STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of October 15, 1996 (the
"Agreement"), is between MASCO CORPORATION, a Delaware corporation ("Masco"),
and MASCOTECH, INC., a Delaware corporation (the "Company").
WHEREAS, Masco is the record holder of 24,824,690 shares of the Company's
Common Stock, par value $1.00 per share (the "Common Stock") and warrants to
purchase 10,000,000 shares of Common Stock (the "Warrants"); and
WHEREAS, Masco desires to sell and the Company desires to purchase
17,000,000 shares of Common Stock (the "Repurchased Stock") and all of the
Warrants owned by Masco upon the terms and conditions hereinafter provided; and
WHEREAS, Masco will own 7,824,690 shares of the Common Stock following the
sale of the Repurchased Stock and Warrants (the "Remaining Common Stock"); and
WHEREAS, Masco and the Company desire to provide the Company with a right
of first refusal to repurchase the Remaining Common Stock upon the terms and
conditions hereinafter provided; and
WHEREAS, simultaneously herewith, the Company has entered into a stock
purchase agreement with Xxxxxxx X. Xxxxxxxxx (the "Xxxxxxxxx Agreement")
providing for the Company to repurchase 1,000,000 shares of the Common Stock;
NOW, THEREFORE, it is hereby agreed as follows:
1. PURCHASE AND SALE OF REPURCHASED STOCK AND WARRANTS: CLOSING.
(a) Subject to the satisfaction or waiver of the conditions set forth in
Section 5 hereof, Masco hereby agrees to sell, convey, transfer and deliver to
the Company, and the Company hereby agrees to purchase from Masco, the
Repurchased Stock and Warrants in consideration for the Purchase Price (as
defined below). The "Purchase Price" for the Repurchased Stock and the Warrants
shall be $266,375,000. Masco and the Company each hereby covenant and agree
that they will discuss in good faith an appropriate allocation for tax purposes
of the Purchase Price between the Repurchased Stock and the Warrants and will
not take a position on any income tax return, before any governmental agency
charged with the collection of any income tax, or in any judicial proceeding
that is in any way inconsistent with such agreement.
(b) The Purchase Price with respect to the Repurchased Stock shall be
subject to adjustment as specified in this Section 1(b).
(i) If, within six months after the Closing Date,
(A) the Company enters into an agreement with respect to any
merger, consolidation, tender offer or similar transaction (provided
that this clause shall not apply to a transaction in which the
Company is the surviving company in any merger or consolidation and
in which the stock issued in such a transaction is less than 40% of
the issued and outstanding Common Stock of the Company after the
transaction), or to issue more than 40% of the Common Stock to any
third party (and its affiliates);
(B) the Company undertakes a recapitalization, extraordinary
dividend, self-tender, spin-off or similar extraordinary
transaction; or
(C) any third party commences a tender or exchange offer for
any capital stock of the Company as a result of which such third
party (and its affiliates) acquires "beneficial ownership" (as such
term is defined in Rule 13d-3 under the Securities Exchange Act of
1934, as amended) of more than 40% of the shares of the Common
Stock,
(any of the transactions referred to above in clauses (A), (B) and (C)
being referred to as a "Transaction") and, in any such case referred to in
clauses (A), (B) and (C) above, the price per share of Common Stock paid
in such Transaction (or in the case of a recapitalization, extraordinary
dividend, self-tender, spin-off or similar Transaction, the aggregate
"price" of the amount distributed to holders of the Common Stock in such
Transaction plus the "price" of any Common Stock paid calculated as
provided below), exceeds $14.00, the Company shall pay to Masco, within
two business days after the closing of the Transaction (or such later date
as the "price" of the consideration has been determined as provided
below), an amount in cash equal to 17,000,000 times the excess, if any,
of such price over $14.00.
(ii) In the event a Transaction shall involve consideration other
than cash, then the "price" of such consideration for purposes of the
foregoing formula shall be determined as follows:
(A) If the consideration shall consist of securities traded
on the New York Stock Exchange, the American Stock Exchange or on
NASDAQ, then such securities shall be valued at an amount equal to
the average closing prices (or, in the case of NASDAQ, the last sale
prices) for such securities during the ten trading days preceding
the completion of the Transaction.
(B) In all other events, Masco and the Company shall engage
in good faith discussion for not less than ten business days after
the closing of the Transaction in an effort to agree upon a
valuation. At the end of such period, if Masco and the Company have
not agreed on a valuation, Masco and the Company shall mutually
select an investment banker who shall determine and appropriate
valuation and whose
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fees and expenses shall be paid 50% by Masco and 50% by the
Company. In such event the amount payable to Masco shall be paid
promptly upon such valuation being determined.
(iii) In the event that, after the date hereof, the Company is
party to any transaction or takes any action that has a materially
dilutive or anti-dilutive effect on the per share value of the shares of
the Common Stock (e.g., a stock split) prior to a Transaction, Masco and
the Company shall make such adjustments to the amounts payable to Masco
under clause (i) above as shall be equitable to preserve the economic
results intended by the parties as of the date hereof.
(c) The closing of the purchase and sale of the Repurchased Stock and
Warrants (the "Closing") shall take place at the offices of the Company at 00000
Xxx Xxxx Xxxx, Xxxxxx, Xxxxxxxx 00000 at 10:00 a.m. Detroit time not later than
three business days following the satisfaction of the conditions set forth in
Section 5 hereof, or at such other time as shall be agreed to in writing by the
Company and Masco (the "Closing Date").
