UNITED STATES
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 (Date of earliest event reported): October 4, 2024
Vista Outdoor Inc.
(Exact name of registrant as specified in its charter)
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| Delaware | 001-36597 | 47-1016855 |
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
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| 1 Vista Way | Anoka | MN | 55303 |
| (Address of Principal Executive Offices) | | | (Zip Code) |
Registrant’s telephone number, including area code: (763) 433-1000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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| ☒ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12 |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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| Title of Each Class | | Trading Symbol(s) | | Name of each exchange on which registered |
| Common Stock, par value $.01 | | VSTO | | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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| Item 1.01. | Entry into a Material Definitive Agreement. |
Sixth Amendment to Agreement and Plan of Merger
As previously announced, on October 15, 2023, Vista Outdoor Inc. (“Vista Outdoor”) entered into an Agreement and Plan of Merger (the “Original CSG Merger Agreement”) with Revelyst, Inc. (“Revelyst”), CSG Elevate II Inc. (“CSG Merger Sub Parent”), CSG Elevate III Inc., a wholly owned subsidiary of CSG Merger Sub Parent (“CSG Merger Sub”), and, solely for the purposes of specific provisions therein, CZECHOSLOVAK GROUP a.s. (“CSG”, together with Vista Outdoor, Revelyst, CSG Merger Sub Parent and CSG Merger Sub, the “Parties”), pursuant to which, on the terms and conditions set forth therein and in accordance with the Delaware General Corporation Law (the “DGCL”), CSG Merger Sub will merge with and into Vista Outdoor with Vista Outdoor surviving the merger as a wholly owned subsidiary of CSG Merger Sub Parent (the “CSG Merger” and, together with the other transactions contemplated by the CSG Merger Agreement (as defined below), the “CSG Transaction”). On May 27, 2024, the Parties entered into the first amendment to the Original CSG Merger Agreement (the “First Amendment”), on June 23, 2024, the Parties entered into the second amendment to the Original CSG Merger Agreement (the “Second Amendment”), on July 7, 2024, the Parties entered into the third amendment to the Original CSG Merger Agreement (the “Third Amendment”), on July 21, 2024, the Parties entered into the fourth amendment to the Original CSG Merger Agreement (the “Fourth Amendment”) and on September 12, 2024, the Parties entered into the fifth amendment to the Original CSG Merger Agreement (the “Fifth Amendment”, and the Original CSG Merger Agreement, as amended by the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment and the Fifth Amendment, the “Fifth Amended CSG Merger Agreement”).
Pursuant to a Separation Agreement, dated as of October 15, 2023 (the “Separation Agreement”), entered into between Vista Outdoor and Revelyst simultaneously with the signing of the Original CSG Merger Agreement, Vista Outdoor will effect a separation pursuant to which, among other things, the businesses and operations of the Outdoor Products reportable segment of Vista Outdoor (the “Revelyst Business”) will be separated from the other businesses and operations of Vista Outdoor (the “Sporting Products Business”) and transferred to Revelyst (the “Separation”). Pursuant to the Fifth Amended CSG Merger Agreement, prior to the consummation of the CSG Merger, (a) pursuant to a Subscription Agreement to be entered into between CSG Merger Sub Parent and Vista Outdoor, CSG Merger Sub Parent would contribute $2,150,000,000 (the “Base Purchase Price”), subject to purchase price adjustments for cash and net working capital, to Vista Outdoor in exchange for shares of common stock, par value $0.01 per share, of Vista Outdoor (the “Vista Outdoor Common Stock”) and (b) immediately thereafter, Vista Outdoor would contribute the Base Purchase Price, subject to purchase price adjustments for cash, net working capital, debt, transaction expenses and taxes (the “Contribution Amount”), and the businesses and operations of the Revelyst Business to Revelyst (the “Contribution”). Following the completion of the foregoing, the CSG Merger will occur.
On the terms and subject to the conditions set forth in the Fifth Amended CSG Merger Agreement, (a) each share of Vista Outdoor Common Stock issued and outstanding immediately prior to the Effective Time (as defined in the Fifth Amended CSG Merger Agreement) (other than (i) any such shares of Vista Outdoor Common Stock held by Vista Outdoor, its subsidiaries or CSG Merger Sub Parent and (ii) any Appraisal Shares (as defined in the Fifth Amended CSG Merger Agreement)) would be converted into the right to receive (x) one fully paid and non-assessable share of common stock, par value $0.01 per share, of Revelyst (“Revelyst Common Stock”) and (y) $28.00 in cash (the “Cash Consideration”), in each case, per share of Vista Outdoor Common Stock and (b) immediately prior to the effectiveness of the CSG Merger, CSG Merger Sub Parent would purchase, and Vista Outdoor would sell to CSG Merger Sub Parent a number of shares of Revelyst Common Stock equal to 7.5% of the fully diluted outstanding shares of Revelyst Common Stock as of the CSG Merger Closing (as defined below) (after giving effect to the Contribution (as defined in the Fifth Amended CSG Merger Agreement) including, for the avoidance of doubt, the shares of Revelyst Common Stock to be transferred by Vista Outdoor to CSG Merger Sub Parent) for an aggregate purchase price of $150,000,000 (the “Revelyst Investment”), on the terms and subject to the conditions set forth in the stock purchase agreement attached to the Fifth Amended CSG Merger Agreement as Exhibit J thereto.
Following the closing of the CSG Merger (the “CSG Merger Closing”), Revelyst, holding only the Revelyst Business, will be an independent, publicly traded company, and Vista Outdoor, holding only the Sporting Products Business, will be a wholly owned subsidiary of CSG.
The Fifth Amended CSG Merger Agreement contains certain termination rights for Vista Outdoor and CSG Merger Sub Parent, including, among others, the right of either party to terminate the Fifth Amended CSG Merger Agreement if the CSG Merger is not consummated by October 15, 2024 (the “CSG Merger End Date”). The CSG Merger End Date would be extended to January 15, 2025 in the event that all closing conditions except for those relating to regulatory approvals have been satisfied by October 15, 2024; however, as previously disclosed, all regulatory approvals required under the Fifth Amended CSG Merger Agreement have been obtained, rendering this extension inapplicable.
On October 4, 2024, the Parties entered into the sixth amendment to the Original CSG Merger Agreement (the “Sixth Amendment”, and the Fifth Amended CSG Merger Agreement as amended by the Sixth Amendment, the “CSG Merger Agreement”). The Sixth Amendment:
1. increases the Base Purchase Price from $2,150,000,000 to $2,225,000,000;
2. changes the Cash Consideration from $28.00 to $25.75 in cash per share of Vista Outdoor Common Stock;
3. extends the CSG Merger End Date to December 11, 2024; and
4. eliminates the Revelyst Investment.
Revelyst Merger Agreement
On October 4, 2024, Vista Outdoor entered into an Agreement and Plan of Merger (the “Revelyst Merger Agreement”) with Revelyst, Olibre LLC (“SVP Parent”) and Cabin Ridge Inc., a wholly owned direct subsidiary of SVP Parent (“SVP Merger Sub”), pursuant to which, on the terms and conditions set forth therein and in accordance with the DGCL, SVP Merger Sub will merge with and into Revelyst with Revelyst surviving the merger as a wholly owned direct subsidiary of SVP Parent (the “Revelyst Merger” and, together with the other transactions contemplated by the Revelyst Merger Agreement, the “Revelyst Transaction”). Consummation of the Revelyst Transaction (the “Revelyst Merger Closing”) is subject to (a) completion of the CSG Merger, (b) receipt of certain required regulatory approvals and (c) other customary closing conditions.
On the terms and subject to the conditions set forth in the Revelyst Merger Agreement, which has been approved by the board of directors of Vista Outdoor, by the board of directors of Revelyst and by Vista Outdoor as sole stockholder of Revelyst, at the effective time of the Revelyst Merger (the “Revelyst Merger Effective Time”), each share of Revelyst Common Stock issued and outstanding immediately prior to the Revelyst Merger Effective Time (other than any such shares of Revelyst Common Stock held by Revelyst, its subsidiaries or SVP Parent) shall be converted into the right to receive an amount (the “Revelyst Merger Consideration”) equal to (a) the sum of (x) $1,125,000,000 plus (y) the Cash Adjustment Amount (as defined in the Revelyst Merger Agreement) plus (z) the Aggregate Option Exercise Price (as defined in the Revelyst Merger Agreement), divided by (b) the sum of (x) number of shares of Revelyst Common Stock issued and outstanding as of immediately prior to the effective time of the Revelyst Merger (other than any such shares of Revelyst Common Stock held by Revelyst, its subsidiaries or SVP Parent) plus (y) the number of shares of Revelyst Common Stock underlying each Revelyst equity award entitled to receive the Revelyst Merger Consideration as of immediately prior to the effective time of the Revelyst Merger. Management of Vista Outdoor currently estimates that, if the Revelyst Merger Closing were to occur on December 31, 2024, the per share consideration payable to holders of Revelyst Common Stock in accordance with the Revelyst Merger Agreement would be $19.25.
The Revelyst Merger Agreement provides that each equity award that is outstanding as of the Revelyst Merger Effective Time shall generally be treated as follows: (1) other than Revelyst Rollover RSUs (as defined below), each restricted stock unit that is subject solely to time-based vesting conditions (a “Revelyst RSU”) shall
vest and be cancelled in exchange for a lump sum cash payment equal to the product of (A) the number of shares of Revelyst Common Stock underlying such Revelyst RSU immediately prior to the Revelyst Merger Effective Time and (B) the Revelyst Merger Consideration; (2) each performance stock unit (a “Revelyst PSU”) shall vest and be cancelled in exchange for a lump sum cash payment equal to the product of (A) the number of shares of Revelyst Common Stock underlying such Revelyst PSU immediately prior to the Revelyst Merger Effective Time (assuming achievement of the applicable performance goals at specified levels) and (B) the Revelyst Merger Consideration; (3) each option to purchase Revelyst Common Stock (a “Revelyst Option”), whether vested or unvested, shall be cancelled in exchange for a lump sum cash payment equal to the difference between the Revelyst Merger Consideration and the exercise price per share of the Revelyst Option; and (4) each deferred stock unit, whether vested or unvested, shall be cancelled in exchange for a lump sum cash payment equal to the Revelyst Merger Consideration. The Revelyst Merger Agreement further provides that certain Revelyst RSUs held by employees will be converted into restricted cash awards, subject to the same terms and conditions as the corresponding Revelyst RSUs, including vesting terms, to the extent necessary to address adverse tax consequences to such employees and Revelyst under Sections 280G and 4999 of the Internal Revenue Code of 1986 (each, a “Revelyst Rollover RSU”).
Each of SVP Parent, SVP Merger Sub, Vista Outdoor and Revelyst have made customary representations, warranties and covenants in the Revelyst Merger Agreement, including, among others, covenants to use their respective reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary or advisable to consummate and make effective, in the most expeditious manner practicable, the Revelyst Transaction. In addition, Vista Outdoor and Revelyst have made customary covenants in the Revelyst Merger Agreement, including, among others, covenants during the period between the date of the Revelyst Merger Agreement and the Revelyst Merger Effective Time (i) to use reasonable best efforts to conduct the Revelyst Business in all material respects in the ordinary course of business consistent with past practice and, to the extent consistent therewith, use reasonable best efforts to preserve the Revelyst Business substantially intact, including using reasonable best efforts to maintain existing relationships with customers and suppliers and (ii) to refrain from taking certain types of actions without SVP Parent’s consent.
The consummation of the Revelyst Merger is subject to certain closing conditions, including, among other things: (i) any waiting period (or any extension thereof) applicable to the Revelyst Transaction under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 having been terminated or having expired and certain other regulatory approvals or consents having been obtained; (ii) the absence of legal restraints prohibiting the Revelyst Transaction; (iii) the CSG Merger having been consummated, the purchase price adjustment in connection with the CSG Merger having become final and binding and the related purchase price adjustment payments, if any, having been paid and certain actions required to be taken pursuant to the Amended and Restated Separation Agreement (as defined below) having been completed and (iv) other customary conditions specified in the Revelyst Merger Agreement. Following the execution of the Revelyst Merger Agreement, Vista Outdoor, in its capacity as the sole stockholder of Revelyst, approved the Revelyst Merger Agreement and the Revelyst Transaction at a meeting held for the purpose of obtaining such approval. No additional stockholder approval of Revelyst or Vista Outdoor is required.
The Revelyst Merger Agreement contains certain termination rights for Revelyst and SVP Parent, including, among others, the right of (i) either party to terminate the Revelyst Merger Agreement (A) if the Revelyst Merger is not consummated by February 4, 2025 (with such deadline extended to March 4, 2025 in the event that all closing conditions except for those relating to regulatory approvals have been satisfied by February 4, 2025) or (B) if the CSG Merger Agreement has been validly terminated and (ii) Revelyst to terminate the Revelyst Merger Agreement due to SVP Parent’s failure to consummate the Revelyst Merger when required pursuant to the terms of the Revelyst Merger Agreement.
If the Revelyst Merger Agreement is terminated under specified circumstances related to failure to obtain regulatory approval, SVP Parent’s failure to consummate the Revelyst Merger when required pursuant to the terms of the Revelyst Merger Agreement or SVP Parent’s or SVP Merger Sub’s breach or failure to perform in any respect its obligations under the Revelyst Merger Agreement, which uncured breach or failure would give rise to the failure of an applicable closing condition, Revelyst will be entitled to a termination fee of $71,110,000 from SVP Parent (the “SVP Parent Termination Fee”). If the Revelyst Merger Agreement is terminated under specified circumstances when the CSG Merger Agreement is also terminated and Vista Outdoor is required to pay to CSG the
Vista Outdoor Termination Fee (as defined in the CSG Merger Agreement) pursuant to the CSG Merger Agreement, SVP Parent will be entitled to a termination fee of $28,125,000 from Vista Outdoor.
In connection with the execution of the Revelyst Merger Agreement, pursuant to an equity commitment letter, dated October 4, 2024, certain affiliates of SVP Parent have committed to provide SVP Parent, on the terms and subject to the conditions set forth in the equity commitment letter, an aggregate equity commitment to fund the Revelyst Merger Consideration and other amounts required to be paid by SVP Parent or SVP Merger Sub under the Revelyst Merger Agreement. Pursuant to a limited guarantee, dated October 4, 2024, certain affiliates of SVP Parent have agreed to guarantee (i) the obligation of SVP Parent to pay the SVP Parent Termination Fee, (ii) certain reimbursement and interest payment obligations that may be owed by SVP Parent if the SVP Parent Termination Fee becomes payable and (iii) certain reimbursement obligations that may be owed by SVP Parent in connection with its financing arrangements for the Revelyst Transaction, in each case, pursuant to and in accordance with the terms and conditions of the Revelyst Merger Agreement.
Amended and Restated Separation Agreement
In connection with the CSG Transaction and the Revelyst Transaction, Vista Outdoor and Revelyst have agreed to amend and restate the Separation Agreement (as so amended and restated, the “Amended and Restated Separation Agreement”) to, among other things, (i) reallocate certain liabilities to be transferred to, assumed by or retained by Vista Outdoor and Revelyst in connection with the Separation, (ii) reflect certain changes to the timing and procedures for the preparation of the Closing Statement (as defined in the Separation Agreement) and estimates thereof, (iii) provide that the Contribution Amount will be increased if necessary to ensure that Revelyst shall have cash and cash equivalents of at least $60 million immediately following the Contribution and Revelyst’s deposit of the cash portion of the CSG Merger Consideration with the Exchange Agent in accordance with the CSG Merger Agreement and (iv) provide that, if the Revelyst Merger closes and Revelyst meets a specific financial performance measure for its 2028 fiscal year, Revelyst shall pay Vista Outdoor an earn-out payment of $25 million, in each case, in accordance with the Amended and Restated Separation Agreement.
The foregoing summaries of the Sixth Amendment, the Revelyst Merger Agreement and the Amended and Restated Separation Agreement are not complete and are qualified in their entirety by the full text of the Sixth Amendment, the Revelyst Merger Agreement and the Amended and Restated Separation Agreement, which are attached hereto as Exhibit 2.1, Exhibit 2.2 and Exhibit 2.3, respectively, and incorporated by reference herein.
The Sixth Amendment, the Revelyst Merger Agreement and the Amended and Restated Separation Agreement have been included to provide investors with information regarding their respective terms. They are not intended to provide any other factual information about Vista Outdoor, Revelyst, CSG Merger Sub Parent, SVP Parent or their respective subsidiaries or affiliates. The representations and warranties in the Sixth Amendment, the Revelyst Merger Agreement and the Amended and Restated Separation Agreement and the covenants contained in the Sixth Amendment, the Revelyst Merger Agreement and the Amended and Restated Separation Agreement were (or will be) made only for purposes of the Sixth Amendment, the Revelyst Merger Agreement and the Amended and Restated Separation Agreement, as applicable, and as of dates specified therein, are solely for the benefit of the parties to the Sixth Amendment, the Revelyst Merger Agreement and the Amended and Restated Separation Agreement, as applicable, and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the applicable agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the Sixth Amendment, the Revelyst Merger Agreement or the Amended and Restated Separation Agreement and should not rely on the representations, warranties or covenants therein or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date of the Sixth Amendment, the Revelyst Merger Agreement and the Amended and Restated Separation Agreement, which subsequent information may or may not be fully reflected in the public disclosures of Vista Outdoor or Revelyst.
Adjournment of Special Meeting of Vista Outdoor Stockholders
Vista Outdoor will adjourn the special meeting of stockholders (the “Vista Outdoor Stockholder Meeting”) convened for the purpose of voting on the proposal to adopt the CSG Merger Agreement, currently scheduled for October 9, 2024. The Vista Outdoor Stockholder Meeting will be adjourned to a later date as will be determined by the board of directors of Vista Outdoor.
Press Releases
On October 4, 2024, Vista Outdoor issued a press release announcing it had entered into the Revelyst Transaction, the Sixth Amendment and the Amended & Restated Separation Agreement. On October 4, 2024, Revelyst issued a press release announcing it had entered into the Revelyst Transaction. A copy of the respective press releases are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated by reference herein.
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| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
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Exhibit No. | | Exhibit |
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| 2.1 | | |
2.2 | | |
2.3 | | |
99.1 | | |
99.2 | | |
104 | | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document |
* | | Schedules have been omitted from Exhibits 2.2 and 2.3 pursuant to Item 601(b)(2) of Regulation S-K. The registrant agrees to furnish supplementally to the SEC a copy of any omitted schedule upon request by the SEC. |
Forward-Looking Statements
Some of the statements made and information contained in these materials, excluding historical information, are “forward-looking statements,” including those that discuss, among other things: Vista Outdoor Inc.’s (“Vista Outdoor”, “we”, “us” or “our”) plans, objectives, expectations, intentions, strategies, goals, outlook or other non-historical matters; projections with respect to future revenues, income, earnings per share or other financial measures for Vista Outdoor; and the assumptions that underlie these matters. The words “believe,” “expect,” “anticipate,” “intend,” “aim,” “should” and similar expressions are intended to identify such forward-looking statements. To the extent that any such information is forward-looking, it is intended to fit within the safe harbor for forward-looking information provided by the Private Securities Litigation Reform Act of 1995.
Numerous risks, uncertainties and other factors could cause our actual results to differ materially from the expectations described in such forward-looking statements, including the following: risks related to the CSG Transaction and risks related to the Revelyst Transaction including (i) the failure to receive, on a timely basis or otherwise, the required approval of the CSG Transaction by our stockholders, (ii) the possibility that any or all of the various conditions to the consummation of the CSG Transaction or the Revelyst Transaction may not be satisfied or
waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals), (iii) the possibility that competing offers or acquisition proposals may be made, (iv) the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement relating to the CSG Transaction or the Revelyst Transaction, including in circumstances which would require Vista Outdoor or Revelyst, as applicable, to pay a termination fee, (v) the effect of the announcement or pendency of the CSG Transaction or the Revelyst Transaction on our ability to attract, motivate or retain key executives and employees, our ability to maintain relationships with our customers, vendors, service providers and others with whom we do business, or our operating results and business generally, (vi) risks related to the CSG Transaction or the Revelyst Transaction diverting management’s attention from our ongoing business operations, (vii) that the CSG Transaction or the Revelyst Transaction may not achieve some or all of any anticipated benefits with respect to either business segment and that the CSG Transaction or the Revelyst Transaction may not be completed in accordance with our expected plans or anticipated timelines, or at all and (viii) that the Revelyst Merger Consideration cannot be determined until the consummation of the Revelyst Merger as it is subject to certain adjustments related to the net cash of Revelyst as of the closing of the Revelyst Merger and the management team’s current estimate of the Revelyst Merger Consideration may be higher or lower than the actual Revelyst Merger Consideration due to the actual cash flows prior to the closing of the Revelyst Merger or other factors; impacts from the COVID-19 pandemic on our operations, the operations of our customers and suppliers and general economic conditions; supplier capacity constraints, production or shipping disruptions or quality or price issues affecting our operating costs; the supply, availability and costs of raw materials and components; increases in commodity, energy, and production costs; seasonality and weather conditions; our ability to complete acquisitions, realize expected benefits from acquisitions and integrate acquired businesses; reductions in or unexpected changes in or our inability to accurately forecast demand for ammunition, accessories, or other outdoor sports and recreation products; disruption in the service or significant increase in the cost of our primary delivery and shipping services for our products and components or a significant disruption at shipping ports; risks associated with diversification into new international and commercial markets, including regulatory compliance; our ability to take advantage of growth opportunities in international and commercial markets; our ability to obtain and maintain licenses to third-party technology; our ability to attract and retain key personnel; disruptions caused by catastrophic events; risks associated with our sales to significant retail customers, including unexpected cancellations, delays, and other changes to purchase orders; our competitive environment; our ability to adapt our products to changes in technology, the marketplace and customer preferences, including our ability to respond to shifting preferences of the end consumer from brick and mortar retail to online retail; our ability to maintain and enhance brand recognition and reputation; our association with the firearms industry; others’ use of social media to disseminate negative commentary about us, our products, and boycotts; the outcome of contingencies, including with respect to litigation and other proceedings relating to intellectual property, product liability, warranty liability, personal injury, and environmental remediation; our ability to comply with extensive federal, state and international laws, rules and regulations; changes in laws, rules and regulations relating to our business, such as federal and state ammunition regulations; risks associated with cybersecurity and other industrial and physical security threats; interest rate risk; changes in the current tariff structures; changes in tax rules or pronouncements; capital market volatility and the availability of financing; our debt covenants may limit our ability to complete acquisitions, incur debt, make investments, sell assets, merge or complete other significant transactions; foreign currency exchange rates and fluctuations in those rates; general economic and business conditions in the United States and our markets outside the United States, including as a result of the war in Ukraine and the imposition of sanctions on Russia, the conflict in the Gaza strip, the COVID-19 pandemic or another pandemic, conditions affecting employment levels, consumer confidence and spending, conditions in the retail environment, and other economic conditions affecting demand for our products and the financial health of our customers.
You are cautioned not to place undue reliance on any forward-looking statements we make, which are based only on information currently available to us and speak only as of the date hereof. A more detailed description of risk factors that may affect our operating results can be found in Part 1, Item 1A, Risk Factors, of our Annual Report on Form 10-K for fiscal year 2024 and in the filings we make with the SEC from time to time. We undertake no obligation to update any forward-looking statements, except as otherwise required by law.
No Offer or Solicitation
This communication is neither an offer to sell, nor a solicitation of an offer to buy any securities, the solicitation of any vote, consent or approval in any jurisdiction pursuant to or in connection with the CSG Transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.
Additional Information and Where to Find It
These materials may be deemed to be solicitation material in respect of the CSG Transaction. In connection with the CSG Transaction, Revelyst, a subsidiary of Vista Outdoor, filed with the SEC on January 16, 2024 a registration statement on Form S-4 in connection with the proposed issuance of shares of common stock of Revelyst to Vista Outdoor stockholders pursuant to the CSG Transaction, which Form S-4 includes a proxy statement of Vista Outdoor that also constitutes a prospectus of Revelyst (the “proxy statement/prospectus”). INVESTORS AND STOCKHOLDERS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE PROXY STATEMENT/PROSPECTUS AND ANY AMENDMENTS AND SUPPLEMENTS THERETO, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE CSG TRANSACTION, THE REVELYST TRANSACTION AND THE PARTIES TO EACH TRANSACTION. The registration statement was declared effective by the SEC on March 22, 2024, and the definitive proxy statement/prospectus was mailed to each of our stockholders entitled to vote at the meeting relating to the approval of the CSG Transaction. In connection with the Sixth Amendment, the Amended and Restated Separation Agreement and the Revelyst Merger Agreement, Revelyst shall prepare and file with the SEC an amendment to the registration statement on Form S-4, which also constitutes a revised proxy statement/prospectus of Vista Outdoor. Investors and stockholders may obtain the proxy statement/prospectus and any other documents free of charge through the SEC’s website at www.sec.gov. Copies of the documents filed with the SEC by Vista Outdoor are available free of charge on our website at www.vistaoutdoor.com.
Participants in Solicitation
Vista Outdoor, Revelyst, CSG Elevate II Inc., CSG Elevate III Inc. and CZECHOSLOVAK GROUP a.s. and their respective directors, executive officers and certain other members of management and employees, under SEC rules, may be deemed to be “participants” in the solicitation of proxies from our stockholders in respect of the CSG Transaction. Information about our directors and executive officers is set forth in our proxy statement on Schedule 14A for our 2024 Annual Meeting of Stockholders, which was filed with the SEC on July 24, 2024, and subsequent statements of changes in beneficial ownership on file with the SEC. These documents are available free of charge through the SEC’s website at www.sec.gov. Additional information regarding the interests of potential participants in the solicitation of proxies in connection with the CSG Transaction, which may, in some cases, be different than those of our stockholders generally, is also included in the proxy statement/prospectus relating to the CSG Transaction.
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.
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| VISTA OUTDOOR INC. |
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| By: | /s/ Jung Choi |
| | Name: | Jung Choi |
| | Title: | Co-General Counsel & Secretary |
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| Date: October 7, 2024 | | | |
AMENDMENT NO. 6 TO AGREEMENT AND PLAN OF MERGER
This Amendment No. 6, dated October 4, 2024 (this “Amendment”), to the Merger Agreement (as defined below) is by and among Vista Outdoor Inc., a Delaware corporation (“Company”), Revelyst, Inc., a Delaware corporation and a direct wholly owned subsidiary of Company (“Outdoor Products”), CSG Elevate II Inc., a Delaware corporation (“Parent”), CSG Elevate III Inc., a Delaware corporation and a direct wholly owned subsidiary of Parent (“Merger Sub”), and Czechoslovak Group a.s., a joint stock company incorporated under the laws of the Czech Republic (“CSG” and, together with Company, Outdoor Products, Parent and Merger Sub, the “Parties”).
Each capitalized term used and not defined herein has the meaning set forth in the Merger Agreement.
WHEREAS, the Parties are parties to that certain Agreement and Plan of Merger, dated October 15, 2023, as amended on May 27, 2024, June 23, 2024, July 7, 2024, July 21, 2024 and September 12, 2024 (the “Merger Agreement”).
WHEREAS, the Merger Agreement currently contemplates (i) a Base Purchase Price of $2,150,000,000 and (ii) that the Merger Consideration is comprised of (A) one fully paid and non-assessable share of Outdoor Products Common Stock and (B) $28.00 (such cash amount, the “Cash Consideration”).
WHEREAS, the Merger Agreement also contemplates that, subject to the terms and conditions contained in the Revelyst Stock Purchase Agreement, substantially in the form attached as Exhibit J to the Merger Agreement (the “Revelyst Stock Purchase Agreement”), Purchaser shall purchase, and the Company shall sell to Parent a number of shares of Outdoor Products Common Stock equal to 7.5% of the fully diluted outstanding shares of Outdoor Products Common Stock as of the Closing (after giving effect to the Contribution including, for the avoidance of doubt, the shares of Outdoor Products Common Stock to be transferred by Company to Merger Sub Parent pursuant to the Revelyst Stock Purchase Agreement) for an aggregate purchase price of $150,000,000 (the “Revelyst Investment”).
WHEREAS, the Merger Agreement also contemplates that either Company or Parent may terminate the Merger Agreement if the Effective Time has not occurred on or before the End Date, which date is currently October 15, 2024, subject to the terms and conditions contained therein.
WHEREAS, the Merger Agreement further contemplates that the Closing shall take place on the third Business Day following the satisfaction or waiver of the conditions set forth in Article VII of the Merger Agreement (the “Closing Conditions”), subject to the terms and conditions contained therein.
WHEREAS, CSG has agreed to increase the Base Purchase Price from $2,150,000,000 to $2,225,000,000.
WHEREAS, the Parties wish to (i) change the amount of the Cash Consideration from $28.00 to $25.75, (ii) eliminate the Revelyst Investment, (iii) extend the End Date to December 11, 2024 and (iv) provide that the Closing shall take place on the earlier of (a) the third Business Day following the satisfaction or waiver of the Closing Conditions and (b) December 11, 2024, assuming the satisfaction or waiver of the Closing Conditions prior to the Closing.
WHEREAS, Section 8.04 of the Merger Agreement provides that any amendment to the Merger Agreement shall be valid only if set forth in an instrument in writing signed on behalf of each of the Parties.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties agree as follows:
1. Section 1.01(c) of the Merger Agreement is hereby amended and restated as follows:
(c) The number of shares of Outdoor Products Common Stock issued to Company pursuant to the Contribution (as defined in the Separation Agreement) shall equal (i) the number of shares of Company Common Stock outstanding on the Closing Date immediately following completion of the Internal Transactions (but excluding all shares of Company Common Stock to be canceled pursuant to Section 2.01(b) and all Appraisal Shares) minus (ii) the number of shares of Outdoor Products Common Stock outstanding at such time, such that the Merger Consideration distributed in accordance with Section 2.03 shall comprise all of the issued and outstanding shares of Outdoor Products Common Stock, all of which shall, immediately prior to such distribution, be held by Company.
2. Section 1.03 of the Merger Agreement is hereby amended and restated as follows:
Closing. The closing of the Merger (the “Closing”) shall take place remotely by exchange of documents and signatures (or their electronic counterparts) at 10:00 a.m., New York City time, on the earlier of (a) the third Business Day following the satisfaction (or, to the extent permitted by Law, waiver by the parties entitled to the benefit thereof) of the conditions set forth in Article VII (other than (i) the condition set forth in Section 7.01(d); provided that such condition is reasonably capable of being satisfied immediately prior to the Closing and (ii) those conditions that by their nature are to be satisfied at the Closing; provided that such conditions are reasonably capable of being satisfied at the Closing) and (b) December 11, 2024, provided that the satisfaction (or, to the extent permitted by Law, waiver by the parties entitled to the benefit thereof) of the conditions set forth in Article VII (other than (i)
the condition set forth in Section 7.01(d); provided that such condition is reasonably capable of being satisfied immediately prior to the Closing and (ii) those conditions that by their nature are to be satisfied at the Closing; provided that such conditions are reasonably capable of being satisfied at the Closing) shall have occurred prior to the Closing. Notwithstanding the foregoing, the Closing may be consummated at such other place, time or date as shall be agreed in writing between Company and Parent. The date on which the Closing actually occurs is referred to in this Agreement as the “Closing Date”.
3. Section 2.01(c)(ii) of the Merger Agreement is hereby amended by replacing the reference to “$28.00” with a reference to “$25.75”.
4. Section 2.03(a)(i) of the Merger Agreement is hereby amended and restated as follows:
(i) Company shall deposit, or shall cause to be deposited, with the Agent for the benefit of the holders of the shares of Company Common Stock, for exchange in accordance with this Article II through the Agent, certificates or evidence of shares in book-entry form representing the shares of Outdoor Products Common Stock to be distributed as Merger Consideration (being all of the issued and outstanding shares of Outdoor Products Common Stock at such time, all of which will be held by Company immediately prior to such deposit)
5. Section 8.01(b)(i) of the Merger Agreement is hereby amended and restated as follows:
(i) if the Effective Time has not occurred on or before December 11, 2024 (the “End Date”); provided that the right to terminate this Agreement pursuant to this Section 8.01(b)(i) shall not be available to a party if the failure of the Effective Time to occur on or before the End Date is primarily due to the breach by such party of any Transaction Document (including, in the case of Company, Outdoor Products, and in the case of Parent, Guarantor or Merger Sub).
6. Section 9.03 of the Merger Agreement is hereby amended by:
(i) replacing the existing defined term “Contribution Amount” with the following definition:
“Contribution Amount” means (A) the Subscription Amount minus (B) Estimated Closing Debt plus (C) Estimated Closing Non-Cash Debt minus (D) Estimated Transaction Expenses minus (E) Estimated Closing Taxes.
(ii) replacing the existing defined term “Base Purchase Price” with the following definition:
“Base Purchase Price” means $2,225,000,000.
(iii) deleting the definitions of “Revelyst Stock Purchase Agreement” and “Revelyst Stock Purchase Agreement Purchase Price”.
7. Article VI of the Merger Agreement is hereby amended by deleting Section 6.20.
8. The Table of Contents of the Merger Agreement shall be amended by deleting the reference to Exhibit J.
9. The Merger Agreement shall be amended by removing Exhibit J.
10. Sections 9.05, 9.08, 9.10(a), 9.13(a) and 9.13(c) of the Merger Agreement shall apply to this Amendment, mutatis mutandis.
[Signature Page Follows]
IN WITNESS WHEREOF, each of the Parties has caused this Amendment to be executed as of the date first written above.
| | | | | | | | | | | |
| VISTA OUTDOOR INC. |
| | | |
| | | |
| | By: | /s/ Jason Vanderbrink |
| | Name: | Jason Vanderbrink |
| | Title: | Co-Chief Executive Officer |
| | | |
| | By: | /s/ Eric Nyman |
| | Name: | Eric Nyman |
| | Title: | Co-Chief Executive Officer |
| | | |
| | | |
| REVELYST, INC. |
| | | |
| | | |
| | By: | /s/ Eric Nyman |
| | Name: | Eric Nyman |
| | Title: | Chief Executive Officer |
| | | | | | | | | | | |
| CSG ELEVATE II INC. |
| | | |
| | | |
| | By: | /s/ Ladislav Štorek |
| | Name: | Ladislav Štorek |
| | Title: | Officer |
| | | |
| | | |
| CSG ELEVATE III INC. |
| | | |
| | | |
| | By: | /s/ Ladislav Štorek |
| | Name: | Ladislav Štorek |
| | Title: | Officer |
| | | |
| | | |
| CZECHOSLOVAK GROUP a.s. |
| | | |
| | | |
| | By: | /s/ Ladislav Štorek |
| | Name: | Ladislav Štorek |
| | Title: | Vice-Chairman of the Board |
| | | |
| | By: | /s/ Zdeněk Jurák |
| | Name: | Zdeněk Jurák |
| | Title: | Member of the Board |
AGREEMENT AND PLAN OF MERGER
Dated October 4, 2024
Among
VISTA OUTDOOR INC.
REVELYST, INC.
CABIN RIDGE INC.
And
OLIBRE LLC
TABLE OF CONTENTS
| | | | | | | | | | | | | | |
| | | | Page |
| | | | |
ARTICLE I THE MERGER | 2 |
| | | | |
| Section 1.01 | | [Reserved] | 2 |
| | | | |
| Section 1.02 | | The Merger | 2 |
| | | | |
| Section 1.03 | | Closing | 2 |
| | | | |
| Section 1.04 | | Effective Time | 2 |
| | | | |
| Section 1.05 | | Effects of the Merger | 2 |
| | | | |
| Section 1.06 | | Certificate of Incorporation and Bylaws of the Surviving Corporation | 2 |
| | | | |
| Section 1.07 | | Directors and Officers of the Surviving Corporation | 3 |
| | | | |
| ARTICLE II CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES | 3 |
| | | | |
| Section 2.01 | | Effect on Capital Stock | 3 |
| | | | |
| Section 2.02 | | Agent | 4 |
| | | | |
| Section 2.03 | | Distribution of Merger Consideration | 4 |
| | | | |
| Section 2.04 | | Treatment of Company Equity Awards; Treatment of Company Employee Stock Purchase Plan | 6 |
| | | | |
| Section 2.05 | | Payments With Respect to Company Equity Awards | 7 |
| | | | |
| Section 2.06 | | Withholding Rights | 8 |
| | | | |
| ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB | 8 |
| | | | |
| Section 3.01 | | Organization, Standing and Power | 8 |
| | | | |
| Section 3.02 | | Ownership and Operations of Parent and Merger Sub | 9 |
| | | | |
| Section 3.03 | | Authority; Execution and Delivery; Enforceability | 9 |
| | | | |
| Section 3.04 | | No Conflicts; Governmental Approvals | 10 |
| | | | |
| Section 3.05 | | Information Supplied | 11 |
| | | | |
| Section 3.06 | | No Ownership of Company Capital Stock | 11 |
| | | | |
| Section 3.07 | | Certain Arrangements | 11 |
| | | | |
| Section 3.08 | | Financing | 12 |
| | | | |
| Section 3.09 | | Limited Guarantee | 13 |
| | | | |
| Section 3.10 | | Brokers | 13 |
| | | | |
| Section 3.11 | | Solvency | 13 |
| | | | |
| Section 3.12 | | Foreign Persons | 14 |
| | | | |
| Section 3.13 | | Interest in Competitors | 14 |
| | | | |
| ARTICLE IV REPRESENTATIONS AND WARRANTIES OF COMPANY | 15 |
| | | | |
| | | | | | | | | | | | | | |
| Section 4.01 | | Organization, Standing and Power | 15 |
| | | | |
| Section 4.02 | | Company Subsidiaries; Equity Interests | 16 |
| | | | |
| Section 4.03 | | Capital Structure of Company | 16 |
| | | | |
| Section 4.04 | | Authority; Execution and Delivery; Enforceability | 17 |
| | | | |
| Section 4.05 | | No Conflicts; Governmental Approvals | 18 |
| | | | |
| Section 4.06 | | Financial Statements; Undisclosed Liabilities | 19 |
| | | | |
| Section 4.07 | | Information Supplied | 19 |
| | | | |
| Section 4.08 | | Absence of Certain Changes or Events | 20 |
| | | | |
| Section 4.09 | | Taxes | 20 |
| | | | |
| Section 4.10 | | Employee Benefit Matters | 23 |
| | | | |
| Section 4.11 | | Labor Matters | 26 |
| | | | |
| Section 4.12 | | Litigation | 27 |
| | | | |
| Section 4.13 | | Compliance with Applicable Laws; Permits | 28 |
| | | | |
| Section 4.14 | | Environmental Matters | 30 |
| | | | |
| Section 4.15 | | Real Property | 32 |
| | | | |
| Section 4.16 | | Intellectual Property and Data Privacy | 33 |
| | | | |
| Section 4.17 | | Material Contracts; Intercompany Contracts | 35 |
| | | | |
| Section 4.18 | | Government Contracts | 38 |
| | | | |
| Section 4.19 | | Brokers | 39 |
| | | | |
| Section 4.20 | | Tangible Personal Property | 39 |
| | | | |
| Section 4.21 | | Product and Service Warranty and Liability; Safety | 39 |
| | | | |
| Section 4.22 | | Insurance | 40 |
| | | | |
| Section 4.23 | | Top Customers and Top Vendors | 40 |
| | | | |
| Section 4.24 | | Separation Agreement | 41 |
| | | | |
| Section 4.25 | | Sufficiency of Assets | 41 |
| | | | |
| Section 4.26 | | Inventory | 41 |
| | | | |
| ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS | 42 |
| | | | |
| Section 5.01 | | Conduct of Business by Company | 42 |
| | | | |
| Section 5.02 | | No Control of Company Business | 47 |
| | | | |
| Section 5.03 | | Notices | 47 |
| | | | |
| Section 5.04 | | Vista Outdoor Obligations | 47 |
| | | | |
| ARTICLE VI ADDITIONAL AGREEMENTS | 47 |
| | | | |
| Section 6.01 | | Proxy Statement and Form S-4 | 47 |
| | | | |
| Section 6.02 | | [Reserved] | 48 |
| | | | |
| Section 6.03 | | Access to Information; Confidentiality | 48 |
| | | | | | | | | | | | | | |
| | | | |
| Section 6.04 | | Required Efforts | 49 |
| | | | |
| Section 6.05 | | Directors’ and Officers’ Indemnification; Liability Insurance | 52 |
| | | | |
| Section 6.06 | | Fees and Expenses | 53 |
| | | | |
| Section 6.07 | | Public Announcements | 54 |
| | | | |
| Section 6.08 | | Section 16 Matters | 54 |
| | | | |
| Section 6.09 | | Tax Matters | 54 |
| | | | |
| Section 6.10 | | [Reserved] | 54 |
| | | | |
| Section 6.11 | | Company Stockholder Meeting | 54 |
| | | | |
| Section 6.12 | | Transaction Litigation | 55 |
| | | | |
| Section 6.13 | | Financing | 55 |
| | | | |
| Section 6.14 | | [Reserved] | 58 |
| | | | |
| Section 6.15 | | Post-Closing Compensation Matters | 58 |
| | | | |
| Section 6.16 | | R&W Insurance Policy | 60 |
| | | | |
| Section 6.17 | | Reorganization | 60 |
| | | | |
| Section 6.18 | | [Reserved] | 60 |
| | | | |
| Section 6.19 | | [Reserved] | 60 |
| | | | |
| Section 6.20 | | Stock Exchange Delisting; Exchange Act Deregistration | 60 |
| | | | |
| Section 6.21 | | CSG-Vista Outdoor Merger Agreement | 61 |
| | | | |
| Section 6.23 | | Cash Adjustment Amount | 61 |
| | | | |
| ARTICLE VII CONDITIONS PRECEDENT | 61 |
| | | | |
| Section 7.01 | | Conditions to Each Party’s Obligation To Effect the Merger | 61 |
| | | | |
| Section 7.02 | | Conditions to Obligations of Company To Effect the Merger | 62 |
| | | | |
| Section 7.03 | | Conditions to Obligations of Parent and Merger Sub To Effect the Merger | 62 |
| | | | |
| Section 7.04 | | Frustration of Closing Conditions | 63 |
| | | | |
| ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER | 63 |
| | | | |
| Section 8.01 | | Termination | 63 |
| | | | |
| Section 8.02 | | Effect of Termination | 65 |
| | | | |
| Section 8.03 | | Termination Fees | 65 |
| | | | |
| Section 8.04 | | Amendment | 67 |
| | | | |
| Section 8.05 | | Extension; Waiver | 67 |
| | | | |
| ARTICLE IX GENERAL PROVISIONS | 68 |
| | | | |
| Section 9.01 | | Nonsurvival of Representations and Warranties and Covenants and Agreements | 68 |
| | | | | | | | | | | | | | |
| | | | |
| Section 9.02 | | Notices | 68 |
| | | | |
| Section 9.03 | | Definitions | 70 |
| | | | |
| Section 9.04 | | Headings | 87 |
| | | | |
| Section 9.05 | | Interpretation | 87 |
| | | | |
| Section 9.06 | | Disclosure Letters | 88 |
| | | | |
| Section 9.07 | | Severability | 89 |
| | | | |
| Section 9.08 | | Counterparts | 89 |
| | | | |
| Section 9.09 | | Entire Agreement; No Third-Party Beneficiaries; No Other Representations or Warranties | 89 |
| | | | |
| Section 9.10 | | Governing Law | 90 |
| | | | |
| Section 9.11 | | Assignment | 90 |
| | | | |
| Section 9.12 | | Enforcement | 91 |
| | | | |
| Section 9.13 | | Jurisdiction | 91 |
| | | | |
| Section 9.14 | | Lender Limitations | 92 |
| | | | |
| Section 9.15 | | [Reserved] | 94 |
| | | | |
| ARTICLE X REPRESENTATIONS AND WARRANTIES OF VISTA OUTDOOR | 94 |
| | | | |
| Section 10.02 | | Representations and Warranties of Vista Outdoor | 94 |
Annex I Glossary of Defined Terms
Exhibit A Certificate of Incorporation of the Surviving Corporation
Exhibit B Bylaws of the Surviving Corporation
THIS AGREEMENT AND PLAN OF MERGER, dated October 4, 2024 (this “Agreement”), is among VISTA OUTDOOR INC., a Delaware corporation (“Vista Outdoor”), REVELYST, INC. (the “Company”), OLIBRE LLC, a Delaware limited liability company (“Parent”), and CABIN RIDGE INC., a Delaware corporation and a wholly owned direct Subsidiary of Parent (“Merger Sub”).
WHEREAS, Vista Outdoor is currently engaged in the Company Business and the Vista Outdoor Business;
WHEREAS, upon the terms and subject to the conditions of that certain Amended & Restated Separation Agreement by and between Vista Outdoor and Company, dated as of the date hereof (the “Separation Agreement”), Vista Outdoor shall effect the Separation pursuant to which, among other things, the assets and liabilities of the Company Business will be transferred to Company and thereby separated from Vista Outdoor Business;
WHEREAS, upon the terms and subject to the conditions of that certain Agreement and Plan of Merger, among Vista Outdoor, Company, CSG Elevate II Inc., a Delaware corporation (“CSG Purchaser”), CSG Elevate III Inc., a Delaware corporation and a direct wholly owned Subsidiary of CSG Purchaser (“CSG Merger Sub”), and, solely for the purposes of certain provisions set forth therein, CZECHOSLOVAK GROUP a.s. (“CSG”), a joint stock company incorporated under the laws of the Czech Republic, dated October 15, 2023, as amended by those certain amendments dated May 27, 2024, June 23, 2024, July 7, 2024, July 21, 2024 and September 12, 2024 (such agreement, as amended, the “CSG-Vista Outdoor Merger Agreement”), (i) CSG Merger Sub shall be merged with and into Vista Outdoor (the “CSG-Vista Outdoor Merger”), with Vista Outdoor surviving the CSG-Vista Outdoor Merger and becoming a wholly owned subsidiary of CSG Purchaser and (ii) except as otherwise set forth therein, each share of Vista Outdoor Common Stock issued and outstanding immediately prior to the CSG-Vista Outdoor Merger shall be converted into the right to receive the CSG-Vista Outdoor Merger Consideration;
WHEREAS, concurrently with the execution of this Agreement, as an inducement to and condition of Company’s willingness to enter into this Agreement, the parties listed on Section 3.09 of the Parent Disclosure Letter (each, a “Guarantor” and, together, the “Guarantors”) have duly executed and delivered to Company a limited guarantee, dated as of the date of this Agreement, in favor of Company (the “Limited Guarantee”), guaranteeing certain of Parent’s and Merger Sub’s obligations under this Agreement as more fully set forth in the Limited Guarantee; and
WHEREAS, concurrently with the execution of this Agreement, as an inducement to and condition of Company’s willingness to enter into this Agreement, Parent has obtained the Equity Financing Commitment;
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows:
ARTICLE I
THE MERGER
Section 1.01 [Reserved].
Section 1.02 The Merger. Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time, Merger Sub shall be merged with and into Company (the “Merger”). As a result of the Merger, at the Effective Time, the separate corporate existence of Merger Sub shall cease and Company shall continue as the surviving corporation in the Merger. Company, as the surviving corporation following the Merger, is sometimes referred to in this Agreement as the “Surviving Corporation”.
Section 1.03 Closing. The closing of the Merger (the “Closing”) shall take place remotely by exchange of documents and signatures (or their electronic counterparts) at 10:00 a.m., New York City time, on the third Business Day following the satisfaction (or, to the extent permitted by Law, waiver by the parties entitled to the benefit thereof) of the conditions set forth in Article VII (other than those conditions that by their nature are to be satisfied at the Closing; provided that such conditions are reasonably capable of being satisfied at the Closing). Notwithstanding the foregoing, the Closing may be consummated at such other place, time or date as shall be agreed in writing between Company and Parent. The date on which the Closing actually occurs is referred to in this Agreement as the “Closing Date”.
Section 1.04 Effective Time. On the Closing Date, Company shall file a certificate of merger (the “Certificate of Merger”) with the Secretary of State of the State of Delaware executed in accordance with, and in such form as is required by, the relevant provisions of the DGCL, and shall make all other filings or recordings required under the DGCL in connection with the Merger. The Merger shall become effective at such time as the Certificate of Merger is duly filed with such Secretary of State, or at such later time as Company and Parent shall agree and specify in the Certificate of Merger in accordance with the DGCL. The time the Merger becomes effective is referred to in this Agreement as the “Effective Time”.
Section 1.05 Effects of the Merger. The Merger shall have the effects set forth in this Agreement and in Section 259 of the DGCL.
Section 1.06 Certificate of Incorporation and Bylaws of the Surviving Corporation.
(a) Subject to Section 6.05, at the Effective Time, the certificate of incorporation of Company, as in effect immediately prior to the Effective Time, shall, by virtue of the Merger, be amended and restated in its entirety, in the form set forth in Exhibit A, and as so amended and restated shall be the certificate of incorporation of the Surviving Corporation until thereafter changed or amended as provided therein or by applicable Law. Each of Company, Merger Sub and Parent shall take all action necessary to carry out the actions contemplated by this Section 1.06(a).
(b) Subject to Section 6.05, at the Effective Time, the bylaws of Company, as in effect immediately prior to the Effective Time, shall, by virtue of the Merger, be amended and restated in their entirety, in the form set forth in Exhibit B, and as so amended and restated shall be the bylaws of the Surviving Corporation, until thereafter changed or amended as provided therein or by applicable Law. Each of Company, Merger Sub and Parent shall take all action necessary to carry out the actions contemplated by this Section 1.06(b).
Section 1.07 Directors and Officers of the Surviving Corporation. The directors of Merger Sub immediately prior to the Effective Time shall be the directors of the Surviving Corporation, in each case until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be. The officers of Merger Sub immediately prior to the Effective Time shall be the officers of the Surviving Corporation, in each case until the earlier of their resignation or removal or until their respective successors are duly elected or appointed and qualified, as the case may be. Each of Company, Merger Sub and Parent shall take all action necessary to implement the provisions of this Section 1.07.
ARTICLE II
CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES
Section 2.01 Effect on Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of Company, Parent, Merger Sub or the holder of any shares or securities of Company, Parent or Merger Sub:
(a) each share of common stock, par value $0.01 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into one fully paid and non-assessable share of common stock, par value $0.01 per share, of the Surviving Corporation;
(b) each share of common stock, par value $0.01 per share, of Company (“Company Common Stock”) that is owned by Company, any of its Subsidiaries or Parent (in each case, if any) immediately prior to the Effective Time shall no longer be outstanding and shall be canceled and shall cease to exist, and no consideration shall be delivered in exchange therefor; and
(c) subject to Section 2.03, each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than any shares to be canceled in accordance with Section 2.01(b)) shall be converted into the right to receive the Merger Consideration in cash. All such shares of Company Common Stock, when so converted, shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and each holder of a certificate (a “Certificate”) or evidence of shares in book-entry form that, in each case, immediately prior to the Effective Time represented any such shares of Company Common Stock shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration upon the surrender of such Certificate (or evidence of shares of Company Common Stock held in book-entry form) in accordance with Section 2.03, without interest. The
right of such holders of shares of Company Common Stock to receive the Merger Consideration shall be subject to and reduced by the amount of any withholding pursuant to Section 2.06.
Section 2.02 Agent. Parent shall appoint (i) Computershare Trust Company, N.A. (or one of its Affiliates) or (ii) another bank or trust company reasonably approved by Company, to act as agent for the distribution of the Merger Consideration as contemplated by this Article II (the “Agent”) pursuant to the terms of a paying agent agreement (or similar agreement) among Agent and Parent, which agreement shall be on terms reasonably acceptable to Company and Parent.
Section 2.03 Distribution of Merger Consideration.
