agreement
shall become effective on the Funding Date. This Agreement
shall terminate prior to the Closing Date at such time that
the Investment Agreement is terminated in accordance with its
terms. This Agreement shall terminate after the Closing Date
upon the earliest to occur of any of the following events:
(a) the mutual written consent of Holdings and
Insurance Companies, to the extent they still have any rights
under this Agreement, and Company; or
(b) the expiration of ten (10) years from the
Closing Date; or
(c) A court having jurisdiction in the premises
shall enter a decree or order for relief in respect of Company
in a voluntary or involuntary case under any applicable
bankruptcy, insolvency, or other similar law now or hereafter
in effect, which decree or order is not stayed, and the
continuance of any such events for 60 days unless dismissed,
bonded, or discharged; or
<PAGE>
<PAGE> 9
(d) the beneficial ownership of all of the Common
Stock is held by only one Person.
3.2. Amendments; Waivers. (a) This Agreement may
not be amended (other than as provided in Section 2.1(f))
except by an instrument in writing signed on behalf of each of
the parties; provided that no such amendment or waiver by
Company shall be effective without the approval of a majority
of the Independent Directors.
(b) Any agreement on the part of a party to any
waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any
party to assert any of its rights under this Agreement shall
not constitute a waiver of such rights.
3.3. Notices. All notices, requests, claims,
demands and other communications hereunder shall be in writing
and shall be given (and shall be deemed to have been duly
given upon receipt) by delivery in person, by cable, facsimile
transmission, telegram or telex or by registered or certified
mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice
given in accordance with this Section 3.3):
If to Holdings, to:
Corimon, S.A.C.A.
Calle Hans Neumann
Edificio Corimon
Los Cortijos de Lourdes
Apartado 3654
Caracas 1010-A, Venezuela
Attention: Arthur W. Broslat
Facsimile: (582) 203-5757
with a copy to:
Sullivan & Cromwell
444 South Flower Street
Los Angeles, California 90071
Attention: Frank H. Golay, Jr.
Facsimile: (213) 683-0457
If to Insurance Companies, to:
Their respective addresses set forth in
the Investment Agreement.
<PAGE>
<PAGE> 10
If to Company, to:
Standard Brands Paint Company
4300 West 190th Street
Torrance, California 90509-2956
Attention: Ronald I. Scharman
Facsimile: (310) 371-8770
3.4. Counterparts. This Agreement may be executed
in one or more counterparts, all of which shall be considered
one and the same agreement.
3.5. Entire Agreement; Insurance Companies;
Otherwise No Third-Party Beneficiaries. The Investment
Agreement, this Agreement, the Registration Rights Agreement,
the other Ancillary Agreements and the agreements contemplated
hereby and thereby (a) constitute the entire agreement, and
supersede all prior agreements and understandings, both
written and oral among the parties hereto with respect to the
subject matter hereof and thereof and (b) are not intended to
confer upon any person other than the parties and their
permitted successors and assigns any rights or remedies, it
being understood that the Insurance Companies are intended to
have third-party beneficiary rights hereunder.
3.6. Assignment. None of the parties to this
Agreement shall assign any of its rights or obligations
hereunder without the prior written consent of the other
parties hereto, except that Holdings may assign all or any of
its rights and obligations hereunder to any Subsidiary or
Affiliate of Holdings; provided that no such assignment shall
relieve Holdings of its obligations hereunder.
3.7. Severability. If any term or provision of
this Agreement or the application thereof to either party or
set of circumstances shall, in any jurisdiction and to any
extent, be finally held invalid or unenforceable, such term or
provision shall only be ineffective as to such jurisdiction,
and only to the extent of such invalidity or unenforceability,
without invalidating or rendering unenforceable any other
terms or provisions of this Agreement or under any other
circumstances, and the parties shall negotiate in good faith a
substitute provision which comes as close as possible to the
invalidated or unenforceable term or provision, and which puts
each party in a position as nearly comparable as possible to
the position it would have been in but for the finding of
invalidity or unenforceability, while remaining valid and
enforceable.
<PAGE>
<PAGE> 11
3.8. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF DELAWARE, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE
GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAW
THEREOF. All actions and proceedings arising out of or
relating to this Agreement shall be brought by the parties and
heard and determined only in a Delaware state court or a
federal court sitting in that State and the parties hereto
consent to jurisdiction before and waive any objections of
venue to the Delaware Chancery Court, and agree to service of
process therein in accordance with the notices provision
above.
3.9. Specific Performance. The parties hereto
recognize and agree that immediate irreparable damages for
which there is no adequate remedy at law would occur in the
event that any provision of this Agreement is not performed in
accordance with the specific terms hereof or is otherwise
breached. It is accordingly agreed that in the event of a
failure by a party to perform its obligations under this
Agreement, the nonbreaching party shall be entitled to
specific performance through injunctive relief to prevent
breaches of the provisions of this Agreement and to enforce
specifically the provisions of this Agreement in any action
instituted in any court having subject matter jurisdiction, in
addition to any other remedy to which such party may be
entitled, at law or in equity.
<PAGE>
<PAGE> 12
STOCKHOLDERS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
STANDARD BRANDS PAINT COMPANY
By /s/ Howard Schwartz
Name: Howard Schwartz
Title:
CORIMON CORPORATION
By /s/ Arthur W. Broslat
Name: Arthur W. Broslat
Title:
<PAGE>
<PAGE> 13
SCHEDULE 2.1 TO
STOCKHOLDERS AGREEMENT
Board of Directors
After the After the Closing
Funding Date Date
Holdings Directors: Ron Breault Arthur W. Broslat
Juan Gramanje Ron Breault
Thomas White Juan Gramanje
Thomas White
Charles D. Codrea
Independent Deborah Hicks Midanek Deborah Hicks Midanek
Directors: Robert Dangremond Robert Dangremond
William Yingling William Yingling
Richard Boje Richard Boje
Other Directors: Ronald I. Scharman Ronald I. Scharman
<PAGE> 1
Exhibit 6
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of February 15, 1995
(this "Agreement"), among Corimon Corporation, a Delaware
corporation ("Holdings"), Fidelity Capital & Income Fund
("Investor1"), Kodak Retirement Income Plan Trust Fund
("Investor2"), Transamerica Life Insurance and
Annuity Company, a North Carolina corporation ("Investor3"),
Transamerica Occidental Life Insurance Company, a California
corporation ("Investor4"), Sun Life Insurance Company of
America, an Arizona corporation ("Investor5"), Anchor National
Life Insurance Company, a California corporation ("Investor6"
and, together with Investor1, Investor2, Investor3, Investor4
and Investor5, the "Other Investors"), Standard Brands Paint
Collateral Trust, a California trust (the "Grantor Trust"),
Libra Investments, Inc. ("Libra") and Standard Brands Paint
Company, a Delaware corporation ("Company").
RECITALS
WHEREAS, the Company, Holdings, Grantor Trust, the Other
Investors and certain other parties entered into the
Investment Agreement, dated as of the date hereof, pursuant to
which Holdings, the Other Investors, Libra will own
15,972,332, 1,445,402, 2,337,327 and 448,586 shares,
respectively, of the Company's newly issued Common Stock, par
value $0.01 per share (the "Registrable Common Stock"), and
1,570,049 shares of the Company's Preferred Stock (the
"Registrable Preferred Stock");
NOW THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained herein and for
other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Securities Subject to this Agreement
(a) Definitions. The terms "Registrable Securities" and
"Restricted Securities" shall each refer to each of the
Registrable Common Stock and the Registrable Preferred Stock.
The term "Target Effective Date" means the date 45 days
after the earlier of (i) the Target Filing Date or (ii) the
date on which the Shelf Registration Statement is filed with
the Commission.
The term "Target Effective Period" shall have the meaning
set forth in Section 2(a).
The term "Target Filing Date" means the date 30 days after
the Closing under the Investment Agreement.
<PAGE>
<PAGE> 2
(b) Restricted Securities. For the purposes of this
Agreement, Restricted Securities will cease to be Restricted
Securities when (i) a registration statement filed with the
Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act"),
covering such Restricted Securities has been declared
effective and they have been disposed of pursuant to such
effective registration statement, or (ii) such Restricted
Securities have been sold pursuant to Rule 144 or Rule 144A
under the Securities Act.