(d) At the Closing,
(i) Masco will deliver to the Company (aa) a certificate or
certificates evidencing the Repurchased Stock and (bb) the Warrants, being
purchased by the Company hereby, free and clear of any claim, lien,
pledge, option, charge, security interest or encumbrance of any nature
whatsoever (collectively "Encumbrances"), duly endorsed for transfer to
the Company's order or accompanied by stock powers with respect to the
Repurchased Stock and such documentation with respect to the termination
of the Warrants as may be reasonably requested, duly executed to the
Company's order and with all requisite documentary or stock transfer tax
stamps affixed as applicable; and
(ii) the Company will pay to Masco the Purchase Price for the
Repurchased Stock and Warrants by (aa) the wire transfer of $115,000,000
in immediately available funds to such bank account as Masco shall have
designated in writing to the Company at least three days prior to the
Closing, and (bb) the delivery to Masco of an unsecured Promissory Note in
the principal amount of $151,375,000 substantially in the form attached as
Exhibit A.
2. REPRESENTATIONS AND COVENANTS OF MASCO. Masco hereby represents,
warrants and covenants to the Company as follows:
(a) Organization and Good Standing. Masco is a corporation duly
organized and validly existing under the laws of the State of Delaware.
(b) Title to Common Stock. Masco is the record holder and sole
beneficial owner of the Repurchased Stock and Warrants being sold pursuant to
this Agreement and such Repurchased Stock and Warrants are free and clear of any
Encumbrances.
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(c) Authority, Execution and Delivery, Etc.. Masco has full corporate
power and authority to enter into this Agreement and Masco has full corporate
power to sell the Repurchased Stock and Warrants in accordance with the terms
hereof. The execution, delivery and performance of this Agreement have been
duly authorized by Masco and no other actions on the part of Masco are required.
This Agreement has been duly executed and delivered by Masco and constitutes the
valid and binding obligation of Masco, enforceable against Masco in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium or other similar laws affecting the rights of
creditors generally and except as rights to specific enforcement may be limited
by the application of equitable principles (whether such equitable principles
are applied in a proceeding at law or in equity).
(d) Consents, No Conflicts, Etc.. Neither the execution and delivery of
this Agreement, the consummation by Masco of the transactions contemplated by
this Agreement nor compliance by Masco with any of the provisions hereof will
(with or without the giving of notice or the passage of time) (i) violate or
conflict with any provision of the organizational documents of Masco or any
agreement, instrument, judgment, decree, statute or regulation applicable to
Masco or any assets or properties of Masco, (ii) violate any material order,
writ, injunction, decree, statute, rule or regulation applicable to Masco or any
material assets or properties of Masco or (iii) require Masco to obtain any
material consent, approval, permission or other authorization of or by, or to
make any material designation, declaration, filing, registration or
qualification with, any court, arbitrator or governmental, administrative or
self-regulatory authority or any other third party whatsoever, other than any
disclosure of the transactions contemplated hereby that may be required in
Masco's filings pursuant to the federal securities laws.
(e) No Brokers. Masco has not entered into, and will not enter into, any
agreement, arrangement or understanding with any person or firm with respect to
the Repurchased Stock and Warrants which will result in the obligation of the
Company to pay any finder's fee, brokerage commission or similar payment in
connection with the transactions contemplated hereby. Masco will pay the fees
and expenses of Xxxxxxx Xxxxx incurred in connection with the transactions
contemplated by this Agreement and agrees to indemnify and hold the Company
harmless from and against any and all claims, liabilities and obligations with
respect to any finder's fees, brokerage commissions or similar payments asserted
by any person on the basis of any act or statement alleged to have been made by
Masco.
(f) Access to Information. Masco acknowledges that it has been offered
access to the business records of the Company and such additional information as
it has requested in order that it may make an informed decision regarding the
transactions contemplated hereby and has been given the opportunity to meet with
Company officials and to have representatives of the Company answer questions
regarding the Company's affairs and condition. Masco is an experienced and
sophisticated participant in transactions of the kind contemplated hereby, is
capable of evaluating the merits and risks of transactions of the kind
contemplated hereby, is experienced in the evaluation of enterprises such as the
Company and has undertaken such investigation and evaluated such information
regarding
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the Company as it has deemed necessary to make an informed and intelligent
decision with respect to the execution and performance of this Agreement.
(g) Disclosure. Masco has made all disclosures to the Company
concerning the Common Stock and the Warrants as required by applicable law.
3. REPRESENTATIONS AND COVENANTS OF THE COMPANY. The Company hereby
represents, warrants and covenants to Masco as follows:
(a) Organization and Good Standing. The Company is a corporation duly,
validly existing and in good standing under the laws of the State of Delaware.
(b) Authority, Execution and Delivery, Etc. The Company has full
corporate power and authority to enter into this Agreement and to purchase the
Repurchased Stock and Warrants in accordance with the terms hereof. The
execution, delivery and performance of this Agreement have been duly authorized
by the Company and no other actions on the part of the Company are required.
This Agreement has been duly executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, moratorium or other similar
laws affecting the rights of creditors generally and except as rights to
specific enforcement may be limited by the application of equitable principles
(whether such equitable principles are applied in a proceeding at law or in
equity).
