-----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, GiGhgfw3LDooNSmP6I+iHlHRJmm4eMjZyQ2gnMVNHa1Gzqv4mYNKlDhaFyDr+vv9 0SgPcZccspHivZ5YOo9c7w== 0000950131-98-004408.txt : 19980727 0000950131-98-004408.hdr.sgml : 19980727 ACCESSION NUMBER: 0000950131-98-004408 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19980724 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980724 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: THOMAS INDUSTRIES INC CENTRAL INDEX KEY: 0000097886 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC LIGHTING & WIRING EQUIPMENT [3640] IRS NUMBER: 610505332 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-05426 FILM NUMBER: 98670789 BUSINESS ADDRESS: STREET 1: 4360 BROWNBORO ROAD STREET 2: SUITE 300 CITY: LOUISVILLE STATE: KY ZIP: 40207 BUSINESS PHONE: 5028934600 MAIL ADDRESS: STREET 1: 4360 BROWNBORO ROAD STREET 2: SUITE 300 CITY: LOUISVILLE STATE: KY ZIP: 40207 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report July 24, 1998 THOMAS INDUSTRIES INC. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation) 1-5426 61-0505332 (Commission File Number) (IRS Employer Identification No.) 4360 Brownsboro Road, Suite 300 Louisville, Kentucky 40207 (Address of principal (Zip Code) executive offices) Registrant's telephone number, including area code 502/893-4600 ITEM 5. Other Events. On April 28, 1998, the registrant, Thomas Industries Inc. ("Thomas"), entered into the following agreements: (1) Master Transaction Agreement dated April 28, 1998 by and between Thomas and The Genlyte Group Incorporated ("Genlyte"); (2) Limited Liability Company Agreement of GT Lighting, LLC dated April 28, 1998 by and among Thomas, Genlyte and GT Lighting, LLC (the "Company"); and (3) Capitalization Agreement dated April 28, 1998 by and among the Company and Thomas and certain of its Affiliates. In addition, Genlyte and the Company entered into the Capitalization Agreement dated April 28, 1998 by and between the Company and Genlyte, which is integral to the transaction contemplated by the foregoing agreements and is included herein. Copies of the above are filed herewith. On July 8, 1998, the Company changed its name to Genlyte Thomas Group LLC pursuant to a Certificate of Amendment to Certificate of Formation of GT Lighting, LLC. ITEM 7. Financial Statements and Exhibits. (c) Exhibits Exhibit Number Description 2.1 Master Transaction Agreement dated April 28, 1998 by and between Thomas Industries Inc. ("Thomas") and The Genlyte Group Incorporated ("Genlyte"). 2.2 Limited Liability Company Agreement of GT Lighting, LLC dated April 28, 1998 by and among Thomas, Genlyte and GT Lighting, LLC (the "Company"). 2.3 Capitalization Agreement dated April 28, 1998 by and among the Company and Thomas and certain of its Affiliates. 2.4 Capitalization Agreement dated April 28, 1998 by and between the Company and Genlyte. Registrant will furnish supplementally a copy of any omitted schedule to any of the agreements listed above to the Securities and Exchange Commission upon request. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THOMAS INDUSTRIES INC. (Registrant) By: /s/ Phillip J. Stuecker Phillip J. Stuecker, Vice President of Finance, Chief Financial Officer, and Secretary Dated: July 24, 1998 EX-2.1 2 MASTER TRANSACTION AGREEMENT EXHIBIT 2.1 MASTER TRANSACTION AGREEMENT BY AND BETWEEN THOMAS INDUSTRIES INC. AND THE GENLYTE GROUP INCORPORATED ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE II RELATED AGREEMENTS AND CLOSING . . . . . . . . . . . . . . . . 4 2.1. Related Agreements . . . . . . . . . . . . . . . . . . . . . . 4 2.2. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 ARTICLE III REPRESENTATIONS AND WARRANTIES OF THOMAS . . . . . . . . . . . 5 3.1. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . 5 3.2. Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 3.3. Due Organization . . . . . . . . . . . . . . . . . . . . . . . 6 3.4. Brokers and Finders . . . . . . . . . . . . . . . . . . . . . 6 3.5. Opinion of Financial Advisor . . . . . . . . . . . . . . . . . 6 3.6. Information Supplied for Joint Proxy Statement . . . . . . . . 6 3.7. Representations and Warranties . . . . . . . . . . . . . . . . 6 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF GENLYTE. . . . . . . . . . . 7 4.1. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . 7 4.2. Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 4.3. Due Organization . . . . . . . . . . . . . . . . . . . . . . . 7 4.4. Brokers and Finders . . . . . . . . . . . . . . . . . . . . . 7 4.5. Opinion of Financial Advisor . . . . . . . . . . . . . . . . . 8 4.6. Information Supplied for Joint Proxy Statement . . . . . . . . 8 4.7. Representations and Warranties . . . . . . . . . . . . . . . . 8 ARTICLE V ADDITIONAL AGREEMENTS. . . . . . . . . . . . . . . . . . . . . 8 5.1. Interim Conduct of Business. . . . . . . . . . . . . . . . . . 8 5.2. Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 5.3. Stockholders' Approvals . . . . . . . . . . . . . . . . . . . 11 5.4. Agreement To Cooperate . . . . . . . . . . . . . . . . . . . . 12 5.5. Public Statements . . . . . . . . . . . . . . . . . . . . . . 12 5.6. Notifications . . . . . . . . . . . . . . . . . . . . . . . . 12 5.7. Joint Proxy Statement; Stockholders Meetings . . . . . . . . . 12 5.8. Alternative Proposals. . . . . . . . . . . . . . . . . . . . . 13 ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF THOMAS. . . . . . . . . 14 6.1. Stockholder Approval . . . . . . . . . . . . . . . . . . . . . 14 6.2. Accuracy of Warranties and Performance of Covenants. . . . . . 14 6.3. No Pending Action . . . . . . . . . . . . . . . . . . . . . . 14 6.4. Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 6.5. Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . 14 6.6. Condition of Business and Assets . . . . . . . . . . . . . . . 14 6.7. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 15 6.8. Financing . . . . . . . . . . . . . . . . . . . . . . . . . . 15 6.9. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 15 6.10. Related Agreements . . . . . . . . . . . . . . . . . . . . . . 15 6.11. Satisfaction of Counsel . . . . . . . . . . . . . . . . . . . 15 ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF GENLYTE. . . . . . .. . 15 7.1. Stockholder Approval . . . . . . . . . . . . . . . . . . . . . 15 7.2. Accuracy of Warranties and Performance of Covenants. . . . . . 15 7.3. No Pending Action . . . . . . . . . . . . . . . . . . . . . . 16 7.4. Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 7.5. Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . 16 7.6. Condition of Business and Assets . . . . . . . . . . . . . . . 16 7.7. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 16 7.8. Financing . . . . . . . . . . . . . . . . . . . . . . . . . . 16 7.9. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 16 7.11. Related Agreements . . . . . . . . . . . . . . . . . . . . . . 17 7.12. Satisfaction of Counsel . . . . . . . . . . . . . . . . . . . 17 ARTICLE VIII TERMINATION BY PARTIES . . . . . . . . . . . . . . . . . . . . 17 8.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . 17 8.2. Termination Fees . . . . . . . . . . . . . . . . . . . . . . . 19 8.3. Effect of Termination . . . . . . . . . . . . . . . . . . . . 20 ARTICLE IX GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . 21 9.1. Amendments and Waiver . . . . . . . . . . . . . . . . . . . . 21 9.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 9.3. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 9.4. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 22 9.5. Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 9.6. Successors and Assigns . . . . . . . . . . . . . . . . . . . . 22 9.7. Entire Transaction . . . . . . . . . . . . . . . . . . . . . . 22 9.8. Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . 23 9.9. Other Rules of Construction . . . . . . . . . . . . . . . . . 23 9.10. Partial Invalidity . . . . . . . . . . . . . . . . . . . . . . 23 9.11. Authorship . . . . . . . . . . . . . . . . . . . . . . . . . . 23 MASTER TRANSACTION AGREEMENT This Master Transaction Agreement is made and entered into this 28th day of April, 1998 by and between THOMAS INDUSTRIES INC., a Delaware corporation ("THOMAS"), and THE GENLYTE GROUP INCORPORATED, a Delaware corporation ("GENLYTE"). WHEREAS, upon the terms and subject to the conditions set forth herein, the parties will form and capitalize GT Lighting, LLC, a Delaware limited liability company (the "COMPANY"), to engage in the business, operations and activities related to the manufacture, sale, marketing and distribution of consumer, commercial, industrial and outdoor lighting (collectively, the "BUSINESS") pursuant to a Limited Liability Company Agreement dated April 28, 1998 by and among Thomas, Genlyte and the Company (the "LLC AGREEMENT"); WHEREAS, upon the terms and subject to the conditions set forth herein and in the Related Agreements, the Company will acquire the assets to be contributed by and assume certain liabilities of (i) Thomas pursuant to the Capitalization Agreement dated April 28, 1998 by and between the Company and Thomas (the "THOMAS CAPITALIZATION AGREEMENT") and (ii) Genlyte pursuant to the Capitalization Agreement dated April 28, 1998, by and between the Company and Genlyte (the "GENLYTE CAPITALIZATION AGREEMENT" and together with the Thomas Capitalization Agreement, the "CAPITALIZATION AGREEMENTS"); and WHEREAS, the parties desire to make certain representations and warranties to one another and provide for the coordination of the closing of all the transactions contemplated by this Agreement and the Related Agreements; NOW, THEREFORE, in consideration of the premises and promises herein contained, the parties agree as set forth below: ARTICLE I DEFINITIONS 1.1. DEFINED TERMS. For purposes of this Agreement, unless the language or context clearly indicates that a different meaning is intended, the words, terms and phrases defined in this Section have the meanings set forth below: (A) "AFFILIATE" means, when used with reference to a specified Person, any Person that directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with the specified Person. (B) "AGREEMENT" means this Master Transaction Agreement, as amended from time to time, including all schedules and exhibits hereto and documents referred to herein or therein. (C) "ALTERNATIVE PROPOSAL" has the meaning assigned to such term in Section 5.8(b). (D) "ALTERNATIVE TRANSACTION" has the meaning assigned to such term in Section 5.8(a). (E) "BUSINESS" has the meaning assigned to such term in the preamble. (F) "BUSINESS DAY" means any day on which commercial banks in the City of New York, New York, are open for business. (G) "CAPITALIZATION AGREEMENTS" has the meaning assigned to such term in the preamble. (H) "CHANGE OF CONTROL" shall mean with respect to a party the occurrence of any of the following events: (i) an acquisition (whether directly from such party or otherwise) of any voting securities of such party (the "VOTING SECURITIES") by any "PERSON" (as the term is used for purposes of Section 13(d) or 14(d) of the Exchange Act), immediately after which such Person has or would have "BENEFICIAL OWNERSHIP" (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty-five percent (25%) or more of the combined voting power of such party's then outstanding Voting Securities; (ii) the individuals who, as of the date hereof, are members of the Board of Directors of such party (the "INCUMBENT BOARD"), cease for any reason to constitute at least seventy-five percent (75%) of the Board of Directors; provided, however, a "Change of Control" shall not be deemed to occur if any of such individuals voluntarily fail to stand for re-election or resign or if the aggregate number of Directors is reduced so long as, after giving effect to such failure to stand for re-election, resignation or reduction, at least seventy-five percent (75%) of the remaining Directors are members of the Incumbent Board; provided, further however, that if the election, or nomination for election, by such party's stockholders of any new director was approved by a vote of at least seventy-five percent (75%) of the Incumbent Board, such new director shall, for purposes of this Agreement, be considered a member of the Incumbent Board; provided further, however, that an individual shall not be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened "ELECTION CONTEST" (as described in Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors (a "PROXY CONTEST") including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest; (iii) the consummation of, or agreement to consummate: (A) a merger, consolidation, share exchange or reorganization of such party in which the stockholders of such party, as a group, cease to hold a majority equity interest in the surviving entity; (B) a liquidation or dissolution of or appointment of a receiver, rehabilitator, conservator or similar person for, such party; or (C) the sale or other disposition of all or substantially all of the assets of such party to any Person (other than a transfer to a subsidiary); or (iv) any other change in "control" of such party. For purposes of the immediately preceding clause, the term "control" shall have the meaning ascribed thereto pursuant to Rule 405 of the rules and regulations of the SEC promulgated pursuant to the Securities Act of 1933, as amended. (I) "CLOSING" has the meaning assigned to such term in Section 2.2. (J) "CLOSING DATE" has the meaning assigned to such term in Section 2.2. (K) "COMPANY" means GT Lighting, LLC, a Delaware limited liability company. (L) " CONTRACT" has the meaning assigned to such term in the Genlyte Capitalization Agreement and the Thomas Capitalization Agreement, as the case may be. (M) "CONTRIBUTED ASSETS" means the Thomas Contributed Assets and the Genlyte Contributed Assets. (N) "CONTRIBUTED BUSINESSES" means the Thomas Contributed Business and the Genlyte Contributed Business. (O) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. (P) "GENLYTE" means The Genlyte Group Incorporated, a Delaware corporation. (Q) "GENLYTE AGREEMENTS" has the meaning assigned to such term in Section 4.1. (R) "GENLYTE CAPITALIZATION AGREEMENT" has the meaning assigned to such term in the preamble. (S) "GENLYTE CONTRIBUTED ASSETS" means the assets to be contributed by Genlyte pursuant to the Genlyte Capitalization Agreement. (T) "GENLYTE CONTRIBUTED BUSINESS" means the Business of Genlyte as defined in the Genlyte Capitalization Agreement. (U) "GENLYTE REPRESENTATIVES" has the meaning assigned to such term in Section 5.2(a). (V) "INTEREST" has the meaning assigned to such term in the LLC Agreement. (W) "JOINT PROXY STATEMENT" means the Joint Proxy Statement of Thomas and Genlyte to be filed with the SEC under the Exchange Act, pursuant to which each of Thomas and Genlyte will seek stockholder approval of the transactions contemplated hereby. (X) "LAWS" means any federal, state, local or foreign law, rule, regulation, judgment, code, ruling, statute, order or ordinance or other requirement. (Y) "MATERIAL ADVERSE EFFECT" means any adverse circumstance or consequence that, individually or in the aggregate, has an effect that is material to the financial condition, results of operations, assets or business of the Contributed Business of the party at issue taken as a whole. (Z) "PERSON" means any individual, partnership, limited liability company, corporation, cooperative, trust, estate, joint venturer or other entity. (AA) "POTENTIAL ACQUIROR" has the meaning assigned to such term in Section 5.8(b). (BB) "RELATED AGREEMENTS" means the Thomas Agreements and the Genlyte Agreements. (CC) "SECURITIES ACT" means the Securities Act of 1933, as amended. (DD) "SEC" means the Securities and Exchange Commission. (EE) "THOMAS" means Thomas Industries Inc., a Delaware corporation. (FF) "THOMAS AGREEMENTS" has the meaning assigned to such term in Section 3.1. (GG) "THOMAS CAPITALIZATION AGREEMENT" has the meaning assigned to such term in the preamble. (HH) "THOMAS CONTRIBUTED ASSETS" means the assets to be contributed by Thomas pursuant to the Thomas Capitalization Agreement. (II) "THOMAS CONTRIBUTED BUSINESS" means the Business as defined in the Thomas Capitalization Agreement. (JJ) "THOMAS REPRESENTATIVES" has the meaning assigned to such term in Section 5.2(a). ARTICLE II RELATED AGREEMENTS AND CLOSING 2.1. RELATED AGREEMENTS. (a) The LLC Agreement, the Thomas Capitalization Agreement and the Genlyte Capitalization Agreement are being executed and delivered simultaneously herewith. (b) In addition, at Closing, the parties will execute and deliver all of the other documents and agreements required to be delivered on or prior to Closing pursuant to this Agreement and the Related Agreements. 2.2. CLOSING. The contribution of assets to and the assumption of liabilities by, the Company and the issuance of the Interests to Thomas and Genlyte contemplated by the Capitalization Agreements and the LLC Agreement (the "CLOSING") shall take place at the offices of McCarter & English, LLP on the fifth business day following the satisfaction or waiver of all conditions to the obligations of the parties to the transactions contemplated hereby commencing at 10:00 a.m., local time on such date, or at such other date or time or other place as the parties may mutually agree upon in writing, such date being hereinafter referred to as the "CLOSING DATE"; provided, however, that either Thomas or Genlyte shall have the right, in their sole discretion, to delay the Closing for any reasonable reason and for any reasonable period of time. Notwithstanding the foregoing, if all of the conditions to Closing as set forth in Articles VI and VII have been satisfied, the Closing shall occur no later than December 31, 1998. Upon consummation, the Closing shall be deemed to take place as of the opening of business on the Closing Date. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THOMAS Thomas hereby represents and warrants to Genlyte as of the date hereof and as of the Closing Date, as set forth below. The representations and warranties set forth below shall survive the Closing. 3.1. AUTHORITY. Thomas has full capacity, right, corporate power and authority, without the consent of any other Person, to execute and deliver this Agreement, the LLC Agreement, the Thomas Capitalization Agreement, the Services Agreement and any other agreement to which it is a party (collectively, the "THOMAS AGREEMENTS"), and to carry out the transactions contemplated hereby and thereby. Except with respect to the approval of the stockholders of Thomas, all corporate and other acts or proceedings required to be taken by Thomas to authorize the execution, delivery and performance of this Agreement, the Thomas Agreements and the documents to be delivered at Closing and all transactions contemplated hereby and thereby have been duly and properly taken. 3.2. VALIDITY. This Agreement and the Thomas Agreements have been, and the documents to be delivered at Closing will be, duly executed and delivered by Thomas and constitute lawful, valid and legally binding obligations of Thomas, enforceable in accordance with their respective terms. The execution and delivery of this Agreement and the Thomas Agreements and the consummation of the transactions contemplated hereby and thereby will not result in the creation of any lien, charge or encumbrance of any kind or the termination or acceleration of any indebtedness or other obligation of Thomas and are not prohibited by, do not violate or conflict with any provision of, do not constitute a default under or a breach of and do not impair the rights under (a) the Certificate of Incorporation or By-laws of Thomas, (b) any Contract, (c) any order, writ, injunction, decree or judgment of any court or governmental agency, or (d) any Law applicable to Thomas. No approval, authorization, consent or other order or action of or filing with any court, administrative agency or other governmental authority is required for the execution and delivery by Thomas of this Agreement and the Thomas Agreements or the consummation by Thomas of the transactions contemplated hereby and thereby, except as set forth in Schedule 3.1.3 of the Thomas Capitalization Agreement. 3.3. DUE ORGANIZATION. Thomas is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware, and has full corporate power and authority and all requisite licenses, permits and franchises to own, lease and operate its assets and to carry on its business. 3.4. BROKERS AND FINDERS. Except for the fees and expenses payable to Salomon Smith Barney, which fees are reflected in its agreement with Thomas (a true and correct copy of which has been provided to Genlyte), Thomas has not entered into any contract, arrangement or understanding with any person or firm which may result in the obligation of Thomas to pay any finder's fees, brokerage or agent commissions or other like payments in connection with the transactions contemplated hereby. Except for the fees and expenses paid or payable to Salomon Smith Barney, there is no claim for payment by Thomas of any investment banking fees, finder's fees, brokerage or agent commissions or other like payments in connection with the negotiations related to this Agreement or the consummation of the transactions contemplated hereby. 3.5. OPINION OF FINANCIAL ADVISOR. The financial advisor of Thomas, Salomon Smith Barney, has rendered an opinion to the Board of Directors of Thomas to the effect that, as of the date thereof, the Interest to be received by Thomas pursuant to the Thomas Capitalization Agreement is fair from a financial point of view to Thomas; it being understood and acknowledged by Genlyte that such opinion has been rendered for the benefit of the Board of Directors of Thomas and is not intended to, and may not, be relied upon by Genlyte or its Affiliates. 3.6. INFORMATION SUPPLIED FOR JOINT PROXY STATEMENT. None of the information supplied or to be supplied by Thomas for inclusion or incorporation by reference in the Joint Proxy Statement to be filed with the SEC by Thomas and Genlyte in connection with the stockholder meetings of Thomas and Genlyte to be held in connection with this Agreement and the transactions contemplated hereby will, at the date mailed to stockholders, or at the time of such meetings, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. The Joint Proxy Statement will, as of its mailing date, comply as to form in all material respects with all Laws, including the Exchange Act and the rules and regulations promulgated thereunder, except that no representation is made by Thomas with respect to information supplied by Genlyte or the stockholders of Genlyte for inclusion therein. 3.7. REPRESENTATIONS AND WARRANTIES The representations and warranties of Thomas set forth in the Thomas Capitalization Agreement are true and correct; provided, however, that following the Closing Date, the remedies for breach of such representations and warranties shall be governed by the Thomas Capitalization Agreement. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF GENLYTE Genlyte hereby represents and warrants to Thomas as of the date hereof and as of the Closing Date, as set forth below. The representations and warranties set forth below shall survive the Closing. 4.1. AUTHORITY. Genlyte has full capacity, right, corporate power and authority, without the consent of any other Person, to execute and deliver this Agreement, the LLC Agreement, the Genlyte Capitalization Agreement, the Services Agreement and any other agreement to which it is a party (collectively, the "GENLYTE AGREEMENTS"), and to carry out the transactions contemplated hereby and thereby. Except with respect to the approval of the stockholders of Genlyte, all corporate and other acts or proceedings required to be taken by Genlyte to authorize the execution, delivery and performance of this Agreement, the Genlyte Agreements and the documents to be delivered at Closing and all transactions contemplated hereby and thereby have been duly and properly taken. 4.2. VALIDITY. This Agreement and the Genlyte Agreements have been, and the documents to be delivered at Closing will be, duly executed and delivered by Genlyte and constitute lawful, valid and legally binding obligations of Genlyte, enforceable in accordance with their respective terms. The execution and delivery of this Agreement and the Genlyte Agreements and the consummation of the transactions contemplated hereby and thereby will not result in the creation of any lien, charge or encumbrance of any kind or the termination or acceleration of any indebtedness or other obligation of Genlyte and are not prohibited by, do not violate or conflict with any provision of, do not constitute a default under or a breach of and do not impair the rights under (a) the Certificate of Incorporation or By-laws of Genlyte, (b) any Contract, (c) any order, writ, injunction, decree or judgment of any court or governmental agency, or (d) any Law applicable to Genlyte. No approval, authorization, consent or other order or action of or filing with any court, administrative agency or other governmental authority is required for the execution and delivery by Genlyte of this Agreement and the Genlyte Agreements or the consummation by Genlyte of the transactions contemplated hereby and thereby, except as set forth in Schedule 3.1.3 of the Genlyte Capitalization Agreement. 4.3. DUE ORGANIZATION. Genlyte is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware, and has full corporate power and authority and all requisite licenses, permits and franchises to own, lease and operate its assets and to carry on its business. 4.4. BROKERS AND FINDERS. Except for the fees and expenses payable to Donaldson, Lufkin & Jenrette Securities Corporation, which fees are reflected in its agreement with Genlyte (a true and correct copy of which has been provided to Thomas), Genlyte has not entered into any contract, arrangement or understanding with any person or firm which may result in the obligation of Genlyte to pay any finder's fees, brokerage or agent commissions or other like payments in connection with the transactions contemplated hereby. Except for the fees and expenses paid or payable to Donaldson, Lufkin & Jenrette Securities Corporation, there is no claim for payment by Genlyte of any investment banking fees, finder's fees, brokerage or agent commissions or other like payments in connection with the negotiations related to this Agreement or the consummation of the transactions contemplated hereby. 4.5. OPINION OF FINANCIAL ADVISOR. The financial advisor of Genlyte, Donaldson, Lufkin & Jenrette Securities Corporation, has rendered an opinion to the Board of Directors of Genlyte to the effect that the consideration to be received by Genlyte pursuant to the Genlyte Capitalization Agreement is fair from a financial point of view to Genlyte; it being understood and acknowledged by Thomas that such opinion has been rendered for the benefit of the Board of Directors of Genlyte and is not intended to, and may not, be relied upon by Thomas or its Affiliates. 4.6. INFORMATION SUPPLIED FOR JOINT PROXY STATEMENT. None of the information supplied or to be supplied by Genlyte for inclusion or incorporation by reference in the Joint Proxy Statement to be filed with the SEC by Thomas and Genlyte in connection with the stockholder meetings of Thomas and Genlyte to be held in connection with this Agreement and the transactions contemplated hereby will, at the date mailed to stockholders, or at the time of such meetings, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. The Joint Proxy Statement will, as of its mailing date, comply as to form in all material respects with all Laws, including the Exchange Act and the rules and regulations promulgated thereunder, except that no representation is made by Genlyte with respect to information supplied by Thomas or the stockholders of Thomas for inclusion therein. 4.7. REPRESENTATIONS AND WARRANTIES The representations and warranties of Genlyte set forth in the Genlyte Capitalization Agreement are true and correct; provided, however, that following the Closing Date, the remedies for breach of such representations and warranties shall be governed by the Genlyte Capitalization Agreement. ARTICLE V ADDITIONAL AGREEMENTS 5.1. INTERIM CONDUCT OF BUSINESS. (a) From the date hereof until the Closing, each of Thomas and Genlyte shall preserve, protect and maintain their respective Contributed Business consistent with prior practice and in the ordinary course of business. Without limiting the generality of the foregoing, from the date hereof until the Closing, except for transactions expressly approved in writing by the other party or pursuant to Section 5.8, Thomas and Genlyte shall, with respect to their respective Contributed Business: (i) maintain inventories at current levels, except sales in the ordinary course of business, and maintain the properties of their Contributed Business and Contributed Assets in good repair, order and condition, reasonable wear and tear excepted; (ii) maintain and keep in full force and effect all insurance on assets and property or for the benefit of employees of the Contributed Business, all liability and other casualty insurance, and all bonds on personnel of the Contributed Business, presently carried; (iii) except as set forth on Schedule 5.1, not merge or consolidate with or agree to merge or consolidate with, nor purchase or agree to purchase all or substantially all of the assets of, nor otherwise acquire, any corporation, partnership, or other business organization or division thereof; (iv) except as set forth on Schedule 5.1, not sell, lease or otherwise dispose of or agree to sell, lease or otherwise dispose of, or grant an option with respect to, any of the Contributed Business' assets, properties, rights or claims, except for inventory and other assets sold in the ordinary course of business; (v) preserve intact the organization and reputation of the Contributed Business and use its reasonable commercial efforts to keep available the services of the present executives, employees and agents of the Contributed Business and preserve the good will of suppliers, customers and others having business relationships with the Contributed Business; (vi) pay accounts payable and other obligations of the Contributed Business when they become due and payable in the ordinary course of business consistent with prior practice; (vii) not grant any security interest, lien, charge, encumbrance or claim on any assets of the Contributed Business, except in the ordinary course of business and consistent with prior practice; (viii) maintain the Contributed Business' books, accounts and records in the usual, regular and ordinary manner on a basis consistent with prior years; (ix) not enter into, amend or terminate, or agree to enter into, amend or terminate any Contract; provided, however, that the foregoing shall not prohibit the termination or extension of any Contract necessary to the Contributed Business arising in the ordinary course of business and consistent with past practice; (x) except as set forth on Schedule 5.1, not declare, set aside or pay any dividend or make any other distribution with respect to their capital stock or the capital stock of their respective Affiliates, except dividends made in the ordinary course; (xi) perform in all material respects all of its obligations under all Contracts and other agreements and instruments relating to or affecting the Contributed Business or its assets, and comply in all material respects with all Laws applicable to the Assets, except where non-performance or non-compliance would not have a Material Adverse Effect; (xii) not enter into, amend or terminate any employment, bonus, severance or retirement contract or arrangement, nor increase any salary or other form of compensation payable or to become payable to any executives or employees of the Contributed Business other than in the ordinary course of business; (xiii) not take any action or intentionally omit to take any action, which action or omission would result in a breach of any of the representations and warranties set forth under the Genlyte Capitalization Agreement or the Thomas Capitalization Agreement, as the case may be, or in the failure or inability of the parties to consummate the transactions contemplated hereby; or (xiv) not incur or become subject to, nor agree to incur or become subject to, any debt, obligation or liability, contingent or otherwise, except for borrowings under or refinancing of, the existing credit facilities of Thomas or Genlyte, as the case may be, up to the existing borrowing limit on the date hereof, current liabilities and contractual obligations in the ordinary course. (b) Nothing contained in this Agreement shall give Thomas, directly or indirectly, rights to control or direct Genlyte's Contributed Business. Prior to the Closing Date, Genlyte shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its Contributed Business. (c) Nothing contained in this Agreement shall give Genlyte, directly or indirectly, rights to control or direct Thomas' Contributed Business. Prior to the Closing Date, Thomas shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its Contributed Business. 5.2. ACCESS. (a) Subject to applicable law, Genlyte shall afford to Thomas and its accountants, counsel, financial advisors and other representatives (the "THOMAS REPRESENTATIVES") and Thomas shall afford to Genlyte and its accountants, counsel, financial advisors and other representatives (the "GENLYTE REPRESENTATIVES") full access during normal business hours with reasonable notice throughout the period prior to the Closing Date to all of their respective properties, books, contracts, commitments and records and, during such period, shall furnish promptly to one another (i) a copy of each report, schedule and other document filed with or received by any of them from the SEC in connection with the transactions contemplated by this Agreement and (ii) such other information concerning their respective businesses, properties and personnel as Thomas or Genlyte, as the case may be, shall reasonably request; provided, however, that no investigation pursuant to this Section 5.2 shall amend or modify any representations or warranties made herein or in the Related Agreements or the conditions to the obligations of the respective parties to consummate the transactions contemplated hereby and thereby. Thomas shall hold and shall use its reasonable commercial efforts to cause the Thomas Representatives to hold, and Genlyte shall hold and shall use its reasonable commercial efforts to cause Genlyte Representatives to hold, in strict confidence all non-public documents and information furnished to Thomas or to Genlyte, as the case may be, in connection with the transactions contemplated by this Agreement, except that (i) Thomas and Genlyte may disclose such information as may be necessary in connection with seeking any required approvals, consents or financings, and (ii) each of Thomas and Genlyte may disclose any information that it is required by Law or judicial or administrative order to disclose. Neither Thomas nor Genlyte shall use or knowingly permit the use of such non- public information or other confidential or proprietary knowledge of the other party for any purpose other than in connection with the transactions contemplated hereby without the prior consent of the other parties hereto; provided, that any information that is otherwise publicly available, without breach of this provision, or has been obtained from a third party without a breach of such third party's duties, shall not be subject to this Section 5.2(a). (b) In the event that this Agreement is terminated in accordance with its terms, each party shall promptly redeliver to the other all non-public written material provided pursuant to this Section 5.2 and shall not retain any copies, extracts or other reproductions in whole or in part of such written material. In such event, all documents, memoranda, notes and other writings prepared by Thomas or Genlyte based on the information in such material shall be destroyed (and Thomas and Genlyte shall use their respective reasonable commercial efforts to cause their advisors and representatives to similarly destroy their documents, memoranda and notes), and such destruction (and reasonable commercial efforts) shall be certified in writing by an authorized officer supervising such destruction. The last two sentences of Section 5.2(a) and the provisions of Section 5.2(b) shall survive any termination of this Agreement. 5.3. STOCKHOLDERS' APPROVALS. (a) Subject to the fiduciary duties of the Board of Directors of Thomas under applicable Law, Thomas shall, as promptly as practicable, submit the transactions contemplated by this Agreement and the Thomas Agreements for the approval of its stockholders at a meeting of stockholders and shall use its reasonable best efforts to obtain stockholder approval and adoption of the transactions contemplated by this Agreement and the Thomas Agreements. Subject to the fiduciary duties of the Board of Directors of Thomas under applicable Law, such meeting of stockholders shall be held as soon as practicable. Thomas shall use its reasonable best efforts to cause the Joint Proxy Statement to be mailed to its stockholders at the earliest practicable date. Subject to the fiduciary duties of the Board of Directors of Thomas under applicable Law, Thomas shall, through its Board of Directors, recommend to its stockholders approval of the transactions contemplated by this Agreement. (b) Subject to the fiduciary duties of the Board of Directors of Genlyte under applicable Law, Genlyte shall, as promptly as practicable, submit the transactions contemplated by this Agreement and the Genlyte Agreements for the approval of its stockholders at a meeting of stockholders and shall use its reasonable best efforts to obtain stockholder approval and adoption of the transactions contemplated by this Agreement and the Genlyte Agreements. Subject to the fiduciary duties of the Board of Directors of Genlyte under applicable Law, such meeting of stockholders shall be held as soon as practicable. Genlyte shall use its reasonable best efforts to cause the Joint Proxy Statement to be mailed to its stockholders at the earliest practicable date. Subject to the fiduciary duties of the Board of Directors of Genlyte under applicable Law, Genlyte shall, through its Board of Directors, recommend to its stockholders approval of the transactions contemplated by this Agreement. 5.4. AGREEMENT TO COOPERATE. Subject to the terms and conditions herein provided and subject to the fiduciary duties of the respective boards of directors of Genlyte and Thomas, each of the parties hereto shall use all reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws to consummate and make effective the transactions contemplated by this Agreement, including using its reasonable best efforts to obtain all necessary or appropriate waivers, consents or approvals of third parties required in order to preserve material contractual relationships of Thomas and Genlyte and their respective Affiliates, all necessary or appropriate waivers, consents and approvals, to effect all necessary filings and submissions and to lift any injunction or other legal bar to the transactions contemplated hereby and contemplated by the Related Agreements. Each party agrees to use all reasonable efforts to comply with each of their respective covenants and agreements contained in the Related Agreements. 5.5. PUBLIC STATEMENTS. The parties shall consult with each other prior to issuing any press release or any written public statement with respect to this Agreement or the transactions contemplated hereby and shall not issue any such press release or written public statement prior to such consultation. 5.6. NOTIFICATIONS. Each party shall notify the other party and keep it advised as to (a) any litigation or administrative proceeding that is either pending or, to its knowledge, threatened against such party which challenges the transactions contemplated hereby; (b) any material damage to or destruction of its Contributed Business; (c) any breach of its own representations and warranties set forth herein or in any of the Related Agreements; and (d) any fact of which such party has knowledge that indicates that any condition to Closing is reasonably likely not to be satisfied in a timely fashion. No disclosure by any party pursuant to this Section 5.6, however shall be deemed to amend or supplement any schedules or to prevent or cure any misrepresentations, breach of warranty or breach of covenant contained herein or in the Related Agreements. 5.7. JOINT PROXY STATEMENT; STOCKHOLDERS MEETINGS. Thomas and Genlyte shall promptly prepare and file with the SEC the Joint Proxy Statement in preliminary form. Each party shall use its commercially reasonable efforts to respond to any comments of the SEC staff with respect thereto, in order to permit mailing to stockholders of the definitive Joint Proxy Statement as promptly as practicable. Prior to the date of approval of the transactions contemplated hereby by their respective stockholders, each of Thomas and Genlyte shall correct promptly any information provided by it to be used specifically in the Joint Proxy Statement that shall have become false or misleading in any material respect and shall take all steps necessary to file with the SEC and have cleared by the SEC any amendment or supplement to the Joint Proxy Statement so as to correct the same and to cause the Joint Proxy Statement as so corrected to be disseminated to the stockholders of Thomas and Genlyte, in each case, to the extent required by applicable Law. 5.8. ALTERNATIVE PROPOSALS. Each of Thomas and Genlyte hereby agree that: (a) After the date hereof and prior to the Closing Date or earlier termination of this Agreement, such party shall not, and shall not permit any of its Affiliates to, and such party shall, and shall cause each of its Affiliates to, cause each officer, director and employee of such party and its Affiliates, and each attorney, accountant, investment banker, financial advisor and other agent retained by them, not to, directly or indirectly, initiate, solicit or encourage or take any other action to knowingly facilitate or intentionally engage in any discussion in relation to, any inquiries or the submission of any proposal or offer to acquire or operate all or any material part of its Contributed Business or to acquire any Person (including such party) that directly or indirectly owns all or any part of its Contributed Business, whether by merger, share exchange, purchase of stock, purchase of assets, tender offer, joint venture or otherwise, and whether for cash, securities or any other consideration or combination thereof, if such transaction would be materially inconsistent with or preclusive of the transactions contemplated hereby (any such inconsistent or preclusive transaction being referred to herein as an "ALTERNATIVE TRANSACTION"). Such party will immediately cease and cause to be terminated any existing initiation, solicitation, encouragement, discussions or negotiations with parties other than the other party hereto with respect to Alternative Transactions. (b) Notwithstanding the provisions of Section 5.8(a), in response to a proposal for an Alternative Transaction (an "ALTERNATIVE PROPOSAL") that is unsolicited and made after the date hereof and prior to the stockholder vote, (i) such party may engage in discussions or negotiations regarding such Alternative Proposal with the Person who makes such Alternative Proposal (a "POTENTIAL ACQUIROR"); and (ii) such party may furnish to any Potential Acquiror (subject to the execution of a confidentiality agreement containing confidentiality provisions substantially similar to the confidentiality provision of this Agreement or any other confidentiality agreements between the parties) confidential or non-public information concerning such party or its Affiliates, if such party's Board of Directors, after consulting with its outside legal counsel and receiving the written advice of such counsel, determines in good faith that the failure to provide such confidential or non- public information to or negotiate with, a Potential Acquiror would be reasonably likely to constitute a breach of its fiduciary duty to such party's stockholders. It is understood and agreed by the parties that negotiations and other activities conducted in accordance with this Section 5.8(b) shall not constitute a violation of Sections 5.1 or 5.8(a). (c) Such party shall immediately notify the other party of its receipt of any Alternative Proposal or any request for confidential or non- public information relating to such party or its Affiliates in connection with an Alternative Proposal or for access to the properties, books or records of such party or any Affiliate by any Person that it is considering making, or has made, an Alternative Proposal and prior to providing such access shall obtain a confidentiality agreement with such Person. ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF THOMAS Each and all of the obligations of Thomas to consummate the transactions contemplated by this Agreement and the Related Agreements are subject to fulfillment prior to or at the Closing of the following conditions: 6.1. STOCKHOLDER APPROVAL. The transactions contemplated by this Agreement and the Related Agreements shall have been approved and adopted by the requisite vote of the stockholders of Thomas and Genlyte under applicable Law. 6.2. ACCURACY OF WARRANTIES AND PERFORMANCE OF COVENANTS. The representations and warranties of Genlyte contained herein and in the Related Agreements shall be true, correct and accurate in all respects (in the case of any representation or warranty containing any materiality qualification) or in all material respects (in the case of any representation or warranty without any materiality qualification) as if made on and as of the Closing Date. The Company and Genlyte shall have performed all of the obligations and complied in all material respects with each and all of the covenants, agreements and conditions required to be performed or complied with on or prior to the Closing pursuant to this Agreement and the Related Agreements. 6.3. NO PENDING ACTION. No court of competent jurisdiction or governmental, regulatory or administrative agency or commission shall have issued an order, decree or ruling or taken any other action (which order, decree or ruling Genlyte and Thomas shall use their commercially reasonable efforts to lift), in each case temporarily or permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement and the Related Agreements. 6.4. CONSENTS. All consents by third parties that are required for the consummation of the transactions contemplated hereby, or that are required in order to prevent a breach of or a default under or a termination of any Contract, shall have been obtained or provided for, except where the failure to obtain the same would not be reasonably likely, individually or in the aggregate, to have a Material Adverse Effect on the Company following the Closing Date. 6.5. REGULATORY APPROVALS. All regulatory agencies shall have taken such action as may be required to permit the consummation of the transactions contemplated hereby and such actions shall remain in full force and effect and shall be reasonably satisfactory in form and substance to Thomas and its counsel. 6.6. CONDITION OF BUSINESS AND ASSETS. The Contributed Businesses and the Contributed Assets shall not have been adversely affected in any way by any act of God, fire, flood, accident, war, labor disturbance, legislation (proposed or enacted), or other event or occurrence, whether or not covered by insurance, and there shall have been no change in the Contributed Assets or the Contributed Businesses, their financial condition or prospects, taken as a whole, which would have a Material Adverse Effect thereon. 6.7. LITIGATION. Neither Thomas nor the Company nor any of the Contributed Assets shall have been made a party or subject to any litigation related to Genlyte or its Affiliates, which is reasonably expected to have a Material Adverse Effect. 6.8. FINANCING. The Company shall have in place on or prior to the Closing Date, a credit facility, including a working capital line of credit, in an amount which is appropriate given the outstanding indebtedness of the Company on the Closing Date, the contemplated growth, including acquisitions, and the nature and size of the Company, on such terms as are reasonably acceptable to Thomas and Genlyte. 6.9. INSURANCE. The Company shall have in place general liability, workers' compensation, product liability and directors and officers insurance policies and other insurance policies reasonably necessary to operate the Business, which are in amounts and subject to deductibles and self-insured retentions customarily maintained for businesses of the size of the Company in the industry in which it competes. 6.10. RELATED AGREEMENTS. All of the conditions precedent contained in any of the Related Agreements shall have been satisfied or waived and the Closing or effectiveness of the Related Agreements shall occur simultaneously with the Closing. 6.11. SATISFACTION OF COUNSEL. All corporate and other actions and proceedings in connection with the transactions contemplated hereby, all resolutions, documents and instruments incidental thereto, and all other related legal matters, shall be reasonably satisfactory in form and substance to counsel for Thomas, and Thomas shall have received all such resolutions, documents and instruments, or copies thereof, certified if requested, as its counsel shall have requested. ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF GENLYTE Each and all of the obligations of Genlyte to consummate the transactions contemplated by this Agreement and the Related Agreements are subject to fulfillment prior to or at the Closing of the following conditions: 7.1. STOCKHOLDER APPROVAL. The transactions contemplated by this Agreement and the Related Agreements shall have been approved and adopted by the requisite vote of the stockholders of Thomas and Genlyte under applicable Law. 7.2. ACCURACY OF WARRANTIES AND PERFORMANCE OF COVENANTS. The representations and warranties of Thomas contained herein and in the Related Agreements shall be true, correct and accurate in all respects (in the case of any representation or warranty containing any materiality qualification) or in all material respects (in the case of any representation or warranty without any materiality qualification) as if made on and as of the Closing Date. The Company and Thomas shall have performed all of the obligations and complied in all material respects with each and all of the covenants, agreements and conditions required to be performed or complied with on or prior to the Closing pursuant to this Agreement and the Related Agreements. 7.3. NO PENDING ACTION. No court of competent jurisdiction or governmental, regulatory or administrative agency or commission shall have issued an order, decree or ruling or taken any other action (which order, decree or ruling Genlyte and Thomas shall use their commercially reasonable efforts to lift), in each case temporarily or permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement and the Related Agreements. 7.4. CONSENTS. All consents by third parties that are required for the consummation of the transactions contemplated hereby, or that are required in order to prevent a breach of or a default under or a termination of any Contract, shall have been obtained or provided for, except where the failure to obtain the same would not be reasonably likely, individually or in the aggregate, to have a Material Adverse Effect on the Company following the Closing Date. 7.5. REGULATORY APPROVALS. All regulatory agencies shall have taken such action as may be required to permit the consummation of the transactions contemplated hereby and such actions shall remain in full force and effect and shall be reasonably satisfactory in form and substance to Genlyte and its counsel. 7.6. CONDITION OF BUSINESS AND ASSETS. The Contributed Businesses and the Contributed Assets shall not have been adversely affected in any way by any act of God, fire, flood, accident, war, labor disturbance, legislation (proposed or enacted), or other event or occurrence, whether or not covered by insurance, and there shall have been no change in the Contributed Assets or the Contributed Businesses, their financial condition or prospects, taken as a whole, which would have a Material Adverse Effect thereon. 7.7. LITIGATION. Neither Genlyte nor the Company nor any of the Contributed Assets shall have been made a party or subject to any litigation related to Thomas or its Affiliates, which is reasonably expected to have a Material Adverse Effect. 7.8. FINANCING. The Company shall have in place on or prior to the Closing Date, a credit facility, including a working capital line of credit, in an amount which is appropriate given the outstanding indebtedness of the Company on the Closing Date, the contemplated growth, including acquisitions, and the nature and size of the Company, on such terms as are reasonably acceptable to Thomas and Genlyte. 7.9. INSURANCE. The Company shall have in place general liability, workers' compensation, product liability and directors and officers insurance policies and other insurance policies reasonably necessary to operate the Business, which are in amounts and subject to deductibles and self-insured retentions customarily maintained for businesses of the size of the Company in the industry in which it competes. 7.10. AUDITED FINANCIAL STATEMENTS. The audited financial statements of Thomas' Contributed Business for the three years ended December 31, 1997 shall have been completed and shall not be materially different from the unaudited financial statements of Thomas' Contributed Business for the three- year period ended December 31, 1997, which unaudited financial statements have been provided to Genlyte. 7.11. RELATED AGREEMENTS. All of the conditions precedent contained in any of the Related Agreements shall have been satisfied or waived and the Closing or effectiveness of the Related Agreements shall occur simultaneously with the Closing. 7.12. SATISFACTION OF COUNSEL. All corporate and other actions and proceedings in connection with the transactions contemplated hereby, all resolutions, documents and instruments incidental thereto, and all other related legal matters, shall be reasonably satisfactory in form and substance to counsel for Genlyte, and Genlyte shall have received all such resolutions, documents and instruments, or copies thereof, certified if requested, as its counsel shall have requested. ARTICLE VIII TERMINATION BY PARTIES 8.1. TERMINATION. This Agreement and the Related Agreements may be terminated and the transactions contemplated herein and therein may be abandoned at any time prior to the Closing: (a) by mutual written consent of the parties hereto; (b) [intentionally omitted]; (c) by either Thomas or Genlyte in the event that the Closing does not occur for any reason on or before December 31, 1998; provided, however, that if the Closing does not occur due to the act or omission of one of the parties, that party may not terminate this Agreement pursuant to the provisions of this Section; (d) by Thomas, upon approval of the Thomas Board of Directors, if prior to stockholder approval (i) without violation of Section 5.8, Thomas shall have received after the date hereof an Alternative Proposal, (ii) the Thomas Board of Directors shall have determined, in the exercise of its good faith judgment and after consultation with its legal counsel and receipt of a written opinion from its financial advisors, that the Alternative Transaction contemplated by such Alternative Proposal (if consummated pursuant to its terms) would be more favorable from a financial point of view to Thomas or its stockholders, as applicable, than the transactions contemplated by this Agreement and (iii) Thomas shall have given Genlyte at least five (5) Business Days' prior written notice of the material terms and conditions of such Alternative Proposal and of its intention to terminate this Agreement pursuant to this provision, in order to effect such Alternative Proposal; provided, however, that such termination under this clause (d) shall not be effective, and Thomas shall not be entitled to enter into a definitive agreement providing for an Alternative Transaction, until Thomas has made payment to Genlyte of the fee required to be paid pursuant to Section 8.2(a); (e) by Genlyte, upon approval of the Genlyte Board of Directors, if prior to stockholder approval (i) without violation of Section 5.8, Genlyte shall have received after the date hereof an Alternative Proposal, (ii) the Genlyte Board of Directors shall have determined, in the exercise of its good faith judgment and after consultation with its legal counsel and receipt of a written opinion from its financial advisors, that the Alternative Transaction contemplated by such Alternative Proposal (if consummated pursuant to its terms) would be more favorable from a financial point of view to Genlyte or its stockholders, as applicable, than the transactions contemplated by this Agreement and (iii) Genlyte shall have given Thomas at least five (5) Business Days' prior written notice of the material terms and conditions of such Alternative Proposal and of its intention to terminate this Agreement pursuant to this provision, in order to effect such Alternative Proposal; provided, however, that such termination under this clause (e) shall not be effective, and Genlyte shall not be entitled to enter into a definitive agreement providing for an Alternative Transaction, until Genlyte has made payment to Thomas of the fee required to be paid pursuant to Section 8.2(b); (f) by Thomas, if the Genlyte Board of Directors or committee thereof shall have resolved to accept or recommended to the Genlyte stockholders an Alternative Proposal or shall have withdrawn or adversely modified or taken a public position materially inconsistent with its approval or recommendation to the stockholders of Genlyte of the transactions contemplated hereby or shall not have submitted this Agreement and the Genlyte Agreements and the transactions contemplated hereby and thereby for the approval of its stockholders at a meeting of stockholders or used its reasonable best efforts to obtain such stockholder approval; (g) by Genlyte, if the Thomas Board of Directors or committee thereof shall have resolved to accept or recommended to the Thomas stockholders an Alternative Proposal or shall have withdrawn or adversely modified or taken a public position materially inconsistent with its approval or recommendation to the stockholders of Thomas of the transactions contemplated hereby or shall not have submitted this Agreement and the Thomas Agreements and the transactions contemplated hereby and thereby for the approval of its stockholders at a meeting of stockholders or used its reasonable best efforts to obtain such stockholder approval; (h) by Thomas, if (i) a Change of Control of Genlyte shall have occurred, (ii) Genlyte shall have entered into a definitive agreement providing for, or publicly announced its intention to effect, any transaction involving a Change of Control of Genlyte or (iii) a tender offer or exchange offer shall have been commenced or publicly announced that, if consummated, would have the effect of a Change of Control of Genlyte; (i) by Genlyte, if (i) a Change of Control of Thomas shall have occurred, (ii) Thomas shall have entered into a definitive agreement providing for, or publicly announced its intention to effect, any transaction involving a Change of Control of Thomas or (iii) a tender offer or exchange offer shall have been commenced or publicly announced that, if consummated, would have the effect of a Change of Control of Thomas; or (j) by either party, if the approval of the stockholders of such party or the other party contemplated by Section 5.3 is not obtained at the applicable stockholders meeting, including adjournments thereof. Any right of termination set forth above shall be exercised by written notice from the terminating party to the other party. 