(c) Registrable Securities. As to any particular
Registrable Securities, such shares of Common Stock or
Preferred Stock, as the case may be, will cease to be
Registrable Securities when they cease to be Restricted
Securities.
2. Shelf Registration
(a) Filing; Effectiveness. As soon as practicable but not
later than the Target Filing Date, the Company shall prepare
and file with the Commission a "shelf" registration statement
(the "Registration Statement") on the appropriate form for an
offering to be made on a continuous basis pursuant to Rule 415
under the Securities Act (or such successor rule or similar
provision then in effect) covering all of the Registrable
Securities. The Company shall use its best efforts to have
the Registration Statement declared effective on or before the
Target Effective Date and to keep such Registration Statement
continuously effective for a period (the "Target Effective
Period") of 36 months following the date on which such
Registration Statement is declared effective. The holders of
Registrable Securities shall be permitted to withdraw all or
any part of the Registrable Securities from a Registration
Statement at any time prior to the effective date of such
Registration Statement or elect not to have such securities
included under such Registration Statement, but to the extent
any holder so withdraws or elects, it shall be deemed to have
waived its rights hereunder to have such Securities registered
under such Registration Statement.
(b) Supplements; Amendments. The Company agrees, if
necessary in the sole judgment of the Company, to supplement
or amend the Registration Statement, as required by the rules,
regulations or instructions applicable to the registration
form used by the Company for such Registration Statement or by
the Securities Act or as requested (which request may result
in the filing of a supplement or amendment) by any holder of
Registrable Securities to which such Registration Statement
relates, and the Company agrees to furnish to the holders of
Registrable Securities and their counsel and any managing
underwriter copies of any such supplement or amendment prior
to its being used and/or filed with the Commission.
(c) Liquidated Damages. If the Registration Statement is
not filed on or before the Target Filing Date, the Company
shall pay liquidated damages to each holder in an amount equal
to $0.01 per 100 shares of the Registrable Securities per week
beginning with the week including the Target Filing Date. If
the Registration Statement is filed but has not become
effective on or before the Target Effective Date, the Company
shall pay liquidated damages to each holder of Registrable
Securities in an amount equal to $0.01 per 100 shares of the
Registrable Securities per week beginning with the week
including the Target Effective Date. The weekly liquidated
damages associated with a late filing or a late declaration of
effectiveness shall increase by an amount equal to $0.01 per
100 shares of the Registrable Securities 90 days after the
Target Filing Date or the Target Effective Date, as the case
may
<PAGE>
<PAGE> 3
be, and shall thereafter increase by an amount equal to $0.01
per 100 shares of the Registrable Securities at the end of
each subsequent 90 day period for so long as the Registration
Statement is not filed or declared effective, as the case may
be. If a stop order is imposed or if for any other reason the
effectiveness of the Registration Statement is suspended
(including without limitation 5(o)) during the Target
Effective Period, then the Company shall pay liquidated
damages to each Holder of Registrable Securities in an amount
equal to $0.01 per 100 shares of the Registrable Securities
per week beginning with the week including the day on which
such stop order is imposed or effectiveness is otherwise
suspended. The weekly liquidated damages associated with a
suspension of the effectiveness of the Registration Statement
shall increase by an amount equal to $0.01 per 100 shares of
the Registrable Securities 90 days after the stop order was
imposed or the effectiveness of the Registration Statement was
otherwise suspended, and shall thereafter increase by an
amount equal to $0.01 per 100 shares of the Registrable
Securities at the end of each subsequent 90 day period for so
long as the effectiveness remains suspended. Liquidated
damages shall be deemed to commence accruing on the first day
of the week in which the event triggering such liquidated
damages occurs.
The liquidated damages to be paid to holders of Registrable
Securities pursuant to this Section 2(c) shall cease to
accrue, (i) with respect to the liquidated damages for failure
to file on or prior to the Target Filing Date, on the first
Friday after the Registration Statement is filed (but if the
Registration Statement is filed on a Friday, then that day),
(ii) with respect to the liquidated damages for failure to
have the Registration Statement declared effective on or prior
to the Target Effective Date, on the first Friday after the
Registration Statement is declared effective (but if the
Registration Statement is declared effective on a Friday, then
that day), or (iii) with respect to the liquidated damages for
the suspension of effectiveness, on the first Friday after the
reinstatement of effectiveness of the Registration Statement
(but if the effectiveness of the Registration Statement is
reinstated on a Friday, then that day).
The Company shall pay the liquidated damages due with
respect to any Registrable Securities at the end of each week
during which such damages accrue. Liquidated damages shall be
paid to the holders of Registrable Securities entitled to
receive such liquidated damages by wire transfer in
immediately available funds to the accounts designated by such
holders.
(d) Effective Registration. A registration will not be
deemed to have been effected as a Registration Statement
unless the Registration Statement with respect thereto has
been declared effective by the Commission and the Company has
complied in all material respects with its obligations under
this Agreement with respect thereto; provided, however, that
if after it has been declared effective, the offering of
Registrable Securities pursuant to a Registration Statement is
interfered with by any stop order, injunction or other order
or requirement of the Commission or any other governmental
agency or court, such Registration Statement will be deemed
not to have become effective during the period of such
interference (and liquidated damages shall accrue and be
payable under Section 2(c)) until the offering of Registrable
Securities pursuant to such Registration Statement may legally
resume. If a registration requested pursuant to this
Section 2 is deemed not to have been effected then the Company
shall continue to be obligated to effect a registration
pursuant to this Section 2.
<PAGE>
<PAGE> 4
(e) Selection of Underwriter. If the holders of a majority
of Registrable Securities so elect, the offering of
Registrable Securities pursuant to a Registration Statement of
Registrable Securities shall be in the form of an underwritten
offering. If they so elect, the holders of a majority of
Registrable Securities participating in such Registration
Statement shall select one or more nationally recognized firms
of investment bankers acceptable to the Company to act as the
book-running managing underwriter or underwriters in
connection with such offering and shall select any additional
investment bankers and managers acceptable to the Company to
be used in connection with the offering.
3. Piggy-Back Registration
If at any time the Company proposes to file a registration
statement under the Securities Act with respect to an offering
by the Company of its Common Stock or for the account of its
securityholders for any class of common stock (other than a
registration statement on Form S-4 or S-8, or any form
substituted therefor, or filed in connection with an exchange
offer or an offering of securities solely to the Company's
existing stockholders) (the "Piggy-Back Registration"), then
the Company shall in each case give written notice of such
proposed filing to the holders of Registrable Common Stock as
soon as practicable but in no event less than 30 business days
before the anticipated filing date, and such notice shall
offer such holders the opportunity to register such number of
shares of Registrable Common Stock as each such holder may
request. The Company shall use its reasonable efforts to
cause the managing underwriter or underwriters of the proposed
offering to permit the holders of Registrable Common Stock who
have given the Company notice (which may be given by
telephone, to be confirmed promptly in writing, or by telex)
within 10 business days after receipt of such notice of their
desire to include Registrable Common Stock held by them in
such offering on the same terms and conditions as any similar
securities of the Company or any other securityholder included
therein. Notwithstanding the foregoing, if the managing
underwriter or underwriters of such offering determine in good
faith that the total amount of Common Stock that the holders
of Registrable Common Stock intend to include in such offering
would adversely effect the success of such offering, then the
number of shares of Common Stock to be offered for the
accounts of holders of Registrable Common Stock shall be
reduced pro rata, based on the amount of Registrable Common
Stock requested to be registered, or excluded in their
entirety, as the case may be, to the extent necessary to
reduce the total amount of shares of Common Stock to be
included in such offering to the amount recommended by such
managing underwriters. In the event that the contemplated
distribution does not involve an underwritten public offering,
such determination that the inclusion of such Registrable
Common Stock shall adversely affect the success of the
offering shall be made in good faith by the Board of Directors
of the Company.