(c) Consents, No Conflicts, Etc. Neither the execution and delivery of
this Agreement, the consummation by the Company of the transactions contemplated
hereby, nor compliance by the Company with any of the provisions hereof will
(with or without the giving of notice or the passage of time) (i) violate or
conflict with any provision of the Certificate of Incorporation or By-Laws of
the Company or any agreement, instrument, judgment, decree, statute or
regulation applicable to the Company or any assets or properties of the Company,
(ii) violate any material order, writ, injunction, decree, statute rule or
regulation applicable to the Company or any material assets or properties of the
Company or (iii) except as set forth in the Credit Agreement, dated as of
September 2, 1993, as amended, among the Company, the banks signatory thereto,
and NBD Bank (formerly, NBD Bank, N.A.), as Agent (the "Credit Agreement")
require any material consent, approval, permission or other authorization of or
by, or any material designation, declaration, filing, registration or
qualification with, any court, arbitrator or governmental, administrative or
self-regulatory authority or any other third party whatsoever, other than any
disclosure of the transactions contemplated hereby that may be required in the
Company's filings pursuant to the federal securities laws and the rules of the
New York Stock Exchange.
(d) After giving effect to the repurchase of the Repurchased Stock and
Warrants and the transactions contemplated by the Xxxxxxxxx Agreement, the
Company will not be insolvent and will not have unreasonably small capital with
which to engage in its businesses. The completion of the transactions
contemplated hereby and thereby will comply with the Delaware General
Corporation
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Law. The Company is not a party to, and is not engaged in discussions with any
third person with respect to any agreement other than the Xxxxxxxxx Agreement
pursuant to which the Company would repurchase any material amount of its shares
of its capital stock and, except as previously disclosed in its public filings
with the Securities and Exchange Commission (the "Commission"), the Company is
not a party to, and is not engaged in any discussions with any third person with
respect to any agreement to issue any material amount of its securities.
(e) No Material Changes. The Company has filed all required forms,
reports and documents with the Commission required to be filed by it since
December 31, 1994 pursuant to the Securities Act of 1933, as amended (the
"Securities Act") and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations promulgated thereunder
(collectively, the "Company SEC Documents"), all of which have complied in all
material respects with the applicable requirements of the Securities Act and the
Exchange Act and such rules and regulations. As of their respective dates, the
Company SEC Documents did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. Other than as disclosed in the documents referred to in
this Section 3(e), since the filing of the Quarterly Report on Form 10-Q for the
period ended June 30, 1996, there has been no material adverse change in the
results of operations or financial condition of the Company.
(f) No Brokers. The Company has not entered into and will not enter
into any agreement, arrangement or understanding with any person or firm which
will result in the obligation of Masco to pay any finder's fee, brokerage
commission or similar payment in connection with the transactions contemplated
hereby. The Company will pay the fees and expenses of Xxxxx Xxxxxx Inc.
incurred in connection with the transactions contemplated by this Agreement and
agrees to indemnify and hold Masco harmless from and against any and all claims,
liabilities and obligations with respect to any such fees and expenses and
finder's fees, brokerage commissions or similar payments asserted by any person
on the basis of any act or statement alleged to have been made by the Company.
(g) Adequacy of Capital and Surplus. As of the date hereof the
transactions contemplated hereby and under the Xxxxxxxxx Agreement could be
consummated without the capital of the Company being impaired under the Delaware
General Corporation Law.
4. OTHER AGREEMENTS.
(a) Right of First Refusal Upon Receipt of Offer.
(i) If prior to September 30, 2000 Masco receives a bona fide offer
from another person or entity to purchase any of the Remaining Common
Stock (other than a sale which is intended to comply with Rule 144 under
the Securities Act of 1933) (the "Offer"), and Masco desires to accept
the Offer, Masco shall first give written notice to the Company of the
transfer (the "Transfer Notice"). In addition to stating the intention to
accept the Offer, the Transfer Notice shall state the name and address of
the proposed transferee, the number
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of shares of Remaining Common Stock to be transferred, the price per
share, the terms of payment and any other material terms of the sale. The
Transfer Notice shall not be effective unless accompanied by a copy of the
Offer. For 15 days after receipt of the Transfer Notice and Offer, the
Company shall have a first option to purchase all of the Remaining Common
Stock proposed to be transferred, at the price and on the terms of the
proposed transfer. The Company may exercise the option by the personal
delivery or mailing within the option period of written notice to Masco,
which notice shall specify the number of shares to be purchased, the
purchase price and the terms of the purchase. If the Company fails to
exercise its option to purchase the shares of the Remaining Common Stock
proposed to be transferred, such shares may be transferred to the
transferee designated in the written notice given by Masco, at the price
and on the terms described in the notice, within 60 days after the
Company's option period expires. After the expiration of such 60 day
period, no Remaining Common Stock may be transferred to any person without
again complying with this Section 4(a). The 60-day period for the
consummation of the closing shall be extended with respect to a
transaction requiring the consent or approval of any government regulatory
authority; provided, however, that any such extension shall be conditioned
upon the following: (aa) Masco shall make all necessary applications for
such consents and approvals within the 60-day period and shall thereafter
diligently seek to obtain same, and (bb) in the event any necessary
consent or approval is finally denied or an application for any necessary
consent or approval withdrawn, the period for consummation of the
transaction shall terminate without liability on the part of the Company
to Masco or to the proposed purchaser of the shares of the Remaining
Common Stock.
(ii) If the Company exercises an option to purchase any of the
Remaining Common Stock pursuant to Section 4(a)(i), the closing shall
occur on the date which is 15 days following the Company's exercise of the
option, or if such day is a Saturday, Sunday or holiday, on the first
business day thereafter. Masco shall at closing endorse in blank and
deliver to the Company all instruments evidencing the purchased shares.