8.2. TERMINATION FEES. (a) If this Agreement is terminated by Thomas pursuant to Section 8.1(d) or by Genlyte pursuant to Section 8.1(g) or (i), then Thomas shall pay Genlyte a fee of $4.5 million plus documented expenses of Genlyte, which expenses shall not exceed $2.0 million in the aggregate; provided, however, that no fee shall be payable following a termination of this Agreement pursuant to Section 8.1(i)(iii) unless and until the relevant tender offer or exchange offer has been consummated and a Change of Control of Thomas has occurred. (b) If this Agreement is terminated by Genlyte pursuant to Section 8.1(e) or by Thomas pursuant to Section 8.1(f) or (h), then Genlyte shall pay Thomas a fee of $6.5 million plus documented expenses of Thomas, which expenses shall not exceed $2.0 million in the aggregate; provided, however, that no fee shall be payable following a termination of this Agreement pursuant to Section 8.1(h)(iii) unless and until the relevant tender offer or exchange offer has been consummated and a Change of Control of Genlyte has occurred. (c) If this Agreement is terminated by Thomas due to the failure of Genlyte to obtain stockholder approval as set forth in Section 8.1(j), then Genlyte shall pay Thomas a fee of $3.25 million plus documented expenses of Thomas, which expenses shall not exceed $2.0 million in the aggregate. (d) If this Agreement is terminated by Genlyte due to the failure of Thomas to obtain stockholder approval as set forth in Section 8.1(j), then Thomas shall pay Genlyte a fee of $2.25 million plus documented expenses of Genlyte, which expenses shall not exceed $2.0 million in the aggregate. (e) If (i) this Agreement is terminated prior to the occurrence of the Closing for any reason other than pursuant to Section 8.1(a), (ii) prior to such date as is 270 days after such termination there shall occur a Change of Control of a party or a party shall enter into a definitive agreement providing for, or shall publicly announce its intention to effect, any transaction involving a Change of Control of such party or involving the sale or other disposition of all or substantially all of the Contributed Business or Contributed Assets of such party (including by transfer to a joint venture or similar arrangement) to or with an unaffiliated Person or a tender offer or exchange offer shall have been commenced or publicly announced that, if consummated, would result in a Change of Control of such party and (iii) no fee has previously been paid by such party pursuant to Section 8.2(a) or (b), then upon (and subject to) the occurrence of such Change of Control or the consummation of such transaction, to the extent applicable, Thomas will pay to Genlyte the fee and documented expenses set forth in Section 8.2(a) in the event of a Change of Control of Thomas and, to the extent applicable, Genlyte will pay to Thomas the fee and documented expenses set forth in Section 8.2(b) in the event of a Change of Control of Genlyte, less the amount of any fee previously paid pursuant to this Section 8.2 as a result of the failure to obtain stockholder approval. Any such amount shall be paid in cash by wire transfer in immediately available funds, (i) in the case of Section 8.1(d) or (e) or Section 8.2(c) or (d), at or prior to the termination referred to therein and (ii) in the case of Section 8.1(f), (g), (h) or (i) or Section 8.2(e), not later than five (5) Business Days after the obligation to make such payment arises. If one party fails to promptly pay to the other any fee due under this Section 8.2, the defaulting party shall pay the costs and expenses (including reasonable legal fees and expenses) in connection with any action, including the filing of any lawsuit or other legal action, taken to collect payment, together with interest on the amount of any unpaid fee at the publicly announced prime rate of Citibank, N.A. from the date such fee was required to be paid. In no event will either Thomas or Genlyte be entitled to receive more than $6.5 million or $4.5 million, as the case may be, plus documented expenses in each case of up to $2.0 million pursuant to this Section 8.2. This Section 8.2 is the sole and exclusive remedy with respect to a termination of this Agreement and the transactions contemplated hereby pursuant to Sections 8.1(d), (e), (f), (g), (h), (i) and (j) and Section 8.2(e). In the event this Agreement is terminated and the termination fee is paid pursuant to Section 8.2, this Section 8.2 shall be the sole and exclusive remedy with respect to such termination and any other claim for breach of contract and representation and warranty and failure to perform or satisfy any covenant, agreement or other obligation contained in this Agreement or the Related Agreements. Notwithstanding the foregoing, in the event this Agreement is terminated pursuant to Section 8.1(c), the party not entitled to terminate under Section 8.1(c) shall have no rights under this Section 8.2(e). 8.3. EFFECT OF TERMINATION. In the event of any termination of this Agreement as provided above, this Agreement shall forthwith become wholly void and of no further force and effect and there shall be no liability on the part of any party, its Affiliates or their respective officers or directors; provided, however, that upon any such termination the obligations of the parties with respect to this Article VIII (including Section 8.2), the last two sentences of Section 5.2(a), Sections 3.4, 3.6, 4.4, 4.6, 5.2(b) and 9.3 and the Confidentiality Agreement previously entered into by and between Thomas and Genlyte shall remain in full force and effect and if the Company has been formed the parties shall dissolve it, or shall cause it to be dissolved; and provided, further, that subject to the last paragraph of Section 8.2 nothing herein will relieve any party from liability for damages for any breach of covenants or representations and warranties of this Agreement prior to Closing. ARTICLE IX GENERAL PROVISIONS 9.1. AMENDMENTS AND WAIVER. (a) No amendment, waiver or consent with respect to any provision of this Agreement shall in any event be effective, unless the same shall be in writing and signed by the parties hereto, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. (b) The failure of any party at any time or times to require performance of any provisions hereof shall in no manner affect that party's right at a later time to enforce the same. No waiver by any party of the breach of any term or covenant contained in this Agreement in any one or more instances shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Agreement. 9.2. NOTICES. All notices, requests, demands and other communications hereunder shall be in writing and shall be, personally delivered or sent by facsimile transmission with confirming copy sent by overnight courier (such as Express Mail, Federal Express, etc.) and a delivery receipt obtained and addressed to the intended recipient as follows: (a) If to Genlyte: The Genlyte Group Incorporated 2345 Vauxhall Road P.O. Box 3148 Union, NJ 07083-1948 Attention: Larry K. Powers Telecopy No.: (908) 810-4535 With a copy to: McCarter & English, LLP Four Gateway Center 100 Mulberry Street Newark, New Jersey Attention: Bart J. Colli, Esq. Telecopy No.: (973) 624-7070 (b) If to Thomas: Thomas Industries Inc. 4360 Brownsboro Road Louisville, Kentucky 40232 Attention: Timothy C. Brown Telecopy No.: (502) 895-6618 With a copy to: McDermott, Will & Emery 227 West Monroe Street Suite 4400 Chicago, Illinois 60606-5096 Attention: Michael R. Fayhee, P.C. Telecopy No.: (312) 984-7700 Any party may change its address for receiving notice by written notice given to the others named above. Notices shall be deemed given as of the date of receipt. 9.3. EXPENSES. Except as otherwise expressly provided herein, each party to this Agreement shall pay its own costs and expenses in connection with the transactions contemplated herein, including fees of counsel, investment bankers and accountants. The expenses incurred in connection with printing and filing (but not preparing) the Joint Proxy Statement shall be shared equally by Thomas and Genlyte. The provisions of this Section shall survive any termination of this Agreement. 9.4. COUNTERPARTS. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 9.5. CAPTIONS. The captions contained in this Agreement are for convenience of reference only, shall not be given meaning and do not form a part of this Agreement. 9.6. SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the benefit of the parties named herein and their respective successors and permitted assigns. This Agreement shall not be assigned by either party hereto without the express prior written consent of the other party and any attempted assignment, without such consents, shall be null and void. This Agreement does not create any rights, claims or benefits inuring to any person that is not a party hereto nor create or establish any third-party beneficiary hereto. 9.7. ENTIRE TRANSACTION. This Agreement and the agreements and documents referred to herein contain the entire agreement and understanding among the parties with respect to the transactions contemplated hereby and supersede all other agreements, understandings and undertakings among the parties on the subject matter hereof. All exhibits and schedules hereto are hereby incorporated by reference and made a part of this Agreement. 9.8. APPLICABLE LAW. This Agreement shall be governed by and construed in accordance with the internal substantive laws of the state of Delaware, without giving effect to conflict of laws rules. 9.9. OTHER RULES OF CONSTRUCTION. References in this Agreement to sections, schedules and exhibits are to sections of, and schedules and exhibits to, this Agreement unless otherwise indicated. Words in the singular include the plural and in the plural include the singular. The word "OR" is not exclusive. The word "INCLUDING" shall mean including, without limitation. The term "ORDINARY COURSE" means the ordinary course of the business consistent with the past practice of the respective Contributed Business. The section and other headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 9.10. PARTIAL INVALIDITY. In the event that any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 9.11. AUTHORSHIP. The parties hereto agree that the terms and language of this Agreement were the result of negotiations between the parties and, as a result, there shall be no presumption that any ambiguities in this Agreement shall be resolved against either party. Any controversy over construction of this Agreement shall be decided without regard to events of authorship or negotiation. * * * IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first written above. THOMAS INDUSTRIES INC. By: Its: THE GENLYTE GROUP INCORPORATED By: Its: LIST OF SCHEDULES TO THE MASTER TRANSACTION AGREEMENT BETWEEN THOMAS INDUSTRIES INC. AND THE GENLYTE GROUP INCORPORATED DATED AS OF APRIL 28, 1998 Schedule 5.1: Activities Not Conducted in the Ordinary Course of Business EX-2.2 3 LIMITED LIABILITY COMPANY AGREEMENT EXHIBIT 2.2 LIMITED LIABILITY COMPANY AGREEMENT OF GT LIGHTING, LLC ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1. Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE II FORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 9 2.1. Formation and Duration . . . . . . . . . . . . . . . . . . . . 9 2.2. Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 2.3. Principal Office, Registered Office and Registered Agent . . . 10 2.4. Purpose of Company . . . . . . . . . . . . . . . . . . . . . . 10 2.5. Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 2.6. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . 10 2.7. Qualification in Other Jurisdictions . . . . . . . . . . . . . 10 2.8. No State-Law Partnership . . . . . . . . . . . . . . . . . . . 10 2.9. Effective Date and Termination. . . . . . . . . . . . . . . . 10 ARTICLE III MEMBERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3.1. Initial Members. . . . . . . . . . . . . . . . . . . . . . . . 11 3.2. Admission of Additional Members . . . . . . . . . . . . . . . 11 3.3. Agreements with Members or Affiliates . . . . . . . . . . . . 11 3.4. Authority to Execute Documents to be Filed Under the Act . . . 11 3.5. Powers of the Members . . . . . . . . . . . . . . . . . . . . 11 3.6. Liability of Members . . . . . . . . . . . . . . . . . . . . . 11 3.7. Acts of Members . . . . . . . . . . . . . . . . . . . . . . . 11 3.8. Special Meetings . . . . . . . . . . . . . . . . . . . . . . . 12 3.9. Notice of Meetings . . . . . . . . . . . . . . . . . . . . . . 12 3.10. Location and Conduct of the Meetings; Adjournment . . . . . . 12 3.11. Waiver of Notice of Meeting . . . . . . . . . . . . . . . . . 13 3.12. Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.13. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.14. Action Without a Meeting . . . . . . . . . . . . . . . . . . . 13 ARTICLE IV CAPITALIZATION OF THE COMPANY. . . . . . . . . . . . . . . . . 13 4.1. Initial Capital Contributions. . . . . . . . . . . . . . . . . 13 4.2. Additional Capital Contributions . . . . . . . . . . . . . . . 14 4.3. Capital Withdrawal Rights, Interest and Priority . . . . . . . 14 4.4. Capital Accounts . . . . . . . . . . . . . . . . . . . . . . . 14 4.5. Section 754 Election . . . . . . . . . . . . . . . . . . . . . 15 ARTICLE V PROFIT AND LOSS ALLOCATIONS . . . . . . . . . . . . . . . . . . . . 15 5.1. Profits and Losses . . . . . . . . . . . . . . . . . . . . . . 15 5.2. General Provisions . . . . . . . . . . . . . . . . . . . . . . 15 5.3. Special Provisions . . . . . . . . . . . . . . . . . . . . . . 16 5.4. Code section704(c) Allocations . . . . . . . . . . . . . . . . 17 5.5. Allocations Relating to Taxable Issuance of Interests . . . . 17 ARTICLE VI DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . 18 6.1. Distributions. . . . . . . . . . . . . . . . . . . . . . . . . 18 6.2. Mandatory Distributions . . . . . . . . . . . . . . . . . . . 18 ARTICLE VII MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 19 7.1. Management Board . . . . . . . . . . . . . . . . . . . . . . . 19 7.2. Initial Management Board . . . . . . . . . . . . . . . . . . . 19 7.3. Authority of the Management Board . . . . . . . . . . . . . . 19 7.4. Action by the Management Board . . . . . . . . . . . . . . . . 20 7.5. Approval Required for Certain Matters . . . . . . . . . . . . 20 7.6. Place of Meetings . . . . . . . . . . . . . . . . . . . . . . 21 7.7. Salary and Expenses . . . . . . . . . . . . . . . . . . . . . 21 7.8. Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . 21 7.9. Special Meetings . . . . . . . . . . . . . . . . . . . . . . . 21 7.10. Action Without a Meeting . . . . . . . . . . . . . . . . . . . 22 7.11. Telephone Meeting . . . . . . . . . . . . . . . . . . . . . . 22 7.12. Records of Action . . . . . . . . . . . . . . . . . . . . . . 22 7.13. Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . 22 7.14. Reliance on Books . . . . . . . . . . . . . . . . . . . . . . 22 7.15. Standard of Care; Liability . . . . . . . . . . . . . . . . . 22 7.16. Chairman of the Board . . . . . . . . . . . . . . . . . . . . 22 ARTICLE VIII OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 8.1. Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . 23 8.2. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 23 8.3. Resignations . . . . . . . . . . . . . . . . . . . . . . . . . 23 8.4. Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 8.5. Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 ARTICLE IX INDEMNIFICATION AND INSURANCE. . . . . . . . . . . . . . . . . 25 9.1. Indemnification and Advancement of Expenses. . . . . . . . . . 25 9.2. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 26 9.3. Limit on Liability of Members . . . . . . . . . . . . . . . . 27 ARTICLE X TRANSFERS, WITHDRAWALS AND DEADLOCK . . . . . . . . . . . . . . . . 27 10.1. General Restriction on Transfers and Withdrawals . . . . . . . 27 10.2. Assignees and Substitute Members . . . . . . . . . . . . . . . 27 10.3. Effect of Admission as a Substitute Member . . . . . . . . . . 28 10.4. Put Right . . . . . . . . . . . . . . . . . . . . . . . . . . 28 10.5. Change of Control . . . . . . . . . . . . . . . . . . . . . . 29 10.6. Deadlock . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 10.7. Offer Right . . . . . . . . . . . . . . . . . . . . . . . . . 30 10.8. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 10.9. Appraised Value . . . . . . . . . . . . . . . . . . . . . . . 30 10.10. Assignability and Financing. . . . . . . . . . . . . . . . . . 31 10.11. Limited Applicability. . . . . . . . . . . . . . . . . . . . . 32 ARTICLE XI DISSOLUTION AND TERMINATION. . . . . . . . . . . . . . . . . . 32 11.1. Term; Events Causing Dissolution . . . . . . . . . . . . . . . 32 11.2. Distributions Upon Dissolution . . . . . . . . . . . . . . . . 33 11.3. Certificate of Cancellation . . . . . . . . . . . . . . . . . 34 ARTICLE XII ACCOUNTING AND BANK ACCOUNTS . . . . . . . . . . . . . . . . . 34 12.1. Books and Records . . . . . . . . . . . . . . . . . . . . . . 34 12.2. Financial Reports . . . . . . . . . . . . . . . . . . . . . . 35 12.3. Tax Returns and Elections . . . . . . . . . . . . . . . . . . 35 12.4. Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . . 35 12.5. Right of Inspection . . . . . . . . . . . . . . . . . . . . . 35 12.6. Financial Accounting . . . . . . . . . . . . . . . . . . . . . 36 12.7. LIFO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 ARTICLE XIII COVENANTS NOT TO COMPETE . . . . . . . . . . . . . . . . . . . 36 ARTICLE XIV REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 37 14.1. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . 37 14.2. Validity. . . . . . . . . . . . . . . . . . . . . . . . . . . 37 14.3. Due Organization . . . . . . . . . . . . . . . . . . . . . . . 37 14.4. Securities Law Matters . . . . . . . . . . . . . . . . . . . . 38 ARTICLE XV MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 38 15.1. Title to Assets. . . . . . . . . . . . . . . . . . . . . . . . 38 15.2. Amendments and Waiver . . . . . . . . . . . . . . . . . . . . 39 15.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 15.4. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 15.5. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 40 15.6. Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 15.7. Successors and Assigns . . . . . . . . . . . . . . . . . . . . 40 15.8. Entire Transaction . . . . . . . . . . . . . . . . . . . . . . 41 15.9. Other Rules of Construction. . . . . . . . . . . . . . . . . . 41 15.10. Partial Invalidity . . . . . . . . . . . . . . . . . . . . . . 41 15.11. Nature of Interest in the Company. . . . . . . . . . . . . . . 41 15.12. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 41 15.13. Power of Attorney. . . . . . . . . . . . . . . . . . . . . . . 41 15.14. Negotiation between Senior Executives. . . . . . . . . . . . . 42 15.15. Stock Options. . . . . . . . . . . . . . . . . . . . . . . . . 42 15.16. Effect of Inconsistencies with the Act . . . . . . . . . . . . 42 15.17. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . 42 15.18. Authorship . . . . . . . . . . . . . . . . . . . . . . . . . . 43 15.19. Thomas and Affiliates. . . . . . . . . . . . . . . . . . . . . 43 LIMITED LIABILITY COMPANY AGREEMENT OF GT LIGHTING, LLC This Limited Liability Company Agreement is made and entered into this 28th day of April, 1998, by and among GT LIGHTING, LLC, a Delaware limited liability company (the "COMPANY"), THOMAS INDUSTRIES INC., a Delaware corporation ("THOMAS") and THE GENLYTE GROUP INCORPORATED, a Delaware corporation ("GENLYTE"). Thomas and Genlyte being all of the initial members of the Company and hereinafter referred to individually as a "MEMBER" or collectively as the "MEMBERS." WHEREAS, the Company was formed on April 24, 1998, pursuant to a Certificate of Formation dated April 24, 1998, as a limited liability company under the Delaware Limited Liability Company Act, as amended (the "ACT"), but has not yet conducted any business; WHEREAS, the Company was organized to engage in the business, operations and activities related to the manufacture, sale, marketing and distribution of consumer, commercial, industrial and outdoor lighting (collectively, the "BUSINESS"); WHEREAS, the Company is being capitalized with certain assets of Thomas and Genlyte and certain of their respective Affiliates pursuant to the Capitalization Agreements; and WHEREAS, Thomas and Genlyte, as the Members, wish to adopt this Agreement (as defined below) as the limited liability company agreement of the Company; NOW, THEREFORE, in consideration of the premises and promises herein contained, the parties agree as set forth below: ARTICLE I DEFINITIONS 1.1. DEFINED TERMS. For purposes of this Agreement, unless the language or context clearly indicates that a different meaning is intended, the words, terms and phrases defined in this Section have the meanings set forth below: (A) "ACT" has the meaning assigned to such term in the preamble. (B) "ADDITIONAL CAPITAL CONTRIBUTION" means any Capital Contribution by Members other than the initial Capital Contributions as set forth in Section 4.1. (C) "ADJUSTED CAPITAL ACCOUNT DEFICIT" means (for United States federal income tax purposes) with respect to any Member the deficit balance, if any, in such Member's Capital Account as of the end of any Fiscal Year after giving effect to the following adjustments: (i) Credit to such Capital Account the sum of (i) any amount which such Member is obligated to restore to such Capital Account pursuant to any provision of this Agreement, plus (ii) any amount equal to such Member's share of Company Minimum Gain as determined under Regulation section1.704- 2(g)(1) and such Member's share of Member Nonrecourse Debt Minimum Gain as determined under Regulation section1.704- 2(i)(5), plus (iii) any amounts which such Member is deemed to be obligated to restore pursuant to Regulation section1.704-1(b)(2)(ii)(c); (ii) Debit to such Capital Account the items described in Regulation section1.704-1(b)(2)(ii)(d)(4), (5) and (6); and (iii) Credit or Debit to such Capital Account any other items required or permitted to be credited or debited under section704 of the Code and the Regulations thereunder. (D) "AFFILIATE" means, when used with reference to a specified Person, any Person that directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with the specified Person. (E) "AGREEMENT" means this Limited Liability Company Agreement, as amended from time to time, including all schedules and exhibits hereto and documents referred to herein or therein. (F) "APPRAISED VALUE" has the meaning assigned to such term in Section 10.9(a). (G) "APPRAISER'S REPORT" has the meaning assigned to such term in Section 10.9(b). (H) "ASSET VALUE" with respect to Company assets means: (i) with respect to any asset contributed to the Company by a Member, the gross fair market value of such asset on the date contributed; (ii) with respect to any asset distributed by the Company to a Member, the gross fair market value of such asset on the date distributed by the Company to any Member; (iii) upon the occurrence of the following events: (A) the admission of a Member to, or the increase of the Interest of an existing Member in, the Company in exchange for a Capital Contribution; (B) full or partial redemption of a Member's Interest; or (C) the liquidation of the Company under Regulation section1.704-1(b)(2)(ii)(g); the Asset Value shall be adjusted to equal the gross fair market value of such assets, as determined by mutual consent of the Members on the date such event occurs; provided, however, that the Company shall redetermine Asset Value upon the occurrence of any event described in this Section 1.1(h)(iii); or (iv) the Basis of the asset in all other circumstances. For purposes of this Section 1.1(h), the gross fair market value of any asset shall be determined by the unanimous consent of the Members. If the Members cannot agree on the Asset Value for purposes of this Section 1.1(h), the Members shall enter into an appraisal process substantially similar to the process set forth in Section 10.9. (I) "BASIS" with respect to an asset means the adjusted basis from time to time of such asset for United States federal income tax purposes. (J) "BENEFICIAL OWNERSHIP" has the meaning assigned to such term in Section 1.1(q). (K) "BUSINESS" has the meaning assigned to such term in the preamble. (L) "BUSINESS DAY" means any day on which commercial banks in the City of New York, New York, are open for business. (M) "CAPITAL ACCOUNTS" means the Capital Accounts of the Members established in accordance with Section 4.4 hereof. (N) "CAPITAL CONTRIBUTION" means the aggregate amount of cash and the Asset Value of any property other than cash contributed to the Company by a Member in accordance with Article IV hereof. (O) "CAPITALIZATION AGREEMENTS" means the Genlyte Capitalization Agreement and the Thomas Capitalization Agreement. (P) "CERTIFICATE" means the Certificate of Formation of the Company filed with the Secretary of State of Delaware, as amended or restated from time to time. (Q) "CHANGE OF CONTROL" shall mean with respect to a party the occurrence of any of the following events: (i) an acquisition (whether directly from such party or otherwise) of any voting securities of such party (the "VOTING SECURITIES") by any "PERSON" (as the term is used for purposes of Section 13(d) or 14(d) of the Exchange Act), immediately after which such Person has or would have "BENEFICIAL OWNERSHIP" (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty-five percent (25%) or more of the combined voting power of such party's then outstanding Voting Securities; (ii) the individuals who, as of the date hereof, are members of the Board of Directors of such party (the "INCUMBENT BOARD"), cease for any reason to constitute at least seventy-five percent (75%) of the Board of Directors; provided, however, a "Change of Control" shall not be deemed to occur if any of such individuals voluntarily fail to stand for re-election or resign or if the aggregate number of Directors is reduced so long as, after giving effect to such failure to stand for re-election, resignation or reduction, at least seventy-five percent (75%) of the remaining Directors are members of the Incumbent Board; provided further, however, that if the election, or nomination for election, by such party's stockholders of any new director was approved by a vote of at least seventy-five percent (75%) of the Incumbent Board, such new director shall, for purposes of this Agreement, be considered a member of the Incumbent Board; provided further, however, that an individual shall not be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened "ELECTION CONTEST" (as described in Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors (a "PROXY CONTEST") including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest; (iii) the consummation of, or agreement to consummate: (A) a merger, consolidation, share exchange or reorganization of such party in which the stockholders of such party, as a group, cease to hold a majority equity interest in the surviving entity; (B) a liquidation or dissolution of or appointment of a receiver, rehabilitator, conservator or similar person for, such party; or (C) the sale or other disposition of all or substantially all of the assets of such party to any Person (other than a transfer to a subsidiary); or (iv) any other change in "control" of such party. For purposes of the immediately preceding clause, the term "control" shall have the meaning ascribed thereto pursuant to Rule 405 of the rules and regulations of the SEC promulgated pursuant to the Securities Act of 1933, as amended. (R) "CHANGE OF CONTROL DATE" means the date the Change of Control occurred. (S) "CLOSING" has the meaning assigned to it in the Master Transaction Agreement. (T) "CLOSING DATE" has the meaning assigned to it in the Master Transaction Agreement. (U) "CODE" means the Internal Revenue Code of 1986, as amended, or any successor statute to such Code. (V) "COMPANY" means GT Lighting, LLC, the limited liability company formed by the filing of the Certificate, as constituted from time to time. (W) "CONTRACT" has the meaning assigned to such term in the Genlyte Capitalization Agreement or the Thomas Capitalization Agreement, as the case may be. (X) "CONTRIBUTED ASSETS" has the meaning assigned to such term in Section 4.1. (Y) "DEADLOCK" has the meaning assigned to such term in Section 10.6. (Z) "DEADLOCK DATE" has the meaning assigned to such term in Section 10.6. (AA) "DEFICIENCY" has the meaning assigned to such term in Section 4.2. (BB) "DEPRECIATION" for any Fiscal Year or other period means the cost recovery deduction with respect to an asset for such year or other period as determined for United States federal income tax purposes, provided that if the Asset Value of such asset differs from its Basis at the beginning of such year or other period, Depreciation shall be determined as provided in Regulation section1.704-1(b)(2)(iv)(g)(3). (CC) "DISPUTE" has the meaning assigned to such term in Section 15.14. (DD) "EBITDA" means earnings before interest, taxes, depreciation and amortization of the Company, calculated in accordance with United States generally accepted accounting principles. (EE) "EFFECTIVE DATE" has the meaning assigned to such term in Section 2.9. (FF) "ESTIMATED QUARTERLY LIABILITY" has the meaning assigned to such term in Section 6.2(a). (GG) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. (HH) "FAIR MARKET VALUE" has the meaning assigned to such term in Section 10.9(a). (II) "FISCAL YEAR" means the period from January 1 through December 31 each year. (JJ) "GENLYTE" means The Genlyte Group Incorporated, a Delaware corporation. (KK) "GENLYTE CAPITALIZATION AGREEMENT" means the Capitalization Agreement dated April 28, 1998 by and between the Company and Genlyte. (LL) "GENLYTE CONTRIBUTED ASSETS" means the assets contributed by Genlyte to the Company pursuant to the Genlyte Capitalization Agreement. (MM) "INCUMBENT BOARD" has the meaning assigned to such term in Section 1.1(q) (NN) "INITIAL APPRAISER" has the meaning assigned to such term in Section 10.9(b). (OO) "INITIAL MEMBERS" means Thomas and Genlyte. (PP) "INTEREST" means, with respect to any Member at any time, the entire interest of such Member in the Company at such time. Such Interest includes, without limitation, (i) a right of a Member to receive distributions of revenues, allocations of income and loss and distributions of liquidation proceeds under this Agreement and (ii) all management rights, voting rights or rights to consent of a Member. (QQ) "ISSUANCE ITEMS" has the meaning assigned to such term in Section 5.5. (RR) "LIFO" has the meaning assigned to such term in Section 12.7. (SS) "LIQUIDATION PROCEEDS" means all property at the time of liquidation of the Company and all proceeds thereof. (TT) "LITIGATION" means the case entitled Richard D. Lippe, et al., as Trustees of the Keene Creditors Trust v. Bairnco Corporation, et al., 96 Civ. 7600 (DC) (S.D.N.Y.) involving Genlyte, including any litigation related thereto and the liabilities and legal fees associated therewith. (UU) "MANAGEMENT BOARD" means the management board of the Company, appointed in writing by the Members and established pursuant to Article VII hereof. (VV) "MASTER TRANSACTION AGREEMENT" means the Master Transaction Agreement dated April 28, 1998 by and between Thomas and Genlyte. (WW) "MEMBERS" means the Initial Members and Persons who have been admitted under Section 3.2. (XX) "MEMBER ASSUMED TAX RATE" has the meaning assigned to such term in Section 6.2(a). (YY) "MEMBER TAX LIABILITY" has the meaning assigned to such term in Section 6.2(a). (ZZ) "NONCOMPETE PERIOD" has the meaning assigned to such term in Article XIII. (AAA) "NON-TRANSFERRING MEMBER" has the meaning assigned to such term in Section 10.9(b). (BBB) "OFFER EXERCISE DATE" means the date of the Offer Exercise Notice. (CCC) "OFFER EXERCISE NOTICE" has the meaning assigned to such term in Section 10.7. (DDD) "OFFER RIGHT" has the meaning assigned to such term in Section 10.7. (EEE) "PERCENTAGE INTEREST" means, with respect to any Member at any time, the percentage as set forth in Schedule 4.1. (FFF) "PERSON" means any individual, partnership, limited liability company, corporation, cooperative, trust, estate or other entity. (GGG) "PRELIMINARY FAIR MARKET VALUE" has the meaning assigned to such term in Section 10.9(b). (HHH) "PROFITS" and "LOSSES" for any Fiscal Year or other period means an amount equal to the Company's taxable income for United States federal income tax purposes for such year or period determined in accordance with Code section703(a) and the Regulations thereunder with the following adjustments: (i) all items of income, gain, loss and deduction of the Company required to be stated separately shall be included in taxable income or loss; (ii) income of the Company exempt from United States federal income tax shall be treated as taxable income; (iii) expenditures of the Company described in Code section705(a)(2)(B) or treated as such expenditures under Regulation section1.704-1(b)(2)(iv)(i) shall be subtracted from taxable income; (iv) in the event of an adjustment to the value of any asset in accordance with Section 1.1(h)(iii), the amount of such adjustment shall be treated as gain (if an increase) or loss (if a decrease) from the disposition of such asset for the purpose of computing Profits and Losses; (v) gain or loss resulting from the disposition of property from which gain or loss is recognized for United States federal income tax purposes shall be determined with reference to the Asset Value of such property; (vi) Depreciation shall be determined based upon Asset Value instead of as determined for United States federal income tax purposes; and (vii) items which are specially allocated under Section 5.3 of this Agreement shall not be taken into account. (III) "PROXY CONTEST" has the meaning assigned to such term in Section 1.1(q) (JJJ) "PUT EXERCISE NOTICE" has the meaning assigned to such term in Section 10.4(a). (KKK) "PUT PRICE" has the meaning assigned to such term in Section 10.4(b). (LLL) "PUT RIGHT" has the meaning assigned to such term in Section 10.4(a). (MMM) "REGULATIONS" means the United States federal income tax regulations, including temporary (but not proposed) regulations, promulgated under the Code. (NNN) "RELATED PARTY" shall have the meaning assigned to such term in Section 10.1. (OOO) "REPRESENTATIVES" means the persons serving on the Management Board. (PPP) "SEC" means the Securities and Exchange Commission. (QQQ) "SECURITIES LAWS" has the meaning assigned to such term in Section 14.4. (RRR) "SERVICES AGREEMENT" means the Services Agreement by and between the Company and Thomas, in a form mutually acceptable to the parties. (SSS) "TAX BOOK LOSS" means, for any Fiscal Year, the sum of (i) the Company's Losses for such Fiscal Year and (ii) the allocations made pursuant to Section 5.3 (other than any allocation made pursuant to Section 5.3(e)) for such Fiscal Year. (TTT) "TAX YEAR" means the Company's fiscal year for United States federal income tax purposes and shall be the Fiscal Year. (UUU) "TERRITORY" has the meaning assigned to such term in Article XIII. (VVV) "THIRD APPRAISER" has the meaning assigned to such term in Section 10.9(c). (WWW) "THOMAS" means Thomas Industries Inc., a Delaware corporation, as well as any of Thomas's wholly-owned subsidiaries which may, from time to time, hold a portion of Thomas's Interest. (XXX) "THOMAS CAPITALIZATION AGREEMENT" means the Capitalization Agreement dated April 28, 1998 by and between the Company and Thomas. (YYY) "THOMAS CONTRIBUTED ASSETS" means the assets contributed by Thomas to the Company pursuant to the Thomas Capitalization Agreement. (ZZZ) "TRANSFER" means (a) when used as a verb, to give, sell, exchange, assign, transfer, pledge, lease, hypothecate or otherwise dispose of, grant a security interest in or encumber (but shall not include an assignment, pledge or hypothecation of rights to receive distributions pursuant to Article VI or otherwise hereunder), and (b) when used as a noun, the nouns corresponding to such verbs, in either case voluntarily or involuntarily, by operation or law or otherwise, including any merger, consolidation or sale or exchange of securities. (AAAA) "TRANSFER CLOSING DATE" has the meaning assigned to such term in Section 10.8 (BBBB) "TRANSFERRING MEMBER" has the meaning assigned to such term in Section 10.9(b). (CCCC) "UNDERSIGNED" has the meaning assigned to such term in Article XIV. (DDDD) "VALUATION DATE" means the date of the Put Exercise Notice, the Change of Control Date or the Deadlock Date, as the case may be. (EEEE) "VOTING SECURITIES" has the meaning assigned to such term in Section 1.1(q). ARTICLE II FORMATION 2.1. Formation and Duration. The Company was formed under the Act effective upon the filing of the Certificate with the Secretary of State of Delaware and shall continue until dissolved pursuant to Article XI. The Members shall, to the extent required by law, and otherwise the Management Board or authorized officers of the Company shall, execute all amendments to the Certificate and do all filing, recording and other acts as may be appropriate under the Act. The Members hereby adopt this Agreement as the limited liability company agreement of the Company. 2.2. NAME. The name of the Company is GT LIGHTING, LLC To the extent permitted by the Act, the Company may conduct its business under one or more assumed names approved by the Management Board. 2.3. PRINCIPAL OFFICE, REGISTERED OFFICE AND REGISTERED AGENT. (a) The principal office of the Company shall be located at 4360 Brownsboro Road, Louisville, Kentucky 40232, or at such other place(s) as the Management Board may determine from time to time. (b) The location of the registered office and the name of the registered agent of the Company in the state of Delaware shall be as stated in the Certificate, as determined from time to time by the Management Board. 2.4. PURPOSE OF COMPANY. The purpose of the Company is to engage in the Business, any lawful business, purpose or activity for which limited liability companies may be formed under the Act and any and all activities necessary or incidental to the foregoing. 2.5. POWERS. The Company shall have all power to do any and all acts and things necessary, appropriate, advisable or convenient for the furtherance and accomplishment of the purposes of the Company, including to engage in any kind of activity and to enter into and perform obligations of any kind necessary to, or in connection with, or incidental to, the accomplishment of the purposes of the Company, as long as the activities and obligations may be lawfully engaged in or performed by a limited liability company under the Act. 2.6. FISCAL YEAR. The Company's first fiscal year shall begin on the Effective Date and end on December 31, 1998. The Company's subsequent fiscal years shall begin on January 1 and end on December 31 of each succeeding year. 2.7. QUALIFICATION IN OTHER JURISDICTIONS. The Management Board shall have authority to cause the Company to do business in all jurisdictions in which the Company shall be required to be so qualified. 2.8. NO STATE-LAW PARTNERSHIP. No provisions of this Agreement shall be deemed or construed to constitute the Company a partnership (including, without limitation, a limited partnership) or joint venture, or to constitute any Member or Representative a partner or joint venturer of or with any other Member or Representative, for any purposes other than federal and state tax purposes. 2.9. EFFECTIVE DATE AND TERMINATION. This Agreement shall become effective on the Closing Date (the "EFFECTIVE DATE"). In the event the Closing does not occur and the Master Transaction Agreement terminates in accordance with the terms thereof, this Agreement shall not become effective and shall be null and void and all of the rights and obligations of the parties hereunder shall also terminate and be null and void and of no force and effect simultaneously with the termination of the Master Transaction Agreement. ARTICLE III MEMBERS 3.1. Initial Members. As of the date hereof, there are no Members other than the Initial Members, and no other Person has any right to take part in the ownership of the Company. 3.2. ADMISSION OF ADDITIONAL MEMBERS. Additional Members of the Company may only be added if the addition of any such proposed additional Member is made pursuant to Article X, or is approved in writing, prior to such admission, by all of the then existing Members, and, in either such case, such proposed additional Member satisfies the requirements of Section 10.2. 3.3. AGREEMENTS WITH MEMBERS OR AFFILIATES. The Company may, subject to Section 7.5, enter into contracts or other forms of agreement to acquire, sell or otherwise dispose of goods or services with a Member or any Affiliate of a Member. The validity of any transaction, contract, agreement, or payment involving the Company and any Member or Affiliate of any Member otherwise permitted under the terms of this Agreement shall not be affected by reason of (a) the relationship between the Company and such Member or Affiliate, or (b) the approval of said transaction, contract, agreement, or payment by officers, directors, or employees of such Member or Affiliate or of the Company; provided, however, that the terms of any such transaction, contract or agreement shall be on an arm's length basis. 3.4. AUTHORITY TO EXECUTE DOCUMENTS TO BE FILED UNDER THE ACT. The Management Board or authorized officers of the Company shall have the power and authority to execute on behalf of the Company any document required or permitted to be filed by the Company with the Secretary of State of Delaware pursuant to the terms of the Act. 3.5. POWERS OF THE MEMBERS. Except as otherwise provided herein, no Member, acting solely in its capacity as a Member, shall act as an agent of the Company or have any authority to act for the Company. 3.6. LIABILITY OF MEMBERS. Except as explicitly set forth in any Capitalization Agreement or agreed to in writing by any Member, no Member shall, nor shall any Representative, stockholder, officer, director or employee of any Member, be liable for any debts, liabilities or obligations of the Company under any theory of liability (including indemnification, contribution or subrogation); provided that each Member shall be responsible: (a) for the making of any Capital Contribution to the Company required to be made by such Member pursuant to the terms of this Agreement or the Genlyte Capitalization Agreement or Thomas Capitalization Agreement, as the case may be; and (b) for the amount of any distribution made to such Member that must be returned to the Company pursuant to the Act. 3.7. ACTS OF MEMBERS. Subject to Article VII, if, and only if, the Act expressly requires that the Members act, an act of the Members consists of either: (a) a vote of the Members holding more than an aggregate of 50% of the Percentage Interests of the Company present at a properly called meeting of the Members when a quorum is present; provided, however, that with respect to the matters set forth in Sections 4.2 and 7.5 and for purposes of determining Asset Value, a majority of the Members, each of which will be entitled to one vote, will be required; provided further, however, that this Section 3.7 shall affect Article VII only to the extent that the Act expressly requires that the Members act and that such requirement may not be altered by any agreement by the members of a limited liability company to the contrary; or (b) written action without a meeting, as provided in Section 3.14. 3.8. SPECIAL MEETINGS. (a) A special meeting of the Members may be called for any purpose or purposes at any time by the Management Board, or by the Chairman of the Board and the President. (b) For any special meeting of the Members not called by an act of the Management Board, those persons demanding the special meeting must give written notice to the Management Board specifying the purposes of the meeting. Within thirty (30) days after the receipt of a demand under this Section, the Management Board must call a special meeting of the Members. If the Management Board fails to call the special meeting as required by this Section, the person or persons making the demand may, at the expense of the Company, call the meeting by giving the notice described in Section 3.9. 3.9. NOTICE OF MEETINGS. Written notice of each meeting of the Members, stating the date, time, and place and, in the case of a special meeting, the purpose or purposes, must be given to every Member at least ten (10) days and not more than sixty (60) days prior to the meeting. The business transacted at a special meeting of Members is limited to the purposes stated in the notice of the meeting. 3.10. LOCATION AND CONDUCT OF THE MEETINGS; ADJOURNMENT. (a) Each meeting of the Members will be held at the Company's principal place of business or at some other suitable location as designated by the Management Board. (b) The Chairman of the Board or, in his absence, the President, shall chair each meeting of the Members. (c) Any meeting of the Members may be adjourned from time to time to another date and time and, subject to Section 3.10(a), to another place. If at the time of adjournment the person chairing the meeting announces the date, time and place at which the meeting will be reconvened, it is not necessary to give any further notice of the reconvening. (d) To the extent permitted by law, a Member participating in a meeting by conference telephone or similar communications equipment by which all persons participating in the meeting can hear and speak to each other will be deemed present in person at the meeting and all acts taken by such Member during his, her or its participation shall be deemed taken at the meeting. 3.11. WAIVER OF NOTICE OF MEETING. (a) A Member may waive notice of the date, time, place and purpose or purposes of a meeting of Members. A waiver may be made before, at or after the meeting, in writing, orally or by attendance. (b) Attendance by a Member at a meeting is a waiver of notice of that meeting, unless the Member objects at the beginning of the meeting to the transaction of business because the meeting is not properly called or convened, or objects before a vote on an item of business because the item may not properly be considered at that meeting and does not participate in the consideration of the item at that meeting. 3.12. PROXIES. A Member may cast or authorize the casting of a vote by filing a written appointment of a revocable proxy with the Chairman of the Board or the President of the Company at or before the meeting at which the appointment is to be effective. The Member may sign or authorize the written appointment by telecopy or other means of electronic transmission stating, or submitted with information sufficient to determine, that the Member authorized the transmission. Any copy, facsimile, telecommunication or other reproduction of the original of either the writing or the transmission may be used in lieu of the original, if it is a complete and legible reproduction of the entire original. A Member may not grant or appoint an irrevocable proxy. 3.13. QUORUM. For any meeting of the Members, a quorum consists of a majority of the Percentage Interests or the Members as the case may be. 3.14. ACTION WITHOUT A MEETING. Any action required or permitted to be taken at a meeting of the Members may be taken without a meeting by written action signed by the Members who own the Percentage Interests equal to the Percentage Interests or by the necessary number of Members, as the case may be, that would be required to take the same action at a meeting of the Members at which all Members were present. Such written action may specify a prior or subsequent effective date. ARTICLE IV CAPITALIZATION OF THE COMPANY 4.1. Initial Capital Contributions. (a) On the Effective Date, Thomas shall contribute to the Company the Thomas Contributed Assets pursuant to the Thomas Capitalization Agreement and Genlyte shall contribute to the Company the Genlyte Contributed Assets pursuant to the Genlyte Capitalization Agreement. The Thomas Contributed Assets and the Genlyte Contributed Assets are hereinafter referred to as the "CONTRIBUTED ASSETS." (b) All Capital Contributions of the Members shall be reflected in the books and records of the Company. Any cash Capital Contribution shall be in lawful currency of the United States of America. The Contributed Assets shall be deemed to have the value, in the aggregate, set forth in a Schedule 4.1(a) to be mutually agreed upon in writing by the Members prior to the Effective Date. 4.2. ADDITIONAL CAPITAL CONTRIBUTIONS. If additional capital is required by the Company and all of the Members agree that additional capital can be contributed by the Members, each Member shall have the right, but not the obligation, to advance as an additional Capital Contribution (the "ADDITIONAL CAPITAL CONTRIBUTION") its proportionate share, based on the Percentage Interest of such Member as of the date of contribution, of the total amount of capital required. If a Member does not contribute to the Company the full amount of its share of the Additional Capital Contribution that the Member is entitled to contribute pursuant to this Section 4.2 (the "DEFICIENCY"), the other Members shall have the right, but not the obligation, to advance, as an Additional Capital Contribution, their proportionate share, based on the contributing Members' Percentage Interests, of the Deficiency. The making of any Additional Capital Contribution by a Member shall not change any Member's Percentage Interest. 4.3. CAPITAL WITHDRAWAL RIGHTS, INTEREST AND PRIORITY. Except as expressly provided in this Agreement: (a) no Member shall be entitled to withdraw or reduce such Member's Capital Contribution or any amount from its Capital Account or to receive any distributions from the Company; (b) no Member shall be entitled to demand or receive property other than cash in return for such Member's Capital Contribution; and (c) no Member shall be entitled to receive or be credited with any interest on the balance of such Member's Capital Contribution or Capital Account at any time. 4.4. CAPITAL ACCOUNTS. (a) A Capital Account shall be maintained for each Member in accordance with Regulation sectionsection1.704-1(b) and 1.704-2 and to which the following provisions apply to the extent not inconsistent with such Regulation: (i) There shall be credited to each Member's Capital Account (A) such Member's Capital Contributions; (B) such Member's distributive share of Profits; (C) any items of income or gain specially allocated to such Member under Section 5.3 of this Agreement; and (D) the amount of any Company liabilities (determined as provided in Code section752(c) and the Regulations thereunder) assumed by such Member or to which property distributed to such Member is subject; (ii) There shall be debited to each Member's Capital Account (A) the amount of money and the Asset Value of any property distributed or paid as a redemption to such Member pursuant to this Agreement; (B) such Member's distributive share of Losses; (C) any items of expense or loss which are specially allocated to such Member under Section 5.3 of this Agreement; and (D) the amount of liabilities (determined as provided in Code section752(c) and the Regulations thereunder) of such Member assumed by the Company or to which property contributed to the Company by such Member is subject; and (iii) The Capital Account of any Transferee (as defined below) shall include the appropriate portion of the Capital Account of the Member from which the Transferee's Interest was obtained. (b) The Members intend that Capital Accounts be maintained in accordance with Regulation sectionsection1.704-1(b) and 1.704-2, and to accomplish that purpose the Members are authorized to modify the manner in which the Capital Accounts are maintained and adjustments thereto are computed, and to make any appropriate adjustments thereto, so that Capital Account balances will be maintained consistent with such Regulation, provided that such modifications and adjustments will not materially affect the amount distributed to any Member upon dissolution of the Company. 4.5. SECTION 754 ELECTION. In case of a distribution of property made in the manner provided in Section 734 of the Code, or in the case of a Transfer of any interest in the Company permitted by this Agreement made in the manner provided in Section 743 of such Code, the Management Board, on behalf of the Company, may file an election under Section 754 of the Code in accordance with the procedures set forth in the applicable Regulations and shall file such an election in a timely manner at the request of any Member affected by the distribution or Transfer. ARTICLE V PROFIT AND LOSS ALLOCATIONS 5.1. Profits and Losses. Subject to the special allocation provisions of Sections 5.3, 5.4 and 5.5 of this Agreement, Profits or Losses of the Company for any Tax Year shall be allocated to the Members in accordance with their Percentage Interests. 5.2. GENERAL PROVISIONS. (a) Except as otherwise provided in this Agreement, the Members' distributive shares of all items of Company income, gain, loss, and deduction for United States federal income tax purposes shall be the same as their distributive shares of Company Profits and Losses. (b) To the extent permitted by Regulations section1.704-2(i)(6) and section1.704-2(h), the Members shall endeavor to avoid treating distributions of cash as being from the proceeds of a Nonrecourse Liability (as defined under Regulation section1.704-2 (b)(3)) or a Member Nonrecourse Debt (as determined under Regulation section1.704-2(b)(4)). (c) If there is a change in any Member's Percentage Interest during a Tax Year, each Member's distributive share of Profits or Losses or any item thereof for such Tax Year, shall be determined by the proration method prescribed by Code section706(d) or the Regulations thereunder. (d) The Members agree to report their shares of income and loss for United States federal income tax purposes in accordance with the provisions of this Article V. 5.3. SPECIAL PROVISIONS. (a) Minimum Gain Chargeback. Notwithstanding any other provision of this Article V, if there is a net decrease in Company Minimum Gain (as defined in Regulation section1.704-2(d)) during any Tax Year, then each Member shall be allocated such amount of income and gain for such year (and subsequent years, if necessary) determined under and in the manner required by Regulation section1.704-2(g)(1) and (g)(3) as is necessary to meet the requirements for a minimum gain chargeback as provided in Regulation section1.704-2(f). (b) Member Nonrecourse Debt Minimum Gain Chargeback. Notwithstanding any other provision of this Article V except Section 5.3(a), if there is a net decrease in Member Nonrecourse Debt Minimum Gain (as determined in accordance with Regulation section1.704-2(i)(5)) attributable to a Member Nonrecourse Debt (as defined in Regulation section1.704-2(b)(4)) during any Tax Year, any Member who has a share of the Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt determined in accordance with Regulation section1.704-2(i)(5) shall be allocated such amount of income and gain for such year (and subsequent years, if necessary) determined under and in the manner required by Regulation section1.704-2(i)(4) as is necessary to meet the requirements for a minimum gain chargeback as is provided in that Regulation. (c) Qualified Income Offset. If a Member unexpectedly receives any adjustment, allocation or distribution described in Regulation section1.704- 1(b)(2)(ii)(d)(4), (5) or (6), items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of such Member as quickly as possible, provided that an allocation pursuant to this subsection (c) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Section 5.3 of this Agreement tentatively have been made as if this subsection (c) were not in this Agreement. (d) Limitation on Losses. Notwithstanding any other provision of this Agreement, Losses allocated to any Member pursuant to this Agreement shall not exceed the maximum amount of Losses that may be allocated without causing such Member to have an Adjusted Capital Account Deficit at the end of the Tax Year for which the allocation is made. Any Loss that cannot be allocated to a Member as a result of the limitation contained in this subsection (d) shall be allocated to the other Members to the extent possible; provided, however, that the Management Board shall have the authority and obligation to specifically allocate items of Company income and gain for subsequent years in an amount and manner sufficient to offset the Loss so allocated to the other Members. (e) Code section754 Adjustment. To the extent that an adjustment to the Basis of any asset pursuant to Code section734(b) or Code section743(b) is required to be taken into account in determining Capital Accounts as provided in Regulation sectionl.704-1(b)(2)(iv)(m), the adjustment shall be treated (if an increase) as an item of gain or (if a decrease) as an item of loss, and such gain or loss shall be allocated to the Members consistent with the allocation of the adjustment pursuant to such Regulation. (f) Nonrecourse Deductions. Nonrecourse Deductions (as determined under Regulation section1.704-2(c)) for any Tax Year shall be allocated to the Members in accordance with their Percentage Interests. (g) Member Nonrecourse Deductions. Any Member Nonrecourse Deduction (as defined in Regulation sectionl.704-2(i)(2)) shall be allocated pursuant to Regulation section1.704-2(i) to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which it is attributable. (h) Purpose and Application. The purpose and the intent of the special allocations provided for in this Section 5.3 are to comply with the provisions of Regulations sectionl.704-1(b) and sectionl.704-2, and such special allocations are to be made so as to accomplish that result. However, to the extent possible, the Members in allocating items of income, gain, loss, or deduction among the Members shall take into account the special allocations in such a manner that the net amount of allocations to each Member shall be the same as such Member's distributive share of Profits and Losses would have been had the events requiring the special allocations not taken place. The Members shall apply the provisions of this Section 5.3 in whatever order they reasonably believe will minimize any economic distortion that otherwise might result from the application of the special allocations. 5.4. CODE section704(C) ALLOCATIONS. Solely for United States federal, state, and local income tax purposes and not with respect to determining any Member's Capital Account, distributive shares of Profits, Losses, other items, or distributions, a Member's distributive share of income, gain, loss, or deduction with respect to any property (other than money) contributed to the Company, or with respect to any property, the Asset Value of which was adjusted as provided in subsection (iii) of the definition of Asset Value shall be determined in accordance with the principles set forth in Regulations under Section 704(c) of the Code and the Regulations thereunder. 5.5. ALLOCATIONS RELATING TO TAXABLE ISSUANCE OF INTERESTS. For United States federal income tax purposes, any income, gain, loss or deduction realized by the Company as a direct or indirect result of the issuance of any Interest by the Company (the "ISSUANCE ITEMS") shall be allocated among the Members so that, to the extent possible, the net amount of such Issuance Items, together with all other allocations under this Agreement to each Member, shall be equal to the net amount that would have been allocated to each such Member if the Issuance Items had not been realized. ARTICLE VI DISTRIBUTIONS 6.1. Distributions. Subject to Sections 6.2 and 7.5, distributions shall be made at such time and in such amounts as determined by the Management Board and shall be made among the Members in cash or other property in proportion to their respective Percentage Interests. Notwithstanding anything to the contrary herein provided, no distribution hereunder shall be permitted to the extent prohibited by the Act. 6.2. MANDATORY DISTRIBUTIONS. Notwithstanding the above, the Company shall make the following distributions to its Members: (a) The Company, upon advice of and review by its independent accountants, shall determine in good faith the projected aggregate Member Tax Liability (as defined below) for each fiscal year or other period computed on a quarterly basis (the "ESTIMATED QUARTERLY LIABILITY"). The Company shall distribute to each of the Members an amount equal to the Estimated Quarterly Liability attributable to such Member's Percentage Interest in the Company not earlier than fourteen (14) days prior nor later than two (2) days prior to the date on which such Member's attributable share of such Estimated Quarterly Liability is due and payable. Any shortfall in distributions attributable to a difference between the actual Member Tax Liability and the Estimated Quarterly Liability previously distributed to the Member for a Fiscal Year shall be distributed no later than March 13 of the year following such Fiscal Year. The "MEMBER TAX LIABILITY" with respect to a taxable year means, for each Member, the product of (x) the net income or net loss of the Company, calculated as the items of income (other than tax-exempt income), loss and deduction described in Section 703(a) of the Code allocable to such Member for United States federal income tax purposes for the taxable year, reduced by the sum of net losses or deductions (if any) allocated to such Member by reason of its Percentage Interest in the Company in prior taxable years and which have not previously reduced the net income of the Company allocated to such Member for purposes of calculating the Member Tax Liability, and (y) the Member's Assumed Tax Rate. The "MEMBER'S ASSUMED TAX RATE" shall equal: A + B where "A" equals the maximum United States federal income tax rate for taxable income of corporations filing a return under Section 1 of the Code, and "B" equals the weighted average effective state and local tax rate for taxable income of the Members allocated to each Member by reason of their ownership interest in the Company; and (b) subject to the provisions of the Act and the terms of the primary credit facility of the Company, distributions (exclusive of the tax distributions set forth in Section 6.2(a)) to each of its Members so that Thomas receives at least an aggregate of $3,000,000 and Genlyte receives at least an aggregate of $6,375,000 per Fiscal Year from the Company beginning in Fiscal Year 1999; provided, however, that prior to any distribution under this Section 6.2(b), the Management Board shall first consult with the Company's tax counsel. ARTICLE VII MANAGEMENT 7.1. Management Board. The Company shall have a Management Board consisting of six (6) Representatives, two (2) of whom shall be appointed by Thomas and four (4) of whom shall be appointed by Genlyte, (each such person being referred to as a "REPRESENTATIVE"). Such Representatives shall collectively be referred to as the "MANAGEMENT BOARD." In the event of the removal, resignation or death of a Representative, the vacancy promptly shall be filled by the Member who appointed the departing Representative. The appointment of each Representative on the Management Board subsequent to the initial Representatives named in Section 7.2 hereof shall be evidenced by an appointment, and acceptance of the appointment, in a writing delivered to the Company by the Member entitled to appoint such Representative. Each Representative will serve on the Management Board at the pleasure of the Member appointing him or her, and may be removed and replaced with a substitute at any time, with or without cause, by such Member. Each Representative shall be an officer, director or high-ranking management employee of the appointing Member. 7.2. INITIAL MANAGEMENT BOARD. The initial Representatives shall be Timothy C. Brown and another director of Thomas to be appointed by Thomas prior to the Effective Date (appointed by Thomas) and Larry K. Powers, Avrum Drazin, Fred Heller and David Engelman (appointed by Genlyte). 