No registration effected under this Section 3, and no
failure to effect a registration under this Section 3 shall
relieve the Company of its obligation to effect a registration
upon the request of holders of Registrable Securities pursuant
to Section 2. No failure to effect a registration under this
Section 3 and to complete the sale of Registrable Securities
in connection therewith shall relieve the Company of any other
obligation under this Agreement, including without limitation,
the Company's obligations under Sections 6 and 7.
<PAGE>
<PAGE> 5
4. Holdback Agreement
If reasonably requested by the managing underwriter or
underwriters for any public offering of Registrable Securities
being made pursuant to a Registration Statement (the
"Registration Statement"), the Company will (i) not publicly
sell or distribute any securities similar to those being
registered, or any securities convertible into or exchangeable
or exercisable for such securities (other than any such sale
or distribution of such securities in connection with any
merger or consolidation by the Company or any subsidiary
thereof, or the acquisition by the Company or a subsidiary
thereof of the capital stock or substantially all of the
assets of any other person, or by reason of the existence of
previously issued and outstanding convertible securities,
options or warrants), during the time reasonably requested by
the underwriter, not to exceed 14 business days prior to, and
during the 180-day period beginning on, the effective date of
any Registration Statement in which the holders of Registrable
Securities are participating or the commencement of a public
distribution of the Registrable Securities pursuant to such
Registration Statement; provided, however, that in no event
shall this clause prevent the Company from selling or
distributing any securities registered under the Securities
Act on Form S-4 or Form S-8 or any successor form, and
(ii) use reasonable efforts to cause each other holder of
privately placed securities similar to those being registered
to agree not to effect any public sale or distribution of any
such securities during the periods described in clause (i)
above, in each case including a sale pursuant to Rule 144 or
Rule 144A under the Securities Act (except as part of any such
registration, if permitted).
5. Registration Procedures
In connection with any sale of Registrable Securities
pursuant to a Registration Statement, the Company will as
promptly as practicable:
(a) prepare and file with the Commission a Registration
Statement on the appropriate form under the Securities Act,
which form shall comply as to form in all material respects
with the requirements of the applicable form and include all
financial statements required by the Commission to be filed
therewith, and use its best efforts to have such
Registration Statement declared effective and remain
effective in accordance with the provisions of this
Agreement; provided, however, that, prior to filing a
Registration Statement or prospectus relating to Registrable
Securities or any amendments or supplements thereto, the
Company shall furnish to the holders of the Registrable
Securities covered by such Registration Statement, such
holders' counsel and the underwriters, if any, copies of all
such documents proposed to be filed, which documents will be
subject to the review of such holders' counsel and the
underwriters, if any, and the Company will not, unless
required by law, file any Registration Statement or
amendment thereto or any prospectus or any supplement
thereto relating to Registrable Securities to which holders
of Registrable Securities holding a majority in interest of
the Registrable Securities covered by such Registration
Statement or the underwriters with respect to such
Registrable Securities, if any, shall object; provided,
however, that any such objection to the filing of any
Registration Statement or amendment thereto or any
prospectus or supplement thereto shall be made by written
notice (the "Objection Notice") delivered to the Company no
later than ten business
<PAGE>
<PAGE> 6
days after the party or parties asserting such objection
(the "Objecting Party") receives copies of the documents
that the Company proposes to file. The Objection Notice
shall set forth the objections and the specific areas in the
documents where such objections arise. The Company shall
have five business days after receipt of the Objection
Notice to correct such deficiencies to the reasonable
satisfaction of the Objecting Party; provided, however, that
nothing contained herein shall prevent the Company from
filing documents within the time periods specified under the
Securities Act or the terms of this Agreement;
(b) prepare and file with the Commission such amendments
and post-effective amendments to the Registration Statement
as may be necessary to keep such Registration Statement
effective for as long as such registration is required to
remain effective pursuant to the terms hereof; shall cause
the prospectus contained in the Registration Statement to be
supplemented by any required prospectus supplement, and, as
so supplemented, to be filed pursuant to Rule 424 under the
Securities Act; and shall comply with the provisions of the
Securities Act applicable to it with respect to the
disposition of all Registrable Securities covered by such
Registration Statement during the applicable period in
accordance with the intended methods of disposition by the
holders of Registrable Securities set forth in such
Registration Statement or supplement to the prospectus;
(c) promptly notify each holder of Registrable
Securities, counsel to such holders and any underwriter and
(if requested by any such person) confirm such notice in
writing, (i) when a prospectus or any prospectus supplement
or post-effective amendment has been filed and, with respect
to a Registration Statement or any post-effective amendment,
when the same has become effective, (ii) of any request by
the Commission or any state securities authority for
amendments and supplements to a Registration Statement and
prospectus or for additional information after the
Registration Statement has become effective, (iii) of the
issuance by the Commission of any stop order suspending the
effectiveness of a Registration Statement or the initiation
or threatening of any proceedings for that purpose, (iv) of
the issuance by any state securities commission or other
regulatory authority of any order suspending the
qualification or exemption from qualification of any of the
Registrable Securities under state securities or "blue sky"
laws or the initiation of any proceedings for that purpose,
and (v) if, between the effective date of a Registration
Statement and the closing of any sale of Registrable
Securities covered thereby, the representations and
warranties of the Company contained in any underwriting
agreement, securities sales agreement or other similar
agreement, if any, relating to the offering cease to be true
and correct in all material respects;
(d) use its best efforts to prevent the issuance of any
order suspending the effectiveness of a Registration
Statement, and if one is issued use its best efforts to
obtain the withdrawal of any order suspending the
effectiveness of a Registration Statement at the earliest
possible moment;
(e) if requested by the managing underwriter or
underwriters, if any, by any holder of Registrable
Securities or its counsel, incorporate in a prospectus
supplement
<PAGE>
<PAGE> 7
or post-effective amendment such information as such
managing underwriter or underwriters request, or holders'
counsel reasonably requests, to be included therein,
including, without limitation, with respect to the
Registrable Securities being sold by such holder of
Registrable Securities to such underwriter or underwriters,
the purchase price being paid therefor by such underwriter
or underwriters and with respect to any other terms of an
underwritten offering of the Registrable Securities to be
sold in such offering, and make all required filings of such
prospectus supplement or post-effective amendment; provided,
however, that the Company need not include such information
if it deems it misleading or inappropriate or does not
receive an indemnity with respect to such information;
(f) as promptly as practicable after filing with the
Commission of any document which is incorporated by
reference into a Registration Statement (in the form in
which it was incorporated), deliver a copy of each such
document to each of the holders of Registrable Securities
and the counsel to such holder identified in writing by such
holder;
(g) cooperate with the holders of Registrable Securities
and the managing underwriter or underwriters, if any, to
facilitate the timely preparation and delivery of
certificates (which shall not bear any restrictive legends
unless required under applicable law) representing
securities sold under a Registration Statement, and enable
such securities to be in such denominations and registered
in such names as the managing underwriter or underwriters,
if any, or such holders of Registrable Securities may
request and keep available and make available to the
Company's transfer agent prior to the effectiveness of such
Registration Statement a supply of such certificates;
(h) provide a CUSIP number for all Registrable
Securities covered by a Registration Statement not later
than the effective date of such Registration Statement;
(i) cooperate with each holder of Registrable Securities
and each underwriter participating in the disposition of
Registrable Securities and their respective counsel in
connection with any filings required to be made with the
National Association of Securities Dealers, Inc. ("NASD");
(j) during the period when the prospectus is required to
be delivered under the Securities Act, promptly file all
documents required to be filed with the Commission pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act");
(k) appoint a transfer agent and registrar for all
Registrable Securities covered by a Registration Statement
not later than the effective date of such Registration
Statement;
(l) in connection with an underwritten offering,
participate, to the extent reasonably requested by the
managing underwriter for the offering or the holders of
<PAGE>
<PAGE> 8
Registrable Securities, in customary efforts to sell the
securities under the offering, including without limitation,
participating in "road shows;"
(m) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue
sky laws of such jurisdictions as the holders of Registrable
Securities included in the Registration Statement reasonably
request, use its best efforts to keep each such registration
or qualification (or exemption therefrom) effective during
the period in which the Registration Statement is required
to be kept effective, and do any and all other acts and
things that may be necessary or advisable to enable such
sellers to consummate the disposition in such jurisdictions
of the Registrable Securities owned by such sellers;
provided, however, that the Company will not be required to
(i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for
this paragraph (m), (ii) subject itself to general taxation
in any such jurisdiction where it is not then so subject, or
(iii) consent to general service of process in any such
jurisdiction;
(n) use its best efforts to cause the Registrable
Securities covered by the Registration Statement to be
