-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P8u9mh8+mx0qVJENyLJQxtCHrcOxBETWUXOEN1NsfhU6L/92JhHYoPIhFyY+BE5G i+cEL+o/6sT5W06eYmfrnw== 0000040643-96-000018.txt : 19961210 0000040643-96-000018.hdr.sgml : 19961210 ACCESSION NUMBER: 0000040643-96-000018 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961114 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL HOUSEWARES CORP CENTRAL INDEX KEY: 0000040643 STANDARD INDUSTRIAL CLASSIFICATION: 3360 IRS NUMBER: 410919772 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07117 FILM NUMBER: 96663344 BUSINESS ADDRESS: STREET 1: P O BOX 4066 1536 BEECH STREET CITY: TERRE HAUTE STATE: IN ZIP: 47804 BUSINESS PHONE: 8122321000 MAIL ADDRESS: STREET 2: P O BOX 4066 1536 BEECH STREET CITY: TERRE HAUTE STATE: IN ZIP: 47804 10-Q 1 THIRD QUARTER REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended September 30, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 1-7117 General Housewares Corp. (Exact name of Registrant as specified in its Charter) Delaware 41-0919772 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 1536 Beech Street 47804 Terre Haute, Indiana (Zip Code) (Address of principal executive offices) Registrant's telephone number, including area code (812) 232-1000 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the Registrant's classes of Common Stock as of the latest practicable date. Class of Common Stock Outstanding at November 14, 1996 $.33-1/3 Par Value 4,054,610 PART I FINANCIAL INFORMATION GENERAL HOUSEWARES CORP. & SUBSIDIARIES (Dollars in thousands except per share amounts) Consolidated Condensed Statement of Operations and Retained Earnings (Unaudited)
For the three months For the nine months ended September 30, ended September 30, 1996 1995 1996 1995 Net Sales $26,406 $30,529 $72,621 $83,383 Cost of goods sold 16,708 20,013 48,709 54,276 ------- ------- ------- ------- Gross profit 9,698 10,516 23,912 29,107 Selling, general and administrative expenses 8,729 8,649 28,462 25,273 ------- ------- ------- ------- Operating income (loss) 969 1,867 (4,550) 3,834 Interest Expense, net 692 842 2,050 2,226 ------- ------- ------- ------- Income (loss) from operations before income taxes 277 1,025 (6,600) 1,608 Income taxes 217 420 (2,257) 664 ------- ------- ------- ------- Net income (loss) for the period 60 605 (4,343) 944 Retained earnings, beginning of period 26,115 29,770 31,119 30,029 Less: Dividends ($.08 quarterly per common share in 1996 and 1995) 302 299 903 897 -------- ------- ------- ------- Retained earnings, end of period $25,873 $30,076 $25,873 $30,076 ------- ------- ------- ------- ------- ------- ------- ------- Earnings per common share: Net income (loss) $0.02 $ 0.16 ($1.15) $ 0.25 ------- ------ ------- ------ ------- ------ ------- ------
See notes to consolidated condensed financial statement. CONSOLIDATED CONDENSED BALANCE SHEET As of September 30, December 31, 1996 1995 (Unaudited) ----------- ----------- ASSETS Current assets: Cash $ 619 $ 3,414 Accounts receivable, less allowances of $3,543 ($4,029 in 1995) 14,231 16,152 Inventories 23,053 26,867 Deferred tax asset 2,705 2,743 Other current assets 1,432 661 Income taxes refundable 2,289 - ----------- ---------- Total current assets 44,329 49,837 Note receivable 3,000 - Property, plant and equipment, net 13,849 14,613 Other assets 6,033 7,565 Patents and other intangible assets 3,513 3,830 Cost in excess of net assets acquired 27,750 28,765 ----------- ---------- $ 98,474 $104,610 =========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short term debt and notes payable $ 10,000 $ 12,000 Current maturities of long term debt 2,072 2,163 Accounts payable 3,946 3,579 Salaries, wages and related benefits 2,553 2,487 Accrued liabilities 5,024 1,957 Income taxes payable - 1,312 ----------- ---------- Total current liabilities 23,595 23,498 Long term debt 23,574 25,038 Deferred liabilities 4,423 4,226 Stockholders' equity: Preferred stock - $1.00 par value: Authorized - 1,000,000 shares Common stock - $.33-1/3 par value: Authorized - 10,000,000 shares Outstanding - 1996 - 4,055,881 and 1995 - 4,036,334 shares. 1,446 1,347 Capital in excess of par value 23,728 23,528 Treasury stock at cost - 1996 and 1995 - 277,760 shares (3,649) (3,649) Retained earnings 25,873 31,119 Cumulative translation adjustment (58) (39) Minimum pension liability (458) (458) ----------- ---------- Total stockholders' equity 46,882 51,848 ----------- ---------- $ 98,474 $104,610 =========== ==========
See notes to consolidated condensed financial statements. CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS (Unaudited) For the nine months ended September 30, 1996 1995 --------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) ($ 4,343) $ 944 Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities - Depreciation and amortization 3,903 3,168 Loss on sale of assets 2,292 - Foreign exchange loss (7) 97 Compensation related to stock awards 81 95 Increase in deferred taxes 40 - Decrease (increase) in operating assets: Accounts receivable 1,919 (3,059) Inventory 741 (13,054) Other assets (161) 540 Increase (decrease) in operating liabilities: Accounts payable 370 655 Salaries, wages and related benefits, accrued and deferred liabilities 2,209 2,042 Income taxes payable (refundable) (3,600) (893) -------- -------- Net cash provided by (used for) operating activities: 3,444 (9,465) -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property, plant and equipment (3,421) (2,654) Proceeds from sale of asset 1,785 - -------- -------- Net cash used for investing activities (1,636) (2,654) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Payment of deferred obligation - (2,811) Increase in notes payable - 900 Issuance of note receivable (370) - Debt borrowing (repayment) (3,554) 11,707 Proceeds from stock options and employee purchases 218 262 Dividends paid ( 903) ( 896) -------- -------- Net cash (used for) provided by financing activities (4,609) 9,162 -------- -------- Net decrease in cash and cash equivalents (2,801) (2,957) Cash and cash equivalents at beginning of period 3,414 2,993 Effect of exchange rate on cash 6 17 -------- -------- Cash and cash equivalents at end of period $ 619 $ 53 ======== ========
See notes to consolidated condensed financial statements. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Dollars in thousands) NOTE 1 - GENERAL The accompanying interim Consolidated Condensed Financial Statements have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the financial statements included herein reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial information for the periods presented. The Consolidated Condensed Financial Statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 1995 Annual Report on Form 10-K. NOTE 2 - INVENTORIES September 30, December 31, 1996 1995 Raw materials $ 3,705 $ 4,635 Work in process 1,938 2,884 Finished goods 18,436 21,417 ------- ------- 24,076 28,936 LIFO Reserve (1,026) (2,069) ------- ------- Total, net $23,050 $26,867 ======= =======
NOTE 3 - PROPERTIES September 30, December 31, 1996 1995 --------- ------------ Land $ 641 $ 684 Buildings 3,659 4,378 Equipment 27,198 30,795 --------- ------------ Total 31,498 35,857 Accumulated depreciation (17,649) (21,244) --------- ------------ Total, net $13,849 $14,613 ========= ============
NOTE 4 - RESTRUCTURING AND OTHER SPECIAL CHARGES During the first quarter of 1996, management decided to divest the Company's cast iron and cast aluminum cookware businesses (Sidney Division) as well as proceed with other restructuring efforts. Provisions for the restructuring were made in the first quarter of 1996 based on facts available at that time. Total first quarter provisions for restructuring and other pre-tax charges were $1,188. A purchase agreement to sell the Sidney Division, subject to certain conditions, was signed as of August 1, 1996. As a result of this agreement, the Company was required to record an additional charge against pre-tax earnings of $1,500 in the second quarter of 1996. An additional $150 charge against pre-tax earnings was required in the third quarter of 1996 based on the resolution of estimates made in the second quarter. In accordance with the terms of the agreement, the Company received a cash payment of $450 and a long-term note receivable of $3,000 in exchange for the assets of the Sidney division as well as associated brand names and trademarks. Approximately $1,100 of the amount charged against income in the first three quarters of 1996 covers future pension and warranty payments and remains as a component of accrued liabilities. Revenue generated by the Sidney Division was $317 for the three months ended September 30, 1996 as compared to $3,255 for the same period in 1995. For the nine-month period ended September 30, 1996, revenues were $4,128 as compared to $10,451 for the nine months ended September 30, 1995. Net operating losses (including advertising, warehousing and direct marketing expenses but prior to restructuring charges and the allocation of corporate overhead) were $462 for the three month period ended September 30, 1996 as compared to net operating income of $371 for the same period in 1995. Operating losses for the first nine months of 1996 were $1,471 as compared to operating income of $216 for the first nine months of 1995. In addition to the foregoing, the Company has closed three retail stores in 1996. The Company recorded a charge of $150 related to the closure of these stores in 1996. Revenues and operating losses related to the three retail store closures were not significant to the overall operations of the Company. NOTE 5 - DEBT Effective November 13, 1996, the Company entered into a new unsecured financing agreement with three banks. Under the terms of the agreement, which expires December 31, 1999 and may be renewed under certain circumstances for two additional one year periods, the Company has a $45,000 unsecured revolving loan commitment. Proceeds from the financing are available for general corporate purposes. Related interest charges will be based on Prime or LIBOR with spreads calculated on an incentive formula. The agreement contains several financial covenants and provides limits on dividends and capital expenditures. The agreement replaced a $30,000 revolving credit agreement held with two of the three banks entering into the new unsecured agreement. The agreement allows the Company to pre-pay $10,000 of Senior Notes outstanding with institutional investors. The Company plans to make such pre-payments in the fourth quarter of 1996 and will incur related penalties and charges of approximately $800. These Senior Notes have been classified as non-current as of September 30, 1996 as they will be refinanced by the new unsecured financing agreement. The remaining Senior Notes totaling $10,000 will not be pre-paid. Terms of these Notes require that the Company maintain certain minimum financial ratios. The Company was not in compliance with a fixed charge coverage ratio and a restricted payment limitation as of September 30, 1996. As a result the amount has been classified as current. NOTE 6 - INCOME TAXES Due to the Company's financial results for the first nine months of 1996, an estimate of the full year effective tax benefit rate suggested a tax benefit of approximately 35% should be recorded for the nine months ended September 30, 1996. This compares to a 1995 full year effective tax expense rate of approximately 41%. An adjustment was made in the third quarter of 1996 lowering the year-to-date income tax benefit in accordance with the revised estimate. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (In thousands) Nine Months Ended September 30, 1996 versus 1995 Referring to the Company's financial condition as of September 30, 1996 as contrasted with December 31, 1995, inventories, accounts receivable, other assets and current liabilities all decreased. Despite sales below prior year and planned levels, inventories decreased due to successful inventory reduction initiatives resulting from the Company's continued emphasis on supply chain management as well as the divestiture of the Company's Sidney division. Inventory reduction initiatives include the development of timely and accurate sales forecasts which enable more sophisticated management of production and purchasing schedules as well as the proactive identification and liquidation of excess and obsolete inventory. The decrease in accounts receivable is reflective of the Company's seasonality and divestiture of Sidney Division operations. Other assets were reduced by the first quarter 1996 sale of a non-operating facility that the Company retained as part of the sale of its giftware division in 1989. Net sales for the three-month period ended September 30, 1996 were $26,406, a decrease of 13.5% as compared to net sales of $30,529 for the same period in 1995. Net sales for the nine-month period ended September 30, 1996 were $72,621, a decrease of 12.9% as compared to net sales of $83,383 for the same period in 1995. Contributing to the reduction in sales in the first nine months of 1996 was weakness in the Sidney Division product lines due to de-emphasis by major customers as well as some reduction related to uncertainty surrounding the future of the product lines. The Sidney Division was divested in the third quarter of 1996 resulting in a $2,938 reduction in third quarter net sales. In addition, sales across most other product lines were down in the first six months of 1996 due to lower than anticipated sell-through at the retail level in the fourth quarter of 1995 (resulting in higher than required inventory levels at retail) and the first quarter of 1996. Third quarter 1996 order levels in non-Sidney product lines exceeded 1995; however, renovation of the Company's warehouse and distribution facility and related systems delayed shipments significantly in the third quarter of 1996 causing $3,500 of sales scheduled for September shipment to be delayed until the fourth quarter (or, in a few, canceled). Third quarter 1996 gross profit decreased $818 or 7.8% from the third quarter of 1995. Gross profit for the first nine months of 1996 decreased $5,195 or 17.8% from the 1995 comparable period. Of the third quarter decrease, the entire amount was attributable to the decreased sales volume; similarly, $3,226 of the decrease from the first nine months of 1995 was attributable to sales volume. As a result of the Company's emphasis on supply chain management as well as the reduction in sales activity, unfavorable manufacturing variances contributed to the reduction in gross margin dollars (approximately $2.5 million) in the first nine months of 1996. Gross margin percentage for the first nine months was also negatively impacted by the first quarter sale of excess and obsolete inventory at little or no margin. Gross margin for the first nine months was favorably impacted by a reversal of