7.3. AUTHORITY OF THE MANAGEMENT BOARD. (a) Except as otherwise expressly provided in this Article VII, this Agreement and except for situations in which the approval of the Members is expressly required by provisions of the Act, the Management Board shall manage and conduct the business and affairs of the Company and have the exclusive authority (without the need of separate approval of the Members) to make all decisions regarding the management and affairs of the Company and to authorize all things necessary, proper, or desirable to carry out the Business, including the right to make and enter into any contracts, enter into any transactions, and make and obtain any commitments on behalf of the Company to conduct or further the Business. (b) Subject to the foregoing, the day to day operation of the Company shall be under the direction of the President, who shall report and be responsible to the Management Board. The Management Board may delegate such of the above functions as it deems appropriate and necessary to conduct the daily operations of the Company. Subject to the provisions of this Agreement, the Management Board may adopt regulations and policies governing the conduct of its duties. 7.4. ACTION BY THE MANAGEMENT BOARD. Each Representative shall have one vote in Management Board decisions. Action by the Management Board requires either: (a) a resolution approved by the affirmative vote of a majority of the Representatives at a meeting of the Representatives, scheduled by a prior act of the Representatives or called upon at least three (3) Business Days' written notice signed by a Representative (subject to a Representative's right to waive notice); or (b) a written action, signed by all Representatives (such written action may specify a prior or subsequent effective date). 7.5. APPROVAL REQUIRED FOR CERTAIN MATTERS. Notwithstanding Section 7.4, the following shall require the approval of at least a majority of the Representatives, including, in all instances, approval by at least one Representative appointed by Thomas: (a) removal of Larry K. Powers as President and/or Chief Executive Officer of the Company or selection of a President or Chief Executive Officer of the Company other than Larry K. Powers; (b) removal of Timothy C. Brown as Chairman of the Board of the Company; (c) a material change in the nature of the Business; (d) except as provided in Sections 10.4, 10.5, 10.6, 10.7, 10.10(c) or 11.2, acquisition of assets or of equity interests by or on behalf of the Company and its subsidiaries individually or, in the case of a series of related transactions, in the aggregate, in excess of $25,000,000; (e) except as provided in Sections 10.4, 10.5, 10.6, 10.7, 10.10(c) and 11.2, sale, exchange, assignment, transfer, lease or other disposition of assets of the Company in excess of $25,000,000; (f) except as provided in Sections 10.4, 10.5, 10.6 and 10.7, the sale, pledge, lease, encumbrance or granting of a security interest in all or substantially all of the Company's assets unless pursuant to the incurrence of indebtedness for money borrowed for which approval is not required pursuant to Section 7.5(h); (g) except as provided in Sections 10.4, 10.5, 10.6, 10.7, 10.10(c) and 11.2, a consolidation or merger of the Company with or into any other Person; (h) except as provided in Sections 10.4, 10.5, 10.6, 10.7 and 10.10(c), incurrence of indebtedness for money borrowed (net of cash and cash equivalents) by the Company and its subsidiaries in excess of three times EBITDA for the four (4) calendar quarters immediately preceding the quarter in which the indebtedness is to be incurred; (i) any amendment to (i) this Agreement or (ii) the Company's Certificate (unless a Member is required by the Act to file such amendment to correct any false statement in the Certificate or this Agreement and except in connection with any action permitted to be taken by the Company or Genlyte pursuant to Sections 10.4, 10.5, 10.6, 10.7 and 10.10(c)); (j) any voluntary liquidation, dissolution or termination of the Company pursuant to Article XI below, except as provided in Sections 10.4, 10.5, 10.6, 10.7 or 10.10(c); (k) any split, combination, reclassification or, except as otherwise contemplated by this Agreement, redemption of any Interests; (l) except as provided in Sections 10.4, 10.5, 10.6, 10.7 and 10.10(c), the admission or removal of any Member and the issuance by the Company of any additional Interests or other equity interests (including any interests convertible into equity interests) of the Company; (m) distributions in amounts less than the amounts required by Section 6.2; and (n) any transactions between the Company and Genlyte or Thomas or their Affiliates, other than pursuant to the Services Agreement and other than loans by either Member to the Company to the extent permitted by the Company's credit facility and other agreements, the terms of which loans are at least as favorable to the Company as the terms of the Company's then current primary credit facility. To the extent required by applicable law, the matters set forth in Sections 7.5, 10.4, 10.5, 10.6, 10.7 and 10.10(c) may also be subject to approval by the stockholders of Thomas and Genlyte. 7.6. PLACE OF MEETINGS. The Management Board may hold its meetings at the principal business office of the Company or at such other place as it may from time to time determine. 7.7. SALARY AND EXPENSES. Representatives serving on the Management Board who are not employees or officers of the Company may receive compensation for serving as a Representative as the Management Board may from time to time determine. All Representatives shall be reimbursed for reasonable expenses incurred by them in connection with attendance at the Management Board meetings. 7.8. REGULAR MEETINGS. Regular meetings of the Management Board shall be held at least quarterly on such dates as established in advance by resolution of the Management Board. 7.9. SPECIAL MEETINGS. Special meetings of the Management Board may be called by the President, Chairman of the Board or any three (3) Representatives by written notice sent to each Representative in accordance with Section 15.3. hereof. Such meeting shall be set for a date no sooner than five (5) Business Days after the date the notice is sent. 7.10. ACTION WITHOUT A MEETING. Any action which is required or permitted to be taken at a meeting of the Management Board may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, is signed by all of the Representatives of each Member and filed with the Company. 7.11. TELEPHONE MEETING. Representatives of the Management Board may participate in a meeting of the Management Board by means of conference telephone call or other similar communication equipment whereby all persons participating in the meeting can hear each other. Participation in the meeting in this manner constitutes presence in person at the meeting. 7.12. RECORDS OF ACTION. Written records of all action taken by the Management Board, whether at a regular or special meeting or pursuant to written consent in accordance with the provisions of Section 7.10, shall be kept at the principal business office of the Company. Copies of all written approvals of the Members shall also be kept at such office. The Members shall designate the person, who may but need not be a Representative, charged with the maintenance and custody of such records. 7.13. WAIVER OF NOTICE. Whenever any notice is required by the Act, the Certificate or this Agreement, to be given to any Representative or to any Member, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, and delivered to the Company for inclusion in the minutes or filing with the Company's records, shall be deemed equivalent thereto. 7.14. RELIANCE ON BOOKS. A Representative shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or reports made to the Company by any of its officers, or by an independent certified public accountant, or by a professional or expert selected with reasonable care by the Management Board, or in relying in good faith upon other records of the Company. 7.15. STANDARD OF CARE; LIABILITY. Every Representative shall discharge his or her duties in good faith and in a manner he or she believes to be in the best interests of the Company and in accordance with this Agreement. Subject to Section 7.14, a Representative shall not be liable for any monetary damages to the Company for any breach of such duties except (a) for receipt of a financial benefit to which the Representative is not entitled; (b) voting for or assenting to a distribution to Members in violation of this Agreement or the Act; or (c) a knowing violation of the law. No amendment or repeal of Sections 7.14 or 7.15 shall affect any liability or alleged liability of any Representative for any acts, omissions or conduct that occurred prior to the amendment or repeal. 7.16. CHAIRMAN OF THE BOARD. The Chairman of the Board shall be the Chairman of the Management Board and shall perform all duties incident to the office of Chairman of the Board and such other duties as may from time to time be assigned to the Chairman of the Board by the Management Board. ARTICLE VIII OFFICERS 8.1. Appointment. The Management Board shall, from time to time, appoint one or more individuals to be officers of the Company. The officers of the Company shall include a President, a Chief Financial Officer, a Secretary and a Treasurer. Any officers so appointed shall have such authority and perform such duties as are set forth herein or as the Management Board may, from time to time, delegate to them. The Management Board may also appoint other officers (including one or more Vice Presidents, Assistant Treasurers and one or more Assistant Secretaries) as may be necessary or desirable. Any two or more offices may be held by the same person. Each officer shall hold office until his or her successor shall have been duly elected and qualified, or until his or her death, or until he or she shall have resigned or have been removed, as provided in this Section 8.3. 8.2. COMPENSATION. The salaries or other compensation, if any, of the officers of the Company shall be fixed from time to time by the Management Board. 8.3. RESIGNATIONS. Any officer of the Company may resign at any time by giving written notice of resignation to the Company. The notice shall be sent in accordance with the provisions of Section 15.3, and the resignation of the officer shall take effect on the deemed date of delivery specified in Section 15.3, or at such later time as shall be specified in such notice, and, unless otherwise specified therein the acceptance of such resignation shall not be necessary to make it effective. 8.4. REMOVAL. Except as set forth in Section 7.5, any officer of the Company may be removed, either with or without cause, at any time, by the Management Board. 8.5. OFFICERS. The officers of the Company shall have the following duties: (a) President. The President, who may also be the chief executive officer of the Company, shall perform all duties incident to the office of President and such other duties as may from time to time be assigned the President by the Management Board. (b) Chief Financial Officer. The Chief Financial Officer shall perform all duties incident to the office of the Chief Financial Officer and such other duties as may from time to time be assigned to the Chief Financial Officer by the Management Board or the President. (c) Vice President. Each Vice President shall perform all such duties as from time to time may assigned by the Management Board or the President. At the request of the President or in the event of his or her inability as a result of death, disability or removal or refusal to act if required to do so by the Management Board, the Vice President, or if there shall be more than one, the Vice Presidents in the order determined by the Management Board (or if there be no such determination, then the Vice Presidents in the order of their election), shall perform the duties of the President, and, when so acting, shall have the powers of and be subject to the restrictions placed upon the President in respect of the performance of such duties. (d) Treasurer. The Treasurer shall: (i) have charge and custody of, and be responsible for, all the funds and securities of the Company; (ii) keep full and accurate accounts of receipts and disbursements in books belonging to the Company; (iii) render to the Management Board, whenever the Management Board may require, an account of the financial condition of the Company; and (iv) in general, perform all duties incident to the office of Treasurer and such other duties as from time to time may be assigned by the Management Board or the President. (e) Secretary. The Secretary shall: (i) keep or cause to be kept in one or more books provided for the purpose, minutes of all meetings of the Management Board and the Members; (ii) see that all notices are duly given in accordance with the provisions of this agreement and as required by law; (iii) be custodian of the records of the Company; (iv) see that the required records, books, reports, statements, certificates and other documents and records required by law to be kept and filed, are properly kept and filed; and (v) in general, perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to the Secretary by the Management Board or the President. (f) Assistant Treasurer. The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Management Board (or if there be no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of his or her inability as a result of death, disability or removal or refusal to act if required to do so by the President, Treasurer or the Management Board, perform the duties and exercise the powers of the Treasurer and shall perform such other duties as from time to time may be assigned by the Management Board or the President. (g) Assistant Secretary. The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Management Board (or if there be no such determination, then in the order of their election), shall, in the absence of the Secretary or in the event of the Secretary's inability as a result of death, disability or removal or refusal to act if required to do so by the President, Secretary or the Management Board, perform the duties and exercise the powers of the Secretary and shall perform such other duties as from time to time may be assigned by the Management Board or the President. ARTICLE IX INDEMNIFICATION AND INSURANCE 9.1. Indemnification and Advancement of Expenses. (a) The Company shall indemnify and hold harmless, to the fullest extent authorized by law as the same exists, or may hereafter be amended to permit the Company to provide broader indemnification rights, any Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he, she or it is or was a Representative or officer of the Company or officer, employee, representative or agent of the Company serving at the request of the Company as a director, officer, manager, employee, representative or agent of another corporation, limited liability company, general partnership, limited partnership, joint venture, trust, business trust or other enterprise or entity, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him, her or it in connection with such action, suit or proceeding if he, she or it acted in good faith and in a manner he, she or it reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal action or proceeding, had no reasonable cause to believe his, her or its conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that such Person did not act in good faith and in a manner which he, she or it reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal action or proceeding, had reasonable cause to believe that his, her or its conduct was unlawful. Notwithstanding the foregoing, the Company shall not be obligated to indemnify any Person to the extent that a claim for indemnification arises out of a breach of the standard of care contained in Section 7.15 of this Agreement. (b) To the extent that a Representative, officer, employee, representative or agent of the Company has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 9.1(a), or in defense of any claim, issue or matter therein, he, she or it shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him, her or it in connection therewith. (c) Any indemnification under this Section 9.1 (unless ordered by a court of competent jurisdiction) shall be made by the Company only as authorized in the specific case upon a determination that indemnification of the Representative, officer, employee, representative or agent is proper in the circumstances because he, she or it has met the applicable standard of conduct set forth in Section 9.1(a). Such determination shall be made (i) by the Management Board by a majority vote of Representatives who were not parties to such action, suit or proceeding or (ii) if the disinterested Representatives so direct, by independent legal counsel in a written opinion. (d) Expenses (including attorneys' fees) incurred by a Representative in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Company in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such Representative to repay such amount if it shall ultimately be determined that he, she or it is not entitled to be indemnified by the Company pursuant to this Section 9.1. Such expenses (including attorneys' fees) incurred by other officers, employees, representatives and agents shall be so paid upon such terms and conditions, if any, as the Management Board deems appropriate. (e) The indemnification and advancement of expenses provided by, or granted pursuant to, this Section 9.1 shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any agreement, vote of disinterested Representatives or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office. (f) For purposes of this Section 9.1, any reference to the "Company" shall include, in addition to the resulting or surviving entity, any constituent entity (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, managers, members, employees, representatives or agents, so that any Person who is or was a director, officer, manager, member, employee, representative or agent of such constituent entity, or is or was serving at the request of such constituent entity as a director, officer, manager, employee, representative or agent of another entity, limited liability company, general partnership, limited partnership, joint venture, trust, business trust or other enterprise or entity, shall stand in the same position under the provisions of this Section 9.1 with respect to the resulting or surviving entity as he, she or it would have with respect to such constituent entity if its separate existence had continued; provided, however, that nothing contained herein shall require the Company to indemnify any director, officer, manager, member, employee, representative or agent of any Member who is not also a director, officer, manager, member, employee, representative or agent of the Company. (g) The indemnification and advancement of expenses provided by, or granted pursuant to, this Section 9.1 shall continue as to a Person who has ceased to be a Representative, officer, employee, representative or agent and shall inure to the benefit of the heirs, executors, administrators, successors and assigns of such Person. (h) In addition to the foregoing provisions of Article IX, the Company shall have the power, to the full extent provided by law, to indemnify any person for any act or omission of such person against all loss, cost, damage and expense (including attorneys' fees) if such person is determined (in the manner provided in Section 9.1(c) hereof), to have acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interest of the Company. (i) Notwithstanding anything in this Article to the contrary, the Company will not have the obligation of indemnifying any Person with respect to proceedings, claims or actions initiated or brought voluntarily by such Person and not by way of defense. 9.2. INSURANCE. The Company may purchase and maintain insurance or another arrangement on behalf of any Person who is or was a Representative, officer, employee, representative or agent identified in Section 9.1, or is or was serving at the request of the Company as a director, officer, manager, employee, representative or agent of another entity, limited liability company, general partnership, limited partnership, joint venture, trust, business trust or other enterprise or entity, against any liability asserted against such Person or incurred by such Person in such a capacity or arising out of the status of such a Person, whether or not the Company would have the power to indemnify such Person against that liability under Section 9.1 or otherwise. 9.3. LIMIT ON LIABILITY OF MEMBERS. The indemnification set forth in this Article IX shall in no event cause the Members to incur any personal liability beyond their total net Capital Contributions, nor shall it result in any liability of the Members to any third Person. ARTICLE X TRANSFERS, WITHDRAWALS AND DEADLOCK 10.1. General Restriction on Transfers and Withdrawals. (a) Except as set forth in Sections 10.4, 10.5, 10.6, 10.7 and 10.10, no Member may Transfer all or any part of this Agreement or such Member's Interest without the written approval of each Non-Transferring Member (as hereinafter defined); provided, however, that a Member may transfer its Interest to its parent, which shall be Thomas or a wholly-owned subsidiary of Thomas, or a wholly-owned subsidiary (collectively, "RELATED PARTY") existing as of the date hereof. No Member may resign or withdraw from the Company except as provided in this Article X, without the approval of the Non-Transferring Member. (b) Subject to the Member's rights under Sections 10.4, 10.5, 10.6, 10.7 and 10.10, no transfer which would result in a termination of the Company under Section 708(b)(1)(B) of the Code shall be effective unless and until approved by the Non-Transferring Members. (c) Any purported Transfer of all or any part of this Agreement or an Interest in violation of the terms of this Agreement shall be null and void and of no effect. A permitted Transfer shall be effective as of the date specified in the instruments relating thereto. Any transferee Member desiring to make a further Transfer shall be subject to all the provisions of this Article X to the same extent and in the same manner as any Member desiring to make any Transfer. 10.2. ASSIGNEES AND SUBSTITUTE MEMBERS. (a) Unless and until admitted as a substitute Member as provided below, a permitted Transferee of a Member's Interest in whole or in part shall be an assignee with respect to such Interest or portion thereof and shall not be entitled to participate in the management of the Business and affairs of the Company or to become or to exercise the rights of a Member, including the right to vote, the right to appoint Representatives, the right to require any information or accounting of the Business or the right to inspect the Company's books and records or its facilities. Such Transferee shall only be entitled to receive, to the extent of the Interest Transferred to such Transferee, the share of distributions, including distributions representing the return of Capital Contributions, to which the Transferor would otherwise be entitled with respect to the Transferred Interest or portion thereof. (b) No Transferee of all or part of a Member's Interest shall become a substitute Member unless and until: (i) such Transferee has executed an instrument accepting and adopting the terms and provisions of the Certificate, this Agreement and any other documents or agreements executed in connection herewith; and (ii) subject to Section 10.5, except in respect of a Transfer from a Member to a Related Party of such Member, each non- Transferring Member shall have consented in writing to such Transferee becoming a substitute Member, which consent shall not be unreasonably withheld if the conditions set forth in Section 10.2(b)(i) above are satisfied. (c) Upon satisfaction of all the foregoing conditions with respect to a particular Transferee, the Management Board shall cause the books and records of the Company to reflect the admission of the Transferee as a substitute Member to the extent of the Interest or portion thereof held by the Transferee. 10.3. EFFECT OF ADMISSION AS A SUBSTITUTE MEMBER. A Transferee who has become a substitute Member has, to the extent of the Interest Transferred to such substitute Member, all the right, power and benefit and is subject to all the restrictions and liabilities of a Member under the Certificate, this Agreement and the Act. Upon admission of a Transferee as a substitute Member, the Transferor of the Interest so acquired by the substitute Member shall cease to be a Member to the extent of such Transferred Interest. A Person shall not cease to be a Member upon assignment of all such Member's Interest unless and until the Transferee becomes a substitute Member pursuant to Section 10.2. 10.4. PUT RIGHT. (a) At any time on or after January 31, 2002, Thomas shall have the right (a "PUT RIGHT"), but not the obligation, to require the Company to purchase all, but not less than all, of Thomas's Interest at the applicable Put Price (as hereinafter defined). Thomas shall exercise the Put Right, if at all, by giving written notice of exercise (a "PUT EXERCISE NOTICE") to the Company and the other Members. (b) The purchase price (the "PUT PRICE") applicable to any purchase of any Member's Interest shall be equal to the Appraised Value of such Interest as determined pursuant to Section 10.9. (c) If the Company cannot secure the necessary financing or consents with respect to Thomas's exercise of its rights pursuant to Section 10.4(a), Thomas shall have the right, in its sole discretion and without the need of approval of any other Member or Representative or of any further action, to cause the entire Company or the Business to be sold by giving notice to the Management Board and the Management Board shall proceed to sell the entire Company or Business as soon as reasonably practicable; provided, however, that a fairness opinion as to such transaction from a recognized investment banking firm is delivered to the Management Board. (d) Notwithstanding the foregoing, at any time after receipt of the Put Exercise Notice, Genlyte shall have the right, in its sole discretion and without the need of approval of any other Member or Representative or of any further action, to cause the entire Company or Business to be sold by giving notice to the Management Board and the Management Board shall proceed to sell the entire Company or Business as soon as reasonably practicable; provided, however, that a fairness opinion as to such transaction from a recognized investment banking firm is delivered to the Management Board. 10.5. CHANGE OF CONTROL. (a) In the event of a Change of Control of Thomas, the Company shall have the right, but not the obligation, to purchase Thomas's Interest at the Appraised Value. Such right shall be exercised by giving notice to Thomas within 90 days of the effective date of the Change of Control. (b) In the event of a Change of Control of Genlyte, Thomas shall have the right, but not the obligation, to sell its Interest to the Company at the Appraised Value. Such right shall be exercised by giving notice to the Company within 90 days of the effective date of the Change of Control. (c) Notwithstanding the foregoing, if the Company cannot secure the necessary financing or consents or chooses not to exercise its rights pursuant to Section 10.5(a), Genlyte shall have the right, in its sole discretion and without the need of approval of any other Member or Representative or of any further action, to cause the entire Company or Business to be sold by giving notice to the Management Board and the Management Board shall proceed to sell the entire Company or Business as soon as reasonably practicable; provided, however, that a fairness opinion as to such transaction from a recognized investment banking firm is delivered to the Management Board. (d) If the Company cannot secure the necessary financing or consents with respect to Thomas's exercise of its rights pursuant to Section 10.5(b), Thomas shall have the right, in its sole discretion and without the need of approval of any other Member or Representative or of any further action, to cause the entire Company or Business to be sold by giving notice to the Management Board and the Management Board shall proceed to sell the entire Company or Business as soon as reasonably practicable; provided, however, that a fairness opinion as to such transaction from a recognized investment banking firm is delivered to the Management Board. 10.6. DEADLOCK. (a) In the event of a Deadlock (as hereinafter defined), Thomas may exercise its Put Right in accordance with Section 10.4 or Genlyte shall have the right, in its sole discretion and without the need of approval of any other Member or Representative or of any further action, to cause the entire Company or Business to be sold; provided, however, that a fairness opinion as to such transaction from a recognized investment banking firm is delivered to the Management Board. (b) A "DEADLOCK" shall be deemed to exist on or after the date specified in Section 10.4(a) if: (i) the Management Board fails to agree in accordance with Section 7.5 upon any action, or with respect to any matter, set forth in Section 7.5; and (ii) such disagreement continues for 90 days (the "DEADLOCK DATE"); provided, however, that during the 90-day period, negotiations are conducted to resolve such disagreement pursuant to Section 15.14. 10.7. OFFER RIGHT. On or after the later to occur of (i) the final settlement or disposition of the Litigation or (ii) January 31, 2002, either Member shall have the right but not the obligation, to offer to buy the other Member's interest (an "OFFER RIGHT"). A Member shall exercise its Offer Right, if at all, by giving written notice of exercise (an "OFFER EXERCISE NOTICE") to the Company and the other Members. The Members shall negotiate in good faith the terms of the transaction for a period of 60 days following the date of the Offer Exercise Notice. If the Members cannot agree on the terms within the 60 day period or on extending the 60 day period, then the Management Board shall cause the entire Company or Business to be sold to the highest bidder; provided, however, that a fairness opinion as to such transaction from a recognized investment banking firm is delivered to the Management Board. Either Member may participate in the bidding for the purchase of the entire Company or Business pursuant to this Section 10.7. 10.8. CLOSING. The closing of any purchase of a Member's Interest or the sale of the Company or the Business, as the case may be, pursuant to Sections 10.4, 10.5, 10.6 and 10.7 shall take place on a date agreed upon by the Company or the Non-Transferring Member, as the case may be, and the Transferring Member, but in no event later than seven (7) months after the date of the Put Exercise Notice, the Change of Control Date, the Deadlock Date or the Offer Exercise Date (together with the 60 days plus any extension pursuant to Section 10.7), as the case may be (the "TRANSFER CLOSING DATE"); provided, however, that Genlyte shall have the one-time right to delay the closing for up to six (6) months from the anticipated Transfer Closing Date. In addition, Thomas shall have the one-time right to delay the closing with respect to the exercise of an Offer Right for up to six (6) months from the Transfer Closing Date. The time and place of closing shall be agreed upon by the Company and the Transferring Member. At the closing, the Company shall make payment of the Appraised Value by wire transfer of immediately available funds to a bank account designated by the Transferring Member. Such payment shall be in complete satisfaction of the Transferring Member's Interest. Also, at the closing, the Transferring Member shall deliver to the Company such documentation as the Company shall reasonably request evidencing the Transfer to the Company of the Interest so Transferred, free of any lien, claim or encumbrance. 10.9. APPRAISED VALUE. (a) As used herein, "APPRAISED VALUE" means an amount equal to the Fair Market Value of the Company (determined as set forth below) multiplied by the Percentage Interest, or portion thereof, that is being put or Transferred, as the case may be. For purposes of determining Appraised Value, "FAIR MARKET VALUE" of the Company means the value of the total Interests in the Company computed as a going concern, including the control premium. The amount of the Fair Market Value of the Company finally determined in the manner described below shall be binding and conclusive on all Members and the Company. (b) The Member Transferring its Interest (the "TRANSFERRING MEMBER") and the Member(s) not Transferring its Interest (collectively, the "NON- TRANSFERRING MEMBER ") shall each designate an appraiser (which shall be a recognized investment banking firm) for the purpose of determining the Fair Market Value of the Company in accordance with the methodology set forth herein within ten (10) Business Days of the date of the Put Exercise Notice, the Change of Control Date or the Deadlock Date, as the case may be. Each such appraiser (an "INITIAL APPRAISER") shall, as of the Valuation Date, set forth its preliminary determination of the Fair Market Value of the Company (the "PRELIMINARY FAIR MARKET VALUE") in writing (together with reasonable detail showing the method of calculation thereof) and shall deliver a copy of such written determination (an "APPRAISER'S REPORT") to each of the Company, the Transferring Member and the Non-Transferring Member, not later than the 30th day following its retention. (c) The two Initial Appraisers, if they cannot agree on the Fair Market Value, shall mutually designate a third appraiser (the "THIRD APPRAISER"), which shall be a recognized independent investment banking firm, to make its own independent determination of the Preliminary Fair Market Value in accordance with the same methodology as set forth above. (d) The Third Appraiser shall use its best efforts to complete its determination as soon as practicable, and in any event within thirty (30) days of its retention. The determination by the Third Appraiser of the Preliminary Fair Market Value shall be set forth in an Appraiser's Report delivered to the Company, the Transferring Member and the Non-Transferring Member promptly after the preparation thereof. (e) In the event that the determination by the Third Appraiser of the Preliminary Fair Market Value falls between the determinations by the two Initial Appraisers, then the determination of the Third Appraiser shall constitute the Fair Market Value of the Company for purposes of this Section. In the event, however, that the determination by the Third Appraiser is higher than the highest determination of the two Initial Appraisers or is lower than the lowest of such determinations, then the determination by the particular Initial Appraiser that is closest in value to the determination by the Third Appraiser shall be deemed to constitute the Fair Market Value of the Company for purposes of this Section. (f) Promptly upon final determination of the Fair Market Value of the Company, the Company shall calculate the Appraised Value and give notice thereof to the Transferring Member and the Non-Transferring Member. The Transferring Member shall be responsible for the costs and expenses of the Initial Appraiser selected by it, and the Non-Transferring Member shall be responsible for the costs and expenses of the Initial Appraiser selected by the Non-Transferring Member. The costs and expenses of the Third Appraiser, if any, shall be paid by the Member whose Initial Appraiser's Appraised Value is farthest from the Appraised Value determined by the Third Appraiser 10.10. ASSIGNABILITY AND FINANCING. (a) Notwithstanding anything contained herein to the contrary, the Company's obligations under Sections 10.4, 10.5 and 10.6 shall be nonrecourse to the Members and may be assigned by the Company to any third Person approved by the Representatives of the Non-Transferring Members, provided, that no such assignment shall be deemed to release the Company from any liability or obligation hereunder, and, provided, further, that the admission of such third Person as a Member is subject to the unanimous approval of all Non-Transferring Members pursuant to Section 10.2 unless otherwise provided in this Section 10.10. (b) Genlyte shall have the right, in its sole discretion and without the need of approval of any other Member, Representative or of any further action, to cause the Company to assign the rights to purchase Thomas's Interest, pursuant to Sections 10.4, 10.5 and 10.6 to Genlyte; provided, however, that no such assignment shall be deemed to release the Company from any liability or obligation hereunder. (c) Notwithstanding Section 7.5 or Section 10.10(a), Genlyte shall have the right, in its sole discretion and without the need of approval of any other Member, Representative or of any further action, to cause the Company to incur indebtedness, to admit a new Member(s) to merge or consolidate the Company, or to undertake an initial public offering (including taking corporate action for the purpose of converting the Company to a corporation), to finance or effect financing of the payment of the Appraised Value and to satisfy any obligation or the exercise of any right of the Company and/or Genlyte pursuant to this Article X. The incurrence of indebtedness, the admission of a new Member(s) and the completion of an initial public offering shall take place simultaneously with the closing of any purchase of a Member's Interest or the sale of the Company or the Business, as the case may be, pursuant to this Article X to the extent practicable (without in any way limiting Thomas' rights to be paid in accordance with Article X). In the event the Company is converted to a corporation in contemplation of an initial public offering pursuant to Section 10.10(c) and such initial public offering is not completed, Thomas will still be entitled to be paid in accordance with the terms of this Article X. (d) Each of the Members agrees to take all reasonably required actions and to cause the Company to take all actions reasonably necessary to convert the form of the Company to a corporation upon or prior to the initial public offering of equity interests of the Company, if any, pursuant hereto. (e) Notwithstanding Section 7.5 hereof, actions to be taken by the Company pursuant to Sections 10.4, 10.5, 10.6 or 10.10 shall be determined by the Management Board in accordance with the requirements of Section 7.4. 10.11. LIMITED APPLICABILITY. Notwithstanding anything contained herein to the contrary, the provisions contained in Sections 10.4, 10.5, 10.6 and 10.7, inclusive, above are applicable only with respect to Thomas or Genlyte, and are not exercisable by any subsequent Transferee who is not a wholly-owned subsidiary of Thomas or Genlyte, as the case may be. ARTICLE XI DISSOLUTION AND TERMINATION 11.1. Term; Events Causing Dissolution. The Company shall continue in existence until it is dissolved upon the occurrence of any of the following events: (a) the unanimous written consent of the Members; (b) the sale, transfer or other disposition of all or substantially all of the assets of the Company; (c) the termination of the Master Transaction Agreement; or (d) without limiting Thomas's rights to be paid under Section 10.4, 10.5, 10.6, 10.7, and 10.10(c), a merger of the Company in which the Company is not the surviving entity or for the purpose of converting the Company to a corporation in connection with an initial public offering pursuant to Section 10.10(c); (e) the bankruptcy, assignment for the benefit of creditors or the dissolution or liquidation of any Member. 11.2. DISTRIBUTIONS UPON DISSOLUTION. (a) Upon the dissolution of the Company as a result of the occurrence of any of the events set forth in Section 11.1 hereof, the Management Board in accordance with Section 7.4, or if the Members so agree, a liquidating trustee, shall wind up the affairs of the Company and discharge all of its debts as follows: (i) First, to the payment of debts and liabilities of the Company in the order of priority as provided by law (including any loans or advances that may have been made by any of the Members to the Company and any unpaid fees for services) and the expenses of liquidation. (ii) Second, to the establishment of any reserve which the Management Board may deem reasonably necessary for any contingent, conditional or unasserted claims or obligations of the Company. Such reserve may be paid over by the Company to an escrow agent selected by the Company to be held for disbursement in payment of any of the aforementioned liabilities and, at the expiration of such period as shall be deemed advisable by the Management Board, for distribution of the balance, in the manner provided in this Article XI; and (iii) Finally, the remaining balance of the liquidation proceeds, if any, to the Members, in accordance with their respective positive Capital Account balances. (b) A Member shall not have any obligation to contribute any amount to the Company in the event of a negative balance in its Capital Account. Any distribution to a Member under this Article XI shall be made by the end of the taxable year of the "liquidation" of the Company or, if later, within 90 days of such "liquidation," as such term is defined by Treasury Regulations section1.704-1(b)(2)(ii)(g), except as otherwise permitted by Treasury Regulations section1.704-1(b)(2)(ii)(b). The distribution of cash or property to a Member in accordance with the provisions of this Section 11.2 shall constitute a complete return to the Member of its Capital Contributions and a complete distribution to the Member of its Interest and all the Company's property. (c) To the extent the Company assets cannot be sold or in the event the Members otherwise agree, such unsold assets shall be distributed in kind to the Members, in accordance with Article VI, including any value attributed to goodwill. In determining whether the Company assets should be sold or distributed in kind, the Members shall each act reasonably and in good faith with respect to any proposal from the other Member and the approval requirements of Section 7.4 shall govern. (d) If any Company assets are to be distributed in kind to the Members, the liquidator shall obtain an independent appraisal of the fair market value of such assets, net of liabilities, at a date reasonably close to the date of liquidation and shall adjust the Members' Capital Accounts for any unrealized gain or loss in the same manner as such Capital Accounts would be adjusted under Article V upon an actual sale of such assets at such appraised value. The assets shall be distributed in kind to the Members in accordance with Section 11.2. The Capital Account of each Member shall be debited by the appraised value of the net assets distributed to it. All distributions in kind to the Members shall be made subject to the liability of each distributee for costs, expenses, and liabilities theretofore incurred or for which the Company shall have committed to pay prior to the date of termination. 11.3. CERTIFICATE OF CANCELLATION. When all of the remaining property and assets of the Company have been distributed, the Certificate shall be cancelled by filing a certificate of cancellation with the Secretary of State of Delaware. ARTICLE XII ACCOUNTING AND BANK ACCOUNTS 12.1. Books and Records. (a) The books and records of the Company shall be maintained at its principal place of business. (b) The Company shall keep the following books and records: (i) a current list of Members setting forth the full name and last known mailing address of each Member; (ii) a copy of the Certificate and all amendments thereto together with executed copies of any powers of attorney pursuant to which any of the foregoing were executed; (iii) copies of the Company's federal, state, local and foreign income tax returns and reports, if any, for the six (6) most recent years or, if such returns and reports were not prepared for any reason, copies of the information and records provided to, or which should have been provided to, the Members to enable them to prepare their federal, state, local and foreign tax returns for such period; (iv) copies of this Agreement and all amendments thereto, and copies of any other written agreements among the Members or between any Member and the Company; (v) copies of any financial statements of the Company for the five (5) most recent years; (vi) copies of any written promise by a Member to make a contribution to the Company; and (vii) copies of any other instruments or documents reflecting matters required to be in writing pursuant to this Agreement, the Act or at the direction of the Management Board. 12.2. FINANCIAL REPORTS. No later than sixty (60) days after the end of each Fiscal Year of the Company, the Company shall prepare and deliver to each Member audited financial statements of the Company audited by the Company's independent auditors. No later than twenty (20) days after the end of each fiscal quarter of the Company, the Company shall prepare and deliver to each Member unaudited financial statements of the Company for such fiscal quarter. In addition, Genlyte shall deliver to Thomas and Thomas shall deliver to Genlyte copies of all filings made by each of them with the SEC. 12.3. TAX RETURNS AND ELECTIONS. The Company shall prepare and timely file all federal, state, local and foreign income tax returns or other returns or statements required by applicable law and shall timely provide the Members with all information related to the Company needed by the Members to timely prepare and file all federal, state, local and foreign income tax returns or other returns or statements required by applicable law. All costs associated with the preparation and filing of the Company's returns and statements and the provision of such information shall be borne by the Company. The Company shall claim all deductions and make such elections for federal or state income tax purposes which the Management Board reasonably believes will produce the most favorable tax results for the Members. The Company shall consult with the Members with respect to deductions and tax elections which may have a material impact on a Member's tax position before taking such deductions or making such elections. Genlyte shall act as the "TAX MATTERS PARTNER" of the Company pursuant to Section 6231(a)(7) of the Code; provided, that its actions as the tax matters partner shall be subject to review and approval of the Management Board. The Company shall indemnify Genlyte and its appointed Representatives against all liabilities and expenses in its capacity as "tax matters partner" to the fullest extent, but subject to the terms and conditions set forth in Article IX, as though Genlyte and such Representatives were entitled to indemnification thereunder. 12.4. BANK ACCOUNTS. All funds of the Company shall be deposited in a separate bank, money market or similar account(s) approved by the Management Board and in the Company's name. Withdrawals therefrom shall be made only by persons authorized to do so by the Management Board. 12.5. RIGHT OF INSPECTION. On written request stating the purpose, but in no event more than two times per year, a Member may audit, examine and copy in person, at any reasonable time, for any proper purpose reasonably related to such Member's Interest, and at the Member's expense, records required to be maintained under the Act and such other information regarding the business, affairs and financial condition of the Company as is just and reasonable for the Member to audit, examine and copy. The right set forth in this Section 12.5 may be exercised through any agent or employee of such Member designated by it. 12.6. FINANCIAL ACCOUNTING. The provisions of this Agreement are not intended to affect financial accounting for the Company. The Company shall prepare its financial statements in accordance with United States generally accepted accounting principles consistently applied. 12.7. LIFO. The Company shall adopt the federal income tax accounting methodology directed by Thomas for the inventories received by the Company from Thomas and its wholly-owned subsidiaries. In the case of inventories to be accounted for on the last-in-first-out ("LIFO") method, the Company shall take all reasonable measures to ensure the continued use of the LIFO method and avoid the liquidation of LIFO reserves. Thomas shall (i), at its cost, be responsible for the conduct of any income tax or financial reporting examination of such LIFO methodology and any related issues and (ii) control any settlement or litigation and bear any and all costs and expenses of such litigation or settlement and of any proposed adjustments to the taxable income of the Company with respect to such LIFO inventory, including adjustments which are the result of settlement or litigation. ARTICLE XIII COVENANTS NOT TO COMPETE Thomas and Genlyte each agree that during the Noncompete Period (as hereinafter defined), they shall not, directly or indirectly, by or for themselves or as the agent of another, or through others as their agent: (a) manufacture, promote, sell or distribute anywhere in the world (the "TERRITORY"), products or processes, which are similar to or in competition with those of the Business; (b) own, manage, operate, be compensated by, participate in, have any right to or interest in any other business directly or indirectly engaged in the production, sale or distribution of products competitive with those of the Business anywhere in the Territory; or (c) except as may be required by law, divulge, communicate, use or disclose any confidential proprietary information concerning the Company or the Business. "NONCOMPETE PERIOD" means the period from the Effective Date until the earlier to occur of the following: (i) the dissolution of the Company pursuant to Article XI or (ii) the date a Member ceases to be a Member. If, in any judicial proceeding, the duration or scope of the covenants and agreements contained in this Article XIII shall be adjudicated to be invalid or unenforceable, the parties agree that those covenants and agreements shall be deemed amended to reduce such duration or scope to the extent necessary to permit enforcement of such covenants or agreements, such amendment to apply only with respect to the operation of such covenants and agreements in the particular jurisdiction(s) in which such adjudication is made. Genlyte and Thomas each further acknowledge and agree that money damages would constitute an inadequate remedy in the event of a breach of this Article XIII and that in addition to any other remedies which may be available, the obligations of Genlyte and Thomas under this Article XIII shall be specifically enforceable. ARTICLE XIV REPRESENTATIONS AND WARRANTIES Each of the parties, severally and not jointly, represents, warrants and covenants to the other parties to this Agreement (for purposes of this Article, the "UNDERSIGNED") as of the date hereof and as of the Effective Date. The representations and warranties set forth below shall survive the Effective Date. 14.1. AUTHORITY. The Undersigned has full capacity right, corporate power and authority, without the consent of any other Person, to execute and deliver this Agreement and any other agreement to which it is a party, and to carry out the transactions contemplated hereby and thereby. Except with respect to the approval of the stockholders of the Undersigned, all corporate proceedings required to be taken by such to party to authorize the execution, delivery and performance of this Agreement and such other agreements and all of the transactions contemplated hereby and thereby have been duly and properly taken. 14.2. VALIDITY. This Agreement and any agreement executed in connection herewith to which the Undersigned is a party have been duly executed and delivered and constitute lawful, valid and legally binding obligations of such party, enforceable in accordance with their respective terms. The execution and delivery of this Agreement and such other agreements and the consummation of the transactions contemplated hereby and thereby will not result in the creation of any lien, charge or encumbrance of any kind or the termination or acceleration of any indebtedness or other obligation of such party and are not prohibited by, do not violate or conflict with any provision of, and do not constitute a default under or a breach of (a) the Certificate of Incorporation or By-laws of such party, (b) any Contract (as defined in the Capitalization Agreements), (c) any order, writ, injunction, decree or judgment of any court or governmental agency, or (d) any law, rule or regulation applicable to the Undersigned. 14.3. DUE ORGANIZATION. The Undersigned is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware and has full power and authority and all requisite rights, permits and franchises to own, lease and operate its assets and to carry on the business in which it is engaged. 14.4. SECURITIES LAW MATTERS. With respect to the Interests acquired by the Undersigned: (a) The Undersigned has had access to such information concerning the Contributed Assets and the liabilities to be assumed by the Company pursuant to the Capitalization Agreements and such information has been sufficient to enable the Undersigned to make an informed investment judgment with respect to the Undersigned's purchase of the Interests; (b) The Undersigned understands (i) that the Interests evidenced by this Agreement have not been registered under the Securities Act of 1933, the Delaware Securities Act or any other state securities laws (collectively, the "SECURITIES LAWS") because the Company is issuing these Interests in reliance upon the exemptions from the registration requirements of the Securities Laws providing for issuance of securities not involving a public offering, (ii) that the Company has relied upon the fact that the Interests are not to be held by either Member with a view to the resale or distribution thereof, and (iii) that exemption from registration under the Securities Laws would not be available if the Interests were acquired by a Member with a view to distribution; (c) The Undersigned is acquiring its Interest solely for its own account and not with a view to, or for resale in connection with, the distribution or other disposition thereof, except for such distributions and dispositions, which are (i) explicitly permitted or contemplated under the terms of this Agreement, as well as (ii) effected in compliance with the Securities Laws or unless the holder of Interests delivers to the Company an opinion of counsel, satisfactory to the Company, that such registration or other qualification under the Securities Laws is not required in connection with such transfer, offer or sale; and (d) The Undersigned understands that the Company is under no obligation to register the Interests or to assist the Undersigned in complying with any exemption from registration under the Securities Laws if the Undersigned should at a later date, wish to dispose of the Interest. Furthermore, the Undersigned realizes that the Interests are unlikely to qualify for disposition under Rule 144 promulgated under the Securities Act of 1933, as amended, unless the Undersigned is not an "affiliate" of the Company and the Interest has been beneficially owned and fully paid for by the Undersigned for at least two years. ARTICLE XV MISCELLANEOUS 15.1. TITLE TO ASSETS. Title to the Contributed Assets and all other assets acquired by the Company shall be held in the name of the Company or its subsidiaries. No Member shall individually have any ownership interest or rights in the assets of the Company, except indirectly by virtue of such Member's ownership of an Interest. No Member shall have any right to seek or obtain a partition of any of the assets of the Company. No Member shall have the right to any specific assets of the Company upon the liquidation of, or any distribution from, the Company. 15.2. AMENDMENTS AND WAIVER. (a) No amendment, waiver or consent with respect to any provision of this Agreement shall in any event be effective, unless the same shall be in writing and signed by the parties hereto, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. (b) The failure of any party at any time or times to require performance of any provisions hereof shall in no manner affect that party's right at a later time to enforce the same. No waiver by any party of the breach of any term or covenant contained in this Agreement in any one or more instances shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Agreement. 15.3. NOTICES. All notices, requests, demands and other communications hereunder shall be in writing and shall be, personally delivered or sent by facsimile transmission with confirming copy sent by overnight courier (such as Express Mail, Federal Express, etc.) and a delivery receipt obtained and addressed to the intended recipient as follows: (a) If to Genlyte: The Genlyte Group Incorporated 2345 Vauxhall Road P.O. Box 3148 Union, NJ 07083-1948 Attention: Larry K. Powers Telecopy No.: (908) 810-4535 With a copy to: McCarter & English, LLP Four Gateway Center 100 Mulberry Street Newark, New Jersey Attention: Bart J. Colli, Esq. Telecopy No.: (973) 624-7070 (b) If to the Thomas: Thomas Industries Inc. 4360 Brownsboro Road Louisville, Kentucky 40232 Attention: Timothy C. Brown Telecopy No.: (502) 895-6618 With a copy to: McDermott, Will & Emery 227 West Monroe Street Suite 4400 Chicago, Illinois 60606-5096 Attention: Michael R. Fayhee, P.C. Telecopy No.: (312) 984-7700 (c) If to the Company: GT Lighting LLC 4360 Brownsboro Road Louisville, Kentucky 40232 Attention: Larry K. Powers and Timothy C. Brown Telecopy No.: (502) 895-6618 With copies to: McDermott, Will & Emery 227 West Monroe Street Suite 4400 Chicago, Illinois 60606-5096 Attention: Michael R. Fayhee, P.C. Telecopy No.: (312) 984-7700 and McCarter & English, LLP Four Gateway Center 100 Mulberry Street Newark, New Jersey Attention: Bart J. Colli, Esq. Telecopy No.: (973) 624-7070 Any party may change its address for receiving notice by written notice given to the others named above. Notices shall be deemed given as of the date of receipt. 15.4. EXPENSES. Except as otherwise expressly provided herein, each party to this Agreement shall pay its own costs and expenses in connection with the transactions contemplated hereby. Except as otherwise expressly provided herein, the Company shall not bear any of such expense. The provisions of this Section 15.4 shall survive any termination of this Agreement. 15.5. COUNTERPARTS. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 15.6. CAPTIONS. The captions contained in this Agreement are for convenience of reference only, shall not be given meaning and do not form a part of this Agreement. 15.7. SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the benefit of the parties named herein and their respective successors and permitted assigns. Except as otherwise provided in this Agreement, including Section 10.10 hereof, this Agreement shall not be assigned by either party hereto without the express prior written consent of the other party and any attempted assignment, without such consents, shall be null and void. This Agreement does not create any rights, claims or benefits inuring to any person that is not a party hereto nor create or establish any third-party beneficiary hereto. 15.8. ENTIRE TRANSACTION. This Agreement and the documents referred to herein contain the entire agreement and understanding among the parties with respect to the transactions contemplated hereby and supersede all other agreements, understandings and undertakings among the parties on the subject matter hereof. All schedules and exhibits hereto are hereby incorporated by reference and made a part of this Agreement. 15.9. OTHER RULES OF CONSTRUCTION. References in this Agreement to sections, schedules and exhibits are to sections of, and schedules and exhibits to, this Agreement unless otherwise indicated. Words in the singular include the plural and in the plural include the singular. The word "OR" is not exclusive. The word "INCLUDING" shall mean including, without limitation. The term "ORDINARY COURSE" means the ordinary course of the Business consistent with the past practice of the Business. References to the terms "CONTRACTS" or "AGREEMENTS" shall each be deemed to include the other and shall include understandings and arrangements of all types, whether written or oral, and all amendments thereto. The section and other headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 15.10. PARTIAL INVALIDITY. In the event that any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 15.11. NATURE OF INTEREST IN THE COMPANY. A Member's Interest shall be personal property for all purposes. 15.12. GOVERNING LAW. This Agreement shall be construed according to and governed by the laws of the state of Delaware, without giving effect to the conflict of laws principles thereof. 15.13. POWER OF ATTORNEY. The Members, by their execution hereof, hereby make, constitute and appoint the President of the Company or his designee as their true and lawful agent and attorney-in-fact, with full power of substitution and full power and authority in his name, place and stead to make, execute, sign, acknowledge, swear to, record and file: (a) the Certificate of Formation of the Company and all further amendments thereto required by law or the provisions of this Agreement; (b) all certificates and other instruments deemed advisable by the Management Board and required to carry out the provisions of this Agreement and applicable law or to permit the Company to become, qualify, be authorized or licensed or to continue as a limited liability company in any jurisdiction where the Company may be or expects to be doing business; (c) all conveyances and other instruments or papers deemed advisable by the Management Board to effect the dissolution and termination of the Company; (d) all fictitious or assumed name certificates required or permitted to be filed on behalf of the Company; and (e) all other instruments or papers deemed advisable by the Management Board which may be required by law to be filed on behalf of the Company. The Members hereby ratify and approve all such actions that may have been taken prior to the date hereof by such persons pursuant to this Section 15.13. 