The Company shall deliver payment to Masco for the purchased shares of the
Remaining Common Stock at the closing and shall have the option to deliver
debt to the extent and on the same terms as those specified in the Offer.
(b) Right of First Refusal Upon Request for Secondary Registration. If
prior to September 30, 2000 Masco requests that the Company register under the
Securities Act of 1933 or otherwise any of the Remaining Common Stock in
accordance with the terms of the Registration Agreement, dated as of March 31,
1993, between the Company and Masco, the Company shall have a first option to
purchase all of the Remaining Common Stock proposed to be registered (the
"Registrable Stock") for a period of 15 days after receipt of the request. The
per share price to be paid by the Company to purchase the Registrable Stock
shall be an amount equal to 97% of the average closing prices (or, in the case
of NASDAQ, the last sale prices) of the Common Stock on the New York Stock
Exchange (or such other national securities exchange or NASDAQ upon which the
Common Stock is then traded) during the 20 trading days preceding the date of
receipt of the request for registration of the Registrable Stock. If the
Company exercises an option to purchase the Registrable Stock, the
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closing shall occur within 15 days following the Company's exercise of the
option. Masco and the Company agree that the Registration Agreement is amended
hereby to the extent provided in this Section 4 (b).
(c) Masco Standstill Period. During the period (the "Standstill
Period") commencing on the date hereof and ending on the second anniversary of
the Closing Date, Masco shall not, and shall cause each of its subsidiaries not
to, singly or as part of any group (as this term is defined in Section 13(d)(3)
of the Exchange Act), directly or indirectly, take any of the following actions,
provided that nothing in this Section 4(c) shall restrict or limit the free
exercise by Masco of any of its voting rights in respect of the Remaining Common
Stock:
(i) acquire, offer to acquire, or agree to acquire, directly or
indirectly, by purchase, gift or otherwise, any shares of Common Stock of
the Company or any direct or indirect rights or options to acquire any
such Common Stock or any securities convertible or exercisable into or
exchangeable for Common Stock, if such acquisition would increase the
beneficial ownership by Masco and its subsidiaries of the Common Stock
outstanding by more than 1% as compared with its ownership immediately
after completion of the transactions contemplated hereby;
(ii) agree with any person or participate with any person in any
effort or attempt to do or seek to do any of the foregoing; or
(iii) publicly request the Company (or its directors, officers,
employees or agents), directly or indirectly, to amend or waive any
provision of this Section 4(c) or otherwise publicly seek any modification
to or wavier of any of Masco's agreements or obligations under this
Section 4(c).
(d) Company Standstill Period. During the Standstill Period, the
Company shall not, and shall cause each of its subsidiaries not to, singly or as
part of any group (as this term is defined in Section 13(d)(3) of the Exchange
Act), directly or indirectly, take any of the following actions:
(i) acquire, offer to acquire, or agree to acquire, directly or
indirectly, by purchase, gift or otherwise, any shares of Common Stock of
Masco or any direct or indirect rights or options to acquire any such
Common Stock or any securities convertible or exercisable into or
exchangeable for such Common Stock, if as a result of such acquisition,
the Company and its subsidiaries would beneficially own 5% or more of such
Common Stock outstanding;
(ii) agree with any person or participate with any person in any
effort or attempt to do or seek to do any of the foregoing; or
(iii) publicly request Masco (or its directors, officers, employees
or agents), directly or indirectly, to amend or waive any provision of
this Section 4(d) or otherwise publicly seek
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any modification to or wavier of any of the Company's agreements or
obligations under this Section 4(d).
(e) Best Efforts by the Company. The Company agrees to use its best
efforts to obtain the waivers and consents referred to in Section 5(a)(iii)
below and, if necessary, the substitute financing referred to therein.
(f) Cooperation. Masco and the Company will each cooperate with the
other and use reasonable efforts to cause the fulfillment of the conditions to
the other's obligations hereunder. Without limiting the generality of the
foregoing, if any order, decree, preliminary or permanent injunction or
restraining order shall have been enacted, entered, promulgated or enforced by
any court or other governmental authority having jurisdiction which prohibits or
restricts the consummation of the transactions contemplated hereby, or if any
action, suit, claim or proceeding before any court or governmental authority
shall be threatened or shall have been commenced and be pending which seeks to
prohibit or restrict the consummation of the transactions contemplated hereby,
each of Masco and the Company shall use reasonable efforts and take such actions
as may be necessary, at its own expense, to have any such order, stay, judgment
or decree lifted or dismissed and any such suit, action or proceeding dismissed
or terminated.
5. CONDITIONS TO THE CLOSING.
(a) It shall be a condition to the Company's obligation to purchase the
Repurchased Stock and Warrants at the Closing that:
(i) the representations and warranties of Masco shall be true and
correct in all material respects (and by the tendering of the Repurchased
Stock and Warrants by Masco at the Closing Masco shall be deemed to have
represented and warranted that this is so) and Masco shall have complied
in all material respects with all covenants required to be performed prior
to the Closing Date;
(ii) there is not in effect at the time any preliminary or
permanent injunction or other order by any court or governmental authority
having jurisdiction which prevents or restrains the purchase or sale and
delivery of the Repurchased Stock and Warrants;
(iii) the Company shall have obtained any waiver or consent
required under the Credit Agreement or shall have obtained substitute
financing on terms reasonably acceptable to the Company in order to
repurchase the Repurchased Stock and Warrants;
(iv) Masco shall have delivered to the Company duly executed
amendments to the Corporate Services Agreement, dated as of January 1,
1987, the Corporate Opportunities Agreement, dated as of May 1, 1984, and
the Amended and Restated Securities Purchase Agreement, dated as of
November 23, 1993, substantially in the forms attached hereto as Exhibits
B, C, and D, respectively;
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(v) Masco shall have delivered to the Company a duly executed
termination of the Warrant Agreement, dated as of March 31, 1993, between
Masco and the Company;
(vi) there shall be a simultaneous closing of the Company's
repurchase of 1,000,000 shares of Common Stock from Xx. Xxxxxxxxx; and
(vii) the purchase of the Repurchased Stock and Warrants shall not
result in the capital of the Company being impaired under the Delaware
General Corporation Law.