LIFO reserves resulting from the Company's decision to dispose of the Sidney Division. Selling, general and administrative expenses for the three-month period ended September 30, 1996 were $8,729 as compared to $8,649 for the same period in 1995. While variable selling and cooperative advertising costs decreased due to the reduction in sales volume, warehousing costs increased due to additional labor required by the warehouse/distribution renovation. In addition, general and administrative costs increased as a result of the ultimate settlement of the Sidney divestiture. For the nine-month period ended September 30, 1996, selling general and administrative costs increased from $25,273 in 1995 to $28,462. The increase is primarily a result of 1996 strategic initiatives that have included a realignment of staff, manufacturer's retail outlet store closings and divestiture of the Sidney division. Operating income for the three-month period ended September 30, 1996 was $969 as compared to operating income of $1,867 for the same period in 1995. The operating loss for the first nine months of 1996 was $4,550 as compared to operating income of $3,834 for the first nine months of 1995. Interest expense for the third quarter of 1996 was $692 as compared to $842 for the same period in 1995 while interest expense for the first nine months of 1996 was $2,050 as compared to $2,226 for the comparable 1995 period. An estimate of the full year financial results and related effective tax benefit rate resulted in a third quarter adjustment to reflect an effective tax benefit rate of approximately 35%. This compares to a 1995 effective tax expense rate of approximately 41%. An adjustment was made in the third quarter of 1996 lowering the year-to-date income tax benefit in accordance with the estimate. Net income of $60 in the third quarter of 1996 and the net loss of $4,343 for the first nine months of 1996 compare to net income of $605 and $944 for the same periods in 1995. Related quarterly and year-to-date earnings (loss) per share dropped from $0.16 and $0.25 in 1995 to $.02 and ($1.15) in 1996, respectively. During the third quarter of 1996, the Company disposed of the Leyse division which sold a line of commercial quality cookware and also sold the remaining Sidney related inventory which was distributed in Europe. These transactions had little impact on the results of operations for the third quarter and will not significantly impact future operational results. Capital Resources and Liquidity On November 13, 1996, the Company entered into a $45 million three year revolving loan agreement to replace a $30 million revolving loan agreement that would have expired on November 30, 1997. Proceeds from the new agreement will be used to pre-pay $10 million of Senior Notes, replace $9 million outstanding on the existing revolving agreement and provide funds for expected working capital needs. PART II - OTHER INFORMATION Item 5. Other Information The Company entered into a $45 million three year revolving loan agreement on November 13, 1996. A report on Form 8-k containing the agreement will be filed on or before November 27, 1996. Item 6. Exhibits and Reports on Form 8-K 11a. Primary Earnings Per Share Reports on Form 8-K - There were no reports on Form 8-K filed for the three months ended September 30, 1996. EXHIBITS EX-11 Computation of Primary Earnings Per Share EX-27 Financial Data Schedule EX-99 Asset Purchase Agreement between General Housewares Corp. and Wagnerware Corporation EX-3.(ii) Amended By-Laws SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. GENERAL HOUSEWARES CORP. Dated: November 14, 1996 By /s/ Robert L. Gray Robert L. Gray Vice President Finance and Treasurer By /s/ Mark S. Scales Mark S. Scales Corporate Controller Chief Accounting Officer EX-11 2 PRIMARY EARNINGS PER SHARE EXHIBIT 11 COMPUTATION OF PRIMARY EARNINGS PER SHARE For the nine months ended September 30, 1996 1995 --------- --------- Net (loss) income ($ 4,343) $ 944 Shares: Weighted average number of shares of common stock outstanding 3,769,777 3,743,106 Shares assumed issued (less shares assumed purchased for treasury) on stock option agreements 8,844 26,302 Rounding 379 (408) --------- --------- 3,779,000 3,769,000 ========= ========= Net (loss) income per Common Share ($ 1.15) $ 0.25 ========= =========
EX-27 3 ART 5 FDS FOR 10-Q
5 0000040643 FINANCIAL DATA SCHEDULE U.S. DOLLARS 9-MOS DEC-31-1996 JUN-30-1996 SEP-30-1996 1 619 0 17,774 3,543 23,053 44,329 31,498 17,649 98,474 23,595 0 0 0 1,446 45,436 98,474 21,613 21,613 15,038 15,038 8,986 21 686 (3,097) (923) (2,174) 0 0 0 (2,174) (.57) (.57)
EX-99 4 ASSET PURCHASE AGREEMENT ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT dated as of August 1, 1996 (the "Agreement"), by and between GENERAL HOUSEWARES CORP., a Delaware corporation, with an address of 1536 Beech Street, Terre Haute, Indiana 47804 ("Seller") and WAGNERWARE CORPORATION, an Ohio corporation, with an address of 800 West Liberty Street, Medina, Ohio 44256 ("Buyer"). W I T N E S S E T H: WHEREAS, Seller is desirous of selling certain of the tangible and intangible assets related to the manufacture and sale of cast iron and cast aluminum cookware ("Business") and having Buyer assume certain scheduled liabilities of the Business; and WHEREAS, Buyer is desirous of purchasing such assets and assuming such liabilities on the terms and subject to the conditions hereinafter set forth. NOW, THEREFORE, in consideration of the premises and of the representations and warranties, covenants and agreements hereinafter made, the parties hereby agree as hereinafter set forth: 1. PURCHASE AND SALE OF ASSETS: 1.1 Acquired Assets. Subject to the terms and conditions hereof, at the Closing (as hereinafter defined), Seller shall sell, transfer, assign, convey and deliver, or cause to be sold, transferred, assigned, conveyed and delivered, to Buyer, and Buyer shall purchase and accept all of the assets (excluding the assets specifically set forth in Section 1.2 hereof) owned by Seller and used in connection with or related to the Business (collectively, such assets are referred to herein as the "Acquired Assets"), including without limitation: (a) Machinery, Equipment, Furniture and Fixtures. All of the machinery, equipment, tooling, dies, patterns, molds, stampings, computers, software, furniture, fixtures, supplies and all other personal property not normally included in inventory, used or held for use in connection with the Business, wherever located, set forth on Schedule 1.1(a) hereto; (b) Inventory. All of Seller's inventory used to produce cast iron and cast aluminum cookware (including raw materials, work-in-process, finished goods and parts) and supplies used or held for use in connection with the Business, wherever located; (c) Books, Records, Drawings and Similar Property. All operating data, books and records of Seller which are necessary to the operation of the Business, wherever located, including, without limitation, customer lists, accounting and financial records, employee records, credit information, invoices, correspondence, engineering blueprints, drawings, designs, patterns, processes, sales and marketing materials, formulae, trade secrets and know-how, and other similar property and rights; (d) Leases. All of Seller's right, title and interest in certain leases and any improvements thereon as set forth on Schedule 1.1(d) hereto; (e) Contracts. All oral and written contracts, purchase commitments and other agreements pertaining to the Business that are set forth on Schedule 1.1(e) hereto; (f) Real Property and Improvements. All of Seller's right, title and interest in the real property and improvements listed on Schedule 1.1(f); (g) Permits, Licenses and Authorizations. All governmental permits, licenses and authorizations of any kind whatsoever associated with the Business set forth on Schedule 1.1 (g) hereto; and (h) Other Assets. All other assets owned by Seller, wherever located (but excluding the assets identified in Section 1.2 hereof) relating to the Business, existing at the Closing, of every kind and nature, whether or not carried on the books of Seller, as set forth on Schedule 1.1(h). 1.2 Certain Excluded Assets. Notwithstanding Section 1.1 hereof, Seller shall not sell or transfer, and Buyer shall not purchase or accept, the following assets of Seller (collectively, the "Excluded Assets"): (a) Cash; (b) Any rights to receive refunds with respect to income taxes paid by or with respect to Seller; (c) All of Seller's accounts receivable associated with the business; (d) All right, title and interest to any employee benefit and pension plan, contracts or agreements relating to employees or former employees of Seller; (e) All rights of Seller under this Agreement and the agreements and instruments delivered by Buyer pursuant hereto; (f) Minute books, stock certificates, stock ledger, general ledger, check registers, sales journals, bank statements, payroll records, tax returns and all rights of Seller in and to the "Licensed Marks", the "Patent" and the "Products" (as such terms are defined in the license agreement attached hereto as Exhibit C); (g) Motor vehicles; (h) Any obligation, contract, commitment or other agreement relating to the Business not set forth or described in Sections 1.1 hereof, including that certain Trademark License Agreement dated November 22, 1993, by and between Seller and Innovation Group Ltd., the lease on the Sidney warehouse described in the Sublease attached hereto as Exhibit E and any agreement with the stockholders of Seller; and (i) Security deposits and any prepaid insurance to extent policies are not assumed by Buyer. 2. ASSUMPTION OF CERTAIN LIABILITIES: 2.1 Assumed Liabilities. Buyer shall assume and thereafter pay, perform or discharge when due the liabilities as described on the Schedule of Assumed Liabilities attached hereto as Schedule 2(a) (the "Assumed Liabilities") as of the Closing (except for any liability arising out of Seller's failure to perform its obligations thereunder to the extent such performance is due on or prior to the Closing). Buyer shall acquire the Acquired Assets free and clear of all liens, encumbrances, obligations and liabilities, except to the extent expressly assumed by Buyer or otherwise provided in or contemplated by this Agreement, as well as any and all liabilities that may arise after the Closing. 2.2 Buyer's Responsibility. Buyer shall have all responsibility to all creditors and all third parties and to Seller with respect to, and shall pay, discharge and perform when due the Assumed Liabilities. Buyer shall indemnify and hold Seller harmless from and against any and all costs, loss, liability (including reasonable attorneys' fees) arising from such obligations or liabilities. Buyer shall also be responsible for all liabilities and obligations incurred in connection with the operation of the Business after the date hereof, including liability for taxes relating to any period after the date hereof, and for any liability arising out of an Occurrence (as defined in Section 2.3 (d) hereof) which takes place after the date hereof. Real estate taxes on the real property included in the Acquired Assets (the "Real Property") will be prorated to August 1, 1996. 2.3 Non-Assumed Liabilities. Seller shall remain liable and responsible for the liabilities and obligations of the Business not specifically assumed by Buyer hereunder (collectively, the "Non-Assumed Liabilities"), including without limitation: (a) The contracts, commitments and agreements which are Excluded Assets under Section 1.2 (h) hereof; (b) Liability for accrued vacation pay as of August 1, 1996; (c) Post-retirement life, health and disability insurance benefits, including but not limited to those specified in Section 7.3 hereof; (d) Liability for all actions, suits, claims, proceedings or investigations involving the Business which were either (i) instituted or asserted prior to the date hereof, including without limitation those listed on Schedules 5.4, 5.6 and 5.11 (a)(iii) and (iv) hereto, or (ii) arise out of any Occurrence (defined as of the date of injury, death, damage, loss or destruction of property giving rise to a claim) which takes place prior to the date hereof, including in each case all workers' compensation claims; (e) Liability for severance pay; (f) Responsibility or liability associated with the "employee benefit plans" listed on Schedule 5.11(f); and (g) All taxes relating to any period prior to the date hereof, including but not limited to, (i) federal, state and local income taxes and state or local income based franchise taxes, (ii) taxes relating to the real property prorated to the date hereof and (iii) FICA and other sate or federal payroll taxes and withholding taxes. 3. PURCHASE PRICE FOR THE ACQUIRED ASSETS. The Purchase Price for the Acquired Assets will be Four Million Dollars ($4,000,000), payable by Buyer to Seller as follows: (a) One Million Dollars ($1,000,000) cash payable by wire transfer in immediately available funds delivered at the Closing to an account designated by the Seller in Section 4.2 and (b) a Promissory Note in the amount of Three Million Dollars ($3,000,000) delivered at the Closing, substantially in the form of Exhibit A (the "Promissory Note"), secured by a mortgage on the real property listed on Schedule 1.1(f) and a security interest in all other Acquired Assets. The purchase price will be reduced by an amount equal to the Book Value of any packaging inventory returned to Seller by Buyer, which amount will be set off against the final payment or payments due under the Promissory Note as more fully provided therein. 4. CLOSING AND PAYMENT OF THE PURCHASE PRICE. 4.1 Closing. Subject to the satisfaction of the conditions precedent of Buyer and Seller set forth in Article 10 and Article 11, the Closing of the transactions contemplated hereby (the "Closing") shall be held at the offices of Vorys, Sater, Seymour and Pease in Columbus, Ohio, on August 16, 1996, to be effective as of August 1, 1996. 4.2 Payment of Purchase Price. At the Closing, Buyer shall deliver to Seller, against transfer of title to the Acquired Assets, the Purchase Price for the Acquired Assets by wire transfer the sum of One Million Dollars ($1,000,000) to the Seller's account at Harris Trust and Savings Bank, 111 West Monroe Street, Chicago, IL 60690, GHC Account #268-5600, Routing ABA #071 000 288 and delivery of the Promissory Note. 4.3 Transfer of Acquired Assets. At the Closing, Seller shall transfer to Buyer all right, title and interest in and to the Acquired Assets as provided herein. Said transfer shall be effected by the delivery to Buyer of fully executed bills of sale, endorsements, assignments and other good and sufficient instruments of conveyance and transfer, all in form and substance reasonably satisfactory to Buyer and its counsel. 