registered with or approved by such other governmental
agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable the seller
or sellers thereof to consummate the disposition of such
Registrable Securities;
(o) notify each seller of such Registrable Securities at
any time when a prospectus relating thereto is required to
be delivered under the Securities Act, of the happening of
any event as a result of which the prospectus included in
the Registration Statement contains an untrue statement of a
material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Company
will prepare and file with the Commission a supplement or
amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a
material fact or omit to state any material fact required to
be stated therein or necessary to make the statements
therein not misleading;
(p) enter into customary agreements (including an
underwriting agreement in customary form) and take such
other actions as are reasonably required in order to
expedite or facilitate the disposition of such Registrable
Securities (the holders of Registrable Securities may, at
their option, require that any or all of the
representations, warranties and covenants of the Company to
or for the benefit of any underwriters also be made to and
for the benefit of the holders of Registrable Securities);
(q) make reasonably available for inspection by any
seller of Registrable Securities included in the
Registration Statement, any underwriter participating in any
disposition pursuant to such Registration Statement, and any
attorney, accountant or other agent retained by a majority
of the holders or the managing underwriter (collectively,
the "Inspectors"), all pertinent financial and other
records, pertinent corporate documents and properties of the
Company (collectively, the "Records"), as
<PAGE>
<PAGE> 9
shall be reasonably necessary to enable them to exercise
their due diligence responsibility, and cause the Company's
officers, directors and employees to supply all information
reasonably requested by any such Inspector in connection
with the Registration Statement. Records and other
information that the Company determines, in good faith, to
be confidential shall be identified as confidential prior to
delivery of such records or information to the Inspectors,
and if the Company so notifies the Inspectors that such
records and information are confidential, such records and
information shall not be disclosed by the Inspectors unless
(i) the disclosure of such Records in the opinion of counsel
reasonably acceptable to the Company is necessary to avoid
or correct a misstatement or omission in the Registration
Statement or (ii) the release of such Records is ordered
pursuant to a subpoena or other order from a court of
competent jurisdiction; each seller of Registrable
Securities agrees that it will, upon learning that
disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the
Company, at the Company's expense, to undertake appropriate
action to prevent disclosure of the Records deemed
confidential;
(r) if the offering is an underwritten public offering,
use its best efforts to obtain a "cold comfort" letter from
the Company's independent public accountants in customary
form and covering such matters of the type customarily
covered by "cold comfort" letters as the holder of a
majority of Registrable Securities being sold or the
managing underwriter reasonably request;
(s) use its best efforts to obtain an opinion or
opinions from counsel for the Company in customary form and
covering such matters of the type customarily covered by
opinions as a majority of the holders of the Registrable
Securities being sold or the managing underwriter reasonably
request;
(t) cause all of the Registrable Common Stock being
registered to be listed on each securities exchange, if any,
on which the Common Stock is then listed; and
(u) otherwise comply with all applicable rules and
regulations of the Commission and any other governmental,
quasi-governmental or private body to which the Company or
the transactions contemplated by this Agreement is subject,
and make available to its security holders, as soon as
reasonably practicable, an earnings statement, which
earnings statement shall satisfy the provisions of section
11(a) of the Securities Act.
The Company may require each seller of Registrable
Securities to furnish to the Company, and the registration
rights of such Seller of Registrable Securities hereunder
shall be subject to such seller furnishing, such information
regarding the distribution of such Securities as the Company
may from time to time reasonably request in writing.
Each holder of Registrable Securities agrees that, upon
receipt of any notice from the Company of the happening of any
event of the kind described in Section 5(o) hereof, such
holder will forthwith discontinue disposition of Registrable
Securities pursuant to the Registration Statement until such
holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 5(o) hereof and, if so
directed by the Company,
<PAGE>
<PAGE> 10
such holder will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies then in
such holder's possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such
notice. In the event the Company shall give any such notice,
the Company shall extend the period during which the
Registration Statement shall be maintained effective pursuant
to this Agreement by the number of days during the period from
and including the date of the giving of such notice pursuant
to Section 5(o) hereof to and including the date when each
seller of Registrable Securities shall have received the
copies of the supplemented or amended prospectus contemplated
by Section 5(o) hereof.
All underwriting discounts, selling commissions and expenses
of underwriters will be borne by the holders of Registrable
Securities pro rata on the basis of the number of shares so
sold.
If any Registration Statement refers to any holder of
Registrable Securities by name or otherwise as the holder of
any securities of the Company, then such holder of Registrable
Securities shall have the right to require (i) the insertion
therein of language, in form and substance satisfactory to
such holder, to the effect that the holding by such holder of
such securities is not to be construed as a recommendation by
such holder of the investment quality of the Company's
securities covered thereby and that such holding does not
imply that such holder will assist in meeting any future
financial requirements of the Company, or (ii) in the event
that such reference to such holder by name or otherwise is not
required by the Securities Act or any similar Federal or state
"blue sky" statute and the rules and regulations thereunder
then in force, the deletion of the reference to such holder.
6. Registration Expenses
The Company will pay all expenses incident to the Company's
performance of or compliance with this Agreement, including,
without limitation, all costs and expenses of registration
hereunder, all registration and filing fees, fees and expenses
of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection
with blue sky qualifications of the Registrable Securities),
fees and expenses of the counsel and accountants for the
Company (including the reasonable expenses of any special
audit and "cold comfort" letters required by or incident to
such performance), opinions of counsel and all other costs and
expenses of the Company incident to the preparation, printing
and filing under the Securities Act of the Registration
Statement (and all amendments and supplements thereto) and
furnishing copies thereof and of the prospectus included
therein. In addition, the Company will reimburse the holders
of Registrable Securities for the reasonable fees and expenses
of not more than one counsel chosen by holders, other than
Holdings and affiliates of Holdings, of a majority of the
Registrable Securities sold or disposed.
7. Indemnification and Contribution.
(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless, to the full extent permitted by
law, each holder of Registrable Securities, its partners,
officers, directors, trustees, stockholders, employees, agents
and investment advisers, and each person who controls such
holder within the meaning of either Section 15 of
<PAGE>
<PAGE> 11
the Securities Act or Section 20 of the Exchange Act, or is
under common control with, or is controlled by, such holder,
together with the partners, officers, directors, trustees,
stockholders, employees and agents of such controlling person
(collectively, the "Holder Controlling Persons"), from and
against all losses, claims, damages, liabilities and expenses
(including without limitation any legal or other fees and
expenses incurred by any holder of Registrable Securities or
any such Holder Controlling Person in connection with
defending or investigating any action or claim in respect
thereof) (collectively, the "Holder Damages") to which such
holder, its partners, officers, directors, trustees,
stockholders, employees, agents and investment advisers, and
any such Holder Controlling Person may become subject under
the Securities Act or otherwise, insofar as such Holder
Damages (or proceedings in respect thereof) arise out of or
are caused by any untrue statement or alleged untrue statement
of material fact or any omission or alleged omission of a
material fact required to be stated in the Registration
Statement or prospectus or any amendment thereof or supplement
thereto or necessary to make the statements therein (in the
case of a prospectus, in the light of the circumstances under
which they were made) not misleading, except insofar as such
Holder Damages arise out of or are caused by any untrue
statement or alleged untrue statement or omission or alleged
omission contained in any information or affidavit with
respect to such holder of Registrable Securities so furnished
in writing by such holder expressly for use therein (or any
amendment or supplement thereto); provided, however, that the
Company shall not be liable to any holder of Registrable
Securities under this Section 7(a) to the extent that any such
Holder Damages were caused by the fact that such holder sold
securities to a person as to whom it shall be established that
there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the prospectus as then
amended or supplemented if, and only if, (i) the Company has
previously furnished copies of such amended or supplemented
prospectus to such holder and (ii) such Holder Damages were
caused by any untrue statement or omission or alleged untrue
statement or omission contained in the prospectus so delivered
which was corrected in such amended or supplemented
prospectus. In connection with an underwritten offering, the
Company shall agree to indemnify the underwriters thereof,
their officers and directors and each person who controls
such underwriters (within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act) on
similar terms as provided above with respect to the
indemnification of the holders of Registrable Securities;
provided, however, if pursuant to an underwritten public
offering of Registrable Securities, the Company and any
underwriters enter into an underwriting agreement or purchase
agreement relating to such offering that contains provisions
relating to indemnification between the Company and such
underwriters such provision shall be deemed to govern
indemnification as between the Company and the underwriters.