(a) Deposit of Merger Consideration. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited (and, if directed by Parent, Company shall deposit an amount equal to the Cash Adjustment Amount (provided that the Cash Adjustment Amount is a positive number)), with the Agent for the benefit of the holders of the shares of Company Common Stock, for exchange in accordance with this Article II through the Agent, cash sufficient to pay the aggregate Merger Consideration. All such cash deposited with the Agent for purposes of paying the Merger Consideration pursuant to this Article II is hereinafter referred to as the “Merger Exchange Fund”. For the avoidance of doubt, (i) in no event shall Parent be required to deposit more than the Base Purchase Price with the Agent and (ii) in the event that Company fails to deposit the entire Cash Adjustment Amount with the Agent (if so directed by Parent), then the Revelyst Purchase Price shall be reduced by the amount of such deficit.
(b) Letter of Transmittal. As promptly as practicable after the Effective Time, Parent shall cause the Agent to mail to each holder of record of Company Common Stock a form of letter of transmittal (the “Letter of Transmittal”) (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates (or shares of Company Common Stock held in book-entry form) shall pass, only upon delivery of the Certificates (or shares of Company Common Stock held in book-entry form) to the Agent and shall be in such form and have such other provisions (including customary provisions with respect to delivery of an “agent’s message” with respect to shares held in book-entry form) as Parent may reasonably specify), together with instructions thereto. Prior to causing the Agent to mail the Letter of Transmittal, Parent shall give Company and its counsel a reasonable opportunity to review the form of Letter of Transmittal and the form of Letter of Transmittal shall be reasonably acceptable to Company and Parent.
(c) Merger Consideration Received in Connection with Exchange. Upon (i) in the case of shares of Company Common Stock represented by a Certificate, the surrender of such Certificate for cancelation to the Agent or (ii) in the case of shares of Company Common Stock held in book-entry form, the receipt of an “agent’s message” by the Agent, in each case together with the Letter of Transmittal, duly, completely and validly executed in accordance with the instructions thereto, and such other documents as may reasonably be required by the Agent, the holder of such shares of Company Common Stock shall be entitled to receive in exchange
therefor the Merger Consideration which the holder of such shares of Company Common Stock has the right to receive pursuant to Section 2.01. In the event of a transfer of ownership of Company Common Stock which is not registered in the transfer records of Company, the proper Merger Consideration pursuant to Section 2.01 may be issued to a transferee if the Certificate representing such Company Common Stock (or, if such Company Common Stock is held in book-entry form, proper evidence of such transfer) is presented to the Agent, accompanied by all documents required to evidence and effect such transfer and by evidence that any applicable stock transfer Taxes have been paid. Until surrendered as contemplated by this Section 2.03(c), each share of Company Common Stock, and any Certificate with respect thereto, shall be deemed at any time from and after the Effective Time to represent only the right to receive upon such surrender the Merger Consideration which the holders of shares of Company Common Stock were entitled to receive in respect of such shares pursuant to Section 2.01. No interest shall be paid or shall accrue on any cash payable upon surrender of any Certificate (or shares of Company Common Stock held in book-entry form).
(d) [Reserved].
(e) No Further Ownership Rights in Company Common Stock. The cash paid in accordance with the terms of this Article II upon conversion of any shares of Company Common Stock shall be deemed to have been distributed and paid in full satisfaction of all rights pertaining to such shares of Company Common Stock. From and after the Effective Time, the stock transfer books of Company shall be closed and thereafter there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of shares of Company Common Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, any Certificates formerly representing shares of Company Common Stock (or shares of Company Common Stock held in book-entry form) are presented to the Surviving Corporation or the Agent for any reason, they shall be canceled and exchanged as provided in this Article II.
(f) [Reserved].
(g) Termination of Merger Exchange Fund. Any portion of the Merger Exchange Fund (including any interest or other income received with respect thereto) that remains undistributed to holders of Company Common Stock for 180 days after the Effective Time shall be delivered to the Surviving Corporation, upon demand, and any holder of Company Common Stock who has not theretofore complied with this Article II shall thereafter look only to the Surviving Corporation for payment of its claim for Merger Consideration to which such holder is entitled pursuant to this Article II, in each case without any interest thereon.
(h) No Liability. None of Company, the Surviving Corporation, Parent, Merger Sub or the Agent shall be liable to any Person in respect of any portion of the Merger Exchange Fund or the Merger Consideration delivered to a Public Official pursuant to any applicable abandoned property, escheat or similar Law. Any portion of the Merger Exchange Fund which remains undistributed to the holders of Certificates (or shares of Company Common Stock held in book-entry form) for two years after the Effective Time (or immediately prior to
such earlier date on which the Merger Exchange Fund would otherwise escheat to, or become the property of, any Governmental Authority), shall, to the extent permitted by applicable Law, become the property of the Surviving Corporation, free and clear of all claims or interest of any Person previously entitled thereto.
(i) Investment of Merger Exchange Fund. The Agent shall invest any cash in the Merger Exchange Fund as directed by Parent.
(j) Lost Certificates. If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by Parent, the posting by such Person of a bond, in such reasonable and customary amount as Parent may direct, as indemnity against any claim that may be made against Parent or the Surviving Corporation with respect to such Certificate, the Agent will issue, in exchange for such lost, stolen or destroyed Certificate, the Merger Consideration.
Section 2.04 Treatment of Company Equity Awards; Treatment of Company Employee Stock Purchase Plan. Prior to the Effective Time (but following the consummation of the CSG-Vista Outdoor Merger), the Board of Directors of Company (or if appropriate, any committee administering the Company Stock Plan or Company ESPP) shall adopt resolutions and take such other actions as may be required to provide for the following:
(a) Each Company RSU that is outstanding immediately prior to the Effective Time, and which is a Company Cash-out RSU, shall, as of the Effective Time, vest and be canceled and the holder thereof shall then become entitled to receive solely, in full satisfaction of the rights of the holder thereof, a lump-sum cash payment, without interest, equal to the product, rounded to the nearest cent, of (i) the number of shares of Company Common Stock underlying such Company RSU immediately prior to the Effective Time and (ii) the Merger Consideration. Each Company RSU that is a Company Rollover RSU shall, as of the Effective Time, be canceled and converted into a time-based restricted cash award (each, a “Converted Cash Award”) representing the right to receive an aggregate amount of cash, without interest, equal to the product, rounded to the nearest cent, of (i) the number of shares of Company Common Stock underlying such Company RSU as of immediately prior to the Effective Time and (ii) the Merger Consideration, with the same terms and conditions, including with respect to vesting (including any accelerated vesting provisions, including under any Company Benefit Plan applicable to such Company RSU), as were applicable to the corresponding Company RSU immediately prior to the Effective Time. As of the Effective Time, all Company RSUs shall cease to be outstanding and shall automatically terminate other than with respect to the restrictive covenants contained therein, and each holder of a Company RSU shall cease to have any rights with respect thereto, except the right to receive the payments contemplated by this Section 2.04(a) in respect thereof.
(b) Except as provided in Section 2.04(b) of the Company Disclosure Letter, each Company PSU that is outstanding immediately prior to the Effective Time shall, as of the Effective Time, vest and be canceled and the holder thereof shall then become entitled to receive solely, in full satisfaction of the rights of the holder thereof, a lump-sum cash payment, without
interest, equal to the product, rounded to the nearest cent, of (i) the number of shares of Company Common Stock underlying such Company PSU immediately prior to the Effective Time (assuming achievement of the applicable performance goals at the level set forth in Section 2.04(b) of the Company Disclosure Letter) and (ii) the Merger Consideration. As of the Effective Time, all Company PSUs shall cease to be outstanding and shall automatically terminate other than with respect to the restrictive covenants contained therein, and each holder of a Company PSU shall cease to have any rights with respect thereto, except the right to receive the payments contemplated by this Section 2.04(b) in respect thereof.
(c) At the Effective Time, each Company Option, whether vested or unvested, shall, as of the Effective Time, be canceled and the holder thereof shall then become entitled to receive solely, in full satisfaction of the rights of such holder with respect thereto, a lump-sum cash payment, rounding down to the nearest cent and without interest, equal to the product of (i) the number of shares of Company Common Stock for which such Company Option has not been exercised and (ii) the excess, if any, of the Merger Consideration over the exercise price per share of such Company Option; provided that, for the avoidance of doubt, any Company Option that has an exercise price per share that is greater than or equal to the Merger Consideration shall be canceled at the Effective Time for no consideration or payment. As of the Effective Time, all Company Options shall cease to be outstanding and shall automatically terminate other than with respect to the restrictive covenants contained therein, and each holder of a Company Option shall cease to have any rights with respect thereto, except the right to receive the payments contemplated by this Section 2.04(c) in respect thereof.
(d) At the Effective Time, each Company DSU, whether vested or unvested, shall, automatically and without any required action on the part of the holder thereof, be canceled in exchange for the right to receive a cash payment from Parent or the Surviving Corporation equal to the sum of (i) the number of shares of Company Common Stock underlying such Company DSU immediately prior to the Effective Time, multiplied by (ii) the Merger Consideration. As of the Effective Time, all Company DSUs shall cease to be outstanding and shall automatically terminate, and each holder of a Company DSU shall cease to have any rights with respect thereto, except the right to receive the payments contemplated by this Section 2.04(d) in respect thereof.
(e) [Reserved].
(f) No Offering Period (as defined in the Company ESPP) under the Company ESPP shall be commenced after the date of this Agreement and the Company ESPP shall terminate in its entirety on the Closing Date and no further rights shall be granted or exercised under the Company ESPP thereafter.
Section 2.05 Payments With Respect to Company Equity Awards. Promptly after the Effective Time (but in any event, no later than the first payroll date that occurs more than five Business Days after the Effective Time, other than with respect to the Converted Cash Awards), the Surviving Corporation or its applicable Affiliate shall pay through its payroll systems (or, if a payroll systems payment is not reasonably practicable, by wire transfer or such other method as
Company typically utilizes for such payments) the amounts due pursuant to Sections 2.04(a), 2.04(b), 2.04(c) and 2.04(d); provided, however, that (i) each Company DSU shall be paid in accordance with the applicable holder’s election with respect to the timing of such payment, (ii) each Converted Cash Award shall be paid by the Surviving Corporation or its applicable Affiliate through its payroll systems in accordance with the vesting and settlement terms of such Converted Cash Award (but in any event, no later than the first payroll date that occurs more than five Business Days after the applicable vesting date(s)) and (iii) any such payments will be less applicable Tax withholdings.
Section 2.06 Withholding Rights. Each of the parties to this Agreement and the Agent (without duplication) shall be entitled to deduct and withhold (or cause to be deducted and withheld) from the amounts otherwise payable pursuant to this Agreement such amounts as may be required to be deducted and withheld with respect to the making of such payments under applicable Law. Amounts deducted and withheld pursuant to this Section 2.06 and paid over to the appropriate Governmental Authority shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub, jointly and severally, represent and warrant to Company and Vista Outdoor that, except as disclosed in the manner contemplated in Section 9.06, in the letter, dated as of the date of this Agreement, from Parent to Company (the “Parent Disclosure Letter”):
Section 3.01 Organization, Standing and Power.
(a) Each of Parent and Merger Sub is duly organized, validly existing and in good standing under the Laws of the State of Delaware. Each of Parent and Merger Sub has all requisite corporate power and authority necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its business as currently conducted. Parent has made available to Company true and complete copies of the certificate or articles of incorporation and bylaws or comparable organizational documents of Parent and Merger Sub, as amended through, and in full force and effect as of, the date of this Agreement, and neither Parent nor Merger Sub are in violation of any provision of its certificate or articles of incorporation or bylaws or comparable organizational documents, other than such violations that, individually or in the aggregate, have not had, and would not reasonably be expected to have, a Parent Material Adverse Effect.
(b) Each of Parent and Merger Sub is duly qualified to do business and is in good standing (or its equivalent status) in each jurisdiction where the nature of its business or the ownership or leasing of its properties makes such qualification or good standing necessary, except for any failure to be so qualified or in good standing that, individually or in the aggregate, has not had, and would not reasonably be expected to have, a Parent Material Adverse Effect.
Section 3.02 Ownership and Operations of Parent and Merger Sub.
(a) All the issued and outstanding equity interests in Merger Sub are owned beneficially and of record by Parent, free and clear of all Liens, except for (i) Liens created by this Agreement, (ii) Liens arising in connection with the Financing or (iii) transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Law.
(b) Each of Parent and Merger Sub was organized solely for the purpose of entering into this Agreement, the other Transaction Documents to which it is or will be a party and consummating the Transactions and has not engaged in any activities or business, and has incurred no Liabilities, in each case, other than those incident or relating to the Financing or otherwise in connection with its formation, organization and the negotiation, evaluation, preparation or execution of this Agreement, the other Transaction Documents to which it is or will be a party, the performance of its obligations, covenants and agreements hereunder and thereunder and the consummation of the Transactions.
Section 3.03 Authority; Execution and Delivery; Enforceability.
(a) Each of Parent and Merger Sub has all requisite power and authority to execute and deliver each Transaction Document to which it is or is contemplated to be a party, to perform its obligations thereunder and to consummate the Transactions. The execution and delivery by each of Parent and Merger Sub of each Transaction Document to which it is or is contemplated to be a party and the consummation by each of Parent and Merger Sub of the Transactions have been duly authorized by the Boards of Directors of Parent and Merger Sub, and no other proceedings on the part of Parent or Merger Sub are necessary to authorize the Transaction Documents to which it is or is contemplated to be a party or the consummation of the Transactions. Each of Parent and Merger Sub has duly executed and delivered this Agreement, and, assuming due authorization, execution and delivery by the other parties hereto, this Agreement constitutes its legal, valid and binding obligation, enforceable against Parent and Merger Sub in accordance with its terms (except insofar as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally or by principles governing the availability of equitable remedies). Upon the execution and delivery by each of Parent and Merger Sub of each other Transaction Document to which it is or is contemplated to be a party and, assuming due authorization, execution and delivery by the other parties thereto, each other Transaction Document to which it is or is contemplated to be a party will constitute its legal, valid and binding obligation, enforceable against it in accordance with its terms (except insofar as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally, or by principles governing the availability of equitable remedies).
(b) In resolutions adopted on or prior to the date of this Agreement, the Board of Directors of Parent has (i) determined that the Merger, upon the terms and subject to the conditions set forth herein, is fair to and in the best interests of Parent and its equityholders and
(ii) approved and declared advisable this Agreement, each other Transaction Document to which Parent is or is contemplated to be a party and the Transactions.
(c) In resolutions adopted on or prior to the date of this Agreement, the Board of Directors of Merger Sub has (i) approved and declared advisable this Agreement, each other Transaction Document to which it is or is contemplated to be a party and the Transactions and (ii) resolved to recommend adoption of this Agreement to Parent, as the sole stockholder of Merger Sub, which resolutions have not been subsequently rescinded, modified or withdrawn in any way.
(d) The only vote or consent of holders of any class or series of capital stock of Merger Sub necessary to adopt this Agreement and the Merger is the affirmative vote of Parent in its capacity as the sole stockholder of Merger Sub, which adoption shall be provided by the written consent of Parent immediately following the execution of this Agreement.
(e) No vote or Consent of the holders of any equity interests of Parent is necessary to approve this Agreement or the Merger.
Section 3.04 No Conflicts; Governmental Approvals.
(a) The execution and delivery by each of Parent and Merger Sub of each Transaction Document to which it is a party does not, the execution and delivery by each of Parent and Merger Sub of each Transaction Document to which it is contemplated to be a party will not, and the consummation by each of Parent and Merger Sub of the Transactions and compliance with the terms hereof and thereof will not, conflict with, or result in any violation of or default (or an event that, with or without notice or lapse of time or both, would become a default) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to loss of a material benefit under, or to increased, additional, accelerated or guaranteed rights or entitlements of any Person under, or result in the creation of any Lien upon any of the properties or assets of Parent or Merger Sub under any provision of (i) the certificate or articles of incorporation, bylaws or comparable organizational documents of Parent or Merger Sub, (ii) any Contract to which Parent or Merger Sub is a party or by which any of their respective properties or assets is bound or (iii) subject to the filings, Consents and other matters referred to in Section 3.04(b), any Judgment or Law applicable to Parent or Merger Sub or their respective properties or assets, other than, in the case of clauses (ii) and (iii) above, any such item that, individually or in the aggregate, has not had, and would not reasonably be expected to have, a Parent Material Adverse Effect.
(b) No Governmental Approval is required to be obtained or made by or with respect to Parent, Merger Sub or any Equity Financing Source in connection with the execution, delivery and performance of any Transaction Document to which it is a party or the consummation of the Transactions, other than (i) compliance with and filings and approvals under the HSR Act and the other Review Laws set forth in Section 3.04(b) of the Parent Disclosure Letter, (ii) the filing of the Certificate of Merger and any other filings or recordings required under the DGCL in connection with the Merger with the Secretary of State of the State
of Delaware and (iii) such other Governmental Approvals, the failure of which to be obtained or made, individually or in the aggregate, has not had, and would not reasonably be expected to have, a Parent Material Adverse Effect.
Section 3.05 Information Supplied. None of the information supplied or to be supplied by Parent, Merger Sub, the Guarantors or the Equity Financing Sources for inclusion or incorporation by reference in the Vista Outdoor Proxy Statement or the Form S-4 or any other filing contemplated by Section 6.01 of the CSG-Vista Outdoor Merger Agreement will, at the time each such document is filed with the SEC or any other Governmental Authority, at any time it is amended or supplemented or at the date of mailing and at the date of the Vista Outdoor Stockholders’ Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading. No representation or warranty is made by Parent or Merger Sub with respect to statements included or incorporated by reference in the Vista Outdoor Proxy Statement based on information supplied by or on behalf of Vista Outdoor or its Subsidiaries (including Company and its Subsidiaries) for inclusion or incorporation by reference therein.
Section 3.06 No Ownership of Company Capital Stock. Neither Parent, Merger Sub, any Guarantor, any Equity Financing Source nor any “affiliate” or “associate” thereof (as defined in Section 203 of the DGCL) is or has been during the past three years an “interested stockholder” of Company or Vista Outdoor as defined in Section 203 of the DGCL. Neither Parent, Merger Sub, any Guarantor, any Equity Financing Source nor any “affiliate” or “associate” thereof (as defined in Section 203 of the DGCL) beneficially owns, directly or indirectly, or is the record holder of (or during the past three years has beneficially owned, directly or indirectly, or been the record holder of), and is not (and during the past three years has not been) a party to any agreement (other than this Agreement and the other Transaction Documents), arrangement or understanding for the purpose of acquiring, holding, voting or disposing of, in each case, any shares of Company Common Stock or Vista Outdoor Common Stock or any option, warrant or other right to acquire any shares of Company Common Stock or Vista Outdoor Common Stock.
Section 3.07 Certain Arrangements. Other than this Agreement and the Confidentiality Agreement, there are no Contracts or other arrangements or understandings (whether oral or written and whether or not legally binding) or commitments to enter into contracts or other arrangements or understandings (whether oral or written and whether or not legally binding) between (a) Parent, Merger Sub, any Guarantor, any Equity Financing Source or any of their Affiliates, on the one hand, and any member of management or the Board of Directors of Company or Vista Outdoor or any beneficial owner of shares of Company Common Stock or Vista Outdoor Common Stock, on the other hand, that relate in any way to Company, Vista Outdoor or any of their respective businesses or Subsidiaries, the Transactions or the CSG-Vista Outdoor Transactions or (b) Parent, Merger Sub, any Guarantor, any Equity Financing Source or any of their Affiliates, on the one hand, and any stockholder of Company or Vista Outdoor, on the other hand, pursuant to which such stockholder would be entitled to receive value or
consideration of a different amount or nature than the Merger Consideration or the CSG-Vista Outdoor Merger Consideration or pursuant to which such stockholder agrees to vote to approve the Merger or the CSG-Vista Outdoor Merger or agrees to vote against or otherwise oppose any Company Superior Proposal (as defined in the CSG-Vista Outdoor Merger Agreement).
Section 3.08 Financing. Parent has delivered to Company a true and complete copy of the fully executed equity commitment letter, dated as of the date of this Agreement (the “Equity Financing Commitment”), from the Persons identified therein (together with any Persons that become a party thereto after the date of this Agreement in accordance with the terms and conditions thereof, each, an “Equity Financing Source”), reflecting such Person’s commitment to provide to Parent at the Closing the cash amount set forth therein, subject to the terms and conditions thereof (the “Equity Financing”). As of the date hereof, the Equity Financing Commitment, in the form so delivered, is in full force and effect and is a legal, valid and binding obligation of Parent and, to the Knowledge of Parent, the other parties thereto, enforceable against each such party in accordance with its terms (except insofar as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally or by principles governing the availability of equitable remedies). As of the date hereof, the Equity Financing Commitment has not been amended, supplemented or otherwise modified in any respect, and, to the Knowledge of Parent, no amendment or modification to, or withdrawal, termination or rescission of, the Equity Financing Commitment is currently contemplated (except to the extent amended, supplemented, modified or replaced in a manner not prohibited by the terms of this Agreement), and the commitments contained in the Equity Financing Commitment have not, to the Knowledge of Parent, been withdrawn, reduced or rescinded in any respect. Assuming the satisfaction of the closing conditions set forth in Article VII of this Agreement, no event has occurred that, with or without notice, lapse of time or both, constitutes or would reasonably be expected to constitute a material default or breach on the part of Parent or any of its Affiliates or, to the Knowledge of Parent, any other parties thereto, under any term or condition of the Equity Financing Commitment, and, to the Knowledge of Parent, no reasonable basis exists to believe that any term or condition precedent to the funding of any of the Equity Financing set forth in the Equity Financing Commitment will not be satisfied on a timely basis, or that any portion of the Equity Financing to be made thereunder will otherwise not be available to Parent on a timely basis to consummate the Merger at the time required pursuant to this Agreement. Parent or its applicable Affiliate has fully paid or caused to be paid any and all commitment fees or other fees required by the Equity Financing Commitment to be paid thereunder on or prior to the date of this Agreement. Assuming the satisfaction of the conditions set forth in the Equity Financing Commitment and the satisfaction of the closing conditions set forth in Article VIII of this Agreement, the aggregate proceeds contemplated by the Equity Financing Commitment, when funded in accordance with the Equity Financing Commitment, together with all Other Sources, will provide Parent with funds sufficient to pay the amounts required to be paid by Parent or Merger Sub in connection with the consummation of the Transactions. The obligations to make the Equity Financing available to Parent or its applicable Affiliate pursuant to the terms of the Equity Financing Commitment are not subject to any conditions precedent or other contingencies related to the funding of the full amount of the Equity Financing, other than as expressly set forth
in the Equity Financing Commitment. As of the date of this Agreement, there are no contracts or other agreements, arrangements or understandings (whether oral or written) to which Parent, Merger Sub, the Guarantors, any Equity Financing Source or any of their respective Affiliates is a party related to the Equity Financing, other than as expressly contained in the Equity Financing Commitments and delivered to Company on or prior to the date of this Agreement.
Section 3.09 Limited Guarantee. Concurrently with the execution of this Agreement, the Guarantors have delivered to Company a true and complete copy of the executed Limited Guarantee, pursuant to which each Guarantor has, severally (and not jointly or jointly and severally), guaranteed its respective portion of the full amount of the Parent Termination Fee, all the fees and expenses payable by Parent or Merger Sub pursuant to this Agreement and all liabilities and damages payable by Parent or Merger Sub pursuant to Section 8.03(a) or Section 8.03(c). The Limited Guarantee is in full force and effect and constitutes the legal, valid, binding and enforceable obligation of each Guarantor party thereto in favor of Company, enforceable by Company in accordance with its terms. None of the Guarantors are in default or breach under the terms and conditions of the Limited Guarantee, and no event has occurred that, with or without notice, lapse of time or both, would or would reasonably be expected to constitute a default or breach or a failure to satisfy a condition under the terms and conditions of the Limited Guarantee. Each Guarantor has access to sufficient capital to satisfy the amount of its guaranteed obligations under the Limited Guarantee in full.
Section 3.10 Brokers. No broker, investment banker, financial advisor or other Person, other than Goldman Sachs & Co. LLC, is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the Transactions based upon arrangements made by or on behalf of Parent or Merger Sub.
Section 3.11 Solvency. Neither Parent nor Merger Sub is entering into this Agreement (and the Guarantors are not entering into the Limited Guarantee) with the actual intent to hinder, delay or defraud either present or future creditors of Company or any of its Subsidiaries. Assuming satisfaction or waiver of the conditions to Parent and Merger Sub’s obligations to consummate the Merger, the accuracy of the representations and warranties of Company set forth in Article IV hereof and the accuracy of the representations and warranties of Vista Outdoor set forth in Article X hereof, and after giving effect to the Transactions and the payment of the aggregate Merger Consideration, any repayment or refinancing of debt contemplated in this Agreement, payment of all amounts required to be paid in connection with the consummation of the Transactions (including all amounts payable in respect of Company Equity Awards under this Agreement), and payment of all related fees and expenses, each of Parent and the Surviving Corporation will be Solvent as of the Effective Time and immediately after the consummation of the applicable Transactions. For the purposes of this Agreement, the term “Solvent” means, when used with respect to any Person, that, as of any date of determination, (a) the amount of the “fair saleable value” of the assets of such Person and its Subsidiaries, taken as a whole, will, as of such date, exceed the sum of (i) the value of all “liabilities of such Person and its Subsidiaries, taken as a whole, including contingent and other liabilities”, as of such date, as such quoted terms are generally determined in accordance with applicable Laws governing determinations of
the insolvency of debtors, and (ii) the amount that will be required to pay the probable liabilities of such Person and its Subsidiaries, taken as a whole, as of such date, on its existing debts (including contingent and other liabilities) as such debts become absolute and mature, (b) such Person and its Subsidiaries, taken as a whole, will not have, as of such date, an unreasonably small amount of capital for the operation of the businesses in which they are engaged or proposed to be engaged following such date and (c) such Person and its Subsidiaries, taken as a whole, will be able to pay their liabilities, including contingent and other liabilities, as they mature. For purposes of this definition, “not have an unreasonably small amount of capital for the operation of the businesses in which it is engaged or proposed to be engaged” and “able to pay its liabilities, including contingent and other liabilities, as they mature” means that such Person will be able to generate enough cash from operations, asset dispositions or refinancing, or a combination thereof, to meet its obligations as they become due.
Section 3.12 Foreign Persons. Neither Parent nor Merger Sub is, or is acting on behalf of, a “foreign person”, as such term is defined in Section 721 of the Defense Production Act of 1950 (the “DPA”). Neither Parent nor Merger Sub is an entity over which “control” is exercised or exercisable by a “foreign person”, as such terms are defined in the DPA. Neither Parent nor Merger Sub is permitting any “foreign person” (as such term is defined in the DPA) affiliated with Parent or Merger Sub to obtain through either of them any of the following with respect to the Company or any of its Subsidiaries: (a) access to any “material nonpublic technical information” (as such term is defined in the DPA) in the possession of the Company or any of its Subsidiaries; (b) membership or observer rights on, or the right to nominate an individual to a position on, the board of directors or equivalent governing body of the Company or any of its Subsidiaries; (c) any involvement, other than through voting of shares, in substantive decision-making of the Company or any of its Subsidiaries regarding (i) the use, development, acquisition, safekeeping or release of “sensitive personal data” (as such term is defined in the DPA) of U.S. citizens maintained or collected by the Company or any of its Subsidiaries, (ii) the use, development, acquisition or release of any “critical technology” (as such term is defined in the DPA) or (iii) the management, operation, manufacture or supply of “covered investment critical infrastructure” (as such term is defined in the DPA); or (d) “control” (as such term is defined in the DPA) of the Company or any of its Subsidiaries.
Section 3.13 Interest in Competitors. To the Knowledge of Parent, neither Parent nor any of its “associates” or “affiliates” (each as defined in 16 CFR 801.1(d)) hold five percent (5%) or more of the voting securities or non-corporate interests (as “hold,” “voting securities” and “non-corporate interest” are defined under 16 CFR 801) of any entity that directly competes to a material extent with the Company Business to the extent that any such holdings would reasonably be expected to prevent or materially delay the expiration or termination of the waiting period under the HSR Act or any other Review Law or the receipt of Governmental Approval under any Review Law in connection with the Transactions.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF COMPANY
Company represents and warrants to Parent and Merger Sub that, except as disclosed (i) in the manner contemplated in Section 9.06, in the letter, dated as of the date of this Agreement, from Company to Parent (the “Company Disclosure Letter”) or (ii) in Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024, Vista Outdoor’s Annual Report on Form 10-K for the fiscal year ended April 1, 2021, or in any report, schedule, form, statement or other document filed with, or furnished to, the SEC by Company or Vista Outdoor and publicly available on the SEC’s Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”) filed subsequent to such Form 10-K but prior to the date of this Agreement (collectively, the “Filed SEC Documents”), other than in any disclosures in any such Filed SEC Document contained in the “Risk Factors”, “Statement Regarding Forward-Looking Information” and “Quantitative and Qualitative Disclosures About Market Risk” sections thereof or under similarly titled captions or sections thereof or other disclosure statements included therein that are cautionary, predictive or forward-looking in nature and not statements of historical fact; provided that nothing in the Filed SEC Documents shall be deemed to be disclosures against Section 4.01, Section 4.02 or Section 4.03:
Section 4.01 Organization, Standing and Power.
(a) Company is duly organized, validly existing and in good standing under the Laws of the State of Delaware. Company has all requisite corporate power and authority necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its business as currently conducted. Company has made available to Parent true and complete copies of the certificate of incorporation and bylaws of Company as amended through, and in full force and effect as of, the date of this Agreement, and Company is not in violation of any provision of its certificate of incorporation or bylaws, other than such violations that, individually or in the aggregate, (i) have not been, or would not reasonably be expected to be, material to the Company Business, taken as a whole, or (ii) would not prevent or materially impair or delay Company’s ability to consummate the Transactions, including the Merger.
(b) Each Company Subsidiary is duly organized, validly existing and in good standing (or its equivalent status) under the Laws of the jurisdiction in which it is organized, except for any failure to be duly organized, validly existing and in good standing that, individually or in the aggregate, has not had, and would not reasonably be expected to have, a Company Material Adverse Effect. Each Company Subsidiary has all requisite power and authority necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its business as currently conducted, except for any failure to have such power and authority that, individually or in the aggregate, has not had, and would not reasonably be expected to have, a Company Material Adverse Effect. Company has made available to Parent true and complete copies of the certificate or articles of incorporation and bylaws or comparable organizational documents of each Company Subsidiary, in each case, as amended through, and in full force and effect as of, the date of this Agreement, and no Company Subsidiary is in violation
of any provision of its certificate or articles of incorporation, bylaws or comparable organizational documents, other than such violations that, individually or in the aggregate, (A) have not been, or would not reasonably be expected to be, material to the Company Business, taken as a whole, or (B) would not prevent or materially impair or delay Company’s ability to consummate the transactions contemplated hereby, including the Merger.
(c) Each of Company and each of its Subsidiaries is duly qualified to do business and is in good standing (or its equivalent status) in each jurisdiction where the nature of its business or the ownership or leasing of its properties makes such qualification or good standing necessary, except for any failure to be so qualified or in good standing that, individually or in the aggregate, has not had, and would not reasonably be expected to have, a Company Material Adverse Effect.
Section 4.02 Company Subsidiaries; Equity Interests.
(a) Section 4.02(a) of the Company Disclosure Letter sets forth, as of the date of this Agreement, a true and complete list of each Company Subsidiary and its jurisdiction of organization and each other jurisdiction where such Company Subsidiary is qualified to conduct business (or the equivalent thereof), and the record owners of capital stock (or other equity) of each such Company Subsidiary. All of the outstanding shares of capital stock of, or other equity or equity based or voting rights or interests in, each Company Subsidiary have been duly authorized and validly issued and are fully paid and, in the case of shares of capital stock, non-assessable, and not subject to or issued in violation of any purchase option, put option, call option, right of first refusal, preemptive right, subscription right, warrant or any similar right under any provision of the Laws of the jurisdiction in which it is organized, its certificate of incorporation or bylaws or comparable organizational documents or any Company Material Contract, and are owned by Vista Outdoor or one of its Subsidiaries and, after giving effect to the Reorganization, will be owned by the Company or one of its Subsidiaries, free and clear of all Liens.
(b) Except for its interests in the other members of the Company Group set forth on Section 4.02(b) of the Company Disclosure Letter, as of the date of this Agreement, Company does not own, directly or indirectly, any capital stock of, or other equity based or voting rights or interest in, any Person.
Section 4.03 Capital Structure of Company.
(a) As of the date hereof, the authorized capital stock or other equity interests and the number of issued and outstanding shares or other equity interests of the Company are set forth in Section 4.03(a) of the Company Disclosure Letter. All of the outstanding shares or other equity interests of each member of the Company Group (the “Company Equity Interests”) have been duly authorized and validly issued, are fully paid and non-assessable (if applicable) and were not issued in violation of any preemptive rights, purchase or call rights, rights of first refusal or subscription rights. The Company Equity Interests represent all of the issued and outstanding equity interests of the Company Group. Vista Outdoor is, as of the date of this
Agreement, and will be, immediately prior to the consummation of the CSG-Vista Outdoor Merger, the sole beneficial owner of record of all of the equity interests of Company, and the equity interests of each other member of the Company Group are solely and beneficially owned (as record owner), as of the date of this Agreement, by the Person identified on Section 4.03(a) of the Company Disclosure Letter.
(b) There are no options, warrants or rights of conversion or exchange or other similar rights, agreements, arrangements or commitments obligating any member of the Company Group to issue or sell any shares of its capital stock, other equity interests or securities convertible into or exchangeable for its shares or other equity interests, other than as provided in this Agreement, Article VI of the Employee Matters Agreement, the CSG-Vista Outdoor Merger Agreement and the Separation Agreement. There are no repurchase rights or other similar rights, agreements, arrangements or commitments obligating any member of the Company Group to purchase any shares of its capital stock or other equity interests or securities convertible into or exchangeable for its shares or other equity interests. There are no voting trusts, stockholder agreements, proxies or other agreements in effect with respect to the voting or transfer of the Company Equity Interests, other than as provided for in this Agreement, the CSG-Vista Outdoor Merger Agreement and the Separation Agreement and other than as provided in the certificate or articles of incorporation, bylaws or comparable organizational documents of each member of the Company Group. The Company Group does not have any declared and unpaid dividends or other distributions.
Section 4.04 Authority; Execution and Delivery; Enforceability.
(a) Company has all requisite power and authority to execute and deliver each Transaction Document to which it is or is contemplated to be a party, to perform its obligations thereunder and to consummate the Transactions. The execution and delivery by Company of each Transaction Document to which it is or is contemplated to be a party and the consummation by Company of the Transactions has been duly authorized by the Board of Directors of Company and, except for the Company Stockholder Approval, no other corporate proceedings on the part of Company are necessary to authorize the Transaction Documents to which it is or is contemplated to be a party or the consummation of the Transactions. Company has duly executed and delivered this Agreement, and, assuming due authorization, execution and delivery by the other parties hereto, this Agreement constitutes its legal, valid and binding obligation, enforceable against Company in accordance with its terms (except insofar as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally or by principles governing the availability of equitable remedies). Upon the execution and delivery by Company of each other Transaction Document to which it is or is contemplated to be a party, and, assuming due authorization, execution and delivery by the other parties thereto, each other Transaction Document to which it is or is contemplated to be a party, will constitute its legal, valid and binding obligation, enforceable against it in accordance with its terms (except insofar as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally or by principles governing the availability of equitable remedies).
(b) In resolutions adopted on or prior to the date of this Agreement, the Board of Directors of Company has (i) determined that this Agreement is advisable, fair to and in the best interests of Company and the sole stockholder of Company, and declared it advisable that Company enter into this Agreement and consummate the Transactions, (ii) adopted resolutions approving and declaring the advisability of this Agreement, each other Transaction Document to which Company is or is contemplated to be a party, and the consummation of Transactions to which it is a party, (iii) adopted resolutions recommending that the sole stockholder of Company give the Company Stockholder Approval and (iv) directed that this Agreement be submitted to the sole stockholder of Company for adoption, which resolutions have not been subsequently rescinded, modified or withdrawn in any way.
(c) The only vote or Consent of holders of any class or series of capital stock of Company necessary to approve the Transactions is the Company Stockholder Approval.
Section 4.05 No Conflicts; Governmental Approvals.
(a) The execution and delivery by Company of each Transaction Document to which it is a party does not, the execution and delivery by Company of each Transaction Document to which it is contemplated to be a party will not, and the consummation by Company of the Transactions and compliance with the terms hereof and thereof will not, conflict with or result in any violation of or default (or an event that, with or without notice or lapse of time or both, would become a default) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, or to increased, additional, accelerated or guaranteed rights or entitlements of any Person under, or result in the creation of any Lien upon any of the properties or assets of Company under, any provision of (i) the certificate or articles of incorporation, bylaws or comparable organizational documents of Company or any Company Subsidiary, (ii) any Contract to which Company or any Company Subsidiary is a party, or by which any of their respective properties or assets is bound, relating to the Company Business (including with respect to any Shared Contract (as defined in the Separation Agreement)) or (iii) subject to the filings, Consents and other matters referred to in Section 4.05(b), and assuming the accuracy of the representations and warranties set forth in Section 3.12, any Judgment or Law applicable to Company, any Company Subsidiary or any of their respective properties or assets or the Company Business, other than, in the case of clauses (ii) and (iii) above, any such item that, individually or in the aggregate, (1) has not been, or would not reasonably be expected to be, material to the Company Business, taken as a whole or (2) would not prevent or materially impair or delay Company’s ability to consummate the Transactions, including the Merger.
(b) No Governmental Approval is required to be obtained or made by or with respect to Company in connection with the execution, delivery and performance by Company of any Transaction Document to which it is a party or the consummation by Company of the Transactions, other than (i) compliance with and filings and approvals under the HSR Act and the other Review Laws set forth on Section 4.05(b) of the Company Disclosure Letter, (ii) the filing of the Certificate of Merger and any other filings or recordings required under the DGCL
in connection with the Merger with the Secretary of State of the State of Delaware, (iii) compliance by Company with the rules and regulations of NYSE, (iv) compliance with and filings and approvals under any applicable international, federal or state securities or “blue sky” Laws, (v) a notice to be delivered pursuant to Section 122.4(a) of the ITAR and (vi) such other Governmental Approvals, the failure of which to be obtained or made, individually or in the aggregate, (1) has not been, or would not reasonably be expected to be, material to the Company Business, taken as a whole, or (2) would not prevent or materially impair or delay Company’s ability to consummate the Transactions, including the Merger.
Section 4.06 Financial Statements; Undisclosed Liabilities.
(a) The audited condensed combined financial statements and unaudited condensed combined interim financial statements of Company included or incorporated by reference in the Filed SEC Documents filed by Company (the “Company Business Financial Information”) (i) were derived from the books of account and other financial records of Vista Outdoor and its Subsidiaries, (ii) present fairly in all material respects the financial position of the Company Business and the results of operations and changes in cash flows of the Company Business as of the dates thereof and for the periods covered thereby (subject, in the case of unaudited interim financial statements, to normal year-end audit adjustments, none of which are expected to be material), and (iii) were prepared in accordance with GAAP, applied in all material respects on a consistent basis during the periods covered thereby (except as may be indicated in the notes thereto and subject, in the case of unaudited interim financial statements, to normal year-end audit adjustments, none of which are expected to be material).
(b) Except as reflected or reserved against in the Company Business Financial Information, neither Company nor any of its consolidated Subsidiaries has any Liabilities of a nature required to be disclosed in a balance sheet prepared in accordance with GAAP (whether accrued, absolute, contingent or otherwise), except for Liabilities (i) incurred after the Company Business Balance Sheet Date in the ordinary course of business (none of which are a Liability resulting from a breach of contract, infringement, misappropriation, tort, violation of Law or any Environmental Liability), (ii) as contemplated by this Agreement or the CSG-Vista Outdoor Merger Agreement or otherwise incurred in connection with the Transactions or the CSG-Vista Outdoor Transactions, or (iii) that, individually or in the aggregate, have not been, or would not reasonably be expected to be, material to the Company Business, taken as a whole.
(c) Neither Company nor any Company Subsidiary has applied for or obtained a loan or second draw pursuant to the PPP.
Section 4.07 Information Supplied. None of the information supplied or to be supplied by Vista Outdoor, Company or any of their respective Subsidiaries for inclusion or incorporation by reference in the Proxy Statement or the Form S-4 or any other filing contemplated by Section 6.01 of the CSG-Vista Outdoor Merger Agreement will, at the time each such document is filed with the SEC or any other Governmental Authority, at any time it is amended or supplemented or, in the case of the Form S-4, at the time it becomes effective under the Securities Act, or, in the case of the Proxy Statement, at the date of mailing and at the date of the Company
Stockholders’ Meeting (as defined in the CSG-Vista Outdoor Merger Agreement), contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading. The Form S-4 and the Proxy Statement will comply as to form in all material respects with the requirements of the Securities Act and the Exchange Act except that no representation or warranty is made by Company with respect to statements included or incorporated by reference therein based on information supplied in writing by or on behalf of Parent, Merger Sub, any Guarantor, any Equity Financing Source or any of their respective Affiliates specifically for inclusion or incorporation by reference therein.
Section 4.08 Absence of Certain Changes or Events. Since the Company Business Balance Sheet Date through the date of this Agreement, (a) there has not been a Company Material Adverse Effect or any effect, change, event or occurrence that, individually or in the aggregate, would reasonably be expected to have a Company Material Adverse Effect, (b) except in connection with execution and performance of this Agreement, the other Transaction Documents or the Transactions or the CSG-Vista Outdoor Merger Agreement, the other CSG-Vista Outdoor Transaction Documents or the CSG-Vista Outdoor Transactions, and the discussions and negotiations related thereto, the Company Business has been carried on and conducted in all material respects in the ordinary course of business consistent with past practice, (c) other than pursuant to this Agreement, none of Vista Outdoor, the Company nor any of their respective Subsidiaries have authorized, declared, set aside or paid any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of their respective equity interests or securities or otherwise made any payments to equityholders in their capacity as such, and (d) none of Vista Outdoor, the Company nor any of their respective Subsidiaries have taken any action that, if such sections had been in effect from and after the Company Business Balance Sheet Date, would have constituted a breach of, or otherwise required the consent of Parent under, any of the covenants set forth in clauses (i), (ii), (iii), (iv), (v), (vi), (vii), (x), (xii), (xiii), (xiv), (xv), (xvi), (xvii) or (xviii) of Section 5.01(b) (or Section 5.01(b)(xxvi) with respect to any of the foregoing).
Section 4.09 Taxes.
(a) All material Tax Returns of or relating to Company or any Company Subsidiary required to be filed have been timely filed and all such Tax Returns are true, correct and complete in all material respects.
(b) Company and each Company Subsidiary have timely paid in full all material Taxes required to be paid by any of them (whether or not shown as due on any Tax Return).
(c) No Liens for Taxes (other than Company Permitted Liens) exist with respect to Company or any Company Subsidiary or any of their respective assets, and no outstanding claims for material Taxes have been asserted in writing to Company with respect to Company or any Company Subsidiary.
(d) The Company Business Balance Sheet reflects an adequate reserve in accordance with GAAP for all Taxes payable by Company and each Company Subsidiary (in addition to any reserve for deferred Taxes to reflect timing differences between book and Tax items).
(e) No audit or other Action with respect to material Taxes or Tax Returns of Company or any Company Subsidiary is currently in progress or has been threatened in writing. No deficiency for any material amount of Tax has been asserted or assessed by a Governmental Authority against Company or any Company Subsidiary that has not been settled, paid or withdrawn.
(f) None of Company or any Company Subsidiary (A) in a period for which the statute of limitations for assessment of Tax (taking into account any waivers or extensions) has not expired, has been a member of an affiliated group (or similar state, local or foreign filing group) filing a consolidated U.S. federal income Tax Return (or similar state, local or foreign Tax Return) other than such a group the common parent of which was Company or one of the Company Subsidiaries or Vista Outdoor or one of its Subsidiaries, or (B) has any material Liability for the Taxes of any Person other than Company or any of the Company Subsidiaries or Vista Outdoor or any of its Subsidiaries under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or foreign Law), as a transferee or successor, by assumption, by operation of Law or otherwise.
(g) None of Company or any Company Subsidiary is a party to or bound by any agreement or arrangement the primary purpose of which relates to Taxes (other than such an agreement or arrangement exclusively between or among Company and the Company Subsidiaries or Vista Outdoor and its Subsidiaries).
(h) Within the past two (2) years, none of Company or any Company Subsidiary has been a “distributing corporation” or a “controlled corporation” in a distribution intended to qualify in whole or in part for tax-free treatment under Code Section 355 or so much of Code Section 356 as relates to Code Section 355 (or any similar provisions of state, local or foreign Law).
(i) None of Company or any Company Subsidiary has “participated” in a “listed transaction” within the meaning of Treasury Regulations Section 1.6011-4.
(j) None of Company or any Company Subsidiary has waived or extended any statute of limitations relating to any material Tax or material Tax Return, which waiver or extension is currently in effect, and no extension of time within which to file any material Tax Return of Company or any Company Subsidiary is currently in effect (other than any extension of the time to file a Tax Return obtained in the ordinary course).
(k) None of Company or any Company Subsidiary is aware of the existence of any fact, or has taken or agreed to take any action, that would reasonably be expected to prevent or impede the applicable Transactions from qualifying for the Intended Tax Treatment.
(l) No claim has been made in writing to Company by a Governmental Authority in a jurisdiction where Company or any Company Subsidiary does not file Tax Returns that Company or such Company Subsidiary is or may be subject to taxation by or required to file a Tax Return in that jurisdiction.
(m) None of Company or any Company Subsidiary is subject to taxation in any country, other than the country in which it was organized, by virtue of having a permanent establishment (within the meaning of an applicable income Tax treaty) or other fixed place of business in such other country.
(n) Company and each Company Subsidiary have withheld and timely paid to the appropriate Governmental Authority all material amounts of Taxes required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, client, creditor, customer or other Person, and have complied in all material respects with all related reporting requirements in respect of the matters described in the foregoing clause.
(o) None of Company or any Company Subsidiary will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any Tax period (or portion thereof) ending after the Closing Date as a result of any: (A) change in method of accounting, or use of an improper method of accounting, with respect to a Tax period (or portion thereof) ending on or prior to the Closing Date, (B) “closing agreement” as described in Section 7121 of the Code (or any similar agreement under state, local or foreign Law) executed prior to the Closing, (C) intercompany transaction or excess loss account described in the Treasury Regulations under Section 1502 of the Code (or any similar transaction or account under state, local or foreign Law) entered into or created prior to the Closing or recapture under Treasury Regulations Section 1.1503(d)-6 of dual consolidated losses that arose in a Tax period (or portion thereof) ending on or prior to the Closing Date, (D) installment sale or open transaction disposition made prior to the Closing, (E) prepaid amount received or deferred revenue accrued prior to the Closing, (F) election under Section 965(h) of the Code, (G) “global intangible low-taxed income” within the meaning of Section 951A of the Code attributable to a Tax period (or portion thereof) ending on or prior to the Closing Date, or (H) “subpart F income” within the meaning of Section 952 of the Code accruing on or prior to the Closing Date.
(p) A “domestic use election” has been made by Vista Outdoor (pursuant to Treasury Regulations Section 1.1503(d)-6) with respect to any dual consolidated loss of Company or any Company Subsidiary in any Tax period (or portion thereof) ending on or before the date on which the closing of the CSG-Vista Outdoor Merger occurs.
(q) No private letter rulings, technical advice memoranda or similar rulings by, or agreements with, a Governmental Authority have been requested, entered into or issued with respect to Company or any Company Subsidiary.
(r) Company (assuming for this purpose that the Separation has been completed as of the date hereof in accordance with the Separation Agreement) is not and will not
have been a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A) of the Code.
(s) Each of Company and the Company Subsidiaries has complied in all material respects with all escheat and unclaimed property Laws.
Section 4.10 Employee Benefit Matters.
(a) Section 4.10(a) of the Company Disclosure Letter sets forth, as of the date of this Agreement, a true and complete list of each material Company Benefit Plan. With respect to each material Company Benefit Plan, Company has made available to Parent true and complete copies of (i) such Company Benefit Plan (or, in the case of any unwritten Company Benefit Plan, a description thereof), (ii) the most recent annual report on Form 5500 filed with respect to each such Company Benefit Plan (and all schedules and attachments thereto, if any such report was required), (iii) the most recent summary plan description for each such Company Benefit Plan for which such summary plan description is required, (iv) the most recent actuarial valuation report, if any, for each such Company Benefit Plan, (v) the most recent determination or advisory or opinion letter received from the IRS for each such Company Benefit Plan (if applicable), and (vi) all material correspondence with a Governmental Authority relating to such Company Benefit Plan since April 1, 2019.
(b) Except as would not, individually or in the aggregate, have or reasonably be expected to have a Company Material Adverse Effect, (i) the Company Benefit Plans are and have been established, maintained, funded, operated and administered in all respects in compliance with their terms and applicable Law, (ii) all contributions, reimbursements, distributions and premium payments with respect to each Company Benefit Plan that are required to be made have been timely made or paid in accordance with the Company Benefit Plan’s terms and in compliance with applicable Laws, or have been properly accrued on Company’s audited financial statements, and (iii) there are no pending or, to the Knowledge of Company, threatened Actions or claims on behalf of or relating to a Company Benefit Plan (other than routine claims for benefits thereunder).
(c) Except as would not, individually or in the aggregate, have or reasonably be expected to have a Company Material Adverse Effect, (i) no Company Benefit Plan that is an “employee welfare benefit plan”, as described in Section 3(1) of ERISA (each, a “Company Welfare Benefit Plan”), is funded or insured through a “welfare benefits fund”, as such term is defined in Code Section 419(e), (ii) each Company Welfare Benefit Plan that is a “group health plan”, as such term is defined in Code Section 5000(b)(1), complies with the applicable requirements of Code Section 4980B(f), (iii) each Company Welfare Benefit Plan (in each case, including any such plan covering retirees or other former employees) may be amended or terminated without Liability to any member of the Company Group, other than for claims incurred prior to the date of such termination, on or at any time after the Effective Time, and (iv) no Company Benefit Plan provides health or life insurance benefits after termination of employment, except as required by Section 4980B of the Code and Part 6 of Subtitle B of Title I
of ERISA and where the premium cost of coverage thereof is borne entirely by the former employee (or his or her eligible dependents).
(d) Except as would not, individually or in the aggregate, have or reasonably be expected to have a Company Material Adverse Effect, no Controlled Group Liability has been incurred by Company or any Company Subsidiary nor do any circumstances exist that would reasonably be expected to result in Controlled Group Liability for any of Company or any Company Subsidiary following the Closing.
(e) Except as would not, individually or in the aggregate, have or reasonably be expected to have a Company Material Adverse Effect, (i) neither Company nor any ERISA Affiliate has engaged in any transaction described in Section 4069 or Section 4204 of ERISA, and (ii) no Company Benefit Plan is, and no member of the Company Group has any Liability with respect to, a (1) Multiemployer Plan, or (2) plan that is or was subject to Section 412 of the Code, Section 302 of ERISA or Title IV of ERISA.
(f) Except as would not, individually or in the aggregate, have or reasonably be expected to have a Company Material Adverse Effect, each Company Benefit Plan that is an “employee pension benefit plan”, as defined in Section 3(2) of ERISA (each, a “Company Pension Benefit Plan”), and that is intended to be tax qualified has been the subject of favorable determination letters from the IRS with respect to all Tax Law changes with respect to which the IRS has provided a current favorable determination letter to the effect that such Company Pension Benefit Plans are qualified and exempt from federal income Taxes under Sections 401(a) and 501(a) of the Code, respectively, and no such determination letter has been revoked nor, to the Knowledge of Company, has revocation been threatened, and no condition exists that would adversely affect or result in the revocation of any such determination or cause the imposition of any Liability, penalty or Tax under ERISA or the Code with respect to such determination.