(b) It shall be a condition to the obligations of Masco to sell the
Repurchased Stock and Warrants at the Closing that:
(i) the representations and warranties of the Company shall be
true and correct in all material respects (and by tendering the Purchase
Price at the Closing the Company shall be deemed to have represented and
warranted that this is so) and the Company shall have complied in all
material respects with all covenants required to be performed prior to the
Closing Date;
(ii) there is not in effect at the time any preliminary or
permanent injunction or other order by any court or governmental authority
having jurisdiction which prevents or restrains the purchase or sale and
delivery of the Repurchased Stock and Warrants;
(iii) the Company shall have delivered to Masco duly executed
amendments to the Corporate Services Agreement, the Corporate
Opportunities Agreement, and the Amended and Restated Securities Purchase
Agreement, substantially in the forms attached hereto as Exhibits B, C,
and D, respectively; and
(iv) there shall be a simultaneous closing of the Company's
repurchase of 1,000,000 shares of Common Stock from Xx. Xxxxxxxxx.
6. SPECIFIC PERFORMANCE.
(a) Masco acknowledges that money damages are an inadequate remedy for a
breach of this Agreement which would prevent consummation of the sale of the
Repurchased Stock and Warrants to the Company because of the difficulty of
ascertaining the amount of damage that would be suffered by the Company in such
event. Therefore, Masco agrees that the Company may obtain specific performance
to mandate the sale of the Repurchased Stock and Warrants to the Company in
accordance with this Agreement in the event Masco's breach would otherwise
prevent consummation of the sale of the Repurchased Stock and Warrants to the
Company as set forth in this Agreement.
(b) The Company acknowledges that money damages are an inadequate remedy
for a breach of this Agreement which would prevent consummation of the purchase
of the Repurchased Stock and Warrants by the Company because of the difficulty
of ascertaining the amount of damage that would
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be suffered by Masco in such event. Therefore, the Company agrees that Masco
may obtain specific performance to mandate the purchase of the Repurchased Stock
and Warrants by the Company in accordance with this Agreement in the event the
Company's breach would otherwise prevent consummation of the purchase of the
Repurchased Stock and Warrants by the Company as set forth in this Agreement.
7. MISCELLANEOUS.
(a) Expenses. Each party shall be liable for its own expenses in
connection with the transactions contemplated by this Agreement.
(b) Amendments, Etc. All amendments or waivers of any provisions of
this Agreement may only be made pursuant to a written instrument executed by the
parties hereto or their successors and assigns.
(c) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
assigns; nothing in this Agreement is intended to confer on any person or entity
other than the parties hereto and their respective successors and assigns any
rights, remedies, obligations or liabilities by reason of this Agreement.
(d) Notices. All notices, requests and other communications provided for
hereunder shall be effective upon receipt, shall be in writing and shall be
deemed to have been duly given if delivered in person or by courier, telegraph,
telex or by facsimile transmission with electromechanical report of delivery:
If to the Company:
MascoTech, Inc.
00000 Xxx Xxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxx X. Xxxxxxx
With a copy to:
Xxxxxx Xxxxxxx PLLC
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000-0000
Attention: Xxx X. Xxxxxxxxxxx, Xx., Esq.
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If to Masco:
Masco Corporation
00000 Xxx Xxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
With a copy to:
Masco Corporation
00000 Xxx Xxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
or to such other address with respect to any party as such party shall notify
the others in writing.
(e) Governing Law and Jurisdiction. This Agreement shall be construed
and enforced in accordance with, and the rights of the parties shall be governed
by, the laws of the State of Michigan (without regard to the choice of law
provisions thereof).
(f) Headings. The descriptive headings of the several paragraphs of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
(g) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and it shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart.
(h) Public Announcements. Without prior consultation with the other
party, neither Masco nor the Company will issue any press release or public
announcement of the transactions contemplated hereby.
(i) Complete Agreement. This Agreement and the Exhibits attached hereto
contain the entire agreement between the parties with respect to the subject
matter hereof and, except as provided herein, supersedes all previous
negotiations, commitments and writings.
(j) Termination. This Agreement shall terminate if the Closing
contemplated hereby shall not have occurred on or prior to December 31, 1996.
Notwithstanding the foregoing, the provisions of Section 7(a) and 7(h) shall
survive termination of this Agreement.
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IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement as of the date first above written.
MASCO CORPORATION
By: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Senior Vice President and General Counsel
MASCOTECH, INC.