(b) Indemnification by Holders of Registrable Securities.
Each holder of Registrable Securities whose securities are
being registered will furnish to the Company in writing such
information and affidavits with respect to such holder as the
Company reasonably requests for use in connection with the
Registration Statement or any prospectus or any amendment
thereof and/or supplement thereto and agrees to indemnify and
hold harmless, to the full extent permitted by law, the
Company, its officers, directors, stockholders, employees,
agents and investment advisors, and each person who controls
the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, or is under
common control with, or is controlled by, the Company,
together with the officers, directors,
<PAGE>
<PAGE> 12
stockholders, employees and agents of such controlling person
(called the "Company Controlling Person") from and against all
losses, claims, damages, liabilities and expenses (including
without limitation any legal or other fees and expenses
incurred by the Company or any such Company Controlling Person
in connection with defending or investigating any action or
claim in respect thereof) (collectively, the "Company
Damages") to which Company, its officers, directors,
stockholders, employees, agents and investment advisers, and
any such Company Controlling Person may become subject under
the Securities Act or otherwise, insofar as such Company
Damages (or proceedings in respect thereof) arise out of or
are caused by any untrue statement or alleged untrue statement
of material fact or any omission or alleged omission of a
material fact required to be stated in the Registration
Statement or prospectus or any amendment thereof or supplement
thereto or necessary to make the statements therein (in the
case of a prospectus, in the light of the circumstances under
which they were made) not misleading, to the extent, but only
to the extent, that such Company Damages arise out of or are
caused by any untrue statement or alleged untrue statement or
omission or alleged omission is contained in any information
or affidavit with respect to such holder so furnished in
writing by such holder expressly for use therein (or any
amendment or supplement thereto); provided, however, that such
holder shall not be obligated to the Company under this
Section 7(b) to the extent that such Company Damages were
caused by the failure of the Company to promptly amend or take
action to correct or supplement any such Registration
Statement or prospectus on the basis of corrected or
supplemental information provided in writing by such holder to
the Company expressly for such purpose. In no event shall the
liability of any selling holder of Registrable Securities
hereunder be greater in amount than the dollar amount of the
proceeds (net of underwriting discounts and commissions)
received by such holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. Any person
entitled to indemnification hereunder agrees to give prompt
written notice to the indemnifying party after the receipt by
such person of any written notice of the commencement of any
action, suit, proceeding or investigation or threat thereof
made in writing for which such person will claim
indemnification or contribution pursuant to this Agreement
and, upon request of the indemnified party, permit the
indemnifying party to assume the defense thereof and retain
counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and shall pay the fees and
disbursements of such counsel relating to such proceeding;
provided, however, that failure by such person entitled to
indemnification to give prompt written notice shall not
prejudice such person's right of indemnification granted
hereunder, except to the extent the indemnifying party is
prejudiced thereby. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the
retention of such counsel, or (ii) the indemnifying party
fails promptly to assume the defense of such proceeding or
fails to employ counsel reasonably satisfactory to such
indemnified party, or (iii) the named parties to any such
proceeding (including any impleaded parties) include both such
indemnified party and the indemnifying parties or an affiliate
of the indemnifying party or such indemnified party, and there
may be one or more defenses available to such indemnified
party that are different from or additional to the
indemnifying party, in which case, if such indemnified party
notifies the indemnifying party in writing that it elects to
employ separate counsel of its choice at the
<PAGE>
<PAGE> 13
expense of the indemnifying party, the indemnifying party
shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the indemnifying
party, it being understood, however, that unless there exists
a conflict among indemnified parties, the indemnifying party
shall not, in connection with any one such proceeding or
separate but substantially similar or related proceedings in
the same jurisdiction, arising out of the same general
allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (together
with appropriate local counsel) at any time for such
indemnified party. The indemnifying party will not be subject
to any liability for any settlement made without its consent,
which shall not be unreasonably withheld but, if settled with
such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party
shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is a
party, and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all
liability on claims that are the subject matter of such
proceeding.
(d) Contribution. If the indemnification provided for in
this Section 7 from an indemnifying party is unavailable to an
indemnified party hereunder in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate
to reflect (i) the relative benefits received by the Company
on the one hand and the holders of Registrable Securities on
the other hand from the offering of such Registrable
Securities, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of
the indemnifying party and indemnified parties in connection
with the actions that resulted in such losses, claims,
damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such
indemnifying party and indemnified parties shall be determined
by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of
a material fact or omission or alleged omission to state a
material fact, has been made by, or relates to information
supplied by, such indemnifying party or indemnified parties,
and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action.
The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations
set forth in Section 7(c), any legal or other fees or expenses
reasonably incurred by such party in connection with any
investigation or proceeding.
Notwithstanding the provisions of this Section 7(d), no
holder of Registrable Securities shall be required to
contribute any amount in excess of the amount by which the
total price at which the Registrable Securities of such holder
were offered to the public less underwriting discounts and
commissions exceeds the amount of any damages which such
holder has otherwise been required to pay by reason of such
untrue statement or omission. Each holder of Registrable
Securities' obligation to contribute pursuant to this Section
7(d) is
<PAGE>
<PAGE> 14
several in the proportion that the proceeds of the offering
received by such holder bears to the total proceeds of the
offering received by all the holders of Registrable Securities
and not joint.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were
determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable
considerations referred to in the second preceding paragraph.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
If indemnification is available under this Section 7, the
indemnifying parties shall indemnify each indemnified party to
the full extent provided in Sections 7(a) and (b) without
regard to the relative fault of said indemnifying party or
indemnified party or any other equitable consideration
provided for in this Section 7(d).
The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in
equity.
8. Rule 144
The Company covenants that it will file the reports required
to be filed by the Company under the Securities Act and the
Exchange Act and the rules and regulations adopted by the
Commission thereunder (or, if the Company is not required to
file such reports, it will, upon the request of any holder of
Registrable Securities, make publicly available other
information so long as necessary to permit sales under
Rule 144 under the Securities Act), and it will take such
further action as any holder of Registrable Securities may
reasonably request, all to the extent required from time to
time to enable such holder to sell Registrable Securities
without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 under the
Securities Act, as such Rule may be amended from time to time,
and any similar rule or regulation hereafter adopted by the
Commission. Upon the request of any holder of Registrable
Securities, the Company will deliver to such holder a written
statement as to filings made by the Company with the
Commission.
9. Rule 144A
The Company covenants that it will file all reports required
to be filed by it under the Securities Act and the Exchange
Act, and the rules and regulations adopted by the Commission
thereunder (or if the Company is not required to file such
reports, it will, upon the request of any holder of
Registrable Securities, make available other information so
long as necessary to permit sales of the Registrable
Securities pursuant to Rule 144A under the Securities Act),
all to the extent as may be required from time to time to
enable such holder of Registrable Securities to sell its
Securities without registration under the Securities Act
within the limitation of the exemptions provided by (a) Rule
144A, as such rule may be amended from time to time, or
(b) any similar rule or regulation hereafter adopted by the
<PAGE>
<PAGE> 15
Commission. The parties acknowledge that Registrable
Securities may not currently be eligible for resale pursuant
to Rule 144A.
10. Miscellaneous
(a) No Inconsistent Agreements. The Company has not and
will not hereafter enter into any agreement with respect to
its securities that is inconsistent with the rights granted to
the holders of Registrable Securities in this Agreement or
otherwise conflicts with the provisions hereof, except for
agreements to which any party hereunder is also a party.