15.14. NEGOTIATION BETWEEN SENIOR EXECUTIVES. (a) If any dispute, controversy or claim arises out of or is related to this Agreement (except for determinations of the Appraised Value by appraisers under Section 10.9) or any other agreements executed in connection herewith (a "DISPUTE"), the parties shall attempt to resolve the Dispute promptly by negotiations between senior executives who have authority to settle the controversy. Either Member may give the other Member written notice of any Dispute not resolved in the normal course of business. Within thirty (30) days after delivery of said notice, senior executives of both Members shall meet at a mutually acceptable time and place, to exchange relevant information and to attempt to resolve the Dispute. The senior executives shall continue to meet either until agreement is reached or until an impasse is declared by either party. (b) If a negotiator intends to be accompanied at a meeting by an attorney, the other negotiator shall be given at least three (3) Business Days' notice of such intention and may also be accompanied by an attorney. All negotiations pursuant to this Section 15.14 are confidential and shall be treated as compromise and settlement negotiations for purposes of all rules of evidence. 15.15. STOCK OPTIONS . The Management Board, on an annual basis, shall recommend to Thomas and Genlyte the aggregate amount of non-qualified stock options that the Management Board would like Thomas and Genlyte to issue to Company employees based on the value of the non-qualified stock options of each of Thomas and Genlyte, the intention being that Thomas and Genlyte will issue non-qualified stock options to Company employees based on their Percentage Interests or such other arrangements as the parties may agree. In no event, however, shall Thomas or Genlyte be obligated to grant the amount of non- qualified stock options recommended by the Management Board. 15.16. EFFECT OF INCONSISTENCIES WITH THE ACT. Without limitation of any of the parties' rights under the Capitalization Agreements and the Collateral Agreements (as defined therein), it is the express intention of the Members and the Company that this Agreement shall be the sole source of agreement among them as to the matters covered hereby, and, except to the extent a provision of this Agreement expressly incorporates federal income tax rules by reference to sections of the Code or Regulations or is expressly prohibited or ineffective under the Act, this Agreement shall govern, even when inconsistent with, or different than, the provisions of the Act or any other law or rule. In the event the Act is subsequently amended or interpreted in such a way to make any provision of this Agreement that was formerly invalid valid, such provision shall be considered to be valid from the effective date of such interpretation or amendment. The Members and the Company hereby agree that the duties and obligations imposed on the Members of the Company as such shall be those set forth in this Agreement and the Capitalization Agreements and the Collateral Agreements (as defined therein), which are intended to govern the relationship among the Company and the Members notwithstanding any provision of the Act or common law to the contrary. 15.17. RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies provided by this Agreement are cumulative and the use of any one right or remedy by any party shall not preclude or waive the right to use any or all other remedies. Said rights and remedies are given in addition to any other rights the parties may have by law, statute, ordinance or otherwise. 15.18. AUTHORSHIP. The parties hereto agree that the terms and language of this Agreement were the result of negotiations between the parties and, as a result, there shall be no presumption that any ambiguities in this Agreement shall be resolved against either party. Any controversy over construction of this Agreement shall be decided without regard to events of authorship or negotiation. 15.19. THOMAS AND AFFILIATES. For purposes of this Agreement, the term "Thomas" shall refer to Thomas together with its wholly-owned subsidiaries, if any, that own Interests in the Company and the terms and conditions of this Agreement shall be binding on Thomas and its wholly-owned subsidiaries and Thomas shall cause such wholly-owned subsidiaries to comply with the terms and conditions of this Agreement to the same extent as they apply to Thomas. * * * IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first written above. THOMAS INDUSTRIES INC. By: Its: THE GENLYTE GROUP INCORPORATED By: Its: GT LIGHTING, LLC By: Its: SCHEDULE 4.1 MEMBER PERCENTAGE INTEREST Thomas Industries Inc. and its wholly-owned subsidiaries 32% The Genlyte Group Incorporated 68 100% EX-2.3 4 CAPITALIZATION AGREEMENT EXHIBIT 2.3 EXECUTION CAPITALIZATION AGREEMENT Among GT LIGHTING, LLC and THOMAS INDUSTRIES INC. TUPELO HOLDINGS INC. THOMAS INDUSTRIES HOLDINGS INC. GARDCO MFG, INC. CAPRI LIGHTING, INC. THOMAS IMPORTS, INC. TI INDUSTRIES CORPORATION Dated April 28, 1998 CAPITALIZATION AGREEMENT CAPITALIZATION AGREEMENT, dated April 28, 1998, by and among GT Lighting, LLC, a Delaware limited liability company (the "Company"), Thomas Industries Inc., a Delaware corporation ("Thomas") and the Transferring Affiliates (Thomas and the Transferring Affiliates, collectively, "Transferor"). W I T N E S S E T H: WHEREAS, Transferor is in the business of manufacturing, selling, marketing and distributing consumer, commercial, industrial and outdoor lighting products through an unincorporated division (collectively the "Division") of Transferor; WHEREAS, the Transferring Affiliates are wholly owned, either directly or indirectly, by Thomas; WHEREAS, Transferor and The Genlyte Group Incorporated ("Genlyte") have caused the Company to be formed under the laws of the State of Delaware; WHEREAS, Transferor desires to capitalize the Company with substantially all of the assets, properties and capital stock comprising, held or used in connection with the Business in a transaction qualifying under Section 721(a) of the Code, in exchange for an ownership interest in the Company and the direct or indirect assumption by the Company of the Assumed Liabilities and upon the terms and subject to the conditions hereinafter set forth; WHEREAS, Thomas's rights and duties as a member of the Company shall be as set forth in that certain Limited Liability Company Agreement dated April 28, 1998 by and between Thomas and Genlyte (the "LLC Agreement"); WHEREAS, the Company will consummate certain transactions and enter into certain agreements as set forth in the Master Transaction Agreement dated April 28, 1998 by and between Thomas and Genlyte (the "Master Transaction Agreement") and the parties' obligations hereunder will be subject to satisfaction or waiver of the conditions in the Master Transaction Agreement; and NOW, THEREFORE, in consideration of the mutual covenants, representations and warranties made herein, and of the mutual benefits to be derived hereby, the parties hereto agree as follows: ARTICLE I CAPITALIZATION 1.1 Assets. Subject to and upon the terms and conditions set forth in this Agreement, at the Closing, Transferor will contribute, transfer, convey, assign and deliver to the Company, and the Company will acquire from Transferor, all right, title and interest of Transferor in and to the properties, assets and rights of every nature, kind and description, tangible and intangible (including goodwill), whether real, personal or mixed, whether accrued, contingent or otherwise and whether now existing or hereinafter acquired (other than the Excluded Assets) primarily relating to or used or held for use in connection with the Business as the same may exist on the Closing Date (collectively, the "Assets"), including all those items in the following categories that conform to the definition of the term "Assets": (a) all machinery, equipment, telephone systems and equipment, furniture, furnishings, automobiles, trucks, vehicles, tools, dies, molds and parts and similar property (including any of the foregoing purchased subject to any conditional sales or title retention agreement in favor of any other Person) together with all Systems and all Components; (b) all inventories of raw materials, work in process, finished products, goods, spare parts, replacement and component parts, and office and other supplies (collectively, the "Inventories") held at any Facility and Inventories previously purchased and in transit to any Transferor at the Facilities; (c) all rights in and to products sold or leased (including products hereafter returned or repossessed and Transferor's unpaid rights of rescission, replevin, reclamation and rights to stoppage in transit); (d) all rights (including any and all Intellectual Property rights) in and to the products sold or leased and in and to any products or other Intellectual Property rights under research or development prior to or on the Closing Date; (e) all of the rights of Transferor under all contracts, arrangements, licenses, leases and other agreements, including any right to receive payment for products sold or services rendered, and to receive goods and services, pursuant to such agreements and to assert claims and take other rightful actions in respect of breaches, defaults and other violations of such contracts, arrangements, licenses, leases and other agreements and otherwise; (f) all credits, prepaid expenses, deferred charges, advance payments, security deposits and prepaid items; (g) all notes and accounts receivable held by Transferor and all notes, bonds and other evidences of indebtedness of and rights to receive payments from any Person held by Transferor, except as set forth in Section 4.3; (h) all Intellectual Property and all rights thereunder or in respect thereof used or held for use in connection with the Business, including rights to sue for and remedies against past, present and future infringements thereof, and rights of priority and protection of interests therein under the laws of any jurisdiction worldwide and all tangible embodiments thereof (the "Intellectual Property Assets"); (i) all books, records, manuals and other materials (in any form or medium), including all records and materials maintained at the headquarters or other offices of Transferor, advertising matter, catalogues, price lists, correspondence, mailing lists, lists of customers, distribution lists, photographs, production data, sales and promotional materials and records, purchasing materials and records, personnel records, manufacturing and quality control records and procedures, blueprints, research and development files, records, data and laboratory books, Intellectual Property disclosures, media materials and plates, accounting records, sales order files and litigation files, (collectively, the "Books and Records"); (j) to the extent their transfer is permitted by law, all Governmental Approvals, including all applications therefor; (k) all Real Property and all licenses, permits, approvals and qualifications relating to any Real Property issued to Transferor by any Governmental Authority; (l) all rights to causes of action, lawsuits, judgments, claims and demands of any nature available to or being pursued by Transferor with respect to the Business or the ownership, use, function or value of any Asset, whether arising by way of counterclaim or otherwise; (m) all guarantees, warranties, indemnities and similar rights in favor of Transferor with respect to any Asset; (n) to the extent not described elsewhere in this Section 1.1, all Net Working Capital; (o) Thomas Lighting web site domain name together with related rights; and (p) all stock, partnership, membership or other interests in any Person engaged in the Business listed on Schedule 1.1(p); provided that, at Transferor's option, Transferor may convey Inventories to a limited liability company that is a wholly-owned subsidiary of the Company. At the Closing, the Assets shall be transferred to the Company free and clear of all liabilities, obligations, liens and encumbrances excepting only Assumed Liabilities, liens listed on Schedule 3.1.11 and Permitted Liens. 1.2. Excluded Assets. Transferor will retain and not transfer, and the Company will not acquire any assets of Transferor other than the Assets, including (i) the assets listed on Schedule 1.2, (ii) the Headquarters, (iii) all Tax refunds, (iv) the names and marks "Thomas" and "Thomas Industries Inc.", and (v) computers and software located at the Headquarters (collectively, the "Excluded Assets"). 1.3. Shared Assets. All of Transferor's properties, assets and rights of every nature, kind and description, tangible and intangible (including goodwill), whether real, personal or mixed, whether accrued, contingent or otherwise and whether now existing or hereinafter acquired (other than the Excluded Assets) that do not primarily relate to or are not primarily used or held for use in connection with the Business as the same may exist on the Closing Date, but relate to or are used in or held for use in connection with the Business to some lesser degree shall be retained by Transferor and provided to the Company pursuant to the Services Agreement or a license agreement in a form mutually acceptable to Transferor and the Company. ARTICLE II THE CLOSING 2.1. Place and Date. The consummation of the transactions contemplated hereby shall take place on the "closing date" described in the Master Transaction Agreement (the "Closing Date"). 2.2. Consideration. (a) Membership Interests. On the terms and subject to the conditions set forth in this Agreement, the Master Transaction Agreement and the LLC Agreement and, together with the Note or cash referenced in Section 2.2(b) below, as the sole consideration for Transferor's contribution of the Assets to the Company pursuant hereto, on the Closing Date, the Company agrees to issue to Thomas and/or wholly-owned subsidiaries of Thomas an aggregate interest in the Company representing a 32% ownership interest (the "Membership Interests") and to assume the Assumed Liabilities as provided in Section 2.3. (b) Note. On the Closing Date, the Company agrees to pay Thomas an amount equal to 32/68ths of Genlyte's total long-term indebtedness for borrowed money on the Closing Date plus 100% of the cash consideration paid by Thomas for the Horizon/Lite Acquisition, either in cash or pursuant to a promissory note payable to Thomas, on payment terms corresponding to the terms contained in the Company's primary credit facility referenced in Sections 6.8 and 7.8 of the Master Transaction Agreement (the "Note"), provided that the Note shall be prepayable at any time without penalty or premium. 2.3. Assumption of Liabilities. (a) Subject to Sections 2.4 and 8.2 and the other terms and conditions set forth herein, at the Closing, the Company will assume and agree to pay, honor and discharge when due all of those liabilities primarily relating to the Assets or arising out of the Business and existing at or arising on or after the Closing Date (collectively, the "Assumed Liabilities"), except for (i) long-term indebtedness of Thomas or the Business for borrowed money, (ii) Taxes of Transferor for periods prior to the Closing Date, whether or not relating to or arising out of the Business, (iii) intercompany accounts payable that do not represent trade accounts payable, (iv) liabilities in respect of Employees, employment agreements or Plans except to the extent specifically assumed by the Company pursuant to Article VI, (v) liabilities in respect to Transferred Employees except to the extent specifically assumed by the Company pursuant to Article VI, and (vi) any liability, obligation or commitment of Transferor set forth on Schedule 2.3. (b) At the Closing, the Company shall assume the Assumed Liabilities by executing and delivering to Transferor an assumption agreement in a form reasonably satisfactory to Transferor (the "Assumption Agreement"). 2.4 Excluded Liabilities. Notwithstanding the provisions of Section 2.3 or any other provision hereof or any schedule or exhibit hereto and regardless of any disclosure to the Company, the Company shall not assume any liabilities, obligations or commitments of Transferor, whether or not relating to or arising out of the operation of the Business or the ownership of the Assets prior to the Closing, other than the Assumed Liabilities (the "Excluded Liabilities"). 2.5 Consent of Third Parties. Notwithstanding anything to the contrary in this Agreement, this Agreement shall not constitute an agreement to assign or transfer any Governmental Approval, instrument, contract, lease, permit or other agreement or arrangement or any claim, right or benefit arising thereunder or resulting therefrom if an assignment or transfer or an attempt to make such an assignment or transfer without the consent of a third party would constitute a breach or violation thereof or affect adversely the rights of the Company or Transferor thereunder; and any transfer or assignment to the Company by Transferor of any interest under any such instrument, contract, lease, permit or other agreement or arrangement that requires the consent of a third party shall be made subject to such consent or approval being obtained. In the event any such consent or approval is not obtained on or prior to the Closing Date, Transferor shall continue to use its reasonable commercial efforts to obtain any such approval or consent after the Closing Date until such time as such consent or approval has been obtained, and Transferor will cooperate with the Company in any lawful and economically feasible arrangement to provide that the Company shall receive the interest of Transferor in the benefits under any such instrument, contract, lease or permit or other agreement or arrangement, including performance by Transferor as agent, if economically feasible, provided that the Company shall be solely responsible for and undertake to pay or satisfy the corresponding liabilities for the enjoyment of such benefit to the extent the Company would have been responsible therefor hereunder if such consent or approval had been obtained and shall be solely responsible for any breach of warranty with respect to products of the Business manufactured after the Closing Date. Transferor shall pay and discharge, and shall indemnify and hold the Company harmless from and against, any and all out-of-pocket costs of seeking to obtain or obtaining any such consent or approval whether before or after the Closing Date. Nothing in this Section 2.5 shall be deemed a waiver by the Company of its right to have received on or before the Closing an effective assignment of all of the Assets nor shall this Section 2.5 be deemed to constitute an agreement to exclude from the Assets any assets described under Section 1.1. ARTICLE III REPRESENTATIONS AND WARRANTIES 3.1. Representations and Warranties of Transferor. Transferor represents and warrants to and agrees with the Company as follows: 3.1.1. Authorization, etc. Transferor has the corporate power and authority to execute and deliver this Agreement and each of the Collateral Agreements to which it will be a party, to perform fully its obligations thereunder, and to consummate the transactions contemplated hereby and thereby. Subject to Section 4.1.10, the execution and delivery by Transferor of this Agreement, and the consummation of the transactions contemplated hereby, have been, and on the Closing Date the execution and delivery by Transferor of each of the Collateral Agreements to which it will be a party and the consummation of the transactions contemplated thereby will have been, duly authorized by all requisite corporate action of Transferor (including the approval of Transferor's shareholders to the extent required by law). Transferor has duly executed and delivered this Agreement and on the Closing Date will have duly executed and delivered each of the Collateral Agreements to which it is a party. This Agreement is, and on the Closing Date each of the Collateral Agreements to which Transferor is a party will be, legal, valid and binding obligations of Transferor, enforceable against it in accordance with their respective terms. 3.1.2. Corporate Status. (a) Transferor is a corporation duly organized, validly existing and in good standing under the respective laws of the jurisdiction of its incorporation, as set forth in Schedule 3.1.2(a), with full corporate power and authority to carry on its business (including the Business) and to own or lease and to operate its properties as and in the places where such business is conducted and such properties are owned, leased or operated. (b) Transferor is duly qualified or licensed to do business and is in good standing in each of the respective jurisdictions specified in Schedule 3.1.2(b), which are the only jurisdictions in which the operation of the Business or the character of the properties owned, leased or operated by it in connection with the Business makes such qualification or licensing necessary. (c) Transferor has delivered to the Company complete and correct copies of its certificate of incorporation and by-laws or other organizational documents, as amended and in effect on the date hereof. Transferor is not in violation of any of the provisions of its certificate of incorporation or by- laws or other organizational documents. (d) Thomas has no Subsidiaries engaged in the Business except as set forth on Schedule 3.1.2(d). Except as set forth on Schedule 3.1.2(d), Thomas has no interest, direct or indirect, and has no commitment to purchase any interest, direct or indirect, in any other corporation or in any partnership, joint venture or other business enterprise or entity. Except as set forth on Schedule 3.1.2(d), the Business has not been conducted through any other direct or indirect Subsidiary or affiliate of Thomas. 3.1.3. No Conflicts, etc. The execution, delivery and performance by Transferor of this Agreement and each of the Collateral Agreements to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not conflict with or result in a violation of or a default under (with or without the giving of notice or the lapse of time or both) (i) any Applicable Law applicable to Transferor or any Affiliate thereof or any of the properties or assets of Transferor (including the Assets), (ii) the certificate of incorporation or by-laws or other organizational documents of Transferor or (iii) except as set forth in Schedule 3.1.3, any Contract to which Transferor or any Affiliate thereof is a party or by which Transferor or any of its properties or assets, including the Assets, may be bound or affected. Except as specified in Schedule 3.1.3, no Governmental Approval or other Consent is required to be obtained or made by Transferor in connection with the execution and delivery of this Agreement and the Collateral Agreements or the consummation of the transactions contemplated thereby. The consummation of the transaction that is the subject of this Agreement and the Collateral Agreements and the issuance of the Membership Interests to all members will not trigger any rights under the Thomas Industries Inc. and The Fifth Third Bank Rights Agreement dated as of January 5, 1998 between Thomas and The Fifth Third Bank or any applicable shareholder protection or state takeover statute. 3.1.4. Financial Statements. Transferor has delivered to the Company (a) unaudited consolidated financial statements of the Business as at and for the year ended December 31, 1997 (the "Balance Sheet Date"), (b) unaudited consolidated financial statements of the Business as at and for the period ended March 31, 1998, and (c) unaudited consolidated financial statements of the Business as at and for the monthly periods ended March 31, 1998 , including in each of clauses (a), (b) and (c) a balance sheet, a statement of income and a statement of cash flows (collectively, the "Financial Statements"). The Financial Statements are complete and correct in all material respects and have been prepared in accordance with GAAP applied throughout the periods indicated and consistently applied with those portions of Transferor's financial statements regarding the Business, except that the Financial Statements do not contain notes and may be subject to normal audit adjustments. The balance sheets included in the Financial Statements do not include any material assets (other than Excluded Assets) or liabilities (other than Excluded Liabilities) not intended to constitute a part of the Business or the Assets or omit any material assets or liabilities of the Business, and present fairly the financial condition of the Business as at their respective dates. The statements of income and retained earnings and statements of cash flows included in the Financial Statements do not reflect the operations of any entity or business not intended to constitute a part of the transactions, reflect all costs that historically have been incurred by the Business (other than the Excluded Liabilities) and present fairly the results of operations and cash flows of the Business for the periods indicated. 3.1.5. Absence of Undisclosed Liabilities. Transferor has no liabilities or obligations of any nature, whether known or unknown, absolute, accrued, contingent or otherwise and whether due or to become due, arising out of or relating to the Business, except (a) as set forth in Schedule 3.1.5, (b) as and to the extent disclosed or reserved against in the Balance Sheet (excluding the notes thereto) and (c) for liabilities and obligations that (i) were incurred after the date of the Balance Sheet in the ordinary course of business consistent with prior practice and (ii) have not had or resulted in, and will not have or result in, a Material Adverse Effect. None of the Division's employees is, or will by the passage of time hereinafter become, entitled to receive any material vacation time, vacation pay or severance pay attributable to services rendered prior to such date except as disclosed on the Balance Sheet (excluding the notes thereto) or as set forth on Schedule 3.1.5. 3.1.6. Taxes. (a) Transferor has (or by the Closing will have) duly and timely filed all Tax Returns with respect to Taxes required to be filed on or before the Closing Date ("Returns"). Except for Taxes set forth on Schedule 3.1.6(a), which are being contested in good faith and by appropriate proceedings, and with respect to which Transferor has Adequate Reserves, the following Taxes have (or by the Closing Date will have) been duly and timely paid: (i) all Taxes shown to be due on the Returns, (ii) all deficiencies and assessments of Taxes of which notice has (or by the Closing Date will have) been received by Transferor that are or may become payable by the Company or chargeable as a lien upon the Business or the Assets, and (iii) all other Taxes due and payable on or before the Closing Date for which neither filing of Returns nor notice of deficiency or assessment is required, if Transferor is or reasonably should be (or by the Closing Date will be or reasonably should be) aware that such Taxes are or may become payable by the Company or chargeable as a lien upon the Business or the Assets. All Taxes required to be withheld by or on behalf of Transferor in connection with amounts paid or owing to any employee, independent contractor, or creditor ("Withholding Taxes") have been withheld, and such withheld taxes have either been duly and timely paid to the proper Governmental Authorities or set aside in accounts for such purposes. (b) Except as set forth on Schedule 3.1.6(b), no agreement or other document extending, or having the effect of extending, the period of assessment or collection of any Taxes or Withholding Taxes, and no power of attorney with respect to any such Taxes, has been filed with the IRS or any other Governmental Authority. (c) Except for items set forth on Schedule 3.1.6(c), with respect to which Transferor has Adequate Reserves, (i) there are no Taxes or Withholding Taxes asserted in writing by any Governmental Authority to be due from Transferor and (ii) no issue has been raised in writing by any Governmental Authority in the course of any audit with respect to Taxes or Withholding Taxes. Except as set forth on Schedule 3.1.6(c), no Taxes and no Withholding Taxes are currently under audit by any Governmental Authority. Except for items set forth on Schedule 3.1.6(c), with respect to which Transferor has Adequate Reserves, neither the IRS nor any other Governmental Authority is now asserting or, to the Knowledge of Transferor, threatening to assert against Transferor any deficiency or claim for additional Taxes or any adjustment or Taxes that would, if paid by the Company, have a Material Adverse Effect, and there is no reasonable basis for any such assertion of which Transferor is or reasonably should be aware. (d) Except as set forth on Schedule 3.1.6(d), there is no litigation or administrative appeal pending or, to the Knowledge of Transferor, threatened against or relating to Transferor in connection with Taxes. 3.1.7. Absence of Changes. Except for items set forth in Schedule 3.1.7, with respect to which Transferor has Adequate Reserves, since the Balance Sheet Date, Transferor has conducted the Business only in the ordinary course consistent with prior practice and has not, on behalf of, in connection with or relating to the Business or the Assets: (a) suffered any Material Adverse Effect; (b) incurred any obligation or liability, absolute, accrued, contingent or otherwise, whether due or to become due, except current liabilities for trade or business obligations incurred in connection with the purchase of goods or services in the ordinary course of business consistent with prior practice, none of which liabilities, in any case or in the aggregate, could have a Material Adverse Effect; (c) discharged or satisfied any Lien other than those then required to be discharged or satisfied, or paid any obligation or liability, absolute, accrued, contingent or otherwise, whether due or to become due, other than current liabilities shown on the Balance Sheet and current liabilities incurred since the date thereof in the ordinary course of business consistent with prior practice; (d) mortgaged, pledged or subjected to Lien, any property, business or assets, tangible or intangible, held in connection with the Business other than purchase money security interests incurred in the ordinary course of business; (e) sold, transferred, leased to others or otherwise disposed of any of the Assets, except in the ordinary course of business, or canceled or compromised any debt or claim, or waived or released any right of substantial value; (f) received any notice of termination of any contract, lease or other agreement or suffered any damage, destruction or loss (whether or not covered by insurance) which, in any case or in the aggregate, has had a Material Adverse Effect; (g) transferred or granted any rights under, or entered into any settlement regarding the breach or infringement of, any Intellectual Property, or modified any existing rights with respect thereto; (h) other than in the ordinary course of business, made any change in the rate of compensation, commission, bonus or other direct or indirect remuneration payable, or paid or agreed or orally promised to pay, conditionally or otherwise, any bonus, dividend, incentive, retention or other compensation, retirement, welfare, fringe or severance benefit or vacation pay, to or in respect of any shareholder, director, officer, employee, salesman, distributor or agent of Transferor relating to the Business; (i) encountered any labor union organizing activity, had any actual or threatened employee strikes, work stoppages, slowdowns or lockouts, or had any material change in its relations with its employees, agents, customers or suppliers; (j) failed to replenish the Division's inventories and supplies in a normal and customary manner consistent with its prior practice and prudent business practices prevailing in the industry, or made any purchase commitment in excess of the normal, ordinary and usual requirements of the Business or at any price in excess of the then current market price or upon terms and conditions more onerous than those usual and customary in the industry, or made any change in its selling, pricing, advertising or personnel practices inconsistent with its prior practice and prudent business practices prevailing in the industry; (k) made any capital expenditures or capital additions or improvements in excess of $250,000; (l) instituted, settled or agreed to settle any litigation, action or proceeding before any court or governmental body relating to the Business or the Assets other than in the ordinary course of business consistent with past practices but not in any case involving amounts in excess of $250,000; (m) entered into any transaction, contract or commitment other than in the ordinary course of business or paid or agreed to pay any legal, accounting, brokerage, finder's fee, Taxes or other expenses in connection with, or incurred any severance pay obligations by reason of, this Agreement or the transactions contemplated hereby; or (n) except with respect to performing its obligations under this Agreement, taken any action or omitted to take any action that would result in the occurrence of any of the foregoing. 3.1.8. Litigation. Except for items set forth on Schedule 3.1.8, with respect to which Transferor has Adequate Reserves, there is no action, claim, demand, suit, proceeding, arbitration, grievance, citation, summons, subpoena, inquiry or investigation of any nature, civil, criminal, regulatory or otherwise, in law or in equity, pending or threatened against or relating to Transferor in connection with the Assets or the Business or against or relating to the transactions contemplated by this Agreement, and Transferor knows of no basis for any of the foregoing. Except for items set forth in such Schedule 3.1.8, with respect to which Transferor has Adequate Reserves, since December 31, 1997, no material citations, fines or penalties have been asserted against Transferor with respect to the Division under any Environmental Law or any foreign, federal, state or local law relating to occupational health or safety. 3.1.9. Compliance with Laws; Governmental Approvals and Consents; Governmental Contracts. (a) Except for items disclosed in Schedule 3.1.9(a), with respect to which Transferor has Adequate Reserves, since the Balance Sheet Date, Transferor has complied in all material respects with all Applicable Laws applicable to the Business or the Assets, and Transferor has not received any notice alleging any such conflict, violation, breach or default. (b) Except for items set forth in Schedule 3.1.9(b), with respect to which Transferor has Adequate Reserves, all Governmental Approvals and Consents necessary for or otherwise material to the conduct of the Business have been duly obtained and are in full force and effect, and Transferor is in material compliance with each of such Governmental Approvals and Consents held by it with respect to the Assets and the Business. (c) To the Knowledge of Transferor, there are no proposed laws, rules, regulations, ordinances, orders, judgments, decrees, governmental takings, condemnations or other proceedings which would be applicable to the business, operations or properties of the Division and which might adversely affect the properties, assets, liabilities, operations or prospects of the Division, either before or after the Closing Date. 3.1.10. Operation of the Business. Except as set forth in Schedule 3.1.10, (a) Transferor has conducted the Business only through the Division and not through any other divisions or any direct or indirect Subsidiary or Affiliate of Transferor and (b) no part of the Business is operated by Transferor through any entity other than Transferor. 3.1.11. Assets. Except for items disclosed in Schedule 3.1.11, with respect to which Transferor has Adequate Reserves, Transferor has good title to all the Assets free and clear of any and all Liens other than Permitted Liens. The Assets, together with the services and arrangements described in Section 5.2.2, comprise all assets and services required for the continued conduct of the Business by the Company as now being conducted. The Assets, taken as a whole, constitute all the properties and assets primarily relating to or used or held for use in connection with the Business during the past twelve months (except Inventory sold, cash disposed of, accounts receivable collected, prepaid expenses realized, Contracts fully performed, properties or assets sold in the ordinary course of business, employees not hired by the Company, and the Excluded Assets). Except for Excluded Assets and subject to Section 2.5, there are no assets or properties used in the operation of the Business and owned by any Person other than Transferor that will not be leased or licensed to the Company under valid, current leases or license arrangements. Except as disclosed on Schedule 3.1.11, the Assets are in all material respects adequate for the purposes for which such Assets are currently used or are held for use, and are in reasonably good repair and operating condition (subject to normal wear and tear) and, to the Knowledge of Transferor, there are no facts or conditions affecting the Assets which could interfere in any material respect with the use, occupancy or operation thereof as currently used, occupied or operated, or their adequacy for such use. 3.1.12. Contracts. (a) Schedule 3.1.12(a) contains a complete and correct list of all agreements, contracts, commitments and other instruments and arrangements (whether written or oral) of the types described below (x) by which any of the Assets are bound or affected or (y) to which Transferor is a party or by which it is bound in connection with the Business or the Assets (the "Contracts"): (i) other than the Leases and Other Leases, each lease and other contract concerning or relating to the Real Property with respect to which the amount that could reasonably be expected to be paid or received thereunder exceeds $100,000 per year; (ii) employment, consulting, agency, collective bargaining or other similar contracts, agreements, and other instruments and arrangements that cannot be terminated in accordance with their terms within six months of the date hereof relating to or for the benefit of current, future or former employees, officers, directors, sales representatives, distributors, dealers, agents, independent contractors or consultants; (iii) loan agreements, indentures, letters of credit, mortgages, security agreements, pledge agreements, deeds of trust, bonds, notes, guarantees, and other agreements and instruments relating to the borrowing of money or obtaining of or extension of credit; (iv) licenses, licensing arrangements and other contracts providing in whole or in part for the use of, or limiting the use of, any Intellectual Property; (v) brokerage or finders' agreements; (vi) joint venture, partnership and similar contracts involving a sharing of profits or expenses (including joint research and development and joint marketing contracts); (vii) asset purchase agreements and other acquisition or divestiture agreements, including any agreements relating to the sale, lease or disposal of any Assets (other than sales of inventory or other properties or assets in the ordinary course of business) or involving continuing indemnity or other obligations, entered into since January 1, 1992; (viii) other than purchase orders or contracts for capital projects already approved by Transferor's Board of Directors, contracts with respect to which the aggregate amount that could reasonably be expected to be paid or received thereunder in the future exceeds $250,000 per annum; (ix) contracts, agreements or arrangements with respect to the representation of the Business in foreign countries, other than Canada and Mexico; (x) master lease agreements providing for the leasing of both (A) personal property primarily used in, or held for use primarily in connection with, the Business and (B) other personal property, pursuant to which, in either case, the amount that could reasonably be expected to be paid or received thereunder exceeds $100,000 per year or $1,500,000 in the aggregate; (xi) contracts, agreements or commitments with any employee, director, officer, stockholder or Affiliate of Transferor; and (xii) any other contracts, agreements or commitments that are material to the Business pursuant to which the amount that could reasonably be expected to be paid or received thereunder exceeds $100,000 per year or $1,500,000 in the aggregate. (b) Transferor has delivered to the Company complete and correct copies of all written Contracts, together with all amendments thereto, and accurate descriptions of all material terms of all oral Contracts, set forth or required to be set forth in Schedule 3.1.12(a). (c) All Contracts are in full force and effect and enforceable against each party thereto. There does not exist under any Contract any event of default or event or condition that, after notice or lapse of time or both, would constitute a violation, breach or event of default thereunder on the part of Transferor or, to the Knowledge of Transferor, any other party thereto except for items set forth in Schedule 3.1.12(c), with respect to which Transferor has Adequate Reserves, and except for such events or conditions that, individually and in the aggregate, (i) has not had or resulted in, and will not have or result in, a Material Adverse Effect and (ii) has not and will not materially impair the ability of Transferor to perform its obligations under this Agreement and under the Collateral Agreements. Except as set forth in Schedule 3.1.12(c), no consent of any third party is required under any Contract as a result of or in connection with, and the enforceability of any Contract will not be affected in any manner by, the execution, delivery and performance of this Agreement or any of the Collateral Agreements or the consummation of the transactions contemplated hereby or thereby. (d) Transferor has outstanding no power of attorney relating to the Business. 3.1.13. Territorial Restrictions. Except as set forth on Schedule 3.1.13, Transferor is not restricted by any written agreement or understanding with any other Person from carrying on the Business anywhere in the world. Except as set forth on Schedule 3.1.13, the Company, solely as a result of its purchase of the Business from Transferor pursuant hereto and the assumption of the Assumed Liabilities, will not thereby become restricted in carrying on any business anywhere in the world. 3.1.14. Product Warranties. Except for items set forth in Schedule 3.1.14, with respect to which Transferor has Adequate Reserves, and for warranties under Applicable Law, there are no pending or threatened claims with respect to any warranty, express or implied, written or oral, with respect to the products or services of the Business in excess of $100,000 per claim, and Transferor has no liability with respect to any such warranty, whether known or unknown, absolute, accrued, contingent or otherwise and whether due or to become due. 3.1.15. Absence of Certain Business Practices. To the Knowledge of Transferor, none of Transferor, any officer, employee or agent of Transferor, or any other Person acting on their behalf, has, directly or indirectly, within the past five years given or agreed to give any gift or similar benefit to any customer, supplier, governmental employee or other person who was or may be in a position to help or hinder the Business (or assist Transferor in connection with any actual or proposed transaction relating to the Business) (i) which subjected or might have subjected Transferor to any damage or penalty in any civil, criminal or governmental litigation or proceeding, (ii) which if not given in the past, might have had a Material Adverse Effect, (iii) which if not continued in the future, might have a Material Adverse Effect or subject Transferor to suit or penalty in any private or governmental litigation or proceeding, (iv) for any of the purposes described in Section 162(c) of the Code or (v) for the purpose of establishing or maintaining any concealed fund or concealed bank account. 3.1.16. Intellectual Property. (a) Title. Schedule 3.1.16(a) contains a complete and correct list of all Intellectual Property that is owned by Transferor and primarily related to, used in, held for use in connection with, or necessary for the conduct of, or otherwise material to the Business (the "Owned Intellectual Property"). Except as set forth on Schedule 3.1.16(a), Transferor owns or has the right to use pursuant to license, sublicense, agreement or permission all Intellectual Property Assets, free from any Liens (other than Permitted Liens) and free from any requirement of any past, present or future royalty payments, license fees, charges or other payments, in any case in excess of $100,000, or conditions or restrictions whatsoever. The Intellectual Property Assets comprise all of the Intellectual Property necessary for the Company to conduct and operate the Business as now being conducted by Transferor. (b) Transfer. Immediately after the Closing, the Company will own all of the Owned Intellectual Property and will have a right to use all other Intellectual Property Assets, free from any Liens (other than Permitted Liens) and on the same terms and conditions as in effect prior to the Closing. (c) No Infringement. The conduct of the Business does not infringe or otherwise conflict with any rights of any Person in respect of any Intellectual Property. To the Knowledge of Transferor, none of the Intellectual Property Assets is being infringed or otherwise used or available for use, by any other Person. (d) No Intellectual Property Litigation. Except for items set forth on Schedule 3.1.16(d), with respect to which Transferor has Adequate Reserves, no claim or demand of any Person has been made nor is there any proceeding that is pending, or to the Knowledge of Transferor, threatened, nor is there a reasonable basis therefor, that (i) challenges the rights of Transferor in respect of any Intellectual Property Assets, (ii) asserts that Transferor is infringing or otherwise in conflict with, or is, except for items set forth in Schedule 3.1.16(d), with respect to which Transferor has Adequate Reserves, required to pay any royalty, license fee, charge or other amount, in any case in excess of $100,000, with regard to, any Intellectual Property, or (iii) claims that any default exists under any agreement or arrangement concerning any Intellectual Property Assets. None of the Intellectual Property Assets is subject to any outstanding order, ruling, decree, judgment or stipulation by or with any court, arbitrator, or administrative agency, or has been the subject of any litigation within the last five years, whether or not resolved in favor of Transferor. (e) Use of Name and Mark. Except as set forth in Schedule 3.1.16(e), there are, and immediately after the Closing will be, no contractual restriction or limitations pursuant to any orders, decisions, injunctions, judgments, awards or decrees of any Governmental Authority on the Company's right to use the name and marks set forth on Schedule 3.1.16(e) in the conduct of the Business as presently carried on by Transferor. 3.1.17. Insurance. Schedule 3.1.17 contains a complete description of all insurance policies maintained by Transferor for the benefit of or in connection with the Assets or the Business. Transferor has made available to the Company complete and correct copies of all such policies together with all riders and amendments thereto. Such policies are in full force and effect, and all premiums due thereon have been paid. Transferor has complied in all material respects with the terms and provisions of such policies. The insurance coverage provided by such policies is adequate and customary for the Business. Schedule 3.1.17 sets out all claims, other than worker's compensation claims, made by Transferor under any policy of insurance during the past two years with respect to the Business. 3.1.18. Real Property. (a) Owned Real Property. Schedule 3.1.18(a) contains a complete and correct list of all Owned Real Property setting forth the address and owner of each parcel of Owned Real Property and describing all improvements thereon including the properties reflected as being so owned on the Financial Statements. Transferor has, or on the Closing Date will have, good, valid and marketable fee simple title to the Owned Real Property indicated on Schedule 3.1.18(a) as being owned by it, free and clear of all Liens other than Permitted Liens. There are no outstanding options or rights of first refusal to purchase the Owned Real Property, or any portion thereof or interest therein. (b) Leases. Schedule 3.1.18(b) contains a complete and correct list of (i) all Leases setting forth the address, landlord and tenant for each Lease and (ii) all Other Leases, setting forth the address, landlord and tenant for each Other Lease, in either case, with respect to which the amount that could reasonably be expected to be paid or received thereunder exceeds $100,000 per year. Transferor has made available to the Company correct and complete copies of the Leases and the Other Leases. Each Lease and Other Lease is legal, valid, binding, enforceable, and in full force and effect, except as may be limited by bankruptcy, insolvency, reorganization and similar Applicable Laws affecting creditors generally and by the availability of equitable remedies. Neither Transferor nor any other party is in default, violation or breach in any respect under any Lease or Other Lease, and no event has occurred and is continuing that constitutes or, with notice or the passage of time or both, would constitute a default, violation or breach in any respect under any Lease or Other Lease, which default, violation or breach has had or could reasonably be expected to have a Material Adverse Effect on the Business or the Company or cause any Lease or Other Lease to be terminated. Each Lease grants the tenant under the Lease the exclusive right to use and occupy the demised premises thereunder. Transferor has good and valid title to the leasehold estate under each Lease free and clear of all Liens other than Permitted Liens. Transferor enjoys peaceful and undisturbed possession under its respective Leases for the Leased Real Property. (c) Fee and Leasehold Interests, etc. The Real Property constitutes all the fee and leasehold interests in real property held for use in connection with, necessary for the conduct of, or otherwise material to, the Business. (d) No Proceedings. There are no eminent domain or other similar proceedings pending or, to the Knowledge of Transferor, threatened affecting any portion of the Real Property. There is no writ, injunction, decree, order or judgment outstanding, nor any action, claim, suit or proceeding, pending or, to the Knowledge of Transferor, threatened, relating to the ownership, lease, use, occupancy or operation by any Person of any Real Property. (e) Current Use. Transferor has received no written notice that the use and operation of the Real Property in the conduct of the Business violates in any material respect any instrument of record or agreement affecting the Real Property. Transferor has received no written notice that there is any violation of any covenant, condition, restriction, easement or order of any Governmental Authority having jurisdiction over such property or of any other Person entitled to enforce the same affecting the Real Property or the use or occupancy thereof. No damage or destruction has occurred with respect to any of the Real Property since December 31, 1997 that would, individually or in the aggregate, have a Material Adverse Effect. (f) Compliance with Real Property Laws. Transferor has received no written notice that the Real Property is not in full compliance with all applicable building, zoning, subdivision and other land use and similar Applicable Laws affecting the Real Property (collectively, the "Real Property Laws"). To the Knowledge of Transferor, there is no pending or anticipated change in any Real Property Law that will have or result in a Material Adverse Effect upon the ownership, alteration, use, occupancy or operation of the Real Property or any portion thereof. No current use by Transferor of the Real Property is dependent on a nonconforming use or other Governmental Approval the absence of which would materially limit the use of such properties or Assets held for use in connection with, necessary for the conduct of, or otherwise material to, the Business. (g) Subdivision. To Transferor's Knowledge, no approvals are necessary to subdivide the Owned Real Property from any Real Property included in the Excluded Assets. 3.1.19. Environmental Matters. (a) Permits. Except for items set forth on Schedule 3.1.19(b), with respect to which Transferor has Adequate Reserves, Transferor currently holds, and at all times has held, all such Environmental Permits necessary to the operation of the Business or the ownership, occupancy or use of the Real Property or the Assets, and all such Environmental Permits shall be validly transferred to the Company on the Closing Date. All such Environmental Permits are in full force and effect. To Transferor's Knowledge, Transferor has not been notified by any relevant Governmental Authority that any Environmental Permit will be modified, suspended, canceled or revoked, or cannot be renewed in the ordinary course of business. (b) No Violations. Except for items set forth on Schedule 3.1.19(b), with respect to which Transferor has Adequate Reserves, each of Transferor and its Affiliates have complied and is in compliance in all material respects with all Environmental Permits and all applicable Environmental Laws pertaining to the Real Property (and the ownership, occupancy, use or transferability thereof), the Business or the Assets. Except for items set forth on Schedule 3.1.19(b), with respect to which Transferor has Adequate Reserves, no Person has alleged any violation by Transferor and its Affiliates of any Environmental Permits or any applicable Environmental Law relating to the conduct of the Business or the use, ownership or transferability of the Real Property or the Assets. (c) No Actions. Except for items set forth in Schedule 3.1.19(c), with respect to which Transferor has Adequate Reserves, none of Transferor or any of its Affiliates has caused or taken any action that has resulted or may result in, or has been or is subject to, any liability or obligation relating to (i) the environmental conditions on, under, about or emanating from any Real Property, the Assets or other properties or assets owned, operated, leased or used by Transferor held for use in connection with, necessary for the conduct of, or otherwise material to, the Business, or (ii) the past or present use, management, handling, transport, treatment, generation, storage, disposal or Release of any Hazardous Substances, except for any such liabilities and obligations that, individually and in the aggregate, are not material to the Business and have not had or resulted in, and will not have or result in, a Material Adverse Effect. (d) Other. Except for items set forth in Schedule 3.1.19(d), with respect to which Transferor has Adequate Reserves: (i) None of current or past operations, or any by-product thereof, and none of the currently or formerly owned property or assets of Transferor used in the Business, including the Assets and the Real Property, is related to or subject to any investigation or evaluation by any Governmental Authority, as to whether any Remedial Action is needed to respond to a Release or threatened Release of any Hazardous Substances. (ii) Transferor is not subject to any outstanding order, judgment, injunction, decree or writ from, or contractual or other obligation to or with, any Governmental Authority or other Person in respect of which the Company may be required to incur any Environmental Liabilities and Costs arising from the Release or threatened Release of a Hazardous Substances. (iii) None of the Real Property is, and none of Transferor or any of its Affiliates has transported or arranged for transportation (directly or indirectly) of any Hazardous Substances relating to the Assets or the Real Property to any location that is, listed or proposed for listing under CERCLA, or on any similar state list, or the subject of federal, state or local enforcement actions or investigations or Remedial Action. (iv) No work, repair, construction or capital expenditure is required or planned in respect of the Assets pursuant to or to comply with any Environmental Law, nor has Transferor or any of its Affiliates received any notice of any such requirement, except for such work, repair, construction or capital expenditure as is not material to the Business and is in the ordinary course of business. (e) Full Disclosure. Transferor has disclosed and made available to the Company all information, including all studies, analyses and test results, in the possession, custody or control of Transferor and its Affiliates relating to (i) the environmental conditions on, under, about or emanating from the Real Property, and (ii) Hazardous Substances used, managed, handled, transported, treated, generated, stored, disposed of or Released by Transferor or any other Person at any time on any Real Property, or otherwise in connection with the operation of the Business or the ownership, operation, occupancy or use of the Real Property, the Assets or other assets, equipment or facilities used in or held for use in connection with the Business. 3.1.20. Employees, Labor Matters, etc. Except as set forth in Schedule 3.1.20, Transferor is not a party to or bound by any collective bargaining agreement and there are no labor unions or other organizations representing, purporting to represent or, to Transferor's Knowledge, attempting to represent any employees employed in the operation of the Business. Since December 31, 1997, there has not occurred or, to Transferor's Knowledge, been threatened any material strike, slowdown, picketing, work stoppage, concerted refusal to work overtime or other similar labor activity with respect to any employees employed in the operation of the Business. Except for items set forth on Schedule 3.1.20, with respect to which Transferor has Adequate Reserves, there are no labor disputes currently subject to any grievance procedure, arbitration or litigation and there is no representation petition pending or, to the Knowledge of Transferor, threatened with respect to any employees employed in the operation of the Business. Transferor has complied with all provisions of Applicable Law pertaining to the employment of employees, including all such Laws relating to labor relations, equal employment, fair employment practices, entitlements, prohibited discrimination or other similar employment practices or acts, except for any failure so to comply that, individually or together with all such other failures has not had or resulted in, and will not have or result in, a Material Adverse Effect. Except for items set forth on Schedule 3.1.20, with respect to which Transferor has Adequate Reserves, Transferor is not party to any agreement with any employee employed in the Business that contains change of control and/or severance provisions that would become operative by virtue of the consummation of the transaction that is the subject of this Agreement. 