By: /s/ Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
Vice President, Controller and Treasurer
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Exhibit A
PROMISSORY NOTE
$151,375,000.00 _____________, 1996
FOR VALUE RECEIVED, MascoTech, Inc., a Delaware corporation with its
principal offices located at 00000 Xxx Xxxx Xxxx, Xxxxxx, Xxxxxxxx 00000
("MascoTech"), hereby promises to pay to the order of Masco Corporation, a
Delaware corporation with its principal offices located at 00000 Xxx Xxxx Xxxx,
Xxxxxx, Xxxxxxxx 00000 ("Payee"), in lawful money of the United States of
America, the principal sum of One Hundred Fifty One Million Three Hundred
Seventy Five Thousand Dollars ($151,375,000.00) (the "Principal Amount"),
together with interest, in accordance with the terms hereof.
This Note is referred to in, and issued pursuant to, that certain Stock
Purchase Agreement, dated as of October 15, 1996, by and between MascoTech and
Payee (the "Stock Purchase Agreement"). Capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Stock Purchase
Agreement.
The Principal Amount shall be due and payable in one, lump-sum payment on
September 30, 1997 (the "Maturity Date"). Interest from the date hereof on the
unpaid Principal Amount shall accrue at the per annum rate of six and five-
eights percent (6-5/8%), and shall be payable in four installments on December
31, 1996, March 31, 1997, June 30, 1997 and September 30, 1997.
Notwithstanding the first paragraph of this Note, MascoTech may repay all
or any portion of the Principal Amount and any accrued interest thereon by
transferring any publicly-traded securities (debt or equity) of Emco Limited
that MascoTech holds at the time of payment which were held on the date hereof.
Any such Emco Limited securities shall be valued at an amount equal to 97% of
the average of the closing prices for such securities on the Toronto Stock
Exchange during the 20 trading days ending on the third day prior to the date of
payment, expressed in U.S. Dollars at the prevailing exchange rate on the date
of payment. Any such payment in Emco Limited securities shall be subject to
applicable regulatory approvals, which MascoTech and Payee agree to diligently
seek to obtain upon MascoTech's written notice to Payee of its intention to
transfer to Payee any Emco Limited securities.
This Note may be prepaid in whole at any time or in part from time to
time, with accrued interest, without penalty or premium.
MascoTech agrees to pay all costs of collection of any amounts due
hereunder when incurred, including, without limitation, reasonable attorneys'
fees and expenses, unless prohibited by law.
MascoTech hereby waives presentment for payment, demand, notice of
dishonor, notice of protest and all other notices and demands in connection with
the delivery, acceptance, performance
or default of this Note and agrees that this Note may not be changed, modified
or terminated orally, but only by an agreement in writing signed by MascoTech
and Payee.
This Note shall become immediately due and payable upon notice by Payee to
MascoTech if one or more of the following events shall have occurred and be
continuing (except in the case of the events specified in clauses (e) and (f) in
which event this Note shall become immediately due and payable without any such
notice):
(a) any event or condition shall occur which results in the acceleration
of the maturity of any indebtedness for borrowed money in excess of
$10,000,000 or enables (or, with the giving of notice or lapse of time or
both, would enable) the holder of such indebtedness or any person acting
on such holder's behalf to accelerate the maturity thereof;
(b) default in the payment of interest upon this Note when it becomes
due and payable and continuance of such default for a period of 5 days; or
(c) default in the payment of all or any part of the principal of this
Note as and when the same shall become due and payable;
(d) any representation or warranty of MascoTech in the Stock Purchase
Agreement should prove to have been incorrect in any material respect when
made or deemed made;
(e) MascoTech shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors;
(f) an involuntary case or other proceeding shall be commenced against
MascoTech seeking liquidation, reorganization or other relief with respect
to it or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60 days;
or an order for relief shall be entered against MascoTech under the
federal bankruptcy laws as now or hereafter in effect;
(g) a judgment or order for the payment of money in excess of $5,000,000
shall be rendered against MascoTech and such judgment or order shall
continue unsatisfied and unstayed for a period of 20 days.
This Note shall be governed by, and construed in accordance with, the law
of the State of Michigan.
Any notice or other communication under this Note shall be in writing and
shall be considered given when mailed by certified or registered mail, return
receipt requested, to the Chief Financial Officer of MascoTech or the Payee, as
the case may be, at the address set forth in the first paragraph of this Note
(or at such other address as either party may specify by notice to the other).
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed in
its corporate name by a duly authorized officer, as of the date first written
above.
MASCOTECH, INC.
By:
Name:
Title:
BH\ 00000
XX\ DRM
Exhibit B
AMENDMENT NO. 1 TO
CORPORATE SERVICES AGREEMENT
This Amendment is made as of ------------, 1996 between Masco Corporation,
a Delaware corporation ("Masco"), and MascoTech, Inc., f/k/a Masco Industries,
Inc., a Delaware corporation ("Tech"), concerning that certain Corporate
Services Agreement (the "Services Agreement"), dated as of January 1, 1987,
between Masco and Tech. All capitalized terms not otherwise defined in this
Amendment shall have the meanings given them in the Services Agreement.
X. Xxxxx holds 24,824,690 shares of the Common Stock, par value $1.00
per share, of Tech (the "Tech Common Stock");
B. Concurrently herewith, Tech has, among other things, repurchased
from Masco 17,000,000 shares of the Tech Common Stock;
C. In connection therewith, Masco and Tech desire to amend certain
provisions of the Services Agreement as set forth herein.
IN CONSIDERATION of the mutual covenants and agreements contained in
this Amendment, the parties agree to amend the Services Agreement as follows:
1. All references to "Industries" are hereby revised to be references
to "Tech".