(b) Remedies. The Company and each holder of Registrable
Securities, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be
entitled to specific performance of its or his rights under
this Agreement. The Company and each holder of Registrable
Securities agree that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by
any of them of the provisions of this Agreement and hereby
agree to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(c) Amendments and Waivers. This Agreement may not be
amended except by an instrument in writing signed by holders,
other than Holdings and affiliates of Holdings, of at least a
majority of shares of other than Common Registrable Securities
then outstanding affected by such amendment, modification,
supplement, waiver or departure.
(d) Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing (and shall
be deemed to have been duly given upon receipt) by delivery in
person, by cable, facsimile transmission, telegram or telex or
by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be
specified in a notice given in accordance with this
Section 10(d)):
(i) if to a holder of Registrable Securities,
at the most current address, and with a copy to be
sent to each additional address, given by such
holder to the Company in writing; and
(ii) if to Holdings, to:
Corimon, S.A.C.A.
Calle Hans Neumann
Edificio Corimon
Los Cortijos de Lourdes
Apartado 3654
Caracas 1010-A, Venezuela
Attention: Arthur W. Broslat
Facsimile: (582) 203-5757
<PAGE>
<PAGE> 16
with a copy to:
Sullivan & Cromwell
444 South Flower Street
Los Angeles, California 90071
Attention: Frank H. Golay, Jr.
Facsimile: (213) 683-0457
(iii) if to Investor1, to:
Fidelity Capital & Income Fund
c/o Fidelity Management and Research Co.
82 Devonshire Street - F7E and F7D
Boston, Massachusetts 02109
Attention: Portfolio Manager and
Robert M. Gervis, Esq.
Facsimile: (617) 476-3316 and
(617) 476-7774
if to Investor2, to:
Kodak Retirement Income Plan Trust Fund
c/o Fidelity Management Trust Company
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Portfolio Manager and
Robert M. Gervis, Esq.
Facsimile: (617) 476-3316 and
(617) 476-7774
with a copy to:
Goodwin Procter & Hoar
Exchange Place
53 State Street
Boston, Massachusetts 02109
Attention: Laura Hodges Taylor
Facsimile: (617) 523-1231
(iv) if to Investor3, to:
Transamerica Life Insurance and Annuity
Company
c/o Transamerica Realty Services, Inc.
1150 South Olive Street, Suite 2200
Los Angeles, California 90015
Attention: Lyman Lokken
Facsimile: (213) 741-6917
<PAGE>
<PAGE> 17
(v) if to Investor4, to:
Transamerica Occidental Insurance Company
c/o Transamerica Realty Services, Inc.
1150 South Olive Street, Suite 2200
Los Angeles, California 90015
Attention: Lyman Lokken
Facsimile: (213) 741-6917
(vi) if to Investor5, to:
Sun Life Insurance Company
1 Sun America Center
Los Angeles, California 90067
Attention: Robert Sydow
Facsimile: (310) 772-6150
(vii) if to Investor6, to:
Anchor National Life Insurance Company
1 Sun America Center
Los Angeles, California 90067
Attention: Robert Sydow
Facsimile: (310) 772-6150
(viii) If to Grantor Trust, to:
Standard Brands Paint Collateral Trust
c/o Karl Sauryn, Trustee
Dornbush, Mandelstam & Schaeffer
74 Third Avenue, 11th Floor
New York, New York 10017
Facsimile:
(ix) if to the Company, to:
Standard Brands Paint Company
4300 West 190th Street
Torrance, California 90509-2956
Attention: Ronald I. Scharman
Facsimile: (310) 371-8770
(x) if to Libra, to:
Libra Investments, Inc.
11766 Wilshire Blvd., Suite 870
Los Angeles, California 90025
<PAGE>
<PAGE> 18
Attention: General Counsel
Facsimile: (310) 996-9560
(e) Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the successors and
assigns of each of the parties hereto including, without
limitation and without the need for an express assignment,
subsequent holders of Registrable Securities. If any
transferee of any holder of Registrable Securities shall
acquire Registrable Securities in any manner, whether by
operation of law or otherwise, such Registrable Securities
shall be held subject to all of the terms of this Agreement,
and by taking and holding such Registrable Securities such
person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this
Agreement and such person shall be entitled to receive the
benefits hereof.
(f) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall
constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER
APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS THEREOF. All
actions and proceedings arising out of or relating to this
Agreement shall be brought by the parties and heard and
determined only in a Federal or State court located in the
State of New York and the parties hereto consent to
jurisdiction before and waive any objections of venue to the
New York courts. The parties hereto agree to accept service
of process in connection with any such action or proceeding in
any manner permitted for a notice hereunder.
(i) Severability. If any one or more of the provisions
contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in
any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect
and of the remaining provisions contained herein shall not be
in any way impaired thereby, it being intended that all of the
rights and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
(j) Entire Agreement. This Agreement is intended by the
parties to be a final expression of their agreement and
intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect
of the subject matter contained herein and therein. There are
no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein and therein. This
Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
(k) Attorneys' Fees. In any action or proceeding
brought to enforce any provision of this Agreement or where
any provision hereof is validly asserted as a defense,
<PAGE>
<PAGE> 19
the successful party shall, to the extent permitted by
applicable law, be entitled to recover reasonable attorneys'
fees in addition to any other available remedy.
(l) Further Assurances. Each party shall cooperate and
take such action as may be reasonably requested by another
party in order to carry out the provisions and purposes of
this Agreement and the transactions contemplated hereby.
<PAGE>
<PAGE> 20
REGISTRATION RIGHTS AGREEMENT
IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the day and year first above written.
CORIMON CORPORATION
By /s/ Arthur W. Broslat
Name: Arthur W. Broslat
Title:
TRANSAMERICA LIFE INSURANCE AND
ANNUITY COMPANY
By /s/ Lyman K. Lokken
Name: Lyman K. Lokken
Title:
TRANSAMERICA OCCIDENTAL LIFE
INSURANCE COMPANY
By /s/ Lyman K. Lokken
Name: Lyman K. Lokken
Title:
SUN LIFE INSURANCE COMPANY OF
AMERICA
By /s/ Robert E. Sydow
Name: Robert E. Sydow
Title:
ANCHOR NATIONAL LIFE INSURANCE
COMPANY
By /s/ Robert E. Sydow
Name: Robert E. Sydow
Title:
<PAGE>
<PAGE> 21
STANDARD BRANDS PAINT
COLLATERAL TRUST
By __________________________
Name:
Title:
STANDARD BRANDS PAINT COMPANY
By /s/ Howard Schwartz
Name: Howard Schwartz
Title:
LIBRA INVESTMENTS, INC.
By /s/ James Upchurch
Name: James Upchurch
Title:
KODAK RETIREMENT INCOME PLAN
TRUST FUND
By /s/ David Breazzano
Name: David Breazzano
Title:
<PAGE>
<PAGE> 22
REGISTRATION RIGHTS AGREEMENT
FIDELITY CAPITAL & INCOME FUND
By /s/ David Breazzano
Name: David Breazzano
Title:
Investor1 is a portfolio of a Massachusetts business trust. A
copy of Investor1's Declaration of Trust is on file with the
Secretary of the Commonwealth of Massachusetts. Each of the
parties to this Agreement acknowledges and agrees that this
Agreement is not executed on behalf of or binding upon any of
the trustees, officers, directors or shareholders of Investor1
or Investor2 individually, but is binding only upon the assets
and property of Investor1 and Investor2. With respect to all
obligations of Investor1 and Investor2 arising out of this
Agreement, each of the parties shall look for payment or
satisfaction of any claim solely to the assets and property of
Investor1 and Investor2. Each of the parties are expressly
put on notice that the rights and obligations of each series
of shares of Investor1 or Investor2 under its Declaration of
Trust are separate and distinct from those of any and all
other series.
<PAGE>
Exhibit 7
PUT AGREEMENT
Among
CORIMON, S.A.C.A.,
a Venezuelan corporation
and
FIDELITY CAPITAL & INCOME FUND, KODAK RETIREMENT INCOME PLAN
TRUST FUND, TRANSAMERICA LIFE INSURANCE AND ANNUITY CO.,
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY, SUN LIFE
INSURANCE COMPANY OF AMERICA, ANCHOR NATIONAL LIFE INSURANCE
COMPANY, LIBRA INVESTMENTS, INC.