(g) No Company Pension Benefit Plan had, as of the respective last annual valuation date for such Company Pension Benefit Plan, an “unfunded benefit liability”, as such term is defined in Section 4001(a)(18) of ERISA, based on actuarial assumptions that have been made available to Parent, and, to the Knowledge of Company, there has been no material adverse change in the financial condition of any Company Pension Benefit Plan since its last such annual valuation date. No Company Pension Benefit Plan or any trust established thereunder has failed to satisfy the “minimum funding standards” (as defined in Section 302 of ERISA or Section 412 of the Code), whether or not waived, as of the last day of the most recently ended fiscal year of such Company Pension Benefit Plan, except for instances that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.
(h) None of Company or any Company Subsidiary or, to the Knowledge of Company, any Company Employee or any trustee, fiduciary or administrator of any Company Benefit Plan, or any related trust, has engaged in a “prohibited transaction”, as such term is defined in Section 406 of ERISA or Code Section 4975, or any other breach of fiduciary responsibility that would reasonably be expected to subject Company, any Company Subsidiary
or any Company Employee to the Tax or penalty on prohibited transactions imposed by such Code Section 4975 or to any liability under Section 502(i) or 502(1) of ERISA. No Company Benefit Plan or related trust has been terminated, nor has there been any “reportable event”, as such term is defined in Section 4043 of ERISA, with respect to any Company Benefit Plan during the last six (6) years.
(i) The execution and delivery of each Transaction Document to which Company or any of its Subsidiaries is a party do not, and the consummation of the Transactions and compliance with the terms hereof and thereof will not, either alone or in connection with any other event, directly or indirectly (A) entitle any current or former Company Employee to any bonus, equity or equity-based, non-qualified compensation, severance, termination, retention, transaction, change in control or similar pay or benefits, (B) accelerate the time of payment, funding or vesting or trigger any payment (whether in cash, property or the vesting of property) or funding (through a grantor trust or otherwise) of compensation or benefits under, increase the amount payable under or trigger any other obligation pursuant to, any Company Benefit Plan, (C) result in any breach or violation of, or a default under, any Company Benefit Plan, or (D) result in any payment that could be considered an “excess parachute payment” within the meaning of Section 280G of the Code. None of Company or any Company Subsidiary is a party to or has any obligation under any Company Benefit Plan to gross up or indemnify any person for excise Taxes payable pursuant to Section 409A or 4999 of the Code.
(j) Each Company Benefit Plan that is subject to Section 409A or Section 457A of the Code has been administered in compliance with its terms and Section 409A or Section 457A of the Code, as applicable (including the operational and documentary requirements thereof), and all applicable regulatory guidance thereunder (including, notices, rulings and proposed and final regulations). No payment to be made under any Company Benefit Plan is, or, to the Knowledge of Company, will be, subject to additional Taxes under Section 409A(a)(1) or Section 457A(c) of the Code.
(k) Section 4.10(k) of the Company Disclosure Letter sets forth, as of the date set forth therein, a complete and accurate list of each outstanding Vista Outdoor Equity Award specifying, on a holder-by-holder basis, (A) the name of each holder, (B) the number of shares of Vista Outdoor Common Stock subject thereto (assuming achievement of any applicable performance criteria at the maximum level), (C) the grant date thereof, (D) the exercise price thereof, and (E) the expiration or vesting date thereof, in each case, to the extent applicable.
(l) Neither Vista Outdoor nor Company has issued any stock option to a Company Employee that has an exercise price that is less than the “fair market value” of the underlying shares on the date of grant, as determined for financial accounting purposes under GAAP. Each Vista Outdoor Equity Award is evidenced by written award agreements, in each case, substantially in the forms that have been made available to Parent, except that such outstanding award agreements may differ from such provided forms with respect to certain provisions thereof, but no such different provisions shall impose on Parent any continuing obligations after the Closing. Each Vista Outdoor Equity Award may, by its terms, be treated in
accordance with the terms of Article VI of the Employee Matters Agreement, and each Company Equity Award may be treated in accordance with the terms of Section 2.04.
Section 4.11 Labor Matters.
(a) Neither Company nor any Company Subsidiary is party to or bound by any collective bargaining agreement or any other Contract with any labor union or other labor organization or employee representative body, in each case, with respect to any Company Employee (each, a “Labor Agreement”), and no Company Employees are represented by any labor union or other labor organization or employee representative body with respect to their employment with Company or any Company Subsidiary.
(b) (A) Since April 1, 2020 through the date of this Agreement, (1) there have been no labor unions or works councils purporting to represent any Company Employees, nor, to the Knowledge of Company, is there any pending or threatened application for certification of a collective bargaining agent seeking to represent any employees of Company or any Company Subsidiary or any pending union or works council representation election, and (2) there has not been nor is there threatened in writing or, to the Knowledge of Company, orally threatened, any labor strike, work stoppage, organized slowdown, picketing or concerted refusal to work overtime by, or lockout of, any employees of Company or any Company Subsidiaries, or, with respect to the Company Business, and (B) since April 1, 2021, (1) Company has not received written notice or threat (or, to the Knowledge of Company, oral notice or threat) of, and there has not been any pending unfair labor practice charges against Company or any Company Subsidiary before the National Labor Relations Board or any similar Governmental Authority, and (2) Company has not received written notice or threat (or, to the Knowledge of Company, oral notice or threat) of, and there has not been any pending Actions against Company or any Company Subsidiary or otherwise in connection with the Company Business alleging, violation of any Laws pertaining to labor relations or employment matters, including any charge or complaint filed by an employee before the Equal Employment Opportunity Commission or any similar Governmental Authority responsible for the prevention of unlawful employment practices, or any Action alleging violation of applicable federal, state or local labor or employment Laws (including human rights Laws), except, in the case of each of clauses (A)(1), (A)(2), (B)(1) and (B)(2), for any such matters that, individually or in the aggregate, have not been, or would not reasonably be expected to be, material to the Company Business, taken as a whole.
(c) (A) Except for instances of non-compliance that, individually or in the aggregate, have not been, or would not reasonably be expected to be, material to the Company Business, taken as a whole, Company and the Company Subsidiaries are and have been in compliance with all applicable Laws relating to labor, employment and employment practices, including all Laws respecting workers’ compensation, terms and conditions of employment, applicant and employee background checking, health and welfare, retirement or other savings or insurance contributions, plant closings and mass layoffs (including the WARN Act), worker classification (including the classification of exempt and non-exempt employees and of
independent contractors), affirmative action, equal pay, worker safety, wages and hours, civil rights, equal employment opportunities, leaves of absence, disability rights or benefits, notice of termination, discrimination, retaliation, immigration (including Form I-9 requirements and any applicable mandatory E-Verify obligations), restrictive covenants, pay transparency, withholding of Taxes, collective bargaining and any other statutory or other obligations owed to employees under applicable Law, and (B) neither Company nor any of the Company Subsidiaries has any Liability, including under or on account of a Company Benefit Plan, arising out of the hiring of Persons to provide services to Company or any Company Subsidiary and treating such Persons as consultants or independent contractors and not as employees of Company or any Company Subsidiary.
(d) Since April 1, 2019, neither Company nor any Company Subsidiary has taken any action that would constitute a “mass layoff” or “plant closing” within the meaning of the WARN Act, and no such action with respect to any Company Employees has been planned or announced. Neither Company nor any Company Subsidiary has incurred any Liability under the WARN Act that remains unsatisfied.
(e) To the Knowledge of Company, Company and the Company Subsidiaries have reasonably investigated all sexual harassment, discrimination and retaliation claims or other similar material allegations since April 1, 2019 against any current or former Company Employee within the management level of “Executive” (consistent with the titles of employees set forth on the employee census referenced in Section 4.11(e) of the Company Disclosure Letter (each, a “Key Employee”)), which investigations have all been closed without material Liability. Neither Company nor any Company Subsidiary has, since April 1, 2019, entered into any settlement agreement with any current or former Key Employee related to allegations of sexual harassment, sexual misconduct or employment discrimination. Neither Company nor any Company Subsidiary has any Liability (accrued, contingent or otherwise) with respect to any current or former Key Employee relating to acts of sexual harassment, sexual misconduct or employment discrimination.
(f) Section 4.11(f) of the Company Disclosure Letter sets forth, as of the date specified therein, each Company Employee. To the Knowledge of Company, no Key Employee has any plans to terminate his or her employment or relationship with Vista Outdoor, Company or any of their respective Subsidiaries. To the Knowledge of Company, there are no agreements between any Company Employee at the level of vice president and above and any other Person which would restrict, in any manner, such Company Employee’s ability to perform services for the Company Group following the Closing.
Section 4.12 Litigation.
(a) There is no Action pending or, to the Knowledge of Company, threatened, in each case, by or against (i) Vista Outdoor or any of its Subsidiaries relating to the Company Business or (ii) Company or any Company Subsidiary that, individually or in the aggregate, has been, or would reasonably be expected to be, material to the Company Business, taken as a whole. There is no Judgment outstanding against (x) Vista Outdoor or any of its Subsidiaries
relating to the Company Business or (y) Company or any Company Subsidiary or to which any of their respective properties or assets is subject that, individually or in the aggregate, has been, or would reasonably be expected to be, material to the Company Business, taken as a whole.
(b) As of the date of this Agreement (i) there is no material Action pending or, to the Knowledge of Company, threatened against Vista Outdoor, Company or any of their Subsidiaries and (ii) neither Vista Outdoor, Company nor any of their Subsidiaries is subject to any outstanding Judgment relating to the Company Business, except, in the case of each of clauses (i) and (ii), as would not reasonably be expected to, individually or in the aggregate, prevent or materially impair or delay Vista Outdoor’s or Company’s ability to consummate the Transactions, including the Merger.
Section 4.13 Compliance with Applicable Laws; Permits.
(a) With respect to the Company Business and all Company Owned Real Property, Company and the Company Subsidiaries are, and since April 1, 2021 have at all times been, in compliance with all applicable Laws, except for instances of non-compliance that, individually or in the aggregate, have not been, or would not reasonably be expected to be, material to the Company Business, taken as a whole. With respect to the Company Business and all Company Owned Real Property, neither Company nor any Company Subsidiary has received any written communication since April 1, 2021 from a Governmental Authority that alleges that Company or any Company Subsidiaries is not in compliance with any applicable Law, other than any alleged non-compliance that, individually or in the aggregate, has not been, or would not reasonably be expected to be, material to the Company Business, taken as a whole. With respect to the Company Business and all Company Owned Real Property, Company and the Company Subsidiaries possess all Governmental Approvals necessary for their lawful conduct and use as currently conducted and used, except for any failure to have such Governmental Approvals that, individually or in the aggregate, has not been, and would not reasonably be expected to be, material to the Company Business, taken as a whole.
(b) Company and each Company Subsidiary has, or after giving effect to the Separation will have, all Permits required to own, lease or operate their respective properties and assets and to conduct the Company Business as currently conducted and currently contemplated to be conducted, other than any Permits the absence of which, individually or in the aggregate, has not been, and would not reasonably be expected to be, material to the Company Business, taken as a whole (collectively, “Company Group Permits”), which Company Group Permits are set forth on Section 4.13(b) of the Company Disclosure Letter. Except as is not and would not reasonably be expected to be material to the Company Business, (i) each Company Group Permit is in full force and effect in accordance with its terms, and (ii) no written notice of revocation, cancellation or termination of any Company Group Permit has been received by Company or a Company Subsidiary. Company and each Company Subsidiary is, and since April 1, 2021, has been, in compliance in all material respects with the terms of each Company Group Permit. To the Knowledge of Company, no event or circumstance has occurred which would reasonably be expected to result in (x) the failure of Company or any Company Subsidiary to be in compliance
with the terms of any Company Group Permit, or (y) the revocation, suspension or non-renewal of any Company Group Permit.
(c) (i) Company and its principals, as defined by FAR 52.209-5 or other applicable agency regulations, have not been debarred or suspended or, to the Knowledge of Company, proposed for debarment from participating in Government Contracts or Government Bids and (ii) to the Knowledge of Company, no circumstances exist that would warrant the institution of any such debarment or suspension proceedings.
(d) Neither Company, any of the Company Subsidiaries, nor, to the Knowledge of Company, any of their respective directors, officers, employees, representatives or agents, in each case, acting on behalf of Company or the Company Subsidiaries, has since April 1, 2018, directly or knowingly indirectly, in respect of Company, the Company Subsidiaries or the Company Business: (i) used any funds for unlawful contributions, unlawful gifts, unlawful entertainment or other unlawful expenses relating to political activity; (ii) made, offered, promised or authorized any payment or gift of money or anything of value to or for the benefit of any official, officer, employee or representative of, or any Person acting in an official capacity for or on behalf of, any Governmental Authority (including any official or employee of any government-owned or government-controlled entity, and any officer or employee of a public international organization, as well as any Person acting in an official capacity for or on behalf of any such government or department, agency or instrumentality, or for or on behalf of any such public international organization) or anyone else, in each case, for the purpose of securing any improper advantage or action to assist Company or any of the Company Subsidiaries in obtaining or retaining business for or with, or directing business to, any Person; or (iii) otherwise violated any applicable Anti-Corruption Laws. Company and the Company Subsidiaries have established and continue to maintain internal controls and procedures reasonably designed to ensure compliance with Anti-Corruption Laws. To the Knowledge of Company, neither Company nor any of the Company Subsidiaries (nor any of their respective directors, officers, representatives, agents or employees) is or has been the subject of any enforcement actions, investigations, reviews, audits, notices or inquiries by or disclosures to any Governmental Authority related to Anti-Corruption Laws, and no investigation, review, audit, notice or inquiry by or disclosure to any Governmental Authority related to Anti-Corruption Laws is pending or, to the Knowledge of Company, threatened.
(e) Neither Company, any of the Company Subsidiaries nor, to the Knowledge of Company, any of their respective directors, officers, employees, representatives, or agents, in each case, acting on behalf of Company or the Company Subsidiaries, has since April 1, 2018, directly or knowingly indirectly, in respect of Company, the Company Subsidiaries or the Company Business, violated any applicable Global Trade Laws. Neither Company, any Company Subsidiary nor, to the Knowledge of Company, any of their respective directors, officers, employees, representatives or agents (i) is a Sanctioned Person, (ii) is or has been, or is or has engaged in any business or dealings, directly or indirectly, with or for the benefit of, a Sanctioned Person or in a Sanctioned Country in violation of Global Trade Laws, (iii) is or has been engaging in any export, reexport, transfer or provision of any goods, software,
technology, data or service without, or exceeding the scope of, any required or applicable licenses or authorizations under all applicable Global Trade Laws, or (iv) is otherwise in violation of applicable Global Trade Laws, including valuation, classification or duty treatment requirements of imported or exported merchandise, the eligibility requirements of imported or exported merchandise for favorable duty rates or other special treatment for sourcing requirements. Neither Company, the Company Subsidiaries nor, to the Knowledge of Company, any of their respective directors, officers, employees, representatives, or agents, in each case, acting on behalf of Company or the Company Subsidiaries, is or has been the subject of any investigations, notices, reviews, audits or inquiries by or disclosures to any Governmental Authority related to Global Trade Laws, and no investigation, review, audit, notice or inquiry by or disclosure to any Governmental Authority related to Global Trade Laws is pending or, to the Knowledge of Company, threatened. Company and the Company Subsidiaries have established and continue to maintain compliance policies, procedures and practices reasonably designed to ensure compliance with Global Trade Laws.
(f) Neither Company, the Company Subsidiaries nor, to the Knowledge of Company, any of their respective directors, officers, employees, representatives, or agents, in each case, acting on behalf of Company or the Company Subsidiaries, has since April 1, 2021, directly or knowingly indirectly, in respect of Company, the Company Subsidiaries or the Company Business, violated any applicable federal, state and local laws governing or otherwise regulating the manufacture, marketing, distribution, registration, use, importation, transportation, purchase or other acquisition, possession or sale or other transfer of firearms, ammunition or explosives, including the Gun Control Act of 1968 (Chapter 44 of Title 18, United States Code), the National Firearms Act of 1934, (Chapter 53 of Title 26, United States Code), the Arms Export Control Act (22 U.S.C. § 2778) and the ITAR and other Laws (including public nuisance or similar Laws) relating to firearms, ammunition and explosives.
Section 4.14 Environmental Matters. Except for matters that, individually or in the aggregate, have not been, or would not reasonably be expected to be, material to the Company Business, taken as a whole:
(a) with respect to the Company Business, Company and the Company Subsidiaries are and, since April 1, 2021 (except for matters that have been fully and finally resolved) have been, in compliance with all Environmental Laws;
(b) since April 1, 2021, except for matters that have been fully and finally resolved, neither Company nor the Company Subsidiaries has received any written notice that alleges that, with respect to the Company Business, the Company Owned Real Property or the Company Leased Real Property, Company or any Company Subsidiary is in violation of, or has any liability under, or is required to take or omit to take any action under, any Environmental Law;
(c) Company and the Company Subsidiaries have obtained (or, in the case of a pending modification or expansion, have applied or plan to apply in a timely fashion for) and, since April 1, 2021, have been in compliance with, all Environmental Permits necessary for the
ownership, use and operation of the Company Business as currently conducted or as currently under modification or expansion in any material respect, and all such Environmental Permits are valid and in full force and effect;
(d) since April 1, 2021, Company and the Company Subsidiaries have not received any written notification from any Governmental Authority that any Environmental Permit that Company and the Company Subsidiaries are required to hold under Environmental Laws in connection with the operation of the Company Business is, or is reasonably expected to be, revoked, suspended or not renewed;
(e) other than as described in or accounted for in the Company Business Financial Information, no material capital expenditures for facility works or upgrading are, to the Knowledge of Company, necessary for Company and the Company Subsidiaries to secure compliance with Environmental Laws or to maintain or obtain any Environmental Permits for the operation of the Company Business;
(f) there are no Actions pursuant to Environmental Law pending or, to the Knowledge of Company, threatened, in each case, against Company or any of the Company Subsidiaries relating to the Company Business, the Company Owned Real Property or the Company Leased Real Property or otherwise, and, to the Knowledge of Company, no environmental incident or violation has occurred which would reasonably be expected to give rise to such Actions;
(g) with respect to the Company Business, none of Company or the Company Subsidiaries (i) are subject to any Judgment pursuant to Environmental Law, or (ii) have been subject to any Judgment pursuant to Environmental Law since April 1, 2021, as to which Company or the Company Subsidiaries have any outstanding obligations;
(h) none of Company or the Company Subsidiaries are conducting, funding or liable for any cleanup or other remedial action in connection with any Release of Hazardous Materials (a “Remedial Action”) at, on, under or from the Company Owned Real Property or the Company Leased Real Property, or any real property formerly owned, operated or leased by Company or the Company Subsidiaries in connection with the Company Business or any third-party site at which Company or the Company Subsidiaries has, in connection with the Company Business, disposed or arranged for the disposal of Hazardous Materials;
(i) neither Company nor the Company Subsidiaries has (i) stored, treated, handled or processed any Hazardous Materials at any Company Owned Real Property or Company Leased Real Property, or (ii) with respect to the Company Business (as currently, or at any prior time, conducted), disposed of, arranged for the disposal of, Released or exposed any Person to any Hazardous Materials in the Environment, in the case of each of clauses (i) and (ii), that has resulted or would reasonably be expected to result in any obligation to conduct or fund any Remedial Action on the part of, or Action against, Company or any of the Company Subsidiaries under any Environmental Laws; and
(j) with respect to the Company Business, the Company Owned Real Property or the Company Leased Real Property, neither Company nor any of the Company Subsidiaries has contractually assumed or provided a specific indemnity with respect to any Liabilities of any other Person, in each case, that would reasonably be expected to result in any obligation to conduct any Remedial Action on the part of, or Action against, Company or any of the Company Subsidiaries under Environmental Laws or relating to Hazardous Materials.
Section 4.15 Real Property.
(a) Section 4.15(a) of the Company Disclosure Letter sets forth a true and complete list, as of the date of this Agreement, of all real property owned in fee simple by Vista Outdoor or one of its Subsidiaries and, after giving effect to the Separation, by the Company or any Company Subsidiary, or any right or option to acquire the same, in each case in connection with, or for the operation of, the Company Business (collectively, in each case, together with all buildings, structures, improvements and fixtures thereon and all easements and rights of way pertaining thereto or accruing to the benefit thereof and all other appurtenances and real property rights pertaining thereto, the “Company Owned Real Property”). (i) As of the date of this Agreement Vista Outdoor or one of its Subsidiaries has, and after giving effect to the Separation Company or a Company Subsidiary will have, good and insurable fee simple title to all Company Owned Real Property, in each case, free and clear of all Liens other than Company Permitted Liens, and (ii) there are no reversion rights, outstanding options or rights of first refusal or other preemptive rights in favor of any other Person to purchase, lease, occupy or otherwise utilize the Company Owned Real Property or any portion thereof or interest therein, in the case of each of clauses (i) and (ii), that would reasonably be expected to materially and adversely affect such Company Owned Real Property, and no Person is occupying any Company Owned Real Property other than Company and the Company Subsidiaries or, prior to the Separation, Vista Outdoor and its Subsidiaries. There is no pending or, to the Knowledge of Company, threatened condemnation or eminent domain proceeding or similar proceedings with respect to any Company Owned Real Property. To the Knowledge of Company, there is no uncured violation of any of the easements, covenants or restrictions affecting any Company Owned Real Property that would materially and adversely affect the use or the operation thereof as presently conducted.
(b) Section 4.15(b) of the Company Disclosure Letter sets forth a true and complete list, as of the date of this Agreement, of all real property and interests in real property ground leased, leased, subleased, licensed or otherwise occupied by Vista Outdoor or one of its Subsidiaries and, after giving effect to the Separation, by the Company or any Company Subsidiary, in connection with, or for the operation of, the Company Business (collectively, in each case, together with all buildings, structures, improvements and fixtures thereon, the “Company Leased Real Property”). As of the date of this Agreement Vista Outdoor or one of its Subsidiaries has, and after giving effect to the Separation Company or a Company Subsidiary will have, good and valid title to the leasehold estates in all Company Leased Real Property, in each case, free and clear of all Liens other than Company Permitted Liens. Company has made available to Parent a true and complete copy of each Lease Agreement under which the Company Leased Real Property is held (including all amendments thereto). There is no default
under any such Lease Agreement by the member of the Vista Outdoor Group or Company Group party thereto or, to the Knowledge of Company, by any other party thereto, in each case, that would reasonably be expected to materially and adversely affect the use of such Company Leased Real Property.
Section 4.16 Intellectual Property and Data Privacy.
(a) Section 4.16(a) of the Company Disclosure Letter sets forth a true and complete list, as of the date of this Agreement, of all Registered Intellectual Property included in the Company Business Owned Intellectual Property (the “Company Business Registered Intellectual Property”). Company or a Company Subsidiary is, or after giving effect to the Separation will be, the sole and exclusive owner of all material Company Business Registered Intellectual Property, free and clear of all Liens other than Company Permitted Liens. Company or a Company Subsidiary owns (or after giving effect to the Separation will own) or has the valid right to use all Company Business Intellectual Property necessary to conduct the Company Business in all material respects in substantially the same manner as conducted by Company and the Company Subsidiaries on the date of this Agreement and as of immediately prior to Closing, free and clear of all Liens other than Company Permitted Liens. The Company Business Registered Intellectual Property is subsisting and, to the Knowledge of Company, valid and enforceable.
(b) Following the consummation of the CSG-Vista Outdoor Merger, and except with respect to any services to be provided under the Transition Services Agreement or any Intellectual Property licensed under Sections 9.02 and 9.03 of the Separation Agreement, the Vista Outdoor Group will not own any Intellectual Property necessary for the conduct of the Company Business.
(c) Except for those matters that, individually or in the aggregate, have not been, or would not reasonably be expected to be, material to the Company Business, taken as a whole, (i) no Actions are pending or, since April 1, 2021, have been threatened in writing, or, to the Knowledge of Company, orally threatened, to Company or the Company Subsidiaries, in each case, against Company or any of the Company Subsidiaries by any Person relating to the Company Business (A) claiming that Company or any of the Company Subsidiaries is infringing, diluting, misappropriating or otherwise violating, or has infringed, diluted, misappropriated or otherwise violated, any third-party Intellectual Property, or (B) challenging the validity, ownership, patentability or enforceability of, or the ability by Company or any of the Company Subsidiaries to register or use, any Company Business Intellectual Property (including Actions before the United States Patent and Trademark Office or comparable foreign governmental authorities, but excluding office actions received during prosecution); (ii) to the Knowledge of Company, the conduct of the Company Business, including the provision of products and services, does not infringe, dilute, misappropriate or violate, and since April 1, 2021, has not infringed, diluted, misappropriated or otherwise violated, any Intellectual Property of another Person; (iii) since April 1, 2021, none of Company or any of the Company Subsidiaries has filed any Action or threatened in writing any claim against any third Person alleging that such Person
infringes, dilutes, misappropriates or violates any Company Business Owned Intellectual Property; and (iv) to the Knowledge of Company, as of the date of this Agreement, no Person is infringing, diluting, misappropriating or violating any Company Business Owned Intellectual Property.
(d) Except for those matters that, individually or in the aggregate, have not been, or would not reasonably be expected to be, material to the Company Business, taken as a whole, all Persons, including past and present employees and contractors of Company and the Company Subsidiaries, who have contributed to or participated in the conception or development of any material Company Business Owned Intellectual Property have entered into valid and enforceable written proprietary rights agreements with Vista Outdoor, Company or a Company Subsidiary pursuant to which such Persons assign ownership of all of their rights in such Intellectual Property exclusively to Company or the applicable Company Subsidiary and agree to maintain the confidentiality of such Intellectual Property. To the Knowledge of Company, no such Person is in breach of such agreements.
(e) Company and its Subsidiaries have taken commercially reasonable steps to preserve, protect and enforce all material Company Business Owned Intellectual Property, and to maintain the confidentiality of all material confidential Company Business Intellectual Property, including material confidential and proprietary Know-How included in the Company Business Intellectual Property, and to comply with all duties to protect confidential information provided to Company or a Company Subsidiary by another Person.
(f) Except for those matters that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect, (i) each of the IT Systems used by Company and each of the Company Subsidiaries operates and performs in all respects as required to permit Company and the Company Subsidiaries to conduct the Company Business as currently conducted, and Company and each of Company Subsidiaries owns or otherwise has the right to use all such IT Systems, (ii) Company and the Company Subsidiaries have taken reasonable actions necessary and in accordance with industry standards and legal requirements to protect the security and integrity of the IT Systems used by Company and each of the Company Subsidiaries and the data stored or contained therein or transmitted thereby, and, since April 1, 2021, there has not been any failure with respect to any of the IT Systems used by Company and each of the Company Subsidiaries that has not been remedied or replaced in all respects, (iii) Company and the Company Subsidiaries have implemented and maintained disaster recovery and business continuity measures and (iv) to the Knowledge of Company, the IT Systems used by Company and each Company Subsidiary are free from surreptitious computer code or instructions designed to disrupt, disable, harm or provide unauthorized access to such IT Systems.
(g) Except for those matters that, individually or in the aggregate, have not been and would not reasonably be expected to be material to the Company Business, taken as a whole, (i) Company and the Company Subsidiaries are in compliance with all Privacy and Data Security Requirements; (ii) to the Knowledge of Company, since April 1, 2021, there have not
been any incidents of, or third-party claims related to, any loss, theft, unauthorized access to or unauthorized acquisition, modification, disclosure or corruption of any Personal Information in Company’s or any of the Company Subsidiaries’ possession; (iii) as of the date of this Agreement, neither Company nor any of the Company Subsidiaries has received any written notice of any claims, investigations (including investigations by any Governmental Authority) or alleged violations of any Data Privacy Law; and (iv) to the Knowledge of Company, no investigations by any Governmental Authority regarding the Processing of Personal Information by Company or any Company Subsidiary are pending. Company and the Company Subsidiaries do not engage in the sale, as such term defined by applicable Law, of Personal Information.
Section 4.17 Material Contracts; Intercompany Contracts.
(a) Section 4.17(a) of the Company Disclosure Letter sets forth a true and complete list of all Company Material Contracts in effect as of the date of this Agreement. For purposes of this Agreement, “Company Material Contract” means any of the following Contracts, but excluding any Benefit Plan and Labor Agreement, to which Company or any Company Subsidiary is a party or by which any of their respective properties or assets or the Company Business is otherwise bound:
(i) any Contract that is or would be required to be filed as an exhibit to Company’s Annual Report on Form 10-K or is otherwise a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K under the Securities Act);
(ii) any Contract that relates to the formation, creation, governance or control of any partnership, joint venture or similar arrangement, and any Contract for or relating to any investment in any other Person (whether through the acquisition of an equity interest, the making of a loan or advance or otherwise, but excluding extensions of trade credit in the ordinary course of business), in each case, that is material to the Company Business;
(iii) any Contract that relates to the acquisition or disposition of any business by Company or any Company Subsidiary (whether by merger or the sale of stock, other equity interests, assets or otherwise) for aggregate consideration in excess of $5,000,000 (1) relating to the Company Business that was entered into after April 1, 2021, or (2) pursuant to which any earn-out, indemnification or deferred or contingent payment obligations remain outstanding that would reasonably be expected to involve payments by or to Company or any Company Subsidiary of more than $2,500,000 in the aggregate after the date hereof, other than with respect to which, following the Closing, neither Company nor any Company Subsidiary shall have any Liability, and, in each case under clauses (1) and (2), excluding (x) acquisitions or dispositions of Inventory, supplies, materials or products in the ordinary course of business, and (y) dispositions of obsolete or worn-out assets that are no longer used or useful in the operation or conduct of the Company Business;
(iv) any Contract with respect to Indebtedness or guarantees of any such Indebtedness with a principal amount or aggregate revolving commitment in excess of $10,000,000 or that is secured by a mortgage or deed of trust on any Company Owned Real
Property, other than any such Contract (1) solely between or among members of the Company Group, or (2) with respect to which, following the Closing, neither Company nor any Company Subsidiary shall have any Liability;
(v) any Contract that obligates Company or any Company Subsidiary to make any capital expenditure in an amount in excess of $5,000,000 in any calendar year;
(vi) any Contract with a remaining term of two (2) or more years from the date of this Agreement that requires annual payments in excess of $10,000,000 by the Company Business and that is not terminable at the option of Company or a Company Subsidiary by notice of ninety (90) days or less at no cost to Company or any Company Subsidiary, other than Contracts relating to the acquisition or disposition of other businesses or Indebtedness, which are the subject of clauses (iii) and (iv) above, respectively;
(vii) any non-competition Contract or other Contract that purports to limit in any material respect either the type of business in which the Company Business may engage or the manner or geographic area in which the Company Business may be engaged or which contains any material exclusivity provisions relating to the Company Business (in each case, other than any Contract entered into in the ordinary course of business containing exclusive partnering arrangements with respect to one or more projects or bids);
(viii) any settlement, conciliation or similar agreement (A) with any Governmental Authority, or (B) pursuant to which Company or any Company Subsidiary will have any material outstanding obligation after the date of this Agreement, and excluding, in each case under clause (A) or (B), any such agreements with respect to which, following the Closing, neither Company nor any Company Subsidiary shall have any Liability;
(ix) any Contract under which Company or any Company Subsidiary grant “most-favored nation” rights to any third party, other than Contracts with such restrictions that are not material to the conduct of the Company Business taken as a whole;
(x) any Contract that grants rights of first refusal, rights of first offer, rights of first negotiation or other similar rights to any Person with respect to the sale (whether by merger or otherwise) of Company Equity Interests or any material Company Assets;
(xi) any Contract under which Company or any Company Subsidiary has permitted any material Company Asset to become subject to any Lien (other than a Company Permitted Lien);
(xii) any Contract that constitutes an interest rate, currency or commodity derivative or other Contract relating to hedging, but excluding any such Contract with respect to which, following the Closing, neither Company nor any Company Subsidiary shall have any Liability;
(xiii) any Contract (other than a purchase order) with (1) any of the top 10 largest customers of the Company Business, taken as a whole, based on the aggregate dollar value of sales made by the Company Business to such customer for the twelve (12)-month period ended June 30, 2024 (the “Top Customers”), or (2) any of the top 10 largest commercial vendors of the Company Business, taken as a whole, based on the aggregate dollar value of purchases made by the Company Business from such vendor for the twelve (12) months ended June 30, 2024 (the “Top Vendors”);
(xiv) any Government Contract relating to the Company Business providing for annual payments in excess of $5,000,000;
(xv) any Contract that provides for Company or any Company Subsidiary to make a payment upon a change of control of Company or any Company Subsidiary;
(xvi) any Contract that is a lease under which Company or any Company Subsidiary is lessor of, or permits any third party to hold or operate any, material personal property owned or controlled by Company or any Company Subsidiary and related to the Company Business;
(xvii) any Contract, except for the organizational documents of Company or any Company Subsidiaries, providing for indemnification of directors or officers of Company or any Company Subsidiary;
(xviii) any Lease Agreement; and
(xix) any license or other Contract (1) pursuant to which Company or one of its Subsidiaries is granted by a third-party Person a right to use any Intellectual Property that is material to the operation and conduct of the Company Business, (2) pursuant to which Company or one of its Subsidiaries grants to a third-party Person a right to use any material Company Business Intellectual Property, (3) relating to the ownership or development of material Company Business Intellectual Property, or (4) entered into in connection with the resolution of any claim or dispute related to Intellectual Property that is material to the operation and conduct of the Company Business, such as consent-to-use, covenant-not-to-sue, coexistence, concurrent use or settlement agreements, except, in each case, (i) standard off-the-shelf software license agreements entered into in the ordinary course of business; (ii) non-exclusive licenses granted in the ordinary course of business; (iii) Contracts under which a license to Intellectual Property is merely incidental to the transaction contemplated in such Contract; (iv) confidentiality and non-disclosure agreements entered into in the ordinary course of business and on a standard form (or a substantially similar form) of Company or any of the Company Subsidiaries; and (v) proprietary rights agreements with employees or contractors on a standard form (or a substantially similar form) of Company or any of the Company Subsidiaries.
(b) Each of the Company Material Contracts that are required to be listed in Section 4.17(a) of the Company Disclosure Letter is in full force and effect (except to the extent
that any of them expires in accordance with its terms), and neither Company nor any of its Subsidiaries has violated any provisions of, or committed or failed to perform any act that, with or without notice, lapse of time or both, would constitute a default under the provisions of any Company Material Contract other than such defaults that, individually or in the aggregate, are not, or would not reasonably be expected to be, material to the Company Business, taken as a whole. True and complete copies of each written Company Material Contract, and a summary of each oral Company Material Contract, listed in Section 4.17(a) of the Company Disclosure Letter (in each case, including all substantive written modifications and amendments thereto) have been made available to Parent.
(c) Section 4.17(c) of the Company Disclosure Letter sets forth each material Contract between or among Company or any Company Subsidiary, on the one hand, and Vista Outdoor or any Vista Outdoor Subsidiary, on the other hand, in each case, that is in existence as of the date of this Agreement (collectively, the “Intercompany Contracts”).
(d) Neither Company nor any Company Subsidiary is a party to any Contract relating to the development, distribution, sale, manufacturing or supply of ammunition or primers (or components thereof) and none of Company or any Company Subsidiary controls or participates in the negotiation or performance of any Contract relating to the development, distribution, sale, manufacturing or supply of ammunition or primers (or components thereof). Since January 1, 2015, other than any retailer, sales representative or distributor agreement pursuant to which a Company Subsidiary sold and distributed products of the Company Business and a Vista Outdoor Subsidiary sold and distributed products of the Vista Outdoor Business, (i) neither Company nor any Company Subsidiary has been a party to any Contract relating to the development, distribution, sale, manufacturing or supply of ammunition or primers (or components thereof) and (ii) none of Company or any Company Subsidiary have controlled or participated in the negotiation or performance of any Contract relating to the development, distribution, sale, manufacturing or supply of ammunition or primers (or components thereof).
Section 4.18 Government Contracts. Except for those matters that, individually or in the aggregate, have not had, and would not reasonably be expected to have, a Company Material Adverse Effect:
(i) the representations, certifications and warranties made by Company or any Company Subsidiary to the applicable Governmental Authority with respect to any material Government Contract entered into on or after April 1, 2021 or that otherwise has unfulfilled obligations, or with respect to any material Government Bid pending as of, or made after, the date of this Agreement, were accurate in all material respects as of their effective date, and Company has complied in all material respects with all such certifications;
(ii) since April 1, 2021, neither Company nor any Company Subsidiary has received written notice of any pending or, to the Knowledge of Company, threatened Action brought by a Governmental Authority against Company or any Company Subsidiary relating to any material Government Contract or material Government Bid;
(iii) since April 1, 2021, neither Company nor any Company Subsidiary has made, nor, to the Knowledge of Company, is Company or any Company Subsidiary required to make, any disclosure to a Governmental Authority, in connection with any material Government Contract or material Government Bid, under FAR Subpart 3.1003 or FAR 52.203-13; and
(iv) since April 1, 2021, neither Company nor any Company Subsidiary has (A) breached any Government Contract in any material respect, (B) been suspended or debarred from bidding on government contracts by a Governmental Authority, (C) received from any Governmental Authority or any other Person any written notice of breach, cure, show cause or default with respect to any Government Contract, or (D) had any Government Contract terminated by any Governmental Authority or any other Person for default or failure to perform.
Section 4.19 Brokers. No broker, investment banker, financial advisor or other Person, other than Morgan Stanley & Co. LLC and Moelis & Company LLC, is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the Transactions (based upon arrangements made by or on behalf of Vista Outdoor or any of its Subsidiaries).
Section 4.20 Tangible Personal Property. Except as, individually or in the aggregate, has not been, or would not reasonably be expected to be, material to the Company Business, taken as a whole, Company and the Company Subsidiaries have, or after giving effect to the Separation will have, good and valid title to, or good and valid leasehold interests in, or other rights to use, all material tangible personal property that is used in the conduct of the Company Business, free and clear of all Liens other than Company Permitted Liens, and such material tangible personal property is in good working order, reasonable wear and tear excepted.
Section 4.21 Product and Service Warranty and Liability; Safety.
(a) To the Knowledge of Company, since April 1, 2021, (i) there has been no pattern of defects in the design, construction, manufacture, packaging or labeling of any product distributed by Company or any Company Subsidiary with respect to the Company Business, and (ii) each product sold by Company or any Company Subsidiary with respect to the Company Business that is currently being used has been designed, constructed, manufactured, packaged, installed and labeled in compliance in all material respects with all applicable Laws, and neither Company nor any Company Subsidiary has received any written notice (or, to the Knowledge of Company, oral notice) of any alleged material non-compliance with any such applicable Law. To the Knowledge of Company, there is no reasonable basis for any present or future Action against Company or any Company Subsidiary giving rise to any Liability arising out of or relating to (A) any product or service distributed, provided or sold by Company or any Company Subsidiary with respect to the Company Business, (B) any material product liability or material warranty claims relating to the Company Business, or (C) any injury to individuals or property as a result of the ownership, possession or use of any of the products or services provided by the Company Business. Neither Company nor any Company Subsidiary has been required to file, and has not
filed, a notification or other report with any Governmental Authority concerning actual or potential hazards with respect to any of the products sold by or services provided by Company or any Company Subsidiary with respect to the Company Business.
(b) Section 4.21(b) of the Company Disclosure Letter sets forth, since April 1, 2021, (i) an accurate description of any claim made or threatened in writing to Company or any Company Subsidiary and that remains unresolved alleging deficiencies in the quality of products or services provided by Company or any Company Subsidiary with respect to the Company Business, in respect of which an amount with respect to such claim, individually or in the aggregate, exceeds $1,000,000 and would reasonably be expected to be payable to any customer of the Company Business to resolve such claim, and (ii) an accurate list of any credits for alleged deficiencies in the quality of services provided by Company or any Company Subsidiary with respect to the Company Business, on an individual basis, issued by Company or any Company Subsidiary to any customer of the Company Business in the last three (3) years in excess of $1,000,000 (excluding any administrative or billing credits).
(c) Except as would not reasonably be expected to have a Company Material Adverse Effect, there have been no product recalls, withdrawals or seizures with respect to any products manufactured, sold or delivered by Company or the Company Subsidiaries in the conduct of the Company Business.
Section 4.22 Insurance. Except as, individually or in the aggregate, has not been, or would not reasonably be expected to be, material to the Company Business, taken as a whole, (a) Company or the Company Subsidiaries own, hold or are otherwise covered by, or after giving effect to the Separation will own, hold or otherwise be covered by, policies of insurance, or are self-insured, in such amounts and against such risks customarily insured against by companies in similar lines of business as the Company Business, (b) all such insurance policies are in full force and effect except for any expiration thereof in accordance with the terms thereof, (c) no written notice of cancellation or modification has been received other than in connection with ordinary renewals, (d) there is no existing default or event which, with the giving of notice or lapse of time or both, would constitute a default, by any insured under such insurance policies, and (e) all premiums due and payable thereon have been paid in full. Section 4.22 of the Company Disclosure Letter sets forth all policies of insurance applicable to the Company Business as of the date of this Agreement.
Section 4.23 Top Customers and Top Vendors.
(a) Section 4.23(a) of the Company Disclosure Letter sets forth the names of the Top Customers. Since the Company Business Balance Sheet Date, no Top Customer has (i) ceased, or has given written, or, to the Knowledge of Company, oral notice to Company that it intends to cease, to acquire or to change in any material respect the terms or conditions under which it acquires, the services or products of the Company Business, or has substantially reduced or has given written or, to the Knowledge of Company, oral notice to Company that it intends to substantially reduce the frequency or volume of its acquisition of services and products of the Company Business, or (ii) given written or, to the Knowledge of Company, oral notice to
Company that it intends to (x) fail or refuse to renew any Company Material Contract to which it is a party, or (y) file for bankruptcy or voluntarily or involuntarily enter into insolvency proceedings under any state, federal or other jurisdictions. Company and the Subsidiaries of Company are not, and since the Company Business Balance Sheet Date have not been, involved in any material Action or other material disagreement with any Top Customer.
(b) Section 4.23(b) of the Company Disclosure Letter sets forth the names of the Top Vendors. Since the Company Business Balance Sheet Date, no Top Vendor has (i) ceased, or has given written, or, to the Knowledge of Company, oral notice to Company that it intends to cease, to provide, or to change in any material respect the terms or conditions under which it provides, services or products to Company and its Subsidiaries, or has substantially reduced or has given written, or, to the Knowledge of Company, oral notice to Company that it intends to substantially reduce the frequency or volume of its provision of such services or products, or (ii) given written or, to the Knowledge of Company, oral notice to Company that it intends to (x) fail or refuse to renew any Company Material Contract to which it is a party, or (y) file for bankruptcy or voluntarily or involuntarily enter into insolvency proceedings under any state, federal or other jurisdictions. Company and the Company Subsidiaries are not, and since the Company Business Balance Sheet Date have not been, involved in any material Action or other material disagreement with any Top Vendor.
Section 4.24 Separation Agreement. Each of Vista Outdoor and Company have entered into the Separation Agreement and no amendment or modification of the Separation Agreement has been made as of the date hereof. Section 4.24 of the Company Disclosure Letter sets forth, as of the date hereof, a true and complete copy of the Separation Agreement.
Section 4.25 Sufficiency of Assets. The rights, properties and other assets of Company and the Company Subsidiaries (excluding Company Business Intellectual Property) immediately following the Closing (taking into account the Transactions), together with all other rights of Parent and any of its Affiliates (including Company and the Company Subsidiaries) pursuant to the Separation Agreement and Transition Services Agreement immediately following the Closing, will constitute all of the rights, properties and other assets necessary to conduct the Company Business in all material respects in substantially the same manner as conducted by Company and the Company Subsidiaries on the date of this Agreement and as of immediately prior to the Closing.
Section 4.26 Inventory. Except as reflected or reserved against on the Company Business Balance Sheet in accordance with GAAP or as would not be material to the Company Business, taken as a whole: (a) all inventories of Company or any Company Subsidiary with respect to the Company Business (the “Inventory”) consist of supplies, raw materials, work in progress and finished goods, all of which are merchantable and fit for the purpose for which they were procured or manufactured and conform in all material respects with all applicable specifications and warranties, (b) all of the Inventory is useable or saleable in the ordinary course of business, (c) none of the Inventory is slow-moving, obsolete, damaged or defective, (d) the
quantities of each item of Inventory are not excessive, and (e) none of the Inventory is held on consignment, or otherwise, by third parties.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 5.01 Conduct of Business by Company.
(a) Except for matters set forth in Section 5.01 of the Company Disclosure Letter, otherwise expressly required, permitted or contemplated by this Agreement, any other Transaction Document, the Separation Agreement or the Employee Matters Agreement, required by applicable Law or consented to in writing by Parent (such consent not to be unreasonably withheld, delayed or conditioned), from the date hereof until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, each of Vista Outdoor and Company shall, and shall cause their respective Subsidiaries to, use reasonable best efforts to conduct the Company Business in all material respects in the ordinary course of business consistent with past practice and, to the extent consistent therewith, use reasonable best efforts to preserve the Company Business substantially intact, including using reasonable best efforts to maintain existing relationships with customers and suppliers.
(b) In addition, and without limiting the generality of the foregoing, except for matters set forth in Section 5.01 of the Company Disclosure Letter, otherwise expressly required, permitted or contemplated by this Agreement, any other Transaction Document, the Separation Agreement or the Employee Matters Agreement, required by applicable Law or consented to in writing by Parent (such consent not to be unreasonably withheld, delayed or conditioned), from the date hereof until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, Vista Outdoor and Company shall not, and shall not permit any of their Subsidiaries to, do any of the following:
(i) in the case of Company and the Company Subsidiaries (A) issue or sell any shares of its capital stock or other equity or voting interests, or any securities convertible into, or exchangeable or exercisable for, any shares of its capital stock or other equity or voting interests (including any rights, warrants, puts, calls or options to purchase any shares of its capital stock or other equity or voting interests), other than, following the effective time of the CSG-Vista Outdoor Merger, pursuant to Company Equity Awards outstanding as of the date of this Agreement (in the form of Vista Outdoor Equity Awards) in accordance with their terms or granted following the date of this Agreement as permitted by this Agreement, (B) establish a record date for, approve, declare, set aside for payment or pay any dividends or make any other distributions in respect of its shares of capital stock or other equity interests, other than dividends and distributions by any wholly owned Subsidiary to its parent, (C) split, combine or reclassify any of its capital stock or other equity interests, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for its shares of capital stock or other equity interests, other than any such transaction by a wholly owned Subsidiary that remains a wholly owned Subsidiary after consummation of such transaction or (D) purchase, redeem or otherwise acquire or amend the terms of any shares of its capital stock or other equity interests or any
rights, warrants, options or other equity awards to acquire, directly or indirectly, any such shares of capital stock or other equity interests other than, in each case, following the effective time of the CSG-Vista Outdoor Merger, pursuant to the cashless exercise of Company Options or the forfeiture of, or withholding of taxes with respect to, Company Equity Awards;
(ii) in the case of Company and the Company Subsidiaries, amend its certificate or articles of incorporation or bylaws or comparable organizational documents, other than to change its name in accordance with the terms of any Transaction Document;
(iii) sell, transfer, acquire or dispose of, including by entering or terminating any lease with respect to, in a single transaction or a series of related transactions, direct or indirectly any interests in real property owned or leased by Company or any Company Subsidiary or otherwise used in the conduct of the Company Business (including, any Company Owned Real Property or any Company Leased Real Property), except for the expiration or renewal of any lease, in each case, in accordance with its terms;
(iv) create any Company Subsidiary that is not, directly or indirectly, wholly owned by the Company;
(v) with respect to Company or any Company Subsidiary, acquire, in a single transaction or a series of related transactions, whether by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any business or any partnership, corporation, joint venture, limited liability entity or other business organization or division thereof or any other Person, in each case that would be owned by Company or any Company Subsidiary after giving effect to the Separation and with a value or purchase price that, individually or in the aggregate, exceeds $10,300,000;
(vi) sell, transfer or otherwise dispose of, including by entering any license with respect to, in a single transaction or a series of related transactions, any tangible property or asset (other than, for the avoidance of doubt, sales, transfers or dispositions of Inventory in the ordinary course of business) of the Company Business with a value or purchase price that, individually or in the aggregate, exceeds $7,200,000, except for dispositions of obsolete or worn-out assets that are no longer used or useful in the operation or conduct of the Company Business;
(vii) transfer, sell, assign, lease, exclusively license, cancel, abandon, fail to maintain or enforce, or allow to lapse or expire, or otherwise dispose of any material Company Business Intellectual Property owned by Company or a Company Subsidiary, or take any action or fail to take any action, if such action or failure to take any such action would reasonably be likely to result in the loss, lapse, abandonment, invalidity or unenforceability of any material Company Business Intellectual Property, in each case, except for the disposal of any Company Business Registered Intellectual Property at the end of its statutory life or non-exclusive licenses or sublicenses granted in the ordinary course of business;
(viii) modify in any material respect any of its policies related to Privacy and Data Security Requirements, or any administrative, technical or physical safeguards related to privacy or data security, of the Company or the Company Subsidiaries, except (A) to remediate any security issue, (B) to enhance data security or integrity, (C) to comply with Privacy and Data Security Requirements, or (D) as otherwise directed or required by a Governmental Authority;
(ix) in the case of Company and the Company Subsidiaries (A) with respect to the Company Employees, adopt, enter into, terminate, materially amend or modify, extend or renew any Labor Agreement or Company Benefit Plan, (B) increase the compensation (i.e., base salary and annual target bonus opportunity) or benefits of, or pay any bonus to, any former or current Company Employee, other than with respect to increases made in the ordinary course of business consistent with past practice for employees whose annual base salary would not exceed $200,000; provided, however, that subject to clause (I) below, the foregoing shall not restrict Company or any of the Company Subsidiaries from providing, or making available to, employees who are newly hired in the ordinary course of business compensation and benefit arrangements and Benefit Plans that are substantially consistent with the compensation and benefit arrangements and Benefit Plans previously provided or made available by Company or the applicable Company Subsidiary to newly hired employees in similar positions, (C) with respect to former or current Company Employees, take any action to fund or in any other way secure the payment of compensation or benefits under any Company Benefit Plan, (D) with respect to any former or current Company Employees, take any action to accelerate the vesting or payment of any compensation or benefits, (E) with respect to any former or current Company Employees, make any material determination under any Company Benefit Plan that is not in the ordinary course of business, (F) transfer the sponsorship of any Company Benefit Plan to any member of the Vista Outdoor Group or accept the transfer of or retain (as applicable) the sponsorship or Liabilities relating to any Vista Outdoor Benefit Plan, (G) grant any Vista Outdoor Equity Award or any Company Equity Award, (H) grant to any Company Employee any new change in control, transaction, retention or other payments or benefits that could be triggered in connection with the consummation of the transactions contemplated hereunder, (I) hire or engage any Company Employee whose annual base salary would exceed $200,000 or (J) terminate any Company Employee (other than for cause as reasonably determined by Company) whose annual base salary exceeds $200,000, except in each case, (I) as required to ensure that any Benefit Plan in effect on the date hereof is not then out of compliance with applicable Law, (II) as expressly required pursuant to the terms of any Benefit Plan or applicable Law, (III) as expressly required by Article VI or the Employee Matters Agreement or (IV) to the extent all Liability for such action will, after the Separation, be assumed or retained by Vista Outdoor or the Vista Outdoor Subsidiaries;
(x) other than in the ordinary course of business, incur any Indebtedness, guarantee or otherwise become contingently liable for any Indebtedness of another Person, or enter into any “keep well” or other agreement to maintain any financial statement condition of another Person, except for (A) Indebtedness solely (i) between or among members of the Company Group or (ii) between or among members of the Vista Outdoor Group, (B)
Indebtedness incurred under or in respect of the Existing ABL Credit Agreement, the Existing Notes, any other agreement or instrument existing as of the date of this Agreement, (C) foreign currency hedging arrangements on customary arms’ length commercial terms entered into in the ordinary course of business for bona fide commercial purposes and not for speculative purposes and which would not have fees or costs to unwind that would reasonably be expected to exceed $2,000,000 in the aggregate, (D) Indebtedness (i) that, following the Closing, will be an obligation of Vista Outdoor or a Vista Outdoor Subsidiary and (ii) with respect to which, following the Closing, neither Company nor any Company Subsidiary shall have any Liability and (E) any Indebtedness that is incurred to refinance any Indebtedness outstanding as of the date of this Agreement or any of the foregoing, to the extent the amount of such refinancing Indebtedness is not greater than the amount of Indebtedness being refinanced;
(xi) encumber or subject material Company Assets to any Liens other than Company Permitted Liens;
(xii) (A) make any loan, advance or capital contribution to, or investment in, any Person that, individually or in the aggregate, exceeds $6,200,000 (other than Contracts relating to acquisitions or Indebtedness, which are the subject of clauses (v) and (x) above, respectively) or (B) authorize or make any capital expenditure in an amount, individually or in the aggregate, in excess of $6,200,000 in any fiscal year, in the case of each of clauses (A) and (B), except as (1) in response to any bona fide casualty loss or property damage or (2) to the extent that any Liability for such action will, after the Separation, be assumed or retained in full by Vista Outdoor or the Vista Outdoor Subsidiaries;
(xiii) (A) make any change in its financial accounting methods, principles and practices in effect on the Company Business Balance Sheet Date in any material respect, except as may be required by a change in GAAP after the date hereof, in each case, except to the extent such action relates only to Vista Outdoor, the Vista Outdoor Subsidiaries or the Vista Outdoor Business and such action will, after the Separation, be assumed or retained in full by Vista Outdoor or the Vista Outdoor Subsidiaries or (B) delay or postpone the payment of any accounts payable or other obligations or liabilities or accelerate the collection of any accounts receivable, in each case outside of the ordinary course of business;
(xiv) (A) make, change or revoke any material Tax election (including any “domestic use election” pursuant to Treasury Regulations Section 1.1503(d)-6), (B) file any material amended Tax Return, (C) settle or compromise any material Tax liability, (D) surrender any right to claim a material Tax refund, (E) waive or extend any statute of limitations relating to any material Tax or material Tax Return, (F) enter into any voluntary disclosure agreement or program with any Governmental Authority implicating any material Taxes, (G) enter into any “closing agreement” as described in Section 7121 of the Code (or any similar agreement under state, local or foreign Law) with respect to a material Tax liability or (H) change any material Tax accounting period or any method of Tax accounting, in each case, except to the extent such action relates only to Vista Outdoor, the Vista Outdoor Subsidiaries or the Vista Outdoor Business;
(xv) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization in relation to Company or any Company Subsidiary;
(xvi) adopt or implement any stockholder rights plan, “poison pill” or similar anti-takeover agreement or plan, in each case that would prohibit, restrict or delay, or otherwise be applicable to, the Transactions;
(xvii) settle any Action with respect to the Company Business if such settlement would require any payment by Company or any Company Subsidiary in an amount in excess of $1,000,000 individually or $2,500,000 in the aggregate, or would obligate Company or any Company Subsidiaries to take any material action with respect to the Company Business, or impose any material restrictions on the Company Business;
(xviii) in the case of Company and the Company Subsidiaries, engage in any business other than the Company Business substantially as conducted as of the date hereof or the Vista Outdoor Business;
(xix) amend, extend, renew or permit to lapse any material insurance policy held by Company or any of the Company Subsidiaries covering the Company Business, or enter into new insurance policies binding on the Company Business, except in either case on such terms and for such amounts as is consistent with past practice;
(xx) other than in the ordinary course of business (and, with respect to any existing Company Material Contract, in accordance with the existing terms of such Company Material Contract), or as otherwise permitted by the terms of this Section 5.01(b), enter into, amend, accelerate, cancel, fail to exercise an expiring renewal option, grant a material waiver under or modify in any material respect, terminate or transfer to any person other than Company or a Company Subsidiary any Company Material Contract, or any Contract that would constitute a Company Material Contract if in effect as of the date of this Agreement;
(xxi) amend any engagement letter between the Company and any financial advisor listed in Section 4.19, or enter into a new engagement letter with any such financial advisor;
(xxii) transfer the employment of any individual from (A) Company or a Company Subsidiary to Vista Outdoor or a Vista Outdoor Subsidiary or (B) Vista Outdoor or a Vista Outdoor Subsidiary to Company or a Company Subsidiary, except as expressly required, permitted or contemplated by the Employee Matters Agreement;
(xxiii) amend, modify or terminate any Lease Agreement or take any action in material violation thereof other than the expiration or renewal thereof in each case in accordance with its terms;
(xxiv) enter into or amend any Contract or take any other action, if such Contract, amendment of a Contract or action would reasonably be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the Transactions;
(xxv) amend or otherwise modify the Separation Agreement or the Employee Matters Agreement; or
(xxvi) authorize any of, or commit or agree to take any of, the foregoing actions.