4.4 Assumption of Liabilities. At the Closing, Buyer shall, upon the request of Seller, execute and deliver assumption of liabilities agreements, assuming and undertaking to perform and pay when due the Assumed Liabilities, and instruments granting security interests to Seller all in form and substance reasonably satisfactory to Seller and its counsel. 5. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and warrants as follows: 5.1 Organization and Qualification of Seller. Seller is duly organized, validly existing and in good standing under the laws of the State of Delaware and it is duly authorized to do business in the State of Ohio. Seller has requisite corporate power and authority to own or lease all of its properties and assets relating to the Business and to conduct the Business in the manner and in the places where such properties are owned or leased or the Business is now conducted. 5.2 Authority of Seller. This Agreement and each of the agreements and other documents and instruments delivered or to be delivered to Buyer pursuant to, or as contemplated in this Agreement will constitute, when so delivered, the valid and binding obligations of Seller and shall be enforceable in accordance with their respective terms except insofar as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting creditor's rights generally and except as to the availability of equitable remedies. Upon approval of this Agreement and the transactions contemplated hereby by Seller's Board of Directors, the execution, delivery and performance of this Agreement and each of the agreements and other documents and instruments delivered or to be delivered to Buyer by Seller will have been duly authorized by all necessary action of Seller and will be within Seller's corporate powers. Upon approval of this Agreement and the transactions contemplated hereby by Seller's Board of Directors, the execution, delivery and performance of this Agreement or any other agreement, document or instrument by Seller will not, with the passage of time, or the giving of notice, or both: (a) result in a breach of, or constitute a default, or result in any right of termination, or other effect adverse to Seller or the Acquired Assets, under any indenture or loan or credit agreement of Seller, or any other agreement, lease or instrument to which Seller is a party or by which any of the Acquired Assets is bound or affected; (b) result in, or require, the creation or imposition of any mortgage, deed of trust, pledge, lien, security interest or other charge or encumbrance or claim of any nature whatsoever on the Acquired Assets; (c) result in a violation of, or default under any law, rule, or regulation, or any order, writ, judgment, injunction, decree, determination or award now in effect having applicability to Seller or to the Acquired Assets; (d) violate any provisions of the Certificate of Incorporation or By-Laws of Seller; or (e) require any approval, consent or waiver of, or filing with, any person or entity, private or governmental other than the persons listed on Schedule 5.2(e) hereto. 5.3 Assets. (a) Title. Seller owns all of the Acquired Assets, free and clear of all liens, pledges, mortgages, leases, security interests, options, or any other material encumbrances or imperfections of title, except for those items listed on the Schedule of Liens attached hereto as Schedule 5.3(a) and, as to Real Property, current taxes and assessments not yet due and payable and easements, conditions and restrictions contemplated by Section 7.4 hereof. (b) Inventory. Finished goods, work-in-process, raw materials and component parts being acquired by Buyer will be usable and/or salable in the ordinary course of business. 5.4 Litigation. There is no action, suit, investigation or proceeding pending before any Court or governmental agency against Seller, and, to Seller's knowledge, there is no threatened action, suit, investigation or proceeding, including any bankruptcy proceeding against Seller, except as set forth on the Schedule of Litigation attached hereto as Schedule 5.4. 5.5 Leases. Attached hereto as Schedule 1.1(d) is a description of each lease (whether oral or written) which shall be assigned to and assumed by Buyer hereunder and under which Seller is the lessee of personal or real property. A true, correct and complete copy of each written lease identified in Schedule 1.1(d) has been delivered to Buyer, and Buyer hereby acknowledges such receipt. All rentals due under the leases have been paid and there exists no default under the terms of any such lease, and no event has occurred which, upon the passage of time or giving of notice, or both, would result in any event of default or prevent Seller from exercising and obtaining the benefits of any options or other rights contained therein. Seller has all right, title and interest of the lessee under the terms of each lease, free and clear of all encumbrances, and all such leases are valid and in full force and effect. None of the leases is terminable by the Lessor as a result of the transactions contemplated by this Agreement. 5.6 Contracts and Commitments. Schedule 1.1(e) hereto sets forth a true, complete and correct list of all of Seller's contracts which shall be assigned to and assumed by Buyer hereunder ("Contract(s)"). All such Contracts were made at arms' length and were not entered into with (a) any officer or director of Seller or (b) any entity which Seller controls or in which Seller has any direct or indirect interest. Each Contract is in full force and effect, and Seller is not in material default under any such Contract, nor has any event occurred which, with the passage of time or the giving of notice, or both, would constitute a material default thereunder, or cause the acceleration of any obligation of Seller, or result in the creation of any lien, charge or encumbrance whatsoever upon the Acquired Assets. Except as set forth on Schedule 5.6 hereto, no third party is in material default under any Contract made with Seller or any obligation owed to Seller, nor has any event occurred which, with the passage of time or giving of notice, or both, would constitute a material default thereunder or cause the acceleration of any obligation of Seller, or result in the creation of any lien, charge or encumbrance whatsoever upon the Acquired Assets. 5.7 Tax Matters. There are no tax liens upon or pending or, to the best of Seller's knowledge, threatened against Seller with respect to the Acquired Assets. Seller has made all withholdings and deposits of tax as required by federal, state or local laws. 5.8 Undisclosed Liabilities. Seller does not have, and will not have on the Closing, any liabilities or obligations of any kind or amount secured by the Acquired Assets, whether accrued, absolute, contingent or otherwise, except such as are being discharged at the Closing or assumed by Buyer. To the best of Seller's knowledge, except for the Assumed Liabilities or as otherwise disclosed in this Agreement or in the Schedules hereto, there are no liabilities of the Seller or any kind whatsoever, whether or not accrued or fixed, absolute or contingent, determined or determinable, nor is there any condition or circumstance existing or which has existed, and no event shall have occurred which could reasonably be expected to result in any such liability which is or could be binding upon or become a liability of the Buyer or upon the Acquired Assets. 5.9 Brokers or Finders. Seller shall be responsible for the fees of any broker or finder in connection with the sale of the Acquired Assets; provided, however, that such fees shall not exceed, in the aggregate, Four Hundred Thousand Dollars ($400,000). 5.10 Outside Contractors and Vendors. Schedule 1.1(h) hereto sets forth a true, complete and correct list of all persons other than Seller who have possession of any assets of Seller used or held for use in the Business, including vendors and contractors, with the assets and their locations set forth thereon. 5.11 Labor Matters. (a) With respect to the Business prior to the Closing: (i) No present or former employee of Seller has any claim against Seller (whether under federal or state law, under any employee agreement or otherwise) on account of or for (A) overtime pay, other than overtime pay for the current payroll period, (B) wages or salaries (excluding wages or salaries for the current payroll period), (C) vacations, time off or pay in lieu of vacation or time off, or (D) any violation of any statute, ordinance or regulation relating to minimum wages or maximum hours of work, except as disclosed on Schedule 5.4; (ii) No person or party (including, but not limited to, governmental agencies of any kind) has any claim, and there is no basis for any claim, against Seller arising out of any statute, ordinance or regulation relating to discrimination of employees or employment practices or occupational or safety and health standards; (iii) There is not pending or, to the best of Seller's knowledge, threatened any labor dispute, strike or work stoppage involving Seller's employees, except as set forth on Schedule 5.11(a)(iii); (iv) There is not pending or, to the best of Seller's knowledge, threatened any charge or complaint against Seller by or before the National Labor Relations Board or any representative thereof, or any comparable state agency or authority, except as set forth on Schedule 5.11(a)(iv); (v) Seller has no employment agreements or other agreements that contain any severance or termination pay liabilities or obligations, nor any bonus, vacation, deferred compensation, profit-sharing, pension, retirement or other employee benefit plans affecting persons employed or retained by Seller, except as set forth on Schedule 5.11(a)(v) hereto; (vi) Seller has made all required payments to the appropriate governmental authorities with respect to applicable unemployment compensation reserve accounts; and (vii) Except as set forth on Schedule 5.11(a)(vii), no key employee has notified Seller that he or she intends to terminate his or her employment as a result of the transactions contemplated by this Agreement. (b) Schedule 5.11(b) is a list of union contracts of the Seller with the employees of the business. (c) Schedule 5.11(c) hereto is a list of all hourly paid employees employed by Seller, which list identifies each such person's primary responsibilities with the Business as of the date hereof and the hourly rate of compensation for each such employee. (d) Schedule 5.11(d) hereto is a list of all salaried employees employed by Seller, which list identifies the current position of each such employee and the current rate of compensation for each such employee. (e) Schedule 5.11(e) hereto is a list of the accrued vacation pay as of the date hereof for each employee of Seller. (f) Each "employee benefit plan" (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") established or maintained by Seller and which covers any of Seller's employees is listed on Schedule 5.11(f) hereto. Copies of each such employee benefit plan and the summary plan description thereof have been previously delivered to Buyer. 5.12 Environmental Matters. To the best of Seller's knowledge, there is no material chemical contamination on the facility or violation of applicable environmental laws other than as set forth on Schedule 5.12(a) or in the Phase I Environmental Site Assessment Report, dated June 1, 1989, and performed by Applied Environmental Technologies Corporation, attached hereto and incorporated herein as Schedule 5.12(b), except that Seller acknowledges that hazardous waste had been disposed of in the "on-site dump" referred to in the first paragraph of "6.0 Summary of Key Findings" in the report. Seller is in the process of performing a hazardous waste closure of the "on-site dump" pursuant to a Closure Plan approved by the Ohio Environmental Protection Agency. 5.13 Insurance. All insurance policies providing insurance coverage with respect to the Business, the Acquired Assets and employees of Seller are set forth on Schedule 5.13 hereto. 5.14 Financial Information. The financial information for the business previously provided by Seller to Buyer is consistent with the books and records of Seller with respect to the Business. 5.15 Compliance with Laws. Except as disclosed in this Agreement or the Schedules hereto, Seller has complied in all material respects with all laws, regulations, rules and orders of any governmental department or agency or any other commission, board, agency or instrumentality, federal, state or local, or other requirements of law affecting the Business and operations thereof, and Seller is not in default in any material respect under or in violation of any provision of any federal, state or local law, regulation, rule or order applicable to the Business. 5.16 Licenses and Rights. Seller possesses all franchises, licenses, easements, permits and other authorizations from governmental or regulatory authorities and from all other persons or entities that are necessary to permit it to engage in the Business as presently conducted in and at all locations and places where it is presently operating. Such franchises, licenses, permits and other authorizations are listed on Schedule 1.1(g). 5.17 Conduct of Business. The Acquired Assets, together with the rights granted or assigned by Seller to Buyer pursuant to this Agreement, the license agreement attached hereto as Exhibit C and the sublease attached hereto as Exhibit E constitute all of the assets necessary to the operation of the Business as presently conducted. 5.18 Product Safety. (a) To Seller's current actual knowledge, without investigation, Seller has not been required to file any notification or other report with, or provide information to, the United States Consumer Product Safety Commission, or any product safety agency, commission, board or other body of any jurisdiction, concerning actual or potential hazards with respect to any product manufactured, distributed or sold by Seller as part of the Business being acquired by Buyer; and (b) Seller has not made any knowing misrepresentation or knowingly furnished any information containing any material omission to any product safety testing laboratory or similar organization with respect to any product manufactured, distributed or sold by Seller as part of the Business being acquired by Buyer. 5.19 Real Property. To Seller's current actual knowledge, without investigation, with respect to the Real Property: (a) Seller has adequate permanent rights of ingress to and egress from the Real Property; (b) All water, sewer, gas, electric, telephone, drainage and other utility equipment, facilities and services required by law or necessary for the operation of the Real Property as it is now being operated are installed and connected pursuant to valid permits, are adequate to service the Real Property and are in operating condition; and no fact or condition exists which would result in the termination or impairment of the furnishing of service to the Real Property of water, sewer, gas, electric, telephone, drainage and other such utility services; and (c) Seller has received no notice from any insurance carrier, nor does Seller have knowledge of, defects or inadequacies in the Real Property which, if not corrected, would result in termination of insurance coverage or increase in the costs thereof. 