2. Paragraph 5 is hereby amended to read in its entirety as follows:
5. The term of this Agreement shall expire on September 30, 1998;
provided however, that the term shall be extended automatically for
a period of one year each October 1 thereafter, subject to either
party's right to terminate this Agreement by written notice to the
other received at least 90 days prior to any such October 1.
Termination of this Agreement shall not relieve either party of its
obligations accruing hereunder through the effective date of
termination.
3. All other terms and conditions of the Services Agreement are hereby
ratified and confirmed and remain in full force and effect.
IN WITNESS WHEREOF, the parties have duly executed and delivered
this Amendment as of the date first above written.
MASCO CORPORATION
By:
Name:
Title:
MASCOTECH, INC.
By:
Name:
Title:
BH\ 00000
XX\ DRM
2
Exhibit C
AMENDMENT NO. 1 TO
CORPORATE OPPORTUNITIES AGREEMENT
This Amendment is made as of ______________, 1996 between Masco
Corporation, a Delaware corporation ("Masco"), and MascoTech, Inc., f/k/a Masco
Industries, Inc., a Delaware corporation ("Tech"), concerning that certain
Corporate Opportunities Agreement (the "Opportunities Agreement"), dated as of
May 1, 1987, between Masco and Tech. All capitalized terms not otherwise
defined in this Amendment shall have the meaning given them in the Opportunities
Agreement.
X. Xxxxx holds 24,824,690 shares of the Common Stock, par value $1.00
per share, of Tech (the "Tech Common Stock");
B. Concurrently herewith, Tech has, among other things, repurchased
from Masco 17,000,000 shares of the Tech Common Stock;
C. In connection therewith, Masco and Tech desire to amend certain
provisions of the Opportunities Agreement as set forth herein.
IN CONSIDERATION of the mutual covenants and agreements contained in
this Amendment, the parties agree to amend the Opportunities Agreement as
follows:
1. All references to "Industries" are hereby revised to be references
to "Tech."
2. Paragraph 1 is hereby amended to read in its entirety as follows:
1. Business Opportunities for Tech. Neither Masco nor any of its
subsidiaries shall consider undertaking any Third-Party Transaction (as
hereinafter defined) which comes to the attention of Masco, Tech or any of
their respective subsidiaries if such transaction involves metal-worked
components, engineering or technical support services or aftermarket
products in each case for the automotive industry and is not an Excluded
Transaction (as hereinafter defined) unless Tech has first been provided
with the opportunity to consider undertaking such transaction and
thereafter either declines or fails, within a reasonable period, to
conclude such transaction.
3. Paragraph 2 is hereby amended to read in its entirety as follows:
2. Business Opportunities for Masco. Neither Tech nor any of its
subsidiaries shall consider undertaking any Third-Party Transaction which
comes to the attention of Tech, Masco or any of their respective
subsidiaries if such transaction involves home improvement or building
products or services unless Masco has first been provided with the
opportunity to consider undertaking such transaction and thereafter either
declines or fails, within a reasonable period, to conclude such
transaction, except that a transaction by or with Emco Limited shall not
be subject to the prohibition in this paragraph 2.
4. Subparagraph 4(i) is hereby amended to read in its entirety as
follows:
(i) A "Third-Party Transaction" shall mean any acquisition, merger,
consolidation or joint venture with, investment (other than
investments solely in marketable securities or other noncontrolling
minority investments) in or any similar transaction involving a
party other than Tech, Masco, any of their respective subsidiaries
or any other entities in which on the date hereof any of such
corporations has investments not consisting solely of marketable
securities.
5. Subparagraph 4(ii) is hereby amended to read in its entirety as
follows:
(ii) An "Excluded Transaction" shall mean any Third-Party
Transaction with respect to a business which is not primarily
involved in offering products or services to the automotive
industry, including the automotive aftermarket.
6. Paragraph 5 is hereby amended to read in its entirety as follows:
5. Duration. The term of this Agreement shall expire on September
30, 1998; provided, however, that the term shall be extended automatically
for a period of one year each October 1 thereafter, subject to either
party's right to terminate this Agreement by written notice to the other
received at least 90 days prior to any such October 1. Termination of
this Agreement shall not relieve either party of its obligations accruing
hereunder through the effective date of such termination.
7. All other terms and conditions of the Opportunities Agreement are
hereby ratified and confirmed and remain in full force and effect.
IN WITNESS WHEREOF, the parties have duly executed and delivered
this Amendment as of the date first above written.
MASCO CORPORATION
By:
Name:
Title:
MASCOTECH, INC.
By:
Name:
Title:
BH\ 00000
XX\ DRM
2
Exhibit D
AMENDMENT NO. 1 TO AMENDED AND
RESTATED SECURITIES PURCHASE AGREEMENT
This Amendment is made as of ___________________, 1996, between Masco
Corporation, a Delaware corporation ("Masco"), and MascoTech, Inc., f/k/a Masco
Industries, Inc., a Delaware corporation (the "Company" or the "Issuer"),
concerning that certain Amended and Restated Securities Purchase Agreement (the
"Securities Purchase Agreement"), dated as of November 23, 1993, between Masco
and the Company. All capitalized terms not otherwise defined in this Amendment
shall have the meanings given them in the Securities Purchase Agreement.
X. Xxxxx holds 24,824,690 shares of the Common Stock, par value $1.00
per share, of the Company (the "Tech Common Stock");
B. Concurrently herewith, the Company has, among other things,
repurchased from Masco 17,000,000 shares of Tech Common Stock;
C. In connection therewith, Masco and the Company desire to amend
certain provisions of the Securities Purchase Agreement as set forth herein.