Section 5.02 No Control of Company Business. Nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company Business prior to the Effective Time. Prior to the Effective Time, each of Company, Merger Sub and Parent shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operations.
Section 5.03 Notices. Company shall promptly deliver to Parent in writing notice and copies of (a) any notice of default or termination with respect to any Company Material Contract from the applicable counterparty thereto and (b) any notice of violation of Law affecting the Company Business from any Governmental Authority, in the case of each of clauses (a) and (b), (i) received by Company or any Company Subsidiary on or after the date of this Agreement and prior to the Closing Date and (ii) that would reasonably be expected to be material to the Company Business, taken as a whole; provided, however, that any failure of Company to comply with this Section 5.03 shall not be taken into account for purposes of determining whether the condition to the Closing set forth in Section 7.03(b) is satisfied.
Section 5.04 Vista Outdoor Obligations. Notwithstanding anything to the contrary in Section 5.01, from and after the effective time of the CSG-Vista Outdoor Merger (a) Section 5.01 shall apply solely to the Company and the Company Subsidiaries and (b) neither Vista Outdoor nor any of its Subsidiaries shall have any obligation with respect to Section 5.01.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.01 Proxy Statement and Form S-4.
(a) Parent and its counsel shall be given a reasonable opportunity to review the Vista Outdoor Proxy Statement, the Form S-4 and any other filing contemplated by Section 6.01 of the CSG-Vista Outdoor Agreement and any amendment or supplement thereto (as applicable) before such filing is made (such filings collectively, the “Transaction Filings”) and (b) Company and Vista Outdoor will consider in good faith comments made by Parent and its counsel with respect to disclosure in the Transaction Filings to the extent relating to Parent, Merger Sub, the Guarantors, the Equity Financing Sources or any of their respective Affiliates or the Merger. Parent will furnish to Vista Outdoor and Company all information concerning Parent, Merger Sub, the
Guarantors, the Equity Financing Sources, any Debt Financing Sources or any of their respective Affiliates as may be reasonably requested by Vista Outdoor and Company in connection with the preparation, filing and distribution of the Transaction Filings. Company and Vista Outdoor shall promptly advise Parent of the receipt of any comments from the SEC or its staff and of any request by the SEC or its staff for amendments or supplements to the Transaction Filings or for additional information and shall supply Parent with copies of all material correspondence with the SEC or its staff with respect to the Transaction Filings, and Company and Vista Outdoor shall consider in good faith comments made by Parent and its counsel with respect to any responses to the SEC or its staff to the extent relating to Parent, Merger Sub, the Guarantors, the Equity Financing Sources or any of their respective Affiliates or the Merger.
(b) If prior to the Effective Time, any event occurs with respect to Parent, Merger Sub, the Guarantors, the Equity Financing Sources, any Debt Financing Sources or any of their respective Affiliates, or any change occurs with respect to other information supplied by or on behalf of Parent, Merger Sub, the Guarantors, the Equity Financing Sources, any Debt Financing Sources or any of their respective Affiliates for inclusion in the Transaction Filings, in each case which is required to be described in an amendment of, or a supplement to, a Transaction Filing, Parent shall promptly notify Vista Outdoor and Company of such event, and Vista Outdoor and Company shall cooperate in the prompt filing with the SEC of any necessary amendment or supplement to such Transaction Filing and, as required by Law, Vista Outdoor and Company shall cooperate in disseminating the information contained in such amendment or supplement. Nothing in this Section 6.01(b) shall limit the obligations of any party under Section 6.01(a).
Section 6.02 [Reserved].
Section 6.03 Access to Information; Confidentiality.
Subject to applicable Law and any applicable Judgment, Company, from the date hereof until the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, and Vista Outdoor, from the date hereof until the earlier of the consummation of the CSG-Vista Outdoor Merger or the termination of this Agreement in accordance with its terms, shall, and shall cause their respective Subsidiaries to, subject to applicable Law and upon reasonable written notice from Parent, afford Parent and its Representatives reasonable access during normal business hours to (i) Vista Outdoor’s, Company’s and their respective Subsidiaries’ officers and employees and (ii) Vista Outdoor’s, Company’s and their respective Subsidiaries’ facilities, properties, Contracts and Records; provided that Vista Outdoor, Company and their Subsidiaries shall only be required to provide the access contemplated by clauses (i) and (ii) to the extent (A) such officers and employees are engaged in, or such facilities, properties, Contracts and Records relate to, the Company Business and (B) such access is reasonably required in connection with the implementation of the Transactions (including with respect to Taxes) or is reasonably required by Parent for any post-Closing Tax planning with respect to Company; provided further that no Person shall be required to provide access of the type contemplated by this Section 6.03 if such access would unreasonably interfere with the business or operations of Vista Outdoor, Company and their Subsidiaries. Notwithstanding
anything to the contrary in this Section 6.03, no Person shall be required to provide access to information contemplated by this Section 6.03 (1) if such information constitutes proprietary customer or supplier information or (2) if the disclosure of such information is legally or contractually prohibited or would result in the loss of attorney client privilege; provided that, in the case of this clause (2), the withholding party first uses reasonable best efforts to provide such access in a manner that does not violate any such prohibition or would not result in the loss of any such privilege. All information exchanged pursuant to this Section 6.03 shall be held by the parties as Evaluation Material, as such term is defined in the letter agreement listed on Section 6.03 of the Parent Disclosure Letter (the “Confidentiality Agreement”), and shall be subject to the Confidentiality Agreement.
Section 6.04 Required Efforts.
(a) On the terms and subject to the conditions set forth in this Agreement, each of the parties hereto shall (and shall cause each of their respective Affiliates to) use reasonable best efforts (unless, with respect to any action, another standard of performance is expressly provided for herein) to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties hereto in doing, all things necessary or advisable under this Agreement, each other Transaction Document and applicable Law to consummate and make effective, in the most expeditious manner practicable, the Transactions, including using reasonable best efforts to (i) obtain all necessary or advisable Governmental Approvals and make all necessary or advisable registrations and filings (including filings with Governmental Authorities, if any) and take all reasonable steps as may be necessary to obtain a Consent from, or to avoid an Action by, any Governmental Authority, (ii) subject to the second sentence of Section 6.04(f), obtain all necessary or advisable Consents, (iii) defend against any Actions challenging this Agreement or any other Transaction Document or the consummation of the Transactions, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Authority vacated or reversed and (iv) execute and deliver any additional instruments necessary to consummate the Transactions and to fully carry out the purposes of the Transaction Documents, other than, in the case of each of clauses (i) through (iv), with respect to registrations, filings and other Governmental Approvals relating to Review Laws, which are the subject of Sections 6.04(b) and 6.04(f). In connection with and without limiting the foregoing, each of the parties hereto shall use reasonable best efforts to (A) ensure that no state takeover statute or similar statute or regulation is or becomes applicable to any Transaction or this Agreement or any other Transaction Document and (B) if any state takeover statute or similar statute or regulation becomes applicable to any Transaction or this Agreement or any other Transaction Document, use reasonable best efforts to ensure that the Merger and the other Transactions may be consummated as promptly as practicable on the terms contemplated by the Transaction Documents. Each of the parties hereto shall keep the other parties hereto reasonably informed of its progress in obtaining any necessary or advisable Consents and Governmental Approvals pursuant to this Section 6.04(a).
(b) In furtherance and not in limitation of the foregoing, each of the parties hereto shall (and shall cause each of their respective Affiliates to) (i) file, or cause to be filed, as
promptly as reasonably practicable after the date hereof, all notification and report forms that may be required under the HSR Act or other antitrust, competition or pre-merger notification or trade regulation or foreign direct investment Law or order of any jurisdiction (collectively, “Review Laws”) with respect to the Transactions; provided that (A) each of the parties hereto shall (and shall cause each of their respective Affiliates to) file, or cause to be filed, all notifications and report forms that may be required under the HSR Act and (B) Parent and Merger Sub shall (and shall cause each of their respective Affiliates to) file, or cause to be filed, the UK NSIA Notice, in the case of each of clauses (A) and (B), no later than twenty (20) Business Days after the date hereof, (ii) use reasonable best efforts to supply as promptly as practicable any additional information and documentary material that may be requested by any Governmental Authority pursuant to the HSR Act or any other applicable Review Law and (iii) subject to Sections 6.04(c) and 6.04(e), use reasonable best efforts to take or cause to be taken, all other actions, and to do, or cause to be done, all other things reasonably necessary or advisable to cause the expiration or termination of the applicable waiting periods under the HSR Act and any other applicable Review Laws and to obtain all Governmental Approvals under any Review Laws that may be required by any Governmental Authority with competent jurisdiction, so as to enable the parties hereto to consummate and make effective, in the most expeditious manner practicable, the Transactions. Each of the parties hereto shall (and shall cause each of their respective Affiliates to) use reasonable best efforts to cooperate in all respects with each other in connection with any filing or submission with a Governmental Authority by any Person relating to any Review Laws in connection with the Transactions and in connection with any Action relating to any Review Laws in connection with the Transactions, and each of the parties hereto shall (and shall cause each of their respective Affiliates to) keep the other parties reasonably informed of its progress in obtaining any necessary or advisable Governmental Approvals relating to Review Laws in connection with the Transactions. Subject to applicable Law, and to the extent reasonably practicable, each of the parties hereto shall (and shall cause each of their respective Affiliates to) consult with the other parties hereto in advance with respect to any written materials submitted to any Governmental Authority by such party or its Affiliates, and, to the extent permitted by the applicable Governmental Authority and to the extent reasonably practicable, shall give the other parties hereto the opportunity to attend and participate in any meetings and conferences with Governmental Authorities, in each case in connection with the matters contemplated by this Section 6.04(b). Notwithstanding the foregoing in this Section 6.04(b), each of the parties hereto (and each of their respective Affiliates) may, as each reasonably deems necessary or advisable: (x) designate any competitively sensitive material provided to the others under this Section 6.04(b) as “outside counsel only” and such materials and the information contained therein shall be given only to the outside legal counsel of the recipient and will not be disclosed by such outside counsel to employees, officers or directors of the recipient unless express written consent is obtained in advance from the source of the materials; (y) redact documents and information as necessary to comply with contractual obligations, as necessary to avoid adversely impacting or jeopardizing any legal privilege or work product doctrine or as necessary to protect personal information; and (z) exclude the others from any meeting, conference, videoconference or telephone call (or portion thereof) with any Governmental Authority to the extent it addresses any matters related to any information of the nature contemplated by the foregoing clauses (x) and (y). None of the parties hereto shall (and
each of the parties hereto shall cause each of their respective Affiliates not to) voluntarily extend any waiting period under the HSR Act or any other applicable Review Law or enter into any agreement with any Governmental Authority to delay or not to consummate the Transactions except with the prior written consent of the other parties (such consent not to be unreasonably withheld, delayed or conditioned).
(c) Without limiting the foregoing, each of Parent and Merger Sub agrees to (and shall cause each of their respective Affiliates to) take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary or advisable under this Agreement, each other Transaction Document and applicable Law to eliminate each and every impediment to obtaining all necessary or advisable Governmental Approvals, so as to enable the Closing to occur as promptly as practicable, and in any event no later than the End Date, including, subject to Section 6.04(f), (i) agreeing to conditions imposed or requested by any Governmental Authority and proposing, negotiating, committing to and effecting, by consent decree, hold separate order or otherwise, the sale, divestiture, licensing or disposition of assets or businesses of Parent, Merger Sub or any of their respective Affiliates or of Company or any of the Company Subsidiaries and (ii) accepting any operational restrictions (including through a voting trust agreement, proxy agreement or similar arrangement), or otherwise proposing, negotiating, taking or committing to take or not to take actions that limit any of Parent’s, Merger Sub’s or any of their respective Affiliates’ (including, after the Effective Time, the Surviving Corporation and its Subsidiaries’) freedom of action with respect to, or the ability of any of them to retain or freely operate, any of the assets, properties, licenses, rights, operations or businesses of Parent, Merger Sub or any of their respective Affiliates or of Company or any of the Company Subsidiaries, in each case as may be required in order to obtain all necessary or advisable Governmental Approvals or to avoid the entry of, or to effect the lifting, vacating or dissolution of, any order in any Action, which would otherwise have the effect of preventing, delaying or making it materially more difficult to consummate the Transactions; provided, that, notwithstanding anything contained in this Agreement to the contrary, nothing in this Section 6.04 or any other provision of any Transaction Documents shall require Parent to agree to take any action with respect to (A) any investment fund, investment vehicle, or management or advisory entity managed by, advised by, managing, advising, or affiliated with Parent; or (B) any portfolio company (as such term is commonly understood in the private equity industry) or other investment of any such investment fund, investment vehicle, or management or advisory entity, other than, in the case of each of clause (A) and clause (B), with respect to Parent and Parent’s Subsidiaries.
(d) Parent and Merger Sub shall be responsible for all filing fees due in connection with any necessary or advisable Governmental Approval.
(e) Each party hereto shall not (and shall cause its Affiliates not to) without the prior written consent of each other party hereto, in connection with obtaining any Consents or Governmental Approvals hereunder, or in connection with otherwise complying with any provisions of this Agreement or any other Transaction Document, agree or consent to, or offer to agree or consent to, (A) the taking of any action or the imposition of any terms, conditions,
limitations or standards of service the effectiveness or consummation of which is not conditional upon the occurrence of the Closing, (B) any amendments or modifications to any of the terms of this Agreement or any other Transaction Document or (C) any hold separate, sale, divestiture, license or disposition of, or restriction or limitation with respect to, any of the assets or businesses of the Vista Outdoor Business (other than as expressly contemplated by the CSG-Vista Outdoor Merger Agreement) or any other action, restriction or limitation with respect to the Vista Outdoor Business. Nothing in this Section 6.04 shall be construed to require Company or any of its Subsidiaries to pay any consideration to, or grant any accommodations to, any third party from whom any Consent or Governmental Approval is requested.
(f) Without limiting the generality of anything contained in this Section 6.04, each of the parties hereto shall (and shall cause their respective Affiliates to) within five calendar days after the Closing, prepare and file with DDTC a notification of changes pursuant to Section 122.4(a) of the ITAR.
Section 6.05 Directors’ and Officers’ Indemnification; Liability Insurance.
(a) From and after the Effective Time, Parent shall cause the Surviving Corporation to advance expenses as incurred by, and indemnify, exculpate and hold harmless, in each case, to the fullest extent permitted by applicable Law, the certificate or articles of incorporation, bylaws or comparable organizational documents of Company or any of its Subsidiaries as in effect on the date hereof or the certificate of incorporation or bylaws of Company set forth as Exhibit 3.1 and Exhibit 3.2 to the Form S-4 as of the date hereof to be effective as of the consummation of the CSG-Vista Outdoor Merger, each present and former director, officer or employee of Company or any of its Subsidiaries (in each case, when acting in such capacity) (collectively, the “Company Indemnified Parties”) against any Liabilities incurred in connection with any threatened or actual Action, whether civil, criminal, administrative or investigative, whether arising before, at or after the Effective Time, arising out of, or pertaining to, the fact that such person is or was a director, officer or employee of Company or any of its Subsidiaries or is or was serving at the request of Company or any of its Subsidiaries as a director or officer of another Person and pertaining to matters, acts or omissions existing or occurring at or prior to the Effective Time, including matters, acts or omissions occurring in connection with the approval of this Agreement or any other Transaction Document and the Transactions; provided, that in the case of advancement of expenses, any Company Indemnified Party to whom expenses are advanced provides an undertaking to repay such advances if it is ultimately determined that such Company Indemnified Party is not entitled to indemnification pursuant to this Section 6.05. Without limiting the indemnification and other rights provided in this Section 6.05, all rights to indemnification and all limitations on liability existing in favor of the Company Indemnified Parties as provided in any indemnification agreement in existence on the date of this Agreement shall survive the Merger and shall continue in full force and effect to the fullest extent permitted by Law, and shall be honored by the Surviving Corporation and its Subsidiaries as if they were the indemnifying party thereunder, without any amendment thereto.
(b) For a period of six years after the Effective Time, Parent or the Surviving Corporation shall cause to be maintained in effect the policies of directors’ and officers’ liability insurance maintained by Company as of the consummation of the CSG-Vista Outdoor Merger (which insurance shall be consistent with directors’ and officers’ liability insurance maintained by Vista Outdoor as of the date hereof (the “Vista Outdoor D&O Insurance”)) (provided that Parent or the Surviving Corporation may substitute therefor policies with a substantially comparable insurer of at least the same coverage and amounts containing terms and conditions that are no less advantageous to the Company Indemnified Parties) with respect to claims against the Company Indemnified Parties arising from facts or events which occurred at or prior to the Effective Time (including the approval of this Agreement or any other Transaction Document and the Transactions); provided, however, that neither Parent nor the Surviving Corporation shall be obligated to expend, on an annual basis, an amount in excess of 300% of the current annual premium paid as of the date hereof by Vista Outdoor and its Subsidiaries for the Vista Outdoor D&O Insurance (the “Premium Cap”), and, if such premiums for such insurance would at any time exceed the Premium Cap, then Parent or the Surviving Corporation shall cause to be maintained policies of insurance which, in Parent’s or the Surviving Corporation’s good faith determination, provide the maximum coverage available at an annual premium equal to the Premium Cap. In lieu of the foregoing, Parent or Company may (and at the request of Parent, Company shall use its reasonable best efforts to) obtain at or prior to the Effective Time a six-year “tail” policy under Company’s directors’ and officers’ insurance policy providing equivalent coverage to that described in the preceding sentence if and to the extent that the same may be obtained for an amount that, in the aggregate, does not exceed the Premium Cap.
(c) The obligations of Parent and the Surviving Corporation under this Section 6.05 shall not be terminated or modified after the Effective Time in a manner so as to adversely affect any Company Indemnified Party or any other person entitled to the benefit of this Section 6.05 without the prior written consent of the affected Company Indemnified Party or affected person.
(d) The provisions of this Section 6.05 shall survive the Effective Time and are intended to be for the benefit of, and shall be enforceable by, each Company Indemnified Party and his or her heirs and representatives. If Parent or the Surviving Corporation, or any of its successors or assigns, consolidates with or merges into any other entity and is not the continuing or surviving entity of such consolidation or merger, transfers all or substantially all its assets to any other entity or engages in any similar transaction, then in each case, Parent or the Surviving Corporation, as applicable, will cause proper provision to be made so that the successors and assigns of Parent or the Surviving Corporation, as applicable, will expressly assume the obligations set forth in this Section 6.05.
Section 6.06 Fees and Expenses. Except as otherwise expressly provided in any Transaction Document, all fees and expenses incurred in connection with the Transactions shall be paid by the party incurring such fees or expenses.
Section 6.07 Public Announcements. Company, on the one hand, and Parent and Merger Sub, on the other hand, shall consult with each other and shall mutually agree upon any press release or other public statements with respect to the Transactions, and shall not issue any such press release or make any such public statement prior to such consultation and agreement, other than any press release or other public statement that only contains information and statements that have been previously approved by the parties pursuant to this Section 6.07, except as may be required by applicable Law or court process or by obligations pursuant to any listing agreement with any U.S. national securities exchange, in which case the party proposing to issue such press release or make such public announcement shall use reasonable best efforts to consult in good faith with the other parties before issuing any such press release or making any such public announcement. The parties hereto agree that the initial press release to be issued with respect to the Transactions following execution of this Agreement shall be in the form heretofore agreed by the parties hereto.
Section 6.08 Section 16 Matters. Prior to the Effective Time, Company shall take all such steps as may be required to cause any acquisitions or dispositions of Company Common Stock (including derivative securities with respect thereto), in each case resulting from the Transactions, by each individual who is subject to Section 16 of the Exchange Act with respect to Company to be exempt under Rule 16b-3 promulgated under the Exchange Act.
Section 6.09 Tax Matters. Each party hereto shall cooperate with each other party hereto and use reasonable best efforts to cause the applicable Transactions to qualify for the Intended Tax Treatment, including by refraining from any action that such party knows is reasonably likely to prevent the Intended Tax Treatment. The parties hereto shall not take any position inconsistent with the Intended Tax Treatment for any Tax purpose unless otherwise required by a Final Determination.
Section 6.10 [Reserved].
Section 6.11 Company Stockholder Meeting. Company shall, in accordance with the organizational documents of the Company, within one (1) Business Day following the execution and delivery of this Agreement, convene and hold a meeting of Vista Outdoor, in its capacity as the sole stockholder of the Company (including any postponements, adjournments or recesses thereof, the “Company Stockholder Meeting”), for the purpose of obtaining the Company Stockholder Approval. Company shall, through its Board of Directors, recommend to Vista Outdoor, in its capacity as the sole stockholder of the Company, that Vista Outdoor give the Company Stockholder Approval. Company shall adjourn, recess or postpone the Company Stockholder Meeting if, and only if, Company (i) obtains the prior written consent of Parent to do so or (ii) is required to do so by a court of competent jurisdiction in connection with any Action relating to this Agreement, the Transactions, the CSG-Vista Outdoor Merger Agreement or the CSG-Vista Outdoor Transactions. Vista Outdoor shall, (A) within one (1) Business Day following the execution and delivery of this Agreement, duly execute and deliver to the Company (with a copy delivered substantially concurrently to Parent) (1) a waiver of notice of the Company Stockholder Meeting and (2) a waiver of notice of the availability of appraisal
rights under Section 262(d)(1) of the DGCL in connection with the Merger, (B) cause all Company Common Stock of which Vista Outdoor has the power to vote, or direct the voting of, to be deemed present, in person or by proxy, at, and to be counted for purposes of establishing a quorum at, the Company Stockholder Meeting and (C) cause all such Company Common Stock to be voted at the Company Stockholder Meeting in favor of the Company Stockholder Approval.
Section 6.12 Transaction Litigation.
(a) From the date of this Agreement until the Closing, Company shall provide Parent with reasonably prompt notice of any litigation commenced or, to the Knowledge of Company, threatened against Vista Outdoor, Company or their respective directors relating to the Merger, brought by any holder of Company Common Stock or Vista Outdoor Common Stock and shall keep Parent reasonably informed with respect to the status thereof (including by promptly furnishing to Parent and its representatives such information relating to such proceeding as may be reasonably requested).
(b) Each of Vista Outdoor and Company shall give Parent the opportunity to participate in the defense or settlement of any litigation against Company or its directors relating to the Merger brought by any holder of Company Common Stock. Without limiting in any way the parties’ obligations under Section 6.04, each of Company and Parent shall cooperate, shall cause its Subsidiaries to cooperate, and shall use its reasonable best efforts to cause its Representatives to cooperate, in each case in the defense against such litigation. For purposes of this paragraph, “participate” means Parent being kept reasonably apprised of proposed strategy and other significant decisions with respect to any such litigation (to the extent attorney-client privilege between Company and its counsel is not undermined or otherwise affected), and Parent may offer comments or suggestions with respect to such litigation but will not be afforded any decision making power or other authority over such litigation.
Section 6.13 Financing.
(a) The parties hereto acknowledge that Parent may attempt to arrange third party debt financing for the purpose of funding the transactions contemplated by this Agreement (the “Debt Financing”) and, if Parent so chooses to seek the Debt Financing, prior to the Effective Time, Company shall use, and shall cause its Subsidiaries to use, reasonable best efforts to provide, and shall use reasonable best efforts to cause any Representatives retained by Company or any of its Subsidiaries to use reasonable best efforts to provide, in each case at Parent’s sole cost and expense, such cooperation in connection with the arrangement of the Debt Financing as may be reasonably requested by Parent, including (i) participation in a reasonable number of teleconferences, meetings including rating agency meetings, drafting sessions, presentations, road shows and due diligence sessions, in each case upon reasonable advance notice and at mutually agreeable dates and times, and to otherwise assist the providers of the Debt Financing in obtaining ratings in connection with the Debt Financing, (ii) make available to Parent, its advisors or its Debt Financing Sources such financial and other pertinent information regarding Company and the Company Subsidiaries as may be reasonably requested by Parent, its
advisors or its Debt Financing Sources, including (I) the unaudited financial statements of the Company for each fiscal quarter of the Company ended at least forty-five (45) days prior to the Closing and the audited financial statements of the Company for any fiscal year of the Company ended at least ninety (90) days prior to the Closing and (II) such information as is reasonably necessary to allow Parent, its advisors and its Debt Financing Sources to prepare pro forma financial statements (it being understood that Parent, and not Company or any of its Subsidiaries, shall be responsible for the preparation of the pro forma financial statements and any other pro forma information, including any pro forma adjustments), (iii) reasonably assisting Parent and the Debt Financing Sources in the preparation of lender and investor presentations, rating agency presentations, bank information memoranda, marketing materials and other similar documents and materials in connection with the Debt Financing, (iv) reasonably cooperating and otherwise assisting with marketing efforts of Parent and the Debt Financing Sources for any portion of the Debt Financing, (v) facilitating the granting of a security interest (and perfection thereof) in collateral, including obtaining releases of existing Liens, provided that no security interest and no release of existing Liens shall be effective until the Closing, (vi) assisting in the preparation, execution and delivery (limited, in the case of execution and delivery, solely to officers continuing with Company and the Company Subsidiaries after the Closing) of one or more credit agreements, indentures, purchase agreements, pledge and security documents, customary secretary’s certificates and other definitive documentation, in each case as may be reasonably required by Parent; provided that any such agreements, documents and related certificates and instruments shall be subject to the occurrence of the Closing and become effective no earlier than the Closing, (vii) causing the taking of corporate, limited liability or other organizational actions (subject to the occurrence of the Closing) by the Company reasonably necessary to permit the consummation of the Debt Financing, (viii) executing and delivering (A) customary authorization letters to the Debt Financing Sources authorizing the distribution of information regarding Company to prospective lenders or investors in connection with the Debt Financing and containing a customary representation that the public side versions of such documents do not include material non-public information about Company and its Subsidiaries or their securities, and a customary representation as to the accuracy of the written information contained in the disclosure and marketing materials regarding Company and its Subsidiaries, subject to customary exceptions and qualifications, and (ix) furnishing to Parent and its lenders promptly (and in any event at least five (5) Business Days prior to the Closing Date) with all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act and beneficial ownership regulations (including beneficial ownership certifications as under 31 C.F.R. § 1010.230), and requested by the Debt Financing Sources in writing at least ten (10) Business Days prior to the Closing Date. Notwithstanding anything to the contrary contained herein, nothing in this Section 6.13(a) shall require any such cooperation or assistance to the extent that it could result in Company or any of its Subsidiaries being required to (1) pledge any assets as collateral prior to the Effective Time, (2) incur any liability (including payment of fees) in connection with the Debt Financing prior to the Effective Time, (3) take any actions to the extent such actions would or could reasonably be expected to (I) unreasonably interfere with the ongoing business or operations of Company or any of its Subsidiaries, (II) reasonably be expected to subject any director, manager, officer or employee of Company or any of its Subsidiaries to any actual or
potential personal liability, (III) conflict with, or result in any violation of or default (or an event that, with or without notice or lapse of time or both, would become a default) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to loss of a material benefit under, or to increased, additional, accelerated or guaranteed rights or entitlements (other than de minimis increased, additional, accelerated or guaranteed rights or entitlements) of any Person under, or result in the creation, prior to the Effective Time, of any Lien upon any of the properties or assets of Company or any of its Subsidiaries under, any provision of (x) the certificate or articles of incorporation, bylaws or comparable organizational documents of Company or any of its Subsidiaries (in each case, not entered into in contemplation of this Section 6.13(a)), (y) any Contract to which Company or any of its Subsidiaries is a party or by which any of their respective properties, assets or businesses is bound (in each case, not entered into in contemplation of this Section 6.13(a)) or (z) any Judgment or Law applicable to Company or any of its Subsidiaries or their respective properties, assets or businesses, (IV) prior to the Effective Time, require any such entity to change any fiscal period, or (V) cause (x) any representation or warranty set forth in Article IV or Article X of this Agreement to be inaccurate or breached, (y) any closing condition set forth in Article VII of this Agreement to fail to be satisfied or (z) any other breach of this Agreement, any other Transaction Document or any CSG-Vista Outdoor Transaction Document, (4) commit to take any action under any certificate, document or instrument that is not contingent upon the Closing, (5) provide access to or disclose information that Company reasonably determines could (I) jeopardize any attorney-client privilege, attorney work product protection or other legal privilege of, or conflict with any confidentiality requirements applicable to, Company or any of its Subsidiaries, (II) expose Company or any of its Subsidiaries to risk of liability for disclosure of sensitive or personal information or (III) result in the disclosure of trade secrets or competitively sensitive information to third parties, (6) cause any director, manager or equivalent of Company or any of its Subsidiaries to pass resolutions to approve the Debt Financing or authorize the creation of any agreements, documents or actions in connection therewith (other than any director, manager or equivalent of Company or any of the Company Subsidiaries who will continue in such a position following the Closing and the passing of such resolutions), in each case that are not contingent on the Closing or would be effective prior to the Effective Time, (7) deliver any opinion of counsel (other than customary opinions of counsel delivered in connection with the definitive agreements for the Debt Financing at the Closing) or (8) require Company or any of the Company Subsidiaries or Vista Outdoor or any of its Subsidiaries to prepare any financial statements or other information that is not reasonably available to Company or any of the Company Subsidiaries or Vista Outdoor or any of its Subsidiaries.
(b) Parent shall be responsible for all fees and expenses related to the Financing contemplated hereby. Accordingly, notwithstanding anything to the contrary in Section 6.06, Parent shall promptly reimburse Company and each of its Subsidiaries for all reasonable out-of-pocket costs and expenses (including attorneys’ fees) incurred by Company or such Subsidiary in connection with their cooperation pursuant to Section 6.13(a) in connection with the Financing. Parent shall indemnify and hold harmless Company and each of its Subsidiaries and all of their respective directors, officers, managers, employees and Representatives from and against any and all Liabilities suffered or incurred by them in
connection with the arrangement of the Financing, their assistance pursuant to this Section 6.13 or otherwise or any information utilized in connection therewith, in each case other than as a result of fraud, bad faith, gross negligence or willful misconduct by or on behalf of such Person. Notwithstanding anything to the contrary in this Agreement, prior to the Effective Time, neither Company nor any of its Subsidiaries shall have any Liability under any loan agreement or any related document or any other agreement or document related to the Financing.
(c) For the avoidance of doubt, Parent and Merger Sub, on behalf of themselves and their respective Affiliates, expressly acknowledge and agree that (i) their respective obligations to consummate the Transactions are not subject to any condition or contingency with respect to receipt of the Financing and (ii) the condition set forth in Section 7.03(b), as applied to the obligations of Company under this Section 6.13, shall be deemed to be satisfied unless (A) Company has materially breached its obligations under this Section 6.13, (B) Parent has notified Company of such breach in writing in good faith, detailing in good faith reasonable steps that comply with this Section 6.13 in order to cure such breach, and (C) Company has not taken such steps or otherwise cured such breach with reasonably sufficient time prior to the End Date and the Debt Financing has not been consummated as a result of such breach.
(d) Company hereby consents to the use of its and the Company Subsidiaries’ trademarks, trade names and logos, in each case relating to the Company Business, in connection with the Financing; provided that (i) such trademarks, trade names and logos are used solely in a manner that is not intended, or reasonably likely, to harm or disparage Company or any Company Subsidiaries or the reputation or goodwill of Company or the Company Subsidiaries and (ii) such use is subject to Company’s reasonable review in advance thereof.
Section 6.14 [Reserved].
Section 6.15 Post-Closing Compensation Matters.
(a) For a period of not less than one year following the Effective Time (or if earlier, the date of termination of such Company Employee), Parent shall, and shall cause the Surviving Corporation to, provide each Company Employee (i) a base salary that is no less favorable than that in effect for such Company Employee immediately prior to the Effective Time and (ii) annual cash incentive and long-term incentive opportunities, severance benefits and employee benefit plans and arrangements (other than base salary) that are substantially comparable in the aggregate to those provided to such Company Employee immediately prior to the Effective Time; provided that, in lieu of providing equity or equity-related incentives, Parent may satisfy its obligations by providing the cash equivalent thereof.
(b) Parent hereby acknowledges that the consummation of the Transactions constitutes a “change in control”, “change of control” or other term of similar import for purposes of any Company Benefit Plan that contains a definition of “change in control”, “change of control” or other term of similar import, as applicable. Parent shall or shall cause the Surviving Corporation to assume, honor and provide all the Company Benefit Plans in
accordance with their terms in effect as of the Effective Time, without any amendment or modification in respect of any payments, benefits or rights under any Company Benefit Plan arising as a result of the Transactions (either alone or in combination with any other event).
(c) Each Company Employee who participates in a Benefit Plan that is an annual cash incentive plan (each, an “Annual Incentive Plan”) shall receive a cash bonus in respect of Company’s fiscal year in which the Closing occurs as follows: (i) with respect to the portion of such fiscal year ending on the Closing Date, an amount equal to the cash bonus calculated under the applicable Annual Incentive Plan based on the projected full-year actual performance under the applicable Annual Incentive Plan as of the Closing, as determined prior to the Closing by the Board of Directors of Company (or, if appropriate, any committee administering the Annual Incentive Plan), prorated for the portion of the year elapsed between the beginning of such fiscal year and the Closing Date (the “Pre-Closing Bonus”) and (ii) with respect to the remainder of such fiscal year, an amount equal to the greater of full-year threshold or actual performance, prorated for the portion of the year elapsed between the Closing Date and the end of such fiscal year (the “Post-Closing Bonus”), in each case, otherwise in accordance with the terms of the applicable Annual Incentive Plan as in effect for each Company Employee as of the Closing Date; provided that, notwithstanding the foregoing, in the event the Closing occurs within 60 Business Days preceding Company’s fiscal year end, then such Company Employee shall not receive a Post-Closing Bonus but shall receive a Pre-Closing Bonus equal to an amount calculated under the applicable Annual Incentive Plan based on projected full-year actual performance under the applicable Annual Incentive Plan as of the Closing, as determined by the Board of Directors of Company (or, if appropriate, any committee administering the Annual Incentive Plan), without proration. Parent shall, and shall cause the Surviving Corporation to, (i) pay the Pre-Closing Bonuses to the applicable Company Employees promptly following the Closing (but in any event, no later than the first payroll date that occurs more than five Business Days after the Closing) and (ii) pay the Post-Closing Bonuses to the applicable Company Employees at the same time that such bonuses are typically paid in the ordinary course of business. Notwithstanding the foregoing in this Section 6.15(c), in the event that any Company Employee is terminated by Parent or any of its Affiliates, including the Surviving Corporation or any of its Subsidiaries, without Cause (as defined in the Vista Outdoor 2020 Stock Incentive Plan) or due to death or disability following the Closing but prior to the payment date for Post-Closing Bonuses, if any, Parent shall, and shall cause its Affiliates, including the Surviving Corporation and its Subsidiaries, to, pay to such Company Employee, at the time set forth in the preceding sentence, an amount equal to the sum of (x) the Pre-Closing Bonus and (y) a portion of the applicable Post-Closing Bonus pro-rated based on the number of days the applicable Company Employee was employed between the Closing Date and the end of the performance period.
(d) The provisions of this Section 6.15 are solely for the benefit of the parties to this Agreement, and no provision of this Section 6.15 is intended to, or shall, constitute the establishment, modification, termination or adoption of or an amendment to any employee benefit plan for purposes of ERISA or otherwise or limit the ability following the Closing of the Company Group to modify, amend or terminate any benefit or compensation plan, program,
contract, policy, agreement or arrangement or shall confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee) any right to employment or continued employment for any period of time or any right to a particular term or condition of employment, and no current or former employee or any other Person associated therewith shall be regarded for any purpose as a third-party beneficiary of this Agreement or have the right to enforce the provisions hereof.
Section 6.16 R&W Insurance Policy. In the event that Parent elects to obtain a representation and warranties insurance policy (an “R&W Insurance Policy”) in connection with the Transactions, each of Company and, until the consummation of the CSG-Vista Outdoor Merger, Vista Outdoor shall, and shall cause their Subsidiaries to, use reasonable best efforts to provide Parent with such information as may be reasonably requested by Parent in connection with obtaining any such R&W Insurance Policy (subject to the terms and conditions of Section 6.03 of this Agreement). The premium payable to the underwriters in respect of any R&W Insurance Policy, and all other brokerage commissions, Taxes, or similar expenses, fees or costs associated with obtaining the R&W Insurance Policy shall be borne by Parent.
Section 6.17 Reorganization. Prior to the Effective Time, each of Vista Outdoor and Company shall, and shall cause each of their applicable Subsidiaries to, undertake the steps described in Section 1.01(a) of the Separation Agreement in accordance with the terms thereof (such steps, the “Reorganization”). Prior to the Effective Time, each of Vista Outdoor and Company shall reasonably consult with Parent in connection with the Reorganization, including (i) providing copies of the draft documentation required to effect the Reorganization to Parent for Parent’s review and comment and (ii) considering in good faith Parent’s comments on such documentation or Parent’s proposed changes to the Reorganization (including the steps described in Section 1.01(a) of the Separation Agreement). Each of Vista Outdoor and Company shall keep Parent reasonably apprised, in reasonable detail, of the status of the Reorganization and will not make any changes to the steps described in Section 1.01(a) of the Separation Agreement without Parent’s consent, such consent not to be unreasonably withheld, conditioned or delayed. Vista Outdoor, Company and Parent shall reasonably cooperate in connection with such activities necessary to implement the Reorganization prior to the Closing. The steps of the Reorganization may not be amended, modified or waived in any way without the prior written consent of Parent.
Section 6.18 [Reserved].
Section 6.19 [Reserved].
Section 6.20 Stock Exchange Delisting; Exchange Act Deregistration. Prior to the Effective Time, the Company shall cooperate with Parent and use its reasonable best efforts to take, or cause to be taken, all actions and do, or cause to be done, all things reasonably necessary, proper or advisable on its part pursuant to applicable Law and the rules and regulations of the NYSE to cause (a) the delisting of the Company Common Stock from the NYSE as promptly as practicable after the Effective Time and (b) the deregistration of the Company Common Stock pursuant to the Exchange Act as promptly as practicable after such delisting.
Section 6.21 CSG-Vista Outdoor Merger Agreement. Without the prior written consent of Parent (such consent not to be unreasonably withheld, delayed or conditioned), neither Vista Outdoor nor Company shall, or shall agree to, amend, modify, supplement or waive any provision of the CSG-Vista Outdoor Merger Agreement, the Separation Agreement, the Employee Matters Agreement or any other CSG-Vista Outdoor Transaction Document, and any such action that is taken without such prior written consent of Parent shall be null and void ab initio. Prior to Closing, Company shall comply with the terms of Section 2.06 of the Separation Agreement.
Section 6.22 Cash Adjustment Amount. Company shall deliver to Parent, not more than five (5) Business Days, and not less than three (3) Business Days, prior to the Closing Date, a statement setting forth Company’s calculation of the Cash Adjustment Amount, together with reasonably detailed schedules with respect to the determination thereof, which calculation shall be certified in writing by an independent nationally recognized accounting firm (the “Cash Adjustment Calculation Statement”). Following the delivery of the Cash Adjustment Calculation Statement, Company shall, subject to Parent’s reasonable advance written request (email being sufficient), provide Parent and its Representatives with reasonable access during normal business hours, and in such a manner as to not interfere with the normal operations of Company or any Company Subsidiary, to the records and relevant Representatives (subject to the execution of any required customary access letters), personnel and properties of Company and the Company Subsidiaries to the extent reasonably relevant to Parent’s review of the Cash Adjustment Calculation Statement. Company shall adjust the Cash Adjustment Amount to account for any reasonable comments made by Parent with respect thereto.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.01 Conditions to Each Party’s Obligation To Effect the Merger. The respective obligations of each party to effect the Merger are subject to the satisfaction (or, to the extent permitted by Law, waiver) on or prior to the Closing Date of the following conditions:
(a) the Company Stockholder Approval shall have been obtained;
(b) any waiting period (and any extension thereof) applicable to the Transactions under the HSR Act shall have been terminated or shall have expired and the Governmental Approvals under Review Laws set forth in Section 7.01(b) of the Company Disclosure Letter shall have been obtained;
(c) no court of competent jurisdiction or other Governmental Authority shall have issued a Judgment or enacted a Law (each, a “Restraint”) that is still in effect and prohibits, enjoins or makes illegal the consummation of the Transactions; and
(d) the CSG-Vista Outdoor Merger shall have been consummated in accordance with the CSG-Vista Outdoor Merger Agreement and the Closing Statement (as defined in the Separation Agreement) shall have become final and binding and the Closing
Adjustment Amount (as defined in the Separation Agreement), if any, shall have been paid, in each case in accordance with Section 2.06 of the Separation Agreement.
Section 7.02 Conditions to Obligations of Company To Effect the Merger. The obligations of Company to effect the Merger are further subject to the satisfaction (or, to the extent permitted by Law, waiver) on or prior to the Closing Date of the following conditions:
(a) (i) the representations and warranties of Parent and Merger Sub set forth in Section 3.01, Section 3.02, Section 3.03, Section 3.08, Section 3.09 and Section 3.12 shall be true and correct in all material respects, as of the Closing as though made at the Closing, except to the extent such representation and warranties expressly relate to an earlier date (in which case as of such earlier date) and (ii) all other representations and warranties of Parent and Merger Sub set forth in this Agreement shall be true and correct, disregarding all qualifications or limitations as to “materiality”, “Parent Material Adverse Effect” and words of similar import set forth therein, as of the Closing as though made at the Closing, except to the extent such representations and warranties expressly relate to an earlier date (in which case as of such earlier date), other than, in the case of this clause (ii), any failures to be so true and correct that, individually or in the aggregate, have not had and would not reasonably be expected to have a Parent Material Adverse Effect;
(b) Parent and Merger Sub shall have performed in all material respects all obligations required to be performed by them under this Agreement, and each other Transaction Document to which they are a party, at or prior to the Closing; and
(c) Company shall have received a certificate signed on behalf of Parent by an executive officer of Parent certifying the satisfaction by Parent and Merger Sub (as applicable) of the conditions set forth in Sections 7.02(a) and 7.02(b).
Section 7.03 Conditions to Obligations of Parent and Merger Sub To Effect the Merger. The obligations of Parent and Merger Sub to effect the Merger are further subject to the satisfaction (or, to the extent permitted by Law, waiver) on or prior to the Closing Date of the following conditions:
(a) (i) the representations and warranties of Company set forth in Section 4.01, Section 4.03 (other than Section 4.03(a)), Section 4.04, Section 4.19 and Section 4.24 and the representations and warranties of Vista Outdoor set forth in Section 10.01(a) and Section 10.01(b) shall be true and correct in all material respects, as of the Closing as though made at the Closing, except to the extent such representations and warranties expressly relate to an earlier date (in which case as of such earlier date), (ii) the representations and warranties of Company set forth in Section 4.03(a) shall be true and correct in all respects other than de minimis inaccuracies, as of the Closing as though made at the Closing, except to the extent such representations and warranties expressly relate to an earlier date (in which case as of such earlier date), and (iii) all other representations and warranties of Company and Vista Outdoor set forth in this Agreement shall be true and correct, disregarding all qualifications or limitations as to “materiality”, “Company Material Adverse Effect” and words of similar import set forth therein,
as of the Closing as though made at the Closing, except to the extent such representations and warranties expressly relate to an earlier date (in which case as of such earlier date), other than, in the case of this clause (iii), any failures to be so true and correct that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect;
(b) each of Company and Vista Outdoor shall have performed in all material respects all obligations required to be performed by them under this Agreement, and each other Transaction Document to which they are a party, at or prior to the Closing;
(c) Parent shall have received a certificate signed on behalf of Company by an executive officer of Company certifying the satisfaction by Company of the conditions set forth in Sections 7.03(a), 7.03(b) and 7.03(d);
(d) since the date of this Agreement there shall not have been any effect, change, event or occurrence that, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect; and
(e) the Reorganization shall have been completed.
Section 7.04 Frustration of Closing Conditions. No party may rely on the failure of any condition set forth in this Article VII to be satisfied if such failure was caused by such party’s (or such party’s Affiliate’s) failure to comply with this Agreement or the other Transaction Documents or use the efforts required pursuant to this Agreement or the other Transaction Documents to cause the Closing to occur, including as required by Section 6.04.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.01 Termination. This Agreement may be terminated at any time prior to the Effective Time:
(a) by mutual written consent of Company and Parent;
(b) by either Company or Parent:
(i) if the Effective Time has not occurred on or before February 4, 2025 (the “Initial End Date” and, as extended pursuant to the immediately succeeding proviso, the “End Date”); provided that, if on the Initial End Date, all of the conditions set forth in Article VII have been satisfied (other than those conditions that by their nature are to be satisfied at the Closing; provided that such conditions would have been satisfied on the Initial End Date if the Closing occurred on such date) or waived, other than those conditions set forth in Section 7.01(b) or 7.01(c) (with respect to Section 7.01(c), solely to the extent that such Restraint arises under the HSR Act or any other Review Law), then the Initial End Date will be automatically extended to March 4, 2025; provided further that the right to terminate this Agreement pursuant to this
Section 8.01(b)(i) shall not be available to a party if the failure of the Effective Time to occur on or before the End Date is primarily due to the breach by such party of any Transaction Document (including, in the case of Company, Vista Outdoor, and, in the case of Parent, Merger Sub);
(ii) if any Restraint having the effect set forth in Section 7.01(c) shall be in effect and shall have become final and non-appealable; provided that the party seeking to terminate this Agreement pursuant to this Section 8.01(b)(ii) (and such party’s Affiliates) shall have performed in all material respects its obligations under this Agreement to prevent the entry of and to remove such Restraint in accordance with its obligations under Section 6.04;
(iii) if the CSG-Vista Outdoor Merger Agreement has been validly terminated; or
(c) by Company:
(i) if Parent or Merger Sub breaches or fails to perform in any respect any of their respective representations, warranties or covenants set forth in any Transaction Document, which breach or failure to perform (A) would give rise to the failure of a condition set forth in Section 7.02(a) or 7.02(b) and (B) is not reasonably capable of being cured by the End Date or, if reasonably capable of being cured, has not been cured within 30 days after Parent has received written notice from Company identifying such breach or failure to perform and stating Company’s intention to terminate this Agreement pursuant to this Section 8.01(c)(i); provided that Company shall not have the right to terminate this Agreement pursuant to this Section 8.01(c)(i) if (x) Company or Vista Outdoor is then in breach of any representation, warranty or covenant set forth in any Transaction Document and such breach would give rise to the failure of any condition set forth in Section 7.03(a) or 7.03(b); or
(ii) if (A) all of the conditions in Section 7.01 and Section 7.03 have been satisfied or waived (other than (I) the condition set forth in Section 7.03(e); provided that such condition is reasonably capable of being satisfied immediately prior to the Closing and (II) those conditions that by their nature are to be satisfied at the Closing; provided that such conditions are reasonably capable of being satisfied at the Closing), (B) Company has irrevocably confirmed by written notice to Parent that (1) all conditions set forth in Section 7.02 have been satisfied (other than those that, by their nature, are to be satisfied at the Closing) or that it would be willing to waive any unsatisfied conditions in Section 7.02 if the Closing were to occur, and (2) it is ready, willing, and able to consummate the Closing and (C) Parent fails to consummate the Closing on or prior to the date that is the earlier of (x) three Business Days following the date the Closing should have occurred pursuant to Section 1.03 and (y) the End Date; provided that no party shall be permitted to terminate this Agreement pursuant to Section 8.01(b)(i) during the period expiring on the date set forth in clause (x) or (y) (as applicable); or
(d) by Parent:
(i) if Company or Vista Outdoor breaches or fails to perform in any respect any of their respective representations, warranties or covenants set forth in any
Transaction Document, which breach or failure to perform (A) would give rise to the failure of a condition set forth in Section 7.03(a) or 7.03(b) and (B) is not reasonably capable of being cured by the End Date or, if reasonably capable of being cured, has not been cured within 30 days after Company has received written notice from Parent identifying such breach or failure to perform and stating Parent’s intention to terminate this Agreement pursuant to this Section 8.01(d)(i); provided that Parent shall not have the right to terminate this Agreement pursuant to this Section 8.01(d)(i) if Parent or Merger Sub is then in breach of any representation, warranty or covenant set forth in any Transaction Document and such breach would give rise to the failure of any condition set forth in Section 7.02(a) or 7.02(b); or
(ii) prior to obtaining the Company Stockholder Approval, if the Company Stockholder Approval has not been obtained at the Company Stockholder Meeting within twenty-four (24) hours following the execution and delivery of this Agreement.