Dated as of February 15, 1995
<PAGE>
<PAGE> i
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
1.1. Definitions . . . . . . . . . . . . . . . . . 1
1.2. Other Definitions. . . . . . . . . . . . . . . 2
1.3. Interpretation . . . . . . . . . . . . . . . . 2
ARTICLE II
Put Rights
2.1. Put of Investor1 and Investor2 Common Shares . 2
2.2. Put of Preferred Shares . . . . . . . . . . . 3
ARTICLE III
Representations and Warranties
3.1. Representations and Warranties of Parent . . . 4
3.2. Representations and Warranties of the Other
Investors . . . . . . . . . . . . . . . . . . 4
ARTICLE IV
General Provisions
4.1. Effectiveness; Termination . . . . . . . . . . 5
4.2. Amendments; Waivers . . . . . . . . . . . . . 5
4.3. Notices . . . . . . . . . . . . . . . . . . . 5
4.4. Counterparts . . . . . . . . . . . . . . . . . 7
4.5. Entire Agreement; No Third-Party Beneficiaries 7
4.6. Assignment . . . . . . . . . . . . . . . . . . 7
4.7. Severability . . . . . . . . . . . . . . . . . 8
4.8. Governing Law . . . . . . . . . . . . . . . . 8
<PAGE>
<PAGE> 1
PUT AGREEMENT dated as of February 15, 1995 (this
"Agreement"), among Corimon, S.A.C.A., a Venezuelan
corporation ("Parent"), Fidelity Capital & Income Fund
("Investor1"), Kodak Retirement Income Plan Trust Fund
("Investor2"), Transamerica Life Insurance and Annuity Co., a
North Carolina corporation ("Investor3"), Transamerica
Occidental Life Insurance Company, a California corporation
("Investor4"), Sun Life Insurance Company of America, an
Arizona corporation ("Investor5"), Anchor National Life
Insurance Company, a California corporation ("Investor6" and,
together with Investor1, Investor 2, Investor3, Investor4 and
Investor5, the "Other Investors") and Libra Investments, Inc.
("Libra").
RECITALS
WHEREAS, simultaneously with the execution and
delivery of this Agreement, each of Parent, the Other
Investors, Standard Brands Paint Company, a Delaware
corporation ("Company"), and certain other parties have
entered into the Investment Agreement, dated as of the date
hereof (the "Investment Agreement"); and
WHEREAS, Parent, the Other Investors, Libra and
Company desire to establish in this Agreement certain terms
and conditions concerning certain put rights and related
matters.
NOW, THEREFORE, in consideration of the
representations, warranties, covenants and agreements
contained herein and for other good and valuable
consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
Definitions
1.1. Definitions. For purposes of this Agreement:
"Fair Market Value" means, as of any date of
determination, (i) in the case of a security, the average of
the closing sale prices of such security during the 20-day
trading period immediately preceding such date of
<PAGE>
<PAGE> 2
determination on the principal United States securities
exchange registered under the Exchange Act on which such
security is listed or, if such security is not listed on any
such exchange, the average of the closing sale prices or the
closing bid quotations of such security during the 20-day
trading period preceding such date of determination on the
Nasdaq National Market or any comparable system then in use
or, if no such quotations are available, the fair market value
of such security as of such date of determination as
reasonably determined in good faith by the board of directors
of Parent, provided that if the Other Investors deem such
determination unreasonable and the parties are unable to
agree, they will agree on an independent party to make such
determination; and (ii) in the case of property other than
cash or a security, the fair market value of such property on
such date of determination as determined in good faith by a
majority of the directors of Parent.
"Parent Common Shares" means common shares, nominal
value Bs. 10 each, of Parent.
"Registration Rights Agreement" means the
Registration Rights Agreement, dated as of the date hereof, by
and among Holdings, Grantor Trust, the Other Investors, Libra
and Company.
"Stock and Note Purchase Agreement" means the Stock
and Note Purchase Agreement, dated as of February 14, 1995,
among Parent, Holdings and Investor1.
1.2. Other Definitions. For purposes of this
Agreement, terms used herein but not otherwise defined shall
have the meanings set forth in Section 1.1 of the Investment
Agreement.
1.3. Interpretation. The rules of interpretation
set forth in Section 1.2 of the Investment Agreement shall
apply to this Agreement, and the provisions thereof shall be
deemed to be incorporated by reference herein.
ARTICLE II
Put Rights
2.1. Put of Investor1, Investor2 and Libra Common
Shares. Unless the New Shares held by Investor1, Investor2
and Libra shall have been registered under the Securities Act
in accordance with the terms of the Registration Rights
Agreement, until the latest date required to be registered
<PAGE>
<PAGE> 3
thereunder, then at any time after the second anniversary of
the Closing Date and prior to the fifth anniversary of the
Closing Date, Investor1, Investor2 or Libra may require Parent
to purchase the New Shares held by them at a cash purchase
price of $0.89 per share, as adjusted for any stock dividend,
stock split, reverse stock split or other subdivision or
combination of the outstanding shares of Common Stock. To
implement such a put, Investor1, Investor2 or Libra shall
deliver written notice of the same to Parent. The date of the
put will be the date the written notice is delivered to
Parent. The closing of such put shall take place twenty (20)
business days after the date of the put, at which time (a)
Investor1, Investor2 or Libra shall, as applicable, deliver to
Parent the New Shares held by them, and (b) Parent shall
deliver to Investor1, Investor2 or Libra, as applicable, the
purchase price for such New Shares by wire transfer of
immediately available funds to a bank account designated by
Investor1, Investor2 or Libra, as applicable.
2.2. Put of Preferred Shares. In the event six
quarterly dividends have been not declared or declared and
unpaid on the Preferred Shares, each of the Other Investors
may require Parent to purchase all of the Preferred Shares
held by it at a purchase price of $4.46 per share, without
adjustment for accumulated and unpaid dividends. The purchase
price to be paid by Parent shall consist of not less than 50%
in cash and the remainder, at Parent's option, in cash or
equivalent amount of Parent Common Shares, the latter being
valued for this purpose at Fair Market Value. To implement
such a put, the Other Investor shall deliver written notice of
the same to Parent. The date of the put will be the date the
written notice is delivered to Parent. The closing of such
put shall take place twenty (20) business days after the date
of the put, at which time (a) the Other Investor shall deliver
to Parent the Preferred Shares held by it, and (b) Parent
shall deliver to the Other Investor the purchase price for
such Preferred Shares (i) in cash, by wire transfer of
immediately available funds to a bank account or accounts
designated by the Other Investor and/or (ii) in Parent Common
Shares. If practicable, the Parent Common Shares shall be
delivered in the form of Parent ADSs and the provisions herein
shall be adjusted as necessary to reflect the form of
securities delivered, either Parent ADSs or Parent Common
Shares. All Parent Common Shares and Parent ADSs shall be
entitled to the same registration rights as contained in the
Registration Rights Agreement described in the Stock and Note
Purchase Agreement.
<PAGE>
<PAGE> 4
ARTICLE III
Representations and Warranties
3.1. Representations and Warranties of Parent.
Parent represents and warrants to the Other Investors as
follows:
(a) Authority. Parent has the requisite power and
authority to enter into this Agreement.
(b) Validity. This Agreement has been duly
authorized, executed and delivered by Parent and constitutes a
valid and legally binding agreement of Parent enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
3.2. Representations and Warranties of the Other
Investors and Libra. Each of Other Investors and Libra
represent and warrant, with respect to such Person only,
severally and not jointly, to Parent as follows:
(a) Authority. Such Person has the requisite power
and authority to enter into this Agreement.
(b) Validity. This Agreement has been duly
authorized, executed and delivered by such Person and
constitutes a valid and legally binding agreement of such
Person enforceable against such Person in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles.
(c) Ownership of New Shares and Preferred Shares.
Such Person will, upon exercise of the put, have good and
valid title to the New Shares or Preferred Shares to be
delivered by them hereunder, free and clear of all liens,
encumbrances, equities and claims; and, upon delivery of the
New Shares and Preferred Shares and payment therefor pursuant
to Article II hereof, good and valid title to such securities
free and clear of all liens, encumbrances, equities or claims,
will pass to Parent.