6. REPRESENTATIONS AND WARRANTIES OF BUYER. As of the date hereof and as of the Closing, Buyer represents and warrants as follows: 6.1 Organization of Buyer. Buyer is duly organized, validly existing and in good standing under the laws of the State of Ohio. 6.2 Authority of Buyer. This Agreement and each of the agreements and other documents and instruments delivered or to be delivered to Seller pursuant to or as contemplated in this Agreement will constitute, when so delivered, the valid and binding obligation of Buyer and shall be enforceable in accordance with their respective terms except insofar as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting creditor's rights generally and except as to the availability of equitable remedies. The execution, delivery and performance of this Agreement and each of the agreements, documents and instruments delivered or to be delivered to Seller by Buyer, have been duly authorized by all necessary corporate action of Buyer and are within Buyer's corporate powers. The execution, delivery and performance of this Agreement or any other agreement, document or instrument by Buyer does not and will not, with the passage of time, or the giving of notice, or both: (a) result in a breach of, or constitute a default, or result in any right of termination, or other effect adverse to Buyer or the Acquired Assets, under any indenture or loan or credit agreement of Buyer or any other agreement, lease or instrument to which Buyer is a party; (b) result in a violation of, or default under any law, rule, or regulation, or any order, writ, judgment, injunction, decree, determination or award now in effect having applicability to Buyer or to the Acquired Assets; (c) violate any provisions of the Certificate of Incorporation or By-Laws of Buyer; or (d) require any approval, consent or waiver of, or filing with, any person or entity, private or governmental. 6.3 Brokers or Finders. Buyer has not retained, employed or used any broker or finder in connection with the purchase of the Acquired Assets or in connection with the negotiation thereof. 7. COVENANTS OF SELLER AND BUYER. 7.1 Management Prior to Closing. On the date hereof, Seller and Buyer will execute and deliver a Management Agreement in the form of Exhibit B hereto pursuant to which Buyer will manage the Business until the Closing. During such period, Buyer shall advise Seller of all material developments related to Buyer's management. Seller shall fully cooperate with Buyer in connection therewith. If this Agreement is terminated pursuant to Section 12.1, Seller shall reimburse Buyer for (i) preapproved capital expenditures as specified in the Management Agreement and (ii) unreimbursed payments by Buyer in respect of any liability of Buyer which is not an Assumed Liability. 7.2 Pension Plans - Union Employees. Seller will continue to accrue pension benefits under its existing defined benefit pension plans under the agreements with the unions listed on Schedule 5.11(b) until December 31, 1996, and then shall freeze the benefits for the employees covered by such union contracts as if the defined benefit pension plans were terminated on that date. 7.3 Post-Retirement Life, Health and Disability Insurance Benefits. Seller shall be liable for any post-retirement life, health and disability benefits for all employees who have left employment prior to the date hereof and who have met Seller's eligibility requirements for such benefits. 7.4 Title Insurance. Seller shall furnish, and Buyer shall pay for, an owner's title insurance commitment and policy in the amount of One Million Dollars ($1,000,000). The title evidence shall be certified within 30 days prior to Closing with endorsement as of 8:00 A.M. on the business day prior to the date of Closing, all in accordance with the standards of the Columbus Bar Association, and shall show in Seller marketable title in fee simple free and clear of all liens and encumbrances except; (a) those created by or assumed by Buyer; (b) those specifically set forth in this contract; (c) zoning ordinances; (d) legal highways; and (e) covenants, restrictions, conditions and easements of record which do not unreasonably interfere with present lawful use. Buyer shall pay any additional costs incurred in connection with mortgage insurance issued for the protection of Buyer's lender. If Buyer desires a survey, Buyer shall pay the cost thereof. 7.5 Notice of Breach by Seller. Seller covenants and agrees that, during the period from the date hereof through and including the Closing, to the extent Seller obtains knowledge that any of the representations or warranties contained in Article 5 hereof would be incorrect in any respect were those representations or warranties made immediately after such knowledge was obtained, Seller shall notify Buyer in writing promptly of such fact and exercise its best efforts to remedy same. 7.6 Consummation of Agreement by Seller. Seller shall use its best efforts to satisfy all conditions to the Closing that are within its control to enable the transactions contemplated by this Agreement to be fully carried out. 7.7 Notice of Breach by Buyer. Buyer covenants and agrees that, during the period from the date hereof through and including the Closing, to the extent Buyer obtains knowledge that any of the representations or warranties contained in Articles 5 and 6 hereof would be incorrect in any respect were those representations or warranties made immediately after such knowledge was obtained, Buyer shall notify Seller in writing promptly of such fact and exercise its best efforts to remedy same. 7.8 Consummation of Agreement by Buyer. Buyer shall use its best efforts to satisfy all conditions to the Closing that are within its control to enable the transactions contemplated by this Agreement to be fully carried out. 7.9 Payment of Obligations Retained by Seller. Subject to its right to contest any debt or claim in good faith, Seller shall pay all obligations of the Business retained by it in accordance with reasonable business practice. 8. INDEMNIFICATION. 8.1 Indemnification by Seller. Subject to Section 8.5, Seller hereby agrees to defend, indemnify and hold Buyer and its officers, directors, shareholders, employees, and agents harmless from and against any damages, liabilities, losses and expenses (including, without limitation, reasonable attorneys' fees) of any kind or nature whatsoever which may be sustained or suffered by Buyer or its officers, directors, shareholders, employees and agents, arising out of, based upon or by reason of: (a) the operation of the Business prior to the date hereof; (b) the Non-Assumed Liabilities; (c) a breach of any representation or warranty, or a failure to perform any agreement or covenant, made by Seller in this Agreement or in any Exhibit, Schedule, certificate or other document delivered hereunder, or (d) any claim, action or proceeding asserted or instituted growing out of any matter or thing covered by such breached representations, warranties, agreements or covenants. 8.2 Indemnification by Buyer. Subject to Section 8.5, Buyer hereby agrees to defend, indemnify and hold Seller and its officers, directors, shareholders, employees and agents, harmless from and against any damages, liabilities, losses and expenses (including, without limitation, reasonable attorneys' fees) of any kind or nature whatsoever which may be sustained or suffered by Seller or its officers, directors, shareholders, employees and agents, arising out of, based upon, or by reason of: (a) the operation of the Business from and after the date hereof; (b) the Assumed Liabilities; (c) a breach of any representation or warranty, or a failure to perform any agreement or covenant, made by Buyer in this Agreement or in any Exhibit, Schedule, certificate or other document delivered hereunder, or (d) any claim, action or proceeding asserted or instituted growing out of any matter or thing covered by such breached representations, warranties, agreements or covenants. 8.3 Limitation on Claims. All claims pursuant to Section 8.1 for damages, liabilities, losses and expenses in the aggregate shall not exceed the sum of the Purchase Price payable pursuant hereto and the amounts payable pursuant to the License Agreement referred to in Section 9.5 hereof, it must be brought no later than one (1) year from Closing. 8.4 Notice Defense of Claims. Each party to this Agreement shall give prompt written notice to the other party of each claim for indemnification hereunder specifying the amount and nature of the claim, and of any matter which is likely to give rise to an indemnification claim. The indemnifying party has the right to control, at its expense, the defense of any such matter or its settlement. The indemnifying party will use its reasonable efforts to reach an expeditious resolution of any such matter. Failure to give timely notice of a matter which may give rise to an indemnification claim shall not affect the rights of the indemnified party to collect such claims from the indemnifying party so long as such failure to so notify does not materially adversely affect the indemnifying party's ability to defend such claim against a third party. No indemnifying party, in the defense of any claim or litigation, shall, except with the consent of an indemnified party, which consent shall not be unreasonably withheld or delayed, consent to entry of any judgment or enter into any settlement by which such indemnified party is to be bound and which judgment or settlement does not include, as an unconditional term thereof, the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation. 8.5 Additional Indemnification for Environmental Remediation. Notwithstanding the limitations set forth in Section 8.3, Seller shall indemnify and hold harmless Buyer from and against any and all claims, actions, causes of action, costs, expenses, damages and other charges which Buyer incurs or is required to expend in relation to the cleanup or reduction or securing of contamination that existed on the real property being acquired as part of the Acquired Assets (the "Premises") on the day of Closing, including all lawful storage, treatment and/or disposal of removed contamination, Premises restoration following such activities, payment of natural resource and other damages (all of such activities being called "Remediation"), and all third party and professional costs, including engineering, consultant and attorneys' fees associated with or necessary in order to carry out such Remediation; PROVIDED, HOWEVER, that this indemnification shall be enforceable only with respect to expenditures incurred by Buyer as a result of Buyer being ordered to conduct such Remediation either by an agency or court of competent jurisdiction of either the State of Ohio or of the United States of America, or by both, and Seller shall not be required to indemnify Buyer for any expenditures made for any Remediation or partial Remediation conducted other than pursuant to such an order or orders. Buyer shall give Seller written notice of any written threat or proposal to issue an order for Remediation by any such governmental entity as soon as practicable but in any event within 30 days of Buyer's receipt of such order or threat or proposal for such order of Remediation (or such lesser period as shall be necessary to provide Seller an adequate opportunity to respond thereto) and at least 30 days before Buyer agrees to any such order. Buyer shall not be required to negotiate, contest, challenge or appeal any such order or proposed order, or part thereof, by any such governmental entity. However, if Seller wishes to negotiate, contest, challenge or appeal any such order or threat or proposal for such order of Remediation, it may do so at its sole risk and cost, and Buyer agrees to be named as a party and to sign whatever documents and take whatever actions are reasonable and necessary to assist Seller in such negotiation, contest, challenge or appeal, but Buyer shall be free without imperiling its right to enforce this indemnification to perform all lawful orders that have not been properly stayed. Seller's obligation to indemnify Buyer under this Section 8.5 shall terminate and be unenforceable from and after the tenth anniversary of the Closing, and from and after said tenth anniversary, Buyer shall indemnify Seller from and against all liability for such Remediation. 9. MISCELLANEOUS COVENANTS AND AGREEMENTS OF SELLER AND OF BUYER. 9.1 Consents of Third Parties. To the extent that any transfer or assignment of any contract, license, permit, or right to be transferred and assigned to Buyer as provided herein, shall require the consent of the other party thereto, or of any other person or governmental or other authority, this Agreement shall not constitute an agreement to assign the same if any attempted assignment would constitute a breach thereof or have any other adverse effect thereon. Seller agrees that it will use reasonable efforts before and after the Closing to obtain and deliver the consent of the other parties and the approvals of other persons or authorities, to the extent necessary, to the assignment of all such contracts, leases, licenses, permits, commitments or rights to Buyer. If such consent or approval is not obtained at the Closing and the Buyer elects to proceed with the Closing, Seller shall act as Buyer's agent, to the extent permissible under the applicable document, in order to obtain for Buyer the benefits thereunder, and Seller will cooperate with Buyer in any reasonable arrangement designed to provide for Buyer all benefits under any such contracts, licenses, leases, commitments or rights. Nothing herein shall be deemed a waiver by Buyer of its right to receive at the Closing an effective assignment of all of the Acquired Assets unless it elects to proceed with the Closing. 9.2 Taxes, Assessments, and Charges. Each of Seller and Buyer shall be responsible for, and shall pay when due, any sales, use, transfer or stamp taxes which may be imposed on the sale of the Acquired Assets by a seller or buyer, respectively, as is customary in such transactions. 