Section 8.02 Effect of Termination. In the event of valid termination of this Agreement as provided in Section 8.01, written notice of such termination shall be given to the other party or parties hereto, specifying the provision of Section 8.01 pursuant to which such termination is made, and this Agreement shall forthwith become void and have no effect, without any Liability on the part of Company or any Company Related Party or Parent, Merger Sub or any Parent Related Party, other than (a) the last sentence of Section 6.03, Section 6.06, Section 6.13(b), this Section 8.02, Section 8.03 and Article IX, which provisions shall survive such termination and continue in full force and effect in accordance with their respective terms, (b) the Confidentiality Agreement and the Limited Guarantee shall survive such termination in accordance with their respective terms and (c) subject to Sections 8.03(d) and 8.03(e), any Liability resulting from Fraud or willful and material breach by any party hereto of this Agreement or any other Transaction Document.
Section 8.03 Termination Fees.
(a) If:
(i) either Parent or Company terminates this Agreement pursuant to Section 8.01(b)(i) or 8.01(b)(ii) and, at the time of such termination, all of the conditions set forth in Sections 7.01 and 7.03 have been satisfied (other than those conditions that by their nature are to be satisfied at the Closing; provided that such conditions would have been satisfied on the date of termination if the Closing occurred on such date) or waived, other than those conditions set forth in Section 7.01(b) or 7.01(c) (with respect to Section 7.01(c), solely to the extent that such Restraint arises under the HSR Act or any other Review Law); or
(ii) (A) Company terminates this Agreement pursuant to Section 8.01(c)(i) or 8.01(c)(ii) or (B) Parent terminates this Agreement pursuant to Section 8.01(b)(i), if at such time Company could have validly terminated this Agreement pursuant to Section 8.01(c)(i) or 8.01(c)(ii);
then, in either case, Parent shall pay to Company $71,110,000 (the “Parent Termination Fee”) in immediately available funds to an account designated by Company. Such payment shall be due (x) concurrently with termination by Parent or (y) within two Business Days after written notice of termination by Company (as applicable). Parent shall not be obligated to make more than one payment pursuant to this Section 8.03(a).
(b) If (A) the CSG-Vista Outdoor Merger Agreement is terminated, (B) this Agreement is terminated (x) by Parent pursuant to Section 8.01(d)(ii) or (y) by Parent or Company pursuant to Section 8.01(b)(i) or Section 8.01(b)(iii) (unless, in the case of termination pursuant to this clause (y), at such time Company could have validly terminated this Agreement pursuant to Section 8.01(c)(i) or 8.01(c)(ii)) and (C) Vista Outdoor is, either concurrently with such termination of the CSG-Vista Outdoor Merger Agreement or at anytime thereafter, required to pay to CSG the Vista Outdoor Termination Fee pursuant to Section 8.03(b) of the CSG-Vista Outdoor Merger Agreement, then Vista Outdoor shall pay, or shall cause Company to pay, to Parent $28,125,000 (the “Company Termination Fee”) in immediately available funds to an account designated by Parent. Such payment shall be due simultaneously with the payment of the Vista Outdoor Termination Fee pursuant to Section 8.03(b) of the CSG-Vista Outdoor Merger Agreement. Neither Vista Outdoor nor Company shall be obligated to make more than one payment pursuant to this Section 8.03(b).
(c) Each of the parties hereto acknowledges that the agreements contained in this Section 8.03 are an integral part of the Transactions, and that without these agreements, the other parties hereto would not enter into this Agreement and each other Transaction Document to which it is a party. Accordingly, if Vista Outdoor or Parent, as the case may be, fails to promptly pay any amount due pursuant to this Section 8.03, and, in order to obtain payment of such amount, Parent or Company, as the case may be, commences an Action which results in a final, non-appealable order against the other requiring the payment set forth in this Section 8.03, such paying party shall pay or cause to be paid to the other party, as applicable, its reasonable and documented costs and expenses (including reasonable and documented attorneys’ fees) incurred in connection with such Action, together with interest on such due and unpaid amount pursuant to this Section 8.03 at the rate of (i) the prime rate as published in The Wall Street Journal in effect on the date such amount was required to be paid plus (ii) 2% through the date such payment was actually received.
(d) Subject in all respects to Section 8.02, Company’s injunction, specific performance and equitable relief rights and related rights set forth in Section 9.12 and Section 8.03(c), in the event the Parent Termination Fee is paid to Company in circumstances under which the Parent Termination Fee is payable pursuant to Section 8.03(a), payment of the Parent Termination Fee (which, for the avoidance of doubt, shall be payable to Company solely in the circumstances described in Section 8.03(a)) shall be the sole and exclusive remedy (whether at Law or in equity, whether in contract or in tort or otherwise) of Vista Outdoor, Company and its Subsidiaries against Parent, Merger Sub or any of their respective former, current or future general or limited partners, stockholders, financing sources (including the Debt Financing Sources and the Equity Financing Sources), managers, members, directors, officers or Affiliates
(collectively, the “Parent Related Parties”) for any and all losses, damages, fees, costs and expenses suffered as a result of the failure of the Transactions to be consummated or for a breach or failure to perform hereunder or otherwise relating to or arising out of this Agreement or the Transactions, and upon payment of the Parent Termination Fee, none of the Parent Related Parties shall have any further Liability relating to or arising out of this Agreement or the Transactions. In no event shall Company be entitled to seek or obtain any recovery or judgment in excess of the aggregate amount of the Parent Termination Fee and any amounts payable pursuant to Section 6.13 or Section 8.03(c) against the Parent, Merger Sub and or any other Parent Related Parties, including for any type of damage relating to this Agreement or the Transactions, whether at law or in equity, in contract, in tort or otherwise.
(e) Subject in all respects to Section 8.02, Parent’s injunction, specific performance and equitable relief rights and related rights set forth in Section 9.12 and Section 8.03(c), in the event the Company Termination Fee is paid to Parent in circumstances under which the Company Termination Fee is payable pursuant to Section 8.03(b), payment of the Company Termination Fee (which, for the avoidance of doubt, shall be payable to Parent solely in the circumstances described in Section 8.03(b)) shall be the sole and exclusive remedy (whether at Law or in equity, whether in contract or in tort or otherwise) of Parent, Merger Sub and the other Parent Related Parties against Company and its Subsidiaries and any of their respective former, current or future officers, directors, partners, stockholders, managers, members or Affiliates (collectively, “Company Related Parties”) for any and all losses, damages, fees, costs and expenses suffered as a result of the failure of the Transactions to be consummated or for a breach or failure to perform hereunder or otherwise relating to or arising out of this Agreement or the Transactions, and upon payment of the Company Termination Fee, none of the Company Related Parties shall have any further Liability relating to or arising out of this Agreement or the Transactions.
Section 8.04 Amendment. This Agreement may be amended by the parties hereto at any time. Any amendment to this Agreement shall be valid only if set forth in an instrument in writing signed on behalf of each of the parties hereto.
Section 8.05 Extension; Waiver. At any time prior to the Effective Time, the parties hereto may, to the extent permitted under applicable Law, (a) extend the time for the performance of any of the obligations or other acts of the other parties, (b) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement or (c) waive compliance with any of the agreements or conditions contained in this Agreement. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.
ARTICLE IX
GENERAL PROVISIONS
Section 9.01 Nonsurvival of Representations and Warranties and Covenants and Agreements. None of the representations and warranties, covenants or agreements in this Agreement or in any instrument delivered pursuant to this Agreement (other than any other Transaction Document), or any claim with respect thereto, shall survive the Effective Time, and no such claim may be brought by any Person after the Effective Time, except to the extent covenants and agreements contemplate performance after the Effective Time or otherwise expressly by their terms survive termination of this Agreement or the Effective Time. Notwithstanding the foregoing, nothing herein is intended to limit any party’s liability resulting from Fraud or the willful and material breach by such party of this Agreement or any other Transaction Document.
Section 9.02 Notices. All notices or other communications under this Agreement shall be in writing and shall be deemed to be duly given (a) when delivered in person, (b) on the date received, if sent by a nationally recognized delivery or courier service, (c) on the date of dispatch by the sender in the case of electronic mail (to the extent that no “bounce back” or similar message indicating non-delivery is received with respect thereto) or (d) upon the earlier of confirmed receipt and the fifth business day following the date of mailing if sent by registered or certified mail, return receipt requested, postage prepaid and addressed as follows:
(i) if to Company, to:
Revelyst, Inc.
900 Ehlen Drive
Anoka, MN 55303
Attention: Eric Nyman, CEO; and
Jung Choi, General Counsel & Corporate Secretary
Email: eric.nyman@revelyst.com; and
jung.choi@revelyst.com
with a copy to, prior to the Closing:
Cravath, Swaine & Moore LLP
Two Manhattan West
375 Ninth Avenue
New York, NY 10001
Attention: Craig F. Arcella, Aaron M. Gruber and Bethany A. Pfalzgraf
Email: carcella@cravath.com;
agruber@cravath.com; and
bpfalzgraf@cravath.com
with a copy to, following the Closing:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
Attention: Benjamin M. Goodchild, Robert A. Kindler, Nickolas Bogdanovich
Email: bgoodchild@paulweiss.com
rkindler@paulweiss.com; and
nbogdanovich@paulweiss.com
(ii) if to Vista Outdoor, to:
Vista Outdoor Inc.
900 Ehlen Drive
Anoka, MN 55303
Attention: Jason Vanderbrink, CEO (The Kinetic Group);
Jeffrey Ehrich, General Counsel & Corporate Secretary
(The Kinetic Group)
Email: Jason.Vanderbrink@VistaOutdoor.com;
jehrich@tkghunt.com
with a copy to, prior to the consummation of the CSG-Vista Outdoor Merger:
Cravath, Swaine & Moore LLP
Two Manhattan West
375 Ninth Avenue
New York, NY 10001
Attention: Craig F. Arcella, Aaron M. Gruber and Bethany A.
Pfalzgraf
Email: carcella@cravath.com;
agruber@cravath.com; and
bpfalzgraf@cravath.com
with a copy to, following the consummation of the CSG-Vista Outdoor Merger:
Clifford Chance Prague LLP
Jungmannova Plaza
Jungmannova 745/24
110 00 Prague 1
Czech Republic
Attention: David Kolacek, Nigel Wellings, Alexandra Wilde and David Stringer
Email: david.kolacek@cliffordchance.com;
nigel.wellings@cliffordchance.com;
alexandra.wilde@cliffordchance.com; and
david.stringer@cliffordchance.com
(iii) if to Parent or Merger Sub, to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
Attention: Benjamin M. Goodchild, Robert A. Kindler, Nickolas Bogdanovich
Email: bgoodchild@paulweiss.com
rkindler@paulweiss.com; and
nbogdanovich@paulweiss.com
Any party hereto may, by notice to the other parties hereto, change the address and identity of the Person to which such notices and copies of such notices are to be given. The parties agree that nothing in this Agreement shall affect each other party’s right to serve process in any other manner permitted by Law.
Section 9.03 Definitions. For purposes of this Agreement:
“Accelerated Company Equity Awards” means, collectively, each Company PSU, Company Cash-out RSU, Company Option and Company DSU entitled to receive Merger Consideration at the Effective Time pursuant to Section 2.04 and Section 2.05 of this Agreement; provided that, for purposes of determining the number of shares of Company Common Stock subject to such Accelerated Company Equity Awards, the number of shares of Company Common Stock subject to each Company PSU shall be based on the achievement of applicable performance goals at the level set forth in Section 2.04(b) of the Company Disclosure Letter.
“Action” means any claim, complaint, petition, hearing, charge, demand, action, suit, countersuit, arbitration, inquiry, examination, proceeding, litigation, audit or investigation by or before any Governmental Authority.
“Affiliate” of any Person means a Person that controls, is controlled by or is under common control with such Person. As used herein, “control” of any Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through ownership of voting securities or other interests, by Contract or otherwise.
“Aggregate Option Exercise Price” means the sum of the exercise prices of all Company Options other than the Out-of-the-Money Company Options.
“Anti-Corruption Laws” means all U.S. and applicable non-U.S. Laws relating to the prevention of corruption, money laundering and bribery, including the FCPA and the UK Bribery Act of 2010.
“Base Purchase Price” means $1,125,000,000.
“Benefit Plan” means, with respect to any Person, any plan, program, policy, agreement, arrangement or understanding that is an employment, consulting, deferred compensation, executive compensation, incentive bonus or other bonus, employee pension, profit sharing, savings, retirement, supplemental retirement, stock option, stock purchase, stock appreciation right, restricted stock, restricted stock unit, deferred stock unit, other equity-based compensation, termination, separation, severance, retention, change in control, salary continuation, life, death benefit, health, welfare, hospitalization, workers’ compensation, sick leave, vacation pay, child bonding leave, educational assistance, disability or accident insurance or other employee compensation or benefit plan, program, policy, agreement or arrangement, including any “employee benefit plan” (as defined in Section 3(3) of ERISA) (whether or not subject to ERISA) that is sponsored, maintained or contributed to or required to be contributed to by such Person or to which such Person is a party.
“Board of Directors” means, with respect to any Person, the board of directors, the board of managers or functionally similar governing body of such Person, as applicable, or, if such Person is a limited partnership managed by a general partner, then the “Board of Directors” of such general partner, as applicable.
“Business Day” means any day on which commercial banks are generally open for business in New York, New York, other than a Saturday, a Sunday or a day observed as a holiday in New York, New York under the Laws of the State of New York or the federal Laws of the United States of America.
“CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act (H.R. 748), any current federal, state or local Laws or guidance relating to the COVID-19 pandemic and any similar or successor legislation, including any presidential memoranda or executive orders, relating to the COVID-19 pandemic, including the Health and Economic Recovery Omnibus Emergency Solutions Act and the Health, Economic Assistance, Liability, and Schools Act and including the Memorandum for the Secretary of the Treasury signed on August 8, 2020.
“Cash Adjustment Amount” means an amount, which may be positive or negative, equal to (a) the Company Cash minus (b) the Company Debt minus (c) $25,000,000 minus (d) the proceeds received by Company or any Company Subsidiary from the sale, transfer, assignment, disposition or license (other than licensing in the ordinary course of business for which Company or a Company Subsidiary receives revenue) of any asset (other than inventory in the ordinary course of business) from the date of this Agreement through the Closing Date (but excluding, for the avoidance of doubt, any proceeds received in connection with the CSG-Vista Outdoor Merger Agreement).
“Closing Income Taxes” means the amount (which shall not be less than zero) of all unpaid income Taxes of Company and its Subsidiaries for any Tax period (or portion thereof) ending on or prior to the Closing Date for which a Tax Return has not yet been filed as of the
Closing Date by reason of such Tax Return not being yet due (whether or not such Taxes are due and payable as of the Closing Date), other than any Closing Taxes (as defined in the Separation Agreement). “Closing Income Taxes” shall be calculated (A) as of the end of the Closing Date, (B) in a manner consistent with the past practices of Company or the applicable Subsidiary to the extent such past practices are supported at a “more likely than not” or higher level of comfort, (C) except as otherwise provided in this definition, by disregarding any deferred income Tax assets or liabilities, (D) by disregarding any transactions, actions or elections entered into by members of the Company Group outside the ordinary course of business on the Closing Date after the Closing and not (x) otherwise contemplated by this Agreement or the Separation Agreement, (y) required by applicable Law or by a Contract entered into by a member of the Company Group prior to the Closing or (z) approved in writing by Company, (E) taking into account any estimated income Tax payments and overpayments of income Taxes with respect to any Tax period (or portion thereof) ending on or before the Closing Date as reductions of the liability for income Taxes for such period, (F) taking into account all amounts that are deductible, for income Tax purposes, at a “more likely than not” or higher level of comfort under applicable Law by any member of the Company Group and relate to or arise from the payments of amounts that are included in Company Debt (or amounts that would have been included in such definition but were paid prior to the Closing) and assuming an election was made under Rev. Proc. 2011-29, 2011-18 I.R.B. 746 with respect to any applicable fees, (G) taking into account any “global intangible low-taxed income” within the meaning of Section 951A of the Code and “subpart F income” within the meaning of Section 952 of the Code of any “controlled foreign corporations” for taxable years (or portions thereof) ending on or before the Closing Date and (H) disregarding the effect of any election made with respect to Company under Section 338(g) of the Code. In the case of any taxable period that includes, but does not end on, the Closing Date (such period, a “Straddle Period”), “Closing Income Taxes” shall include an amount of income Taxes allocable to the portion of the Straddle Period ending on and including the Closing Date, based on an “interim closing of the books” method as of the end of the day on the Closing Date, except that (i) exemptions, allowances and deductions that are calculated on an annual basis (such as depreciation deductions) and (ii) Taxes that are imposed on a periodic basis (such as real or personal property Taxes) shall, in each case, be allocated ratably across the entire Straddle Period on a per diem basis and if Company or any of their respective Subsidiaries owns an interest in any entity treated for purposes of an applicable Tax Law as a “flow-through” or fiscally transparent entity or a controlled foreign corporation, or in a similar manner, then such entity’s taxable year shall be deemed to close at the end of the Closing Date.
“Code” means the U.S. Internal Revenue Code of 1986.
“Company Assets” has the meaning given to the term “Revelyst Assets” in the Separation Agreement.
“Company Benefit Plan” has the meaning given to the term “Revelyst Benefit Plan” in the Employee Matters Agreement.
“Company Business” means (i) the businesses and operations the financial results of which were collectively reported as the “Outdoor Products” reporting segment of Vista Outdoor during the period beginning on April 1, 2023 and ending immediately prior to the consummation of the CSG-Vista Outdoor Merger and (ii) the business and operations of Company and the Company Subsidiaries during the period beginning as of the consummation of the CSG-Vista Outdoor Merger and ending immediately prior to the Effective Time.
“Company Business Balance Sheet” means the condensed combined balance sheet of the Company Business, including the notes thereto, as of June 30, 2024, as set forth in Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024.
“Company Business Balance Sheet Date” means June 30, 2024.
“Company Business Intellectual Property” means, collectively, the Company Business Owned Intellectual Property and all other Intellectual Property used in or otherwise necessary to conduct the Company Business as conducted by Vista Outdoor and its Subsidiaries on the date of this Agreement and Company and the Company Subsidiaries as of immediately prior to Closing.
“Company Business Owned Intellectual Property” means all Intellectual Property owned or purported to be owned (or which, following the consummation of the Separation, will be owned or purported to be owned) by the Company or a Company Subsidiary.
“Company Cash” means all cash, cash equivalents and bank deposits held by Company or any Company Subsidiary as of 11:59pm New York City time on the day immediately preceding the Closing Date; provided, however, that “Company Cash” shall (a) be calculated net of all outstanding checks, other pending debits and any other negotiable instruments used like checks of Company or any Company Subsidiaries and (b) exclude all Restricted Cash.
“Company Cash-out RSU” means any Company RSU that is not a Company Rollover RSU.
“Company Debt” means, with respect to Company and its Subsidiaries, as of immediately prior to the Closing, without duplication and regardless of the maturity or when due and payable (A) all obligations of Company and its Subsidiaries for borrowed money, or with respect to deposits or advances of any kind to Company and its Subsidiaries (other than extensions of trade credit to customers of Company and its Subsidiaries in the ordinary course of business consistent with past practice), (B) all obligations of Company and its Subsidiaries evidenced by bonds, debentures, notes or similar instruments, (C) all lease obligations of Company and its Subsidiaries classified as capital or finance leases in the Company Business Financial Information or required to be classified as capital or finance leases in accordance with GAAP, (D) all obligations of Company and its Subsidiaries pursuant to securitization or factoring programs or arrangements, (E) all guarantees and arrangements having the economic effect of a guarantee, direct or indirect, in any manner, by Company or any of its Subsidiaries of
any Indebtedness of any other Person, (F) all obligations or undertakings of Company to maintain or cause to be maintained the financial position or covenants of others or to purchase the obligations or property of others, (G) net cash payment obligations of Company and its Subsidiaries under swaps, options, derivatives and other hedging agreements or arrangements that will be payable upon termination thereof (assuming they were terminated on the date of determination), (H) letters of credit, bank guarantees, surety bonds, performance bonds and other similar contractual obligations entered into by or on behalf of Company and its Subsidiaries, to the extent drawn, (I) all interest, overdraft fees, premiums, penalties, breakage costs (including on interest rate swaps and any other hedging obligations (including foreign currency or exchange contracts)) and fees (including any termination fees) related to any of the foregoing, (J) other than any Earn-Out Payment (as defined in the Separation Agreement), all obligations for the deferred purchase price of property, business, assets, securities, goods or services, including all earn-out payments, seller notes, holdbacks, and other similar payments (whether contingent or otherwise), in each case as would be accrued on the condensed combined balance sheet of the Company Business if prepared as of such date in accordance with GAAP, (K) (1) any outstanding and unpaid severance in respect of any employee of Company and its Subsidiaries terminated prior to the Closing, including, solely to the extent payable upon termination of the relevant employment, any earned but unused vacation, sick leave or other applicable paid time-off benefits, but excluding any severance costs incurred as a result of a termination of employment at the direction or request of Parent, (2) all obligations with respect to unfunded or underfunded deferred compensation or defined benefit pension plans and (3) any earned but unpaid bonuses (including, for the avoidance of doubt, any Cash-Based Retention Awards identified in Item 6 of Section 4.10(a) of the Company Disclosure Letter and the transaction incentive award identified in Item 7 of the Section 4.10(a) of the Company Disclosure Letter, in each case, to the extent earned but unpaid) or commissions as of the Closing and amounts payable pursuant to Section 6.15(c) of this Agreement as either a Pre-Closing Bonus or a Post-Closing Bonus (in the case of a Post-Closing Bonus, based on threshold level of performance achievement), in the case of each of clauses (1), (2) and (3), together with the employer portion of any applicable Taxes payable with respect thereto, (L) all Closing Income Taxes, (M) all unpaid obligations of Company and its Subsidiaries pursuant to Section 2.01(k) or Section 2.06 of the Separation Agreement and (N) all unpaid fees, costs, commissions or expenses incurred, payable or reimbursable by or on behalf of Company or any of its Subsidiaries in connection with the preparation, negotiation, execution of this Agreement, the other Transaction Documents, the CSG-Vista Outdoor Merger Agreement or the Separation Agreement, or the consummation or performance of the Transactions or the CSG-Vista Outdoor Merger (including fees, costs and expenses of counsel, accountants, consultants, brokers, investment bankers and other advisors).
“Company DSU” means a deferred stock unit under the Company Stock Plan outstanding as of immediately prior to the Effective Time.
“Company Employee” means (i) prior to the effective time of the CSG-Vista Outdoor Merger, each employee of Vista Outdoor and its Subsidiaries (including any member of the Company Group) whose work time is dedicated to the operation of the Company Business or
(ii) following the effective time of the CSG-Vista Outdoor Merger, each employee of the Company Group.
“Company Equity Awards” means, collectively, the Company PSUs, Company RSUs, Company Options and Company DSUs.
“Company ESPP” means the Revelyst, Inc. Employee Stock Purchase Plan to be adopted effective immediately prior to the effective time of the CSG-Vista Outdoor Merger.
“Company Group” means Company and each Company Subsidiary, but excluding any member of the Vista Outdoor Group.
“Company Material Adverse Effect” means any effect, change, event or occurrence that, individually or in the aggregate, (a) would prevent or materially impair or delay Company’s ability to consummate the Transactions or (b) has a material adverse effect on the business, results of operations or financial condition of the Company Business; provided, however, that none of the following, and no effect, change, event or occurrence arising out of, or resulting from, the following, shall constitute or be taken into account in determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur for the purposes of clause (b) of this definition: any effect, change, event or occurrence (i) generally affecting (A) the industry in which the Company Business operates or (B) the economy, credit or financial or capital markets, in the United States or elsewhere in the world, including changes in interest or exchange rates, or (ii) to the extent arising out of, resulting from or attributable to (A) changes in Law or in GAAP or in accounting standards, or enforcement of any of the foregoing after the date hereof, or any changes in general legal, regulatory or political conditions (including as a result of any election or campaign in connection therewith), (B) the announcement or performance of this Agreement or any other Transaction Document, or the consummation of the Transactions, including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, distributors, partners, employees or regulators, (C) acts of war (whether or not declared), riots, public disorder, sabotage or terrorism, or any escalation or worsening of any such acts of war (whether or not declared), riots, public disorder, sabotage or terrorism, (D) volcanoes, tsunamis, pandemics, epidemics, earthquakes, hurricanes, tornados, floods or other natural disasters or force majeure events, (E) any action taken or refrained from being taken by Company or any of its Subsidiaries (i) that is expressly required by this Agreement or any other Transaction Document or (ii) at Parent’s written request, (F) any change resulting or arising from the identity of, or any facts or circumstances relating to, Parent, Merger Sub, the Equity Financing Sources or any of their respective Affiliates, (G) any litigation in connection with this Agreement or any other Transaction Document or the Transactions, (H) any “shelter in place”, “stay in home”, shut down, closure, sequestration related law, directive, policy, guideline or recommendation promulgated by any Governmental Authority after the date hereof, (I) any change or prospective change in Company’s or any of its Subsidiaries’ credit ratings, (J) any decline in the market price, or change in trading volume, of any capital stock or other securities of Company or (K) any failure to meet any internal or public projections, forecasts, guidance, estimates, milestones or budgets or internal or published financial or operating predictions of
revenue, earnings, cash flow or cash position (it being understood that the exceptions in clauses (I), (J) and (K) shall not prevent or otherwise affect a determination that the underlying cause of any such change, decline or failure referred to therein (if not otherwise falling within any of the other exceptions set forth in this definition) constitutes a Company Material Adverse Effect); provided that any effect, change, event or occurrence referred to in clauses (i), (ii)(A), (ii)(C), or (ii)(D) above may be taken into account in determining whether there has been, or would reasonably be expected to be, a Company Material Adverse Effect to the extent such effect, change, event or occurrence has a disproportionate adverse effect on Company and the Company Subsidiaries, taken as a whole, as compared to other participants in the industry in which Company and the Company Subsidiaries operate (in which case only the incremental disproportionate impact or impacts may be taken into account in determining whether there has been, or would reasonably be expected to be, a Company Material Adverse Effect).
“Company Option” means an option to purchase Company Common Stock under the Company Stock Plan outstanding as of immediately prior to the Effective Time.
“Company Permitted Liens” means (a) Liens securing Indebtedness reflected on the Company Business Balance Sheet or incurred since the Company Business Balance Sheet Date in the ordinary course of business or as otherwise contemplated or permitted by this Agreement; provided that Liens securing any Indebtedness will be released as and when required by the terms of this Agreement, (b) Liens consisting of zoning or planning restrictions, permits, easements, covenants and other restrictions or limitations on the use or occupancy of real property or irregularities in title thereto, which the Company and the Company Subsidiaries comply with in all material respects and which do not materially impair the use of such property as it is presently used in connection with the Company Business, (c) Liens for current Taxes, assessments or governmental charges or levies on property not yet due and payable or which are being contested in good faith and for which adequate reserves have been created in accordance with GAAP, (d) mechanics’, carriers’, workmen’s, materialmen’s, repairmen’s and similar Liens arising in the ordinary course of business, (e) Liens set forth on Section 9.03 of the Company Disclosure Letter, (f) Liens which are non-monetary Liens entered into prior to, on or after the date of this Agreement and consist of utility easements, access easements and other similar Liens entered into in the ordinary course of business consistent with past practice and (g) non-exclusive licenses of Intellectual Property granted in the ordinary course of business consistent with past practice.
“Company PSU” means a performance stock unit under the Company Stock Plan outstanding and unvested as of immediately prior to the Effective Time.
“Company Rollover RSU” means any Company RSU designated by Company as a Company Rollover RSU prior to the Effective Time in accordance with the methodology set forth in Section 9.03 of the Company Disclosure Letter.
“Company RSU” means a restricted stock unit (or portion thereof) subject solely to time-based vesting conditions under the Company Stock Plan outstanding and unvested as of immediately prior to the Effective Time.
“Company Stock Plan” has the meaning given to the term “Revelyst Stock Plan” in the Employee Matters Agreement.
“Company Stockholder Approval” means the approval of this Agreement by the sole stockholder of Company at the Company Stockholder Meeting.
“Company Subsidiary” means (a) each Person that will be a Subsidiary of Company as of the completion of the Reorganization and (b) each Person that becomes a Subsidiary of Company after the effective time of the CSG-Vista Outdoor Merger, including in each case any person that is merged or consolidated with or into any Subsidiary of Company.
“Consent” means any consents, waivers, notations, licenses, Permits, certifications, authorizations, ratifications, permissions, exemptions or approvals from, or notification requirements to, any Person other than a member of either Group.
“Contract” means any oral or written contract, agreement or other legally binding instrument, including any note, bond, mortgage, deed, indenture, commitment, undertaking, promise, lease, sublease, license or sublicense or joint venture.
“Controlled Group Liability” means all Liabilities (a) under Section 302 of ERISA, (b) under Title IV of ERISA and (c) under Section 412 or 4971 of the Code, in the case of each of clauses (a), (b) and (c), that are imposed on Company or any Company Subsidiary under or in respect of a Company Benefit Plan solely by reason of the treatment of Company or any Company Subsidiary as a single employer with another Person as a result of the application of Section 414(b), (c), (m) or (o) of the Code or by reason of the treatment of Company or any Company Subsidiary as under common control with another Person as a result of the application of Section 4001(b) of ERISA.
“CSG-Vista Outdoor Merger Consideration” has the meaning given to the term “Merger Consideration” in the CSG-Vista Outdoor Merger Agreement.
“CSG-Vista Outdoor Transaction Documents” has the meaning given to the term “Transaction Documents” in the CSG-Vista Outdoor Merger Agreement.
“CSG-Vista Outdoor Transactions” has the meaning given to the term “Transactions” in the CSG-Vista Outdoor Merger Agreement.
“DDTC” means the U.S. Department of State’s Directorate of Defense Trade Controls.
“Debt Financing Sources” means the Persons that have committed to provide or arrange the Debt Financing in connection with the Transactions, including the parties to any commitment letters (including the Debt Commitment Letter), engagement letters, joinder agreements, indentures or credit agreements entered into pursuant thereto or relating thereto, together with their respective Affiliates, and their and their respective Affiliates’ officers, directors,
employees, attorneys, agents and representatives and their respective permitted successors and permitted assigns.
“DGCL” means the General Corporation Law of the State of Delaware.
“dollars” or “$” means lawful money of the United States of America.
“Domain Names” means Internet domain names, URLs and social media identifiers, handles and tags.
“Employee Matters Agreement” means that certain Employee Matters Agreement, dated as of October 15, 2023, by and between Vista Outdoor and the Company, as amended by that certain side letter dated July 25, 2024.
“Environment” means: (a) land, including, surface land, sub-surface strata, sea bed and river bed under water and natural structures; (b) water, including, coastal and inland waters, surface waters, ground waters and water in drains and sewers; and (c) air, including, air inside buildings and in other natural and man-made structures above or below ground.
“Environmental Laws” means all applicable Laws and Judgments relating to the protection of the Environment or to Environmental Matters.
“Environmental Liabilities” has the meaning given to that term in the Separation Agreement.
“Environmental Matters” means: (a) pollution or contamination of the Environment; (b) the generation, handling, storage, distribution, treatment, removal, transport, disposal, release, spillage, deposit or discharge of Hazardous Materials; (c) the exposure of any worker to Hazardous Materials; or (d) the creation of any noise, vibration, radiation, common law or statutory nuisance, in each case of clause (d) that causes a material adverse impact on the Environment.
“Environmental Permit” means any Governmental Approval issued or required pursuant to Environmental Laws.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” means any Person that would be deemed at any relevant time to be (a) a single employer with Company pursuant to Section 414(b), (c), (m) or (o) of the Code or (b) under common control with Company under Section 4001 of ERISA.
“Exchange Act” means the Securities Exchange Act of 1934.
“Existing ABL Credit Agreement” means the Amended and Restated Asset-Based Revolving Credit Agreement dated as of August 5, 2022, among Vista Outdoor, the additional borrowers from time to time party thereto, the lenders from time to time party thereto, each
lender from time to time party thereto, each L/C issuer from time to time party thereto and Capital One, National Association, as administrative agent.
“Existing Notes” means Vista Outdoor’s 4.500% senior notes due 2029 outstanding at the date of this Agreement, and shall include any Indebtedness that refinances such notes in full or in part incurred by Vista Outdoor or any of its Subsidiaries following the date of this Agreement and prior to the Closing Date.
“FCPA” means the U.S. Foreign Corrupt Practices Act of 1977.
“Final Determination” has the meaning given to that term in the Separation Agreement.
“Financing” means the Equity Financing and the Debt Financing.
“Form S-4” means the registration statement on Form S-4 filed by Company with the Commission to register under the Securities Act the shares of Company Common Stock to be issued in connection with the CSG-Vista Outdoor Merger, in the form declared effective by the Commission.
“Fraud” means actual fraud under the laws of the State of Delaware with respect to the representations and warranties in this Agreement, including the requisite elements of (i) making a false representation or warranty set forth in Article III, Article IV or Article X of this Agreement, (ii) with knowledge of the falsity of such representation or warranty, (iii) with an intention to induce the party to this Agreement to whom such representation or warranty is made to act or refrain from acting in reliance upon it, (iv) causing such party, in justifiable reliance upon such false representation or warranty, to take or refrain from taking action and (v) causing such party to suffer loss by reason of such reliance.
“GAAP” means generally accepted accounting principles in effect in the United States at the relevant time.
“Global Trade Laws” means the Sanctions, export, customs and anti-boycott Laws of any jurisdiction in which Company or any of its Subsidiaries is organized or does business, including (a) the Export Administration Regulations administered by the U.S. Commerce Department’s Bureau of Industry and Security, (b) the ITAR administered by the U.S. State Department’s Directorate of Defense Trade Controls, (c) the import laws administered by U.S. Customs and Border Protection, (d) the economic sanctions rules and regulations administered by OFAC, (e) United Nations sanctions policies and (f) all relevant regulations promulgated under any of the foregoing.
“Government Bid” means any offer, quotation or bid which, if accepted or awarded, would lead to a Government Contract for the sale of goods or the provision of services.
“Government Contract” means any prime contract, subcontract, joint venture, basic ordering agreement, blanket purchase agreement, letter agreement, grant, cooperative agreement or other commitment or funding vehicle between Company or any Company Subsidiary and (a) a Governmental Authority, (b) any prime contractor to a Governmental Authority or (c) any subcontractor with respect to any contract described in clause (a) or (b).
“Governmental Approval” means any notices, reports or other filings to be given to or made with, or any Consents, registrations, permits or licenses to be obtained from, any Governmental Authority.
“Governmental Authority” means any federal, state, local, foreign, international or multinational court, government, quasi-government, department, commission, board, bureau, agency, official, public or private arbitrator or arbitral body, or other legislative, judicial, tribunal, commission, regulatory, administrative or governmental authority.
“Group” means either the Vista Outdoor Group or the Company Group, or both, as the context requires.
“Hazardous Materials” means (i) any per- or polyfluoroalkyl substances, lead, petroleum or petroleum products, radioactive materials or wastes, asbestos, urea formaldehyde foam insulation and polychlorinated biphenyls; (ii) any other material, substance or waste that in relevant form or concentration is listed or defined as hazardous or toxic or that is otherwise listed, defined or regulated under any Environmental Law; and (iii) any substance that causes pollution or contamination of the Environment.
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
“Indebtedness” means, with respect to any Person, without duplication, at any date of determination, without duplication and regardless of the maturity or when due or payable, (i) all obligations of such Person for borrowed money, or with respect to deposits or advances of any kind to such Person (other than extensions of trade credit to customers of such Person and its Subsidiaries in the ordinary course of business consistent with past practice), (ii) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (iii) all capitalized lease obligations of such Person or obligations of such Person to pay the deferred and unpaid purchase price of property and equipment, (iv) all obligations of such Person pursuant to securitization or factoring programs or arrangements, (v) all guarantees and arrangements having the economic effect of a guarantee, direct or indirect, in any manner, by such Person of any Indebtedness of any other Person, (vi) all obligations or undertakings of such Person to maintain or cause to be maintained the financial position or covenants of others or to purchase the obligations or property of others, (vii) net cash payment obligations of such Person under swaps, options, derivatives and other hedging agreements or arrangements that will be payable upon termination thereof (assuming they were terminated on the date of determination), (viii) letters of credit, bank guarantees, surety bonds, performance bonds and other similar contractual obligations entered into by or on behalf of such Person to the extent drawn and (ix) all interest, premiums, penalties, breakage costs (including on interest rate swaps and any other hedging
obligations (including foreign currency or exchange contracts)) and fees (including any termination fees) related to any of the foregoing.
“Intellectual Property” means any and all intellectual property and intellectual property and proprietary rights existing anywhere in the world, including the following: (a) patents (including utility and design rights and inclusive of all reissues, divisionals, continuations, continuations-in-part, reexaminations, supplemental examinations, inter partes reviews, post-grant oppositions, substitutions and extensions thereof), patent disclosures, issuances and applications (including provisional applications) and statutory invention registrations, (b) Trademarks, (c) copyrights, works of authorship (whether or not copyrightable, including all translations, adaptations, derivations and combinations thereof), mask works, designs and database rights, including, in each case, any registrations and applications for registration therefor, (d) Domain Names, (e) Software, (f) confidential and proprietary Know-How, (g) all tangible embodiments of the foregoing in whatever form or medium and (h) any other legal protections and rights, including moral rights, related to any of the foregoing.
“Intended Tax Treatment” means the intended tax treatment set forth on Schedule 1.01(a) of the Separation Agreement.
“IRS” means the U.S. Internal Revenue Service.
“IT Systems” means all Software, hardware, electronic data processing equipment, information technology and recordkeeping systems, networks, interfaces, platforms, peripherals, computers, middleware, servers, workstations, routers, hubs, switches, telecommunications systems, data communications lines and other information technology equipment.
“ITAR” means the International Traffic in Arms Regulations, 22 C.F.R Sections 120-130.
“Judgment” means any judgment, order, injunction, ruling, writ, decree or other directive issued, promulgated or entered into by or with any Governmental Authority.
“Know-How” means technical, scientific, regulatory or other information, designs, ideas, concepts, invention disclosures and inventions (whether patentable or unpatentable and whether or not reduced to practice), research and development, discoveries, results, creations, improvements, know-how, techniques and data, technology, algorithms, procedures, plans, processes, practices, methods, trade secrets, instructions, formulae, formulations, compositions, specifications, marketing, pricing, distribution cost and sales information, customer and supplier names and lists, tools, materials, apparatus, creations, improvements and other similar materials, and all recordings, graphs, drawings, diagrams, flow charts, models, studies, reports, surveys, analyses and other writings.
“Knowledge of Company” means the actual knowledge of each Person set forth in Section 9.03 of the Company Disclosure Letter, after reasonable inquiry of such Person’s direct reports who are Company Employees.
“Knowledge of Parent” means the actual knowledge of each Person set forth in Section 9.03 of the Parent Disclosure Letter, after reasonable inquiry of such Person’s direct reports.
“Law” means any statute, law, regulation, ordinance, rule, rule of common law, Judgment, act, code, Governmental Approval, concession, grant, franchise, license, agreement, directive, guideline, policy, requirement or other governmental restriction or any similar form of decision of, or determination by, or any interpretation or administration of any of the foregoing by, any Governmental Authority, whether now or hereinafter in effect.
“Lease Agreement” means any lease, license or other agreement governing Vista Outdoor or one of its Subsidiaries’ and, after giving effect to the Separation, Company or any Company Subsidiary’s use or occupancy of any Company Leased Real Property, including any amendment or guaranty thereof.
“Liabilities” means any and all claims, debts, demands, actions, causes of action, suits, damages, fines, penalties, Taxes, obligations, prohibitions, accruals, accounts payable, reckonings, bonds, indemnities and similar obligations, agreements, promises, guarantees, make-whole agreements and similar obligations, and other liabilities and requirements, including all contractual obligations, whether absolute or contingent, matured or unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown, whenever arising, and including those arising under any Law, Action, threatened or contemplated Action or any award of any arbitrator or mediator of any kind, and those arising under any Contract, including those arising under this Agreement or any other Transaction Document, in each case, whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of any Person. For the avoidance of doubt, Liabilities shall include attorneys’ fees, the costs and expenses of all assessments, judgments, settlements and compromises, and any and all other costs and expenses whatsoever reasonably incurred in connection with anything contemplated by the preceding sentence (including costs and expenses incurred in investigating, preparing or defending against any such Actions or threatened or contemplated Actions).
“Lien” means any pledge, lien, charge, mortgage, encumbrance, title defect, easement, hypothecation, right of first refusal, right of first offer, transfer restriction or security interest of any kind or nature whatsoever.
“Merger Consideration” means an amount equal to (A) the sum of (x) the Revelyst Purchase Price plus (y) the Aggregate Option Exercise Price divided by (B) the sum of (x) the number of shares of Company Common Stock issued and outstanding as of immediately prior to the Effective Time (other than any such shares of Company Common Stock held by Company, its Subsidiaries or Parent as of such time) plus (y) the number of shares of Company
Common Stock underlying Accelerated Company Equity Awards outstanding as of immediately prior to the Effective Time.
“Multiemployer Plan” means any “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA.
“NYSE” means the New York Stock Exchange.
“Other Sources” means cash on hand, undrawn capital commitments or other sources of funds immediately available to Parent, Merger Sub and any of their respective Subsidiaries.
“Out-of-the-Money Company Options” means any Company Option with a strike price that is greater than an amount equal to (A) the Revelyst Purchase Price divided by (B) the number of shares of Company Common Stock issued and outstanding as of immediately prior to the Effective Time (other than any such shares of Company Common Stock held by Company, its Subsidiaries or Parent as of such time).
“Parent Material Adverse Effect” means any effect, change, event or occurrence that, individually or in the aggregate, would prevent or materially impair or delay Parent or Merger Sub’s ability to consummate the Transactions.
“Permit” means any approval, authorization, clearance, license, registration, permit, certificate, exemption or waiver issued by a Governmental Authority, including any Environmental Permit.
“Person” means an individual, a general or limited partnership, a corporation, an association, a trust, a joint venture, an unincorporated organization, a limited liability company, any other entity and any Governmental Authority.
“Personal Information” means (a) any information identifying, describing or relating to, directly or indirectly, an identified or identifiable natural person and (b) any information that constitutes personal information, personally identifiable information or personal data under any Privacy and Data Security Requirement.
“PPP” means the Paycheck Protection Program as described in the CARES Act and modified by the Small Business Administration and Department of Treasury guidance documents and FAQs, subsequent interim final rules, the Paycheck Protection Program Flexibility Act of 2020, Division N of the Consolidated Appropriations Act, 2021, the American Rescue Plan Act, and any subsequent amendments or updates to Section 7(a)(36) of the Small Business Act (15 U.S.C. 636(a)(36)).
“Privacy and Data Security Requirements” means, with respect to a party and its Subsidiaries, as applicable to the respective business thereof and any IT Systems, (a) any Laws regulating the creating, recording, receiving, importing, exporting, collecting, accessing, using,
disclosing, transmitting, transferring, securing, sharing, distributing, storing, maintaining, retaining, deleting, disposing, modifying, protecting, safeguarding, privacy or processing (collectively, “Processing”) of Personal Information or security breach notification requirements (including, as applicable, the California Consumer Privacy Act, the European Union General Data Protection Regulation (EU) 2016/679 (the “GDPR”) and any other Laws implementing the GDPR into national Law, the Personal Information Protection Law of the People’s Republic of China and other international, foreign, federal, local and state data security and data privacy Laws) (collectively, “Data Privacy Laws”), (b) obligations under all Contracts to which such party or any of its Subsidiaries is a party or by which such party or any of its Subsidiaries is bound that relate substantially to the Processing of Personal Information or the protection of IT Systems and (c) all of the current internal and publicly posted written policies of such party or any of its Subsidiaries regarding the Processing of Personal Information.
“Public Official” means: (a) any officer, employee or representative of any Governmental Authority; (b) any officer, employee or representative of any commercial enterprise that is owned or controlled by a Governmental Authority; (c) any officer, employee or representative of any public international organization, such as the International Monetary Fund, the United Nations or the World Bank; (d) any Person acting in an official capacity for any Governmental Authority or any enterprise or organization identified in clause (a) or (c) above; and (e) any political party, party official or candidate for political office.
“Records” means all books, records and other documents, including all Tax records (including Tax Returns), books of account, stock records and ledgers, financial, accounting and personnel records, files, invoices, customers’ and suppliers’ lists, other distribution lists, operating, production and other manuals and sales and promotional literature, in all cases, in any form or medium.
“Registered Intellectual Property” means all patents and patent applications, registered or applied for Trademarks, registered copyrights and copyright applications and Domain Names.
“Regulation S-K” means Regulation S-K promulgated under the Securities Act and the Exchange Act.
“Regulation S-X” means Regulation S-X promulgated under the Securities Act and the Exchange Act.
“Release” means any actual or threatened release, spill, emission, emptying, leaking, dumping, injection, escaping, pumping, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment (including ambient air, surface water, groundwater, land surface or subsurface strata).
“Representatives” means, with respect to any Person, its directors, officers, employees, consultants, agents, investment bankers, financial advisors, attorneys, accountants
and other representatives. For the purposes of this Agreement, Parent’s Representatives will be deemed to include the R&W Insurance Policy provider.
“Restricted Cash” means cash, cash equivalents and bank deposits to the extent not freely usable by Company or the Company Subsidiaries due to limitations, restrictions or Taxes on use or distribution or being otherwise restricted for a particular use, purposes or event, whether by Law, contract or otherwise, including restrictions on dividends or repatriations, other than any cash, cash equivalents or bank deposits that are used to collateralize any letters of credit or bank guarantees (i) set forth on Section 9.03 of the Company Disclosure Letter or (ii) entered into after the date hereof in the ordinary course of business (but, in the case of each of clauses (i) and (ii), only to the extent such collateral would be released upon the issuance of a letter of credit or bank guarantee under a revolving credit facility of Company and the Company Subsidiaries).
“Revelyst Purchase Price” means (i) the Base Purchase Price plus (ii) the Cash Adjustment Amount.
“Sanctioned Country” means any country or region or government thereof that is the subject or target of a comprehensive embargo under Global Trade Laws (including Cuba, Iran, North Korea, Syria, Venezuela, the Crimea, the so-called “Donetsk People’s Republic” and the so-called “Luhansk People’s Republic” regions of Ukraine).
“Sanctioned Person” means any Person that is the subject or target of sanctions or restrictions under Global Trade Laws including: (a) any Person listed on any U.S. or non-U.S. sanctions- or export-related restricted party list, including the U.S. Department of the Treasury Office of Foreign Assets Control’s (“OFAC”) List of Specially Designated Nationals and Blocked Persons, or any other OFAC, U.S. Department of Commerce Bureau of Industry and Security, or U.S. Department of State sanctions- or export-related restricted party list; (b) any Person located, organized or resident in a Sanctioned Country; (c) any Person that is, in the aggregate, 50 percent or greater owned, directly or indirectly, or otherwise controlled, by a Person or Persons described in clauses (a) or (b); or (d) any national of a Sanctioned Country with whom U.S. Persons are prohibited from dealing.
“Sanctions” means all U.S. and applicable non-U.S. Laws relating to economic or trade sanctions, including the Laws administered or enforced by the United States (including by OFAC or the U.S. Department of State) and the United Nations Security Council.
“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002.
“SEC” means the U.S. Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933.
“Separation” has the meaning given to that term in the Separation Agreement.
“Software” means any and all (a) computer programs and applications, including software implementations of algorithms, models and methodologies, whether in source code, object code, human readable form or other form, (b) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise, (c) descriptions, flow charts and other work product used to design, plan, organize and develop any of the foregoing, (d) screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons and (e) documentation including user manuals and other training documentation relating to any of the foregoing.
“Subsidiary” of any Person means any partnership, corporation, trust, joint venture, unincorporated organization, limited liability entity or other legal entity of which an amount of the securities or interests having by the terms thereof voting power to elect at least a majority of the Board of Directors of such entity (or, if there are no such voting securities or voting interests, of which at least a majority of the equity interests) is directly or indirectly owned or controlled by such first Person, or the general partner of which is such first Person.
“Tax Return” means any return, declaration, statement, report, form, estimate or information return relating to Taxes, including any amendments thereto and any related or supporting information, filed or required to be filed with any Governmental Authority.
“Taxes” means (a) all taxes or similar duties, fees or charges or assessments imposed by a Governmental Authority, in each case in the nature of a tax, including any income, gross receipts, franchise, profits, value added, real or personal property, transfer, sales, use, ad valorem, license, withholding, payroll, unemployment, social security (or similar), occupation, stamp, excise, severance, premium, windfall profits, estimated, alternative or add-on minimum tax and (b) all interest, penalties and additions imposed with respect to the foregoing amounts.
“Trademarks” means trademarks, service marks, trade names, logos, slogans, trade dress or other source identifiers, including any registration or any application for registration therefor, together with all goodwill associated therewith.
“Transaction Documents” means this Agreement, the Equity Financing Commitment, the Limited Guarantee and any other agreements entered into between the parties hereto in connection with the Transactions.
“Transactions” means the transactions contemplated by this Agreement and the other Transaction Documents, including the Reorganization.
“Transition Services Agreement” means the transition services agreement to be entered into by Company and Vista Outdoor on or prior to the closing of the CSG-Vista Outdoor Merger.
“UK NSIA” means the United Kingdom National Security and Investment Act 2021.
“UK NSIA Notice” means a notice submitted pursuant to the UK NSIA. “Vista Outdoor Business” means the business and operations conducted by Vista Outdoor and its Subsidiaries immediately prior to the closing of the CSG-Vista Outdoor Merger, other than the Company Business.
“Vista Outdoor Common Stock” has the meaning given to “Company Common Stock” in the CSG-Vista Outdoor Merger Agreement.