IN CONSIDERATION of the mutual covenants and agreements contained in
this Amendment, the parties agree to amend the Securities Purchase Agreement as
follows:
1. Paragraph 1(b) is hereby amended to read in its entirety as follows:
(b) The Securities shall be issued in separate series with the
interest rate on each such series being a rate per annum that is the
higher of: (I) 400 basis points over the average Treasury Rate (as
hereinafter defined) for the week preceding the week in which the
notice of purchase referred to in Paragraph 2 is given to Masco; or
(ii) 75 basis points over the Comparable Debt Issuance Rate (as
hereinafter defined).
"Treasury Rate" means the rate for noncallable direct
obligations of the United States ("Treasury Notes") having a
remaining maturity of five years, as published in the Federal
Reserve Statistical Release H.15(519) (or any successor publication
provided by the Board of Governors of the Federal Reserve System)
under the heading "Treasury Constant Maturities." If a rate for
Treasury Notes having a remaining maturity of five years has not
been so published or reported for the preceding week as provided
above by 1:00 P.M., New York City time, on the day such notice is
given to Masco, then the Treasury Rate shall be calculated by the
Company and shall be a yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) of the arithmetic mean of
the secondary market bid rates, as of approximately 1:30 P.M., New
York City time, on the date of such notice, of three leading primary
United
States government securities dealers selected by the Company for the
purchase of Treasury Notes with a remaining maturity of five years.
The "Comparable Debt Issuance Rate" means a per annum rate of
interest determined as follows:
Each of the Company and Masco shall select an investment
banker within 3 business days from the date the notice of
purchase referred to in Paragraph 2 is given to Masco, and
those two investment bankers shall have 3 business days to
select a third investment banker. Each of the three
investment bankers shall have qualifications with respect to
the sale of debt instruments of manufacturing and industrial
companies. Each of the three investment bankers shall have 3
business days to determine, in its good faith opinion, the per
annum rate of interest that the Company would be required to
pay if it were to issue the relevant series of Securities to
third party investors in a transaction negotiated at
arms'-length and priced as of the date the notice of purchase
referred to in Paragraph 2 is given to Masco, and each banker
shall set forth its conclusion in a letter addressed to each
of Masco and the Company and delivered to each of them by
12:00 noon EST on the 10th day from the date of the notice of
purchase given to Masco. The arithmetic mean of the interest
rates determined by each of the three investment bankers shall
be the Comparable Debt Issuance Rate.
2. Paragraph 2(a) is hereby amended to read in its entirety as follows:
(a) Subject to the terms and conditions set forth herein, Masco
agrees to purchase, at par, at any time or from time to time on or
before March 31, 2002, upon the Company's written notice, up to $200
million aggregate principal amount of Securities (the "Commitment").
The Company's written notice shall specify the principal amount of
Securities that Masco is required to purchase (which for each
respective issuance of Securities shall be $10 million or any larger
multiple of $1,000,000). The interest rate for such Securities
shall be determined in accordance with the provisions of Paragraph
1(b).
3. The first sentence of Paragraph 3(a) is hereby amended to read in
its entirety as follows:
(a) Any closing of a sale of Securities to Masco hereunder shall
occur at Masco's offices on the 10th Business Day (as hereinafter
defined) after the Company gives Masco the written notice referred
to in Paragraph 2.
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4. Section 5.2(b) of the Form of Subordinated Note attached as Exhibit
A to the Securities Purchase Agreement is hereby amended to read in its entirety
as follows:
(b) The holder's right to tender under clause (a) above shall be
triggered upon the occurrence of either of the following events:
(I) Any person or group (an "other entity"), within the
meaning of Section 13 (d) (3) of the Securities Exchange Act
of 1934, shall attain beneficial ownership, within the meaning
of Rule 13d-3 adopted under the Securities Exchange Act of
1934, or at least 50% of the voting power for election of the
Directors of the Issuer, or,
(ii) The Issuer, directly or indirectly, consolidates or
merges with any other entity or sells or leases its properties
and assets substantially as an entirety to any other entity,
provided that this clause shall not apply to a transaction in
which the Company is the surviving company in any merger or
consolidation and in which the stock issued in such a
transaction is less than 40% of the common stock of the
Company issued and outstanding after the transaction.
5. A new Section 2 (c) is hereby added to read in its entirety as
follows:
(c) The Commitment shall terminate upon the occurrence of either
of the following events:
(i) Any person or group (an "other entity"), within the
meaning of Section 13 (d) (3) of the Securities Exchange Act
of 1934, shall attain beneficial ownership, within the meaning
of Rule 13d-3 adopted under the Securities Exchange Acot of
1934, or at least 50% of the voting power for election of the
Directors of the Issuer, or,
(ii) The Issuer, directly or indirectly, consolidates or
merges with any other entity or sells or leases its properties
and assets substantially as an entirety to any other entity,
provided that this clause shall not apply to a transaction in
which the Company is the surviving company in any merger or
consolidation and in which the stock issued in such a
transaction is less than 40% of the common stock of the
Company issued and outstanding after the transaction.
6. All other terms and conditions of the Securities Purchase Agreement
are hereby ratified and confirmed and remain in full force and effect.
3
IN WITNESS WHEREOF, the parties have duly executed and delivered
this Amendment as of the date first above written.
MASCO CORPORATION
By:
Name:
Title:
MASCOTECH, INC.
By:
Name:
Title:
BH\ 00000
XX\ DRM
4