3.1.21. Employee Benefit Plans and Related Matters. (a) Employee Benefit Plans. Schedule 3.1.21(a) sets forth a true and complete list of each "employee benefit plan," as such term is defined in section 3(3) of the ERISA, whether or not subject to ERISA, and each bonus, incentive or deferred compensation, severance, termination or other separation benefits, retention, change of control, stock option, stock appreciation, stock purchase, phantom stock or other equity-based, fringe benefits or payroll practices, performance or other employee or retiree benefit or compensation plan, program, arrangement, agreement, policy or understanding, whether written or unwritten, that provides or may provide benefits or compensation in respect of any employee or former employee employed or formerly employed in the operation of the Business or the beneficiaries or dependents of any such employee or former employee (such employees, former employees, beneficiaries and dependents collectively, the "Employees") or under which any Employee is or may become eligible to participate or derive a benefit and that is or has been maintained, contributed to, or required to contribute to, or established, by Transferor or any of its Affiliates or any other trade or business, whether or not incorporated, which, together with Transferor is or would have been at any date of determination occurring within the preceding six years treated as a single employer under Section 414 of the Code or within the meaning of section 4001 of ERISA (such other trades and business collectively, the "Related Persons"), or to which Transferor or any Related Person contributes or is or has been obligated or required to contribute or with respect to which Transferor or the Business may have any liability or obligation (collectively, the "Plans"). With respect to each such Plan (other than a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA (a "Multiemployer Plan")), Transferor has provided the Company and Genlyte complete and correct copies, if applicable, of: the document embodying or establishing each written Plan (including all amendments thereto); a description of each unwritten Plan; all trust agreements, insurance contracts or other funding arrangements; the two most recent actuarial and trust reports; the two most recent Forms 5500 and all schedules thereto; the most recent IRS determination letter; the current summary plan description; the two most recent summary annual reports, all summaries of material modifications; all material communications received from or sent to the IRS, including a request for a compliance certificate under the IRS Voluntary Compliance Program (or similar program), or an application under the IRS Closing Agreement Programs with respect to any of the Plans, the Pension Benefit Guaranty Corporation or the Department of Labor (including a written description of any oral communication); an actuarial study of any post-employment life or medical benefits provided under any such Plan; and all amendments and modifications to any such document. With respect to each Multiemployer Plan, Transferor has provided the Company and Genlyte a complete and correct copy of statements or other communications regarding withdrawal or other multiemployer plan liabilities, and the most recent available estimate from the Multiemployer Plan of the withdrawal liability of the Transferor or Related Persons if the Transferor or Related Persons were to have a complete withdrawal. Except as specifically set forth in Schedule 3.1.21(a), Transferor has not communicated to any Employee any intention or commitment to modify any Plan or to establish or implement any other employee or retiree benefit or compensation arrangement. (b) Qualification. Each of the Plans (other than a Multiemployer Plan) that is intended to meet the requirements of Section 401(a) and, where applicable, Section 401(k) of the Code, now meets, and since its inception has met, the requirements for qualification under Section 401(a), and, where applicable, Section 401(k) of the Code and its related trust is now, and since its inception has been, exempt from taxation under Section 501(a) of the Code and nothing has occurred that would adversely affect the qualified status of any such Plan. Each such Plan and the trust forming a part thereof, has received a favorable determination letter from the IRS pursuant to Revenue Procedure 93-39 and its progeny as to its qualification under the Code, and to the effect that each such trust is exempt from taxation under section 501(a) of the Code, and, to the Knowledge of the Transferor, nothing has occurred since the date of such determination letter that could adversely affect such qualification or tax- exempt status. (c) Compliance; Liability. (i) With respect to each Plan (other than a Multiemployer Plan) that is subject to section 412 of the Code or section 302 or Title IV of ERISA, (A) no "accumulated funding deficiency" (within the meaning of Section 302 of ERISA and Section 412 of the Code) has been or could be expected to be incurred, whether or not waived, and no excise or other taxes have been or could be expected to be incurred or are due and owing with respect to the Plan because of any failure to comply with the minimum funding standards of ERISA and the Code, (B) no proceeding has been or is expected to be initiated to terminate such Plan, and (C) no security under Section 401(a)(29) of the Code has been or could be expected to be required. (ii) No liability has been or is expected to be incurred by Transferor, any Related Person or the Business (either directly or indirectly, including as a result of an indemnification obligation) under or pursuant to ERISA or otherwise or the penalty, excise tax or joint and several liability provisions of the Code relating to employee benefit plans that could, following the Closing, become or remain a liability of the Business or become a liability of the Company or of any employee benefit plan established or contributed to by the Company and, to the Knowledge of each of Transferor, no event, transaction or condition has occurred or exists that could result in any such liability to the Business or, following the Closing, the Company. (iii) Each of the Plans has been operated and administered in all respects in compliance with all Applicable Laws and the provisions of each Plan, except for any failure so to comply that, individually or together with all other such failures, has not and will not result in a material liability or obligation on the part of the Business, or, following the Closing, the Company, and has not had or resulted in, and will not have or result in, a Material Adverse Effect. There are no material pending or, to the Knowledge of Transferor, threatened claims, lawsuits, arbitrations or other action by or on behalf of any of the Plans, by any Employee or otherwise involving any such Plan or the assets of any Plan (other than routine claims for benefits). No Plan is or is expected to be under audit or investigation by the IRS, DOL, or any other Governmental Authority and no such completed audit, if any, has resulted in the imposition of any tax or penalty. No "reportable event" within the meaning of Section 4043(b) of ERISA has occurred with respect to any Plan. Notwithstanding the foregoing, the representations set forth in this subsection (c) with respect to any Multiemployer Plan shall be made to Transferor's Knowledge. (iv) No Plan is a "multiple employer plan" within the meaning of section 4063 or 4064 of ERISA, and there has never been any "multiple employer plan" covering any Employees. With respect to each Plan which is a Multiemployer Plan: (a) with respect to events prior to the Closing, none of the Transferor, any Related Person, or their predecessors has incurred or has any reason to believe it has incurred or will incur any withdrawal liability; no event has occurred which with the giving of notice would result in any liability under Section 4201 of ERISA as a result of a complete withdrawal (within the meaning of Section 4203 of ERISA) or a partial withdrawal (within the meaning of Section 4205 of ERISA); none of the Transferor, any Related Person, or their predecessors has received any notice of any claim or demand for complete or partial withdrawal liability; (b) none of the Transferor, any Related Person, or their predecessors has received any notice or has any reason to believe that such Multiemployer Plan is in "reorganization" (within the meaning of Section 4241 of ERISA), that increased contributions may be required to avoid a reduction in plan benefits or the imposition of an excise tax, or that the Multiemployer Plan is or may become "insolvent" (within the meaning of Section 4241 of ERISA); (c) no Multiemployer Plan is a party to any pending merger or asset or liability transfer under Part 2 of Subtitle E of Title IV of ERISA; and (d) the PBGC has not instituted proceedings against the Multiemployer Plan. (v) All contributions required to have been made by Transferor and each Related Person to any Plan under the terms of any such Plan or pursuant to any applicable collective bargaining agreement or Applicable Law have been made within the time period prescribed by any such Plan, agreement or Applicable Law. (vi) No Employee is or may become entitled to post-employment benefits of any kind by reason of employment in the Business, including death or survivor benefits, medical or health benefits (whether or not insured), other than (a) coverage provided pursuant to the terms of any Plan specifically identified as providing such coverage in Schedule 3.1.21(c)(vi) or mandated by section 4980B of the Code, (b) retirement benefits payable under any Plan qualified under section 401(a) of the Code or (c) deferred compensation accrued as a liability on the Balance Sheet or incurred after December 31, 1997 in the ordinary course of business consistent with the prior practice of Transferor, pursuant to the terms of a Plan. The consummation of the transactions contemplated by this Agreement or the Collateral Agreements will not (either alone or upon the occurrence of any additional subsequent events) result in an increase in the amount of compensation or benefits (whether of severance pay or otherwise) or the acceleration of the vesting or timing of payment of any compensation or benefits payable to or in respect of any Employee. No amounts payable under any Plan will fail to be deductible for federal income tax purposes by virtue of Sections 280G or 162(m) of the Code. (vii) No Employee has accrued any additional benefits under the Floor Plan since July 1, 1995 (including earning any additional service towards a subsidized "early" retirement benefit). (viii) Transferor does not maintain any Plan that is funded by a trust described in Section 501(c)(9) of the Code or subject to the provisions of Section 505 of the Code. Transferor has complied with the requirements of Section 4980B of the Code regarding the continuation of health care coverage under any Plan and the provisions of the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"). (ix) No event, condition, or circumstance exists that could result in a material increase of the benefits provided under any Plan or the expense of maintaining any Plan from the level of benefits or expense incurred for the most recent fiscal year ended before the Closing. Except as set forth on Schedule 3.1.21(c)(ix), no event, condition, or circumstance exists that would prevent the amendment or termination of any Plan. 3.1.22. Confidentiality. Except as set forth on Schedule 3.1.22, Transferor has taken all steps reasonably necessary to preserve the confidential nature of all material confidential information (including any proprietary information) with respect to the Business, including the manufacturing or marketing of any of the Division products or services. 3.1.23. No Guarantees. None of the obligations or liabilities of the Business or of Transferor incurred in connection with the operation of the Business is guaranteed by or subject to a similar contingent obligation of any other Person other than Transferor. Other than guarantees by Thomas of the obligations of its Affiliates, Transferor has not guaranteed or become subject to a similar contingent obligation in respect of the obligations or liabilities of any other Person related to the Business. There are no outstanding letters of credit, surety bonds or similar instruments of Transferor or any of its Affiliates in connection with the Business or the Assets. 3.1.24. Records. The minute books of Transferor insofar as they relate to or affect the Business and the Assets are substantially complete and correct in all material respects. The books of account of Transferor, insofar as they relate to or affect the Business and the Assets, are sufficient to prepare the Financial Statements in accordance with GAAP. 3.1.25. Brokers, Finders, etc. All negotiations relating to this Agreement, the Collateral Agreements, and the transactions contemplated thereby, have been carried on without the participation of any Person acting on behalf of Transferor or its Affiliates in such manner as to give rise to any valid claim against the Company or any of its subsidiaries for any brokerage or finder's commission, fee or similar compensation, or for any bonus payable to any officer, director, employee, agent or sales representative of or consultant to Transferor or its Affiliates upon consummation of the transactions contemplated hereby or thereby. 3.1.26. Disclosure. No representation or warranty by Transferor contained in this Agreement nor any statement or certificate furnished or to be furnished by or on behalf of Transferor to the Company or its representatives in connection herewith or pursuant hereto or set forth in any reports filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact required to make the statements contained herein or therein not misleading. There is no fact (other than matters of a general economic or political nature which do not affect the Business uniquely) known to Transferor that has not been disclosed by Transferor to the Company that might reasonably be expected to have or result in a Material Adverse Effect. 3.1.27. Receivables. All of Transferor's receivables (including accounts receivable, loans receivable and advances) which have arisen in connection with the Business and which are reflected in the Financial Statements, and all such receivables which will have arisen since the Balance Sheet Date, shall have arisen only from bona fide transactions in the ordinary course of business. Unless paid prior to the Closing Date, such receivables are or will be as of the Closing Date current and collectible net of the respective reserves shown on the Balance Sheet or on the accounting records of Transferor as of the Closing Date (which reserves are adequate and calculated consistent with past practices and, in the case of the reserve as of the Closing Date, will not represent a greater percentage of such receivables as of the Closing Date than the reserve reflected in the Balance Sheet represented of such receivables reflected therein and will not represent a material adverse change in the composition of such receivables in terms of aging). 3.1.28. Relationships With Related Entities. No Related Entity of Transferor has, or since December 31, 1997 has had, any interest in property (whether real, personal or mixed and whether tangible or intangible), used in or pertaining to the Business. Neither Transferor nor any Related Entity of Transferor is or since December 31, 1997 has owned (of record or as a beneficial owner) an equity interest in or in any of the financial or profit interest in, a Person that has (i) had business dealings or a material financial interest in any transaction with Transferor relating to the Business, or (ii) engaged in competition with Transferor with respect to any line of products or services of Transferor relating to the Business in any market presently served by Transferor. Neither Transferor nor any Related Entity of Transferor is a party to any Contract with, or has any claim or right against, Transferor. 3.1.29. Year 2000 Compliance. (a) Transferor represents and warrants that, (i) it is in the process of conducting a comprehensive review of its Systems to identify those Systems that may be unable to process data accurately beyond the year 1999; and (ii) a plan has been implemented whereby identified Systems will either be replaced or modified over the next eighteen months and that the execution of this plan will not cause significant disruptions in the Business's operations or have a Material Adverse Effect. 3.1.30. Information Supplied for Joint Proxy Statement. None of the information supplied or to be supplied by Transferor for inclusion or incorporation by reference in the Joint Proxy Statement to be filed with the Securities and Exchange Commission by Transferor and Genlyte in connection with the stockholder meetings of Transferor and Genlyte to be held in connection with the Master Transaction Agreement and the transactions contemplated hereby will, at the date mailed to stockholders, or at the time of such meetings, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. The Joint Proxy Statement will, as of its mailing date, comply as to form in all material respects with Applicable Law, including the Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder, except that no representation is made by Transferor with respect to information supplied by Genlyte or the stockholders of Genlyte for inclusion therein. 3.1.31 Opinion of Financial Advisor. The financial advisor of Transferor, Salomon Smith Barney, has rendered an opinion to the Board of Directors of Transferor to the effect that, as of the date thereof, the Membership Interest to be received by Transferor pursuant to this Agreement is fair from a financial point of view to Transferor; it being understood and acknowledged by the Company that such opinion has been rendered for the benefit of the Board of Directors of Transferor and is not intended to, and may not, be relied upon by the Company or its Affiliates. ARTICLE IV COVENANTS 4.1. Covenants of Transferor. 4.1.1. Further Actions. (a) Subject to the terms and conditions of the Master Transaction Agreement, Transferor agrees to use all reasonable good faith efforts to take all actions and to do all things necessary, proper or advisable to consummate the transactions contemplated hereby by the Closing Date, including obtaining the approval of Transferor's stockholders. (b) Transferor will, as promptly as practicable, file or supply, or cause to be filed or supplied, all applications, notifications and information required to be filed or supplied by it pursuant to Applicable Law in connection with this Agreement, the Collateral Agreements, the sale and transfer of the Assets pursuant to this Agreement and the consummation of the other transactions contemplated thereby, including filings pursuant to the HSR Act and the WARN Act, to the extent required by Applicable Law. (c) Transferor, as promptly as practicable, will use all reasonable efforts to obtain, or cause to be obtained, all Consents (including all Governmental Approvals and any Consents required under any Contract) necessary to be obtained by any of them in order to consummate the contribution and transfer of the Assets to the Company pursuant to this Agreement and the consummation of the other transactions contemplated thereby. 4.1.2. Further Assurances. Following the Closing, Transferor shall, and shall cause each of their Affiliates to, from time to time, execute and deliver such additional instruments, documents, conveyances or assurances and take such other actions as shall be necessary, or otherwise reasonably requested by the Company, to confirm and assure the rights and obligations provided for in this Agreement, and in the Collateral Agreements and render effective the consummation of the transactions contemplated hereby and thereby. 4.1.3. Certificates of Tax Authorities. On or before the Closing Date, to the extent such taxing authorities grant certificates, Transferor shall provide to the Company copies of certificates from all taxing authorities in which Transferor files (or should file) Tax Returns stating that no Taxes are due to any such state or other taxing authority for which the Company could have liability to withhold or pay Taxes with respect to the transfer of the Assets or the Business 4.1.4. Use of Business Name. After the Closing, Transferor will not, directly or indirectly, use or do business, or allow any Affiliate to use or do business, or assist any third party in using or doing business, under the names and marks listed on Schedule 4.1.4. 4.1.5. Environmental Compliance. Transferor shall comply in all material respects with the requirements of all applicable Environmental Laws necessary to effect the lawful transfer of the Real Property or the Business prior to the Closing Date. 4.1.6. Assumed Liabilities. Transferor agrees that the Company shall be permitted to direct the defense and settlement of any litigation that is an Assumed Liability and shall have sole discretion as to the manner of doing so, provided that the Company takes all steps reasonably necessary to conduct a competent and diligent defense or settlement thereof, and provided further that such litigation does not seek injunctive or other equitable relief involving Transferor or an adverse result in connection therewith could not reasonably be expected to have a Material Adverse Effect on Transferor other than with respect to this Agreement. In addition, to the extent that any litigation is reasonably expected to exceed the Reserve attributable thereto, the Company shall consult with Transferor regarding the settlement, disposition and strategy with respect to such litigation and the Company shall not settle or dispose of such litigation without Transferor's consent, which consent shall not be unreasonably withheld. 4.1.7. Audited Financial Statements. Transferor shall make all books and records available, cooperate with the Company, and pay all of the expenses, and Transferor shall and shall cause Transferor's Accountants to make available all work papers, in connection with the preparation of audited financial statements of the Business as at and for the year ended December 31, 1997, together with an unqualified report thereon by Transferor's Accountants, including a balance sheet, statements of income and retained earnings and a statement of cash flows (the "Audited Financial Statement). At the time that the Audited Financial Statements are delivered to the Company, Transferor shall by such delivery be deemed to have made the same representations and warranties to the Company with respect to such Audited Financial Statements as the representations and warranties have been made to the Unaudited Financial Statements as set forth in Section 3.1.4. 4.1.8. Insurance. Transferor agrees that the Company shall have the right to make claims against any product liability insurance or other insurance maintained prior to Closing by Transferor for the Business, provided that the cost of adding the Company as an additional named insured as well as any deductible or self-insured retentions related to any claim asserted under these insurance policies with respect to the Business shall be borne by the Company. 4.1.9. Adjusted Tax Basis. On or before the Closing Date, Transferor shall prepare and deliver to the Company a schedule that accurately and completely sets forth Transferor's adjusted tax basis in each of the Assets having a value in excess of $10,000, which shall become the Company's tax basis in the Assets by operation of Code Section 723, subject to adjustment in accordance with the provisions of Code Sections 734(b) and 754, as set forth in the LLC Agreement. 4.1.10. Due Authorization. Within 15 days of the date hereof, Thomas shall cause each Transferring Affiliate to have duly authorized the execution and delivery of this Agreement and the Collateral Agreements and the consummation of the transactions contemplated hereby and thereby by all requisite corporate action, and shall deliver to the Company evidence of such authorization satisfactory to the Company in all respects. 4.2. Covenants of the Company. 4.2.1. Further Assurances. Following the Closing, the Company shall, and shall cause its members to, from time to time, execute and deliver such additional instruments, documents, conveyances or assurances and take such other actions as shall be necessary, or otherwise reasonably requested by Transferor, to confirm and assure the rights and obligations provided for in this Agreement and in the Collateral Agreements and render effective the consummation of the transactions contemplated thereby. 4.2.2. Use of Business Names by the Company. To the extent the name "Thomas Industries, Inc." is used by the Division or the Business on stationery, signage, invoices, receipts, forms, packaging, advertising and promotional materials, products, training and service literature and materials, computer programs or like materials ("Marked Materials") or appear on Inventory at the Closing, the Company may use such Marked Materials or sell such Inventory after the Closing for a period of 12 months without altering or modifying such Marked Materials or Inventory, or removing such trademarks, service marks, brand names, or trade, corporate or business names, but the Company shall not thereafter use such trademarks, service marks, brand names or trade, corporate or business names in any other manner without the prior written consent of Transferor. Within 13 months after the Closing Date, the Company shall provide evidence reasonably satisfactory to Transferor that all Marked Materials have been used or destroyed. The Company shall defend, indemnify and hold Transferor harmless from any Loss from the use of the Marked Materials, including any product liability or other claims arising from products manufactured or sold by the Company using such Marked Materials unless due to the fault of Transferor. 4.2.3. Liability for Transfer Taxes. The Company shall be responsible for the timely payment of, and shall indemnify and hold harmless Transferor against, all sales (including bulk sales), use, value added, documentary, stamp, gross receipts, registration, transfer, conveyance, excise, recording, license and other similar Taxes and fees ("Transfer Taxes"), arising out of or in connection with or attributable to the transactions effected pursuant to this Agreement. The Company shall prepare and timely file all Tax Returns required to filed in respect of Transfer Taxes (including all notices required to be given with respect to bulk sales taxes), provided that Transferor shall be permitted to prepare any such Tax Returns that are the primary responsibility of Transferor under applicable law. Transferor's preparation of any such Tax Returns shall be subject to the Company's approval, which approval shall not be withheld unreasonably. 4.2.4. Records and Documents. For seven years following the Closing Date, the Company shall grant Transferor and its representatives, at Transferor's request, during normal business hours on two day's prior notice, access to and the right to make copies of Books and Records, possession of which is held by the Company, as may be necessary or useful in connection with Transferor's preparation of its accounting records, tax returns, financial statements, compliance with Applicable Laws related to Employee Benefits, filings with the Securities and Exchange Commission or other related matters. If during such period, the Company elects to dispose of such Books and Records, the Company shall first give Transferor sixty (60) days' written notice during which period Transferor shall have the right to take such Books and Records. 4.2.5. Removal of Transferor as Guarantor. The Company shall use its best efforts to, within thirty days of the Closing Date, cause Transferor and its Affiliates to be removed as guarantors with respect to any obligation or liability related to the Business or any Asset. During the period prior to removing Transferor and its Affiliates as guarantors, the Company shall indemnify Transferor and its Affiliates from any and all Losses related to such guaranties. 4.2.6. LIFO Method. The Company shall adopt the federal income tax accounting methodology directed by Transferor for the inventories received by the Company from Transferor. In the case of inventories to be accounted for on the last-in-first-out ("LIFO") method, the Company shall take all reasonable measures to ensure the continued use of the LIFO method and avoid the liquidation of LIFO reserves. Transferor shall, (i) at its cost, be responsible for the conduct of any income tax or financial reporting examination of such LIFO methodology and any related issues and (ii) control the settlement or litigation and bear any and all costs and expense of the litigation or settlement of any proposed adjustments to the taxable income of the Company with respect to such LIFO inventory, including adjustments which are the result of settlement or litigation. 4.3. Adjustment. (a) Prior to the Closing, the Company will prepare and deliver to Transferor a balance sheet and income statement of Genlyte and the Business as of the last day of the most recent fiscal month for which month-end statements are available (the "Determination Date"), all at the Company's expense, (the "Determination Date Financial Statements"). The Company will also prepare and deliver to Transferor a calculation setting forth the Target Net Working Capital (as defined below) as of the Determination Date (the "Determination Date Target Net Working Capital") and the Net Working Capital as of the Determination Date (the "Determination Date Net Working Capital"). After the Closing, the Company will prepare a balance sheet and income statement (the "Closing Financial Statements") of Genlyte and the Business as of the Closing Date, all at the Company's expense. The Company shall deliver the Closing Financial Statements to Transferor within 60 days after the Closing Date, together with a statement (the "Adjustment Statement") premised upon such Closing Financial Statements setting forth the Target Net Working Capital (as defined below) of the Business as of the Closing Date (the "Closing Date Target Net Working Capital") and the Net Working Capital as of the Closing Date (the "Closing Date Net Working Capital"). (b) (i) On the Closing Date, Transferor shall pay to the Company, in cash, the amount, if any, by which Net Working Capital of the Business is less than the Determination Date Target Net Working Capital (a "Cash Payment"), and the Company shall pay to Transferor, at Transferor's option, either (A) pursuant to a promissory note, bearing interest at a rate equal to the rate paid by the Company on its short term borrowings, which note may be repaid by the Company at any time, but shall in any event be paid in full within one year from the date of issuance (the "NWC Note"), or (B) Transferor shall retain an undivided percentage interest in the accounts receivable of the Business, equal to, in the case of either clause (A) or (B), the amount, if any, by which Net Working Capital of the Business exceeds the Determination Date Target Net Working Capital (a "Note/Receivable Payment"). In the event Transferor retains such accounts receivable, the Company shall have the exclusive right to collect such accounts receivable and the Company shall remit the proceeds thereof to Transferor within five days after the last day of the month within which such receivables are collected until such time as the proceeds received by Transferor equals the amount owed to Transferor under this Section 4.3(b)(i). (ii) Following the delivery of the Adjustment Statement, the Company shall pay to Transferor, or Transferor shall pay to the Company, as the case may be, the amount necessary so that the Closing Date Net Working Capital of the Business equals the Closing Date Target Net Working Capital, taking into account any Cash Payment or Note/Receivable Payment made pursuant to Section 4.3(b)(i). Any payments made pursuant to this Section 4.3(b)(ii) required by Transferor shall be made in cash, within ten Business Days after the delivery of the Adjustment Statement. Any payments required to be made by the Company pursuant to this Section 4.3(b)(ii) shall be made, at Transferor's option (x) pursuant to the terms of a promissory note on the same terms as the NWC Note, or (y) the Company shall transfer to Transferor that undivided percentage interest in receivables of the Business equal to the amount owed pursuant to this Section 4.3(b)(ii). (c) For purposes of this Section 4.3, the term "Target Net Working Capital" shall mean: A+B 2 where "A" is equal to the Genlyte Adjusted Net Working Capital multiplied by 32/68. "Genlyte Adjusted Net Working Capital" is equal to the sum of (i) Genlyte's Net Working Capital, plus (ii) excess reserves classified by Genlyte as current liabilities; and "B" is the product of (i) Thomas's Business reported year-to-date net sales, and (ii) Genlyte's Net Working Capital divided by Genlyte's reported year-to-date net sales. (d) For purposes of this Section 4.3, the term "Net Working Capital" shall mean current assets less current liabilities (in each case excluding Excluded Assets and Excluded Liabilities), all as determined in accordance with GAAP, consistently applied. (e) Transferor's and the Company's rights to indemnification hereunder (and any limitations on such rights) shall not be deemed to limit, supercede or otherwise affect the Company's or Transferor's rights to a full adjustment pursuant to this Section 4.3. ARTICLE V CONDITIONS PRECEDENT 5.1. Conditions to Obligations of Each Party. The obligations of the parties to consummate the transactions contemplated hereby shall be subject to the fulfillment on or prior to the Closing Date of the following conditions: 5.1.1. Master Transaction Agreement. All of the conditions of Thomas and Genlyte set forth in the Master Transaction Agreement shall have been satisfied, the LLC Agreement shall be effective and the Genlyte Capitalization Agreement shall close simultaneously herewith. 5.2. Conditions to Obligations of the Company. The obligations of the Company to consummate the transactions contemplated hereby shall be subject to the fulfillment (or waiver by the Company) on or prior to the Closing Date of the following additional conditions, which Transferor agrees to use reasonable good faith efforts to cause to be fulfilled: 5.2.1. Representations, Performance. The representations and warranties of Transferor contained in this Agreements and in the Collateral Agreements shall be true and correct in all respects (in the case of any representation or warranty containing any materiality qualification) or in all material respects (in the case of any representation or warranty without any materiality qualification) at and as of the date hereof, and (ii) shall be repeated and shall be true and correct in all respects (in the case of any representation or warranty containing any materiality qualification) or in all material respects (in the case of any representation or warranty without any materiality qualification) on and as of the Closing Date with the same effect as though made on and as of the Closing Date. Transferor shall have duly performed and complied in all material respects with all agreements and conditions required by this Agreement and each of the Collateral Agreements to be performed or complied with by it prior to or on the Closing Date. Transferor shall have delivered to the Company a certificate, dated the Closing Date and signed by its duly authorized officers, to the foregoing effect. 5.2.2. Collateral Agreements. Transferor or one of its Affiliates, as the case may be, shall have entered into each of the following agreements with the Company: (a) a transitional services agreement, in form and substance mutually agreed upon by the parties (the "Services Agreement"); (b) a license agreement, in form and substance mutually agreed upon by the parties, pursuant to which Transferor shall provide to the Company a royalty-free, fully paid-up, perpetual license of the names and marks "Thomas" and "Thomas Lighting"; (c) the LLC Agreement; and (d) the Master Transaction Agreement. 5.2.3. Opinion of Counsel. The Company shall have received an opinion, addressed to it and dated the Closing Date, from McDermott, Will & Emery, counsel to Transferor, in substance and form reasonably satisfactory to the Company. 5.2.4. Transfer Documents. Transferor shall have delivered to the Company at the Closing all documents, certificates and agreements necessary to transfer to the Company good and marketable title to the Assets, free and clear of any and all Liens thereon, other than Permitted Liens, including: (a) a bill of sale, assignment and general conveyance, in form and substance reasonably satisfactory to the Company, dated the Closing Date, with respect to the Assets, (other than any Asset to be transferred pursuant to any of the instruments referred to in any other clause of this Section 5.2.4); (b) assignments of all Contracts, Intellectual Property and any other agreements and instruments constituting Assets, dated the Closing Date, assigning to the Company all of Transferor's right, title and interest therein and thereto, with any required Consent endorsed thereon; (c) a general warranty deed, dated as of the Closing Date, with respect to each parcel of Owned Real Property in form and substance mutually agreed upon by the parties, together with any necessary transfer declarations, or other filings; (d) an assignment of lease, dated as of the Closing Date, with respect to each Lease and each Other Lease, in form and substance mutually agreed upon by the parties, together with any necessary transfer declarations or other filings; (e) certificates of title to all motor vehicles included in the Assets to be transferred to the Company hereunder, duly endorsed for transfer to the Company as of the Closing Date; and (f) stock certificates representing the Assets described in Section 1.1(p) together with stock powers executed by Transferor in blank. 5.2.5. Consents and Estoppels. The Company shall have received consents from the lessor of each Lease listed on Schedule 3.1.18(b) to the assignment of such Lease to the Company. The Company shall also have received estoppel certificates addressed to the Company from the lessor of each Lease, dated within 30 days of the Closing Date, identifying the Lease documents and any amendments thereto, stating that the Lease is in full force and effect and, to the best knowledge of the lessor, that the tenant is not in default under the Lease and no event has occurred that, with notice or lapse of time or both, would constitute a default by the tenant under the Lease and containing any other information reasonably requested by the Company. 5.2.6. FIRPTA Certificate. The Company shall have received a certificate of Transferor, dated the Closing Date and sworn to under penalty of perjury, setting forth the name, address and federal tax identification number of Transferor and stating that Transferor is not a "foreign person" within the meaning of Section 1445 of the Code, such certificate to be in the form set forth in the Treasury Regulations thereunder. 5.2.7. Environmental Compliance. Transferor shall have complied in all material respects with the requirements of all applicable Environmental Laws necessary to effect the lawful transfer of the Real Property or the Business. 5.2.8. Financial Statements. The Company shall have received the Audited Financial Statements and they shall not be materially different from the Financial Statements or reflect a Material Adverse Effect as compared to the Financial Statements. 5.2.9. Adjusted Tax Basis. Transferor shall have delivered to the Company the schedule referred to in Section 4.1.9 in form and substance reasonably satisfactory to the Company. 5.3. Conditions to Obligations of Transferor. The obligation of Transferor to consummate the transactions contemplated hereby shall be subject to the fulfillment (or waiver by Transferor), on or prior to the Closing Date, of the following additional conditions, which the Company agrees to use reasonable good faith efforts to cause to be fulfilled. 5.3.1. Representations, Performance, etc. The Company shall have duly performed and complied in all material respects with all agreements and conditions required by this Agreement and the Collateral Agreements to be performed or complied with by it prior to or on the Closing Date. The Company shall have delivered to Transferor a certificate, dated the Closing Date and signed by its duly authorized officer, to the foregoing effect. 5.3.2. Assumption Agreement. Transferor shall have received from the Company the Assumption Agreement. 5.3.3. Collateral Agreements. The Company shall have entered into each of the Collateral Agreements to which it is a party. 5.3.4. Environmental Compliance. Transferor shall have complied in all material respects with the requirements of all applicable Environmental Laws necessary to effect the lawful transfer of the Real Property or the Business. ARTICLE VI EMPLOYEES AND EMPLOYEE BENEFIT PLANS 6.1 Employment of Transferor's Employees. (a) Transferor will, and will cause each of its Affiliates to, use all commercial efforts to cause the employees employed by Transferor in the Business to make available their employment services to the Company. For a period of two years from the Closing Date, Transferor will not, and will not permit any of its Affiliates to, solicit, offer to employ, hire or retain the services of or otherwise interfere with the relationship of the Company with any person employed by or otherwise engaged to perform services for the Company in connection with the operation of the Business. (b) Effective as of the Closing Date, the Company shall offer employment to all employees who are actively employed by Transferor principally in the operation of the Business ("Business Employees"). Those Business Employees who accept such offers of employment effective as of the Closing Date shall be referred to herein as the "Transferred Employees". The Company shall provide any Transferred Employee who is terminated by the Company within 180 days after the Closing Date with severance pay equal to the severance pay that such Transferred Employee would have received under the severance plans of Transferor listed on Schedule 3.1.21(a) if such person's employment with Transferor were terminated as of the Closing Date. Except as provided under the immediately preceding sentence, Transferor shall remain responsible, and the Company shall not assume any liability, for payment of any and all severance, termination pay, retention, change in control or other similar compensation or benefits which are or may become payable in connection with the consummation of the transactions contemplated by this Agreement or the Collateral Agreements. (c) As of, and subject to, the Closing, the Company shall assume all Benefit Liabilities of Transferor to the extent such Benefit Liabilities relate to a Plan (as defined in Section 3.1.21) and any other non-material Benefit Liability with respect to the Transferred Employees, except to the extent expressly provided in this Article VI . From and after the Closing Date, Transferor shall remain solely responsible for any and all Benefit Liabilities which are not assumed by the Company pursuant to this Article VI. 6.2. Salaried Pension Plan. As of the date hereof, Transferor maintains the Thomas Industries Pension Floor Plan (the "Floor Plan") under which eligible Business Employees have frozen accrued benefits. Notwithstanding anything herein to the contrary, the Company will not assume the Floor Plan, or any rights, duties, obligations or liabilities thereunder, nor shall it become a successor employer or be responsible in any way for Transferor's participation in or obligations or responsibilities with respect to the Floor Plan. Transferor shall take such actions as are necessary to fully vest as of the Closing Date the accrued benefits of each Business Employee under the Floor Plan. 6.3. Salaried Profit Sharing Plan. (a) As of the date hereof, Transferor maintains the Thomas Industries Profit Sharing Plan (the "Transferor Profit Sharing Plan") in which eligible Business Employees participate. Effective as of the Closing Date, Transferor and the Company shall take all action necessary for the Company to adopt the Transferor Profit Sharing Plan as a contributing employer for those Transferred Employees who, immediately prior to the Closing Date, participated (or were eligible to participate) in the Transferor Profit Sharing Plan (the "Covered Profit Sharing Participants"). Such actions shall include Transferor's amendment of the Transferor Profit Sharing Plan and related documents to the extent necessary to effectuate the intent of this Section, including any changes necessary so that Transferred Employees will not be entitled to a distribution under the Transferor Profit Sharing Plan as the result of the transactions contemplated by this Agreement and the Collateral Agreements. Unless the Company unilaterally terminates its participation in the Transferor Profit Sharing Plan at an earlier date, as provided under Section 6.3(c) below, the Company shall remain a participating employer in the Transferor Profit Sharing Plan until December 31, 1999. (b) During the period that the Company is a contributing employer under the Transferor Profit Sharing Plan, the Company consents to all of the provisions of the Transferor Profit Sharing Plan, as the same shall be amended from time to time, and agrees to be bound thereby; provided, however, that the Company shall have discretion to set the contribution levels applicable to Covered Profit Sharing Participants for periods on and after January 1, 1999. During the period it is a contributing employer under the Transferor Profit Sharing Plan, the Company shall pay (i) to the Transferor Profit Sharing Plan its contributions at such times required of other contributing employers, and (ii) to Transferor an administrative fee as set forth in the Services Agreement (as defined in Section 5.2.2(a)). The contribution to the Transferor Profit Sharing Plan for each Covered Profit Sharing Participant for the plan year in which the Closing Date occurs shall be made by Transferor and the Company on a proportionate basis based on the number of days in such plan year that the Covered Profit Sharing Participant were employed by each such company. (c) The Company, upon at least 30 days advance written notice to Transferor, may unilaterally terminate its participation in the Transferor Profit Sharing Plan on a prospective basis; provided that the Company shall remain obligated to pay to the Transferor Profit Sharing Plan all contribution amounts owed to such Plan with respect to the period prior to the effective date of such termination. (d) (i) As soon as practicable after December 31, 1999, or such earlier date after the Company's participation in the Transferor Profit Sharing Plan terminates, that is mutually agreed to by Transferor and the Company, Transferor shall cause the trustee of the Transferor Profit Sharing Plan to transfer to the funding agent of a defined contribution plan maintained or established by the Company (the "Company Profit Sharing Plan ) and containing provisions necessary to satisfy section 411(d)(6) of the Code by a transferee plan, for the benefit of Covered Profit Sharing Participants, an amount, in cash or securities traded on a nationally recognized securities exchange (other than securities of Transferor or any of its Affiliates), bonds of companies traded on a nationally recognized securities exchange or such other assets mutually agreed to by Transferor and the Company, equal to the total account balances (whether or not vested) held under the Transferor Profit Sharing Plan for the Covered Profit Sharing Participants (the "Transferred Profit Sharing Plan Assets"). Transferor also shall include in the Transferred Profit Sharing Plan Assets (i) actual investment earnings or losses through the date of transfer, and (ii) amounts required under the Transferor Profit Sharing Plan or applicable law to be contributed to such plan by Transferor with respect to such Covered Profit Sharing Participants on account of any period prior to the Closing Date (whether or not currently due). The Company hereby represents and warrants that nothing shall occur prior to, and on, the actual date of transfer of the Transferred Profit Sharing Plan Assets which would adversely affect the qualified status of the Company Profit Sharing Plan and Transferor hereby represents and warrants that nothing shall occur prior to, and on, the actual date of transfer of the Transferred Profit Sharing Plan Assets which would adversely affect the qualified status of the Transferor Profit Sharing Plan. Transferor and the Company agree that the Transferred Profit Sharing Plan Assets shall not in any event be less than the amount required under Section 414(1) of the Code and the regulations thereunder. (ii) Pending the transfer of the Transferred Profit Sharing Plan Assets, the accounts of the Covered Profit Sharing Participants shall remain in the trust fund for the Transferor Profit Sharing Plan and Transferor shall cause the trustee of the Transferor Profit Sharing Plan to pay any current benefits or make any distributions to Covered Profit Sharing Participants as they become due. (iii) Transferor and the Company agree to provide each other with such records and information as they may reasonably request relating to their respective obligations under this section or the administration of the Transferor Profit Sharing Plan or the Company Profit Sharing Plan, and agree, if required by law, and in accordance with any time periods required by applicable law, to notify the Internal Revenue Service of the contemplated transfer. (e) Except as specifically provided in this Section 6.3, the Company will not assume the Transferor Profit Sharing Plan, or any rights, duties, obligations or liabilities thereunder (other than to provide benefits under the Company Profit Sharing Plan relating to Transferred Profit Sharing Plan Assets), nor shall it become a successor employer or be responsible in any way for Transferor's participation in or obligations or responsibilities with respect to the Transferor Profit Sharing Plan. 6.4. Salaried Savings Plan. (a) As of the date hereof, Transferor maintains the Thomas Industries Inc. Retirement Savings and Investment Plan (the "Transferor Savings Plan") in which eligible Business Employees participate. Effective as of the Closing Date, Transferor and the Company shall take all action necessary for the Company to adopt the Transferor Savings plan as a contributing employer for those Transferred Employees who, immediately prior to the Closing Date, participated (or were eligible to participate) in the Transferor Savings Plan (the "Covered Savings Participants"). Such actions shall include Transferor's amendment of the Transferor Savings Plan and related documents to the extent necessary to effectuate the intent of this Section, including any changes necessary so that Transferred Employees will not be entitled to a distribution under the Transferor Savings Plan as the result of the transactions contemplated by this Agreement and the Collateral Agreements. Unless the Company unilaterally terminates its participation in the Transferor Savings Plan at an earlier date, as provided under Section 6.4(c) below, the Company shall remain a participating employer in the Transferor Savings Plan until December 31,1999. (b) During the period that the Company is a contributing employer under the Transferor Savings Plan, the Company consents to all of the provisions of the Transferor Savings Plan, as the same shall be amended from time to time, and agrees to be bound thereby; provided, however, that the Company shall have discretion to set the matching contribution levels applicable to Covered Savings Participants for periods on and after January 1, 1999. During the period it is a contributing employer under the Transferor Savings Plan, the Company shall pay (i) to the Transferor Savings Plan its contributions at such times required of other contributing employers, and (ii) to the Transferor an administrative fee as set forth in the Services Agreement (as defined in Section 5.2.2(a)). The employer matching contributions to the Transferor Savings Plan for each Covered Savings Participant for the plan year in which the Closing Date occurs shall be made by Transferor and the Company based on the salary deferral contributions made by the Covered Savings Participant during the period they were employed by each such company. (c) The Company, upon at least 30 days advance written notice to Transferor, may unilaterally terminate its participation in the Transferor Savings Plan on a prospective basis; provided that the Company shall remain obligated to pay to the Transferor Savings Plan all contribution amounts owned to such Plan with respect to the period prior to the effective date of such termination. (d) (i) Unless otherwise agreed to by the Company, as soon as practicable after the Company's participation in the Transferor Savings Plan terminates, Transferor shall cause the trustee of the Transferor Savings Plan to transfer to the funding agent of a defined contribution plan maintained or established by the Company (the "Company Savings Plan") and containing provisions necessary to satisfy sections 401(k) and 411(d)(6) of the Code by a transferee plan, for the benefit of Covered Savings Participants, an amount , in cash or common stock of Transferor, or such other assets mutually agreed to by Transferor and the Company, in kind, equal to the total account balances (whether or not vested) held under the Transferor Savings Plan for the Covered Savings Participants (the "Transferred Savings Plan Assets"). Transferor also shall include in the Transferred Savings Plan assets (i) actual investment earnings or losses through the date of transfer and (ii) amounts required under respect to such Covered Savings Participants on account of any period prior to the Closing Date (whether or not currently due). In addition, Transferor shall take all action necessary prior to the date assets are transferred to the Company Savings Plan so that all accounts of Covered Savings Participants under the Transferor Savings Plan are participant directed under ERISA Section 404(c). The Company hereby represents and warrants that nothing shall occur prior to, and on, the actual date of transfer of the Transferred Savings Plan Assets which would adversely affect the qualified status of the Company Savings Plan and Transferor hereby represents and warrants that nothing shall occur prior to, and on, the actual date of transfer of the Transferred Savings Plan Assets which would adversely affect the qualified status of the Transferor Savings Plan. Transferor and the Company agree that the Transferred Savings Plan Assets shall not in any event be less than the amount required under Section 414(1) of the Code and the regulations thereunder. (ii) Pending the transfer of the Transferred Savings Plan Assets, the accounts of the Covered Participants shall remain in the trust fund for the Transferor Savings Plan and Transferor shall cause the trustee of the Transferor Savings Plan to pay any current benefits or make any distributions to Covered Participants as they become due. (iii) Transferor and the Company agree to provide each other with such records and information as they may reasonably request relating to their respective obligations under this section or the administration of the Transferor Savings Plan or the Company Savings Plan, and agree, if required by law, and in accordance with any time periods required by applicable law, to notify the Internal Revenue Service of the contemplated transfer. (e) Except as specifically provided in this Section 6.4, the Company will not assume the Transferor Savings Plan, or any rights, duties, obligations or liabilities thereunder (other than to provide benefits under the Company Savings Plan relating to Transferred Savings Plan Assets), nor shall it become a successor employer or be responsible in any way for Transferor's participation in or obligations or responsibilities with respect to the Transferor Savings Plan. 6.5. Consolidated Thrift Savings Plan for Hourly Employees. (a) As of the date hereof, Transferor maintains the Thomas Industries, Inc. Consolidated Thrift Savings Plan for Hourly Employees (the "Transferor Consolidated Savings Plan") in which eligible Business Employees participate. Immediately prior to the Closing, Transferor shall establish a separate, substantially identical plan and trust to the Transferor Consolidated Savings Plan and related trust (the "New Consolidated Savings Plan") and "spin off" to the New Consolidated Savings Plan the assets and liabilities of the Transferor Consolidated Savings Plan representing the account balances of Business Employees. As of, and subject to, the Closing, the Company shall adopt and assume the New Consolidated Savings Plan with respect to all persons entitled to benefits under the provisions of the New Consolidated Savings Plan. Transferor shall contribute to the Transferor Consolidated Savings Plan all amounts required under the Transferor Consolidated Savings Plan or applicable law to be contributed to such plan with respect to such Business Employees on account of periods prior to the Closing Date (whether or not currently due). Prior to and after the Closing, Transferor and the Company shall cooperate in preparing any appropriate documents and use their reasonable best efforts to take all other actions necessary to effectuate the intent of this Section. (b) As soon as administratively practicable after the Closing Date, Transferor will supply the Company with (i) all records concerning participation, vesting, accrual of benefits, payment of benefits, and election forms of benefits under the New Consolidated Savings Plan, and (ii) any other information reasonably requested by the Company as necessary or appropriate for the administration of the New Consolidated Savings Plan. Transferor will make all required filings or reports with or to the IRS, or any other governmental agency, and the participants and their beneficiaries with respect to the New Consolidated Savings Plan (the "Required Filings") on a timely basis for all plan years ending before or on the Closing Date or as may be required in connection with the transfer of the New Consolidated Savings Plan. The Company will make all Required Filings on a timely basis for the plan years ending after the Closing Date, and Transferor will supply the Company with all information and data in Transferor's control reasonably requested by the Company as necessary or appropriate for the completion of the Required Filings or for seeking any determination from the IRS with respect to New Consolidated Savings Plan. (c) The Company will not assume the Transferor Consolidated Savings Plan, or any rights, duties, obligations or liabilities thereunder (other than to provide benefits under the New Consolidated Savings Plan), nor shall it become a successor employer or be responsible in any way for Transferor's participation in or obligations or responsibilities with respect to the Transferor Consolidated Savings Plan. 6.6. Assumed Hourly Plans. (a) As of the date hereof, Transferor maintains the Thomas Industries Inc. Thrift Savings Plan for Hourly Employees at Emco Lighting, Milan, Illinois, the Thomas Industries Inc., at Hopkinsville, Kentucky, and the I.B.E.W. Local Union No. 1090, AFL-CIO, Pension Plan, the Thomas Industries Holdings Inc. at Sparta, Tennessee and the I.B.E.W. Local Union No. 2143, AFL- CIO, Pension Plan, and the Thomas Industries Holdings Inc. Retirement Plan for Employees Represented by Local 1028 and Local 1969, I.B.E.W., AFL-CIO (collectively, the "Hourly Plans"), and (ii) Transferor is the contributing employer under the Gardco-I.B.E.W. Retirement Plan and the Gardco-I.B.E.W. 401(k) Plan (collectively, the "Gardco Hourly Plans", and, together with the Hourly Plans, the "Assumed Hourly Plans"), in which eligible Business Employees participate. As of, and subject to, the Closing, the Company shall adopt and assume the Assumed Hourly Plans, with respect to all persons entitled to benefits under the provisions of such Assumed Hourly Plans. Prior to and after the Closing, Transferor and the Company shall cooperate in preparing any appropriate documents and use their reasonable best efforts to take all other actions necessary to effectuate the intent of this Section. (b) As soon as administratively practicable after the Closing Date, Transferor will supply the Company with (i) all records concerning participation, vesting, accrual of benefits, payment of benefits, and election forms of benefits under each Assumed Hourly Plan, and (ii) any other information reasonably requested by the Company as necessary or appropriate for the administration of each Assumed Hourly Plan. Transferor will make all required filings or reports with or to the IRS, or any other governmental agency, and the participants and their beneficiaries with respect to each Assumed Hourly Plan (the "Required Filings") on a timely basis for all plan years ending before the Closing Date or as may be required in connection with the transfer of the Assumed Hourly Plans. The Company will make all Required Filings on a timely basis for all plan years ending after the Closing Date, and Transferor will supply the Company with all information and data in Transferor's control reasonably requested by the Company as necessary or appropriate for the completion of the Required Filings or for seeking any determination from the IRS with respect to the Assumed Hourly Plans. 6.7. Continuation of Welfare Benefits. (a) Transferor agrees to continue to provide, for the one hundred and eighty (180) day period beginning on the Closing Date, any Transferred Employees or, at the Company's option, any other persons hired by the Company or transferred to one of the facilities contributed by Transferor pursuant hereto within the one hundred and eighty (180) day period beginning on the Closing Date (collectively referred to as "Post Closing Employees") with such benefits under "welfare plans" (as defined in Section 3(1) of ERISA) other than severance plans, as are, immediately prior to the Closing Date, being provided to such Transferred Employees, whether provided through insurance programs or on a self- funded basis, (collectively, the "Welfare Benefits"). Transferor agrees to take all steps necessary (including amending the applicable plans and related documents) to allow Transferred Employees to continue to participate in such plans for said one hundred and eighty (180) day period and the Company agrees to reimburse Transferor for the actual cost of providing such Welfare Benefits within thirty (30) days after presentation of written monthly statements thereof to the Company to the extent not disputed. With respect to Welfare Benefits provided through insurance programs, for purposes of the preceding sentence, Transferor's actual cost for providing such Welfare Benefits shall mean the sum of employer and employee premium contributions which are made on behalf of Post- Closing Employees to the plans providing such Welfare Benefits, which shall not exceed the rate of such contributions made on behalf of comparable employees of Transferor. Transferor shall furnish the Company with such reasonable information as the Company shall request in order for the Company to verify Transferor's cost thereof. If the Company so requests, Transferor agrees to use its best efforts to procure the consent of any insurance carrier or other Person, and to take such other actions as may be necessary, in order to effectuate the assignment to the Company of any insurance policies or other contracts issued to Transferor exclusively in connection with the Welfare Benefits or the Transferred Employees under other Plans. If any "qualifying event," as defined in Section 603 of ERISA, occurs during the period in which health coverage is provided pursuant to the provisions hereof, Transferor agrees to offer the affected Post Closing Employees and their dependents the opportunity to continue health coverage with the full cost thereof to be paid by the persons continuing such coverage, to the extent and for the time required by ERISA or the Code and any applicable state laws (on the same basis, to the same extent and for payment of the same amounts as employees and dependents of Transferor are provided the opportunity to continue such coverage), and to provide the Post-Closing Employees and their dependents with any notifications required thereunder. Transferor shall continue to process and pay, or cause to be processed and paid, in accordance with the terms of its plans providing Welfare Benefits, all claims submitted by the Post-Closing Employees under such benefit plans for expenses and claims incurred prior to the date to which such Welfare Benefits coverage is extended pursuant to the provisions hereof. (b) From and after the Closing Date, Transferor shall remain solely responsible for any and all Benefit Liabilities relating to or arising in connection with the requirements of Section 4980B of the Code (including the obligation to provide "COBRA" continuation coverage under 4980(B) of the Code) to provide continuation of health care coverage and the requirements of HIPAA and under any Benefit Plan in respect of (A) Business Employees, other than the Transferred Employees and their covered dependents, and (B) to the extent related to a qualifying event occurring on or before the Closing Date, Transferred Employees and their covered dependents. Transferor agrees, and agrees to cause its Affiliates to, issue or cause to be issued all certificates, notices and such other documents required by HIPAA to each Transferred Employee and their covered dependents. (c) Except as specifically provided in this Section 6.7 and in Sections 6.1(b) and 6.8, the Company will not assume any Plan providing Welfare Benefits, or any rights, duties, obligations or liabilities thereunder, nor shall it become a successor employer or be responsible in any way for Transferor's participation in or obligations or responsibilities with respect to any such Plan. 6.8. Post-Retirement Health Benefits. As of the date hereof, Transferor maintains one or more Plans that are "employee welfare benefit plan" (within the meaning of section 3(1) of ERISA) and that provide post-retirement health benefits to Business Employees and former employees of the Business ("Transferor Retiree Welfare Benefits"). Effective as of, and subject to the Closing, the Company shall assume the obligation to provide such Transferor Retiree Welfare Benefits, provided that Transferor agrees to reimburse the Company after the Closing Date for the actual cost incurred by the Company to provide the Transferor Retiree Welfare Benefits under the terms of the applicable Plan in effect as of the date hereof, to the extent such cost incurred by the Company exceeds (i) $500,000 with respect to any full calendar year beginning after the Closing Date, or (ii) with respect to the calendar year in which the Closing Date occurs, an amount equal to $500,000, multiplied by a fraction, the numerator of which is the number of days in such calendar year after the Closing Date and the denominator of which is 365. Such reimbursement shall be made within 30 days after presentation of written monthly statements thereof to Transferor to the extent not disputed. 