“Vista Outdoor Equity Award” means equity-based awards in respect of shares of Vista Outdoor Common Stock granted under the Vista Outdoor Stock Plans held by any Company Employee.
“Vista Outdoor Group” has the meaning given to such term in the Separation Agreement.
“Vista Outdoor Proxy Statement” has the meaning given to the term “Proxy Statement” in the CSG-Vista Outdoor Merger Agreement.
“Vista Outdoor Stock Plans” has the meaning given to the term “Company Stock Plans” in the CSG-Vista Outdoor Merger Agreement.
“Vista Outdoor Stockholders’ Meeting” has the meaning given to the term “Company Stockholders’ Meeting” in the CSG-Vista Outdoor Merger Agreement.
“Vista Outdoor Subsidiary” means each Subsidiary of Vista Outdoor other than Company and the Company Subsidiaries.
“Vista Outdoor Termination Fee” has the meaning given to the term “Company Termination Fee” in the CSG-Vista Outdoor Merger Agreement.
Section 9.04 Headings. The article, section and paragraph headings contained in this Agreement, including in the table of contents of this Agreement, are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
Section 9.05 Interpretation.
(a) Words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include any other gender as the context requires. The terms “hereof”, “herein”, “herewith” and words of similar import, unless otherwise stated, shall be construed to refer to this Agreement as a whole (including all of the Annexes, Exhibits and Schedules hereto) and not to any particular provision of this Agreement. Article, Section, Annex, Exhibit or Schedule references are to the articles, sections, annexes, exhibits and schedules of or to this Agreement unless otherwise specified. Any capitalized terms used in any Schedule to this Agreement or to any other Transaction Document but not otherwise defined therein shall have the meaning as defined in this Agreement or the other Transaction Document to which such
Schedule is attached, as applicable. Any definition of or reference to any agreement, instrument or other document herein (including any reference herein to this Agreement) shall, unless otherwise stated, be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified from time to time (subject to any restrictions on such amendments, supplements or modifications set forth herein). Any definition of or reference to any Law shall be construed as referring to such Law as from time to time amended, restated, supplemented or otherwise modified (including by succession of comparable successor Laws), and all references to any statute shall be construed as referring to all rules, regulations, rulings and official interpretations promulgated or issued thereunder. The word “including” and words of similar import when used in this Agreement shall mean “including, without limitation”, unless otherwise specified. The word “or” shall not be exclusive. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”. All references to “$” or dollar amounts are to the lawful currency of the United States of America. In the event that an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of the authorship of any provisions hereof. References herein to a day or number of days shall refer to calendar days, unless such reference is specifically to a “Business Day” and the terms “year” and “years” shall refer to calendar years, unless such reference is specifically to a fiscal year. When calculating the period of time before which, within which or following which any act is to be done or step is to be taken pursuant to this Agreement, if the last day of such period is not a Business Day, the period shall end on or such act or step shall be required to be taken on or by, as applicable, the next succeeding Business Day. With respect to the determination of any period of time, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”.
(b) The words “made available to Company” and words of similar import refer to documents delivered in person or electronically to Vista Outdoor (prior to the consummation of the CSG-Vista Outdoor Merger), Company or their Representatives. The words “made available to Parent”, “made available to Merger Sub” and words of similar import refer to documents (i) posted to the Intralinks virtual dataroom by or on behalf of Vista Outdoor or Company, (ii) delivered in person or electronically to Parent, Merger Sub or their Representatives or (iii) contained in any Filed SEC Documents.
(c) Notwithstanding anything to the contrary set forth herein, all representations and warranties in Article IV that cover any business or Person acquired by Company or any Company Subsidiary or Vista Outdoor or any of its Subsidiaries on or after April 1, 2020 shall be deemed to be made to the Knowledge of Company with respect to such business or Person for any time period prior to the acquisition of such business or Person.
Section 9.06 Disclosure Letters. Any matter disclosed in any section of the Parent Disclosure Letter or the Company Disclosure Letter shall qualify the correspondingly numbered representation and warranty or covenant and any other representation and warranty or covenant of Parent or Merger Sub or Company or Vista Outdoor, as applicable, to the extent that the
relevance of any such disclosure to such other representation and warranty or covenant is reasonably apparent from the face of such disclosure.
Section 9.07 Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid, void or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the Transactions is not affected in any manner materially adverse to any party hereto. Upon any such determination, any such provision, to the extent determined to be invalid, void or unenforceable, shall be deemed replaced by a provision that such court determines is valid and enforceable and that comes closest to expressing the intention of the invalid, void or unenforceable provision.
Section 9.08 Counterparts. This Agreement may be executed and delivered in one or more counterparts, all of which counterparts shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to each other party hereto. This Agreement may be executed by electronic or PDF signature and scanned and exchanged by electronic mail, and such electronic or PDF signature shall constitute an original for all purposes.
Section 9.09 Entire Agreement; No Third-Party Beneficiaries; No Other Representations or Warranties.
(a) This Agreement, taken together with the Parent Disclosure Letter and the Company Disclosure Letter, the other Transaction Documents and the Confidentiality Agreement, and any Annexes, Exhibits and Schedules hereto and thereto, (i) contain the entire agreement between the parties hereto and thereto with respect to the subject matter hereof and thereof and supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter, and there are no agreements or understandings between such parties with respect to the subject matter hereof or thereof other than those set forth or referred to herein or therein (provided that the Parent Disclosure Letter, the Company Disclosure Letter and the Annexes, Exhibits and Schedules hereto are “facts ascertainable” as that term is used in Section 251(b) of the DGCL, and do not form part of this Agreement but instead operate upon the terms of this Agreement as provided herein) and (ii) are not intended to confer upon any Person other than the parties hereto and thereto any rights or remedies (other than, following the Effective Time, the provisions of Section 6.05, which shall be enforceable by the specified beneficiaries thereof).
(b) Company acknowledges and agrees that, except for the representations and warranties contained in Article III and in the other Transaction Documents to which such Person is a party, none of Parent, Merger Sub or any of their Subsidiaries or any other Person makes any representation or warranty, express or implied, with respect to Parent or Merger Sub or with respect to any information furnished, disclosed or otherwise made available to Company, Vista Outdoor or any of their respective Representatives in the course of their due diligence
investigation of Parent or Merger Sub and the negotiation of this Agreement and the other Transaction Documents or otherwise in connection with the Transactions. Except pursuant to the terms and conditions of this Agreement and the other Transaction Documents, none of Parent or Merger Sub or any other Person shall be subject to any Liability or responsibility whatsoever to Company or its respective Affiliates or its stockholders, controlling Persons or Representatives on any basis (including in contract or tort, under securities Laws or otherwise) resulting from or based upon Parent’s furnishing, disclosing or otherwise making available any information, documents or material in any form to Company or its Affiliates, stockholders, controlling Persons or Representatives, including in any data room or management presentations (formal or informal) and including any financial statements and any projections, forecasts, budgets, estimates or other forward-looking information, or the use of any such information.
(c) Each of Parent and Merger Sub acknowledges and agrees that, except for the representations and warranties contained in Article IV and Article X and in the other Transaction Documents to which such Person is a party, neither Vista Outdoor nor Company nor any of their Subsidiaries nor any other Person makes any representation or warranty, express or implied, with respect to Company, the Company Subsidiaries, the Company Business, Vista Outdoor, the Vista Outdoor Subsidiaries or the Vista Outdoor Business or with respect to any information furnished, disclosed or otherwise made available to Parent or Merger Sub or any of their respective Representatives in the course of their due diligence investigation of Company or the Company Business or otherwise and the negotiation of this Agreement and the other Transaction Documents or otherwise in connection with the Transactions. Except pursuant to the terms and conditions of this Agreement and the other Transaction Documents, neither Company or Vista Outdoor nor any other Person shall be subject to any Liability or responsibility whatsoever to Parent or Merger Sub or any of their respective Affiliates or any of their respective stockholders, controlling Persons or Representatives on any basis (including in contract or tort, under securities Laws or otherwise) resulting from or based upon Company’s, Vista Outdoor’s or any of their respective Affiliates or Representatives’ furnishing, disclosing or otherwise making available any information, documents or material in any form to Parent, Merger Sub or their respective Affiliates, stockholders, controlling Persons or Representatives, including in any data room or management presentations (formal or informal) and including any financial statements and any projections, forecasts, budgets, estimates or other forward-looking information, or the use of any such information.
Section 9.10 Governing Law. This Agreement and all disputes, controversies or other Actions arising out of or relating to this Agreement or the Transactions, including matters of validity, construction, effect, performance and remedies, shall be governed by, and construed in accordance with, the Laws of the State of Delaware applicable to contracts executed in and to be performed entirely within such State, regardless of the Laws that might otherwise govern under applicable conflicts of law principles.
Section 9.11 Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of Law or otherwise by any party hereto without the prior written consent of each other party hereto;
however, Parent or Merger Sub may assign (or pledge as security for any financing or assign to any lender as collateral security, including the Debt Financing) any of their respective rights under this Agreement, in whole or in part, without the prior written consent of Company or Vista Outdoor, to one or more of its Affiliates at any time, provided that such assignment (or pledge) shall not relieve Parent or Merger Sub of any of their respective obligations hereunder. Any purported assignment without such consent shall be void. Subject to the two immediately preceding sentences, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. No assignment permitted by this Section 9.11 shall release the assigning party from Liability for the full performance of its obligations under this Agreement.
Section 9.12 Enforcement.
(a) In the event of any actual or threatened breach of this Agreement, the affected party shall have the right to specific performance and injunctive or other equitable relief, in addition to any and all other rights and remedies at Law or in equity, and all such rights and remedies shall be cumulative; provided that, for the avoidance of doubt, under no circumstances shall any party hereto be permitted or entitled to receive both a grant of specific performance that results in the Closing occurring and any money damages, including all or any portion of the Parent Termination Fee or the Company Termination Fee, as applicable. The parties agree that the remedies at Law for any breach or threatened breach hereof, including monetary damages (including any fees payable pursuant to Section 8.03), even if available, would not be an adequate remedy. Any requirements for the securing or posting of any bond with such remedy are waived. The parties hereto acknowledge and agree that the right of specific enforcement is an integral part of the Transactions and without such right the parties hereto would not have entered into this Agreement.
(b) Notwithstanding anything to the contrary in Section 9.12(a), each of the parties hereto agrees that Company shall only be entitled to specific performance of Parent’s and Merger Sub’s obligations to consummate the Closing and cause the Equity Financing to be funded if, and only if, (i) all of the conditions in Section 7.01 and Section 7.03 have been satisfied or waived (other than (A) the condition set forth in Section 7.03(e); but subject to such condition being able to be satisfied immediately prior to the Closing and (B) those conditions that by their nature are to be satisfied at the Closing, but subject to such conditions being able to be satisfied at the Closing); and (ii) Company has irrevocably confirmed by written notice to Parent that if the Equity Financing is funded, then Company is ready, willing and able to consummate the Closing
Section 9.13 Jurisdiction.
(a) Each of the parties hereto (i) irrevocably consents to the exclusive jurisdiction, forum and venue of the Delaware Court of Chancery (and, if the Delaware Court of Chancery shall be unavailable, any Delaware state court or the federal court sitting in the State of Delaware) over any and all claims, disputes, controversies or disagreements between the parties hereto or any of their respective Subsidiaries, Affiliates, successors and assigns under or related
to this Agreement or any document executed pursuant to this Agreement or any of the transactions contemplated hereby or thereby, including their execution, performance or enforcement, whether in contract, tort or otherwise, (ii) agrees that it shall not assert, and hereby waives, any claim or right or defense that it is not subject to the jurisdiction of such courts, that the venue is improper or that the forum is inconvenient or any similar objection, claim or argument and (iii) agrees that a final judgment in any Action resolved in accordance with Section 9.12 and this Section 9.13 shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN CONNECTION WITH ANY LITIGATION, ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING IN ANY WAY TO ANY TRANSACTION DOCUMENT OR ANY TRANSACTION.
(b) Each of the parties hereto agrees that (i) actions in the Delaware Court of Chancery (and, if the Delaware Court of Chancery shall be unavailable, any Delaware state court or the federal court sitting in the State of Delaware) (any such court, the “Court”) afford adequate procedural protections consistent with due process, that the Court’s Judgments are final and that actions in the Court otherwise fulfill all conditions necessary for the enforcement of its Judgments in a foreign tribunal and (ii) such party shall not contest the foregoing in any such enforcement Action, in any foreign tribunal.
Section 9.14 Lender Limitations. Notwithstanding anything to the contrary contained in this Agreement, Company (on behalf of itself and its Affiliates and, to the fullest extent legally permissible, the other Company Related Parties): (a) agrees that it will not bring or support any Person in any Action of any kind or description, whether at law or in equity, whether in contract or in tort or otherwise, against any of the Debt Financing Sources in any way relating to this Agreement or any of the Transactions, including any dispute arising out of or relating in any way to any commitment letter with respect to the Debt Financing (the “Debt Commitment Letter”), the definitive agreements entered into in connection with the Debt Financing (the “Debt Financing Agreements”) or the performance thereof or the financings contemplated thereby, in any forum other than the Supreme Court of the State of New York, County of New York, or, if, under applicable Law, exclusive jurisdiction is vested in the Federal courts, the United States District Court for the Southern District of New York sitting in New York County (and appellate courts thereof); (b) waives and hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of, and the defense of an inconvenient forum to the maintenance of, any such action in any such court; (c) agrees that, except as specifically set forth in the Debt Commitment Letter or the Debt Financing Agreements (including as it relates to (I) the interpretation of the definition of Company Material Adverse Effect (and whether or not a Company Material Adverse Effect has occurred), (II) the determination of the accuracy of any “specified acquisition agreement representation” (as such term or similar term is defined in the Debt Commitment Letter) and whether as a result of any inaccuracy thereof Parent or any of its Affiliates has the right to terminate its or their obligations hereunder pursuant to Section 8.01(d)(i) or decline to consummate the Closing as a result thereof
pursuant to Section 7.03(a) and (III) the determination of whether the Closing has been consummated in all material respects in accordance with the terms hereof, which shall in each case be governed by and construed in accordance with the Laws of the State of Delaware, without giving effect to any choice or conflict of Law provision or rule that would cause the application of Laws of any other jurisdiction), all claims or causes of action (whether at law, in equity, in contract, in tort or otherwise) against any of the Debt Financing Sources in any way relating to the Debt Commitment Letter or the Debt Financing Agreements or the performance thereof or the financings contemplated thereby shall be exclusively governed by the laws of the State of New York, without giving effect to principles or rules of conflicts of laws to the extent such principles or rules would require or permit the application of laws of another jurisdiction; and (d) hereby irrevocably and unconditionally waives any right such party may have to a trial by jury in respect of any litigation (whether at law or in equity, whether in contract or in tort or otherwise) directly or indirectly arising out of or relating in any way to the Debt Commitment Letter or the Debt Financing Agreements or the performance thereof or the financings contemplated thereby. Notwithstanding anything to the contrary contained in this Agreement, subject to the rights of the parties to any Debt Commitment Letter or any Debt Financing Agreement, (i) the parties hereto hereby acknowledge and agree that no party hereto or any of its or their respective Affiliates, directors, officers, employees, agents, partners, managers, members or equityholders (x) shall have any rights or claims against any Debt Financing Sources or their Affiliates or representatives in any way relating to this Agreement, the Debt Financing, the Debt Commitment Letter or the Debt Financing Agreements or any of the Transactions, or in respect of any other document or any of the Transactions, or in respect of any oral or written representations made or alleged to have been made in connection herewith or therewith, including any dispute arising out of or relating in any way to the Debt Commitment Letter or the Debt Financing Agreements or the performance thereof or the financings contemplated thereby, whether at law or in equity, in contract, in tort or otherwise, and hereby waives all such rights or claims and (y) agrees not to commence any Action against any Debt Financing Sources or their Affiliates or representatives in connection with this Agreement, the Debt Financing, the Debt Commitment Letter or the Debt Financing Agreements or any of the Transactions, or in respect of any oral or written representations made or alleged to have been made in connection herewith or therewith, including any dispute arising out of or relating in any way to the Debt Commitment Letter or the Debt Financing Agreements or the performance thereof or the financings contemplated thereby, and (ii) no Debt Financing Source shall have any Liability to any party hereto or its Affiliates, directors, officers, employees, agents, partners, managers, members, representatives or equityholders for any Liabilities of any party hereto under this Agreement or for any claim or damages based on, in respect of or by reason of the Transactions or in respect of any oral or written representations made or alleged to have been made in connection herewith or therewith, including any dispute arising out of or relating in any way to the Debt Commitment Letter or the Debt Financing Agreements or the performance thereof or the financings contemplated thereby, whether at law or in equity, in contract, in tort or otherwise. Notwithstanding anything to the contrary contained in this Agreement, the Debt Financing Sources are intended third-party beneficiaries of, and shall be entitled to the protections of, this Section 9.14 and this Section 9.14 shall not be amended or waived in a manner adverse in any material respect to any Debt Financing Source without its prior written consent. Notwithstanding
anything to the contrary contained in this Agreement, nothing in this Section 9.14 shall in any way affect any party’s or any of its Affiliates’ rights and remedies under any binding agreement to which a Debt Financing Source is a party, including the Debt Commitment Letter and any Debt Financing Agreements.
Section 9.15 [Reserved].
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF VISTA OUTDOOR
Section 10.02 Representations and Warranties of Vista Outdoor. Vista Outdoor hereby represents and warrants to Parent and Merger Sub, as of the date hereof, except as disclosed (i) in the manner contemplated in Section 9.06, in the Company Disclosure Letter or (ii) in the Filed SEC Documents, other than in any disclosures in any such Filed SEC Document contained in the “Risk Factors”, “Statement Regarding Forward-Looking Information” and “Quantitative and Qualitative Disclosures About Market Risk” sections thereof or under similarly titled captions or sections thereof or other disclosure statements included therein that are cautionary, predictive or forward-looking in nature and not statements of historical fact; provided that nothing in the Filed SEC Documents shall be deemed to be disclosures against Section 10.01(a):
(a) Organization, Standing and Power. Vista Outdoor is duly organized, validly existing and in good standing under the Laws of the State of Delaware. Vista Outdoor has all requisite corporate power and authority necessary to enable it to own, lease or otherwise hold its properties and assets and to conduct its business as currently conducted. Vista Outdoor has made available to Parent true and complete copies of the organizational documents of Vista Outdoor as amended through, and in full force and effect as of, the date of this Agreement, and Vista Outdoor is not in violation of any provision of its organizational documents, other than such violations that, individually or in the aggregate, would not prevent or materially impair or delay Vista Outdoor’s ability to consummate the Transactions.
(b) Authority; Execution and Delivery; Enforceability. Vista Outdoor has all requisite power and authority to execute and deliver each Transaction Document to which it is or is contemplated to be a party, to perform its obligations hereunder and thereunder and to consummate the Transactions. The execution and delivery by Vista Outdoor of each Transaction Document to which it is or is contemplated to be a party and the consummation by Vista Outdoor of the Transactions has been duly authorized by the Board of Directors of Vista Outdoor, as applicable, and no other corporate proceedings on the part of Vista Outdoor are necessary to authorize the Transaction Documents to which it is or is contemplated to be a party or the consummation of the Transactions, and Vista Outdoor has duly executed and delivered this Agreement, and, assuming due authorization, execution and delivery by the other parties hereto, this Agreement constitutes its legal, valid and binding obligation, enforceable against Vista Outdoor in accordance with its terms (except insofar as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally or by principles governing the availability of equitable remedies). Upon the execution and delivery by Vista Outdoor of each other Transaction Document to which
it is or is contemplated to be a party, and assuming due authorization, execution and delivery by the other parties thereto, each other Transaction Document to which it is or is contemplated to be a party will constitute its legal, valid and binding obligation, enforceable against it in accordance with its terms (except insofar as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally or by principles governing the availability of equitable remedies).
(c) No Conflicts; Governmental Approvals.
(i) The execution and delivery by Vista Outdoor of each Transaction Document to which it is a party does not, the execution and delivery by Vista Outdoor of each Transaction Document to which it is contemplated to be a party will not, and the consummation by Vista Outdoor of the Transactions and compliance with the terms hereof and thereof will not, conflict with or result in any violation of or default (or an event that, with or without notice or lapse of time or both, would become a default) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, or to increased, additional, accelerated or guaranteed rights or entitlements of any Person under, or result in the creation of any Lien upon any of the properties or assets of Vista Outdoor under, any provision of (A) the certificate or articles of incorporation, bylaws or comparable organizational documents of Vista Outdoor, (B) any Contract to which Vista Outdoor is a party or by which any of its properties or assets is bound, or (C) subject to the filings, Consents and other matters referred to in Section 4.05(b), any Judgment or Law applicable to Vista Outdoor or its properties or assets, other than, in the case of clauses (B) and (C) above, any such item that, individually or in the aggregate, would not prevent or materially impair or delay Vista Outdoor’s ability to consummate the Transactions.
(ii) No Governmental Approval is required to be obtained or made by or with respect to Vista Outdoor in connection with the execution, delivery and performance by Vista Outdoor of any Transaction Document to which it is a party or the consummation by Vista Outdoor of the Transactions, other than (A) compliance with and filings and approvals under the HSR Act and the other Review Laws set forth on Section 4.05(b) of the Company Disclosure Letter, (B) compliance by Vista Outdoor with the rules and regulations of NYSE, (C) compliance with and filings and approvals under any applicable international, federal or state securities or “blue sky” Laws, and (D) such other Governmental Approvals, the failure of which to be obtained or made, individually or in the aggregate, would not prevent or materially impair or delay Vista Outdoor’s ability to consummate the Transactions.
[Signature Page Follows]
IN WITNESS WHEREOF, each of Vista Outdoor, Company, Parent and Merger Sub has duly executed this Agreement, all as of the date first written above.
| | | | | | | | | | | |
| VISTA OUTDOOR INC. | |
| | | |
| | | |
| By | /s/ Jason Vanderbrink | |
| Name: | Jason Vanderbrink | |
| Title: | Co-Chief Executive Officer | |
| | | |
| | | |
| REVELYST, INC. | |
| | | |
| | | |
| By | /s/ Eric Nyman | |
| Name: | Eric Nyman | |
| Title: | Chief Executive Officer | |
| | | | | | | | | | | |
| OLIBRE LLC | |
| | | |
| | | |
| By | /s/ Alec Roman | |
| Name: | Alec Roman | |
| Title: | Secretary | |
| | | |
| | | |
| | | |
| CABIN RIDGE INC. | |
| | | |
| | | |
| By | /s/ Alec Roman | |
| Name: | Alec Roman | |
| Title: | Secretary | |
Annex I
Glossary of Defined Terms
| | | | | | | | | | | | | | |
| Term | | Section | |
| Agent | | 2.02 | |
| Agreement | | Preamble | |
| Annual Incentive Plan | | 6.15(c) | |
| Cash Adjustment Calculation Statement | | 6.22 | |
| Certificate | | 2.01(c) | |
| Certificate of Merger | | 1.04 | |
| Closing | | 1.03 | |
| Closing Date | | 1.03 | |
| Company | | Preamble | |
| Company Business Financial Information | | 4.06(a) | |
| Company Business Registered Intellectual Property | | 4.16(a) | |
| Company Common Stock | | 2.01(b) | |
| Company Disclosure Letter | | IV | |
| Company Equity Interests | | 4.03(a) | |
| Company Group Permits | | 4.13(b) | |
| Company Indemnified Parties | | 6.05(a) | |
| Company Leased Real Property | | 4.15(b) | |
| Company Material Contract | | 4.17(a) | |
| Company Owned Real Property | | 4.15(a) | |
| Company Pension Benefit Plan | | 4.10(f) | |
| Company Related Parties | | 8.03(e) | |
| Company Stockholder Meeting | | 6.11 | |
| Company Termination Fee | | 8.03(b) | |
| Company Welfare Benefit Plan | | 4.10(c) | |
| Confidentiality Agreement | | 6.03 | |
| Converted Cash Award | | 2.04(a) | |
| Court | | 9.13(b) | |
| CSG | | Recitals | |
| CSG Merger Sub | | Recitals | |
| CSG Purchaser | | Recitals | |
| CSG-Vista Outdoor Merger | | Recitals | |
| CSG-Vista Outdoor Merger Agreement | | Recitals | |
| Debt Commitment Letter | | 9.14 | |
| Debt Financing | | 6.13(a) | |
| Debt Financing Agreements | | 9.14 | |
| DPA | | 3.12 | |
| EDGAR | | IV | |
| Effective Time | | 1.04 | |
| End Date | | 8.01(b)(i) | |
| Equity Financing | | 3.08 | |
| Equity Financing Commitment | | 3.08 | |
| | | | | | | | | | | | | | |
| Term | | Section | |
| Equity Financing Source | | 3.08 | |
| Filed SEC Documents | | IV | |
| Guarantor | | Recitals | |
| Guarantors | | Recitals | |
| Initial End Date | | 8.01(b)(i) | |
| Intercompany Contracts | | 4.17(c) | |
| Inventory | | 4.26 | |
| Key Employee | | 4.11(e) | |
| Labor Agreement | | 4.11(a) | |
| Letter of Transmittal | | 2.03(b) | |
| Limited Guarantee | | Recitals | |
| Merger | | 1.02 | |
| Merger Exchange Fund | | 2.03(a) | |
| Merger Sub | | Preamble | |
| Parent | | Preamble | |
| Parent Disclosure Letter | | III | |
| Parent Related Parties | | 8.03(d) | |
| Parent Termination Fee | | 8.03(a)(ii) | |
| Post-Closing Bonus | | 6.15(c) | |
| Pre-Closing Bonus | | 6.15(c) | |
| Premium Cap | | 6.05(b) | |
| R&W Insurance Policy | | 6.16 | |
| Remedial Action | | 4.14(h) | |
| Reorganization | | 6.17 | |
| Restraint | | 7.01(c) | |
| Review Laws | | 6.04(b) | |
| Separation Agreement | | Recitals | |
| Surviving Corporation | | 1.02 | |
| Top Customers | | 4.17(a)(xiii) | |
| Top Vendors | | 4.17(a)(xiii) | |
| Transaction Filings | | 6.01 | |
| Vista Outdoor | | Preamble | |
| Vista Outdoor D&O Insurance | | 6.05(b) | |
AMENDED AND RESTATED SEPARATION AGREEMENT
by and between
VISTA OUTDOOR INC.
and
REVELYST, INC.
Dated as of October 4, 2024
TABLE OF CONTENTS
| | | | | | | | | | | |
| | | Page |
| | | |
| | | |
| ARTICLE I Definitions | 2 |
| Section 1.01 | Definitions | 2 |
| | | |
| ARTICLE II The Separation | 17 |
| Section 2.01 | Transfer of Assets and Assumption of Liabilities | 17 |
| Section 2.02 | Certain Matters Governed Exclusively by Ancillary Agreements | 22 |
| Section 2.03 | Termination of Agreements; Settlement of Intercompany Accounts; Bank Accounts | 22 |
| Section 2.04 | Shared Contracts | 24 |
| Section 2.05 | Disclaimer of Representations and Warranties | 25 |
| Section 2.06 | Closing Adjustments | 25 |
| Section 2.07 | Earn-Out | 32 |
| | | |
| ARTICLE III Credit Support | 36 |
| Section 3.01 | Replacement of Vista Outdoor Credit Support | 36 |
| Section 3.02 | Replacement of Revelyst Credit Support | 37 |
| | | |
| ARTICLE IV Taxes | 38 |
| Section 4.01 | Tax Indemnification | 38 |
| Section 4.02 | Tax Returns | 38 |
| Section 4.03 | Intended Tax Treatment; Certain Tax Actions | 40 |
| Section 4.04 | Tax Dispute Resolution | 41 |
| Section 4.05 | Tax Refunds | 41 |
| Section 4.06 | Treatment of Certain Payments | 41 |
| Section 4.07 | Straddle Periods | 41 |
| Section 4.08 | Certain Tax Contests | 42 |
| Section 4.09 | Tax Matters Cooperation | 43 |
| Section 4.10 | Domestic Use Agreement | 43 |
| Section 4.11 | Insurance Policy | 43 |
| Section 4.12 | Survival | 43 |
| | | |
| ARTICLE V Mutual Releases; Indemnification; Litigation | 44 |
| Section 5.01 | Release of Pre-Closing Claims | 44 |
| Section 5.02 | Indemnification by Revelyst | 46 |
| Section 5.03 | Indemnification by Vista Outdoor | 46 |
| Section 5.04 | Indemnification Obligations Net of Insurance Proceeds and Third-Party Proceeds; Mitigation | 47 |
| Section 5.05 | Procedures for Indemnification of Third-Party Claims | 48 |
| Section 5.06 | Additional Matters | 50 |
| Section 5.07 | Right to Contribution | 51 |
| Section 5.08 | Remedies Cumulative | 51 |
| Section 5.09 | Survival of Indemnities | 51 |
| | | | | | | | | | | |
| Section 5.10 | Limitation on Liability | 51 |
| Section 5.11 | Covenant Not to Sue | 52 |
| Section 5.12 | Management of Actions | 52 |
| Section 5.13 | Settlement of Actions | 54 |
| Section 5.14 | Interpretation | 54 |
| | | |
| ARTICLE VI Access to Information; Privilege; Confidentiality | 54 |
| Section 6.01 | Agreement for Exchange of Information; Archives | 54 |
| Section 6.02 | Ownership of Information | 55 |
| Section 6.03 | Compensation for Providing Information | 55 |
| Section 6.04 | Record Retention | 55 |
| Section 6.05 | Accounting Information | 56 |
| Section 6.06 | Limitations of Liability | 57 |
| Section 6.07 | Production of Witnesses; Records; Cooperation | 57 |
| Section 6.08 | Privileged Matters | 58 |
| Section 6.09 | Confidential Information | 60 |
| Section 6.10 | Counsel Acknowledgment | 61 |
| | | |
| ARTICLE VII Insurance | 61 |
| Section 7.01 | Maintenance of Insurance | 61 |
| Section 7.02 | Claims Under Vista Outdoor Insurance Policies | 62 |
| Section 7.03 | Insurance Proceeds | 63 |
| Section 7.04 | Claims Not Reimbursed | 64 |
| Section 7.05 | Additional Insurance | 64 |
| Section 7.06 | Insurance Cooperation | 64 |
| | | |
| ARTICLE VIII Further Assurances and Additional Covenants | 64 |
| Section 8.01 | Further Assurances | 64 |
| | | |
| ARTICLE IX Intellectual Property | 65 |
| Section 9.01 | Consent To Use Intellectual Property And Duty To Cooperate | 65 |
| Section 9.02 | Intellectual Property Cross-License | 69 |
| Section 9.03 | Other Licenses | 69 |
| Section 9.04 | Scope | 70 |
| | | |
| ARTICLE X Termination | 70 |
| Section 10.01 | Termination | 70 |
| Section 10.02 | Effect of Termination | 70 |
| | | |
| ARTICLE XI Miscellaneous | 70 |
| Section 11.01 | Counterparts; Entire Agreement; Corporate Power | 70 |
| Section 11.02 | Governing Law; Jurisdiction | 71 |
| Section 11.03 | Assignability | 71 |
| Section 11.04 | Third-Party Beneficiaries | 72 |
| Section 11.05 | Notices | 72 |
| Section 11.06 | Severability | 74 |
| Section 11.07 | Expenses | 74 |
| | | | | | | | | | | |
| Section 11.08 | Headings | 75 |
| Section 11.09 | Survival of Covenants | 75 |
| Section 11.10 | Waivers of Default | 75 |
| Section 11.11 | Remedies | 75 |
| Section 11.12 | No Admission of Liability | 76 |
| Section 11.13 | Amendments | 76 |
| Section 11.14 | Interpretation | 76 |
| | | | | | | | |
| | |
| Schedule 1.01(a) | - | Transaction Steps |
| | |
| Schedule 1.01(b) | - | Revelyst Accounts |
| | |
| Schedule 1.01(c) | - | Equity Interests |
| | |
| Schedule 1.01(d) | - | Revelyst Assets |
| | |
| Schedule 1.01(e) | - | Revelyst Balance Sheet |
| | |
| Schedule 1.01(f) | - | Revelyst Liabilities |
| | |
| Schedule 1.01(g) | - | Shared Contracts |
| | |
| Schedule 1.01(h) | - | Vista Outdoor Accounts |
| | |
| Schedule 1.01(i) | - | Vista Outdoor Retained Assets |
| | |
| Schedule 1.01(j) | - | Vista Outdoor Retained Liabilities |
| | |
| Schedule 2.03(b) | - | Surviving Intercompany Agreements |
| | |
| Schedule 2.06(k)(i) | - | Accounting Principles |
| | |
| Schedule 3.01(a) | - | Surviving Vista Outdoor Credit Support Instruments |
| | |
| Schedule 5.12(a) | - | Revelyst-Managed Actions |
| | |
| Schedule 5.12(b) | - | Vista Outdoor-Managed Actions |
| | |
| Attachment A | - | Revelyst IP |
| | |
| Attachment B | - | Revelyst Marks |
AMENDED AND RESTATED SEPARATION AGREEMENT, dated as of October 4, 2024, by and between VISTA OUTDOOR INC., a Delaware corporation (“Vista Outdoor”), and REVELYST, INC., a Delaware corporation and a direct wholly owned Subsidiary of Vista Outdoor (“Revelyst”). Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to them in Article I.
R E C I T A L S
WHEREAS, Vista Outdoor and Revelyst entered into that certain Separation Agreement, dated as of October 15, 2023 (the “Original Agreement”);
WHEREAS, Vista Outdoor, Revelyst, Olibre LLC, a Delaware limited liability company (“Olibre Parent”), and Cabin Ridge Inc., a Delaware corporation and wholly owned Subsidiary of Olibre Parent (“Olibre Merger Sub”), have entered into that certain Agreement and Plan of Merger, dated as of the date hereof (the “Revelyst Merger Agreement”), providing for, among other things, the merger of Olibre Merger Sub with and into Revelyst, with Revelyst surviving such merger (the “Revelyst Merger” and, together with the other transactions contemplated by the Revelyst Merger Agreement, the “Revelyst Transactions”) as a wholly owned subsidiary of Olibre Parent;
WHEREAS, in connection with the Revelyst Merger Agreement, Vista Outdoor and Revelyst wish to amend and restate the Original Agreement in its entirety to, among other things, reflect certain modifications negotiated among the parties to the Revelyst Merger Agreement (the “Amendment”);
WHEREAS, in accordance with Section 11.3 of the Original Agreement, Vista Outdoor, Revelyst and CSG Elevate II Inc., a Delaware corporation (“Parent”), have consented to amending and restating the Original Agreement in its entirety as set forth in this Agreement;
WHEREAS, Vista Outdoor, Revelyst, Parent, CSG Elevate III Inc., a Delaware corporation and a wholly owned Subsidiary of Parent (“Merger Sub”), and, solely for the purposes of the Guarantor Provisions, CZECHOSLOVAK GROUP a.s., a joint stock company incorporated under the laws of the Czech Republic, have entered into that certain Agreement and Plan of Merger, dated as of October 15, 2023 (the “Merger Agreement”), providing for, among other things, the merger of Merger Sub with and into Vista Outdoor, with Vista Outdoor surviving such merger (the “Merger”) as a wholly owned Subsidiary of Parent;
WHEREAS, the transactions identified as the “Pre-Signing Transactions” in Schedule 1.01(a) were completed prior to the time of the execution of this Agreement and the Revelyst Merger Agreement.
WHEREAS, on the terms and subject to the conditions contained herein, prior to the consummation of the Merger, Vista Outdoor shall consummate the Internal Transactions;
WHEREAS, following the consummation of the Internal Transactions, Revelyst will, directly or indirectly, hold the Revelyst Business;
WHEREAS, following the consummation of the Internal Transactions, Parent will subscribe for Vista Outdoor Common Stock in an amount equal to the Subscription Amount on the terms and subject to the conditions set forth in the Merger Agreement (the “Subscription”);
WHEREAS, following the Subscription, on the terms and subject to the conditions contained herein, Vista Outdoor will contribute the Contribution Amount to Revelyst in exchange for newly issued shares of Revelyst Common Stock (the “Contribution”);
WHEREAS, following the Contribution, pursuant to the Merger, each share of Vista Outdoor Common Stock issued and outstanding immediately prior to the Merger (other than any such shares of Vista Outdoor Common Stock held by Vista Outdoor, any of its Subsidiaries or Parent) shall be converted into the right to receive one fully paid and non-assessable share of Revelyst Common Stock;
WHEREAS, the board of directors of Vista Outdoor has approved and declared advisable and in the best interests of Vista Outdoor and its stockholders this Agreement and the Separation;
WHEREAS, it is a condition to the Merger that, on or prior to the Closing Date, the Pre-Closing Separation be consummated in accordance with the terms of this Agreement; and
WHEREAS, it is appropriate and desirable to set forth the principal corporate transactions required to effect the Separation and to set forth certain other agreements that will govern certain matters relating to the Separation and the relationship of Vista Outdoor, Revelyst and their respective Subsidiaries following the Separation and Merger.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, the Parties, intending to be legally bound, hereby agree as follows:
ARTICLE I
Definitions
Section 1.01 Definitions. Each capitalized term used but not defined herein shall have the meaning assigned to such term in the Merger Agreement. In addition, the following terms shall have the following meanings:
“Additional Insurance Policy” has the meaning set forth in Section 7.05.
“Adversarial Action” means (a) an Action by a member of the Vista Outdoor Group, on the one hand, against a member of the Revelyst Group, on the other hand, or (b) an Action by a member of the Revelyst Group, on the one hand, against a member of the Vista Outdoor Group, on the other hand.
“Advisory Estimated Closing Statement” has the meaning set forth in Section 2.06(c).
“Affiliate” of any Person means a Person that controls, is controlled by or is under common control with such Person. As used herein, “control” of any Person means the
possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through ownership of voting securities or other interests, by Contract or otherwise; provided, however, that, solely for purposes of this Agreement and the Ancillary Agreements, (a) Revelyst and the other members of the Revelyst Group shall not be considered Affiliates of Vista Outdoor or any of the other members of the Vista Outdoor Group and (b) Vista Outdoor and the other members of the Vista Outdoor Group shall not be considered Affiliates of Revelyst or any of the other members of the Revelyst Group. Notwithstanding the foregoing, solely with respect to clauses (c) through (f) of Section 9.01, the term Affiliate shall only include such Persons that are Affiliates as of the Closing.
“Agreed Tax Principles” has the meaning set forth in Section 4.02(c).
“Agreement” means this Amended and Restated Separation Agreement, including the Schedules hereto.
“Ancillary Agreements” means (a) the Employee Matters Agreement, the Transition Services Agreement and the Anoka Sublease and (b) any other instruments, assignments, documents and agreements executed by the Parties or the members of their respective Groups in connection with the implementation of the transactions contemplated by this Agreement, excluding the Merger Agreement.
“Assets” means all assets, properties, claims and rights of every kind and nature (including goodwill), wherever located (including in the possession of vendors or other third parties or elsewhere), whether real, personal or mixed, tangible or intangible, or accrued or contingent, in each case whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of any Person, including the following:
(a) all accounting and other books, records, files and Personnel Records, whether in paper, microfilm, microfiche, computer tape or disc, magnetic tape, electronic recording or any other form or medium (“Records”);
(b) all apparatus, fixtures, machinery, furniture, office and other equipment, automobiles, trucks, aircraft, rolling stock, vessels, motor vehicles and other transportation equipment, special and general tools, test devices, prototypes and models and other tangible personal property;
(c) all inventories of materials, parts, raw materials, supplies, work-in-process and finished goods and products;
(d) all interests in real property of whatever nature, including buildings, land, structures, improvements and fixtures thereon, and all licenses, easements and rights-of-way appurtenant thereto, and all leasehold interests, whether as owner, mortgagee or holder of a Lien in real property, lessor, sublessor, lessee, sublessee or otherwise;
(e) all interests in any capital stock of, or other equity interests in, any Subsidiary or any other Person; all bonds, notes, debentures or other securities issued by any Subsidiary or any other Person; all loans, advances or other extensions of credit or capital contributions to any
Subsidiary or any other Person; all other investments in securities of any Person; and all rights as a partner, joint venturer or participant;
(f) all Contracts, including license agreements, leases of personal property, open purchase orders for raw materials, supplies, parts or services, and unfilled orders for the manufacture and sale of products, and all rights arising thereunder;
(g) all deposits, letters of credit, performance bonds and other surety bonds;
(h) all written technical information, data, specifications, research and development information, engineering drawings, operating and maintenance manuals and materials and analyses prepared by consultants and other third parties;
(i) all right, title and interest in and to Intellectual Property;
(j) all IT Systems;
(k) all prepaid expenses, trade accounts and other accounts and notes receivable (whether current or non-current);
(l) all claims or rights against any Person arising from the ownership of any other Asset, all rights in connection with any bids or offers, all Actions, Judgments or similar rights, all rights under express or implied warranties, all rights of recovery and all rights of setoff of any kind and demands of any nature, in each case whether accrued or contingent, whether in tort, contract or otherwise and whether arising by way of counterclaim or otherwise;
(m) all rights under insurance policies and all rights in the nature of insurance, indemnification or contribution;
(n) all Governmental Approvals (including Environmental Permits) and all pending applications therefor;
(o) (i) all cash, cash equivalents, bank deposits and marketable securities, whether denominated in United States dollars or otherwise, and (ii) all bank accounts, lock boxes and other deposit arrangements;
(p) interest rate, currency, commodity or other swap, collar, cap or other hedging or similar agreements or arrangements; and
(q) all goodwill as a going concern and other intangible properties.
“Cash Management Arrangements” means all cash management arrangements pursuant to which Vista Outdoor or its Subsidiaries automatically or manually sweep cash from, or automatically or manually transfer cash to, accounts of Revelyst or any other member of the Revelyst Group.
“CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. § 9601 et seq.
“Commission” means the Securities and Exchange Commission.
“Contribution” has the meaning set forth in the recitals.
“Cravath” has the meaning set forth in Section 6.10.
“Credit Support Instruments” has the meaning set forth in Section 3.01(a).
“Draft Estimated Closing Statement” has the meaning set forth in Section 2.06(b).
“Earn-Out Payment” has the meaning set forth in Section 2.07(a)(i).
“Earn-Out Threshold” has the meaning set forth in Section 2.07(a)(i).
“Environmental Liabilities” means all Liabilities to the extent relating to, arising out of or resulting from any applicable Environmental Laws, or Environmental Permits, including such Liabilities to the extent relating to, arising out of or resulting from any (a) compliance, or any actual or alleged non-compliance, with any Environmental Law; (b) any actual or alleged presence or Release of, disposal, arrangement for disposal or transportation of, or exposure to, Hazardous Materials; (c) any actual or alleged personal injuries, property or natural resource damages, financial assurance obligations or contractual obligations related to any of the foregoing; and (d) any remediation, investigation or clean-up obligations related to any of the foregoing.
“Excise Taxes” has the meaning set forth in the definition of “Transaction Taxes”.
“Final Determination” means (a) any final determination of liability in respect of a Tax that, under applicable Law, is not subject to further appeal, review or modification through proceedings or otherwise (including the expiration of a statute of limitations or period for the filing of claims for refunds, amended Tax Returns or appeals from adverse determinations), including a “determination” as defined in Section 1313(a) of the Code or execution of an IRS Form 870AD, or (b) the payment of Tax by a Party (or its Subsidiary) that is responsible for payment of that Tax under applicable Law, with respect to any item disallowed or adjusted by a Governmental Authority, as long as the responsible Party determines that no action should be taken to recoup that payment and the other Party agrees (such agreement not to be unreasonably withheld, delayed or conditioned).
“Form S-4” means the registration statement on Form S-4 filed by Revelyst with the Commission to register under the Securities Act the shares of Revelyst Common Stock to be issued in connection with the Merger, in the form declared effective by the Commission.
“Group” means either the Vista Outdoor Group or the Revelyst Group, or both, as the context requires.
“Income Taxes” means any Taxes imposed on or determined with reference to gross or net income or profits (including any franchise or withholding Taxes imposed in lieu thereof but excluding any firearms and ammunition excise Taxes).
“Indemnifying Party” has the meaning set forth in Section 5.04(a).
“Indemnitee” has the meaning set forth in Section 5.04(a).
“Indemnity Payment” has the meaning set forth in Section 5.04(a).
“Information” means information, whether or not patentable, copyrightable or protectable as a trade secret, in written, oral, electronic or other tangible or intangible forms, stored in any medium now known or yet to be created, including studies, reports, records, books, Contracts, instruments, Software, Know-How, communications (including those by or to attorneys (whether or not subject to the attorney-client privilege)), memos and other materials and other technical, financial, employee or business information or data, documents, correspondence, materials and files.
“Insurance Proceeds” means those monies:
(a) received by an insured (or its successor-in-interest) from an insurance carrier;
(b) paid by an insurance carrier on behalf of the insured (or its successor-in-interest); or
(c) received (including by way of setoff) by or on behalf of the insured (or its successor-in-interest) from any third party in the nature of insurance, contribution or indemnification in respect of any Liability;
in each such case, net of (i) any applicable premium adjustments (including reserves and retrospectively rated premium adjustments), (ii) any costs or expenses incurred in connection with the collection thereof and (iii) any Taxes resulting from the receipt thereof.
“Intercompany Accounts” has the meaning set forth in Section 2.03(a).
“Intercompany Agreements” has the meaning set forth in Section 2.03(a).
“Internal Transactions” means the transactions identified as the “Internal Transactions” in Schedule 1.01(a).
“Managing Party” has the meaning set forth in Section 5.13.
“Merger” has the meaning set forth in the recitals.
“Merger Agreement” has the meaning set forth in the recitals.
“Mixed Action” has the meaning set forth in Section 5.12(d).
“Non-Managing Party” has the meaning set forth in Section 5.13.
“Olibre Disclosure Sections” means all information set forth in the Transaction Filings to the extent provided by or on behalf of Olibre Merger Sub, Olibre Parent or their respective Affiliates.
“Olibre Merger Sub” has the meaning set forth in the recitals.
“Olibre Parent” has the meaning set forth in the recitals.
“Original Agreement” has the meaning set forth in the recitals.
“Party” means either party hereto, and “Parties” means both parties hereto.
“Personnel Records” means all personnel files, data and other personnel information that relates to (a) in the case of the Vista Outdoor Group, any Vista Outdoor Employee, Former Vista Outdoor Employee or Former Shared Services Employee (each, as defined in the Employee Matters Agreement) and any other service provider of the Vista Outdoor Group immediately following the Closing, or (b) in the case of the Revelyst Group, any Revelyst Employee, Former Revelyst Employee (each, as defined in the Employee Matters Agreement) and any other service provider of the Revelyst Group immediately following the Closing and, in each case under clauses (a) and (b), other than files, data and information that are (or is) prohibited from being made available as a result of applicable Laws regarding the safeguarding of data privacy or any other legal obligation to maintain the confidentiality of such files, data or information.
“Post-Closing Tax Period” means any taxable period beginning after the Closing Date and the portion of any Straddle Period beginning after the Closing Date.
“Pre-Closing Separation” means (a) the Internal Transactions, (b) the execution and delivery of (i) the Transition Services Agreement and (ii) the Anoka Sublease, (c) any actions to be taken prior to the Contribution pursuant to Sections 2.01(a) and 2.03, and (d) the Contribution.
“Pre-Closing Tax Period” means any taxable period ending on or before the Closing Date and the portion of any Straddle Period ending on and including the Closing Date.
“Pre-Closing Tax Returns” has the meaning set forth in Section 4.02(b).
“Retained Information” has the meaning set forth in Section 6.04.
“Revelyst” has the meaning set forth in the preamble.
“Revelyst Account” means any bank, brokerage or similar account owned by Revelyst or any other member of the Revelyst Group, including the Revelyst Accounts listed or described on Schedule 1.01(b).
“Revelyst Assets” means, without duplication, the following Assets of Vista Outdoor and its Subsidiaries as of immediately prior to the Effective Time, whether held directly or indirectly through any Person:
(a) all interests in the capital stock of, or other equity interests in, the members of the Revelyst Group (other than Revelyst) and all other equity, partnership, membership, joint venture and similar interests owned by a member of the Revelyst Group (other than any such interests (i) in a member of the Vista Outdoor Group or (ii) set forth on Schedule 1.01(c)(iii) under the caption “Joint Ventures and Minority Investments – Owned by Vista Outdoor”),
including those set forth on Schedule 1.01(c)(ii) under the caption “Joint Ventures and Minority Investments – Owned by Revelyst”;
(b) all Assets reflected on the Revelyst Business Balance Sheet, and all Assets acquired after the date of the Revelyst Business Balance Sheet that, had they been acquired on or before such date and owned as of such date, would reasonably and in good faith have been reflected on the Revelyst Business Balance Sheet if prepared in accordance with GAAP applied on a consistent basis, subject to any dispositions of such Assets subsequent to the date of the Revelyst Business Balance Sheet;
(c) any additional Assets listed or described on Schedule 1.01(d);
(d) any rights to the extent related to the Revelyst Portion of any Shared Contract;
(e) all Assets that are expressly provided by this Agreement or any Ancillary Agreement as Assets to be assigned to or retained by, or allocated to, any member of the Revelyst Group;
(f) (i) all rights, interests and claims with respect to Information and Records that, as of immediately prior to the Effective Time, are primarily related to, or used or held for use primarily in connection with, the facilities, business or operations of the Revelyst Business; and (ii) a non-exclusive right to, and copies of the portions of, Information and Records described in clause (e)(i) of the definition of Vista Outdoor Assets that, as of immediately prior to the Effective Time, are related to, or used or held for use in connection with, the facilities, business or operations of the Revelyst Business (but not primarily related to, or used or held for use primarily in connection with, the facilities, business or operations of the Revelyst Business), in each case unless otherwise expressly provided in this Agreement; and
(g) all Assets of Vista Outdoor and its Subsidiaries that, as of immediately prior to the Effective Time, are primarily related to, or used or held for use primarily in connection with, the facilities, business or operations of the Revelyst Business (unless otherwise expressly provided in this Agreement).
Notwithstanding the foregoing, the Revelyst Assets shall not include (i) any Vista Outdoor Retained Assets, (ii) any Tax assets, (iii) any rights to the extent related to the Vista Outdoor Portion of any Shared Contracts or (iv) any Assets of Vista Outdoor and its Subsidiaries that, as of immediately prior to the Effective Time, are primarily related to, or used or held for use primarily in connection with, the facilities, business or operations of the Vista Outdoor Business (unless otherwise expressly provided in this Agreement).
“Revelyst Bank Debt Incurrence” means any incurrence of indebtedness at or following the Closing but before the closing of the Revelyst Merger (or commitments to provide any such indebtedness) by Revelyst or any member of its Group.
“Revelyst Business” means the businesses and operations whose financial results were collectively reported as the “Outdoor Products” reporting segment of Vista Outdoor during the period beginning on April 1, 2023 and ending immediately prior to the Effective Time.
“Revelyst Business Balance Sheet” means the balance sheet of the Revelyst Business, including the notes thereto, as of June 30, 2024, as set forth on Schedule 1.01(e).
“Revelyst Common Stock” means, collectively, the common stock, $0.01 par value per share, of Revelyst.
“Revelyst Credit Support Instruments” has the meaning set forth in Section 3.02(a).
“Revelyst EBITDA Notice of Disagreement” has the meaning set forth in Section 2.07(b)(i).
“Revelyst EBITDA Statement” has the meaning set forth in Section 2.07(b)(i).
“Revelyst FY28 EBITDA” has the meaning set forth in Section 2.07(a)(ii).
“Revelyst FY28 Financial Statements” has the meaning set forth in Section 2.07(a)(ii).