9.3 Warranty Program. Products manufactured by Seller as part of the Business being acquired by Buyer are subject to certain express and implied warranties. Buyer shall assume and pay, perform and discharge all warranty obligations of Seller; provided, however, that for a period of 18 months from and after the date hereof, Seller shall, upon receipt of evidence satisfactory to it of return of a product and shipment of a replacement product and Buyer's costs, reimburse Buyer the actual costs incurred by Buyer in satisfying the warranty. From and after the end of such 18 month period, Buyer shall be solely responsible for discharging all warranty claims arising out of the Business, regardless of the date of manufacture or sale of the product which is the subject of a warranty claim. 9.4 Settlement of Claims. Seller and Buyer agree that notwithstanding the responsibility of Seller therefor, it is advantageous to both of them to settle claims (other than warranty claims covered by Section 9.3 hereof) presented by trade customers within twelve (12) months after the date hereof arising out of products sold or services rendered prior to the date hereof in a manner satisfactory to the trade customers, and, in order to facilitate settlement of any claim, Buyer, upon providing written notice to Seller and if Seller does not object for valid reasons within five (5) business days after such notice is given, may use its best efforts to repay, replace or grant credit in respect of products sold or services rendered prior to the date hereof, and Seller will reimburse Buyer, within thirty (30) days of demand upon Seller, for its incremental costs of producing such replacement products, and any reasonable out-of-pocket expenses incurred in making any such repairs or replacement or in granting any such credit. Claims presented by trade customers after 12 months shall be the sole responsibility of Buyer. 9.5 Sales Orders and Purchase Orders. At the Closing, Seller will furnish Buyer with a Schedule identified as Schedule 9.5 of the purchase orders and sales orders which are to be assigned to and paid or performed by Buyer after the Closing. 9.6 License Agreement. At the Closing, Seller and Buyer shall execute and deliver a License Agreement, in the form of Exhibit C hereto. 9.7 Purchase of Products from Buyer. Seller shall cause its subsidiary Chicago Cutlery etc., Inc., an Indiana corporation, to purchase, for a period of three years from and after the date of Closing, not less than One Million Dollars ($1,000,000) of products from Buyer at a purchase price equal to the lower of (a) Buyer's cost plus 30% or (b) Buyer's price, net of all allowances, to its lowest net-priced customer. Seller shall have the right to request and receive information establishing Buyer's cost or price to its lowest priced customer and shall have the right to audit Buyer's books and records to verify such information. 9.8 Support Services Agreement. At the Closing, Seller and Buyer will execute and deliver a Support Services Agreement in the form of Exhibit D hereto. 9.9 Sidney Warehouse Sublease. At the Closing, Seller and Buyer will execute and deliver a Sublease in the form of Exhibit E hereto. 9.10 Allocation of Purchase Price to Acquired Assets. The purchase price shall be allocated to the Acquired Assets as determined by Buyer, subject to the consent of Seller which shall not be unreasonably withheld. 9.11 Non-Exclusive License. Seller hereby grants to Buyer the non-exclusive right to use Seller's name and logo (Trademark Registration No. 1,140,402) in sales and marketing materials and invoices and other forms sold pursuant to Section 1.1(c), packaging sold pursuant to Section 1.1(b) and cast iron and cast aluminum cookware sold pursuant to Section 1.1(b) or manufactured and sold by Buyer from and after the Closing for the period of one year from the date of the Closing. From and after the first anniversary of the Closing, Buyer shall not use Seller's name or logo in any manner whatsoever. 9.12 Covenant Not to Compete. Except as provided in Section 9.7, Seller agrees that, for a period of five years from and after the Closing, it will not engage in the manufacture or sale of heavy gauge cast aluminum cookware, heavy gauge anodized aluminum cookware or cast iron cookware. For purpose of this section, "heavy gauge" means ten gauge or heavier. 10. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER TO CLOSE. The obligation of Buyer to purchase the Acquired Assets as contemplated hereby and to perform its other obligations hereunder to be performed on or after the Closing, shall be subject to the fulfillment, on or prior to the Closing, unless otherwise waived in writing by Buyer, of the following conditions: 10.1 Financing. Buyer shall have obtained financing of the transaction contemplated by this Agreement on commercially reasonable terms customary for such transactions. 10.2 Representations and Warranties. The representations and warranties of Seller set forth in Sections 5.1 and 5.2 hereof shall be true and correct in all material respects at the Closing as if made on and as of such date, and Buyer shall have received a certificate to such effect, executed by the President or any Vice President of Seller, dated as of the date of Closing, in form reasonably satisfactory to Buyer and its counsel. 10.3 Performance of Covenants. Seller shall have performed all of its obligations contained in this Agreement to be performed on or prior to the Closing, and Buyer shall have received a certificate to such effect, executed by the President or any Vice President of Seller, dated as of the Closing, in form reasonably satisfactory to Buyer and its counsel. 10.4 Threatened or Pending Proceedings. No proceedings shall have been initiated or threatened by any governmental department, commission, bureau, board, agency or instrumentality or any other bona fide third party seeking to enjoin or otherwise restrain or to obtain an award for damages in connection with the consummation of the transactions contemplated hereby. 10.5 Corporate Action. All corporate action necessary to authorize (a) the execution, delivery and performance by Seller of this Agreement and any other agreements or instruments contemplated hereby to which Seller is a party and (b) the consummation of the transactions and performance of Seller's other obligations contemplated hereby and thereby, shall have been duly and validly taken by the Board of Directors of Seller, and Buyer shall have been furnished with copies of all applicable resolutions, certified by the Secretary or Assistant Secretary of Seller. 10.6 Delivery of Certificates and Documents to Buyer. Seller shall have delivered, or caused to be delivered, to Buyer the certificates as to the legal existence and good standing of Seller issued by the Secretary of State of the State of Delaware. 10.7 Additional Agreements. Seller shall have executed and delivered to Buyer the License Agreement, in the form of Exhibit C hereto, the Support Services Agreement in the form of Exhibit D hereto and the Sublease in the form of Exhibit E hereto. 10.8 Deed. Seller shall convey to Buyer marketable title in fee simple to the Real Property by transferable and recordable general warranty deed, free and clear of all liens and encumbrances not excepted by this contract. 10.9 Legal Opinion. Buyer shall have received the written opinion of Raymond J. Kulla, Esq., counsel to Seller, dated as of the Closing, in substantially the form of Exhibit F hereto. 10.10 Consents. Seller shall have received the approvals, consents and authorizations of all third persons and governmental agencies necessary for the sale and transfer of the Acquired Assets to Buyer. 10.11 Releases. Seller shall have received and delivered to Buyer releases of all liens on the Acquired Assets. 11. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER TO CLOSE. The obligation of Seller to sell the Acquired Assets as contemplated hereby, and to perform its other obligations hereunder to be performed on or after the Closing, shall be subject to the fulfillment, on or prior to the Closing, unless otherwise waived in writing by Seller, of the following conditions: 11.1 Representations and Warranties. The representations and warranties of Buyer set forth in Article 6 hereof shall be true and correct in all material respects on the Closing as if made on and as of such date, and Seller shall have received a certificate to such effect, executed by the President or any Vice President of Buyer, dated as of the Closing, in form reasonably satisfactory to Seller and its counsel. 11.2 Performance of Covenants. Buyer shall have performed all of its obligations contained in this Agreement to be performed on or prior to the Closing, and Seller shall have received a certificate to such effect, executed by the President or any Vice President of Buyer, dated as of the Closing, in form reasonably satisfactory to Seller and its counsel. 11.3 Threatened or Pending Proceedings. No proceedings shall have been initiated or threatened by any governmental department, commission, bureau, board, agency or instrumentality or any other bona fide third party seeking to enjoin or otherwise restrain or to obtain an award for damages in connection with the consummation of the transactions contemplated hereby. 11.4 Corporate Action. All corporate action, necessary to authorize (a) the execution, delivery and performance by Buyer or Seller of this Agreement and any other agreements or instruments contemplated hereby to which Buyer or Seller is a party and (b) the consummation of the transactions and performance of Buyer's and Seller's other obligations contemplated hereby and thereby, shall have been duly and validly taken by Buyer and Seller, and Seller shall have been furnished with copies of all applicable resolutions adopted by the Board of Directors or the Executive Committee of Buyer, certified by the Secretary or Assistant Secretary of Buyer. 11.5 Delivery of Certificates and Documents to Seller. Buyer shall have delivered, or caused to be delivered, to Seller certificates as to the legal existence and good standing of Buyer issued by the Secretary of State of the State of Ohio. 11.6 Additional Agreements. Buyer and its affiliated purchaser, if any, under Section 13.11 hereof shall have executed and delivered to Seller the License Agreement, in the form of Exhibit C hereto, the Support Services Agreement in the form of Exhibit D hereto, the Sublease in the form of Exhibit E hereto and instruments evidencing the liens, mortgages and security interests securing the Promissory Note. 11.7 Legal Opinion. Seller shall have received the written opinion of Persky, Shapiro, Salim, Esper, Arnoff & Nolfi Co. LPA, counsel to Buyer, dated as of the Closing, in form and substance reasonably acceptable to Seller and its counsel. 11.8 Consents. Buyer shall have received the approvals, consents and authorizations of all third parties and governmental agencies necessary for the purchase and transfer of the Acquired Assets to Buyer. 12. TERMINATION OF AGREEMENT. 12.1 Termination. At any time prior to the Closing, this Agreement may be terminated (a) by the written consent of Buyer and Seller, (b) by Seller if there has been a material misrepresentation, breach of warranty or breach of covenant by Buyer in its representations, warranties and covenants set forth herein, (c) by Buyer, after giving Seller written notice thereof and providing Seller with thirty (30) days within which to cure such matter, if there has been a material misrepresentation, breach of warranty or breach of covenant by Seller in its representations, warranties and covenants set forth herein, (d) by Seller if the conditions stated in Article 11 have not been satisfied at or prior to the Closing or (e) by Buyer if the conditions stated in Article 10 have not been satisfied at or prior to the Closing. 12.2 Effect of Termination. If this Agreement shall be terminated as provided in Section 12.1, or as provided in Section 12.4 below, all obligations of the parties hereunder shall terminate without liability of any party to the other; provided, however, such termination shall not affect the rights and obligations of the parties under the Management Agreement attached hereto as Exhibit B. 12.3 Right to Proceed. Anything in this Agreement to the contrary notwithstanding, if any of the conditions specified in Article 10 hereof have not been satisfied at or prior to the Closing, Buyer shall have the right to proceed with the transactions contemplated hereby without waiving any of its rights hereunder; and if any of the conditions specified in Article 11 hereof have not been satisfied at or prior to the Closing, Seller shall have the right to proceed with the transactions contemplated hereby without waiving any of its rights hereunder. 12.4 Automatic Termination. This Agreement and the transactions contemplated hereby shall automatically terminate on August 16, 1996 if the Closing does not occur on or prior to that date; provided, however, nothing herein shall be deemed to limit or otherwise affect the liability of any party hereto whose default hereunder has caused the Closing not to have occurred by such date. 13. MISCELLANEOUS. 13.1 Expenses. Buyer and Seller shall each pay the fees and expenses of their respective representatives and legal counsel incurred in connection with the transactions contemplated by this Agreement. 13.2 Risk of Loss. All risk of loss with respect to the Acquired Assets between the date hereof and the Closing shall be upon Buyer. 13.3 Notices. Any demand, notice or other communication required or permitted under or in connection with the transactions contemplated by this Agreement shall be in writing and shall be deemed to be effective when delivered in person, by facsimile transmission, overnight carrier or deposited in the United States mail and sent by certified or registered mail, return receipt requested, postage prepaid, addressed as follows (or to such other address as may be provided by the party to be notified on ten days prior written notice to the other party hereto): To Seller: General Housewares Corp. 1536 Beech Street P. O. Box 4066 Terre Haute, IN 47804 Attn: Paul A. Saxton, President With a copy to: Raymond J. Kulla, Esq. General Housewares Corp. 1536 Beech Street Terre Haute, IN 47804 To Buyer: Peter J. Slyman, President Wagnerware Corporation 800 West Liberty Street Medina, OH 44256 With a copy to: Thomas Esper Persky, Shapiro, Salim, Esper, Arnoff & Nolfi Co. LPA 1410 Terminal Tower Cleveland, OH 44113 13.4 Governing Law. This Agreement shall in all respects be enforced, interpreted and construed in accordance with and governed by the laws of the State of Ohio. 13.5 Waiver. Except as set forth in Section 8.3, the failure of any party hereto at any time or times hereafter to exercise any right, power, privilege or remedy hereunder or to require strict performance by the other or another party of any of the provisions, terms or conditions contained in this Agreement or in any other document, instrument or agreement contemplated hereby or delivered in connection herewith shall not waive, affect, or diminish any right, power, privilege or remedy of such party at any time or times thereafter to demand strict performance thereof; and no rights of any party hereto shall be deemed to have been waived by any act or knowledge of such party, or any of its agents, officers or employees, unless such waiver is contained in an instrument in writing, signed by such party. No waiver by any party hereto of any of its rights on any one occasion shall operate as a waiver of any other of its rights or any of its rights on a future occasion. 