6.9. Multiemployer Plans. With respect to each Multiemployer Plan set forth on Schedule 3.1.21(a), the Company shall reimburse Transferor for any withdrawal liability incurred by Transferor under such Multiemployer Plan as the result of the transactions contemplated under this Agreement and the Collateral Agreements. Notwithstanding the foregoing, the Company may elect prior to the Closing Date that Section 4204 of ERISA shall apply to the transactions contemplated under this Agreement and the Collateral Agreements with respect to any such Multiemployer Plan, in which case Transferor and the Company shall take all actions necessary to comply with Section 4204 of ERISA with respect to each such Multiemployer Plan. Such compliance shall include the execution of any necessary documentation and the posting of a bond or escrow (or letter of credit if acceptable to the Multiemployer Plan) within the time required by Section 4204(a)(1)(B) of ERISA for each of the Multiemployer Plans for which a bond or escrow (or letter of credit) is required, in an amount, for the period of time, and in a form that complies with Section 4204(a)(1)(B) of ERISA - or, within such time period obtaining a variance from such bonding or escrow requirement from each of the applicable Multiemployer Plan or Multiemployer Plans or from the Pension Benefit Guaranty Corporation (the "PBGC") - so that a transfer of contribution obligations to the Company under the Multiemployer Plans with respect to Business Employees does not result in a complete or partial withdrawal of Transferor from the applicable Multiemployer Plans under Sections 4203 or 4205 of ERISA, respectively. In order to assist the Company in making any election contemplated by this Section 6.9, Transferor shall use its reasonable best efforts to provide to the Company as soon as possible after the date hereof a written estimate from each Multiemployer Plan of the withdrawal liability of the Transferor or Related Persons if the Transferor or Related Persons were to have a complete withdrawal as of the Closing. 6.10. Supplemental Profit Sharing Plan. (a) As of the date hereof, Transferor maintains the Thomas Industries Supplemental Profit Sharing Plan (the "Supplemental Plan") in which eligible Business Employees participate, and with respect to which Transferor has established and maintained a grantor trust (the "Rabbi Trust") to fund benefits to be provided under the Supplemental Plan. Effective as of, and subject to, the Closing Date, Transferor and the Company shall take all action necessary for the Company to adopt the Supplemental Plan as a contributing employer for those Transferred Employees who, immediately prior to the Closing Date, participated (or were eligible to participate) in the Supplemental Plan (the "Supplemental PSP Participants"). The Company shall remain a contributing employer under the Supplemental Plan until December 31, 1998 or such longer period agreed to by the parties. During the period it is a contributing employer under the Supplemental Plan, the Company shall pay to the Rabbi Trust its contributions at such times required of other contributing employers, and (ii) to Transferor an administrative fee as set forth in the Services Agreement (as defined in Section 5.2.2(a)). (b) At approximately the same time as Transferred Profit Sharing Plan Assets are transferred to the Company Profit Sharing Plan under Section 6.3(d), Transferor shall use its commercially reasonable efforts to transfer assets of the Rabbi Trust to a successor trust to be established by the Company which represents the entire benefit accrued by Supplemental PSP Participants as of such date under the Supplemental Plan. To the extent that Transferor is able to transfer such amounts to the successor trust to be established by the Company, the Company shall assume the obligation of Transferor to provide the benefits accrued by Supplemental PSP Participants under the Supplemental Plan. Transferor agrees to provide Company with such records and information as it may reasonably request relating to its obligations to provide the benefits contemplated under this Section. (c) Except for the Company's assumption of Transferor's obligation to provide benefits accrued by Supplemental PSP Participants under the Supplemental Plan to the extent that assets are transferred to a successor trust to be established by the Company, as described above, the Company will not assume the Supplemental Plan, or any rights, duties, obligations or liabilities thereunder, nor shall it become a successor employer or be responsible in any way for Transferor's participation in or obligations or responsibilities with respect to the Supplemental Plan. 6.11. Employment Taxes. (a) Transferor and the Company will, to the extent permitted by Applicable Law, (i) treat the Company as a "successor employer" and Transferor as a "predecessor employer" within the meaning of sections 3121(a)(1) and 3306(b)(1) of the Code, with respect to Transferred Employees who are employed by the Company for purposes of Taxes imposed under the United States Federal Unemployment Tax Act ("FUTA") or the United States Federal Insurance Contributions Act ("FICA") and (ii) and cooperate with each other to avoid, to the extent possible, the filing of more than one IRS Form W-2 with respect to each such Transferred Employee for the calendar year within which the Closing Date occurs. (b) At the request of the Company with respect to any particular applicable Tax law relating to employment, unemployment insurance, social security, disability, workers' compensation, payroll, healthcare or other similar Tax other than taxes imposed under FICA and FUTA, Transferor and the Company will, to the extent permitted by Applicable Law, (i) treat the Company as a successor employer and Transferor as a predecessor employer, within the meaning of the relevant provisions of such Tax law, with respect to Transferred Employees who are employed by the Company and (ii) cooperate with each other to avoid, to the extent possible, the filing of more than one individual information reporting form pursuant to each such Tax law with respect to each such Transferred Employee for the calendar year within which the Closing Date occurs. 6.12. Other Plans. The Company shall not assume or have any Benefit Liabilities with respect to the Thomas Industries Executive Retirement Plan, the Thomas Industries Inc. 1995 Incentive Stock Plan and the Thomas Industries Stock Award Program. ARTICLE VII TERMINATION 7.1 Termination. This Agreement shall be terminated at such time as the Master Transaction Agreement is terminated. In the event of the termination of this Agreement, this Agreement shall become void and have no effect, without any liability to any Person in respect hereof or of the transactions contemplated hereby on the part of any party hereto, or any of its directors, members, managers, officers, employees, agents, consultants, representatives, advisers, stockholders or Affiliates, except (i) as specified in Section 8.4, (ii) subject to Article VIII of the Master Transaction Agreement, for any liability resulting from such party's breach of this Agreement and (iii) for the payment of any fee pursuant to Article VIII of the Master Transaction Agreement. ARTICLE VIII DEFINITIONS, MISCELLANEOUS 8.1 Definition of Certain Terms. The terms defined in this Section 8.1, whenever used in this Agreement (including in the Schedules), shall have the respective meanings indicated below for all purposes of this Agreement. All references herein to a Section, Article or Schedule are to a Section, Article or Schedule of or to this Agreement, unless otherwise indicated. Adequate Reserves: with respect to any asset or liability, an amount of specific or general Reserves that equals or exceeds the amount of any Loss associated with such asset or liability now or hereafter recognized. Adjustment Statement: as defined in Section 4.3(a). Affiliate: when used with reference to a specified Person, any Person that directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with the specified Person. Agreement: this Capitalization Agreement, including the Schedules hereto. Applicable Law: all applicable provisions of all (i) constitutions, treaties, statutes, laws (including the common law), rules, regulations, ordinances, codes or orders of any Governmental Authority, (ii) Governmental Approvals and (iii) orders, decisions, injunctions, judgments, awards and decrees of or agreements with any Governmental Authority. Assets: as defined in Section 1.1. Assumed Liabilities: as defined in Section 2.3. Assumed Hourly Plans: as defined in Section 6.6(a). Assumption Agreement: as defined in Section 2.3(b). Audited Financial Statements: as defined in Section 4.1.7. Balance Sheet: the balance sheet contained in the Financial Statements referenced in clause (a) of Section 3.1.4. Balance Sheet Date: as defined in Section 3.1.4. Benefit Liabilities: liabilities, obligations, commitments, damages, costs, taxes and expenses, including reasonable fees and disbursements of attorneys and other advisors, including any such expenses incurred in connection with the enforcement of any applicable provision of this Agreement payable to any Employee or other Person as a result of, with respect to or under any Plan or similar employee benefit plan, agreement, policy or practice. Books and Records: as defined in Section 1.1(i). Business: the business of Transferor relating to the manufacture, sale, marketing and distribution of consumer, commercial, industrial and outdoor lighting. Business Day: shall mean any day on which commercial banks in the City of New York, New York are open for business. Business Employees: as defined in Section 6.1(b). Cash Payment: as defined in Section 4.3(b)(i). CERCLA: the Comprehensive Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C. section9601 et seq. Closing Date: as defined in Section 2.1. Closing Date Net Working Capital: as defined in Section 4.3(a). Closing Date Target Net Working Capital: as defined in Section 4.3(a). Closing Financial Statement: as defined in Section 4.3(a). Code: the Internal Revenue Code of 1986, as amended, or any successor statute to such Code. Collateral Agreements: the agreements and other documents and instruments described in Section 5.2.2 and 5.2.4. Company: as defined in the first paragraph of this Agreement. Company Indemnitees: as defined in Section 8.2(a). Company's Accountants: the accountants of the Company as determined by the Company's management board. Company Profit Sharing Plan: as defined in Section 6.3(d)(i). Company Savings Plan: as defined in Section 6.4(d)(i). Component: means any Hardware, Software, Databases and/or Embedded Control of any System used in the Business. Consent: any consent, approval, authorization, waiver, permit, grant, franchise, concession, agreement, license, exemption or order of registration, certificate, declaration or filing with, or report or notice to, any Person, including but not limited to any Governmental Authority. Contract: as defined in Section 3.1.12(a). Covered Profit Sharing Participants: as defined in Section 6.3(a). Covered Savings Participants: as defined in Section 6.4(a). Database: shall mean all data and other information recorded, stored, transmitted and retrieved in electronic form by a System or any Component, whether located on any Component(s) of a System or archived in storage media of a type employed or used in conjunction with any Component or System used in the Business. Determination Date: as defined in Section 4.3(a). Determination Date Financial Statements: as defined in Section 4.3(a). Determination Date Net Working Capital: as defined in Section 4.3(a). Determination Date Target Net Working Capital: as defined in Section 4.3(a). Division: as defined in the first WHEREAS clause of this Agreement. $ or dollars: lawful money of the United States. Embedded Control: shall mean any microprocessor, microcontroller, PLC, smart instrumentation or other sensor, driver, monitor, robotic or other device containing a semiconductor, memory circuit, BIOS, PROM or other microchip used in the Business. Employees: as defined in Section 3.1.21(a). Environmental Laws: all Applicable Laws relating to the protection of the environment, to human health and safety, or to any emission, discharge, generation, processing, storage, handling, holding, abatement, existence, Release, threatened Release or transportation or disposal of any Hazardous Substances, including (i) CERCLA, the Resource Conservation and Recovery Act, and the Occupational Safety and Health Act, (ii) all other requirements pertaining to reporting, licensing, permitting, investigation or remediation of emissions, discharges, releases or threatened releases of Hazardous Substances into the air, surface water, groundwater or land, or relating to the manufacture, processing, distribution, use, sale, treatment, receipt, storage, disposal, transport or handling of Hazardous Substances, and (iii) all other requirements pertaining to the protection of the health and safety of employees or the public. Environmental Liabilities and Costs: all Losses, whether direct or indirect, known or unknown, current or potential, past, present or future, imposed by, under or pursuant to Environmental Laws, including all Losses related to Remedial Actions, and all fees disbursements and expenses of counsel, experts, personnel and consultants based on, arising out of or otherwise in respect of: (i) the ownership, operation, use or occupancy of the Business, the Assets, the Real Property or Other Leases or any other real properties, assets, equipment or facilities, by any Transferor, or any of their predecessors or Affiliates; (ii) the environmental conditions existing on the Closing Date on, under, above, about or emanating from any Real Property, the Assets or property subject to Other Leases or any other real properties, assets, equipment or facilities currently or previously owned, leased, operated, occupied or used by the any Transferor, or any of their predecessors or Affiliates; and (iii) expenditures necessary to cause any Real Property or any aspect of the Business or the Assets to be in compliance with any and all requirements of Environmental Laws as of the Closing Date, including all Environmental Permits issued or required under or pursuant to such Environmental Laws, and reasonably necessary to make full economic use of any Real Property or the Assets. Environmental Permits: any federal, state and local permit, license, registration, consent, order, administrative consent order, certificate, approval or other authorization with respect to the any Transferor necessary for the conduct of the Business as currently conducted or previously conducted under any Environmental Law. ERISA: the Employee Retirement Income Security Act of 1974, as amended. Excluded Assets: as defined in Section 1.2. Excluded Liabilities: as defined in Section 2.4. Financial Statements: each of the financial statements required to be provided by Section 3.1.4. Floor Plan: as defined in Section 6.2. GAAP: generally accepted accounting principles as in effect in the United States. Gardco Hourly Plans: as defined in Section 6.6(a). Genlyte: as defined in the WHEREAS clauses of this Agreement. Genlyte Adjusted Net Working Capital: as defined in Section 4.3(c). Governmental Approval: any Consent of, with or to any Governmental Authority. Governmental Authority: any nation of government, any state or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any government authority, agency, department, board, commission or instrumentality of the United States, any State of the United States or any political subdivision, thereof, and any tribunal or arbitrator(s) of competent jurisdiction, and any self- regulatory organization. Hardware: shall mean all mainframes, midrange computers, personal computers, notebooks, servers, switches, printers, modems, drives, peripherals and any component of any of the foregoing used by the Business. Hazardous Substances: any substance that: (i) is or contains asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum or petroleum-derived substances or wastes, radon gas or related materials (ii) requires investigation, removal or remediation under any Environmental Law, or is defined, listed or identified as a "hazardous waste" or "hazardous substance" thereunder, or (iii) is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is regulated by any Governmental Authority or Environmental Law. Headquarters: the building located at 4360 Brownsboro Road, Louisville, Kentucky 40232. HIPAA: as defined in Section 3.1.21(c)(viii). Horizon/Lite Acquisition: the contemplated acquisition by one of Transferor's subsidiaries of certain assets of Horizon/Lite. Hourly Plans: as defined in Section 6.6(a). HSR Act: the Hart-Scott-Rodino Anti-trust Improvements Act of 1976, as amended. Indemnified Party: as defined in Section 8.2(d). Indemnifying Party: as defined in Section 8.2(d). Intellectual Property: any and all United States and foreign: (a) patents (including design patents, industrial designs and utility models) and patent applications (including docketed patent disclosures awaiting filing, reissues, divisions, continuations, continuations-in-part and extensions), patent disclosures awaiting filing determination, inventions and improvements thereto; (b) trademarks, service marks, trade names, trade dress, logos, business and product names, slogans, and registrations and applications for registration thereof but excluding the names "Thomas" and "Thomas Industries Inc."; (c) copyrights (including software) and registrations thereof; (d) inventions, processes, designs, formulae, trade secrets, know-how, industrial models, confidential and technical information, manufacturing, engineering and technical drawings, product specifications and confidential business information; (e) mask work and other semiconductor chip rights and registrations thereof; (f) Software; (g) intellectual property rights similar to any of the foregoing; (h) copies and tangible embodiments thereof (in whatever form or medium, including electronic media) used in the Business. Intellectual Property Assets: as defined in Section 1.1(h). Inventories: as defined in Section 1.1(b). IRS: the Internal Revenue Service. Joint Proxy Statement: the Joint Proxy Statement of Thomas and Genlyte to be filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, pursuant to which each of Thomas and Genlyte will seek stockholder approval of the transactions contemplated by the Master Transaction Agreement. Knowledge: the actual knowledge after due inquiry of (i) any "officer" of the Transferor, as such term is defined in Rule 16a-1(f) of the General Rules and Regulations under the Securities Exchange Act of 1934, or (ii) any individual employed by Transferor as a manager of any portion of the Business. LLC Agreement: as defined in the WHEREAS clauses of this Agreement. Leased Real Property: means all interests leased pursuant to the Leases. Leases: means the real property leases, subleases, licenses and occupancy agreements relating the Business pursuant to which Transferor is the lessee, sublessee, licensee or occupant. Lien: any mortgage, pledge, hypothecation, right of others, claim, security interest, encumbrance, lease, sublease, license, occupancy agreement, adverse claim or interest, easement, covenant, encroachment, burden, title defect, title retention agreement, voting, trust agreement, interest, equity, option, lien, right of first refusal, charge or other restrictions or limitations of any nature whatsoever, including such as may arise under any Contracts. Losses: as defined in Section 8.2(a). Marked Materials: as defined in Section 4.2.2. Master Transaction Agreement: as defined in the WHEREAS clauses of this Agreement. Material Adverse Effect: any event, occurrence, fact, condition, change or effect that is adverse to the business, operations, prospects, results of operations, condition (financial or otherwise), properties (including intangible properties), assets (including intangible assets) or liabilities of the Business in an amount equal to $5,000,000 or greater. Membership Interests: as defined in Section 2.2. Multiemployer Plan: as defined in Section 3.1.21(a). Net Working Capital: as defined in Section 4.3(d). New Consolidated Savings Plan: as defined in Section 6.5. Note: as defined in Section 2.2(b). Note/Receivable Payment: as defined in Section 4.3(b)(i). NWC Note: as defined in Section 4.3(b). Other Leases: the leases, subleases, licenses and occupancy agreements pursuant to which Transferor is a lessor sublessor or licensor of any part of the Real Property. Owned Intellectual Property: as defined in Section 3.1.16(a). Owned Real Property: the real property owned by the Transferor or any Affiliate utilized by the Business, together with all other structures, facilities, improvements, fixtures, systems, equipment and items of property presently or hereafter located thereon attached or appurtenant thereto or owned by Transferor or any Affiliate and utilized by the Business and located on Leased Real Property and all easements, licenses, rights and appurtenances relating to the foregoing other than owned real property included in Excluded Assets. Permitted Liens: (i) Liens reserved against in the Balance Sheet to the extent so reserved, (ii) Liens for Taxes not yet due and payable or which are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on Transferor's books in accordance with GAAP, (iii) liens arising in the ordinary course of business from a purchase money security interest or related to indebtedness for borrowed money under Transferor's credit facilities, or (iv) Liens that, individually and in the aggregate, do not and would not materially detract from the value of any of the property or assets of the Business or materially interfere with the use thereof as currently used. Person: any individual, partnership, limited liability company, corporation, cooperative, trust, estate or other entity. Plan: as defined in Section 3.1.21(a). Rabbi Trust: as defined in Section 6.10. Real Property: all of the real property, together with all buildings, structures, fixtures and improvements, listed on Schedules 3.1.18(a) and 3.1.18(b). Real Property Laws: as defined in Section 3.1.18(f). Related Entity: with respect to any Person other than an individual: (a) any Person that directly or indirectly controls, is directly or indirectly controlled by, or is directly or indirectly under common control with such specified Person; (b) any Person that holds a material interest in such specified Person; (c) each Person that serves as a director, officer, partner, executor, or trustee of such specified Person (or in a similar capacity); (d) any Person in which such specified Person holds a material interest; (e) any Person with respect to which such specified Person serves as a general partner or a trustee(or in a similar capacity); and (f) any Related Entity of any individual described in clause (b) or (c). Related Persons: as defined in Section 3.1.21(a). Release: any releasing, disposing, discharging, injecting, spilling, leaking, leaching, pumping, dumping, emitting, escaping, emptying, seeping, dispersal, migration, transporting, placing and the like, including, the moving of any materials through, into or upon, any land, soil, surface water, ground water or air, or otherwise entering into the environment. Remedial Action: all actions required to (i) clean up, remove, treat or in any other way remediate any Hazardous Substances; (ii) prevent the release of Hazardous Substances so that they do not migrate or endanger or threaten to endanger public health or welfare or the environment; or (iii) perform studies, investigations and care related to any such Hazardous Substances. Reserves: the reserves shown on the Balance Sheet or in the accounting records of Transferor for the Business as of the Closing Date. Software: shall mean all software owned, developed, licensed or used by Transferor or any of its Affiliates in the Business, including (i) all modifications, enhancements, fixes, updates, upgrades, bypasses and work- arounds, (ii) the source code and object code for any of the foregoing and (iii) all operating systems, bridgeware, firmware, middleware or utilities used by the Business. Subsidiaries: each corporation or other Person in which a Person owns or controls, directly or indirectly, capital stock or other equity interests representing at least 50% of the outstanding voting stock or other equity interests. Supplemental Plan: as defined in Section 6.10. Supplemental PSP Participants: as defined in Section 6.10. System: shall mean any combination of any Software, Hardware, Database or Embedded Control used by the Business. Target Net Working Capital: as defined in Section 4.3(c). Tax: any federal, state, provincial, local, foreign or other income, alternative, minimum, accumulated earnings, personal holding company, franchise, capital stock, net worth, capital, profits, windfall profits, gross receipts, value added, sales, use, goods and services, excise, customs duties, transfer, conveyance, mortgage registration, stamp, documentary, recording, premium, severance, environmental (including taxes under Section 59A of the Code), real property, personal property, ad valorem, intangibles, rent, occupancy, license, occupational, employment, unemployment insurance, social security, disability, workers' compensation, payroll, health care, withholding, estimated or other similar tax, duty or other governmental charge or assessment or deficiencies thereof (including all interest and penalties thereon and additions thereto whether disputed or not). Tax Return: any return, report, declaration, form, claim for refund or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof. Thomas: as defined in the first paragraph of this Agreement. Transaction Expenses: as defined in Section 8.4. Transferred Employees: as defined in Section 6.1(b). Transferred Profit Sharing Plan Assets: as defined in Section 6.3(d)(i). Transferred Savings Plan Assets: as defined in Section 6.4(d)(i). Transferring Affiliates: Tupelo Holdings Inc., Thomas Industries Holdings Inc., Gardco Mfg, Inc., Capri Lighting, Inc., Thomas Imports, Inc. and TI Industries Corporation. Transfer Taxes: as defined in Section 4.2.3. Transferor: as defined in the first paragraph of this Agreement. Transferor Consolidated Savings Plan: as defined in Section 6.5. Transferor Profit Sharing Plan: as defined in Section 6.3(a). Transferor Retiree Welfare Benefits: as defined in Section 6.8. Transferor Savings Plan: as defined in Section 6.4(a). Transferor's Accountants: Ernst & Young LLP. Treasury Regulations: the regulations prescribed pursuant to the Code. Welfare Benefits: as defined in Section 6.7(a). Withholding Taxes: as defined in Section 3.1.6(a) 8.2 Indemnification. (a) By Transferor. Transferor covenants and agrees to defend, indemnify and hold harmless the Company, its officers, directors, employees, agents, advisers, representatives and Affiliates (collectively, the "Company Indemnitees") from and against, and pay or reimburse the Company Indemnitees for, any and all claims, liabilities, obligations, losses, fines, costs, royalties, proceedings, deficiencies or damages (whether absolute, accrued, conditional or otherwise and whether or not resulting from third party claims), including out-of-pocket expenses and reasonable attorneys' and accountants' fees incurred in the investigation or defense of any of the same or in asserting any of their respective rights hereunder (collectively, "Losses"), resulting from or arising out of: (i) any inaccuracy of any representation or warranty made by Transferor herein or under any Collateral Agreement or in connection herewith or therewith; (ii) any failure of Transferor to perform any covenant or agreement hereunder or under any Collateral Agreement or fulfill any other obligation in respect hereof or of any Collateral Agreement; (iii) any Excluded Liabilities or Excluded Assets; (iv) any and all Taxes of Transferor and all Affiliates thereof, whether or not relating to or arising out of the Business; and (v) any and all Benefit Liabilities not assumed by the Company. Except for inaccuracies in the representations and warranties contained in Sections 3.1.1, 3.1.2, 3.1.3, 3.1.6 and 3.1.11 and breaches of covenants contained herein or in any Collateral Agreement, Transferor shall not be required to indemnify the Company Indemnitees with respect to any claim for indemnification pursuant to this Section 8.2(a) unless and until the aggregate amount of all Losses arising under this Section 8.2(a) exceeds $1,000,000 and then only for the amount of such excess. Notwithstanding the immediately preceding sentence, Transferor shall not be required to indemnify the Company Indemnitees with respect to any claim for indemnification arising from inaccuracies in the representations and warranties contained in Section 3.1.19 unless and until the aggregate amount of all such Losses exceeds $500,000 and then only for the amount of such excess. (b) By the Company. The Company covenants and agrees to defend, indemnify and hold harmless Transferor and its officers, directors, employees, agents, advisers, representatives and Affiliates (collectively, the "Transferor Indemnitees") from and against any and all Losses resulting from or arising out of: (i) any inaccuracy in any representation or warranty by the Company made or contained in any Collateral Agreement or in connection therewith; or (ii) any failure of the Company to perform any covenant or agreement made or contained in this Agreement or any Collateral Agreement or fulfill any other obligation in respect thereof; (iii) the Assumed Liabilities except to the extent that they constitute Losses for which Transferor is required to indemnify the Company Indemnitees under Section 8.2(a); (iv) the use by the Company of any Transferor tradenames or trademarks after the Closing Date as contemplated by Section 4.2.2; and (v) the operation of the Business by the Company or the Company's ownership, operation or use of the Assets following the Closing Date, except to the extent such Losses result from or arise out of the Excluded Liabilities, Excluded Assets or constitute Losses for which Transferor is required to indemnify the Company Indemnitees under Section 8.2(a). (c) Adjustment to Indemnification Payments. Any payment made by Transferor pursuant to Section 8.2(a) in respect of any Losses shall be net of any Reserve maintained by Transferor for such Loss or category of Losses. Any payment made by Transferor to the Company Indemnitees, on the one hand, or by the Company to the Transferor Indemnitees, on the other hand, pursuant to this Section 8.2 in respect of any Losses (i) shall be net of any insurance proceeds realized by and paid to the Indemnified Party in respect of such Losses and (ii) shall be (A) reduced by an amount equal to any Tax benefits attributable to such Losses and (B) increased by an amount equal to any Taxes attributable to the receipt of such payment, but only to the extent that such Tax benefits are actually realized, or such Taxes are actually paid, as the case may be, by the Indemnified Party or by a consolidated, combined or unitary group of which the Indemnified Party is a member. The Indemnified Party shall use its reasonable efforts to make insurance claims relating to any Losses for which it is seeking indemnification pursuant to this Section 8.2; provided that the Indemnified Party shall not be obligated to make such an insurance claim if the Indemnified Party in its reasonable judgment believes (based on written advice from insurance brokers or providers) the cost of pursuing such an insurance claim together with any corresponding increase in insurance premiums or other chargebacks to the Indemnified Party, as the case may be, would exceed the value of the claim for which the Indemnified Party is seeking indemnification. Any amount paid by Transferor pursuant to Section 8.2(a) shall be characterized, for tax purposes, as a contribution to the Company's capital and amounts paid by the Company pursuant to Section 8.2(b) shall be characterized as a return of capital. "Indemnified Party" means a party entitled to indemnification pursuant to this Agreement. (d) Indemnification Procedures. In the case of any claim asserted by a third party against an Indemnified Party, notice shall be given by the Indemnified Party to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and the Indemnified Party shall permit the Indemnifying Party (at the expense of such Indemnifying Party) to assume the defense of any claim or any litigation resulting therefrom, provided that (i) the counsel for the Indemnifying Party who shall conduct the defense of such claim or litigation shall be reasonably satisfactory to the Indemnified Party, (ii) the Indemnified Party may participate in such defense at such Indemnified Party's expenses, and (iii) the omission by any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its indemnification obligation under this Agreement except to the extent that such omission results in a failure of actual notice to the Indemnifying Party and such Indemnifying Party is materially damaged as a result of such failure to give notice. Except with the prior written consent of the Indemnified Party, no Indemnifying Party, in the defense of any such claim or litigation, shall consent to entry of any judgment or enter into any settlement that provides for injunctive or other nonmonetary relief affecting the Indemnified Party or that does not include as an unconditional term thereof the giving by each claimant or plaintiff to such Indemnified Party of a release from all liability with respect to such claim or litigation. In the event that the Indemnified Party shall in good faith determine that the conduct of the defense of any claim subject to indemnification hereunder or any proposed settlement of any such claim by the Indemnifying Party might be expected to affect adversely the Indemnified Party's Tax liability or the ability of the Company to conduct its business, or that the Indemnified Party may have available to it one or more defenses or counterclaims that are inconsistent with one or more of those that may be available to the Indemnifying Party in respect of such claim or any litigation relating thereto, the Indemnified Party shall have the right at all times to take over and assume control over the defense, settlement, negotiations or litigation relating to any such claim at the sole cost of the Indemnifying Party, provided that if the Indemnified Party does so take over and assume control, the Indemnified Party shall not settle such claim or litigation without the written consent of the Indemnifying Party, such consent not to be unreasonably withheld. In the event that the Indemnifying Party does not accept the defense of any matter as above provided, the Indemnified Party shall have the full right to defend against any such claim or demand and shall be entitled to settle or agree to pay in full such claim or demand. In any event, the Indemnifying Party and the Indemnified Party shall cooperate in the defense of any claim or litigation subject to this Section 8.2 and the records of each shall be available to the other with respect to such defense. (e) Time Limitation. All claims for indemnification under clause (i) of the first sentence of Section 8.2(a) or clause (i) of the first sentence of Section 8.2(b) must be asserted prior to the termination of the respective survival periods set forth in Section 8.3. Notwithstanding the foregoing, any claim for indemnification that is asserted by written notice within the applicable survival period shall survive until resolved and discharged by the parties or pursuant to a final non-appealable judicial determination. (f) Payment by Transferor. Notwithstanding any provision of this Section 8.2 to the contrary, any payment required to be made by Transferor to the Company pursuant to this Section 8.2 shall be deemed a liability of Thomas owing to the Company and shall be deducted from the next distribution made to Thomas pursuant to Section 6.2(b) of the LLC Agreement (other than Tax Distributions, as such term is defined in the LLC Agreement), provided that in the event that the Loss payable by Transferor exceeds the amount of such distribution, Transferor shall deliver to the Company a note in the amount of such excess, which shall bear interest at the rate of the Company's primary credit facility referenced in Sections 6.8 and 7.8 of the Master Transaction Agreement, and shall be payable out of future distributions (other than Tax Distributions) pursuant to the LLC Agreement. The mechanism provided in this Section 8.2(f) shall be the sole and exclusive source of payment for any obligation of Transferor pursuant to this Section 8.2. (g) Application of Reserve. With respect to indemnification claims for breach of representations or warranties to which a Reserve is applicable, Transferor shall bear the burden of proving the amount of the Reserve. (h) Exclusive Remedy. Except for the provisions of Section 7.1 and subject to Article VIII of the Master Transaction Agreement, the indemnifications contained in Section 8.2 shall be Transferor's and the Company's sole and exclusive remedies with respect to money damages, against each other, with respect to matters arising under this Agreement, of any kind or nature, or relating to the Division, the Business, the Assets, the Assumed Liabilities, the Excluded Assets or the Excluded Liabilities. Transferor and the Company hereby waive and release any other rights, remedies, causes of action or claims that they have or that may arise against the other with respect to matters arising under this Agreement, of any kind or nature, or relating to the Division, the Business, the Assets, the Assumed Liabilities, the Excluded Assets or the Excluded Liabilities. The foregoing restrictions of this Section 8.2(h) shall not apply to any matter involving actual fraud or criminal misconduct. 8.3. Survival of Representations and Warranties, etc. The representations and warranties contained in this Agreement shall survive the execution and delivery of this Agreement, any examination by or on behalf of the parties hereto and the completion of the transactions contemplated herein, but only to the extent specified below: (a) except as set forth in clauses (b) and (c) below, the representations and warranties contained in Section 3.1 shall survive to the date that is 60 days after the delivery of the audited financial statements of the Company for the fiscal year 1999; (b) the representations and warranties contained in Section 3.1.19 shall survive for a period of three years following the Closing Date; (c) the representations and warranties contained in Sections 3.1.1, 3.1.2, 3.1.3 and 3.1.11 shall survive without limitation; and (d) the representations and warranties of Transferor contained in Section 3.1.6 shall survive as to any Tax covered by such representations and warranties for so long as any statute of limitations for such Tax remains open, in whole or in part, including by reason of waiver of such statute of limitations. 8.4. Expenses. Except as provided in Section 4.2.3 and in Section 8.2 of the Master Transaction Agreement, Transferor, on the one hand, and the Company, on the other hand, shall bear their respective expenses, costs and fees (including attorneys', auditors' and financing commitment fees) in connection with the transactions contemplated hereby, including the preparation, execution and delivery of this Agreement and compliance herewith (the "Transaction Expenses"), whether or not the transactions contemplated hereby shall be consummated. 8.5. Partial Invalidity. In the event that any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 8.6 Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be, personally delivered or sent by facsimile transmission with confirming copy sent by overnight courier (such as Express Mail, Federal Express, etc.) and a delivery receipt obtained and addressed to the intended recipient as follows: (a) If to Thomas: Thomas Industries Inc. 4360 Brownsboro Road, Suite 300 P.O. Box 35120 Louisville, Kentucky 40232 Attention: Timothy C. Brown, President and CEO Telecopy No.: 502-893-4685 With a copy to: McDermott, Will & Emery 227 West Monroe Street Chicago, Illinois 60606-5096 Attention: Michael R. Fayhee, Esq. Telecopy No.: 312-372-2000 (b) If to the Company: GT Lighting, LLC 4360 Brownsboro Road, Suite 300 P.O. Box 35120 Louisville, Kentucky 40232 Attention: Larry Powers, President & CEO Telecopy No. 502-893-4685 Any party may change its address for receiving notice by written notice given to the others named above. Notices shall be deemed given as of the date of receipt. 8.7. Miscellaneous. 8.7.1. Other Rules of Construction. References in this Agreement to sections, schedules and exhibits are to sections of, and schedules and exhibits to, this Agreement unless otherwise indicated. Words in the singular include the plural and in the plural include the singular. The word "or" is not exclusive. The word "including" shall mean including, without limitation. The section and other headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement 8.7.2. Entire Transaction. This agreement and the agreements and documents referred to herein contain the entire agreement and understanding among the parties with respect to the transactions contemplated hereby and supersede all other agreements, understandings and undertakings among the parties on the subject matter hereof. All exhibits and schedules hereto are hereby incorporated by reference and made a part of this Agreement 8.7.3. Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 8.7.4. Governing Law, etc. This Agreement shall be governed in all respects, including as to validity, interpretation and effect, by the internal laws of the State of Delaware without giving effect to the conflict of laws rules thereof. The Company and Transferor hereby irrevocably submit to the jurisdiction of the courts of the State of Delaware and the Federal courts of the United States of America located in the State of Delaware solely in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document, that such party is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement or any of such document may not be enforced in or by said courts, and the parties hereto irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in such a Delaware State or Federal court. The Company and Transferor hereby consent to and grant any such court jurisdiction over the person of such parties and over the subject matter of any such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 8.6, or in such other manner as may be permitted by law, shall be valid and sufficient service thereof. 8.7.5. Successors and Assigns This Agreement shall bind and inure to the benefit of the parties named herein and their respective successors and permitted assigns. This Agreement shall not be assigned by either party hereto without the express prior written consent of the other party and any attempted assignment, without such consents, shall be null and void, provided that the Company may assign this Agreement to any Subsidiary of the Company, provided further that the Company shall in all events remain liable hereunder. Except as otherwise provided in the Master Transaction Agreement, this Agreement does not create any rights, claims or benefits inuring to any person that is not a party hereto nor create or establish any third-party beneficiary hereto. 8.7.6. Amendment; Waivers. (a) No amendment, waiver or consent with respect to any provision of this Agreement shall in any event be effective, unless the same shall be in writing and signed by the parties hereto, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. (b) The failure of any party at any time or times to require performance of any provisions hereof shall in no manner affect that party's right at a later time to enforce the same. No waiver by any party of the breach of any term or covenant contained in this Agreement in any one or more instances shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Agreement. 8.7.7. Remedies. The rights and remedies of any party based upon, arising out of or otherwise in respect of any inaccuracy or breach of any representation, warranty, covenant or agreement or failure to fulfill any condition shall in no way be limited by the fact that the act, omission, occurrence or other state of facts upon which any claim of any such inaccuracy or breach is based may also be the subject matter of any other representation, warranty, covenant or agreement as to which there is no inaccuracy or breach. The representations and warranties of Transferor shall not be affected or deemed waived by reason of any investigation made by or on behalf of the Company (including but not limited to by any of its advisors, consultants or representatives) or by reason of the fact that the Company or any of such advisors, consultants or representatives knew or should have known that any such representation or warranty is or might be inaccurate. 8.7.8. Authorship. The parties hereto agree that the terms and language of this Agreement were the result of negotiations between the parties and, as a result, there shall be no presumption that any ambiguities in this Agreement shall be resolved against either party. Any controversy over the construction of this Agreement shall be decided without regard to events of authorship or negotiation. IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written. GT LIGHTING, LLC By: ______________________________ Larry K. Powers President THOMAS INDUSTRIES INC. TUPELO HOLDINGS INC. THOMAS INDUSTRIES HOLDINGS INC. GARDCO MFG, INC. CAPRI LIGHTING, INC. THOMAS IMPORTS, INC. TI INDUSTRIES CORPORATION By: ______________________________ Timothy C. Brown President LIST OF SCHEDULES TO THE CAPITALIZATION AGREEMENT BETWEEN GT LIGHTING, LLC AND THOMAS INDUSTRIES INC. TUPELO HOLDINGS INC. THOMAS INDUSTRIES HOLDINGS INC. GARDCO MFG, INC. CAPRI LIGHTING, INC. THOMAS IMPORTS, INC. TI INDUSTRIES CORPORATION DATED APRIL 28, 1998 Schedule 1.1(p): Stock, Partnership, Membership or Other Interests in any Person Engaged in the Business Schedule 1.2: Excluded Assets Schedule 2.3: Excluded Liabilities Schedule 3.1.2(a): State of Incorporation Schedule 3.1.2(b): States in Which Qualified to do Business Schedule 3.1.2(d): Subsidiaries Schedule 3.1.3: Required Consents Schedule 3.1.5: Undisclosed Liabilities Schedule 3.1.6(a): Contested Taxes Schedule 3.1.6(b): Agreements or Powers of Attorney Extending Period of Assessment or Collection of Taxes Schedule 3.1.6(c): Taxes Due or Audit Issues Schedule 3.1.6(d): Tax-Related Litigation or Administrative Appeal Schedule 3.1.7: Changes in Conduct of Business out of the Ordinary Course Since the Audited Balance Sheet Date Schedule 3.1.8: Litigation Pending or Threatened Schedule 3.1.9(a): Noncompliance with Applicable Law Schedule 3.1.9(b): Governmental Approvals and Consents Required Schedule 3.1.10: Conduct of the Business Outside of the Division Schedule 3.1.11: Assets to Which Thomas Industries Inc. Does Not Have Good Title; Assets Not in Reasonably Good Repair and Operating Condition Schedule 3.1.12(a): List of Contracts Schedule 3.1.12(c): Defaults under Contracts; Consents Required Schedule 3.1.12(d): Power of Attorney Relating to the Business Schedule 3.1.13: Territorial Restrictions: Non-Competition Agreements Schedule 3.1.14: Pending or Threatened Claims Regarding Warranties in Excess of $100,000 Schedule 3.1.16(a): Owned Intellectual Property Schedule 3.1.16(d): Intellectual Property Litigation Schedule 3.1.16(e): List of Names and Marks; Contractual Restrictions Schedule 3.1.17: Insurance Policies; Claims Made within Last Two Years Schedule 3.1.18(a): Owned Real Property Schedule 3.1.18(b): Leases in amount in excess of $100,000 Schedule 3.1.19(b): Noncompliance with Environmental Permits and Laws Schedule 3.1.19(c): Actions Resulting in Liability or Obligation Schedule 3.1.19(d): Other Environmental Concerns Schedule 3.1.20: Employees, Labor Matters, etc. Schedule 3.1.21(a): Employee Benefit Plans, etc. Schedule 3.1.21(c)(vi): Post-Employment Benefits Schedule 3.1.21(c)(ix): Severance Pay Policies Schedule 3.1.22: Breaches of Confidentiality Schedule 4.1.4: Names and Marks Under which Business Will be Conducted After Closing Schedule 8.1(b): Transferring Affiliates EX-2.4 5 CAPITALIZATION AGREEMENT EXHIBIT 2.4 EXECUTION CAPITALIZATION AGREEMENT Between GT LIGHTING, LLC and THE GENLYTE GROUP INCORPORATED Dated April 28, 1998 CAPITALIZATION AGREEMENT CAPITALIZATION AGREEMENT, dated April 28, 1998, by and between GT Lighting, LLC, a Delaware limited liability company (the "Company"), and The Genlyte Group Incorporated, a Delaware corporation ("Transferor"). W I T N E S S E T H: WHEREAS, Transferor is in the business of manufacturing, selling, marketing and distributing consumer, commercial, industrial and outdoor lighting products; WHEREAS, Transferor and Thomas Industries Inc. ("Thomas") have caused the Company to be formed under the laws of the State of Delaware; WHEREAS, Transferor desires to capitalize the Company with substantially all of its assets, properties and capital stock in a transaction qualifying under Section 721(a) of the Code, in exchange for an ownership interest in the Company and the direct or indirect assumption by the Company of the Assumed Liabilities and upon the terms and subject to the conditions hereinafter set forth; WHEREAS, Transferor's rights and duties as a member of the Company shall be as set forth in that certain Limited Liability Company Agreement dated April 28, 1998 by and between Transferor and Thomas (the "LLC Agreement"); WHEREAS, the Company will consummate certain transactions and enter into certain agreements as set forth in the Master Transaction Agreement dated April 28, 1998 by and between Thomas and Transferor (the "Master Transaction Agreement") and the parties' obligations hereunder will be subject to satisfaction or waiver of the conditions in the Master Transaction Agreement; and NOW, THEREFORE, in consideration of the mutual covenants, representations and warranties made herein, and of the mutual benefits to be derived hereby, the parties hereto agree as follows: ARTICLE I CAPITALIZATION 1.1 Assets. Subject to and upon the terms and conditions set forth in this Agreement, at the Closing, Transferor will contribute, transfer, convey, assign and deliver to the Company, and the Company will acquire from Transferor, all right, title and interest of Transferor in and to Transferor's properties, assets and rights of every nature, kind and description, tangible and intangible (including goodwill), whether real, personal or mixed, whether accrued, contingent or otherwise and whether now existing or hereinafter acquired (other than the Excluded Assets) as the same may exist on the Closing Date (collectively, the "Assets"), including all those items in the following categories that conform to the definition of the term "Assets": (a) all machinery, equipment, telephone systems and equipment, furniture, furnishings, automobiles, trucks, vehicles, tools, dies, molds and parts and similar property (including any of the foregoing purchased subject to any conditional sales or title retention agreement in favor of any other Person) together with all Systems and all Components; (b) all inventories of raw materials, work in process, finished products, goods, spare parts, replacement and component parts, and office and other supplies (collectively, the "Inventories") held at any Facility and Inventories previously purchased and in transit to any Transferor at the Facilities; (c) all rights in and to products sold or leased (including products hereafter returned or repossessed and Transferor's unpaid rights of rescission, replevin, reclamation and rights to stoppage in transit); (d) all rights (including any and all Intellectual Property rights) in and to the products sold or leased and in and to any products or other Intellectual Property rights under research or development prior to or on the Closing Date; (e) all of the rights of Transferor under all contracts, arrangements, licenses, leases and other agreements, including any right to receive payment for products sold or services rendered, and to receive goods and services, pursuant to such agreements and to assert claims and take other rightful actions in respect of breaches, defaults and other violations of such contracts, arrangements, licenses, leases and other agreements and otherwise; (f) all credits, prepaid expenses, deferred charges, advance payments, security deposits and prepaid items; (g) all notes and accounts receivable held by Transferor and all notes, bonds and other evidences of indebtedness of and rights to receive payments from any Person held by Transferor; (h) all Intellectual Property and all rights thereunder or in respect thereof, including rights to sue for and remedies against past, present and future infringements thereof, and rights of priority and protection of interests therein under the laws of any jurisdiction worldwide and all tangible embodiments thereof (the "Intellectual Property Assets"); (i) all books, records, manuals and other materials (in any form or medium), including all records and materials maintained at the headquarters or other offices of Transferor, advertising matter, catalogues, price lists, correspondence, mailing lists, lists of customers, distribution lists, photographs, production data, sales and promotional materials and records, purchasing materials and records, personnel records, manufacturing and quality control records and procedures, blueprints, research and development files, records, data and laboratory books, Intellectual Property disclosures, media materials and plates, accounting records, sales order files and litigation files (collectively, the "Books and Records"); (j) to the extent their transfer is permitted by law, all Governmental Approvals, including all applications therefor; (k) all Real Property and all licenses, permits, approvals and qualifications relating to any Real Property issued to Transferor by any Governmental Authority; (l) all rights to causes of action, lawsuits, judgments, claims and demands of any nature available to or being pursued by Transferor with respect to the Business or the ownership, use, function or value of any Asset, whether arising by way of counterclaim or otherwise; (m) all guarantees, warranties, indemnities and similar rights in favor of Transferor with respect to any Asset; (n) to the extent not described elsewhere in this Section 1.1, all Net Working Capital; (o) any web site domain name together with related rights; and (p) all stock, partnership, membership or other interests in any Person engaged in the Business listed on Schedule 1.1(p). At the Closing, the Assets shall be transferred to the Company free and clear of all liabilities, obligations, liens and encumbrances excepting only Assumed Liabilities, liens listed on Schedule 3.1.11 and Permitted Liens. 1.2. Excluded Assets. Transferor will retain and not transfer, and the Company will not acquire any assets of Transferor other than the Assets, including (i) the assets listed on Schedule 1.2, and (ii) all Tax refunds (collectively, the "Excluded Assets"). ARTICLE II THE CLOSING 2.1. Place and Date. The consummation of the transactions contemplated hereby shall take place on the "closing date" described in the Master Transaction Agreement (the "Closing Date"). 2.2. Consideration. On the terms and subject to the conditions set forth in this Agreement, the Master Transaction Agreement and the LLC Agreement and as the sole consideration for Transferor's contribution of the Assets to the Company pursuant hereto, on the Closing Date, the Company agrees to issue to Transferor an interest in the Company representing a 68% ownership interest (the "Membership Interests") and to assume the Assumed Liabilities as provided in Section 2.3. 2.3. Assumption of Liabilities. (a) Subject to Sections 2.4 and 8.2 and the other terms and conditions set forth herein, at the Closing, the Company will assume and agree to pay, honor and discharge when due all of those liabilities relating to the Assets or arising out of the Business and existing at or arising on or after the Closing Date (collectively, the "Assumed Liabilities"), except for (i) Taxes of Transferor for periods prior to the Closing Date, whether or not relating to or arising out of the Business, (ii) intercompany accounts payable that do not represent trade accounts payable, (iii) liabilities in respect of Employees, employment agreements or Plans except to the extent specifically assumed by the Company pursuant to Article VI, (iv) liabilities in respect to Transferred Employees except to the extent specifically assumed by the Company pursuant to Article VI, and (v) any liability, obligation or commitment of Transferor set forth on Schedule 2.3. (b) At the Closing, the Company shall assume the Assumed Liabilities by executing and delivering to Transferor an assumption agreement in a form reasonably satisfactory to Transferor (the "Assumption Agreement"). 2.4 Excluded Liabilities. Notwithstanding the provisions of Section 2.3 or any other provision hereof or any schedule or exhibit hereto and regardless of any disclosure to the Company, the Company shall not assume any liabilities, obligations or commitments of Transferor, whether or not relating to or arising out of the operation of the Business or the ownership of the Assets prior to the Closing, other than the Assumed Liabilities (the "Excluded Liabilities"). 2.5 Consent of Third Parties. Notwithstanding anything to the contrary in this Agreement, this Agreement shall not constitute an agreement to assign or transfer any Governmental Approval, instrument, contract, lease, permit or other agreement or arrangement or any claim, right or benefit arising thereunder or resulting therefrom if an assignment or transfer or an attempt to make such an assignment or transfer without the consent of a third party would constitute a breach or violation thereof or affect adversely the rights of the Company or Transferor thereunder; and any transfer or assignment to the Company by Transferor of any interest under any such instrument, contract, lease, permit or other agreement or arrangement that requires the consent of a third party shall be made subject to such consent or approval being obtained. In the event any such consent or approval is not obtained on or prior to the Closing Date, Transferor shall continue to use its reasonable commercial efforts to obtain any such approval or consent after the Closing Date until such time as such consent or approval has been obtained, and Transferor will cooperate with the Company in any lawful and economically feasible arrangement to provide that the Company shall receive the interest of Transferor in the benefits under any such instrument, contract, lease or permit or other agreement or arrangement, including performance by Transferor as agent, if economically feasible, provided that the Company shall be solely responsible for and undertake to pay or satisfy the corresponding liabilities for the enjoyment of such benefit to the extent the Company would have been responsible therefor hereunder if such consent or approval had been obtained and shall be solely responsible for any breach of warranty with respect to products of the Business manufactured after the Closing Date. Transferor shall pay and discharge, and shall indemnify and hold the Company harmless from and against, any and all out-of-pocket costs of seeking to obtain or obtaining any such consent or approval whether before or after the Closing Date. Nothing in this Section 2.5 shall be deemed a waiver by the Company of its right to have received on or before the Closing an effective assignment of all of the Assets nor shall this Section 2.5 be deemed to constitute an agreement to exclude from the Assets any assets described under Section 1.1. ARTICLE III REPRESENTATIONS AND WARRANTIES 3.1. Representations and Warranties of Transferor. Transferor represents and warrants to and agrees with the Company as follows: 3.1.1. Authorization, etc. Transferor has the corporate power and authority to execute and deliver this Agreement and each of the Collateral Agreements to which it will be a party, to perform fully its obligations thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Transferor of this Agreement, and the consummation of the transactions contemplated hereby, have been, and on the Closing Date the execution and delivery by Transferor of each of the Collateral Agreements to which it will be a party and the consummation of the transactions contemplated thereby will have been, duly authorized by all requisite corporate action of Transferor (including the approval of Transferor's shareholders to the extent required by law). Transferor has duly executed and delivered this Agreement and on the Closing Date will have duly executed and delivered each of the Collateral Agreements to which it is a party. This Agreement is, and on the Closing Date each of the Collateral Agreements to which Transferor is a party will be, legal, valid and binding obligations of Transferor, enforceable against it in accordance with their respective terms. 