“Revelyst Group” means (a) Revelyst, (b) each Person that will be a Subsidiary of Revelyst following the Internal Transactions and immediately prior to the Effective Time, including the entities set forth on Schedule 1.01(c) under the caption “Subsidiaries”, and (c) each Person that becomes a Subsidiary of Revelyst after the Closing, including in each case any Person that is merged or consolidated with or into Revelyst or any Subsidiary of Revelyst.
“Revelyst Indemnitees” has the meaning set forth in Section 5.03.
“Revelyst IP” means the Intellectual Property included in the Revelyst Assets, including the Intellectual Property set forth on Attachment A, together with all documentation related thereto, all rights to sue and collect damages for past, present or future infringement, misappropriation or other violation thereof, and all goodwill arising in connection therewith.
“Revelyst Know-How” means the Know-How included in the Revelyst Assets.
“Revelyst Liabilities” means, without duplication, all of the following Liabilities of the Vista Outdoor Group or the Revelyst Group whether arising prior to, at or after the Effective Time:
(a) all Liabilities (including Environmental Liabilities) to the extent relating to, arising out of or resulting from:
(i) the facilities, operation or conduct of the Revelyst Business as conducted at any time prior to the Closing (including any Liability to the extent relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative (whether or not such act or failure to act is or was within such Person’s authority));
(ii) the facilities, operation or conduct of the Revelyst Business or any other business conducted by Revelyst or any other member of the Revelyst Group at any time after the Closing (including any Liability relating to, arising out of or resulting from any
act or failure to act by any director, officer, employee, agent or representative (whether or not such act or failure to act is or was within such Person’s authority));
(iii) any terminated, divested or discontinued facilities, businesses or operations of the Revelyst Business;
(iv) the Revelyst Assets; or
(v) the VOO Subject Assets.
(b) all Liabilities reflected on the Revelyst Business Balance Sheet, and all Liabilities arising or assumed after the date of the Revelyst Business Balance Sheet that, had they arisen or been assumed on or before such date and been existing as of such date, would reasonably and in good faith have been reflected on the Revelyst Business Balance Sheet if prepared in accordance with GAAP applied on a consistent basis, subject to any discharge of such Liabilities subsequent to the date of the Revelyst Business Balance Sheet;
(c) any additional Liabilities listed or described on Schedule 1.01(f);
(d) any Liabilities to the extent related to the Revelyst Portion of any Shared Contract;
(e) all Liabilities of Parent, Olibre Parent, Vista Outdoor, Revelyst and their respective Subsidiaries in respect of or relating to the Substitute Revelyst DSU Awards, the Substitute Revelyst Option Awards, the Substitute Revelyst PSU Awards or the Substitute Revelyst RSU Awards (in each case, as defined in the Employee Matters Agreement), including the treatment thereof and any payments required to be made to holders thereof in connection with the Revelyst Merger; and
(f) all other Liabilities that are expressly provided by this Agreement or any Ancillary Agreement as Liabilities to be assumed or retained by, or allocated to, any member of the Revelyst Group.
Notwithstanding the foregoing, the Revelyst Liabilities shall not include (i) any Vista Outdoor Retained Liabilities, (ii) any Liabilities for Taxes, (iii) any Liabilities to the extent related to the Vista Outdoor Portion of any Shared Contract or (iv) any Liabilities of Vista Outdoor and its Subsidiaries as of immediately prior to the Effective Time, to the extent related to the facilities, businesses or operations of the Vista Outdoor Business (unless otherwise expressly provided in this Agreement).
“Revelyst Marks” means the Trademarks included in the Revelyst Assets, including the Trademarks set forth on Attachment B.
“Revelyst Merger” has the meaning set forth in the recitals.
“Revelyst Portion” has the meaning set forth in Section 2.04.
“Revelyst Pre-Closing Taxes” means, without duplication, any Tax of a member of the Revelyst Group or member of the Vista Outdoor Group for a Pre-Closing Tax Period, in each case, to the extent attributable to the conduct of the Revelyst Business, the Revelyst Assets or the Revelyst Liabilities as determined pursuant to Section 4.01(d); provided, however, that Revelyst Pre-Closing Taxes shall not include any Transaction Taxes or Taxes described in clause (iv) of the definition of Vista Outdoor Taxes.
“Revelyst Prepared Returns” has the meaning set forth in Section 4.02(b).
“Revelyst Purchase Price” has the meaning assigned to such term in the Revelyst Merger Agreement.
“Revelyst Sharing Percentage” means the percentage equal to a fraction the numerator of which is the Revelyst Purchase Price and the denominator of which is the Revelyst Purchase Price plus the Contribution Amount plus the amount payable to Revelyst under Section 2.06(f)(i) (if the Closing Adjustment Amount is greater than the Estimated Closing Adjustment Amount) or minus the amount payable to Vista Outdoor under Section 2.06(f)(ii) (if the Closing Adjustment Amount is less than the Estimated Closing Adjustment Amount).
“Revelyst Subsidiary Group” means the members of the Revelyst Group other than Revelyst.
“Revelyst Tax Contest” has the meaning set forth in Section 4.08(b).
“Revelyst Tax Returns” means Tax Returns that include a member of the Revelyst Group and do not include any member of the Vista Outdoor Group.
“Revelyst Taxes” means, without duplication, (i) all Revelyst Pre-Closing Taxes, (ii) all Taxes to the extent resulting from, arising out of or relating to the members of the Revelyst Group, the Revelyst Business, the Revelyst Assets or the Revelyst Liabilities for any Post-Closing Tax Period, and (iii) Taxes collected from Vista Outdoor as a result of Revelyst’s failure to pay any Income Tax liability in a taxable period ending after the Closing Date that includes a “recapture tax amount” pursuant to Treasury Regulations Section 1.1503(d)-6(h)(3)(iv)(B), except to the extent any such Taxes were incurred as a result of the failure by Vista Outdoor or any of its Affiliates (other than any member of the Revelyst Group) to timely file a domestic use agreement in accordance with Treasury Regulations Section 1.1503(d)-6(f)(2), and including in each case of clauses (i) through (iv), any such Taxes imposed on any member of any consolidated, affiliated, unitary, aggregate, combined or similar group of which any member of the Revelyst Group is or was a member, including pursuant to Treasury Regulations Sections 1.1502-6 and 1.1502-78, and including any such Taxes imposed as a successor or transferee, by Contract or otherwise; provided that Revelyst Taxes shall not include any Taxes (1) to the extent taken into account in the determination of the Closing Adjustment Amount as finally determined pursuant to Section 2.06) or (2) arising from transactions, actions or elections entered into by the Vista Outdoor Group outside the ordinary course of business on the Closing Date and not (x) otherwise contemplated by this Agreement, the Merger Agreement or the Revelyst Merger Agreement, (y) required by applicable Law or by a Contract entered into by a member of the Vista Outdoor Group prior to the Closing or (z) approved in writing by Revelyst.
“Separation” means (a) (i) the Internal Transactions, (ii) any actions to be taken pursuant to Article II and (iii) any other transfers of Assets and assumptions of Liabilities, in each case, between a member of the Revelyst Group and a member of the Vista Outdoor Group, provided for in this Agreement or in any Ancillary Agreement and (b) the Contribution.
“Shared Background IP” has the meaning set forth in Section 9.02.
“Shared Contract” means any Contract of any member of either Group with a third party that relates in any material respect to both the Revelyst Business and the Vista Outdoor Business, including the contracts and agreements set forth on Schedule 1.01(g); provided that the Parties may, by mutual consent, elect to include in, or exclude from, this definition any Contract; provided further Shared Contracts shall not include any Contract relating to the development, distribution, sale, manufacturing or supply of ammunition or primers (or components thereof), which shall in each case be Vista Outdoor Assets.
“Shared Pre-Closing Deductions” means all items of loss, deduction or credit arising from (i) any third-party indebtedness issued by (A) the Vista Outdoor Group to the extent such indebtedness was not issued solely to benefit (directly or indirectly) the Vista Outdoor Business or (B) the Revelyst Group to the extent such indebtedness was not issued solely to benefit (directly or indirectly) the Revelyst Business and (ii) any other expenses incurred by (A) the Vista Outdoor Group to the extent not incurred solely for the direct or indirect benefit of the Vista Outdoor Business (including corporate overhead or other similar expenses) or (B) the Revelyst Group to the extent not incurred solely for the direct or indirect benefit of the Revelyst Business, in each case of clauses (i) and (ii), to the extent such items are deductible in a Pre-Closing Tax Period for applicable Tax purposes at a “more-likely-than-not” or higher level of comfort; provided that any deductions attributable to the consummation of the Transactions shall be excluded from this definition.
“Shared Tax Contest” has the meaning set forth in Section 4.08(c).
“Specified Dual Consolidated Loss” means any dual consolidated loss of any separate unit and combined separate unit of Revelyst as determined under Treasury Regulations Section 1.1503(d)-1(b)(4) (including (a) Hydrosport, S. de R.L. de C.V., (b) Advanced Arrow S. de R.L. de C.V., (c) CamelBak Products, LLC (Philippine Representative Office), (d) Bell Sports Inc. –Ireland Branch and (e) any combined separate unit comprised of any combination of the foregoing separate units), for Tax years of Vista Outdoor up to and including the Tax year that includes the Closing Date, for which a “domestic use election” has been made pursuant to Treasury Regulations Section 1.1503(d)-6.
“Specified Group Insurance Policies” has the meaning set forth in Section 7.01.
“Straddle Period” means any taxable period that includes, but does not end on, the Closing Date.
“Surviving Vista Outdoor Credit Support Instruments” has the meaning set forth in Section 3.01(a).
“Tax Indemnified Party” has the meaning set forth in Section 4.01(c).
“Tax Indemnifying Party” has the meaning set forth in Section 4.01(c).
“Third-Party Claim” means any assertion by a Person (including any Governmental Authority) who is not a member of the Vista Outdoor Group or the Revelyst Group of any claim, or the commencement by any such Person of any Action, against any member of the Vista Outdoor Group or the Revelyst Group.
“Third-Party Proceeds” has the meaning set forth in Section 5.04(a).
“Transaction Filings” means the Form S-4, any registration statement, offering memorandum or other marketing materials relating to the Revelyst Bank Debt Incurrence, or any other document filed by Vista Outdoor or Revelyst with the Commission in connection with the Transactions or the Revelyst Transactions as contemplated by this Agreement.
“Transaction Tax Deductions” means any amounts that are deductible, for Income Tax purposes, at a “more likely than not” or higher level of comfort and relate to or arise from the payments of amounts that are included in Transaction Expenses or Closing Debt (or amounts that would have been included in such definitions but were paid prior to the Closing) and assuming an election was made under Rev. Proc. 2011-29, 2011-18 I.R.B. 746 with respect to any applicable fees.
“Transaction Taxes” means, without duplication, (a) Taxes imposed on Vista Outdoor as a result of the Merger pursuant to Section 4501 of the Code (“Excise Taxes”), (b) Transfer Taxes imposed on Revelyst, Vista Outdoor or any of their respective Subsidiaries attributable to the consummation of the Transactions and (c) any other Taxes imposed on Revelyst, Vista Outdoor or any of their respective Subsidiaries, which are attributable to the consummation of the Transactions.
“Transfer Taxes” means all transfer, sales, use, excise, stock, stamp, stamp duty, stamp duty reserve, stamp duty land, documentary, filing, recording, registration, value-added and other similar Taxes.
“Vista Outdoor” has the meaning set forth in the preamble.
“Vista Outdoor Account” means any bank, brokerage or similar account owned by Vista Outdoor or any other member of the Vista Outdoor Group, including the Vista Outdoor Accounts listed or described on Schedule 1.01(h).
“Vista Outdoor Assets” means, without duplication, all Assets of Vista Outdoor and its Subsidiaries as of immediately prior to the Effective Time, whether held directly or indirectly through any Person, other than the Revelyst Assets, including the following Assets of Vista Outdoor and its Subsidiaries:
(a) the Vista Outdoor Retained Assets;
(b) all Assets of Vista Outdoor and its Subsidiaries that, as of immediately prior to the Effective Time, are primarily related to, or used or held for use primarily in connection with,
the facilities, business or operations of the Vista Outdoor Business (unless otherwise expressly provided in this Agreement);
(c) all interests in the capital stock, or other equity interests in, the members of the Vista Outdoor Group (other than Vista Outdoor);
(d) all Assets that are expressly provided by this Agreement or any Ancillary Agreement as Assets to be retained by, or allocated to, any member of the Vista Outdoor Group;
(e) (i) all rights, interests and claims with respect to Information and Records that, as of immediately prior to the Effective Time, are primarily related to, or used or held for use primarily in connection with, the facilities, business or operations of the Vista Outdoor Business; and (ii) a non-exclusive right to, and copies of the portions of, Information and Records described in clause (f)(i) of the definition of Revelyst Assets that, as of immediately prior to the Effective Time, are related to, or used or held for use in connection with, the facilities, business or operations of the Vista Outdoor Business (but not primarily related to, or used or held for use primarily in connection with, the facilities, business or operations of the Vista Outdoor Business), in each case unless otherwise expressly provided in this Agreement; and
(f) any rights to the extent related to the Vista Outdoor Portion of any Shared Contract.
Notwithstanding the foregoing, the Vista Outdoor Assets shall not include any Tax assets.
“Vista Outdoor Business” means the businesses and operations conducted by Vista Outdoor and its Subsidiaries immediately prior to the Effective Time, other than the Revelyst Business.
“Vista Outdoor Common Stock” means, collectively, the common stock, $0.01 par value per share, of Vista Outdoor.
“Vista Outdoor Credit Support Instruments” has the meaning set forth in Section 3.01(a).
“Vista Outdoor Group” means Vista Outdoor and each of its Subsidiaries, but excluding any member of the Revelyst Group.
“Vista Outdoor Indemnitees” has the meaning set forth in Section 5.02.
“Vista Outdoor IP” means the Intellectual Property included in the Vista Outdoor Assets.
“Vista Outdoor Know-How” means the Know-How included in the Vista Outdoor Assets.
“Vista Outdoor Liabilities” means, without duplication, all of the following Liabilities of the Vista Outdoor Group or the Revelyst Group whether arising prior to, at or following the Effective Time:
(a) all Liabilities (including Environmental Liabilities) to the extent relating to, arising out of or resulting from:
(i) the facilities, operation or conduct of the Vista Outdoor Business as conducted at any time prior to the Closing (including any Liability to the extent relating to, arising out of or resulting from (x) any act or failure to act by any director, officer, employee, agent or representative (whether or not such act or failure to act is or was within such Person’s authority) and (y) the development, distribution, sale, manufacturing or supply of ammunition or primers (or components thereof));
(ii) the facilities, operation or conduct of the Vista Outdoor Business or any other business conducted by Vista Outdoor or any other member of the Vista Outdoor Group at any time after the Closing (including any Liability relating to, arising out of or resulting from (x) any act or failure to act by any director, officer, employee, agent or representative (whether or not such act or failure to act is or was within such Person’s authority) and (y) the development, distribution, sale, manufacturing or supply of ammunition or primers (or components thereof));
(iii) any terminated, divested or discontinued facilities, businesses or operations of Vista Outdoor and its Subsidiaries (other than the Revelyst Business, the Revelyst Group and any terminated, divested or discontinued facilities, businesses or operations of the Revelyst Business); or
(iv) the Vista Outdoor Assets;
(b) the Vista Outdoor Retained Liabilities;
(c) any Liabilities to the extent related to the Vista Outdoor Portion of any Shared Contract;
(d) all Liabilities of Vista Outdoor and its Subsidiaries, immediately prior to the Effective Time, to the extent related to the facilities, businesses or operations of the Vista Outdoor Business (unless otherwise expressly provided in this Agreement);
(e) all Liabilities of Vista Outdoor and its Subsidiaries in respect of or relating to the Vista Outdoor Equity Awards, including the treatment thereof and any payments required to be made to holders thereof in connection with the Merger;
(f) all other Liabilities that are expressly provided by this Agreement or any Ancillary Agreement as Liabilities to be assumed or retained by, or allocated to, any member of the Vista Outdoor Group;
(g) any Liability to the extent taken into account in the determination of the Closing Adjustment Amount as finally determined pursuant to Section 2.06; and
(h) all other Liabilities of Vista Outdoor and its Subsidiaries as of immediately prior to the Effective Time (other than the Revelyst Liabilities).
Notwithstanding the foregoing, the Vista Outdoor Liabilities shall not include any Liabilities for Taxes.
“Vista Outdoor Marks” means the Trademarks included in the Vista Outdoor Assets, but excluding, for clarity, any and all Revelyst Marks.
“Vista Outdoor Policy Pre-Closing Insurance Claim” means any (a) claim made against a member of the Revelyst Group or a member of the Vista Outdoor Group and reported to the applicable insurer(s) at or prior to the Closing in respect of an act or omission occurring at or prior to the Closing that results in a Liability under a “claims-made-based” insurance policy of the Vista Outdoor Group in effect at or prior to the Closing or any extended reporting period thereof or (b) Action (whether made prior to, at or following the Closing) in respect of a Liability occurring at or prior to the Closing under an “occurrence-based” insurance policy of any member of the Vista Outdoor Group in effect at or prior to the Closing.
“Vista Outdoor Portion” has the meaning set forth in Section 2.04.
“Vista Outdoor Pre-Closing Taxes” means, without duplication, any Taxes of a member of the Vista Outdoor Group or the Revelyst Group to the extent attributable to the Vista Outdoor Business, the Vista Outdoor Assets or the Vista Outdoor Liabilities, in each case, for a Pre-Closing Tax Period as determined pursuant to Section 4.01(d); provided, however, that Vista Outdoor Pre-Closing Taxes shall not include any Taxes described in clause (iii) of the definition of Revelyst Taxes.
“Vista Outdoor Prepared Returns” has the meaning set forth in Section 4.02(a).
“Vista Outdoor Retained Assets” means any specified Assets set forth on Schedule 1.01(i).
“Vista Outdoor Retained Liabilities” means any specified Liabilities set forth on Schedule 1.01(j).
“Vista Outdoor Sharing Percentage” means 1 minus the Revelyst Sharing Percentage.
“Vista Outdoor Tax Contest” has the meaning set forth in Section 4.08(b).
“Vista Outdoor Taxes” means, without duplication, all (i) Vista Outdoor Pre-Closing Taxes, (ii) Taxes of a member of the Vista Outdoor Group or that arises out of or relates to the Vista Outdoor Business, the Vista Outdoor Assets or the Vista Outdoor Liabilities for any Post-Closing Tax Period, (iii) Transaction Taxes, and (iv) any Taxes that arise from any Tax election made by Vista Outdoor or Parent or any of their respective Affiliates in connection with the Merger (including pursuant to Section 336 or Section 338 of the Code), including in each case of clauses (i) through (iv), any such Taxes of any member of any consolidated, affiliated, unitary, aggregate, combined or similar group of which any member of the Vista Outdoor Group or the Revelyst Group is or was a member prior to the Closing, including pursuant to Treasury Regulations Sections 1.1502-6 and 1.1502-78 and including any such Taxes imposed as a successor or transferee, by Contract or otherwise; provided that Vista Outdoor Taxes shall not include any Taxes arising from transactions, actions or elections entered into by the Revelyst
Group outside the ordinary course of business on the Closing Date and not (x) otherwise contemplated by this Agreement, the Merger Agreement or the Revelyst Merger Agreement, (y) required by applicable Law or by a Contract entered into by a member of the Revelyst Group prior to the Closing or (z) approved in writing by Vista Outdoor.
“VOO” has the meaning set forth in Section 2.01(l).
“VOO Subject Assets” has the meaning set forth in Section 2.01(l).
“VOO Subject Assets Liabilities” has the meaning set forth in Section 2.01(l).
“VOO Subject Assets Transfers” has the meaning set forth in Section 2.01(l).
ARTICLE II
The Separation
Section 2.01 Transfer of Assets and Assumption of Liabilities. (a) Prior to the consummation of the Contribution, and subject to Section 2.01(f), Vista Outdoor shall cause the Internal Transactions to be consummated. In connection therewith, Vista Outdoor shall, and shall cause the members of the Vista Outdoor Group and the members of the Revelyst Subsidiary Group to, execute such instruments of assignment or transfer, and take such other corporate actions as are necessary to:
(i) assign, transfer or convey to one or more members of the Revelyst Subsidiary Group all of the right, title and interest of the Vista Outdoor Group in, to and under all Revelyst Assets not already owned by the Revelyst Subsidiary Group;
(ii) assign, transfer or convey to one or more members of the Vista Outdoor Group all of the right, title and interest of the Revelyst Subsidiary Group in, to and under all Vista Outdoor Assets not already owned by the Vista Outdoor Group;
(iii) cause one or more members of the Revelyst Subsidiary Group to assume all of the Revelyst Liabilities to the extent such Liabilities would otherwise remain obligations of any member of the Vista Outdoor Group; and
(iv) cause one or more members of the Vista Outdoor Group to assume all of the Vista Outdoor Liabilities to the extent such Liabilities would otherwise remain obligations of any member of the Revelyst Subsidiary Group.
Notwithstanding anything to the contrary in this Agreement, no member of the Vista Outdoor Group or the Revelyst Subsidiary Group shall be required to transfer any Information except as required by Article VI.
(b) Subject to the satisfaction (or, to the extent permitted by Law, waiver by the Parties entitled to the benefit thereof) of each of the conditions to Closing set forth in Article VIII of the Merger Agreement (other than (i) the condition set forth in Section 7.01(d) of the Merger Agreement and (ii) those conditions that by their nature are to be satisfied at the Closing;
provided that the conditions referred to in this clause (ii) are reasonably capable of being satisfied at the Closing), and subject to Section 2.01(f), Vista Outdoor shall consummate the Contribution immediately prior to the Closing, by contributing the Contribution Amount to Revelyst in exchange for newly issued shares of Revelyst Common Stock.
(c) In the event that it is discovered in the two (2) year period after the Closing that there was an omission of (i) the transfer or conveyance by Revelyst (or a member of the Revelyst Group) to, or the acceptance or assumption by, Vista Outdoor (or a member of the Vista Outdoor Group) of any Vista Outdoor Asset or Vista Outdoor Liability, as the case may be, (ii) the transfer or conveyance by Vista Outdoor (or a member of the Vista Outdoor Group) to, or the acceptance or assumption by, Revelyst (or a member of the Revelyst Group) of any Revelyst Asset or Revelyst Liability, as the case may be, or (iii) the transfer or conveyance by one Party (or any other member of its Group) to, or the acceptance or assumption by, the other Party (or any other member of its Group) of any Asset or Liability, as the case may be, that, had the Parties given specific consideration to such Asset or Liability prior to the Closing, would have otherwise been so transferred, conveyed, accepted or assumed, as the case may be, pursuant to this Agreement or the Ancillary Agreements, the Parties shall, subject to Section 2.01(f), execute, acknowledge and deliver, and cause the members of their respective Groups to execute, acknowledge and deliver, all reasonable further documents in order to effect such transfer, conveyance, acceptance or assumption of such Asset or Liability, as the case may be, as promptly as reasonably practicable. Any transfer, conveyance, acceptance or assumption made pursuant to this Section 2.01(c) shall be treated by the Parties for all purposes as if it had occurred immediately prior to the Effective Time, except as otherwise required by applicable Law or a Final Determination.
(d) In the event that it is discovered in the two (2) year period after the Closing that there was (i) a transfer or conveyance by Revelyst (or a member of the Revelyst Group) to, or the acceptance or assumption by, Vista Outdoor (or a member of the Vista Outdoor Group) of any Revelyst Asset or Revelyst Liability, as the case may be, or (ii) a transfer or conveyance by Vista Outdoor (or a member of the Vista Outdoor Group) to, or the acceptance or assumption by, Revelyst (or a member of the Revelyst Group) of any Vista Outdoor Asset or Vista Outdoor Liability, as the case may be, the Parties shall, subject to Section 2.01(f), execute, acknowledge and deliver, and cause the members of their respective Groups to execute, acknowledge and deliver, all reasonable further documents in order to transfer or convey such Asset or Liability back to the transferring or conveying Party or to rescind any acceptance or assumption of such Asset or Liability, as the case may be, as promptly as reasonably practicable. Any transfer or conveyance made or acceptance or assumption rescinded pursuant to this Section 2.01(d) shall be treated by the Parties for all purposes as if such Asset or Liability had never been originally transferred, conveyed, accepted or assumed, as the case may be, except as otherwise required by applicable Law or a Final Determination.
(e) With respect to any post-Closing transfer of an Asset required by Section 2.01(c), the Party required to make such transfer pursuant to this Agreement, on behalf of itself and the members of its Group, hereby grants to the receiving Party and the members of its Group a non-exclusive, royalty-free, fully paid-up, worldwide, irrevocable, sublicensable and transferable right and license (or sublicense, as the case may be) to fully use, practice and otherwise exploit such Asset, effective as of the Effective Time and until such time that the Party required to make
such transfer (or the applicable member of its Group) transfers such Asset to the receiving Party (or the applicable member of its Group) in accordance with Section 2.01(c). With respect to any post-Closing transfer back of an Asset required by Section 2.01(d), the Party required to make such transfer back pursuant to this Agreement, on behalf of itself and the members of its Group, hereby grants to the Party that should have retained such Asset and the members of its Group a non-exclusive, royalty-free, fully paid-up, worldwide, irrevocable, sublicensable and transferable right and license (or sublicense, as the case may be) to fully use, practice and otherwise exploit such Asset, effective as of the Effective Time and until such time that the Party required to make such transfer back (or the applicable member of its Group) transfers such Asset back to the Party that should have retained such Asset (or the applicable member of its Group) in accordance with Section 2.01(d).
(f) To the extent that any transfer or conveyance of any Asset (other than Shared Contracts, which are governed solely by Section 2.04) or acceptance or assumption of any Liability (other than Shared Contracts, which are governed solely by Section 2.04) required by this Agreement to be so transferred, conveyed, accepted or assumed, as the case may be, shall not have been completed prior to the Closing, the Parties shall, subject to this Section 2.01(f), execute, acknowledge and deliver, and cause the members of their respective Groups to execute, acknowledge and deliver, all reasonable further documents in order to effect such transfer, conveyance, acceptance or assumption, as the case may be, as promptly as reasonably practicable following the Closing. Notwithstanding anything to the contrary herein, nothing in this Agreement shall be deemed to require the transfer or conveyance of any Assets or the acceptance or assumption of any Liabilities which by their respective terms (or the terms of any Contract relating to such Asset or Liability) or operation of Law cannot be so transferred, conveyed, accepted or assumed; provided, however, that, prior to and following the Closing, the Parties shall use commercially reasonable efforts to obtain and make any Governmental Approvals and other Consents necessary for the transfer, conveyance, acceptance or assumption, as the case may be, of all Assets and Liabilities required by this Agreement to be so transferred, conveyed, accepted or assumed; provided, further that neither Party nor any member of its Group shall be required to contribute capital, pay or grant any consideration or concession in any form (including providing any letter of credit, guaranty or other financial accommodation) to any Person, or expend any money or take any action that would require the expenditure of money, in order to obtain or make any such Governmental Approval or other Consent (other than reasonable out-of-pocket expenses, attorneys’ fees and recording or similar fees, all of which shall be reimbursed by the Party or the member of the Party’s Group entitled to such Asset or intended to assume such Liability, as applicable, as promptly as reasonably practicable). In the event that any such transfer, conveyance, acceptance or assumption, as the case may be, has not been completed effective as of the Closing, the Party retaining such Asset or Liability (or the member of the Party’s Group retaining such Asset or Liability) shall thereafter hold such Asset for the use and benefit, and at the expense, of the Party or the member of its Group to which such Asset should have been transferred or conveyed pursuant to this Agreement and retain such Liability for the account, and at the expense, of the Party or the member of its Group by which such Liability should have been assumed or accepted pursuant to this Agreement, and take such other actions as may be reasonably requested by the Party or the member of its Group to which such Asset should have been transferred or conveyed pursuant to this Agreement, or by which such Liability should have been assumed or accepted pursuant to this Agreement, as the case may be, in order to place such Party or such member of its Group, insofar as reasonably possible
without violation of the terms of such Asset or Liability (or the terms of any Contract relating to such Asset or Liability) or violation of Law, in substantially the same position as it would have been had such Asset or Liability been transferred, conveyed, accepted or assumed, as the case may be, as contemplated by this Agreement and so that the benefits and burdens relating to such Asset or Liability, as the case may be, including possession, use, risk of loss, potential for gain/loss and control over such Asset or Liability, as the case may be, are to inure from and after the Closing to such Party or such member of its Group. As and when any such Asset or Liability becomes transferable or assumable, as the case may be, the Parties shall execute, acknowledge and deliver, and cause the members of their respective Groups to execute, acknowledge and deliver, all reasonable further documents in order to effect such transfer, conveyance, acceptance or assumption, as the case may be, as promptly as reasonably practicable.
(g) The Party retaining any Asset or Liability due to the deferral of the transfer or conveyance of such Asset or the deferral of the acceptance or assumption of such Liability pursuant to this Section 2.01 or otherwise shall not be obligated by this Agreement, in connection with this Section 2.01, to contribute capital, pay or grant any consideration or concession in any form (including providing any letter of credit, guaranty or other financial accommodation) or expend any money or take any action that would require the expenditure of money (other than reasonable out-of-pocket expenses, Taxes, attorneys’ fees and recording or similar fees, all of which shall be reimbursed by the Party or the member of the Party’s Group to which such Asset should have been transferred or conveyed pursuant to this Agreement or by which such Liability should have been assumed or accepted pursuant to this Agreement, as applicable, as promptly as reasonably practicable) unless and to the extent that the Party or the member of the Party’s Group to which such Asset should have been transferred or conveyed pursuant to this Agreement or by which such Liability should have been assumed or accepted pursuant to this Agreement, as applicable, advances or agrees to reimburse it for the applicable expenditures. For the avoidance of doubt, reasonable out-of-pocket expenses, attorneys’ fees and recording or similar fees shall not include any purchase price, license fee or other payment or compensation for the procurement of any asset intended to replace an Asset in the course of a Party’s obligation under Section 2.01(f).
(h) To the extent permissible under applicable Law, Revelyst hereby waives compliance by each and every member of the Vista Outdoor Group with the requirements and provisions of any “bulk-sale” or “bulk-transfer” Laws of any jurisdiction that may otherwise be applicable with respect to the transfer or sale of any or all of the Revelyst Assets to any member of the Revelyst Group.
(i) To the extent permissible under applicable Law, Vista Outdoor hereby waives compliance by each and every member of the Revelyst Group with the requirements and provisions of any “bulk-sale” or “bulk-transfer” Laws of any jurisdiction that may otherwise be applicable with respect to the transfer or sale of any or all of the Vista Outdoor Assets to any member of the Vista Outdoor Group.
(j) In the event that Vista Outdoor determines to seek novation with respect to any Revelyst Liability, Revelyst shall reasonably cooperate with, and shall cause the members of the Revelyst Group to reasonably cooperate with, Vista Outdoor and the members of the Vista Outdoor Group (including, where necessary, entering into appropriate instruments of assumption
and, where necessary, Revelyst providing parent guarantees in support of the obligations to the extent assumed pursuant to such instruments of assumption by other members of the Revelyst Group) to cause such novation to be obtained, on terms reasonably acceptable to Revelyst, and to have Vista Outdoor and the members of the Vista Outdoor Group released from all liability to third parties under the applicable Contract arising after the date of such novation and, in the event Revelyst determines to seek novation with respect to any Vista Outdoor Liability, Vista Outdoor shall reasonably cooperate with, and shall cause the members of the Vista Outdoor Group to reasonably cooperate with, Revelyst and the members of the Revelyst Group (including, where necessary, entering into appropriate instruments of assumption and, where necessary, Vista Outdoor providing parent guarantees in support of the obligations to the extent assumed pursuant to such instruments of assumption by other members of the Vista Outdoor Group) to cause such novation to be obtained, on terms reasonably acceptable to Vista Outdoor, and to have Revelyst and the members of the Revelyst Group released from all liability to third parties under the applicable Contract arising after the date of such novation; provided that neither Party nor any other member of its Group shall be required to contribute capital, pay or grant any consideration or concession in any form (including providing any letter of credit, guaranty (other than any parent guaranty expressly contemplated by this Section 2.01(j)) or other financial accommodation) to any Person or expend any money or take any action that would require the expenditure of money, in order to cause such novation to be obtained (other than reasonable out-of-pocket expenses, attorneys’ fees and recording or similar fees, all of which shall be reimbursed by the Party or the member of the Party’s Group intended to assume such Liability pursuant to this Agreement, as promptly as reasonably practicable).
(k) The Contribution Amount that is contributed to Revelyst pursuant to Section 2.01(b) shall be increased by an amount necessary to ensure that, immediately following payment of the Contribution Amount and the deposit by Revelyst of the cash portion of the Merger Consideration with the Exchange Agent pursuant to the Merger Agreement, Revelyst shall have cash and cash equivalents, bank deposits and marketable securities of no less than $60,000,000; provided that, if the Contribution Amount is increased pursuant to this Section 2.01(k), Revelyst shall pay to Vista Outdoor the amount of such increase on the earlier of (a) the consummation of the Revelyst Merger and (b) the date that is three months after the Closing.
(l) The Parties acknowledge and agree that certain Assets of Vista Outdoor Operations LLC (“VOO”) may be subject to the procedures set forth in Section 2.01(f). In such event, the Parties will cooperate in good faith to promptly identify any such Assets (the “VOO Subject Assets”) and agree on documentation to facilitate the transfer of such VOO Subject Assets to Revelyst (such transfer, the “VOO Subject Assets Transfer”); provided that (i) such VOO Subject Assets Transfer shall be consistent in all respects with Schedule 1.01(a) and (ii) if such documentation will be executed prior to the consummation of the Revelyst Merger, the Parties shall provide Olibre Parent (at the notice address set forth in the Revelyst Merger Agreement) with draft documentation effecting such VOO Subject Assets Transfer for Olibre Parent’s review and comment as soon as reasonably practicable after the date hereof (and in any event, no later than seven (7) Business Days prior to consummation of the Revelyst Merger). The Parties shall consider in good faith Olibre Parent’s comments on such draft documentation so long as such comments are provided by Olibre Parent to the Parties no later than the earlier of (x) five (5) Business Days after receipt of such draft documentation and (y) three (3) Business Days prior to the consummation of the Revelyst Merger. The Parties will use commercially
reasonable efforts to effectuate the VOO Subject Assets Transfer prior to the consummation of the Revelyst Merger. Prior to the effective time of the Revelyst Merger, Revelyst shall bear (and if applicable, reimburse) any and all out-of-pocket filing fees and expenses, payments made in connection with any third-party consents and authorizations, and legal and other professional advisors fees, in each case that are incurred by any member of the Revelyst Group or any member of the Vista Outdoor Group and are necessary to effectuate the VOO Subject Assets Transfer. Following the effective time of the Revelyst Merger, each of Revelyst and Vista Outdoor shall bear (and, if applicable, reimburse) fifty percent (50%) of any and all out-of-pocket filing fees and expenses, payments made in connection with any third-party consents and authorizations, and legal and other professional advisors fees, in each case that are incurred by any member of the Revelyst Group or any member of the Vista Outdoor Group and are necessary to effectuate the VOO Subject Assets Transfer. If Vista Outdoor, Parent or any of their respective Affiliates (excluding, immediately following the Effective Time, the Revelyst Group) remits payments for any such costs and expenses, then within five (5) Business Days following written request from Parent, Revelyst will reimburse such Person via wire transfer of immediately available funds to an account (or accounts) designated by Parent an amount equal to Revelyst’s allocable share of such fees and expenses and if Revelyst, Olibre Parent or any of their respective Affiliates (excluding, immediately following the Effective Time, the Vista Outdoor Group) remits payments for any such costs and expenses, then within five (5) Business Days following written request from Revelyst, Vista Outdoor will reimburse such Person via wire transfer of immediately available fund to an account (or accounts) designated by Revelyst an amount equal to Vista Outdoor’s allocable share of such fees and expenses. Revelyst shall retain and, if applicable, assume, and shall fully pay, perform, satisfy and discharge when due, any and all Liabilities resulting from, relating to or arising out of any of the VOO Subject Assets, regardless of whether such Liabilities arise prior to, on or after the Effective Time (collectively, the “VOO Subject Asset Liabilities”). Olibre Parent is a third party beneficiary of this Section 2.01(l).
Section 2.02 Certain Matters Governed Exclusively by Ancillary Agreements. On the Closing Date, the Parties shall execute and deliver (i) the Transition Services Agreement and (ii) the Anoka Sublease. Each Party agrees on behalf of itself and the other members of its Group that, except as explicitly provided in this Agreement or in any Ancillary Agreement, (a) the Employee Matters Agreement shall exclusively govern the allocation of Assets and Liabilities related to employees and employee compensation and benefits matters with respect to employees and former employees of members of both the Vista Outdoor Group and the Revelyst Group (except to the extent that employee compensation and benefits-related reimbursements are addressed in the Transition Services Agreement) (it being understood that any such Assets and Liabilities, as allocated pursuant to the Employee Matters Agreement, shall constitute Revelyst Assets, Revelyst Liabilities, Vista Outdoor Assets or Vista Outdoor Liabilities, as applicable, hereunder and shall be subject to Article V hereof), (b) the Transition Services Agreement shall exclusively govern all matters relating to the provision of certain services identified therein to be provided by each Party to the other on a transitional basis following the Closing and (c) the Anoka Sublease shall exclusively govern all matters relating to the Subleased Premises (as defined in the Anoka Sublease).
Section 2.03 Termination of Agreements; Settlement of Intercompany Accounts; Bank Accounts. (a) Except as set forth in Section 2.03(b) or as otherwise provided by the steps
constituting the Internal Transactions, in furtherance of the releases and other provisions of Section 5.01, effective as of the Closing, Revelyst and each other member of the Revelyst Group, on the one hand, and Vista Outdoor and each other member of the Vista Outdoor Group, on the other hand, hereby terminate or settle, as applicable, any and all Contracts exclusively between such parties and in existence as of the Closing (including all Tax allocation or sharing agreements that are exclusively between one or more members of the Revelyst Group, on the one hand, and one or more members of the Vista Outdoor Group, on the other hand) (“Intercompany Agreements”), including all intercompany payables due or receivables owed (“Intercompany Accounts”) between such Parties (including any such payables or receivables which relate to payroll) and in effect or accrued as of the Closing. No such terminated or settled Intercompany Agreement or Intercompany Account (including any provision thereof that purports to survive termination) shall be of any further force or effect after the Closing. Each Party shall, at the reasonable request of the other Party, take, or cause to be taken, such other actions as may be necessary to effect the foregoing. The Parties, on behalf of the members of their respective Groups, hereby waive any advance notice provision or other termination requirements with respect to any Intercompany Agreement or Intercompany Account to be terminated or settled, as applicable, pursuant to this Section 2.03(a).
(b) The provisions of Section 2.03(a) shall not apply to any of the following Intercompany Agreements or Intercompany Accounts (or to any of the provisions thereof): (i) this Agreement and the Ancillary Agreements (and each other Intercompany Agreement or Intercompany Account expressly contemplated by this Agreement or any Ancillary Agreement to be entered into by either Party or any other member of its Group); (ii) those Intercompany Agreements set forth on Schedule 2.03(b); (iii) any Agreements to which any third party is a party, including Shared Contracts; and (iv) any other Intercompany Agreements or Intercompany Accounts that this Agreement or any Ancillary Agreement expressly contemplates will survive the Closing.
(c) (i) Vista Outdoor and Revelyst each agrees to take, or cause the members of their respective Groups to take, prior to the Closing, all actions necessary to amend all Contracts governing Revelyst Accounts so that such Revelyst Accounts, if linked (whether by automatic withdrawal, automatic deposit or any other authorization to transfer funds from or to, hereinafter “linked”) to any Vista Outdoor Accounts, are de-linked from such Vista Outdoor Accounts effective as of the Closing (or such earlier time as the Parties may agree).
(ii) Vista Outdoor and Revelyst each agrees to take, or cause the members of their respective Groups to take, prior to the Closing, all actions necessary to amend all Contracts governing the Vista Outdoor Accounts so that such Vista Outdoor Accounts, if linked to any Revelyst Accounts, are de-linked from such Revelyst Accounts effective as of the Closing (or such earlier time as the Parties may agree).
(iii) With respect to any outstanding checks issued by, or payments made by, Vista Outdoor, Revelyst or any of their respective Subsidiaries prior to the Closing, such outstanding checks shall be honored from and after the Closing by the Person or Group
owning the account on which the check is drawn, without limiting the ultimate allocation of Liability for such amounts under this Agreement or any Ancillary Agreement.
(iv) As between Vista Outdoor and Revelyst (and the members of their respective Groups), except to the extent prohibited by applicable Law or a Final Determination, all payments and reimbursements received after the Closing by either Party (or any other member of its Group) to which the other Party (or any other member of its Group) is entitled under this Agreement shall be held by such Party (or the applicable member of its Group) in trust for the use and benefit of the Person entitled thereto and, within 60 days of receipt by such Party (or the applicable member of its Group) of any such payment or reimbursement, such Party shall pay over, or shall cause the applicable member of its Group to pay over, to the other Party (or the applicable member of its Group) the amount of such payment or reimbursement without right of setoff.
(d) Each Party shall, and shall cause its Subsidiaries to, take all necessary actions to remove each of Revelyst and Revelyst’s Subsidiaries from all Cash Management Arrangements to which it is a party, in each case prior to the close of business on the business day immediately prior to the Closing Date.
Section 2.04 Shared Contracts. (a) The Parties shall, and shall cause the members of their respective Groups to, use their respective commercially reasonable efforts to work together (and, if necessary and desirable, from the date of this Agreement until the earlier of two years after the Closing Date and such time as the formal division, partial assignment, modification or replication of such Shared Contract is effected, to work with the third party to such Shared
Contract) in an effort to divide, partially assign, modify or replicate (in whole or in part) the respective rights and obligations under and in respect of any Shared Contract, such that (i) a member of the Revelyst Group is the beneficiary of the rights and is responsible for the obligations related to that portion of such Shared Contract relating to the Revelyst Business (the “Revelyst Portion”), which rights shall be a Revelyst Asset and which obligations shall be a Revelyst Liability, and (ii) a member of the Vista Outdoor Group is the beneficiary of the rights and is responsible for the obligations related to such Shared Contract not relating to the Revelyst Business (the “Vista Outdoor Portion”), which rights shall be a Vista Outdoor Asset and which obligations shall be a Vista Outdoor Liability. Nothing in this Agreement shall require the division, partial assignment, modification or replication of a Shared Contract unless and until any necessary Consents are obtained or made, as applicable. If the Parties, or their respective Group members, as applicable, are not able to enter into an arrangement to formally divide, partially assign, modify or replicate such Shared Contract prior to the Closing as contemplated by the previous sentence, then the Parties shall, and shall cause their respective Group members to, cooperate in any reasonable and permissible arrangement to provide that, following the Closing and until the earlier of two years after the Closing Date and such time as the formal division, partial assignment, modification or replication of such Shared Contract as contemplated by the previous sentence is effected, a member of the Revelyst Group shall receive the interest in the benefits and obligations of the Revelyst Portion under such Shared Contract and a member of the
Vista Outdoor Group shall receive the interest in the benefits and obligations of the Vista Outdoor Portion under such Shared Contract, it being understood that no Party shall have Liability to the other Party for the failure of any third party to perform its obligations under any such Shared Contract.
(b) Nothing in this Section 2.04 shall require either Party or any member of their respective Groups to contribute capital, pay or grant any consideration or concession in any form (including providing any letter of credit, guaranty or other financial accommodation) to any Person or expend any money or take any action that would require the expenditure of money (other than reasonable out-of-pocket expenses, attorneys’ fees and recording or similar fees, all of which shall be reimbursed by the Party or the member of the Party’s Group entitled to the applicable Asset or intended to assume the applicable Liability, as applicable, as promptly as reasonably practicable). For the avoidance of doubt, reasonable out-of-pocket expenses and recording or similar fees shall not include any purchase price, license fee or other payment or compensation for the procurement of any asset secured to replace an Asset in the course of a Party’s obligation under Section 2.04(a).
Section 2.05 Disclaimer of Representations and Warranties. (a) Each of Vista Outdoor (on behalf of itself and each other member of the Vista Outdoor Group) and Revelyst (on behalf of itself and each other member of the Revelyst Group) understands and agrees that, except as expressly set forth in this Agreement or any other Transaction Document, no party to this Agreement, any Ancillary Agreement or any other agreement or document contemplated by this Agreement or any Ancillary Agreement is representing or warranting in any way as to any Assets or Liabilities transferred, conveyed, accepted or assumed as contemplated hereby or thereby, as to the sufficiency of such Assets or Liabilities transferred, conveyed, accepted or assumed hereby or thereby for the conduct and operations of the Vista Outdoor Business or Revelyst Business, as applicable, as to any Governmental Approvals or other Consents required in connection therewith or in connection with any past transfers of the Assets or assumptions of the Liabilities, as to the value or freedom from any Liens of, or any other matter concerning, any Assets or Liabilities of such Party, or as to the absence of any defenses or rights of setoff or freedom from counterclaim with respect to any claim or other Asset, including any accounts receivable, of any such Party, or as to the legal sufficiency of any assignment, document or instrument delivered hereunder to convey title to any Asset or thing of value upon the execution, delivery and filing hereof or thereof.
(b) Except as may expressly be set forth herein or in any other Transaction Document, any such Assets are being transferred or conveyed on an “as is”, “where is” basis and the respective transferees shall bear the economic and legal risks that (i) any transfer or conveyance shall prove to be insufficient to vest in the transferee good and marketable title or interest, free and clear of any Lien, and (ii) any necessary Governmental Approvals or other Consents are not obtained or that any requirements of Laws or Judgments are not complied with.
Section 2.06 Closing Adjustments. (a) At least five (5) Business Days prior to the Closing Date, Vista Outdoor shall prepare and deliver to Parent a statement (the “Estimated Closing Statement”) setting forth Vista Outdoor’s good faith estimate of (i) Closing Cash (such estimate, “Estimated Closing Cash”), (ii) Closing Working Capital (such estimate, “Estimated Closing Working Capital”), (iii) Closing Debt (such estimate, “Estimated Closing Debt”), (iv) Transaction Expenses (such estimate, “Estimated Transaction Expenses”), (v) Closing Taxes
(such estimate, “Estimated Closing Taxes”), (vi) Closing Transaction Tax Deductions (such estimate, “Estimated Closing Transaction Tax Deductions”), (vii) the Closing Non-Cash Debt (such estimate, “Estimated Closing Non-Cash Debt”) and (viii) the Estimated Closing Adjustment Amount, in each case, together with reasonably detailed schedules with respect to the determination thereof to support the estimates set forth in the Estimated Closing Statement. The Estimated Closing Statement shall be prepared in accordance with the terms of this Agreement, including the Accounting Principles. The Parties agree that the purpose of preparing the Estimated Closing Statement is to estimate the amounts of Closing Cash, Closing Working Capital, Closing Debt, Transaction Expenses, Closing Taxes, Closing Transaction Tax Deductions and the Closing Adjustment Amount in accordance with the terms of this Agreement, including the Accounting Principles. Vista Outdoor shall consider in good faith and implement all reasonable comments provided by Parent to the Estimated Closing Statement (including the components thereof) at least one Business Day prior to the Closing Date.
(b) At least five (5) Business Days prior to Vista Outdoor’s delivery of the Estimated Closing Statement, and in any event at least ten (10) Business Days prior to the Closing Date, Vista Outdoor shall prepare and deliver to Parent a good faith non-binding, advisory draft of the Estimated Closing Statement (the “Draft Estimated Closing Statement”), including reasonably detailed schedules with respect to the determination thereof to support the estimates set forth therein. In furtherance of Vista Outdoor’s preparation of the Estimated Closing Statement, Vista Outdoor shall consider in good faith all reasonable comments provided to the Draft Estimated Closing Statement by Parent at least one Business Day prior to delivery of the Estimated Closing Statement.
(c) Within ten (10) Business Days of the date of this Agreement, Vista Outdoor shall prepare and deliver to Parent a good faith non-binding, advisory draft of the Estimated Closing Statement, including reasonably detailed schedules with respect to the determination thereof to support the estimates set forth therein (an “Advisory Estimated Closing Statement”), assuming, for purposes of creating such Advisory Estimated Closing Statement, a Reference Time of 11:59 p.m. New York City time on September 30, 2024. Within ten (10) Business Days following October 31, 2024, Vista Outdoor shall prepare and deliver to Parent, an Advisory Estimated Closing Statement assuming, for purposes of creating such Advisory Estimated Closing Statement, a Reference Time of 11:59 p.m. New York City time on October 31, 2024. In furtherance of Vista Outdoor’s preparation of the Draft Estimated Closing Statement and the Estimated Closing Statement, Vista Outdoor shall consider in good faith all reasonable comments provided to the Advisory Estimated Closing Statements by Parent at least one (1) Business Day prior to delivery of the Draft Estimated Closing Statement.
(d) As promptly as practicable, and in any event within the later of (x) thirty (30) days following the Closing Date and (y) five (5) Business Days prior to the consummation of the Revelyst Merger (if such merger is consummated) (the later of (x) and (y), the “Closing Statement Deadline”), Vista Outdoor and Revelyst shall cooperate in good faith and jointly prepare a statement (the “Closing Statement”) setting forth their joint good faith calculation of (i) Closing Cash, (ii) Closing Working Capital, (iii) Closing Debt, (iv) Transaction Expenses, (v) Closing Taxes, (vi) Closing Transaction Tax Deductions and (vii) the Closing Adjustment Amount, in each case, together with reasonably detailed schedules with respect to the determination thereof to support the calculations set forth in the Closing Statement. The Closing Statement shall be prepared in accordance with the terms of this Agreement, including the
Accounting Principles. The Parties agree that the purpose of preparing the Closing Statement is to measure and determine the amount of Closing Cash, Closing Working Capital, Closing Debt, Transaction Expenses, Closing Taxes, Closing Transaction Tax Deductions and the Closing Adjustment Amount in accordance with the terms of this Agreement, including the Accounting Principles. Each of Vista Outdoor and Revelyst shall execute the Closing Statement to certify the calculations set forth therein and upon such certification the Closing Statement shall become final and binding upon the Parties; provided, that, notwithstanding anything to the contrary in this Agreement, in the event that Vista Outdoor and Revelyst do not agree upon and execute the Closing Statement by the Closing Statement Deadline, then the Estimated Closing Statement shall be deemed to be the Closing Statement for all purposes under this Agreement and neither Party nor their respective Affiliates shall have any further obligation pursuant to this Section 2.06.
(e) In connection with the preparation of the Closing Statement, Vista Outdoor shall, subject to reasonable advance written request (email being sufficient), provide Revelyst and its Representatives with reasonable access during normal business hours, and in such a manner as to not interfere with the normal operations of Vista Outdoor and each other member of the Vista Outdoor Group, to the Records and relevant advisors (subject to the execution of any required customary access letters), personnel and properties of Vista Outdoor and each other member of the Vista Outdoor Group to the extent reasonably relevant to the preparation of the Closing Statement; provided that Revelyst shall, and shall cause its Representatives to, keep any nonpublic information shared with it confidential.
(f) Within three (3) Business Days after the Closing Statement becomes final and binding upon the Parties in accordance with this Section 2.06, if the Closing Adjustment Amount is:
(i) greater than the Estimated Closing Adjustment Amount, then Vista Outdoor shall pay Revelyst an amount of cash equal to such difference;
(ii) less than the Estimated Closing Adjustment Amount, then Revelyst shall pay Vista Outdoor an amount of cash equal to such difference; or
(iii) equal to the Estimated Closing Adjustment Amount, then neither Party shall have any obligation to make a payment to the other Party in respect thereof.