13.6 Section Headings. The section headings in this Agreement are for convenience of reference only and shall not be deemed to be a part of this Agreement or to alter or affect any provisions, terms or conditions contained herein. 13.7 Exhibits and Schedules. Any Exhibits and/or Schedules referenced herein shall be deemed to be attached hereto and made a part hereof. All references herein to this Agreement shall include all Schedules, Exhibits, certificates and other documents required to be delivered hereunder. 13.8 Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If any portion of this Agreement is declared invalid for any reason in any jurisdiction, such declaration shall have no effect upon the remaining portions of this Agreement which shall continue in full force and effect as if this Agreement had been executed with the invalid portions thereof deleted. Furthermore, the entirety of this Agreement shall continue in full force and effect in all other jurisdictions. 13.9 Entire Understanding. This Agreement contains the entire understanding between the parties hereto with respect to the transactions contemplated hereby, and such understanding shall not be modified except in writing signed by or on behalf of the parties hereto. 13.10 Binding Effect. This Agreement shall be binding upon and shall inure to the exclusive benefit of the parties hereto and their respective successors and assigns. This Agreement is not intended to, nor shall it, create any rights in any other party. 13.11 Assignability. Neither this Agreement nor any rights or obligations hereunder are assignable by Seller or Buyer except Buyer may assign its right to purchase the real property identified on Schedule 1.1(f) to an affiliate of Buyer, provided the affiliate unconditionally guarantees and secures the obligations of Buyer under this Agreement. 13.12 Remedies. Neither Seller nor Buyer waives any right or remedy available to it to enforce this Agreement or to seek damages for the breach of the representations and warranties contained herein except to the extent that such right or remedy is specifically waived or limited in this Agreement. 13.13 Best Knowledge of Seller. The term "best of Seller's knowledge" means knowledge of the Executive Officers of Seller of such circumstances as would ordinarily lead on investigation, in the exercise of reasonable diligence, to a knowledge of the actual facts. 13.14 Access to Records. Subsequent to Closing, Seller shall maintain in its possession, and intact, all records not delivered to Buyer pursuant hereto and relating to the Business created at or prior to the Closing for a period of five (5) years. After the Closing, Buyer shall have access during normal business hours to all such records, upon reasonable request therefore, and may from time to time copy any such records as Buyer sees fit. Seller may, at its option, during such five (5) year period, deliver any of such records to Buyer. For a period of five (5) years after Closing, Seller shall have reasonable access to records delivered to Buyer hereunder after having identified a business necessity for such access, such as the preparation of tax returns. 13.15 Counterparts. This Agreement may be signed in any number of counterparts each of which shall be deemed to be an original and all of which together shall constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers as of the day and year first written above. SELLER: GENERAL HOUSEWARES CORP. By:/s/ Paul A. Saxton Name: Paul A. Saxton Title: President BUYER: WAGNERWARE CORPORATION By:/s/ Peter J. Slyman Name: Peter J. Slyman Title: President EX-3.(II) 5 AMENDED BYLAWS GENERAL HOUSEWARES CORP. BYLAWS As Amended November 12, 1996 1. Offices Principal Office. The principal office or place of business of the Corporation in the State shall be the Corporation's registered office in the City of Wilmington, County of New Castle, State of Delaware. Other Offices. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or as the business of the Corporation may from time to time require. Stockholders Place of Meeting. All meetings of the stockholders shall be held at the registered office of the Corporation in the State of Delaware or at such other place within or without the State of Delaware as may from time to time be designated by the Board of Directors or as stated in the notice of such meeting. Annual Meetings. The annual meeting of the stockholders of the Corporation shall be held on such date and at such time each year as may be designated by resolution of the Board of Directors from time to time for the purpose of electing directors for the ensuing year and for the transaction of such other proper business, notice of which is given in the notice of such meeting. Notice of Stockholder Nominations of Directors. Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation, except as may be otherwise provided in the Certificate of Incorporation of the Corporation. Nominations of persons for election to the Board of Directors may be made at any annual meeting of stockholders (a) by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (b) by any stockholder of the Corporation (i) who is a stockholder of record on the date of such stockholder's giving of the notice provided for in this Section 3 and on the record date for the determination of stockholders entitled to vote at such annual meeting and (ii) who complies with the applicable requirements of this Section 3, including the giving of timely notice in proper written form to the Secretary of the Corporation. To be timely, a stockholder's notice to the Secretary must be delivered to or mailed and received at the principal executive offices of the Corporation not less than 90 days nor more than 130 days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is called for a date that is not within 30 days before or after such anniversary date, the notice must be so received not later than the close of business on the 10th day following the day on which notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever first occurs. In no event shall the public disclosure of an adjournment of an annual meeting commence a new time period for the giving of a stockholder's notice. To be in proper written form, a stockholder's notice to the Secretary must set forth (a) as to each person whom the stockholder proposes to nominate for election as a director (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by the person and (iv) any other information relating to the person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations promulgated thereunder; and (b) as to the stockholder giving the notice (i) the name and record address of such stockholder, (ii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by such stockholder, (iii) a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, (iv) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (v) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected. No person nominated by a stockholder shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 3. If the Chairman of the meeting determines that a nomination was not made in accordance with this Section 3, the Chairman shall declare to the meeting that the nomination was defective and it shall be disregarded. Notwithstanding anything in this Section 3 to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and there is no public disclosure by the Corporation naming all of the nominees for director or specifying the size of the increased Board of Directors at least 100 days prior to the first anniversary of the preceding year's annual meeting, a stockholder's notice required by this Bylaw shall be considered timely--but only with respect to nominees for any new positions created by such increase--if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public disclosure is first made by the Corporation. Notice of Stockholder Proposals of Business. No business may be transacted at an annual meeting of stockholders, other than business that is either (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly brought before the annual meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (c) otherwise properly brought before the annual meeting by any stockholder of the Corporation (i) who is a stockholder of record on the date of such stockholder's giving of the notice provided for in this Section 4 and on the record date for the determination of stockholders entitled to vote at such annual meeting and (ii) who complies with the applicable requirements of this Section 4, including the giving of timely notice in proper written form to the Secretary of the Corporation. To be timely, a stockholder's notice to the Secretary must be delivered to or mailed and received at the principal executive offices of the Corporation not less than 90 days nor more than 130 days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is called for a date that is not within 30 days before or after such anniversary date, the notice must be so received not later than the close of business on the 10th day following the day on which notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever first occurs. In no event shall the public disclosure of an adjournment of an annual meeting commence a new time period for the giving of a stockholder's notice. To be in proper written form, a stockholder's notice to the Secretary must set forth as to each matter (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and record address of such stockholder, (iii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by such stockholder, (iv) a description of all arrangements or understandings between such stockholder and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business and (v) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting. No business shall be conducted at the annual meeting of stockholders except business brought before the annual meeting in accordance with this Section 4; provided, however, that, once business has been properly brought before the annual meeting, nothing in this Section 4 shall be deemed to preclude discussion by any stockholder of any such business. If the Chairman of the meeting determines that business was not properly brought before the meeting, the Chairman shall declare to the meeting that the business was not properly brought before the meeting and such business shall not be transacted. Definition. For purposes of Sections 3 and 4 of this Article II, "public disclosure" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act. Special Meetings. Special meetings of the stockholders for any purpose or purposes may be called by the Board of Directors, the Chairman of the Board or the President, and shall be called by the Chairman of the Board, the President or Secretary upon receipt of a request in writing signed by a majority of the Board of Directors. Such request shall state the purpose or purposes of the proposed meeting and the matters proposed to be acted upon thereat. Notice of Meetings. Not less than 10 days nor more than 60 days written or printed notice of every meeting of stockholders, stating the place, date and time thereof, and, in the case of a special meeting (and the annual meeting, if so required by law), the purpose or purposes for which the meeting is called, shall be given to each stockholder entitled to vote thereat by leaving the same with him or at his residence or usual place of business or by mailing it, postage prepaid, and addressed to him at his address as it appears on the records of the Corporation. No notice of the time, date, place or purpose of any meeting of stockholders need be given to any stockholder entitled to such notice who attends in person or is represented by proxy (except when the stockholder attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business on the grounds that the meeting is not lawfully called or convened), or to any stockholder entitled to such notice who, in writing executed and filed with the records of the meeting either before or after the time thereof, waives such notice. Neither the business to be transacted at, nor the purpose of, any annual or special meeting of stockholders need be specified in any such written waiver of notice. Any previously scheduled meeting of the stockholders may be postponed, and any special meeting of the stockholders may be cancelled, by resolution of the Board of Directors upon public notice given prior to the date scheduled for such meeting of stockholders. Record Dates. The Board of Directors may fix in advance a date, not exceeding 60 days preceding the date of any meeting of stockholders, any dividend payment date, any date of any other distribution, any date for the allotment of any rights, or any date for the exercise of any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, and, in the case of any meeting of stockholders, not less than 10 days, as a record date for the determination of the stockholders entitled to notice of or to vote at such meeting, or entitled to receive such dividends or other distributions or rights, or to exercise such rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, as the case may be; and only stockholders of record on such dates shall be entitled to notice of and to vote at such meeting, or to receive such dividends or other distributions or rights, or to exercise such rights in respect of any change, conversion or exchange of stock, as the case may be. Nothing in this Section 8 shall in any way be construed to change the procedure for setting the record date and for determining the effectiveness of stockholder action by written consent as set forth in Sections 9 and 11 of this Article II. Record Date for Action by Written Consent. In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. The Board of Directors shall promptly, but in all events within 10 days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board of Directors within 10 days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in Delaware, its principal place of business or to any officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors for corporate action to be authorized or taken by stockholders' written consent is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action. Inspectors of Written Consent. In the event of the delivery, in the manner provided by Section 9 of this Article II, to the Corporation of the requisite written consent or consents to take corporate action and/or any related revocation or revocations, the Corporation shall engage independent inspectors of elections for the purpose of promptly performing a ministerial review of the validity of the consents and revocations. For the purpose of permitting the inspectors to perform such review, no action by written consent without a meeting shall be effective until such date as the independent inspectors certify to the Corporation that the consents represent at least the minimum number of votes necessary to take the corporate action. Nothing contained in this Section 10 shall in any way be construed to suggest or imply that the Board of Directors or any stockholder shall not be entitled to contest the validity of any consent or revocation thereof, whether before or after certification by the independent inspectors, or to take any other action (including, without limitation, the commencement, prosecution or defense of any litigation with respect thereto, and the seeking of injunctive relief in such litigation). Effectiveness of Written Consent. Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the date the earliest dated written consent was received in accordance with Section 9 of this Article II, written consents signed by a sufficient number of holders to take such action are delivered to the Corpora tion in the manner prescribed in Section 9 of this Article II. List of Stockholders Entitled to Vote. The officer who has charge of the stock ledger of the Corporation shall prepare and make, or cause to be prepared and made, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order and showing the address and number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either at a place within the city where the meeting is to be held or, if such place is not specified in the notice of such meeting, at the place where the meeting is to be held; and such list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Quorum, Adjournment of Meetings. The presence in person or by proxy of the holders of record of a majority of the shares of stock of the Corporation issued and outstanding and entitled to be voted thereat shall constitute a quorum at all meetings of stockholders, except as otherwise may be required by law. The Chairman of the meeting or the holders of record of a majority of the shares of stock present in person or by proxy and entitled to be voted thereat shall have power to adjourn the meeting from time to time, without notice other than an announcement at the meeting, whether or not there is such a quorum. No notice of the time and place of adjourned meetings need be given except as required by law. At any such adjourned meeting at which the requisite number of shares of stock entitled to be voted thereat shall be present in person or by proxy, any business may be transacted which might have been transacted at the meeting as originally called and notified. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of such meeting unless the Board of Directors fixes a new record date for the adjourned meeting. If an adjournment of any meeting of stockholders shall be for more than 30 days, or if after adjournment a new record date is fixed by the Board of Directors for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to notice of or to vote at the meeting. Conduct of Meetings. The meetings of stockholders shall be presided over by the Chairman of the Board or the President, or if neither be present, by a Vice President, or if none of them is present, by a chairman to be elected at the meeting. The Secretary of the Corporation, if present, shall act as secretary of such meeting, or if he is not present, an Assistant Secretary shall so act, or if neither the Secretary nor an Assistant Secretary is present, then the meeting shall elect its secretary. Voting and Inspectors. Each stockholder entitled to vote at a meeting of stockholders or to consent or dissent to corporate action in writing without a meeting may vote, consent or dissent in person or by proxy, but no proxy need be sealed, witnessed or acknowledged. No proxy may be voted upon or acted upon after three years from its date unless such proxy shall provide for a longer period. All elections shall be had and all questions decided by a majority of the votes cast at a duly constituted meeting, except as otherwise required by the Certificate of Incorporation, these Bylaws or by specific statutory provision superseding requirements contained in the Certificate of Incorporation or in these Bylaws. The Board of Directors shall, in advance of any meeting of the stockholders, appoint one or more inspectors of election as required by, and who shall act pursuant to, applicable law. No candidate for the office of director shall be appointed such inspector or judge. All elections of directors shall be by written ballot. The chairman of the meeting may cause the vote to be taken on any other matters to be by written ballot. Validity of Proxies and Ballots. At every meeting of the stockholders, all proxies shall be received and taken in charge of, and all ballots, if any, shall be received and canvassed by, the inspectors of election, who shall decide all questions touching the qualification of voters, the validity of the proxies, and the acceptance or rejection of votes. Board of Directors General Powers. The business, property and affairs of the Corporation shall be conducted and managed under the direction of a Board of Directors. The Board of Directors shall have and exercise, or cause to be exercised, in the name and on behalf of the Corporation all the powers of the Corporation, except those conferred upon or reserved to stockholders expressly by statute, the Certificate of Incorporation or these Bylaws. Number and Tenure of Office. The number of directors which shall constitute the whole Board shall be such as from time to time may be fixed by resolution of the Board of Directors at a duly held regular or special meeting, but in no case shall the number be less than three. The directors shall be classified with respect to the time for which they shall severally hold office by dividing them into three classes, each class to consist of such number of directors as the directors may determine, provided that the whole number of directors of any class shall not exceed the whole number of directors of any other class by more than one. At each annual meeting, the successors to the directors of the class whose terms shall expire in that year shall be elected to hold office for a term of three years from the date of their election and until the election and qualification of their successors, so that the term of office of one class of directors shall expire in each year. Notwithstanding the provisions of this Section 2 of Article III, whenever the holders of any series of nonvoting Preferred Stock shall be entitled, voting separately as a class, to elect directors, the terms of all directors elected by such holders shall expire on the next succeeding annual meeting of stockholders. Directors need not be stockholders. Vacancies. In case of any vacancy in the Board of Directors through death, resignation, removal, increase in the number of directors, or other cause, such vacancy may be filled by the vote of a majority of the remaining directors, although such majority shall not constitute a quorum. Any successor director so elected shall hold office for the unexpired term of the director whose office has been vacated. Removal of Directors. Any director may be removed from office for cause, at any time, by the vote of at least two-thirds of the whole Board of Directors or by the vote at a special meeting, called for such purpose, of the holders of at least two-thirds of all shares outstanding and entitled to vote for the election of directors. Place of Meeting; Maintenance of Books and Records. The directors may hold their meetings, whether regular or special, and keep the books, records of account and stock ledgers of the Corporation either within or without the State of Delaware, at any office or offices of the Corporation or at any place as they may from time to time by resolution determine, or, in the case of meetings, as shall be specified or fixed in the respective notices, waivers of notice, or consents with respect thereto. Regular Meetings. Regular meetings of the Board of Directors shall be held at such times and at such places either within or without the State of Delaware as the directors may from time to time determine. No notice of any regular meeting need be given to any director, except as otherwise provided in Article XI hereof. The annual meeting of the Board of Directors shall be held as soon as practicable after the annual meeting of the stockholders for the election of directors, and no notice of such meeting shall be necessary if held at the same place as the annual meeting of stockholders following such meeting, except as otherwise provided in Article XI hereof. Special Meetings. Special meetings of the Board of Directors may be held from time to time at such places either within or without the State of Delaware upon call of the Chairman of the Board, the President or by a quorum of the Board. Notice of each special meeting of the Board shall be given to each director personally or by telephone, electronic or facsimile transmission or by written notice sent or mailed, postage prepaid, to each director at his address as it appears on the records of the Corporation, not less than 48 hours before such meeting or such shorter period before such meeting as the person or persons calling such meeting deem appropriate in the circumstances. No notice need be given to any director who attends the meeting in person or to any director who, in writing executed and filed with the records of the meeting either before or after the holding thereof, waives such notice. Such notice or waiver of notice may but need not state the business to be transacted at, or the purpose or purposes of, such meeting. Quorum. One-third of the total number of directors shall constitute a quorum for the transaction of any and all business, provided that a quorum shall in no case be less than two directors. If at any meeting of the Board there shall be less than a quorum present, a majority of those present shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting of the time and place of such adjourned meeting, until a quorum shall have been obtained. The act of the majority of the directors present at any meeting at which there is a quorum shall be the act of the Board, except as may be otherwise specifically provided by applicable law, by the Certificate of Incorporation or by these Bylaws. Committees. The Board of Directors may at any time, by the affirmative vote of a majority of the whole Board, appoint from among its members an Executive Committee composed of two or more directors, and may delegate by resolution to such Executive Committee, in the intervals between meetings of the Board of Directors, any or all of the powers of the Board of Directors respecting the business, affairs and property of the Corporation, and the power to authorize the seal of the Corporation to be affixed to all papers which may require it; provided, however, that nothing herein shall be deemed to prohibit the designation of additional committees for limited and appropriate purposes with such memberships as may be provided in the resolution of the Board of Directors designating any such committee. In the absence or disqualification of any member of any such committee at a meeting thereof, the member or members thereof present at such meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint a member of the Board of Directors to act at such meeting in the place of any such absent or disqualified member. All such committees shall report the action taken or principal matters considered to the Board of Directors at the next succeeding regular or special meeting, and any action by the committees which in all cases shall be by a majority of those present at a meeting at which there is a quorum shall be subject to revision and alteration by the Board of Directors, provided that no rights of third persons shall be affected by any such revision or alteration. The Board of Directors may at any time, by the affirmative vote of a majority of the whole Board, remove, with or without cause, any member of any such committee and fill vacancies therein. Compensation. Directors and members of any committee of the Corporation contemplated by these Bylaws or otherwise provided for by resolution of the Board of Directors who are not salaried officers of the Corporation shall, in consideration of their serving as such, receive from the Corporation such amount per annum or such fees for attendance at meetings of the Board of Directors or of such committee, or both, as the Board may from time to time determine. All directors and members of any such committee shall receive reimbursement for the reasonable expenses incurred by them in connection with their attendance at meetings or the performance of their duties. Nothing contained herein shall preclude any director or any member of such committee from serving the Corporation in any other capacity and receiving compensation therefor. Officers Election; Appointment; Vacancies. The executive officers of the Corporation shall be chosen by the Board of Directors as soon as may be practicable after the annual meeting of stockholders. Such executive officers may include a Chairman of the Board, a Vice Chairman of the Board and one or more Vice Presidents, and shall include a President, a Secretary and a Treasurer. The Board of Directors may also in its discretion appoint Assistant Secretaries, Assistant Treasurers, a Controller, Assistant Controllers, and other officers, agents and employees, or may, by resolution, delegate this authority to the Chairman of the Board or President of the Corporation. The Board of Directors, or the Chairman of the Board or President if authorized as aforesaid, may fill any vacancy which may occur in any office, except that vacancies in executive offices shall be filled by the Board of Directors. Any number of offices, except those of President and Vice President and those of Treasurer and Controller, may be held by the same person, but no officer shall execute, acknowledge or verify any instrument in more than one capacity, if such instrument is required by law, these Bylaws or otherwise to be executed, acknowledged or verified by two or more officers. Tenure of Office; Removal. Executive officers, and other officers if to be elected by the Board, shall be elected at the first meeting of the Board of Directors, or as soon thereafter as practicable, after the annual meeting of stockholders to hold office until their successors are chosen and qualified. Other officers, if appointed by the Chairman of the Board or President as provided in Section 1 of this Article IV, shall have a tenure in office until their successors be chosen and qualified. Executive officers and any other officers, agents, or