3.1.2. Corporate Status. (a) Transferor is a corporation duly organized, validly existing and in good standing under the respective laws of the jurisdiction of its incorporation, as set forth in Schedule 3.1.2(a), with full corporate power and authority to carry on its business (including the Business) and to own or lease and to operate its properties as and in the places where such business is conducted and such properties are owned, leased or operated. (b) Transferor is duly qualified or licensed to do business and is in good standing in each of the respective jurisdictions specified in Schedule 3.1.2(b), which are the only jurisdictions in which the operation of the Business or the character of the properties owned, leased or operated by it in connection with the Business makes such qualification or licensing necessary. (c) Transferor has delivered to the Company complete and correct copies of its certificate of incorporation and by-laws or other organizational documents, as amended and in effect on the date hereof. Transferor is not in violation of any of the provisions of its certificate of incorporation or by- laws or other organizational documents. (d) Transferor has no Subsidiaries engaged in the Business except as set forth on Schedule 3.1.2(d). Except as set forth on Schedule 3.1.2(d), Transferor has no interest, direct or indirect, and has no commitment to purchase any interest, direct or indirect, in any other corporation or in any partnership, joint venture or other business enterprise or entity. Except as set forth on Schedule 3.1.2(d), the Business has not been conducted through any other direct or indirect Subsidiary or affiliate of Transferor. 3.1.3. No Conflicts, etc. The execution, delivery and performance by Transferor of this Agreement and each of the Collateral Agreements to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not conflict with or result in a violation of or a default under (with or without the giving of notice or the lapse of time or both) (i) any Applicable Law applicable to Transferor or any Affiliate thereof or any of the properties or assets of Transferor (including the Assets), (ii) the certificate of incorporation or by-laws or other organizational documents of Transferor or (iii) except as set forth in Schedule 3.1.3, any Contract to which Transferor or any Affiliate thereof is a party or by which Transferor or any of its properties or assets, including the Assets, may be bound or affected. Except as specified in Schedule 3.1.3, no Governmental Approval or other Consent is required to be obtained or made by Transferor in connection with the execution and delivery of this Agreement and the Collateral Agreements or the consummation of the transactions contemplated thereby. The consummation of the transaction that is the subject of this Agreement and the Collateral Agreements and the issuance of the Membership Interests to all members will not trigger any rights under the Rights Agreement between Transferor and Continental Bank National Association dated August 29, 1989 or any applicable shareholder protection or state takeover statute. 3.1.4. Financial Statements. Transferor has delivered to the Company (a) its audited consolidated financial statements as at and for the year ended December 31, 1997 (the "Audited Balance Sheet Date"), together with a report thereon by Transferor's Accountants (the "Audited Financial Statements"), (b) unaudited consolidated financial statements as at and for the period ended March 31, 1998 (the "Unaudited Financial Statements"), and (c) unaudited consolidated financial statements as at and for the monthly periods ended March 31, 1998 (the "Monthly Unaudited Financial Statements"), including in each of clauses (a), (b) and (c) a balance sheet, statements of income and retained earnings and a statement of cash flows (the Audited Financial Statements and the Monthly Unaudited Financial Statements, collectively the "Financial Statements"). The Audited Financial Statements are complete and correct in all material respects and have been prepared in accordance with GAAP applied throughout the periods indicated. The Unaudited Financial Statements and the Monthly Unaudited Financial Statements have been prepared in accordance with GAAP, except that the Unaudited Financial Statements and the Monthly Unaudited Financial Statements do not contain notes and may be subject to normal audit adjustments and, in the case of the Monthly Unaudited Financial Statements, normal annual adjustments. The balance sheets included in the Financial Statements do not include any material assets (other than Excluded Assets) or liabilities (other than Excluded Liabilities) not intended to constitute a part of the Business or the Assets or omit any material assets or liabilities of Transferor, and present fairly the financial condition of Transferor as at their respective dates. The statements of income and retained earnings and statements of cash flows included in the Financial Statements do not reflect the operations of any entity or business not intended to constitute a part of the transactions, reflect all costs that historically have been incurred by Transferor (other than the Excluded Liabilities) and present fairly the results of operations and cash flows of Transferor for the periods indicated. 3.1.5. Absence of Undisclosed Liabilities. Transferor has no liabilities or obligations of any nature, whether known or unknown, absolute, accrued, contingent or otherwise and whether due or to become due, arising out of or relating to the Business, except (a) as set forth in Schedule 3.1.5, (b) as and to the extent disclosed or reserved against in the Audited Balance Sheet (excluding the notes thereto) and (c) for liabilities and obligations that (i) were incurred after the date of the Audited Balance Sheet in the ordinary course of business consistent with prior practice and (ii) have not had or resulted in, and will not have or result in, a Material Adverse Effect. None of Transferor's employees is, or will by the passage of time hereinafter become, entitled to receive any material vacation time, vacation pay or severance pay attributable to services rendered prior to such date except as disclosed on the Audited Balance Sheet (excluding the notes thereto) or as set forth on Schedule 3.1.5. 3.1.6. Taxes. (a) Transferor has (or by the Closing will have) duly and timely filed all Tax Returns with respect to Taxes required to be filed on or before the Closing Date ("Returns"). Except for Taxes set forth on Schedule 3.1.6(a), which are being contested in good faith and by appropriate proceedings, and with respect to which Transferor has Adequate Reserves, the following Taxes have (or by the Closing Date will have) been duly and timely paid: (i) all Taxes shown to be due on the Returns, (ii) all deficiencies and assessments of Taxes of which notice has (or by the Closing Date will have) been received by Transferor that are or may become payable by the Company or chargeable as a lien upon the Business or the Assets, and (iii) all other Taxes due and payable on or before the Closing Date for which neither filing of Returns nor notice of deficiency or assessment is required, if Transferor is or reasonably should be (or by the Closing Date will be or reasonably should be) aware that such Taxes are or may become payable by the Company or chargeable as a lien upon the Business or the Assets. All Taxes required to be withheld by or on behalf of Transferor in connection with amounts paid or owing to any employee, independent contractor, or creditor ("Withholding Taxes") have been withheld, and such withheld taxes have either been duly and timely paid to the proper Governmental Authorities or set aside in accounts for such purposes. (b) Except as set forth on Schedule 3.1.6(b), no agreement or other document extending, or having the effect of extending, the period of assessment or collection of any Taxes or Withholding Taxes, and no power of attorney with respect to any such Taxes, has been filed with the IRS or any other Governmental Authority. (c) Except for items set forth on Schedule 3.1.6(c) , with respect to which Transferor has Adequate Reserves, (i) there are no Taxes or Withholding Taxes asserted in writing by any Governmental Authority to be due from Transferor and (ii) no issue has been raised in writing by any Governmental Authority in the course of any audit with respect to Taxes or Withholding Taxes. Except as set forth on Schedule 3.1.6(c), no Taxes and no Withholding Taxes are currently under audit by any Governmental Authority. Except for items set forth on Schedule 3.1.6(c), with respect to which Transferor has Adequate Reserves, neither the IRS nor any other Governmental Authority is now asserting or, to the Knowledge of Transferor, threatening to assert against Transferor any deficiency or claim for additional Taxes or any adjustment or Taxes that would, if paid by the Company, have a Material Adverse Effect, and there is no reasonable basis for any such assertion of which Transferor is or reasonably should be aware. (d) Except as set forth on Schedule 3.1.6(d), there is no litigation or administrative appeal pending or, to the Knowledge of Transferor, threatened against or relating to Transferor in connection with Taxes. 3.1.7. Absence of Changes. Except for items set forth in Schedule 3.1.7, with respect to which Transferor has Adequate Reserves, since the Audited Balance Sheet Date, Transferor has conducted the Business only in the ordinary course consistent with prior practice and has not, on behalf of, in connection with or relating to the Business or the Assets: (a) suffered any Material Adverse Effect; (b) incurred any obligation or liability, absolute, accrued, contingent or otherwise, whether due or to become due, except current liabilities for trade or business obligations incurred in connection with the purchase of goods or services in the ordinary course of business consistent with prior practice, none of which liabilities, in any case or in the aggregate, could have a Material Adverse Effect; (c) discharged or satisfied any Lien other than those then required to be discharged or satisfied, or paid any obligation or liability, absolute, accrued, contingent or otherwise, whether due or to become due, other than current liabilities shown on the Audited Balance Sheet and current liabilities incurred since the date thereof in the ordinary course of business consistent with prior practice; (d) mortgaged, pledged or subjected to Lien, any property, business or assets, tangible or intangible, held in connection with the Business other than purchase money security interests incurred in the ordinary course of business; (e) sold, transferred, leased to others or otherwise disposed of any of the Assets, except in the ordinary course of business, or canceled or compromised any debt or claim, or waived or released any right of substantial value; (f) received any notice of termination of any contract, lease or other agreement or suffered any damage, destruction or loss (whether or not covered by insurance) which, in any case or in the aggregate, has had a Material Adverse Effect; (g) transferred or granted any rights under, or entered into any settlement regarding the breach or infringement of, any Intellectual Property, or modified any existing rights with respect thereto; (h) other than in the ordinary course of business, made any change in the rate of compensation, commission, bonus or other direct or indirect remuneration payable, or paid or agreed or orally promised to pay, conditionally or otherwise, any bonus, dividend, incentive, retention or other compensation, retirement, welfare, fringe or severance benefit or vacation pay, to or in respect of any shareholder, director, officer, employee, salesman, distributor or agent of Transferor relating to the Business; (i) encountered any labor union organizing activity, had any actual or threatened employee strikes, work stoppages, slowdowns or lockouts, or had any material change in its relations with its employees, agents, customers or suppliers; (j) failed to replenish Transferor's inventories and supplies in a normal and customary manner consistent with its prior practice and prudent business practices prevailing in the industry, or made any purchase commitment in excess of the normal, ordinary and usual requirements of the Business or at any price in excess of the then current market price or upon terms and conditions more onerous than those usual and customary in the industry, or made any change in its selling, pricing, advertising or personnel practices inconsistent with its prior practice and prudent business practices prevailing in the industry; (k) made any capital expenditures or capital additions or improvements in excess of $250,000; (l) instituted, settled or agreed to settle any litigation, action or proceeding before any court or governmental body relating to the Business or the Assets other than in the ordinary course of business consistent with past practices but not in any case involving amounts in excess of $250,000; (m) entered into any transaction, contract or commitment other than in the ordinary course of business or paid or agreed to pay any legal, accounting, brokerage, finder's fee, Taxes or other expenses in connection with, or incurred any severance pay obligations by reason of, this Agreement or the transactions contemplated hereby; or (n) except with respect to performing its obligations under this Agreement, taken any action or omitted to take any action that would result in the occurrence of any of the foregoing. 3.1.8. Litigation. Except for items set forth on Schedule 3.1.8, with respect to which Transferor has Adequate Reserves, there is no action, claim, demand, suit, proceeding, arbitration, grievance, citation, summons, subpoena, inquiry or investigation of any nature, civil, criminal, regulatory or otherwise, in law or in equity, pending or threatened against or relating to Transferor in connection with the Assets or the Business or against or relating to the transactions contemplated by this Agreement, and Transferor knows of no basis for any of the foregoing. Except for items set forth in such Schedule 3.1.8, with respect to which Transferor has Adequate Reserves, since December 31, 1997, no material citations, fines or penalties have been asserted against Transferor under any Environmental Law or any foreign, federal, state or local law relating to occupational health or safety. 3.1.9. Compliance with Laws; Governmental Approvals and Consents; Governmental Contracts. (a) Except for items disclosed in Schedule 3.1.9(a), with respect to which Transferor has Adequate Reserves, since the Audited Balance Sheet Date, Transferor has complied in all material respects with all Applicable Laws applicable to the Business or the Assets, and Transferor has not received any notice alleging any such conflict, violation, breach or default. (b) Except for items set forth in Schedule 3.1.9(b), with respect to which Transferor has Adequate Reserves, all Governmental Approvals and Consents necessary for or otherwise material to the conduct of the Business have been duly obtained and are in full force and effect, and Transferor is in material compliance with each of such Governmental Approvals and Consents held by it with respect to the Assets and the Business. (c) To the Knowledge of Transferor, there are no proposed laws, rules, regulations, ordinances, orders, judgments, decrees, governmental takings, condemnations or other proceedings which would be applicable to the business, operations or properties of Transferor and which might adversely affect the properties, assets, liabilities, operations or prospects of Transferor, either before or after the Closing Date. 3.1.10. Operation of the Business. Except as set forth in Schedule 3.1.10, (a) Transferor has not conducted the Business through any divisions or any direct or indirect Subsidiary or Affiliate of Transferor and (b) no part of the Business is operated by Transferor through any entity other than Transferor. 3.1.11. Assets. Except for items disclosed in Schedule 3.1.11, with respect to which Transferor has Adequate Reserves, Transferor has good title to all the Assets free and clear of any and all Liens other than Permitted Liens. The Assets, together with the services and arrangements described in Section 5.2.2, comprise all assets and services required for the continued conduct of the Business by the Company as now being conducted. The Assets, taken as a whole, constitute all the properties and assets relating to or used or held for use in connection with the Business during the past twelve months (except Inventory sold, cash disposed of, accounts receivable collected, prepaid expenses realized, Contracts fully performed, properties or assets sold in the ordinary course of business, employees not hired by the Company, and the Excluded Assets). Except for Excluded Assets and subject to Section 2.5, there are no assets or properties used in the operation of the Business and owned by any Person other than Transferor that will not be leased or licensed to the Company under valid, current leases or license arrangements. Except as disclosed on Schedule 3.1.11, the Assets are in all material respects adequate for the purposes for which such Assets are currently used or are held for use, and are in reasonably good repair and operating condition (subject to normal wear and tear) and, to the Knowledge of Transferor, there are no facts or conditions affecting the Assets which could interfere in any material respect with the use, occupancy or operation thereof as currently used, occupied or operated, or their adequacy for such use. 3.1.12. Contracts. (a) Schedule 3.1.12(a) contains a complete and correct list of all agreements, contracts, commitments and other instruments and arrangements (whether written or oral) of the types described below (x) by which any of the Assets are bound or affected or (y) to which Transferor is a party or by which it is bound in connection with the Business or the Assets (the "Contracts"): (i) other than the Leases and Other Leases, each lease and other contract concerning or relating to the Real Property with respect to which the amount that could reasonably be expected to be paid or received thereunder exceeds $100,000 per year; (ii) employment, consulting, agency, collective bargaining or other similar contracts, agreements, and other instruments and arrangements that cannot be terminated in accordance with their terms within six months of the date hereof relating to or for the benefit of current, future or former employees, officers, directors, sales representatives, distributors, dealers, agents, independent contractors or consultants; (iii) loan agreements, indentures, letters of credit, mortgages, security agreements, pledge agreements, deeds of trust, bonds, notes, guarantees, and other agreements and instruments relating to the borrowing of money or obtaining of or extension of credit; (iv) licenses, licensing arrangements and other contracts providing in whole or in part for the use of, or limiting the use of, any Intellectual Property; (v) brokerage or finders' agreements; (vi) joint venture, partnership and similar contracts involving a sharing of profits or expenses (including joint research and development and joint marketing contracts); (vii) asset purchase agreements and other acquisition or divestiture agreements, including any agreements relating to the sale, lease or disposal of any Assets (other than sales of inventory or other properties or assets in the ordinary course of business) or involving continuing indemnity or other obligations, entered into since January 1, 1992; (viii) other than purchase orders or contracts for capital projects already approved by Transferor's Board of Directors, contracts with respect to which the aggregate amount that could reasonably be expected to be paid or received thereunder in the future exceeds $250,000 per annum; (ix) contracts, agreements or arrangements with respect to the representation of the Business in foreign countries, other than Canada and Mexico; (x) master lease agreements providing for the leasing of both (A) personal property primarily used in, or held for use primarily in connection with, the Business and (B) other personal property, pursuant to which, in either case, the amount that could reasonably be expected to be paid or received thereunder exceeds $100,000 per year or $1,500,000 in the aggregate; (xi) contracts, agreements or commitments with any employee, director, officer, stockholder or Affiliate of Transferor; and (xii) any other contracts, agreements or commitments that are material to the Business pursuant to which the amount that could reasonably be expected to be paid or received thereunder exceeds $100,000 per year or $1,500,000 in the aggregate. (b) Transferor has delivered to the Company complete and correct copies of all written Contracts, together with all amendments thereto, and accurate descriptions of all material terms of all oral Contracts, set forth or required to be set forth in Schedule 3.1.12(a). (c) All Contracts are in full force and effect and enforceable against each party thereto. There does not exist under any Contract any event of default or event or condition that, after notice or lapse of time or both, would constitute a violation, breach or event of default thereunder on the part of Transferor or, to the Knowledge of Transferor, any other party thereto except for items set forth in Schedule 3.1.12(c), with respect to which Transferor has Adequate Reserves, and except for such events or conditions that, individually and in the aggregate, (i) has not had or resulted in, and will not have or result in, a Material Adverse Effect and (ii) has not and will not materially impair the ability of Transferor to perform its obligations under this Agreement and under the Collateral Agreements. Except as set forth in Schedule 3.1.12(c), no consent of any third party is required under any Contract as a result of or in connection with, and the enforceability of any Contract will not be affected in any manner by, the execution, delivery and performance of this Agreement or any of the Collateral Agreements or the consummation of the transactions contemplated hereby or thereby. (d) Transferor has outstanding no power of attorney relating to the Business. 3.1.13. Territorial Restrictions. Except as set forth on Schedule 3.1.13, Transferor is not restricted by any written agreement or understanding with any other Person from carrying on the Business anywhere in the world. Except as set forth on Schedule 3.1.13, the Company, solely as a result of its purchase of the Business from Transferor pursuant hereto and the assumption of the Assumed Liabilities, will not thereby become restricted in carrying on any business anywhere in the world. 3.1.14. Product Warranties. Except for items set forth in Schedule 3.1.14, with respect to which Transferor has Adequate Reserves, and for warranties under Applicable Law, there are no pending or threatened claims with respect to any warranty, express or implied, written or oral, with respect to the products or services of the Business in excess of $100,000 per claim, and Transferor has no liability with respect to any such warranty, whether known or unknown, absolute, accrued, contingent or otherwise and whether due or to become due. 3.1.15. Absence of Certain Business Practices. To the Knowledge of Transferor, none of Transferor, any officer, employee or agent of Transferor, or any other Person acting on their behalf, has, directly or indirectly, within the past five years given or agreed to give any gift or similar benefit to any customer, supplier, governmental employee or other person who was or may be in a position to help or hinder the Business (or assist Transferor in connection with any actual or proposed transaction relating to the Business) (i) which subjected or might have subjected Transferor to any damage or penalty in any civil, criminal or governmental litigation or proceeding, (ii) which if not given in the past, might have had a Material Adverse Effect, (iii) which if not continued in the future, might have a Material Adverse Effect or subject Transferor to suit or penalty in any private or governmental litigation or proceeding, (iv) for any of the purposes described in Section 162(c) of the Code or (v) for the purpose of establishing or maintaining any concealed fund or concealed bank account. 3.1.16. Intellectual Property. (a) Title. Schedule 3.1.16(a) contains a complete and correct list of all Intellectual Property that is owned by Transferor and primarily related to, used in, held for use in connection with, or necessary for the conduct of, or otherwise material to the Business (the "Owned Intellectual Property"). Except as set forth on Schedule 3.1.16(a), Transferor owns or has the right to use pursuant to license, sublicense, agreement or permission all Intellectual Property Assets, free from any Liens (other than Permitted Liens) and free from any requirement of any past, present or future royalty payments, license fees, charges or other payments, in any case in excess of $100,000, or conditions or restrictions whatsoever. The Intellectual Property Assets comprise all of the Intellectual Property necessary for the Company to conduct and operate the Business as now being conducted by Transferor. (b) Transfer. Immediately after the Closing, the Company will own all of the Owned Intellectual Property and will have a right to use all other Intellectual Property Assets, free from any Liens (other than Permitted Liens) and on the same terms and conditions as in effect prior to the Closing. (c) No Infringement. The conduct of the Business does not infringe or otherwise conflict with any rights of any Person in respect of any Intellectual Property. To the Knowledge of Transferor, none of the Intellectual Property Assets is being infringed or otherwise used or available for use, by any other Person. (d) No Intellectual Property Litigation. Except for items set forth on Schedule 3.1.16(d) , with respect to which Transferor has Adequate Reserves, no claim or demand of any Person has been made nor is there any proceeding that is pending, or to the Knowledge of Transferor, threatened, nor is there a reasonable basis therefor, that (i) challenges the rights of Transferor in respect of any Intellectual Property Assets, (ii) asserts that Transferor is infringing or otherwise in conflict with, or is, except for items set forth in Schedule 3.1.16(d) , with respect to which Transferor has Adequate Reserves, required to pay any royalty, license fee, charge or other amount, in any case in excess of $100,000, with regard to, any Intellectual Property, or (iii) claims that any default exists under any agreement or arrangement concerning any Intellectual Property Assets. None of the Intellectual Property Assets is subject to any outstanding order, ruling, decree, judgment or stipulation by or with any court, arbitrator, or administrative agency, or has been the subject of any litigation within the last five years, whether or not resolved in favor of Transferor. (e) Use of Name and Mark. Except as set forth in Schedule 3.1.16(e), there are, and immediately after the Closing will be, no contractual restriction or limitations pursuant to any orders, decisions, injunctions, judgments, awards or decrees of any Governmental Authority on the Company's right to use the name and marks set forth on Schedule 3.1.16(e) in the conduct of the Business as presently carried on by Transferor. 3.1.17. Insurance. Schedule 3.1.17 contains a complete description of all insurance policies maintained by Transferor for the benefit of or in connection with the Assets or the Business. Transferor has made available to the Company complete and correct copies of all such policies together with all riders and amendments thereto. Such policies are in full force and effect, and all premiums due thereon have been paid. Transferor has complied in all material respects with the terms and provisions of such policies. The insurance coverage provided by such policies is adequate and customary for the Business. Schedule 3.1.17 sets out all claims, other than worker's compensation claims, made by Transferor under any policy of insurance during the past two years with respect to the Business. 3.1.18. Real Property. (a) Owned Real Property. Schedule 3.1.18(a) contains a complete and correct list of all Owned Real Property setting forth the address and owner of each parcel of Owned Real Property and describing all improvements thereon including the properties reflected as being so owned on the Audited Financial Statements. Except as set forth on Schedule 3.1.18(a), Transferor has, or on the Closing Date will have, good, valid and marketable fee simple title to the Owned Real Property indicated on Schedule 3.1.18(a) as being owned by it, free and clear of all Liens other than Permitted Liens. Except as set forth on Schedule 3.1.18(a), there are no outstanding options or rights of first refusal to purchase the Owned Real Property, or any portion thereof or interest therein. (b) Leases. Schedule 3.1.18(b) contains a complete and correct list of (i) all Leases setting forth the address, landlord and tenant for each Lease and (ii) all Other Leases, setting forth the address, landlord and tenant for each Other Lease, in either case, with respect to which the amount that could reasonably be expected to be paid or received thereunder exceeds $100,000 per year. Transferor has made available to the Company correct and complete copies of the Leases and the Other Leases. Each Lease and Other Lease is legal, valid, binding, enforceable, and in full force and effect, except as may be limited by bankruptcy, insolvency, reorganization and similar Applicable Laws affecting creditors generally and by the availability of equitable remedies. Neither Transferor nor any other party is in default, violation or breach in any respect under any Lease or Other Lease, and no event has occurred and is continuing that constitutes or, with notice or the passage of time or both, would constitute a default, violation or breach in any respect under any Lease or Other Lease, which default, violation or breach has had or could reasonably be expected to have a Material Adverse Effect on the Business or the Company or cause any Lease or Other Lease to be terminated. Each Lease grants the tenant under the Lease the exclusive right to use and occupy the demised premises thereunder. Transferor has good and valid title to the leasehold estate under each Lease free and clear of all Liens other than Permitted Liens. Transferor enjoys peaceful and undisturbed possession under its respective Leases for the Leased Real Property. (c) Fee and Leasehold Interests, etc. The Real Property constitutes all the fee and leasehold interests in real property held for use in connection with, necessary for the conduct of, or otherwise material to, the Business. (d) No Proceedings. There are no eminent domain or other similar proceedings pending or, to the Knowledge of Transferor, threatened affecting any portion of the Real Property. There is no writ, injunction, decree, order or judgment outstanding, nor any action, claim, suit or proceeding, pending or, to the Knowledge of Transferor, threatened, relating to the ownership, lease, use, occupancy or operation by any Person of any Real Property. (e) Current Use. Transferor has received no written notice that the use and operation of the Real Property in the conduct of the Business violates in any material respect any instrument of record or agreement affecting the Real Property. Transferor has received no written notice that there is any violation of any covenant, condition, restriction, easement or order of any Governmental Authority having jurisdiction over such property or of any other Person entitled to enforce the same affecting the Real Property or the use or occupancy thereof. No damage or destruction has occurred with respect to any of the Real Property since December 31, 1997 that would, individually or in the aggregate, have a Material Adverse Effect. (f) Compliance with Real Property Laws. Transferor has received no written notice that the Real Property is not in full compliance with all applicable building, zoning, subdivision and other land use and similar Applicable Laws affecting the Real Property (collectively, the "Real Property Laws"). To the Knowledge of Transferor, there is no pending or anticipated change in any Real Property Law that will have or result in a Material Adverse Effect upon the ownership, alteration, use, occupancy or operation of the Real Property or any portion thereof. No current use by Transferor of the Real Property is dependent on a nonconforming use or other Governmental Approval the absence of which would materially limit the use of such properties or Assets held for use in connection with, necessary for the conduct of, or otherwise material to, the Business. (g) Subdivision. To Transferor's Knowledge, no approvals are necessary to subdivide the Owned Real Property from any Real Property included in the Excluded Assets. 3.1.19. Environmental Matters. (a) Permits. Except for items set forth on Schedule 3.1.19(b), with respect to which Transferor has Adequate Reserves, Transferor currently holds, and at all times has held, all such Environmental Permits necessary to the operation of the Business or the ownership, occupancy or use of the Real Property or the Assets, and all such Environmental Permits shall be validly transferred to the Company on the Closing Date. All such Environmental Permits are in full force and effect. To Transferor's Knowledge, Transferor has not been notified by any relevant Governmental Authority that any Environmental Permit will be modified, suspended, canceled or revoked, or cannot be renewed in the ordinary course of business. (b) No Violations. Except for items set forth on Schedule 3.1.19(b), with respect to which Transferor has Adequate Reserves, each of Transferor and its Affiliates have complied and is in compliance in all material respects with all Environmental Permits and all applicable Environmental Laws pertaining to the Real Property (and the ownership, occupancy, use or transferability thereof), the Business or the Assets. Except for items set forth on Schedule 3.1.19(b), with respect to which Transferor has Adequate Reserves, no Person has alleged any violation by Transferor and its Affiliates of any Environmental Permits or any applicable Environmental Law relating to the conduct of the Business or the use, ownership or transferability of the Real Property or the Assets. (c) No Actions. Except for items set forth in Schedule 3.1.19(c) , with respect to which Transferor has Adequate Reserves, none of Transferor or any of its Affiliates has caused or taken any action that has resulted or may result in, or has been or is subject to, any liability or obligation relating to (i) the environmental conditions on, under, about or emanating from any Real Property, the Assets or other properties or assets owned, operated, leased or used by Transferor held for use in connection with, necessary for the conduct of, or otherwise material to, the Business, or (ii) the past or present use, management, handling, transport, treatment, generation, storage, disposal or Release of any Hazardous Substances, except for any such liabilities and obligations that, individually and in the aggregate, are not material to the Business and have not had or resulted in, and will not have or result in, a Material Adverse Effect. (d) Other. Except for items set forth in Schedule 3.1.19(d), with respect to which Transferor has Adequate Reserves: (i) None of current or past operations, or any by-product thereof, and none of the currently or formerly owned property or assets of Transferor used in the Business, including the Assets and the Real Property, is related to or subject to any investigation or evaluation by any Governmental Authority, as to whether any Remedial Action is needed to respond to a Release or threatened Release of any Hazardous Substances. (ii) Transferor is not subject to any outstanding order, judgment, injunction, decree or writ from, or contractual or other obligation to or with, any Governmental Authority or other Person in respect of which the Company may be required to incur any Environmental Liabilities and Costs arising from the Release or threatened Release of a Hazardous Substances. (iii) None of the Real Property is, and none of Transferor or any of its Affiliates has transported or arranged for transportation (directly or indirectly) of any Hazardous Substances relating to the Assets or the Real Property to any location that is, listed or proposed for listing under CERCLA, or on any similar state list, or the subject of federal, state or local enforcement actions or investigations or Remedial Action. (iv) No work, repair, construction or capital expenditure is required or planned in respect of the Assets pursuant to or to comply with any Environmental Law, nor has Transferor or any of its Affiliates received any notice of any such requirement, except for such work, repair, construction or capital expenditure as is not material to the Business and is in the ordinary course of business. (e) Full Disclosure. Transferor has disclosed and made available to the Company all information, including all studies, analyses and test results, in the possession, custody or control of Transferor and its Affiliates relating to (i) the environmental conditions on, under, about or emanating from the Real Property, and (ii) Hazardous Substances used, managed, handled, transported, treated, generated, stored, disposed of or Released by Transferor or any other Person at any time on any Real Property, or otherwise in connection with the operation of the Business or the ownership, operation, occupancy or use of the Real Property, the Assets or other assets, equipment or facilities used in or held for use in connection with the Business. 3.1.20. Employees, Labor Matters, etc. Except as set forth in Schedule 3.1.20, Transferor is not a party to or bound by any collective bargaining agreement and there are no labor unions or other organizations representing, purporting to represent or, to Transferor's Knowledge, attempting to represent any employees employed in the operation of the Business. Since December 31, 1997, there has not occurred or, to Transferor's Knowledge, been threatened any material strike, slowdown, picketing, work stoppage, concerted refusal to work overtime or other similar labor activity with respect to any employees employed in the operation of the Business. Except for items set forth on Schedule 3.1.20, with respect to which Transferor has Adequate Reserves, there are no labor disputes currently subject to any grievance procedure, arbitration or litigation and there is no representation petition pending or, to the Knowledge of Transferor, threatened with respect to any employees employed in the operation of the Business. Transferor has complied with all provisions of Applicable Law pertaining to the employment of employees, including all such Laws relating to labor relations, equal employment, fair employment practices, entitlements, prohibited discrimination or other similar employment practices or acts, except for any failure so to comply that, individually or together with all such other failures has not had or resulted in, and will not have or result in, a Material Adverse Effect. Except for items set forth on Schedule 3.1.20, with respect to which Transferor has Adequate Reserves, Transferor is not party to any agreement with any employee employed in the Business that contains change of control and/or severance provisions that would become operative by virtue of the consummation of the transaction that is the subject of this Agreement. 3.1.21. Employee Benefit Plans and Related Matters. (a) Employee Benefit Plans. Schedule 3.1.21(a) sets forth a true and complete list of each "employee benefit plan," as such term is defined in section 3(3) of the ERISA, whether or not subject to ERISA, and each bonus, incentive or deferred compensation, severance, termination or other separation benefits, retention, change of control, stock option, stock appreciation, stock purchase, phantom stock or other equity-based, fringe benefits or payroll practices, performance or other employee or retiree benefit or compensation plan, program, arrangement, agreement, policy or understanding, whether written or unwritten, that provides or may provide benefits or compensation in respect of any employee or former employee employed or formerly employed in the operation of the Business or the beneficiaries or dependents of any such employee or former employee (such employees, former employees, beneficiaries and dependents collectively, the "Employees") or under which any Employee is or may become eligible to participate or derive a benefit and that is or has been maintained, contributed to, or required to contribute to, or established, by Transferor or any of its Affiliates or any other trade or business, whether or not incorporated, which, together with Transferor is or would have been at any date of determination occurring within the preceding six years treated as a single employer under Section 414 of the Code or within the meaning of section 4001 of ERISA (such other trades and business collectively, the "Related Persons"), or to which Transferor or any Related Person contributes or is or has been obligated or required to contribute or with respect to which Transferor or the Business may have any liability or obligation (collectively, the "Plans"). With respect to each such Plan (other than a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA (a "Multiemployer Plan")), Transferor has provided the Company and Thomas complete and correct copies, if applicable, of: the document embodying or establishing each written Plan (including all amendments thereto); a description of each unwritten Plan; all trust agreements, insurance contracts or other funding arrangements; the two most recent actuarial and trust reports; the two most recent Forms 5500 and all schedules thereto; the most recent IRS determination letter; the current summary plan description; the two most recent summary annual reports, all summaries of material modifications; all material communications received from or sent to the IRS, including a request for a compliance certificate under the IRS Voluntary Compliance Program (or similar program), or an application under the IRS Closing Agreement Programs with respect to any of the Plans, the Pension Benefit Guaranty Corporation or the Department of Labor (including a written description of any oral communication); an actuarial study of any post-employment life or medical benefits provided under any such Plan; and all amendments and modifications to any such document. With respect to each Multiemployer Plan, Transferor has provided the Company and Thomas a complete and correct copy of statements or other communications regarding withdrawal or other multiemployer plan liabilities, and the most recent available estimate from the Multiemployer Plan of the withdrawal liability of the Transferor or Related Persons if the Transferor or Related Persons were to have a complete withdrawal. Except as specifically set forth in Schedule 3.1.21(a), Transferor has not communicated to any Employee any intention or commitment to modify any Plan or to establish or implement any other employee or retiree benefit or compensation arrangement. (b) Qualification. Each of the Plans (other than a Multiemployer Plan) that is intended to meet the requirements of Section 401(a) and, where applicable, Section 401(k) of the Code, now meets, and since its inception has met, the requirements for qualification under Section 401(a), and, where applicable, Section 401(k) of the Code and its related trust is now, and since its inception has been, exempt from taxation under Section 501(a) of the Code and nothing has occurred that would adversely affect the qualified status of any such Plan. Each such Plan and the trust forming a part thereof, has received a favorable determination letter from the IRS pursuant to Revenue Procedure 93-39 and its progeny as to its qualification under the Code, and to the effect that each such trust is exempt from taxation under section 501(a) of the Code, and, to the Knowledge of the Transferor, nothing has occurred since the date of such determination letter that could adversely affect such qualification or tax- exempt status. (c) Compliance; Liability. (i) With respect to each Plan (other than a Multiemployer Plan) that is subject to section 412 of the Code or section 302 or Title IV of ERISA, (A) no "accumulated funding deficiency" (within the meaning of Section 302 of ERISA and Section 412 of the Code) has been or could be expected to be incurred, whether or not waived, and no excise or other taxes have been or could be expected to be incurred or are due and owing with respect to the Plan because of any failure to comply with the minimum funding standards of ERISA and the Code, (B) no proceeding has been or is expected to be initiated to terminate such Plan, and (C) no security under Section 401(a)(29) of the Code has been or could be expected to be required. (ii) No liability has been or is expected to be incurred by Transferor, any Related Person or the Business (either directly or indirectly, including as a result of an indemnification obligation) under or pursuant to ERISA or otherwise or the penalty, excise tax or joint and several liability provisions of the Code relating to employee benefit plans that could, following the Closing, become or remain a liability of the Business or become a liability of the Company or of any employee benefit plan established or contributed to by the Company and, to the Knowledge of each of Transferor, no event, transaction or condition has occurred or exists that could result in any such liability to the Business or, following the Closing, the Company. (iii) Each of the Plans has been operated and administered in all respects in compliance with all Applicable Laws and the provisions of each Plan, except for any failure so to comply that, individually or together with all other such failures, has not and will not result in a material liability or obligation on the part of the Business, or, following the Closing, the Company, and has not had or resulted in, and will not have or result in, a Material Adverse Effect. There are no material pending or, to the Knowledge of Transferor, threatened claims, lawsuits, arbitrations or other action by or on behalf of any of the Plans, by any Employee or otherwise involving any such Plan or the assets of any Plan (other than routine claims for benefits). No Plan is or is expected to be under audit or investigation by the IRS, DOL, or any other Governmental Authority and no such completed audit, if any, has resulted in the imposition of any tax or penalty. No "reportable event" within the meaning of Section 4043(b) of ERISA has occurred with respect to any Plan. Notwithstanding the foregoing, the representations set forth in this subsection (c) with respect to any Multiemployer Plan shall be made to Transferor's Knowledge. (iv) No Plan is a "multiple employer plan" within the meaning of section 4063 or 4064 of ERISA, and there has never been any "multiple employer plan" covering any Employees. With respect to each Plan which is a Multiemployer Plan: (a) with respect to events prior to the Closing, none of the Transferor, any Related Person, or their predecessors has incurred or has any reason to believe it has incurred or will incur any withdrawal liability; no event has occurred which with the giving of notice would result in any liability under Section 4201 of ERISA as a result of a complete withdrawal (within the meaning of Section 4203 of ERISA) or a partial withdrawal (within the meaning of Section 4205 of ERISA); none of the Transferor, any Related Person, or their predecessors has received any notice of any claim or demand for complete or partial withdrawal liability; (b) none of the Transferor, any Related Person, or their predecessors has received any notice or has any reason to believe that such Multiemployer Plan is in "reorganization" (within the meaning of Section 4241 of ERISA), that increased contributions may be required to avoid a reduction in plan benefits or the imposition of an excise tax, or that the Multiemployer Plan is or may become "insolvent" (within the meaning of Section 4241 of ERISA); (c) no Multiemployer Plan is a party to any pending merger or asset or liability transfer under Part 2 of Subtitle E of Title IV of ERISA; and (d) the PBGC has not instituted proceedings against the Multiemployer Plan. (v) All contributions required to have been made by Transferor and each Related Person to any Plan under the terms of any such Plan or pursuant to any applicable collective bargaining agreement or Applicable Law have been made within the time period prescribed by any such Plan, agreement or Applicable Law. (vi) No Employee is or may become entitled to post-employment benefits of any kind by reason of employment in the Business, including death or survivor benefits, medical or health benefits (whether or not insured), other than (a) coverage provided pursuant to the terms of any Plan specifically identified as providing such coverage in Schedule 3.1.21(c)(vi) or mandated by section 4980B of the Code, (b) retirement benefits payable under any Plan qualified under section 401(a) of the Code or (c) deferred compensation accrued as a liability on the Audited Balance Sheet or incurred after December 31, 1997 in the ordinary course of business consistent with the prior practice of Transferor, pursuant to the terms of a Plan. The consummation of the transactions contemplated by this Agreement or the Collateral Agreements will not (either alone or upon the occurrence of any additional subsequent events) result in an increase in the amount of compensation or benefits (whether of severance pay or otherwise) or the acceleration of the vesting or timing of payment of any compensation or benefits payable to or in respect of any Employee. No amounts payable under any Plan will fail to be deductible for federal income tax purposes by virtue of Sections 280G or 162(m) of the Code. (vii) Transferor does not maintain any Plan that is funded by a trust described in Section 501(c)(9) of the Code or subject to the provisions of Section 505 of the Code. Transferor has complied with the requirements of Section 4980B of the Code regarding the continuation of health care coverage under any Plan and the provisions of the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"). (viii) No event, condition, or circumstance exists that could result in a material increase of the benefits provided under any Plan or the expense of maintaining any Plan from the level of benefits or expense incurred for the most recent fiscal year ended before the Closing. No event, condition, or circumstance exists that would prevent the amendment or termination of any Plan. 3.1.22. Confidentiality. Except as set forth on Schedule 3.1.22, Transferor has taken all steps reasonably necessary to preserve the confidential nature of all material confidential information (including any proprietary information) with respect to the Business, including the manufacturing or marketing of any of Transferor's products or services. 3.1.23. No Guarantees. None of the obligations or liabilities of the Business or of Transferor incurred in connection with the operation of the Business is guaranteed by or subject to a similar contingent obligation of any other Person other than Transferor. Other than guarantees by Transferor of the obligations of its Affiliates, Transferor has not guaranteed or become subject to a similar contingent obligation in respect of the obligations or liabilities of any other Person related to the Business. There are no outstanding letters of credit, surety bonds or similar instruments of Transferor or any of its Affiliates in connection with the Business or the Assets. 3.1.24. Records. The minute books of Transferor insofar as they relate to or affect the Business and the Assets are substantially complete and correct in all material respects. The books of account of Transferor, insofar as they relate to or affect the Business and the Assets, are sufficient to prepare the Financial Statements in accordance with GAAP. 3.1.25. Brokers, Finders, etc. All negotiations relating to this Agreement, the Collateral Agreements, and the transactions contemplated thereby, have been carried on without the participation of any Person acting on behalf of Transferor or its Affiliates in such manner as to give rise to any valid claim against the Company or any of its subsidiaries for any brokerage or finder's commission, fee or similar compensation, or for any bonus payable to any officer, director, employee, agent or sales representative of or consultant to Transferor or its Affiliates upon consummation of the transactions contemplated hereby or thereby. 3.1.26. Disclosure. No representation or warranty by Transferor contained in this Agreement nor any statement or certificate furnished or to be furnished by or on behalf of Transferor to the Company or its representatives in connection herewith or pursuant hereto or set forth in any reports filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact required to make the statements contained herein or therein not misleading. There is no fact (other than matters of a general economic or political nature which do not affect the Business uniquely) known to Transferor that has not been disclosed by Transferor to the Company that might reasonably be expected to have or result in a Material Adverse Effect. 3.1.27. Receivables. All of Transferor's receivables (including accounts receivable, loans receivable and advances) which have arisen in connection with the Business and which are reflected in the Audited Financial Statements, and all such receivables which will have arisen since the Audited Balance Sheet Date, shall have arisen only from bona fide transactions in the ordinary course of business. Unless paid prior to the Closing Date, such receivables are or will be as of the Closing Date current and collectible net of the respective reserves shown on the Balance Sheet or on the accounting records of Transferor as of the Closing Date (which reserves are adequate and calculated consistent with past practices and, in the case of the reserve as of the Closing Date, will not represent a greater percentage of such receivables as of the Closing Date than the reserve reflected in the Balance Sheet represented of such receivables reflected therein and will not represent a material adverse change in the composition of such receivables in terms of aging). 3.1.28. Relationships With Related Entities. No Related Entity of Transferor has, or since December 31, 1997 has had, any interest in property (whether real, personal or mixed and whether tangible or intangible), used in or pertaining to the Business. Neither Transferor nor any Related Entity of Transferor is or since December 31, 1997 has owned (of record or as a beneficial owner) an equity interest in or in any of the financial or profit interest in, a Person that has (i) had business dealings or a material financial interest in any transaction with Transferor relating to the Business, or (ii) engaged in competition with Transferor with respect to any line of products or services of Transferor relating to the Business in any market presently served by Transferor. Neither Transferor nor any Related Entity of Transferor is a party to any Contract with, or has any claim or right against, Transferor. 3.1.29. Year 2000 Compliance. (a) Transferor represents and warrants that, (i) it is in the process of conducting a comprehensive review of its Systems to identify those Systems that may be unable to process data accurately beyond the year 1999; and (ii) a plan has been implemented whereby identified Systems will either be replaced or modified over the next eighteen months and that the execution of this plan will not cause significant disruptions in the Business's operations or have a Material Adverse Effect. 3.1.30. Information Supplied for Joint Proxy Statement. None of the information supplied or to be supplied by Transferor for inclusion or incorporation by reference in the Joint Proxy Statement to be filed with the Securities and Exchange Commission by Transferor and Thomas in connection with the stockholder meetings of Transferor and Thomas to be held in connection with the Master Transaction Agreement and the transactions contemplated hereby will, at the date mailed to stockholders, or at the time of such meetings, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. The Joint Proxy Statement will, as of its mailing date, comply as to form in all material respects with Applicable Law, including the Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder, except that no representation is made by Transferor with respect to information supplied by Thomas or the stockholders of Thomas for inclusion therein. 3.1.31 Opinion of Financial Advisor. The financial advisor of Transferor, Donaldson, Lufkin & Jenrette Securities Corporation, has rendered an opinion to the Board of Directors of Transferor to the effect that, as of the date thereof, the Membership Interest to be received by Transferor pursuant to this Agreement is fair from a financial point of view to Transferor; it being understood and acknowledged by the Company that such opinion has been rendered for the benefit of the Board of Directors of Transferor and is not intended to, and may not, be relied upon by the Company or its Affiliates. ARTICLE IV COVENANTS 4.1. Covenants of Transferor. 4.1.1. Further Actions. (a) Subject to the terms and conditions of the Master Transaction Agreement, Transferor agrees to use all reasonable good faith efforts to take all actions and to do all things necessary, proper or advisable to consummate the transactions contemplated hereby by the Closing Date, including obtaining the approval of Transferor's stockholders. (b) Transferor will, as promptly as practicable, file or supply, or cause to be filed or supplied, all applications, notifications and information required to be filed or supplied by it pursuant to Applicable Law in connection with this Agreement, the Collateral Agreements, the sale and transfer of the Assets pursuant to this Agreement and the consummation of the other transactions contemplated thereby, including filings pursuant to the HSR Act and the WARN Act, to the extent required by Applicable Law. (c) Transferor, as promptly as practicable, will use all reasonable efforts to obtain, or cause to be obtained, all Consents (including all Governmental Approvals and any Consents required under any Contract) necessary to be obtained by any of them in order to consummate the contribution and transfer of the Assets to the Company pursuant to this Agreement and the consummation of the other transactions contemplated thereby. 4.1.2. Further Assurances. Following the Closing, Transferor shall, and shall cause each of their Affiliates to, from time to time, execute and deliver such additional instruments, documents, conveyances or assurances and take such other actions as shall be necessary, or otherwise reasonably requested by the Company, to confirm and assure the rights and obligations provided for in this Agreement, and in the Collateral Agreements and render effective the consummation of the transactions contemplated hereby and thereby. 4.1.3. Certificates of Tax Authorities. On or before the Closing Date, to the extent such taxing authorities grant certificates, Transferor shall provide to the Company copies of certificates from all taxing authorities in which Transferor files (or should file) Tax Returns stating that no Taxes are due to any such state or other taxing authority for which the Company could have liability to withhold or pay Taxes with respect to the transfer of the Assets or the Business 4.1.4. Use of Business Name. After the Closing, Transferor will not, directly or indirectly, use or do business, or allow any Affiliate to use or do business, or assist any third party in using or doing business, under the names and marks listed on Schedule 4.1.4. 