<PAGE>
<PAGE> 5
ARTICLE IV
General Provisions
4.1. Effectiveness; Termination. This Agreement
shall become effective on the Closing Date. This Agreement
shall terminate prior to the Closing Date at such time that
the Investment Agreement is terminated in accordance with its
terms. This Agreement shall terminate after the Closing Date
upon the earliest to occur of any of the following events:
(a) the mutual written consent of Parent, the Other
Investors and Libra; or
(b) the expiration of ten (10) years from the
Closing Date.
The rights of any Other Investor or Libra under this
Agreement shall terminate when such party no longer
beneficially owns any New Shares or Preferred Shares, as
applicable.
4.2. Amendments; Waivers. (a) This Agreement may
not be amended except by an instrument in writing signed on
behalf of each of the parties.
(b) Any agreement on the part of a party to any
waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any
party to assert any of its rights under this Agreement shall
not constitute a waiver of such rights.
4.3. Notices. All notices, requests, claims,
demands and other communications hereunder shall be in writing
and shall be given (and shall be deemed to have been duly
given upon receipt) by delivery in person, by cable, facsimile
transmission, telegram or telex or by registered or certified
mail (postage prepaid, return receipt requested) to the
respective parties at the following
<PAGE>
<PAGE> 6
addresses (or at such other address for a party as shall be
specified in a notice given in accordance with this
Section 4.3):
(i) If to Parent, to:
Corimon, S.A.C.A.
Calle Hans Neumann
Edificio Corimon
Los Cortijos de Lourdes
Apartado 3654
Caracas 1010-A, Venezuela
Attention: Arthur W. Broslat
Facsimile: (582) 203-5757
with a copy to:
Sullivan & Cromwell
444 South Flower Street
Los Angeles, California 90071
Attention: Frank H. Golay, Jr.
Facsimile: (213) 683-0457
(ii) If to Investor1, to:
Fidelity Capital & Income Fund
c/o Fidelity Management Trust Company
82 Devonshire Street - F7E and F7D
Boston, Massachusetts 02109
Attention: Portfolio Manager and
Robert M. Gervis, Esq.
Facsimile: (617) 476-3316 and 476-7774
If to Investor2, to:
Kodak Retirement Income Plan Trust Fund
c/o Fidelity Management Company
82 Devonshire Street - F7E and F7D
Boston, Massachusetts 02109
Attention: Portfolio Manager and
Robert M. Gervis, Esq.
Facsimile: (617) 476-3316 and 476-7774
<PAGE>
<PAGE> 7
with a copy to:
Goodwin Procter & Hoar
Exchange Place
53 State Street
Boston, Massachusetts 02109
Attention: Laura Hodges Taylor
Facsimile: (617) 523-1231
(iii) If to Investor3, to:
Transamerica Life Insurance and Annuity Co.
c/o Transamerica Realty Services, Inc.
1150 South Olive Street, Suite 2200
Los Angeles, California 90015
Attention: Lyman Lokken
Facsimile: (213) 741-6917
(iv) If to Investor4, to:
Transamerica Occidental Insurance Co.
c/o Transamerica Realty Services, Inc.
1150 South Olive Street, Suite 2200
Los Angeles, California 90015
Attention: Lyman Lokken
Facsimile: (213) 741-6917
(v) If to Investor5, to:
Sun Life Insurance Company of America
1 Sun America Center
Century City, California 90067
Attention: Robert Sydow
Facsimile: (310) 772-6150
(vi) If to Investor6, to:
Anchor National Life Insurance Co.
1 Sun America Center
Century City, California 90067
Attention: Robert Sydow
Facsimile: (310) 772-6150
(vii) If to Libra, to:
Libra Investments, Inc.
11766 Wilshire Boulevard, Suite 870
Los Angeles, California 90025
Attention: General Counsel
Facsimile: (310) 996-9560
<PAGE>
<PAGE> 8
4.4. Counterparts. This Agreement may be executed
in one or more counterparts, all of which shall be considered
one and the same agreement.
4.5. Entire Agreement; No Third-Party
Beneficiaries. The Investment Agreement, this Agreement, the
other Ancillary Agreements and the agreements contemplated
hereby and thereby (a) constitute the entire agreement, and
supersede all prior agreements and understandings, both
written and oral among the parties hereto with respect to the
subject matter hereof and thereof and (b) are not intended to
confer upon any person other than the parties and their
permitted successors and assigns any rights or remedies.
4.6. Assignment. None of the parties to this
Agreement shall assign any of its rights or obligations
hereunder without the prior written consent of the other
parties hereto, except that Parent may assign all or any of
its rights and obligations hereunder to any Subsidiary or
Affiliate of Parent; provided that no such assignment shall
relieve Parent of its obligations hereunder. In particular,
no purchaser of any New Shares or Preferred Shares shall be
deemed to be a successor or assignee of any party hereto, the
rights hereunder being intended solely for the parties hereto
and not being transferable.
4.7. Severability. If any term or provision of
this Agreement or the application thereof to either party or
set of circumstances shall, in any jurisdiction and to any
extent, be finally held invalid or unenforceable, such term or
provision shall only be ineffective as to such jurisdiction,
and only to the extent of such invalidity or unenforceability,
without invalidating or rendering unenforceable any other
terms or provisions of this Agreement or under any other
circumstances, and the parties shall negotiate in good faith a
substitute provision which comes as close as possible to the
invalidated or unenforceable term or provision, and which puts
each party in a position as nearly comparable as possible to
the position it would have been in but for the finding of
invalidity or unenforceability, while remaining valid and
enforceable.
<PAGE>
<PAGE> 9
4.8. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE
GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAW
THEREOF. All actions and proceedings arising out of or
relating to this Agreement shall be brought by the parties and
heard and determined only in a Federal or State court located
in the State of New York and the parties hereto consent to
jurisdiction before and waive any objections of venue to the
New York courts. The parties hereto agree to accept service
of process in connection with any such action or proceeding in
any manner permitted for a notice hereunder.
<PAGE>
<PAGE> 10
PUT AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
CORIMON, S.A.C.A.
By /s/ Arthur W. Broslat
Name: Arthur W. Broslat
Title:
TRANSAMERICA LIFE INSURANCE
AND ANNUITY CO.
By /s/ Lyman K. Lokken
Name: Lyman K. Lokken
Title:
TRANSAMERICA OCCIDENTAL LIFE
INSURANCE COMPANY
By /s/ Lyman K. Lokken
Name: Lyman K. Lokken
Title:
SUN LIFE INSURANCE COMPANY OF
AMERICA
By /s/ Robert E. Sydow
Name: Robert E. Sydow
Title:
<PAGE>
<PAGE> 11
ANCHOR NATIONAL LIFE INSURANCE
COMPANY
By /s/ Robert E. Sydow
Name: Robert E. Sydow
Title:
LIBRA INVESTMENTS, INC.
By /s/ James Upchurch
Name: James Upchurch
Title:
<PAGE>
<PAGE> 12
PUT AGREEMENT
FIDELITY CAPITAL & INCOME FUND
By /s/ David Breazzano
Name: David Breazzano
Title:
KODAK RETIREMENT INCOME PLAN
TRUST FUND
By /s/ David Breazzano
Name: David Breazzano
Title:
Investor1 is a portfolio of a Massachusetts business trust. A
copy of Investor1's Declaration of Trust is on file with the
Secretary of the Commonwealth of Massachusetts. Each of the
Parties acknowledges and agrees that this agreement is not
executed on behalf of or binding upon any of the trustees,
officers, directors or shareholders of Investor1 or Investor2
individually, but is binding only upon the assets and property
of Investor1 and Investor2. With respect to all obligations
of Investor1 arising out of this Agreement, each of the
Parties shall look for payment or satisfaction of any claim
solely to the assets and property of Investor1 and Investor2.
Each of the Parties are expressly put on notice that the
rights and obligations of each series of shares of each of
Investor1 and Investor2 under its Declaration of Trust are
separate and distinct from those of any and all other series.