employees elected by the Board may be removed from office at any time with or without cause by the Board of Directors, and officers, agents or employees appointed by the Chairman of the Board or President, as aforesaid, may be removed from office at any time with or without cause by such officers or by the Board of Directors, but any such removal shall be without prejudice to contractual rights with the Corporation, if any, of the officers, agents or employees so removed. Powers and Duties. Officers, agents and employees shall have such powers and duties in the management of the business, property and affairs of the Corporation as are provided by statute, the Certificate of Incorporation and these Bylaws, as well as such powers and duties as generally pertain to their respective offices and such powers and duties as may from time to time be conferred by resolution of the Board of Directors. Salaries. The salaries of all officers, agents and employees of the Corporation shall be fixed by or pursuant to the authority of the Board of Directors. Fidelity Bonds. The Board of Directors may require any officer, agent or employee of the Corporation to give bond for the faithful discharge of his duties, in such sum and of such character as the Board of Directors may from time to time prescribe. Checks, Notes, Etc. All checks and drafts on the Corporation's bank accounts and all bills of exchange and promissory notes, and all acceptances, guarantees, obligations, evidences of indebtedness and other instruments for the payment of money, and all certificates or other instruments representing the Corporation's stock or other securities, and any indentures, mortgages or agreements with respect thereto, shall be signed by such officer or officers, agent or agents, as shall be thereunto authorized from time to time by the Board of Directors. Capital Stock Certificate of Shares. The interest of each stockholder of the Corporation shall be evidenced by certificates for shares of stock in such form as the Board of Directors may from time to time prescribe, except insofar as provided by law. No certificate shall be valid unless it is signed by the Chairman of the Board, or the President or a Vice President, and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer of the Corporation and sealed with its seal (which seal may be in facsimile), and if such certificate is countersigned by a transfer agent or registered by a registrar (in each case other than the Corporation or its employees), the signatures of the aforesaid officers of the Corporation may be by facsimile. In the event that any such officer so signing a certificate manually or by facsimile is no longer an officer of the Corporation or holds a different office at the time the certificate is issued, such certificate may nevertheless be issued and, if so issued, shall have the same force and effect as if such officer held at such time the office held by him when so signing, whether manually or by facsimile, the certificate. Transfer of Shares. Shares of the Corporation shall be transferable on the books of the Corporation by the holder thereof in person or by his duly authorized attorney or legal representative, upon surrender and cancellation of certificates for the same number of shares of the same class or series, duly endorsed or accompanied by proper instruments of assignment and transfer, with such proof of the authenticity of the signature as the Corporation or its agents may reasonably require. The Board of Directors shall designate an officer of the Corporation to act as transfer clerk in the absence of the appointment of a transfer agent. Stock Ledgers. The stock ledgers of the Corporation, containing the names and addresses of the stockholders and the number of shares held by them respectively, shall be kept at the office of the Secretary of the Corporation, whether within or without the State of Delaware, in the custody of the transfer clerk or, if the Corporation employs a transfer agent, at the offices of such transfer agent, and shall during the usual business hours of every business day be open for inspection and for copying for any proper purpose by any person authorized by the laws of the State of Delaware and the Certificate of Incorporation to do so. Lost, Stolen or Destroyed Certificates. The Board of Directors may determine the conditions upon which a new certificate representing shares of any class or series may be issued in place of a certificate which is alleged to have been lost, stolen or destroyed; and may, in their discretion, require the owner of such certificate or his legal representative to give bond, with sufficient surety to the Corporation and the transfer agent, if any, to indemnify it and such transfer agent against any and all loss or claims which may arise by reason of the issue of a new certificate in the place of the one so lost, stolen or destroyed. Corporate Seal The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization, the words "Corporate Seal, Delaware," and such other inscriptions, if any, as the Board of Directors may from time to time determine. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. Fiscal Year The fiscal year of the Corporation shall cover such period of 12 calendar months as the Board of Directors may determine. In the absence of any such determination, the accounts of the Corporation shall be kept on a calendar-year basis. Voting the Stock of Other Corporations Any stock or other securities of other corporations, which may from time to time be held by the Corporation, may be represented and voted at any meeting of stockholders or security holders of such other corporations by the Chairman of the Board, the President, or any Vice President of the Corporation, or by proxy or proxies appointed by any such person, or otherwise pursuant to authorization thereunto given by resolution of the Board of Directors. Indemnification of Directors, Officers and Others Indemnification of Directors and Officers. The Corporation shall, to the fullest extent permitted by applicable law, indemnify any person (and the heirs, executors and administrators thereof) who was or is made, or threatened to be made, a party to or otherwise required to appear in an action, suit, matter or proceeding, or was or is otherwise involved with any agency or body, whether civil, criminal, administrative, arbitrative, or investigative, whether formal or informal, whether involving any actual or alleged breach of duty, neglect or error, any accountability, or any actual or alleged misstatement, misleading statement or other act or omission, whether involving conduct in any capacity or the person's status arising from any capacity, and whether brought or threatened in any court or administrative or legislative body or agency, including an action by or in the right of the Corporation to procure a judgment in its favor and an action by or in the right of any other corporation of any type or kind, domestic or foreign, or any partnership, joint venture, trust, employee benefit plan or other enterprise, which any director or officer of the Corporation is serving or served in any capacity at the request of the Corporation (individually and collectively, a "proceeding"), by reason of the fact that such person, his or her testator, intestate or other successor in interest is or was a director or officer of the Corporation, or is serving or served such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity, against judgments, fines, amounts paid in settlement, and costs, charges and expenses, including attorneys' fees, incurred therein or in any appeal thereof. Indemnification of Others. The Corporation shall indemnify other persons and reimburse the expenses thereof, to the extent required by applicable law, and may indemnify any other person to whom the Corporation is permitted to provide indemnification or the advancement of expenses, whether pursuant to rights granted pursuant to, or provided by, the Delaware General Corporation Law or other rights created by (i) a resolution of stockholders, (ii) a resolution of the Board of Directors, or (iii) an agreement providing for such indemnification, it being expressly intended that these Bylaws authorize the creation of other rights in any such manner. Advances or Reimbursement of Expenses. The Corporation shall, from time to time, reimburse or advance to any person referred to in Section 1, upon his or her good faith written request, the funds necessary for payment of expenses, including attorneys' fees, incurred in connection with any action, suit or proceeding referred to in Section 1, upon receipt of a written undertaking by or on behalf of such person to repay such amount(s) if a judgment or other final adjudication adverse to the director or officer establishes that (i) his or her acts were committed in bad faith or were the result of active and deliberate dishonesty and, in either case, were material to the cause of action so adjudicated, (ii) such person personally gained in fact a financial profit or other advantage to which he or she was not legally entitled, or (iii) his or her conduct was otherwise of a character such that Delaware law would require that such amount(s) be repaid. In connection with any request for advancement or reimbursement, the amount of expenses shall be presumed to be reasonable and necessarily incurred. Solely for purposes of the advancement or reimbursement of expenses that may be incurred, in connection with his or her appearance as a witness in a proceeding at a time when not a party, a person referred to in Section 1 of this Article X shall be deemed to be threatened to be made such a party. Service of Certain Entities Deemed Requested. Any director or officer of the Corporation serving (i) another corporation, of which a majority of the shares entitled to vote in the election of its directors is held , directly or indirectly, by the Corporation, or (ii) any employee benefit plan of the Corporation or any corporation referred to in clause (i), in any capacity shall be deemed to be doing so at the request of the Corporation. Referring to clause (i) of the preceding sentence, the provisions of this Article X shall apply only if and to the extent that, after the exertion of such efforts as shall be reasonable in the circumstances, the claimant is unable to obtain indemnification from such other corporation, or any other enterprise served by the claimant at the Corporation's request, or reimbursement from its insurer. Interpretation. Any person entitled to be indemnified or to the reimbursement or advancement of expenses as a matter of right pursuant to this Article X may elect, to the extent permitted by applicable law, to have the right to indemnification (or advancement of expenses) interpreted on the basis of the applicable corporate indemnification provisions or the applicable law in effect at the time of the occurrence of the event or events giving rise to the action, suit or proceeding, or on the basis of the applicable corporate indemnification provisions or the applicable law in effect at the time indemnification is sought. The rights referred to in the preceding sentence shall include any applicable provisions of the Certificate of Incorporation or these Bylaws. Indemnification Right. The right to be indemnified or to the reimbursement or advancement of expenses pursuant to this Article X (i) is a contract right pursuant to which the person entitled thereto may bring suit as if the provisions hereof were set forth in a separate written contract between the Corporation and the director or officer, (ii) is intended to be retroactive and shall be available with respect to events occurring prior to the adoption hereof, and (iii) shall continue to exist after the rescission or restrictive modification hereof with respect to events occurring prior thereto. Indemnification Procedure. Consistent with Section 1 of this Article X, the Corporation shall, promptly upon the submission of a request to be indemnified, take whatever steps may be prescribed by law, or otherwise may be necessary or appropriate, in order to authorize the requested indemnification. In connection therewith, it shall be presumed that the requester is entitled to be indemnified and that presumption shall be overcome only if indemnification is forbidden by an adverse judgement or other final adjudication directly establishing that the requester engaged in a form of improper conduct as specified in Section 1 of this Article X. Indemnification Claims. If a request to be indemnified or for the reimbursement or advancement of expenses pursuant hereto is not paid in full by the Corporation within 30 days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled also to be paid the expenses of prosecuting such claim. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of or reimbursement or advancement of expenses to the claimant is proper -- or cannot be provided -- in the circumstances, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant is not entitled to indemnification or to the reimbursement or advancement of expenses, shall be a defense to the action or create a presumption that the claimant is not so entitled. Limitation on Indemnification. Notwithstanding anything contained in this Article X to the contrary, except for proceedings to enforce rights to indemnification (which shall be governed by Section 8 of this Article X), the Corporation shall not be obligated to indemnify any director or officer in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors. Severability. If this Article X or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director or officer of the Corporation as to liabilities incurred in connection with any proceeding, including an action by or in the right of the Corporation, to the full extent permitted by any applicable portion of this Article X that shall not have been invalidated. Amendments The Bylaws of the Corporation may be altered, amended, added to or repealed at any annual or special meeting of stockholders at which a quorum is present or represented, provided notice of the proposed alteration, amendment, addition or repeal is set forth in the notice of such meeting, by the affirmative vote of a majority of the shares of stock present or represented at such meeting and entitled to vote thereat, or by the Board of Directors at any regular or special meeting of the Board if notice of the proposed alteration, amendment, addition or repeal is contained in the notice of any such meeting or in the waivers or consents with respect thereto. Any action of the Board of Directors of the Corporation taken under this Article XI may be altered, amended, added to or repealed by the stockholders at such meeting or at any other meeting. In no event shall the Board of Directors of the Corporation have power to alter, amend, add to or repeal this Article XI. -----END PRIVACY-ENHANCED MESSAGE-----