4.1.5. Compliance with ISRA. (a) Securing a Remediation Agreement. (i) With respect to each "industrial establishment" (as such term is defined under ISRA) owned or operated by Transferor, Transferor shall, prior to the Closing Date, obtain from the NJDEP and execute a Remediation Agreement ("RA") permitting the consummation of the transactions contemplated by this Agreement. Transferor and the Company shall be the ordered parties on the RA. Transferor shall prepare and file all documents required by the NJDEP to obtain such RA. (ii) In connection with the Closing, Transferor shall obtain and post or execute any remediation funding source (as such term is defined under ISRA) required in connection with the RA obtained in connection with clause (i) above. From and after the Closing Date, the Company shall maintain such remediation funding source in full force and effect as required by ISRA. (b) Conduct of ISRA Proceedings Following the Closing. To the extent necessary to achieve Compliance with ISRA after the Closing, the Company shall take all actions required under the RA or ISRA, including the preparation and filing of any Preliminary Assessment, Site Investigation, Remedial Investigation or Remedial Action Workplan or any other document or information required by the NJDEP under the RA or ISRA and the implementation of all Remedial Actions. (c) Payment of ISRA Compliance Costs. Transferor shall pay all costs required to satisfy its obligations under subparagraph (a) above. Except as limited by the preceding sentence, the Company shall pay all fees, costs and expenses incurred by Transferor or the Company to achieve Compliance with ISRA, including without limitation, environmental consultants' and contractors' fees, attorneys' fees, NJDEP filing fees and oversight charges, costs (including any surcharges) associated with securing and maintaining any remediation funding source, laboratory and analytical costs and expenses, equipment charges, industrial or hazardous waste disposal costs and all other fees, costs and expenses incurred in connection with or relating to Remedial Actions. 4.1.6. Environmental Compliance. Subject to Section 4.1.5 hereof, Transferor shall comply in all material respects with the requirements of all applicable Environmental Laws necessary to effect the lawful transfer of the Real Property or the Business prior to the Closing Date. 4.1.7. Assumed Liabilities. Transferor agrees that the Company shall be permitted to direct the defense and settlement of any litigation that is an Assumed Liability and shall have sole discretion as to the manner of doing so, provided that the Company takes all steps reasonably necessary to conduct a competent and diligent defense or settlement thereof, and provided further that such litigation does not seek injunctive or other equitable relief involving Transferor or an adverse result in connection therewith could not reasonably be expected to have a Material Adverse Effect on Transferor other than with respect to this Agreement. In addition, to the extent that any litigation is reasonably expected to exceed the Reserve attributable thereto, the Company shall consult with Transferor regarding the settlement, disposition and strategy with respect to such litigation and the Company shall not settle or dispose of such litigation without Transferor's consent, which consent shall not be unreasonably withheld. 4.1.8. Insurance. Transferor agrees that the Company shall have the right to make claims against any product liability insurance or other insurance maintained prior to Closing by Transferor for the Business, provided that the cost of adding the Company as an additional named insured as well as any deductible or self-insured retentions related to any claim asserted under these insurance policies with respect to the Business shall be borne by the Company. 4.1.9. Adjusted Tax Basis. On or before the Closing Date, Transferor shall prepare and deliver to the Company a schedule that accurately and completely sets forth Transferor's adjusted tax basis in each of the Assets having a value in excess of $10,000 which shall become the Company's tax basis in the Assets by operation of Code Section 723, subject to adjustment in accordance with the provisions of Code Sections 734(b) and 754, as set forth in the LLC Agreement. 4.2. Covenants of the Company. 4.2.1. Further Assurances. Following the Closing, the Company shall, and shall cause its members to, from time to time, execute and deliver such additional instruments, documents, conveyances or assurances and take such other actions as shall be necessary, or otherwise reasonably requested by Transferor, to confirm and assure the rights and obligations provided for in this Agreement and in the Collateral Agreements and render effective the consummation of the transactions contemplated thereby. 4.2.2. Use of Business Names by the Company. To the extent the trademarks, service marks, brand names or trade, corporate or business names of Transferor or of any of Transferor's Affiliates or divisions are used by Transferor or the Business on stationery, signage, invoices, receipts, forms, packaging, advertising and promotional materials, products, training and service literature and materials, computer programs or like materials ("Marked Materials") or appear on Inventory at the Closing, the Company may use such Marked Materials or sell such Inventory after the Closing for a period of 12 months without altering or modifying such Marked Materials or Inventory, or removing such trademarks, service marks, brand names, or trade, corporate or business names, but the Company shall not thereafter use such trademarks, service marks, brand names or trade, corporate or business names in any other manner without the prior written consent of Transferor. Within 13 months after the Closing Date, the Company shall provide evidence reasonably satisfactory to Transferor that all Marked Materials have been used or destroyed. The Company shall defend, indemnify and hold Transferor harmless from any Loss from the use of the Marked Materials, including any product liability or other claims arising from products manufactured or sold by the Company using such Marked Materials unless due to the fault of Transferor. 4.2.3. Liability for Transfer Taxes. The Company shall be responsible for the timely payment of, and shall indemnify and hold harmless Transferor against, all sales (including bulk sales), use, value added, documentary, stamp, gross receipts, registration, transfer, conveyance, excise, recording, license and other similar Taxes and fees ("Transfer Taxes"), arising out of or in connection with or attributable to the transactions effected pursuant to this Agreement. The Company shall prepare and timely file all Tax Returns required to filed in respect of Transfer Taxes (including all notices required to be given with respect to bulk sales taxes), provided that Transferor shall be permitted to prepare any such Tax Returns that are the primary responsibility of Transferor under applicable law. Transferor's preparation of any such Tax Returns shall be subject to the Company's approval, which approval shall not be withheld unreasonably. 4.2.4. ISRA. The Company shall satisfy its obligations to achieve Compliance with ISRA as set forth in Section 4.1.5 hereof. 4.2.5. Removal of Transferor as Guarantor. The Company shall use its best efforts to, within thirty days of the Closing Date, cause Transferor and its Affiliates to be removed as guarantors with respect to any obligation or liability related to the Business or any Asset. During the period prior to removing Transferor and its Affiliates as guarantors, the Company shall indemnify Transferor and its Affiliates from any and all Losses related to such guaranties. 4.2.6. Records and Documents. For seven years following the Closing Date, the Company shall grant Transferor and its representatives, at Transferor's request, during normal business hours on two day's prior notice, access to and the right to make copies of Books and Records, possession of which is held by the Company, as may be necessary or useful in connection with Transferor's preparation of its accounting records, tax returns, financial statements, compliance with Applicable Laws related to Employee Benefits, filings with the Securities and Exchange Commission or other related matters. If during such period, the Company elects to dispose of such Books and Records, the Company shall first give Transferor sixty (60) days' written notice during which period Transferor shall have the right to take such Books and Records. 4.2.7. LIFO Method. The Company shall adopt the federal income tax accounting methodology directed by Transferor for the inventories received by the Company from Transferor. ARTICLE V CONDITIONS PRECEDENT 5.1. Conditions to Obligations of Each Party. The obligations of the parties to consummate the transactions contemplated hereby shall be subject to the fulfillment on or prior to the Closing Date of the following conditions: 5.1.1. Master Transaction Agreement. All of the conditions of Thomas and Transferor set forth in the Master Transaction Agreement shall have been satisfied, the LLC Agreement shall be effective and the Thomas Capitalization Agreement shall close simultaneously herewith. 5.2. Conditions to Obligations of the Company. The obligations of the Company to consummate the transactions contemplated hereby shall be subject to the fulfillment (or waiver by the Company) on or prior to the Closing Date of the following additional conditions, which Transferor agrees to use reasonable good faith efforts to cause to be fulfilled: 5.2.1. Representations, Performance. The representations and warranties of Transferor contained in this Agreements and in the Collateral Agreements shall be true and correct in all respects (in the case of any representation or warranty containing any materiality qualification) or in all material respects (in the case of any representation or warranty without any materiality qualification) at and as of the date hereof, and (ii) shall be repeated and shall be true and correct in all respects (in the case of any representation or warranty containing any materiality qualification) or in all material respects (in the case of any representation or warranty without any materiality qualification) on and as of the Closing Date with the same effect as though made on and as of the Closing Date. Transferor shall have duly performed and complied in all material respects with all agreements and conditions required by this Agreement and each of the Collateral Agreements to be performed or complied with by it prior to or on the Closing Date. Transferor shall have delivered to the Company a certificate, dated the Closing Date and signed by its duly authorized officers, to the foregoing effect. 5.2.2. Collateral Agreements. Transferor or one of its Affiliates, as the case may be, shall have entered into each of the following agreements with the Company: (a) a transitional services agreement, in form and substance mutually agreed upon by the parties (the "Services Agreement"); (b) the LLC Agreement; and (c) the Master Transaction Agreement. 5.2.3. Opinion of Counsel. The Company shall have received an opinion, addressed to it and dated the Closing Date, from McCarter & English, LLP, counsel to Transferor, in substance and form reasonably satisfactory to the Company. 5.2.4. Transfer Documents. Transferor shall have delivered to the Company at the Closing all documents, certificates and agreements necessary to transfer to the Company good and marketable title to the Assets, free and clear of any and all Liens thereon, other than Permitted Liens, including: (a) a bill of sale, assignment and general conveyance, in form and substance reasonably satisfactory to the Company, dated the Closing Date, with respect to the Assets, (other than any Asset to be transferred pursuant to any of the instruments referred to in any other clause of this Section 5.2.4); (b) assignments of all Contracts, Intellectual Property and any other agreements and instruments constituting Assets, dated the Closing Date, assigning to the Company all of Transferor's right, title and interest therein and thereto, with any required Consent endorsed thereon; (c) a general warranty deed, dated as of the Closing Date, with respect to each parcel of Owned Real Property in form and substance mutually agreed upon by the parties, together with any necessary transfer declarations, or other filings; (d) an assignment of lease, dated as of the Closing Date, with respect to each Lease and each Other Lease, in form and substance mutually agreed upon by the parties, together with any necessary transfer declarations or other filings; (e) certificates of title to all motor vehicles included in the Assets to be transferred to the Company hereunder, duly endorsed for transfer to the Company as of the Closing Date; and (f) stock certificates representing the Assets described in Section 1.1(p) together with stock powers executed by Transferor in blank. 5.2.5. Consents and Estoppels. The Company shall have received consents from the lessor of each Lease listed on Schedule 3.1.18(b) to the assignment of such Lease to the Company. The Company shall also have received estoppel certificates addressed to the Company from the lessor of each Lease, dated within 30 days of the Closing Date, identifying the Lease documents and any amendments thereto, stating that the Lease is in full force and effect and, to the best knowledge of the lessor, that the tenant is not in default under the Lease and no event has occurred that, with notice or lapse of time or both, would constitute a default by the tenant under the Lease and containing any other information reasonably requested by the Company. 5.2.6. FIRPTA Certificate. The Company shall have received a certificate of Transferor, dated the Closing Date and sworn to under penalty of perjury, setting forth the name, address and federal tax identification number of Transferor and stating that Transferor is not a "foreign person" within the meaning of Section 1445 of the Code, such certificate to be in the form set forth in the Treasury Regulations thereunder. 5.2.7. Environmental Compliance. Subject to Section 4.1.5 hereof, Transferor shall have complied in all material respects with the requirements of all applicable Environmental Laws necessary to effect the lawful transfer of the Real Property or the Business. 5.2.8. Adjusted Tax Basis. Transferor shall have delivered to the Company the schedule referred to in Section 4.1.9 in form and substance reasonably satisfactory to the Company. 5.2.9. ISRA. With respect to each "industrial establishment" (as such term is defined under ISRA) owned or operated by Transferor, Transferor shall have secured a RA issued by the NJDEP under ISRA permitting the consummation of the transactions contemplated by this Agreement. 5.3. Conditions to Obligations of Transferor. The obligation of Transferor to consummate the transactions contemplated hereby shall be subject to the fulfillment (or waiver by Transferor), on or prior to the Closing Date, of the following additional conditions, which the Company agrees to use reasonable good faith efforts to cause to be fulfilled. 5.3.1. Representations, Performance, etc. The Company shall have duly performed and complied in all material respects with all agreements and conditions required by this Agreement and the Collateral Agreements to be performed or complied with by it prior to or on the Closing Date. The Company shall have delivered to Transferor a certificate, dated the Closing Date and signed by its duly authorized officer, to the foregoing effect. 5.3.2. Assumption Agreement. Transferor shall have received from the Company the Assumption Agreement. 5.3.3. Collateral Agreements. The Company shall have entered into each of the Collateral Agreements to which it is a party. 5.3.4. ISRA. With respect to each "industrial establishment" (as such term is defined under ISRA) owned or operated by Transferor, Transferor shall have secured a RA issued by the NJDEP under ISRA permitting the consummation of the transactions contemplated by this Agreement. 5.3.5. Environmental Compliance. Subject to Section 4.1.5 hereof, Transferor shall have complied in all material respects with the requirements of all applicable Environmental Laws necessary to effect the lawful transfer of the Real Property or the Business. ARTICLE VI EMPLOYEES AND EMPLOYEE BENEFIT PLANS 6.1 Employment of Transferor's Employees (a) Transferor will, and will cause each of its Affiliates to, use all commercial efforts to cause the employees employed by Transferor in the Business to make available their employment services to the Company. For a period of two years from the Closing Date, Transferor will not, and will not permit any of its Affiliates to, solicit, offer to employ, hire or retain the services of or otherwise interfere with the relationship of the Company with any person employed by or otherwise engaged to perform services for the Company in connection with the operation of the Business. (b) Effective as of the Closing Date, the Company shall offer employment to all employees who are actively employed by Transferor ("Transferor Employees"). Those Transferor Employees who accept such offers of employment effective as of the Closing Date shall be referred to herein as the "Transferred Employees". The Company shall provide any Transferred Employee who is terminated by the Company within 180 days after the Closing Date with severance pay equal to the severance pay that such Transferred Employee would have received under the severance plans of Transferor listed on Schedule 3.1.21(a) if such person's employment with Transferor were terminated as of the Closing Date. Except as provided under the immediately preceding sentence, Transferor shall remain responsible, and the Company shall not assume any liability, for payment of any and all severance, termination pay, retention, change in control or other similar compensation or benefits which are or may become payable in connection with the consummation of the transactions contemplated by this Agreement or the Collateral Agreements. 6.2 Assumption of Plans Except as specifically provided under this Article VI, effective as of the Closing Date, the Company will adopt and assume each Plan, and all rights and Benefit Liabilities thereunder and all other non-material Benefit Liabilities, and shall become a successor employer and be responsible for Transferor's participation in and obligations and responsibilities with respect to each Plan. Prior to and after the Closing, Transferor and the Company shall cooperate in preparing any appropriate documents and use their reasonable best efforts to take all other actions necessary to effectuate the intent of this Section. 6.3 Multiemployer Plans With respect to each Multiemployer Plan set forth on Schedule 3.1.21(a), the Company shall reimburse Transferor for any withdrawal liability incurred by Transferor under such Multiemployer Plan as the result of the transactions contemplated under this Agreement and the Collateral Agreements. Notwithstanding the foregoing, the Company may elect prior to the Closing Date that Section 4204 of ERISA shall apply to the transactions contemplated under this Agreement and the Collateral Agreements with respect to any such Multiemployer Plan, in which case Transferor and the Company shall take all actions necessary to comply with Section 4204 of ERISA with respect to each such Multiemployer Plan. Such compliance shall include the execution of any necessary documentation and the posting of a bond or escrow (or letter of credit if acceptable to the Multiemployer Plan) within the time required by Section 4204(a)(1)(B) of ERISA for each of the Multiemployer Plans for which a bond or escrow (or letter of credit) is required, in an amount, for the period of time, and in a form that complies with Section 4204 (a)(1)(B) of ERISA -- or, within such time period obtaining a variance from such bonding or escrow requirement from each of the applicable Multiemployer Plan or Multiemployer Plans or from the Pension Benefit Guaranty Corporation (the "PBGC") -- so that a transfer of contribution obligations to the Company under the Multiemployer Plans with respect to Transferor Employees does not result in a complete or partial withdrawal of Transferor from the applicable Multiemployer Plans under Sections 4203 or 4205 of ERISA, respectively. In order to assist the Company in making any election contemplated by this Section 6.3, Transferor shall use its reasonable best efforts to provide to the Company as soon as possible after the date hereof a written estimate from each Multiemployer Plan of the withdrawal liability of the Transferor or Related Persons if the Transferor or Related Persons were to have a complete withdrawal as of the Closing. 6.4 Employment Taxes (a) Transferor and the Company will, to the extent permitted by Applicable Law, (i) treat the Company as a "successor employer" and Transferor as a "predecessor employer," within the meaning of sections 3121(a)(1) and 3306(b)(1) of the Code, with respect to Transferred Employees who are employed by the Company for purposes of Taxes imposed under the United States Federal Unemployment Tax Act ("FUTA") or the United States Federal Insurance Contributions Act ("FICA") and (ii) and cooperate with each other to avoid, to the extent possible, the filing of more than one IRS Form W-2 with respect to each such Transferred Employee for the calendar year within which the Closing Date occurs. (b) At the request of the Company with respect to any particular applicable Tax law relating to employment, unemployment insurance, social security, disability, workers' compensation, payroll, healthcare or other similar Tax other than taxes imposed under FICA and FUTA, Transferor and the Company will, to the extent permitted by Applicable Law, (i) treat the Company as a successor employer and Transferor as a predecessor employer, within the meaning of the relevant provisions of such Tax law, with respect to Transferred Employees who are employed by the Company and (ii) cooperate with each other to avoid, to the extent possible, the filing of more than one individual information reporting form pursuant to each such Tax law with respect to each such Transferred Employee for the calendar year within which the Closing Date occurs. 6.5. Other Plans. The Company shall not assume or have any Benefit Liabilities with respect to either the Genlyte 1988 Stock Option Plan or the Genlyte 1998 Stock Option Plan. ARTICLE VII TERMINATION 7.1 Termination. This Agreement shall be terminated at such time as the Master Transaction Agreement is terminated. In the event of the termination of this Agreement, this Agreement shall become void and have no effect, without any liability to any Person in respect hereof or of the transactions contemplated hereby on the part of any party hereto, or any of its directors, members, managers, officers, employees, agents, consultants, representatives, advisers, stockholders or Affiliates, except (i) as specified in Section 8.4, (ii) subject to Article VIII of the Master Transaction Agreement, for any liability resulting from such party's breach of this Agreement, and (iii) for the payment of any fee pursuant to Article VIII of the Master Transaction Agreement. ARTICLE VIII DEFINITIONS, MISCELLANEOUS 8.1 Definition of Certain Terms. The terms defined in this Section 8.1, whenever used in this Agreement (including in the Schedules), shall have the respective meanings indicated below for all purposes of this Agreement. All references herein to a Section, Article or Schedule are to a Section, Article or Schedule of or to this Agreement, unless otherwise indicated. Adequate Reserves: with respect to any asset or liability, an amount of specific or general Reserves that equals or exceeds the amount of any Loss associated with such asset or liability now or hereafter recognized. Affiliate: when used with reference to a specified Person, any Person that directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with the specified Person. Agreement: this Capitalization Agreement, including the Schedules hereto. Applicable Law: all applicable provisions of all (i) constitutions, treaties, statutes, laws (including the common law), rules, regulations, ordinances, codes or orders of any Governmental Authority, (ii) Governmental Approvals and (iii) orders, decisions, injunctions, judgments, awards and decrees of or agreements with any Governmental Authority. Assets: as defined in Section 1.1. Assumed Liabilities: as defined in Section 2.3. Assumption Agreement: as defined in Section 2.3(b). Audited Balance Sheet: the balance sheet contained in the Audited Financial Statements. Audited Balance Sheet Date: as defined in Section 3.1.4. Audited Financial Statements: as defined in Section 3.1.4. Benefit Liabilities: liabilities, obligations, commitments, damages, costs, taxes and expenses, including reasonable fees and disbursements of attorneys and other advisors, including any such expenses incurred in connection with the enforcement of any applicable provision of this Agreement payable to any Employee or other Person as a result of, with respect to or under any Plan or similar employee benefit plan, agreement, policy or practice. Books and Records: as defined in Section 1.1(i). Business: the business of Transferor relating to the manufacture, sale, marketing and distribution of consumer, commercial, industrial and outdoor lighting. Business Day: shall mean any day on which commercial banks in the City of New York, New York are open for business. CERCLA: the Comprehensive Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C. section9601 et seq. Closing Date: as defined in Section 2.1. Code: the Internal Revenue Code of 1986, as amended, or any successor statute to such Code. Collateral Agreements: the agreements and other documents and instruments described in Section 5.2.2 and 5.2.4. Company: as defined in the first paragraph of this Agreement. Company Indemnitees: as defined in Section 8.2(a). Company's Accountants: the accountants of the Company as determined by the Company's management board. Compliance with ISRA: with respect to each "industrial establishment" (as such term is defined under ISRA) owned or operated by Transferor, the receipt by the Company or Transferor of a Deminimis Quantity Exemption approval, Negative Declaration approval or a No Further Action Letter and Covenant Not to Sue (as such terms are defined under ISRA) from the NJDEP, or other document or documents advising that the requirements of ISRA have been satisfied. Component: means any Hardware, Software, Databases and/or Embedded Control of any System used in the Business. Consent: any consent, approval, authorization, waiver, permit, grant, franchise, concession, agreement, license, exemption or order of registration, certificate, declaration or filing with, or report or notice to, any Person, including but not limited to any Governmental Authority. Contract: as defined in Section 3.1.12(a). Database: shall mean all data and other information recorded, stored, transmitted and retrieved in electronic form by a System or any Component, whether located on any Component(s) of a System or archived in storage media of a type employed or used in conjunction with any Component or System used in the Business. $ or dollars: lawful money of the United States. Embedded Control: shall mean any microprocessor, microcontroller, PLC, smart instrumentation or other sensor, driver, monitor, robotic or other device containing a semiconductor, memory circuit, BIOS, PROM or other microchip used in the Business. Employees: as defined in Section 3.1.21(a). Environmental Laws: all Applicable Laws relating to the protection of the environment, to human health and safety, or to any emission, discharge, generation, processing, storage, handling, holding, abatement, existence, Release, threatened Release or transportation or disposal of any Hazardous Substances, including (i) CERCLA, the Resource Conservation and Recovery Act, and the Occupational Safety and Health Act, (ii) all other requirements pertaining to reporting, licensing, permitting, investigation or remediation of emissions, discharges, releases or threatened releases of Hazardous Substances into the air, surface water, groundwater or land, or relating to the manufacture, processing, distribution, use, sale, treatment, receipt, storage, disposal, transport or handling of Hazardous Substances, and (iii) all other requirements pertaining to the protection of the health and safety of employees or the public. Environmental Liabilities and Costs: all Losses, whether direct or indirect, known or unknown, current or potential, past, present or future, imposed by, under or pursuant to Environmental Laws, including all Losses related to Remedial Actions, and all fees disbursements and expenses of counsel, experts, personnel and consultants based on, arising out of or otherwise in respect of: (i) the ownership, operation, use or occupancy of the Business, the Assets, the Real Property or Other Leases or any other real properties, assets, equipment or facilities, by any Transferor, or any of their predecessors or Affiliates; (ii) the environmental conditions existing on the Closing Date on, under, above, about or emanating from any Real Property, the Assets or property subject to Other Leases or any other real properties, assets, equipment or facilities currently or previously owned, leased, operated, occupied or used by the any Transferor, or any of their predecessors or Affiliates; and (iii) expenditures necessary to cause any Real Property or any aspect of the Business or the Assets to be in compliance with any and all requirements of Environmental Laws as of the Closing Date, including all Environmental Permits issued or required under or pursuant to such Environmental Laws, and reasonably necessary to make full economic use of any Real Property or the Assets. Environmental Permits: any federal, state and local permit, license, registration, consent, order, administrative consent order, certificate, approval or other authorization with respect to the any Transferor necessary for the conduct of the Business as currently conducted or previously conducted under any Environmental Law. ERISA: the Employee Retirement Income Security Act of 1974, as amended. Excluded Assets: as defined in Section 1.2. Excluded Liabilities: as defined in Section 2.4. Financial Statements: each of the financial statements required to be provided by Section 3.1.4. GAAP: generally accepted accounting principles as in effect in the United States. Governmental Approval: any Consent of, with or to any Governmental Authority. Governmental Authority: any nation of government, any state or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any government authority, agency, department, board, commission or instrumentality of the United States, any State of the United States or any political subdivision, thereof, and any tribunal or arbitrator(s) of competent jurisdiction, and any self- regulatory organization. Hardware: shall mean all mainframes, midrange computers, personal computers, notebooks, servers, switches, printers, modems, drives, peripherals and any component of any of the foregoing used by the Business. Hazardous Substances: any substance that: (i) is or contains asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum or petroleum-derived substances or wastes, radon gas or related materials (ii) requires investigation, removal or remediation under any Environmental Law, or is defined, listed or identified as a "hazardous waste" or "hazardous substance" thereunder, or (iii) is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is regulated by any Governmental Authority or Environmental Law. HIPAA: as defined in Section 3.1.21(c)(viii). HSR Act: the Hart-Scott-Rodino Anti-trust Improvements Act of 1976, as amended. Indemnified Party: as defined in Section 8.2(d). Indemnifying Party: as defined in Section 8.2(d). Intellectual Property: any and all United States and foreign: (a) patents (including design patents, industrial designs and utility models) and patent applications (including docketed patent disclosures awaiting filing, reissues, divisions, continuations, continuations-in-part and extensions), patent disclosures awaiting filing determination, inventions and improvements thereto; (b) trademarks, service marks, trade names, trade dress, logos, business and product names, slogans, and registrations and applications for registration thereof; (c) copyrights (including software) and registrations thereof; (d) inventions, processes, designs, formulae, trade secrets, know-how, industrial models, confidential and technical information, manufacturing, engineering and technical drawings, product specifications and confidential business information; (e) mask work and other semiconductor chip rights and registrations thereof; (f) Software; (g) intellectual property rights similar to any of the foregoing; (h) copies and tangible embodiments thereof (in whatever form or medium, including electronic media) used in the Business. Intellectual Property Assets: as defined in Section 1.1(h). Inventories: as defined in Section 1.1(b). IRS: the Internal Revenue Service. ISRA: the Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et seq., and the rules and regulations promulgated thereunder. Joint Proxy Statement: the Joint Proxy Statement of Thomas and Transferor to be filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, pursuant to which each of Thomas and Transferor will seek stockholder approval of the transactions contemplated by the Master Transaction Agreement. Knowledge: the actual knowledge after due inquiry of (i) any "officer" of the Transferor, as such term is defined in Rule 16a-1(f) of the General Rules and Regulations under the Securities Exchange Act of 1934, or (ii) any individual employed by Transferor as a manager of any portion of the Business. LLC Agreement: as defined in the WHEREAS clauses of this Agreement. Leased Real Property: means all interests leased pursuant to the Leases. Leases: means the real property leases, subleases, licenses and occupancy agreements relating the Business pursuant to which Transferor is the lessee, sublessee, licensee or occupant. Lien: any mortgage, pledge, hypothecation, right of others, claim, security interest, encumbrance, lease, sublease, license, occupancy agreement, adverse claim or interest, easement, covenant, encroachment, burden, title defect, title retention agreement, voting, trust agreement, interest, equity, option, lien, right of first refusal, charge or other restrictions or limitations of any nature whatsoever, including such as may arise under any Contracts. Losses: as defined in Section 8.2(a). Marked Materials: as defined in Section 4.2.2. Master Transaction Agreement: as defined in the WHEREAS clauses of this Agreement. Material Adverse Effect: any event, occurrence, fact, condition, change or effect that is adverse to the business, operations, prospects, results of operations, condition (financial or otherwise), properties (including intangible properties), assets (including intangible assets) or liabilities of the Business in an amount equal to $5,000,000 or greater. Membership Interests: as defined in Section 2.2. Multiemployer Plan: as defined in Section 3.1.21(a). Net Working Capital: current assets less current liabilities of the Business (in each case excluding Excluded Assets and Excluded Liabilities), all as determined in accordance with GAAP, consistently applied. NJDEP: the New Jersey Department of Environmental Protection, its divisions, bureaus and subdivisions. Other Leases: the leases, subleases, licenses and occupancy agreements pursuant to which Transferor is a lessor sublessor or licensor of any part of the Real Property. Owned Intellectual Property: as defined in Section 3.1.16(a). Owned Real Property: the real property owned by the Transferor or any Affiliate together with all other structures, facilities, improvements, fixtures, systems, equipment and items of property presently or hereafter located thereon attached or appurtenant thereto or owned by Transferor or any Affiliate and located on Leased Real Property and all easements, licenses, rights and appurtenances relating to the foregoing other than owned real property included in Excluded Assets. Permitted Liens: (i) Liens reserved against in the Audited Balance Sheet to the extent so reserved, (ii) Liens for Taxes not yet due and payable or which are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on Transferor's books in accordance with GAAP, (iii) liens arising in the ordinary course of business from a purchase money security interest or related to indebtedness for borrowed money under Transferor's credit facilities, or (iv) Liens that, individually and in the aggregate, do not and would not materially detract from the value of any of the property or assets of the Business or materially interfere with the use thereof as currently used. Person: any individual, partnership, limited liability company, corporation, cooperative, trust, estate or other entity. Plan: as defined in Section 3.1.21(a). Real Property: all of the real property, together with all buildings, structures, fixtures and improvements, listed on Schedules 3.1.18(a) and 3.1.18(b). Real Property Laws: as defined in Section 3.1.18(f). Related Entity: with respect to any Person other than an individual: (a) any Person that directly or indirectly controls, is directly or indirectly controlled by, or is directly or indirectly under common control with such specified Person; (b) any Person that holds a material interest in such specified Person; (c) each Person that serves as a director, officer, partner, executor, or trustee of such specified Person (or in a similar capacity); (d) any Person in which such specified Person holds a material interest; (e) any Person with respect to which such specified Person serves as a general partner or a trustee(or in a similar capacity); and (f) any Related Entity of any individual described in clause (b) or (c). Related Persons: as defined in Section 3.1.21(a). Release: any releasing, disposing, discharging, injecting, spilling, leaking, leaching, pumping, dumping, emitting, escaping, emptying, seeping, dispersal, migration, transporting, placing and the like, including, the moving of any materials through, into or upon, any land, soil, surface water, ground water or air, or otherwise entering into the environment. Remedial Action: all actions required to (i) clean up, remove, treat or in any other way remediate any Hazardous Substances; (ii) prevent the release of Hazardous Substances so that they do not migrate or endanger or threaten to endanger public health or welfare or the environment; or (iii) perform studies, investigations and care related to any such Hazardous Substances. Reserves: the reserves shown on the Balance Sheet or in the accounting records of Transferor for the Business as of the Closing Date. Software: shall mean all software owned, developed, licensed or used by Transferor or any of its Affiliates in the Business, including (i) all modifications, enhancements, fixes, updates, upgrades, bypasses and work- arounds, (ii) the source code and object code for any of the foregoing and (iii) all operating systems, bridgeware, firmware, middleware or utilities used by the Business. Subsidiaries: each corporation or other Person in which a Person owns or controls, directly or indirectly, capital stock or other equity interests representing at least 50% of the outstanding voting stock or other equity interests. System: shall mean any combination of any Software, Hardware, Database or Embedded Control used by the Business. Tax: any federal, state, provincial, local, foreign or other income, alternative, minimum, accumulated earnings, personal holding company, franchise, capital stock, net worth, capital, profits, windfall profits, gross receipts, value added, sales, use, goods and services, excise, customs duties, transfer, conveyance, mortgage registration, stamp, documentary, recording, premium, severance, environmental (including taxes under Section 59A of the Code), real property, personal property, ad valorem, intangibles, rent, occupancy, license, occupational, employment, unemployment insurance, social security, disability, workers' compensation, payroll, health care, withholding, estimated or other similar tax, duty or other governmental charge or assessment or deficiencies thereof (including all interest and penalties thereon and additions thereto whether disputed or not). Tax Return: any return, report, declaration, form, claim for refund or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof. Thomas: as defined in the WHEREAS clauses of this Agreement. Transaction Expenses: as defined in Section 8.4. Transferred Employees: as defined in Section 6.1(b). Transfer Taxes: as defined in Section 4.2.3. Transferor: as defined in the first paragraph of this Agreement. Transferor's Accountants: Arthur Andersen LLP. Transferor Employees: as defined in Section 6.1(b). Treasury Regulations: the regulations prescribed pursuant to the Code. Withholding Taxes: as defined in Section 3.1.6(a) 8.2 Indemnification. (a) By Transferor. Transferor covenants and agrees to defend, indemnify and hold harmless the Company, its officers, directors, employees, agents, advisers, representatives and Affiliates (collectively, the "Company Indemnitees") from and against, and pay or reimburse the Company Indemnitees for, any and all claims, liabilities, obligations, losses, fines, costs, royalties, proceedings, deficiencies or damages (whether absolute, accrued, conditional or otherwise and whether or not resulting from third party claims), including out-of-pocket expenses and reasonable attorneys' and accountants' fees incurred in the investigation or defense of any of the same or in asserting any of their respective rights hereunder (collectively, "Losses"), resulting from or arising out of: (i) any inaccuracy of any representation or warranty made by Transferor herein or under any Collateral Agreement or in connection herewith or therewith; (ii) any failure of Transferor to perform any covenant or agreement hereunder or under any Collateral Agreement or fulfill any other obligation in respect hereof or of any Collateral Agreement; (iii) any Excluded Liabilities or Excluded Assets; (iv) any and all Taxes of Transferor and all Affiliates thereof, whether or not relating to or arising out of the Business; and (v) any and all Benefit Liabilities not assumed by the Company. Except for inaccuracies in the representations and warranties contained in Sections 3.1.1, 3.1.2, 3.1.3, 3.1.6 and 3.1.11 and breaches of covenants contained herein or in any Collateral Agreement, Transferor shall not be required to indemnify the Company Indemnitees with respect to any claim for indemnification pursuant to this Section 8.2(a) unless and until the aggregate amount of all Losses arising under this Section 8.2(a) exceeds $1,000,000 and then only for the amount of such excess. Notwithstanding the immediately preceding sentence, Transferor shall not be required to indemnify the Company Indemnitees with respect to any claim for indemnification arising from inaccuracies in the representations and warranties contained in Section 3.1.19 unless and until the aggregate amount of all such Losses exceeds $500,000 and then only for the amount of such excess. (b) By the Company. The Company covenants and agrees to defend, indemnify and hold harmless Transferor and its officers, directors, employees, agents, advisers, representatives and Affiliates (collectively, the "Transferor Indemnitees") from and against any and all Losses resulting from or arising out of: (i) any inaccuracy in any representation or warranty by the Company made or contained in any Collateral Agreement or in connection therewith; or (ii) any failure of the Company to perform any covenant or agreement made or contained in this Agreement or any Collateral Agreement or fulfill any other obligation in respect thereof; (iii) the Assumed Liabilities except to the extent that they constitute Losses for which Transferor is required to indemnify the Company Indemnitees under Section 8.2(a); (iv) the use by the Company of any Transferor tradenames or trademarks after the Closing Date as contemplated by Section 4.2.2; and (v) the operation of the Business by the Company or the Company's ownership, operation or use of the Assets following the Closing Date, except to the extent such Losses result from or arise out of the Excluded Liabilities, Excluded Assets or constitute Losses for which Transferor is required to indemnify the Company Indemnitees under Section 8.2(a). (c) Adjustment to Indemnification Payments. Any payment made by Transferor pursuant to Section 8.2(a) in respect of any Losses shall be net of any Reserve maintained by Transferor for such Loss or category of Losses. Any payment made by Transferor to the Company Indemnitees, on the one hand, or by the Company to the Transferor Indemnitees, on the other hand, pursuant to this Section 8.2 in respect of any Losses (i) shall be net of any insurance proceeds realized by and paid to the Indemnified Party in respect of such Losses and (ii) shall be (A) reduced by an amount equal to any Tax benefits attributable to such Losses and (B) increased by an amount equal to any Taxes attributable to the receipt of such payment, but only to the extent that such Tax benefits are actually realized, or such Taxes are actually paid, as the case may be, by the Indemnified Party or by a consolidated, combined or unitary group of which the Indemnified Party is a member. The Indemnified Party shall use its reasonable efforts to make insurance claims relating to any Losses for which it is seeking indemnification pursuant to this Section 8.2; provided that the Indemnified Party shall not be obligated to make such an insurance claim if the Indemnified Party in its reasonable judgment believes (based on written advice from insurance brokers or providers) the cost of pursuing such an insurance claim together with any corresponding increase in insurance premiums or other chargebacks to the Indemnified Party, as the case may be, would exceed the value of the claim for which the Indemnified Party is seeking indemnification. Any amount paid by Transferor pursuant to Section 8.2(a) shall be characterized, for tax purposes, as a contribution to the Company's capital and amounts paid by the Company pursuant to Section 8.2(b) shall be characterized as a return of capital. "Indemnified Party" means a party entitled to indemnification pursuant to this Agreement. (d) Indemnification Procedures. In the case of any claim asserted by a third party against an Indemnified Party, notice shall be given by the Indemnified Party to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and the Indemnified Party shall permit the Indemnifying Party (at the expense of such Indemnifying Party) to assume the defense of any claim or any litigation resulting therefrom, provided that (i) the counsel for the Indemnifying Party who shall conduct the defense of such claim or litigation shall be reasonably satisfactory to the Indemnified Party, (ii) the Indemnified Party may participate in such defense at such Indemnified Party's expenses, and (iii) the omission by any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its indemnification obligation under this Agreement except to the extent that such omission results in a failure of actual notice to the Indemnifying Party and such Indemnifying Party is materially damaged as a result of such failure to give notice. Except with the prior written consent of the Indemnified Party, no Indemnifying Party, in the defense of any such claim or litigation, shall consent to entry of any judgment or enter into any settlement that provides for injunctive or other nonmonetary relief affecting the Indemnified Party or that does not include as an unconditional term thereof the giving by each claimant or plaintiff to such Indemnified Party of a release from all liability with respect to such claim or litigation. In the event that the Indemnified Party shall in good faith determine that the conduct of the defense of any claim subject to indemnification hereunder or any proposed settlement of any such claim by the Indemnifying Party might be expected to affect adversely the Indemnified Party's Tax liability or the ability of the Company to conduct its business, or that the Indemnified Party may have available to it one or more defenses or counterclaims that are inconsistent with one or more of those that may be available to the Indemnifying Party in respect of such claim or any litigation relating thereto, the Indemnified Party shall have the right at all times to take over and assume control over the defense, settlement, negotiations or litigation relating to any such claim at the sole cost of the Indemnifying Party, provided that if the Indemnified Party does so take over and assume control, the Indemnified Party shall not settle such claim or litigation without the written consent of the Indemnifying Party, such consent not to be unreasonably withheld. In the event that the Indemnifying Party does not accept the defense of any matter as above provided, the Indemnified Party shall have the full right to defend against any such claim or demand and shall be entitled to settle or agree to pay in full such claim or demand. In any event, the Indemnifying Party and the Indemnified Party shall cooperate in the defense of any claim or litigation subject to this Section 8.2 and the records of each shall be available to the other with respect to such defense. (e) Time Limitation. All claims for indemnification under clause (i) of the first sentence of Section 8.2(a) or clause (i) of the first sentence of Section 8.2(b) must be asserted prior to the termination of the respective survival periods set forth in Section 8.3. Notwithstanding the foregoing, any claim for indemnification that is asserted by written notice within the applicable survival period shall survive until resolved and discharged by the parties or pursuant to a final non-appealable judicial determination. (f) Payment by Transferor. Notwithstanding any provision of this Section 8.2 to the contrary, any payment required to be made by Transferor to the Company pursuant to this Section 8.2 shall be deemed a liability of Transferor owing to the Company and shall be deducted from the next distribution made to Transferor pursuant to Section 6.2(b) of the LLC Agreement (other than Tax Distributions, as such term is defined in the LLC Agreement), provided that in the event that the Loss payable by Transferor exceeds the amount of such distribution, Transferor shall deliver to the Company a note in the amount of such excess, which shall bear interest at the rate of the Company's primary credit facility referenced in Sections 6.8 and 7.8 of the Master Transaction Agreement, and shall be payable out of future distributions (other than Tax Distributions) pursuant to the LLC Agreement. The mechanism provided in this Section 8.2(f) shall be the sole and exclusive source of payment for any obligation of Transferor pursuant to this Section 8.2. (g) Application of Reserve. With respect to indemnification claims for breach of representations or warranties to which a Reserve is applicable, Transferor shall bear the burden of proving the amount of the Reserve. (h) Exclusive Remedy. Except for the provisions of Section 7.1 and subject to Article VIII of the Master Transaction Agreement, the indemnifications contained in Section 8.2 shall be Transferor's and the Company's sole and exclusive remedies with respect to money damages, against each other, with respect to matters arising under this Agreement, of any kind or nature, or relating to the Division, the Business, the Assets, the Assumed Liabilities, the Excluded Assets or the Excluded Liabilities. Transferor and the Company hereby waive and release any other rights, remedies, causes of action or claims that they have or that may arise against the other with respect to matters arising under this Agreement, of any kind or nature, or relating to the Division, the Business, the Assets, the Assumed Liabilities, the Excluded Assets or the Excluded Liabilities. The foregoing restrictions of this Section 8.2(h) shall not apply to any matter involving actual fraud or criminal misconduct. 8.3. Survival of Representations and Warranties, etc. The representations and warranties contained in this Agreement shall survive the execution and delivery of this Agreement, any examination by or on behalf of the parties hereto and the completion of the transactions contemplated herein, but only to the extent specified below: (a) except as set forth in clauses (b) and (c) below, the representations and warranties contained in Section 3.1 shall survive to the date that is 60 days after the delivery of the audited financial statements of the Company for the fiscal year 1999; (b) the representations and warranties contained in Section 3.1.19 shall survive for a period of three years following the Closing Date; (c) the representations and warranties contained in Sections 3.1.1, 3.1.2, 3.1.3 and 3.1.11 shall survive without limitation; and (d) the representations and warranties of Transferor contained in Section 3.1.6 shall survive as to any Tax covered by such representations and warranties for so long as any statute of limitations for such Tax remains open, in whole or in part, including by reason of waiver of such statute of limitations. 8.4. Expenses. Except as provided in Section 4.2.3 and in Section 8.2 of the Master Transaction Agreement, Transferor, on the one hand, and the Company, on the other hand, shall bear their respective expenses, costs and fees (including attorneys', auditors' and financing commitment fees) in connection with the transactions contemplated hereby, including the preparation, execution and delivery of this Agreement and compliance herewith (the "Transaction Expenses"), whether or not the transactions contemplated hereby shall be consummated. 8.5. Partial Invalidity. In the event that any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 8.6 Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be, personally delivered or sent by facsimile transmission with confirming copy sent by overnight courier (such as Express Mail, Federal Express, etc.) and a delivery receipt obtained and addressed to the intended recipient as follows: (a) If to Transferor: The Genlyte Group Incorporated 2345 Vauxhall Road Union, New Jersey 07083-1948 Attention: Larry Powers, President & CEO Telecopy No.: 908-964-7000 With a copy to: McCarter & English, LLP Four Gateway Center 100 Mulberry Street Newark, New Jersey 07102 Attention: Bart J. Colli, Esq. Telecopy No. 973-624-7070 (b) If to the Company: GT Lighting, LLC 4360 Brownsboro Road, Suite 300 P.O. Box 35120 Louisville, Kentucky 40232 Attention: Larry Powers, President & CEO Telecopy No. 502-893-4685 Any party may change its address for receiving notice by written notice given to the others named above. Notices shall be deemed given as of the date of receipt. 8.7. Miscellaneous. 8.7.1. Other Rules of Construction. References in this Agreement to sections, schedules and exhibits are to sections of, and schedules and exhibits to, this Agreement unless otherwise indicated. Words in the singular include the plural and in the plural include the singular. The word "or" is not exclusive. The word "including" shall mean including, without limitation. The section and other headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement 8.7.2. Entire Transaction. This agreement and the agreements and documents referred to herein contain the entire agreement and understanding among the parties with respect to the transactions contemplated hereby and supersede all other agreements, understandings and undertakings among the parties on the subject matter hereof. All exhibits and schedules hereto are hereby incorporated by reference and made a part of this Agreement 8.7.3. Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 8.7.4. Governing Law, etc. This Agreement shall be governed in all respects, including as to validity, interpretation and effect, by the internal laws of the State of Delaware without giving effect to the conflict of laws rules thereof. The Company and Transferor hereby irrevocably submit to the jurisdiction of the courts of the State of Delaware and the Federal courts of the United States of America located in the State of Delaware solely in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document, that such party is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement or any of such document may not be enforced in or by said courts, and the parties hereto irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in such a Delaware State or Federal court. The Company and Transferor hereby consent to and grant any such court jurisdiction over the person of such parties and over the subject matter of any such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 8.6, or in such other manner as may be permitted by law, shall be valid and sufficient service thereof. 8.7.5. Successors and Assigns This Agreement shall bind and inure to the benefit of the parties named herein and their respective successors and permitted assigns. This Agreement shall not be assigned by either party hereto without the express prior written consent of the other party and any attempted assignment, without such consents, shall be null and void, provided that the Company may assign this Agreement to any Subsidiary of the Company, provided further that the Company shall in all events remain liable hereunder. Except as otherwise provided in the Master Transaction Agreement, this Agreement does not create any rights, claims or benefits inuring to any person that is not a party hereto nor create or establish any third-party beneficiary hereto. 8.7.6. Amendment; Waivers. (a) No amendment, waiver or consent with respect to any provision of this Agreement shall in any event be effective, unless the same shall be in writing and signed by the parties hereto, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. (b) The failure of any party at any time or times to require performance of any provisions hereof shall in no manner affect that party's right at a later time to enforce the same. No waiver by any party of the breach of any term or covenant contained in this Agreement in any one or more instances shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Agreement. 8.7.7. Remedies. The rights and remedies of any party based upon, arising out of or otherwise in respect of any inaccuracy or breach of any representation, warranty, covenant or agreement or failure to fulfill any condition shall in no way be limited by the fact that the act, omission, occurrence or other state of facts upon which any claim of any such inaccuracy or breach is based may also be the subject matter of any other representation, warranty, covenant or agreement as to which there is no inaccuracy or breach. The representations and warranties of Transferor shall not be affected or deemed waived by reason of any investigation made by or on behalf of the Company (including but not limited to by any of its advisors, consultants or representatives) or by reason of the fact that the Company or any of such advisors, consultants or representatives knew or should have known that any such representation or warranty is or might be inaccurate. 8.7.8. Authorship. The parties hereto agree that the terms and language of this Agreement were the result of negotiations between the parties and, as a result, there shall be no presumption that any ambiguities in this Agreement shall be resolved against either party. Any controversy over the construction of this Agreement shall be decided without regard to events of authorship or negotiation. IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written. GT LIGHTING, LLC By: ______________________________ Larry K. Powers President THE GENLYTE GROUP INCORPORATED By: ______________________________ Larry K. Powers President LIST OF SCHEDULES TO THE CAPITALIZATION AGREEMENT BETWEEN GT LIGHTING, LLC AND THE GENLYTE GROUP INCORPORATED DATED AS OF APRIL 28, 1998 Schedule 1.1(p): Stock, Partnership, Membership or Other Interests in any Person Engaged in the Business Schedule 1.2: Excluded Assets Schedule 2.3: Excluded Liabilities Schedule 3.1.2(a): State of Incorporation Schedule 3.1.2(b): States in Which Qualified to do Business Schedule 3.1.2(d): Subsidiaries Schedule 3.1.3: Conflicts with Contracts; Governmental Approvals and Consents Required Schedule 3.1.5: Undisclosed Liabilities Schedule 3.1.6(a): Contested Taxes Schedule 3.1.6(b): Agreements or Powers of Attorney Extending Period of Assessment or Collection of Taxes Schedule 3.1.6(c): Taxes Due or Audit Issues Schedule 3.1.6(d): Tax-Related Litigation or Administrative Appeal Schedule 3.1.7: Changes in Conduct of Business Since the Audited Balance Sheet Date Schedule 3.1.8: Litigation Pending or Threatened Schedule 3.1.9(a): Noncompliance with Applicable Law Schedule 3.1.9(b): Governmental Approvals and Consents Required Schedule 3.1.10: Conduct of the Business Outside of the Division Schedule 3.1.11: Assets to Which The Genlyte Group Incorporated Does Not Have Good Title; Assets Not in Reasonably Good Repair and Operating Condition Schedule 3.1.12(a): List of Contracts Schedule 3.1.12(c): Defaults under Contracts; Consents Required Schedule 3.1.13: Territorial Restrictions Schedule 3.1.14: Pending or Threatened Claims Regarding Warranties in Excess of $100,000 Schedule 3.1.16(a): Owned Intellectual Property Schedule 3.1.16(d): Intellectual Property Litigation Schedule 3.1.16(e): List of Names and Marks; Contractual Restrictions Schedule 3.1.17: Insurance Policies; Claims Made within Last Two Years Schedule 3.1.18(a): Owned Real Property Schedule 3.1.18(b): Leases Schedule 3.1.19(b): Noncompliance with Environmental Permits and Laws Schedule 3.1.19(c): Actions Resulting in Liability or Obligation Schedule 3.1.19(d): Environmental Exceptions Schedule 3.1.20: Employees, Labor Matters, etc. Schedule 3.1.21(a): Employee Benefit Plans, etc. Schedule 3.1.21(c)(vi): List of Plans Providing Death or Survivor Benefits, Medical or Health Benefits Schedule 3.1.22: Breaches of Confidentiality Schedule 4.1.4: Names and Marks Under which Business Will be Conducted After Closing -----END PRIVACY-ENHANCED MESSAGE-----