(g) Each Party acknowledges that the agreements contained in this Section 2.06 are an integral part of the Transactions, and that, without these agreements, the other Party would not have entered into this Agreement and each other Transaction Document to which it is a party. Accordingly, if a Party fails to promptly pay any amount due pursuant to this Section 2.06 (such Party, the “Defaulting Party”), and, in order to obtain payment of such amount, the other Party commences a legal action which results in an order against the Defaulting Party for such amount, or any portion thereof, the Defaulting Party shall pay to the other Party such other Party’s out-of-pocket, reasonable and documented costs and expenses (including attorneys’ fees) incurred in connection with such legal action, together with interest on such due and unpaid amounts pursuant to this Section 2.06 at a rate equal to (i) the prime rate as published in The Wall Street Journal in effect on the date such amount was required to be paid plus (ii) 2% through the date such payment was actually received.
(h) Vista Outdoor agrees that, from the Closing Date through the date that the Closing Adjustment Amount is finally determined in accordance with this Section 2.06, it shall not, and shall cause each other member of the Vista Outdoor Group not to, take any action with respect to any accounting books, records, policies or procedures on which the Closing Statement is based that would impede or delay the final determination of the Closing Adjustment Amount.
(i) Notwithstanding anything to the contrary in this Agreement or any investigation or examination conducted, or any knowledge possessed or acquired, by or on behalf of Vista Outdoor or Revelyst, the process set forth in this Section 2.06 shall be the sole and exclusive remedy between the Parties for any disputes related to the items required to be included or reflected in the calculation of Closing Cash, Closing Working Capital, Closing Debt, Transaction Expenses, Closing Taxes, Closing Transaction Tax Deductions and the Closing Adjustment Amount.
(j) Without the prior written consent of Olibre Parent, none of the time periods set forth in this Section 2.06 shall be extended or waived by any Party. For the avoidance of doubt, from and after the closing of the Revelyst Merger, neither Olibre Parent, Revelyst nor any of their respective Subsidiaries shall have any obligation with respect to this Section 2.06. Each Party agrees that Olibre Parent is a third party beneficiary of this Section 2.06(j).
(k) For the purposes of this Agreement:
(i) “Accounting Principles” means the judgments, accounting methodologies, policies, principles, practices, procedures and conventions set forth on Schedule 2.06(k)(i).
(ii) “Cash” means, with respect to any Person, the aggregate amount of all cash, cash equivalents, bank deposits and marketable securities, whether denominated in United States dollars or otherwise, held by such Person, including all uncleared checks, drafts, transfers or wires received by such Person but not yet cleared, but net of all checks, drafts, transfers or wires issued by such Person but not yet cleared; provided that “Cash” shall exclude any cash or cash equivalent that is not immediately available for use because it is subject to legal, regulatory, contractual or other restrictions on transfer (including (A) amounts held to collateralize outstanding letters of credit, bank guarantees, surety bonds, performance bonds and other similar contractual obligations and (B) amounts held as security deposits, in the case of each of clauses (A) and (B), unless such amounts are included in the calculation of Closing Debt or Transaction Expenses).
(iii) “Closing Adjustment Amount” means (A) Closing Cash plus (B) Closing Working Capital minus Target Working Capital (which amount may be positive or negative) minus (C) Closing Debt minus (D) Transaction Expenses minus (E) Closing Taxes plus (F) Closing Transaction Tax Deductions.
(iv) “Closing Cash” means, as of the Reference Time, the aggregate balance of Cash held by Vista Outdoor and each other member of the Vista Outdoor Group, determined in accordance with the Accounting Principles.
(v) “Closing Debt” means, as of the Reference Time, the aggregate amount, without duplication, of Debt of Vista Outdoor and each other member of the Vista Outdoor Group, determined in accordance with the Accounting Principles, but excluding any amounts included in the calculation of Closing Taxes. For purposes of this Agreement, the Closing Debt attributable to clauses (E), (F) and (K)(2) in the definition of Debt shall be referred to as “Closing Non-Cash Debt”.
(vi) “Closing Income Taxes” means the amount (which shall not be less than zero) of all unpaid Income Taxes of Vista Outdoor and its Subsidiaries for any Pre-Closing Tax Period for which a Tax Return has not yet been filed as of the Closing Date by reason of such Tax Return not being yet due (whether or not such Taxes are due and payable as of the Closing Date). “Closing Income Taxes” shall be calculated (A) as of the end of the Closing Date, (B) in a manner consistent with the past practices of Vista Outdoor or the applicable Subsidiary to the extent such past practices are supported at a “more likely than not” or higher level of comfort, (C) except as otherwise provided in this definition, by disregarding any deferred Income Tax assets or liabilities, (D) taking into account all Transaction Tax Deductions deductible by Vista Outdoor and its Subsidiaries in a Pre-Closing Tax Period under applicable Law, (E) by disregarding any transactions, actions or elections entered into by members of the Vista Outdoor Group outside the ordinary course of business on the Closing Date after the Closing and not (x) otherwise contemplated by this Agreement or the Merger Agreement, (y) required by applicable Law or by a Contract entered into by a member of the Vista Outdoor Group prior to the Closing or (z) approved in writing by Revelyst and (F) taking into account any “global intangible low-taxed income” within the meaning of Section 951A of the Code and “subpart F income” within the meaning of Section 952 of the Code of any “controlled foreign corporations” for taxable years (or portions thereof) ending on or before the Closing Date but excluding such income for any taxable years of any “controlled foreign corporations” included in the Revelyst Group that do not end on the Closing Date. Except as expressly provided to the contrary in the foregoing sentence, in the case of any Straddle Period, “Closing Income Taxes” shall include an amount of Income Taxes allocable to the portion of the Straddle Period ending on and including the Closing Date, as determined applying the conventions set forth in Section 4.07. Notwithstanding the foregoing, and for the avoidance of doubt, “Closing Income Taxes” shall not include any Income Taxes payable after the Closing Date solely by any member of the Revelyst Group that remain unpaid after the Closing Date.
(vii) “Closing Taxes” means an amount equal to (A) Closing Income Taxes plus (B) Closing Transaction Taxes, provided that “Closing Taxes” shall be calculated in accordance with the Intended Tax Treatment.
(viii) “Closing Transaction Tax Deductions” means an amount equal to (A) the amount of Transaction Tax Deductions that are not included in the calculation of Closing Income Taxes and that are deductible by any member of the Vista Outdoor Group multiplied by (B) 25%.
(ix) “Closing Transaction Taxes” means, without duplication of any amounts taken into account in Closing Income Taxes, the amount of Transaction Taxes. Notwithstanding the foregoing, and for the avoidance of doubt, “Closing Transaction
Taxes” shall not include any Taxes payable after the Closing Date solely by any member of the Revelyst Group that remain unpaid after the Closing Date.
(x) “Closing Working Capital” means, as of the Reference Time, (A) all Vista Outdoor Assets constituting “current” or other assets (which shall include current assets for Taxes), in each case, as set forth in the applicable line items to be determined in accordance with the Accounting Principles minus (B) all Vista Outdoor Liabilities constituting “current” or other liabilities (which, for purposes of this definition of “Closing Working Capital” and notwithstanding anything in this Agreement to the contrary, shall include current liabilities for Taxes), in each case as set forth in the applicable line items to be determined in accordance with the Accounting Principles but, in the case of each of clauses (A) and (B), excluding all items with respect to (1) any assets for Income Taxes or Transaction Taxes, (2) Cash, (3) any liabilities for Income Taxes or Transaction Taxes, (4) any Debt or (5) any deferred Tax assets or deferred Tax liabilities, in each of the foregoing cases, determined in accordance with the Accounting Principles.
(xi) “Debt” means, with respect to any Person, at any date of determination, without duplication and regardless of the maturity or when due and payable (A) all obligations of such Person for borrowed money, or with respect to deposits or advances of any kind to such Person (other than extensions of trade credit to customers of such Person and its Subsidiaries in the ordinary course of business consistent with past practice), (B) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (C) all capitalized lease obligations of such Person or obligations of such Person to pay the deferred and unpaid purchase price of property and equipment, (D) all obligations of such Person pursuant to securitization or factoring programs or arrangements, (E) all guarantees and arrangements having the economic effect of a guarantee, direct or indirect, in any manner, by such Person of any Debt of any other Person, (F) all obligations or undertakings of such Person to maintain or cause to be maintained the financial position or covenants of others or to purchase the obligations or property of others, (G) net cash payment obligations of such Person under swaps, options, derivatives and other hedging agreements or arrangements that will be payable upon termination thereof (assuming they were terminated on the date of determination), (H) letters of credit, bank guarantees, surety bonds, performance bonds and other similar contractual obligations entered into by or on behalf of such Person, to the extent drawn, (I) all interest, overdraft fees, premiums, penalties, breakage costs (including on interest rate swaps and any other hedging obligations (including foreign currency or exchange contracts)) and fees (including any termination fees) related to any of the foregoing, (J) all obligations for the deferred purchase price of property, business, assets, securities, goods or services and (K) (1) any outstanding and unpaid severance in respect of any employee terminated prior to the Closing, including, solely to the extent payable upon termination of the relevant employment, any earned but unused vacation, sick leave or other applicable paid time-off benefits, but excluding any severance costs incurred as a result of a termination of employment at the direction or request of Parent, (2) all obligations with respect to unfunded or underfunded deferred compensation or defined benefit pension plans and (3) any earned but unpaid bonuses or commissions as of the Closing and amounts payable pursuant to Section 6.15(c) of the Merger Agreement as a Pre-Closing Bonus, in the case of each of clauses (1), (2) and (3), together with the employer portion of any applicable Taxes payable with respect thereto and solely to the
extent not a Revelyst Employee Liability (as defined in the Employee Matters Agreement).
(xii) “Estimated Closing Adjustment Amount” means (A) Estimated Closing Cash plus (B) Estimated Closing Working Capital minus Target Working Capital (which amount may be positive or negative) minus (C) Estimated Closing Debt minus (D) Estimated Transaction Expenses minus (E) Estimated Closing Taxes plus (F) Estimated Closing Transaction Tax Deductions.
(xiii) “Independent Expert” means KPMG LLP or, if such Person is (i) not independent at the time of such appointment or (ii) unable or unwilling to serve, another internationally recognized independent public accounting firm agreed upon by Vista Outdoor and Revelyst in writing.
(xiv) “Reference Time” means 11:59 p.m. New York City time on the day immediately preceding the Closing Date.
(xv) “Target Working Capital” means $382,571,901.64.
(xvi) “Transaction Expenses” means, without duplication, the aggregate amount of (A) all third party fees, costs and expenses payable by Vista Outdoor or any other member of the Vista Outdoor Group in connection with the negotiation of the Transaction Documents or the consummation of the Transactions (including those that become due or payable at or after the Closing pursuant to Contracts in effect at or prior to the Closing), any alternatives to the Transactions and any processes in connection thereto, in each case that have been incurred or established at or prior to the Closing and that remain unpaid as of the Closing, including any fees, costs and other expenses of any broker, investment banker or financial advisor, attorneys, accountants and other consultants and advisors of Vista Outdoor or any other member of the Vista Outdoor Group in connection with the negotiation of the Transaction Documents or the consummation of the Transactions, (B) any “single trigger” or similar change of control, bonus, retention or other payments (including payments in respect of any Vista Outdoor Equity Awards as set forth in Sections 2.04(a), 2.04(b), 2.04(c) and 2.04(d) of the Merger Agreement) that are or become payable by the Vista Outdoor Group to any current or former employee, officer, director or other individual service provider of Vista Outdoor or the Vista Outdoor Group as a result of the Transactions, together with the employer portion of any applicable Taxes due with respect to such payments (or due as a result of the accelerated vesting or settlement thereof), in each case of this clause (B), excluding any payments made pursuant to an offer letter or other agreement or arrangement adopted or entered into by Parent (or by a member of the Vista Outdoor Group prior to the Closing at the written direction of Parent), whether prior to, on or following the date of this Agreement and (C) all out-of-pocket fees, costs and expenses (other than Taxes) of the Vista Outdoor Group to settle, repay, capitalize, terminate or cancel any of the Intercompany Accounts and Intercompany Agreements in accordance with Section 2.03, but in each case excluding (I) any fees, costs or expenses incurred by Parent, Merger Sub, the Guarantors or the Equity Financing Sources in connection with the Transactions whether or not billed or accrued (including any fees, costs and expenses of any broker, investment banker or financial advisor, attorneys, accountants and other consultants and advisors retained by or on their behalf), (II) any amounts included in the calculation of Closing Debt, Closing
Taxes or Closing Working Capital or (III) any fees, costs or expenses incurred after the Closing (other than those that become due or payable at or after the Closing pursuant to Contracts in effect at or prior to the Closing).
Section 2.07 Earn-Out.
(a) Payment and Definitions.
(i) Subject to the provisions of this Section 2.07, if the Revelyst FY28 EBITDA exceeds $200,000,000 (the “Earn-Out Threshold”), then Revelyst shall pay, or shall cause to be paid, to Vista Outdoor (or its designee), by wire transfer of immediately available funds to bank account(s) designated in writing by Vista Outdoor, an amount equal to $25,000,000 (the “Earn-Out Payment”) in accordance with Section 2.07(b)(v). If the Revelyst FY28 EBITDA is equal to or less than the Earn-Out Threshold, no Earn-Out Payment shall be required pursuant to this Section 2.07.
(ii) “Revelyst FY28 EBITDA” shall mean the consolidated net income of Revelyst and its Subsidiaries before taking into account adjustments for interest, tax, depreciation and amortization, calculated using the values set forth in Revelyst’s audited consolidated financial statements for the fiscal year ending on ending March 31, 2028 (the “Revelyst FY28 Financial Statements”).
(b) Revelyst FY28 Financial Statements.
(i) Not later than thirty (30) days after the Revelyst FY28 Financial Statement are completed, Revelyst shall deliver to Vista Outdoor a calculation of the Revelyst FY28 EBITDA (the “Revelyst EBITDA Statement”), including (x) calculation of the amount of the Earn-Out Payment and (y) a copy of the Revelyst FY28 Financial Statements. The Parties agree that the purpose of preparing the Revelyst EBITDA Statement is to measure and determine the amount of Revelyst FY28 EBITDA in accordance with the terms of this Agreement. Vista Outdoor may provide Revelyst with written notice of its disagreement with such Revelyst EBITDA Statement (such notice, a “Revelyst EBITDA Notice of Disagreement”) within thirty (30) days after delivery of the Revelyst EBITDA Statement to Vista Outdoor. The Revelyst EBITDA Notice of Disagreement, if any, shall specify in reasonable detail (based on the information comprising the Revelyst EBITDA Statement) the nature, item and amount of any disagreement so asserted. Any item or amount that Vista Outdoor does not dispute in the Revelyst EBITDA Notice of Disagreement within such 30-day period will be final, binding and conclusive for all purposes under this Agreement. If a timely Revelyst EBITDA Notice of Disagreement is not received by Revelyst within thirty (30) days after delivery of the Revelyst EBITDA Statement, then the Revelyst EBITDA Statement shall become final and binding upon the Parties. If a Revelyst EBITDA Notice of Disagreement is received by Revelyst, then the Revelyst EBITDA Statement (as revised in accordance with this sentence) shall become final and binding upon the parties on the earlier of (i) the date on which Vista Outdoor and Revelyst resolve in writing any differences they have with respect to the matters specified in such Revelyst EBITDA Notice of Disagreement and (ii) the date on which all such disputed matters are finally resolved in writing by the Independent Expert pursuant to the procedures set forth in this Section 2.07. Following the delivery of a Revelyst EBITDA Notice of Disagreement, for a period of fifteen (15) days, Vista Outdoor and Revelyst shall seek in good faith to resolve in writing any differences that
they may have with respect to the matters specified in the Revelyst EBITDA Notice of Disagreement. At the end of such 15-day period, Vista Outdoor and Revelyst shall, unless agreed by Vista Outdoor and Revelyst in writing otherwise, submit to the Independent Expert for review any and all matters that remain in dispute and were included in the Revelyst EBITDA Notice of Disagreement. Vista Outdoor and Revelyst shall instruct the Independent Expert to render its decision as to the disputed items and the effect of its decision on the Revelyst EBITDA Notice of Disagreement as promptly as practicable but in no event later than thirty (30) days after the date of such submission. Each of Vista Outdoor and Revelyst shall furnish (subject to the execution of any required customary access letters) to the Independent Expert and to one another, such working papers and other relevant documents and information reasonably relating to the disputed items, and shall provide interviews and answer questions, as the Independent Expert may reasonably request in connection with its determination of such disputed items. In the event Vista Outdoor or Revelyst shall participate in teleconferences or meetings with, or make presentations to, the Independent Expert, both Vista Outdoor and Revelyst shall be entitled to participate in such teleconferences, meetings or presentations. The terms of appointment and engagement of the Independent Expert shall be as agreed upon between Vista Outdoor and Revelyst in writing and such terms shall obligate the Independent Expert to keep any nonpublic information shared with it confidential and not to disclose such information without approval from Vista Outdoor and Revelyst.
(ii) In resolving any disputed item, the Independent Expert (i) shall act in the capacity of an expert and not as an arbitrator, (ii) shall limit its review to whether matters specifically set forth in the Revelyst EBITDA Notice of Disagreement as a disputed item, other than matters thereafter resolved by mutual written agreement of Vista Outdoor and Revelyst pursuant to Section 2.07(b)(i), were determined in accordance with the terms of this Agreement, (iii) shall not assign a value to any disputed item greater than the greatest value for such item, or less than the smallest value for such item, claimed in the Revelyst EBITDA Statement or in the Revelyst EBITDA Notice of Disagreement, (iv) shall make its determination based solely on written materials and oral communications made available to the Independent Expert in accordance with Section 2.07 (i.e., not on independent review) and (v) shall not consider any proposals related to settlement of any disputed items made by Vista Outdoor or Revelyst during their negotiations prior to submitting any disputed items to the Independent Expert. The Independent Expert is not authorized to, and shall not, make any other determination, including (A) any determination with respect to any matter included in the Revelyst EBITDA Statement or the Revelyst EBITDA Notice of Disagreement that was not submitted for resolution to the Independent Expert, (B) any determination as to the accuracy of any representation or warranty in this Agreement or any other Transaction Document or (C) any determination as to compliance by either Party of any of its respective covenants in this Agreement or any other Transaction Document. Any dispute not within the scope of disputes to be resolved by the Independent Expert pursuant to this Section 2.07 shall be resolved as otherwise provided in this Agreement. Any determination by the Independent Expert, and any work or analyses performed by the Independent Expert, may not be offered as evidence of a breach of this Agreement (other than a breach of this Section 2.07) in any Action between the Parties.
(iii) The final determination by the Independent Expert of each matter submitted to it in accordance with Section 2.07 shall (i) be in writing, (ii) include the Independent Expert’s
calculation of Revelyst FY28 EBITDA, (iii) include the Independent Expert’s determination of each disputed item submitted to it in accordance with Section 2.07, (iv) include a brief summary of the Independent Expert’s reason for its determination of each disputed item and (v) include a determination of the apportionment of the Independent Expert’s fees and expenses as between Vista Outdoor, on the one hand, and Revelyst, on the other hand, in accordance with the provisions of Section 2.07(b)(iv).
(iv) The resolution of disputed items by the Independent Expert shall be final and binding (other than in the case of fraud or manifest error) and an order may be entered in respect thereof by a court having jurisdiction over the Party against which such determination is to be enforced. The fees and expenses of the Independent Expert pursuant to this Section 2.07(b)(iv) shall be allocated between Vista Outdoor, on the one hand, and Revelyst, on the other hand, in inverse proportion as they may prevail on the final amount of the adjustment of the disputed items submitted to the Independent Expert. For example, in the event that Vista Outdoor asserts that the calculation of Revelyst FY28 EBITDA should have been 10% lower than the amount set forth in the Revelyst EBITDA Statement, and the Independent Expert determines that the final amount of Revelyst FY28 EBITDA is 7% lower than the amount set forth in the Revelyst EBITDA Statement, then 70% of the fees and expenses of the Independent Expert shall be paid by Revelyst and 30% of the fees and expenses of the Independent Expert shall be paid by Vista Outdoor.
(v) If the Earn-Out Payment is owing, Revelyst shall pay (or cause to be paid) to Vista Outdoor an amount equal to the Earn-Out Payment in accordance with Section 2.07(b)(i) within five (5) Business Days following the final resolution of the amount of Revelyst FY28 EBITDA in accordance with this Section 2.07.
(c) Acknowledgements.
(i) Notwithstanding anything in the contrary in this Section 2.07, the obligation of Revelyst to pay the Earn-Out Payment shall be conditioned upon the consummation of both the Merger and the Revelyst Merger. In the event that the Merger and the Revelyst Merger are not consummated and either the Merger Agreement or the Revelyst Merger Agreement is terminated, then Revelyst shall have no further obligation pursuant to this Section 2.07.
(ii) Vista Outdoor understands and acknowledges that, from and after the closing of the Revelyst Merger Agreement, control of all business decisions of the Revelyst Group shall be conducted in accordance with the directions of Olibre Parent, that Olibre Parent may operate the Revelyst Group in the manner it deems reasonably appropriate in its business judgment and neither Olibre Parent, Revelyst or any other member of the Revelyst Group shall have any obligation to operate the Revelyst Group in order to achieve any Earn-Out Payment or to maximize the amount of any Earn-Out Payment; provided, however, notwithstanding the foregoing (A) Olibre Parent shall cause the Revelyst Group to maintain the books and records of the Revelyst Group necessary for the calculation of Revelyst FY28 EBITDA; (B) Olibre Parent shall not take any intentional action in bad faith that would have the purpose of reducing the amount of Revelyst FY28 EBITDA (including any such action that would so impact the determination or calculation of the same); (C) divert to any Affiliate of Olibre Parent any revenue producing activities or business in bad faith in a manner that is intended to avoid or
reduce the amount of Revelyst FY28 EBITDA; and (D) Olibre Parent shall cause the Revelyst Group to produce the applicable Revelyst FY28 Financial Statements in a timely manner in accordance with its customary past practice.
(iii) Revelyst makes no representations or warranties regarding the Revelyst FY28 EBITDA, the ability of Revelyst or its Subsidiaries to meet any forecast or projection of Revelyst FY28 EBITDA or whether the Earn-Out Payment will be earned hereunder.
(d) Sale; Acquisitions; Divestitures.
(i) If, prior to the determination and payment of the Earn-Out Payment (if any), all or substantially all of the assets of the Revelyst Group are sold or transferred to any Person, then Olibre Parent will provide or cause to be provided in the agreements governing such transaction that such third-party shall assume and agree to perform Revelyst’s obligations under this Section 2.07, including without limitation those set out in Section 2.07(c)(ii) and shall commit to implementing reasonable procedures to permit the Revelyst FY28 EBITDA to be tracked and determined in a manner this is consistent with the procedures and policies in place for such purposes immediately prior to such sale or transfer.
(ii) To the extent that, after the date hereof, Revelyst or any member of the Revelyst Group acquires another business or entity or disposes of any business or entity outside of the ordinary course of businesses (in each case, whether by merger, stock purchase, asset purchase or otherwise), then the Revelyst FY28 EBITDA shall be determined in a manner that does not take into consideration the financial results of such acquired businesses or entity or the impact of the disposal of such entity or business on the Revelyst FY28 EBITDA so that the Revelyst FY28 EBITDA is determined based on the businesses of the Revelyst Group as of the date hereof; provided, however, that, in the case of a disposal of any business or entity outside of the ordinary course of businesses (whether by merger, stock purchase, asset purchase or otherwise), the amount of earnings before interest, taxes, depreciation and amortization attributable to such business or entity in the audited financial statements of Revelyst for the most recent fiscal year ending prior to such disposal shall be added to the Revelyst FY28 EBITDA (or deducted if such amount was negative).
ARTICLE III
Credit Support
Section 3.01 Replacement of Vista Outdoor Credit Support. (a) Revelyst shall use commercially reasonable efforts to arrange, at its sole cost and expense and effective at or prior to the Closing, the termination or replacement of all guarantees, covenants, indemnities, surety bonds, letters of credit or similar assurances of credit support (“Credit Support Instruments”) provided by, through or on behalf of Vista Outdoor or any other member of the Vista Outdoor Group for the benefit of Revelyst or any other member of the Revelyst Group (the “Vista Outdoor Credit Support Instruments”), other than any of the Vista Outdoor Credit Support Instruments set forth on Schedule 3.01(a) (the “Surviving Vista Outdoor Credit Support Instruments”), with alternate arrangements that do not require any credit support from Vista Outdoor or any other member of the Vista Outdoor Group, and shall use commercially
reasonable efforts to obtain from the beneficiaries of such Vista Outdoor Credit Support Instruments written releases (which in the case of a letter of credit or bank guarantee would be effective upon surrender of the original Vista Outdoor Credit Support Instrument to the originating bank and such bank’s confirmation in writing to Vista Outdoor of the cancelation thereof) indicating that Vista Outdoor or such other member of the Vista Outdoor Group will, effective upon the Closing, have no liability with respect to such Vista Outdoor Credit Support Instruments, in each case reasonably satisfactory to Vista Outdoor.
(b)If Revelyst is unable to obtain, or to cause to be obtained, the termination or replacement of, and corresponding release of Vista Outdoor or such other members of the Vista Outdoor Group from, any Vista Outdoor Credit Support Instrument pursuant to Section 3.01(a) at or prior to the Closing, (i) without limiting Revelyst’s obligations under Article V, Revelyst shall, and shall cause the relevant member of the Revelyst Group that has assumed the Liability with respect to such Vista Outdoor Credit Support Instrument to, indemnify and hold harmless the member of the Vista Outdoor Group that is the guarantor or obligor under such Visa Outdoor Credit Support Instrument for any Liability arising out of, resulting from or relating thereto in accordance with the provisions of Article V and shall, or shall cause one of its Subsidiaries to, as agent or subcontractor for such guarantor or obligor, pay, perform and discharge fully all the obligations or other Liabilities of such guarantor or obligor thereunder, (ii) if such Vista Outdoor Credit Support Instrument is in the form of a letter of credit or bank guarantee, Revelyst shall provide Vista Outdoor with a letter of credit or guarantee, in each case issued by a bank reasonably acceptable to Vista Outdoor, against losses arising from such Vista Outdoor Credit Support Instrument or, if Vista Outdoor agrees in writing, cash collateralize the full amount of such Vista Outdoor Credit Support Instrument and (iii) with respect to such Vista Outdoor Credit Support Instrument, each Party, on behalf of itself and the members of its Group, agrees, except as otherwise expressly required by the terms of a Contract with a third party in effect as of the Closing, not to renew or extend the term of, increase its obligations under or transfer to a third party any loan, guarantee, lease, sublease, license, Contract or other obligation for which the other Party or any member of the other Party’s Group is or may be liable under such Vista Outdoor Credit Support Instrument unless all obligations of the other Party and the other members of the other Party’s Group with respect thereto are thereupon terminated by documentation reasonably satisfactory in form and substance to the other Party. With respect to all Surviving Vista Outdoor Credit Support Instruments, Revelyst shall take the actions set forth in the provisions of clauses (i), (ii) and (iii) of the foregoing sentence.
Section 3.02 Replacement of Revelyst Credit Support. (a) Vista Outdoor shall use commercially reasonable efforts to arrange, at its sole cost and expense and effective at or prior to the Closing, the termination or replacement of all Credit Support Instruments provided by,
through or on behalf of Revelyst or any other member of the Revelyst Group for the benefit of Vista Outdoor or any other member of the Vista Outdoor Group (the “Revelyst Credit Support Instruments”) with alternate arrangements that do not require any credit support from Revelyst or any other member of the Revelyst Group, and shall use commercially reasonable efforts to obtain from the beneficiaries of such Revelyst Credit Support Instruments written releases (which in the case of a letter of credit or bank guarantee would be effective upon surrender of the original Revelyst Credit Support Instrument to the originating bank and such bank’s confirmation in writing to Revelyst of the cancelation thereof) indicating that Revelyst or such other member of the Revelyst Group will, effective upon the Closing, have no liability with respect to such Revelyst Credit Support Instruments, in each case reasonably satisfactory to Revelyst.
(b) If Vista Outdoor is unable to obtain, or to cause to be obtained, the termination or replacement of, and corresponding release of Revelyst or such other members of the Revelyst Group from, any Revelyst Credit Support Instrument pursuant to Section 3.02(a) at or prior to the Closing, (i) without limiting Vista Outdoor’s obligations under Article V, Vista Outdoor shall, and shall cause the relevant member of the Vista Outdoor Group that has assumed the Liability with respect to such Revelyst Credit Support Instrument to, indemnify and hold harmless the member of the Revelyst Group that is the guarantor or obligor under such Revelyst Credit Support Instrument for any Liability arising out of, resulting from or relating thereto in accordance with the provisions of Article V and shall, or shall cause one of its Subsidiaries to, as agent or subcontractor for such guarantor or obligor, pay, perform and discharge fully all the obligations or other Liabilities of such guarantor or obligor thereunder, (ii) if such Revelyst Credit Support Instrument is in the form of a letter of credit or bank guarantee, Vista Outdoor shall provide Revelyst with a letter of credit or guarantee, in each case issued by a bank reasonably acceptable to Revelyst, against losses arising from such Revelyst Credit Support Instrument or, if Revelyst agrees in writing, cash collateralize the full amount of such Revelyst Credit Support Instrument and (iii) with respect to such Revelyst Credit Support Instrument, each Party, on behalf of itself and the members of its Group, agrees, except as otherwise expressly required by the terms of a Contract with a third party in effect as of the Closing, not to renew or extend the term of, increase its obligations under or transfer to a third party any loan, guarantee, lease, sublease, license, Contract or other obligation for which the other Party or any member of the other Party’s Group is or may be liable under such Revelyst Credit Support Instrument unless all obligations of the other Party and the other members of the other Party’s Group with respect thereto are thereupon terminated by documentation reasonably satisfactory in form and substance to the other Party.
ARTICLE IV
Taxes
Section 4.01 Tax Indemnification.
(a) Revelyst shall indemnify, defend and hold harmless Vista Outdoor and each other member of the Vista Outdoor Group from and against any and all Liabilities of Vista Outdoor and such other members of the Vista Outdoor Group relating to, arising out of or resulting from, or constituting, any Revelyst Taxes.
(b) Vista Outdoor shall indemnify, defend and hold harmless Revelyst and each other member of the Revelyst Group from and against any and all Liabilities of Revelyst and such
other members of the Revelyst Group relating to, arising out of or resulting from, or constituting, any Vista Outdoor Taxes.
(c) If either Party (the “Tax Indemnified Party”) determines that it has the right to receive an indemnification payment from the other Party (the “Tax Indemnifying Party”) pursuant to this Section 4.01(a), then the Tax Indemnified Party shall provide the Tax Indemnifying Party with a written notice that includes its calculation of the amount of such indemnification payment. Such notice shall provide such detail as is reasonably necessary to permit the Tax Indemnifying Party to understand the calculation of the indemnification payment. Subject to the dispute resolution procedures set forth in Section 4.04, the Tax Indemnifying Party shall make the indemnification payment to the Tax Indemnified Party within ten (10) days after receipt of such notice by the Tax Indemnifying Party.
(d) Calculation of Pre-Closing Taxes. Revelyst Pre-Closing Taxes of a member of the Vista Outdoor Group or a member of the Revelyst Group shall be calculated (a) as if such member, as applicable, were a standalone taxpayer (or standalone group in the case of Taxes that are determined on a consolidated or combined group basis) that only owns the Revelyst Assets and Revelyst Liabilities and conducts the operations of the Revelyst Business and (b) in the case of Income Taxes, by taking into account an amount of the Shared Pre-Closing Deductions equal to the product of (A) the amount of such Shared Pre-Closing Deductions multiplied by (B) the Revelyst Sharing Percentage. Vista Outdoor Pre-Closing Taxes of a member of the Vista Outdoor Group or a member of the Revelyst Group shall be calculated (a) as if such member, as applicable, were a standalone taxpayer (or standalone group in the case of Taxes that are determined on a consolidated or combined group basis) that only owns the Vista Outdoor Assets and Vista Outdoor Liabilities and conducts the operations of the Vista Outdoor Business and (b) in the case of Income Taxes, by taking into account an amount of the Shared Pre-Closing Deductions equal to the product of (A) the amount of such Shared Pre-Closing Deductions multiplied by (B) the Vista Outdoor Sharing Percentage.
Section 4.02 Tax Returns.
(a) Vista Outdoor shall, at its expense, prepare, or cause to be prepared, all Tax Returns that are required to be filed after the Closing Date for any Pre-Closing Tax Period or Straddle Period with respect to Vista Outdoor or any of its Subsidiaries (including, for the avoidance of doubt, any Tax Returns that include members of the Revelyst Group) other than Revelyst Tax Returns (such Tax Returns, “Vista Outdoor Prepared Returns”). To the extent that a Vista Outdoor Prepared Return relates to Revelyst Taxes, Vista Outdoor shall provide Revelyst with a draft of any such Vista Outdoor Prepared Return for review and comment (i) in the case of such Tax Return for Income Taxes at least thirty (30) days prior to the due date thereof taking into account any valid extensions (or, in the case of any Vista Outdoor Prepared Return that is due less than thirty (30) days after the Closing Date, as soon as reasonably practicable) and (ii) in the case of any other such Tax Return as soon as reasonably practicable prior to the filing deadline for such Tax Return, taking into account any valid extensions. Vista Outdoor shall revise such Vista Outdoor Prepared Return to reflect reasonable comments of Revelyst provided at least ten (10) days prior to the due date thereof (taking into account any valid extensions) to the extent such comments are consistent with the Agreed Tax Principles. The applicable Party required by Law to file such Vista Outdoor Prepared Returns shall timely file any such Vista Outdoor Prepared Returns. At least three (3) days prior to the filing of any Vista Outdoor Prepared Return, (i) if a member of the Vista Outdoor Group is the filing party, Revelyst shall pay to Vista Outdoor an amount equal to the amount of Revelyst Taxes due with respect to such
Vista Outdoor Prepared Return and (ii) if a member of the Revelyst Group is the filing party, Vista Outdoor shall pay to Revelyst an amount equal to the amount of Vista Outdoor Taxes due with respect to such Vista Outdoor Prepared Return.
(b) Revelyst shall, at its expense, prepare, or cause to be prepared, all Tax Returns that are required to be filed after the Closing Date for any Pre-Closing Tax Period or Straddle Period with respect to Revelyst or any of its Subsidiaries other than any Vista Outdoor Prepared Returns (such Tax Returns, “Revelyst Prepared Returns” and together with the Vista Outdoor Prepared Returns, “Pre-Closing Tax Returns”). To the extent that a Revelyst Prepared Return relates to Vista Outdoor Taxes, Revelyst shall provide Vista Outdoor a draft of any Revelyst Prepared Return for its review and comment (i) in the case of such Tax Return for Income Taxes at least thirty (30) days prior to the due date thereof taking into account any valid extensions (or, in the case of any Revelyst Prepared Return that is due less than thirty (30) days after the Closing Date, as soon as reasonably practicable) and (ii) in the case of any other such Tax Return as soon as reasonably practicable prior to the filing deadline for such Tax Return, taking into account any valid extensions. Revelyst shall revise such Revelyst Prepared Return to reflect reasonable comments of Vista Outdoor provided at least ten (10) days prior to the due date thereof (taking into account any valid extensions) to the extent such comments are consistent with the Agreed Tax Principles. The applicable Party required by Law to file such Revelyst Prepared Returns shall timely file any such Revelyst Prepared Returns. At least three (3) days prior to the filing of any Revelyst Prepared Return, (i) if a member of the Revelyst Group is the filing party, Vista Outdoor shall pay to Revelyst an amount equal to the amount of Vista Outdoor Taxes due with respect to such Revelyst Prepared Return and (ii) if a member of the Vista Outdoor Group is the filing party, Revelyst shall pay to Vista Outdoor an amount equal to the amount of Revelyst Taxes due with respect to such Revelyst Prepared Return.
(c) The Parties shall prepare (or cause to be prepared) all Pre-Closing Tax Returns (i) in a manner consistent with (A) the past practice of Vista Outdoor, Revelyst or the applicable Subsidiary to the extent such past practices are supportable at a “more likely than not” or higher level of comfort and (B) the Intended Tax Treatment and (ii) treating Transaction Tax Deductions as accruing immediately before the Closing to the extent such accrual is supportable at a “more likely than not” or higher level of comfort (clauses (i) and (ii), the “Agreed Tax Principles”); provided that, if the Party reviewing the Tax Return objects to whether a position is supportable at a “more likely than not” or higher level of comfort, the Party preparing the Tax Return shall provide confirmation from an internationally recognized public accounting firm or a nationally recognized law firm that such position is supportable at a “more likely than not” or higher level of comfort. Notwithstanding anything in this Section 4.02 or Section 4.04 to the contrary, the applicable Party required (or whose Affiliate is required) by Law to file any Revelyst Prepared Return or Vista Outdoor Prepared Return shall be entitled to timely file (or cause to be filed) such Tax Return (prepared in accordance with this Section 4.02); provided that, following a written agreement signed by the Parties or a final resolution (which cannot be further reviewed or appealed) of the Parties’ dispute as to such Tax Return, the applicable Party shall as promptly as reasonably practicable file an amended Tax Return consistent with such agreement or resolution. Subject to the preceding two sentences, disputes over the preparation of any Pre-Closing Tax Return shall be subject to the procedures set forth in Section 4.04.
(d) For avoidance of doubt, (A) Vista Outdoor (x) shall prepare and file (or cause to be prepared and filed) all Tax Returns with respect to Vista Outdoor or other members of the Vista Outdoor Group that are not Pre-Closing Tax Returns and (y) shall conduct (or cause to be conducted) all Tax Contests relating to Taxes of Vista Outdoor or other members of the Vista Outdoor Group that are not Revelyst Tax Contests or Vista Outdoor Tax Contests and (B) Revelyst (x) shall prepare and file (or cause to be prepared and filed) all Tax Returns with respect to Revelyst or other members of the Revelyst Group that are not Pre-Closing Tax Returns and (y) shall conduct (or cause to be conducted) all Tax Contests relating to Taxes of Revelyst or other members of the Revelyst Group that are not Revelyst Tax Contests or Vista Outdoor Tax Contests.
Section 4.03 Intended Tax Treatment; Certain Tax Actions.
(a) The Parties hereto shall not take any position inconsistent with the Intended Tax Treatment for any Tax purpose unless otherwise required by a Final Determination.
(b) Except as expressly provided for in this Agreement or any of the other Transaction Documents or the Revelyst Merger Agreement, neither Party shall, nor shall they cause or permit any of their respective Affiliates to, (i) amend or approve or consent to the amendment, re-filing, revocation or other modification of any Tax Return of Vista Outdoor, Revelyst or any of their respective Subsidiaries for a Pre-Closing Tax Period or Straddle Period, (ii) voluntarily approach any Governmental Authority regarding any Taxes or Tax Returns of Vista Outdoor, Revelyst or any of their respective Subsidiaries relating to a Pre-Closing Tax Period or Straddle Period or (iii) make, change, revoke, approve or consent to any Tax election with respect to Vista Outdoor, Revelyst or any of their respective Subsidiaries for a Pre-Closing Tax Period or Straddle Period, in each case, (A) to the extent doing so is reasonably likely to increase the amount of any Taxes for which the other Party is liable for under this Agreement or (B) without the prior written consent of the other Party, which shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing or anything in this Agreement or any other Transaction Document or the Revelyst Merger Agreement to the contrary, Revelyst and its Affiliates shall be permitted to make an election under Section 338(g) of the Code in connection with the Revelyst Transactions.
Section 4.04 Tax Dispute Resolution. In the event of any disagreement relating to (i) the calculation of the amount of any Taxes in respect of which Revelyst or Vista Outdoor may be liable pursuant to Section 4.01 or Section 4.02, (ii) the determination of which Party is entitled to a Tax Refund or (iii) the preparation of any Pre-Closing Tax Returns, the Parties shall negotiate in good faith for a period of thirty (30) days (or such longer period as may be mutually agreed in writing) to resolve such disagreement. In the event that the Parties have not reached a resolution set forth in a written agreement signed by the Parties at the end of such 30-day period (or such longer period as may be mutually agreed in writing), the Parties shall submit all matters that remain in dispute to an independent, nationally recognized accounting firm mutually agreed to by the Parties (the “Reviewing Accountant”). The Parties shall instruct the Reviewing Accountant to make a determination no later than thirty (30) days following the submission of such dispute to such Reviewing Accountant, based solely on the written submissions of the Parties. The determination of the Reviewing Accountant shall, absent a Final Determination to the contrary, be conclusive and binding on the Parties for all Tax purposes and the Parties, and
neither Party shall take any position inconsistent therewith on any Tax Return, in any Tax Refund claim or in any Tax Contest, in each case, unless otherwise required pursuant to a Final Determination. All fees and expenses relating to the work, if any, to be performed by the Reviewing Accountant shall be borne equally by the Parties.
Section 4.05 Tax Refunds. Any Tax refunds received, or any credit against Taxes otherwise payable that is applied in lieu of a Tax refund (“Tax Refunds”), of Revelyst Taxes (excluding any such refunds or credits to the extent taken into account in the determination of the Closing Adjustment Amount as finally determined pursuant to Section 2.06), shall be for the account of Revelyst. Any Tax Refunds of Vista Outdoor Taxes, shall be for the account of Vista Outdoor. The Party who receives a Tax Refund that the other Party is entitled to under this Section 4.05 shall remit any such Tax Refunds to the other Party within ten (10) days of receipt thereof net of any Taxes and reasonable out-of-pocket costs or expenses incurred in connection with the receipt or accrual of such Tax Refund (or making the applicable payment in respect of such Tax Refund under this Section 4.05); provided, however, that if any such Tax Refund is subsequently disallowed by a Governmental Authority, the Party entitled to such Tax Refund shall repay the Party who received such Tax Refund the amount of such Tax Refund, together with any interest, penalties and any additional amounts imposed by such Governmental Authority with respect to such disallowance.
Section 4.06 Treatment of Certain Payments. Any Indemnity Payment (other than any portion of a payment that represents interest accruing after the Closing Date), any payments made pursuant to Section 2.07 and any Closing Adjustment Amount payment shall be treated by Vista Outdoor and Revelyst for all Tax purposes as a reduction of the cash contributed to Revelyst in the Contribution to the extent thereof (if made by Revelyst to Vista Outdoor) or an increase of the cash contributed to Revelyst in the Contribution (if made by Vista Outdoor to Revelyst), except as otherwise required by a change in applicable Tax Law after the date of this Agreement or a Final Determination.
Section 4.07 Straddle Periods. Where it is necessary for purposes of this Agreement to apportion, between Vista Outdoor and Revelyst, Taxes with respect to Vista Outdoor, Revelyst or any of their respective Subsidiaries for a Straddle Period, such Taxes shall be apportioned based on an “interim closing of the books” method as of the end of the day on the Closing Date, except that (i) exemptions, allowances and deductions that are calculated on an annual basis (such as depreciation deductions) and (ii) Taxes that are imposed on a periodic basis (such as real or personal property Taxes) shall, in each case, be allocated ratably across the entire Straddle Period on a per diem basis. For purposes of making the determinations necessary to give effect to the allocation set forth in the preceding sentence, if Vista Outdoor, Revelyst or any of their respective Subsidiaries owns an interest in any entity treated for purposes of an applicable Tax Law as a “flow-through” or fiscally transparent entity or a controlled foreign corporation, or in a similar manner, then, except as provided to the contrary in this Agreement, such entity’s taxable year shall be deemed to close at the end of the Closing Date.
Section 4.08 Certain Tax Contests.
(a) Following the Closing, Vista Outdoor shall notify Revelyst promptly, and in any event within ten (10) days, after receipt by Vista Outdoor or any of its Affiliates of written notice
of any audit, examination or other proceeding relating to Taxes (each, a “Tax Contest”) in respect of Revelyst Taxes. Following the Closing, Revelyst shall notify Vista Outdoor promptly, and in any event within ten (10) days, after receipt by Revelyst or any of its Affiliates of written notice of any Tax Contest in respect of Vista Outdoor Taxes. Notwithstanding the foregoing, the failure by a Party to provide such notice in accordance with this Section 4.08(a) shall not relieve the other Party of its indemnification obligations under Section 4.01(a), except to the extent that such other Party is actually prejudiced by such failure.
(b) Subject to Section 4.08(c), Revelyst shall have the right to control, at its own expense, any Tax Contest relating principally to Revelyst Taxes (a “Revelyst Tax Contest”) and Vista Outdoor shall have the right to control, at its own expense any Tax Contest relating principally to Vista Outdoor Taxes (a “Vista Outdoor Tax Contest”), in each case, as reasonably determined in good faith by the Parties.
(c) To the extent that (i) a Revelyst Tax Contest relates to Vista Outdoor Taxes, (ii) a Vista Outdoor Tax Contest relates to Revelyst Taxes or (iii) the Parties agree that Revelyst should control a Vista Outdoor Tax Contest or that Vista Outdoor should control a Revelyst Tax Contest (in each case a “Shared Tax Contest”) then (A) the Party that does not control such Shared Tax Contest shall have the right to participate fully, at its own expense, in such Shared Tax Contest either directly or indirectly through its Representatives (including to review in advance and reasonably comment on submissions made in the course of such Shared Tax Contest), (B) the Party controlling such Shared Tax Contest shall (1) keep the other Party promptly informed of any significant developments in such Shared Tax Contest and provide copies of any material written communications with the applicable Governmental Authority related thereto and (2) shall not settle or compromise, or fail to timely exercise any appeal or review rights available under applicable Law in respect of, any such Shared Tax Contest without the prior written consent of the other Party (such consent not to be unreasonably withheld, conditioned or delayed). For purposes of this Section 4.08(c), the term “Representatives” shall be deemed to include the provider of any representation and warranty insurance policy that is obtained by Olibre Parent in connection with this Agreement or the Revelyst Merger Agreement.
(d) This Section 4.08 and not Section 5.05 shall govern the conduct of any Tax Contest relating to Taxes with respect to which indemnification is provided pursuant to Section 4.01.
Section 4.09 Tax Matters Cooperation. From and after the Closing Date, each of Vista Outdoor and Revelyst shall and shall cause their respective Subsidiaries to (a) furnish to the other Party and its Representatives such information, documents, work papers and other materials as the other Party and its Representatives may reasonably request in connection with the filing of any Tax Return or the conduct of any Tax Contest, (b) make their respective Representatives available during normal business hours to provide explanations of any material provided pursuant to this Section 4.09 and (c) reasonably cooperate with the other Party and its Representatives in connection with any of the foregoing Tax matters. If one Party requests the cooperation of the other Party pursuant to this Section 4.09, the requesting Party shall reimburse the other Party for all reasonable out-of-pocket costs and expenses incurred by the other Party in complying with such
request, unless such out-of-pockets costs and expenses would otherwise constitute Liabilities in respect of which indemnification is available pursuant to Section 4.01.
Section 4.10 Domestic Use Agreement. Revelyst shall prepare, or cause to be prepared, and attach to its timely filed (accounting for all applicable extensions) consolidated U.S. federal income Tax Return for its first Tax year beginning after the Closing Date (the “Specified Tax Return”) a new domestic use agreement, as defined in Treasury Regulations Section 1.1503(d)-6(f)(2)(iii) with respect to each Specified Dual Consolidated Loss. Revelyst shall prepare such new domestic use agreements in accordance with Treasury Regulations Section 1.1503(d)-6(f)(2)(iii). Revelyst shall provide Vista Outdoor a draft of any such new domestic use agreements and all associated filings under Treasury Regulations Section 1.1503(d)-1 through -8 with respect to the Specified Dual Consolidated Losses for Vista Outdoor’s review and comment at least thirty (30) days prior to the due date of the Specified Tax Return (accounting for all applicable extensions). Revelyst shall revise such new domestic use agreements and all associated filings to reflect reasonable comments of Vista Outdoor provided at least ten (10) days prior to the due date of the Specified Tax Return. In addition, without limiting Section 4.02, the Parties agree that Vista Outdoor shall file an original elector statement in accordance with Treasury Regulations Section 1.1503(d)-6(f)(2)(iii) with respect to each Specified Dual Consolidated Loss.
Section 4.11 Insurance Policy. Notwithstanding anything herein to the contrary, the Parties acknowledge that the insurer(s) under any representation and warranty insurance policy that is obtained by Olibre Parent in connection with this Agreement or the Revelyst Merger Agreement may have certain rights under such insurance policy in respect of the defense, settlement and/or compromise of a Tax Contest.
Section 4.12 Survival. This Article IV shall survive the Closing until ninety (90) days after the expiration of the statute of limitations (taking into account extensions) applicable to the relevant Tax matter.
ARTICLE V
Mutual Releases; Indemnification; Litigation
Section 5.01 Release of Pre-Closing Claims. (a) Except as provided in Section 5.01(d) or elsewhere in this Agreement or in any other Transaction Document, effective as of the Closing, Revelyst does hereby, for itself and each other member of the Revelyst Group, their respective Affiliates and, to the extent it may legally do so, successors and assigns and all Persons who at any time at or prior to the Closing have been stockholders, directors, officers, members, agents or employees of any member of the Revelyst Group (in each case, in their respective capacities as such), remise, release and forever discharge Vista Outdoor and the other members of the Vista Outdoor Group, their respective Affiliates, successors and assigns, and all Persons who at any time at or prior to the Closing have been stockholders, directors, officers, members, agents or employees of any member of the Vista Outdoor Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from any and all Revelyst Liabilities whatsoever, whether at Law or in equity (including any right of contribution), whether arising under any Contract, by operation of Law or
otherwise, existing or arising from any acts or events occurring or failing to occur, or alleged to have occurred or to have failed to occur, or any conditions, facts or circumstances existing or alleged to have existed at or before the Closing (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen or accrue, in each case before, at or after the Closing), including in connection with the Separation and all other activities to implement the Separation, and including Liabilities arising under CERCLA and other Environmental Laws. This Section 5.01(a) shall not affect Section 6.05 (Directors’ and Officers’ Indemnification; Liability Insurance) of the Merger Agreement.
(b) Except as provided in Section 5.01(d) or elsewhere in this Agreement or in any other Transaction Document, effective as of the Closing, Vista Outdoor does hereby, for itself and each other member of the Vista Outdoor Group, their respective Affiliates and, to the extent it may legally do so, successors and assigns and all Persons who at any time at or prior to the Closing have been stockholders, directors, officers, agents or employees of any member of the Vista Outdoor Group (in each case, in their respective capacities as such), remise, release and forever discharge Revelyst and the other members of the Revelyst Group, their respective Affiliates, successors and assigns, and all Persons who at any time at or prior to the Closing have been stockholders, directors, officers, agents or employees of any member of the Revelyst Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from any and all Vista Outdoor Liabilities whatsoever, whether at Law or in equity (including any right of contribution), whether arising under any Contract, by operation of Law or otherwise, existing or arising from any acts or events occurring, or failing to occur, or alleged to have occurred or to have failed to occur, or any conditions, facts or circumstances existing or alleged to have existed at or before the Closing (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen or accrue, in each case before, at or after the Closing), including in connection with the Separation and all other activities to implement the Separation, and including Liabilities arising under CERCLA and other Environmental Laws.
(c) The Parties expressly understand and acknowledge that it is possible that unknown losses or claims exist or might come to exist or that present losses may have been underestimated in amount, severity, or both. Accordingly, the Parties are deemed expressly to understand and acknowledge any federal or state law or right, rule or legal principle of the State of Delaware or any other jurisdiction which provides that a general release does not extend to claims which a creditor does not know or suspect to exist in such creditor’s favor at the time of executing the release, which if known by such creditor must have materially affected such creditor’s settlement with a debtor. The Parties are hereby deemed to agree that any such or similar federal or state laws or rights, rules or legal principles of the State of Delaware or any other jurisdiction that may be applicable herein are hereby knowingly and voluntarily waived and relinquished with respect to the releases in Section 5.01(a) and (b).
(d) Nothing contained in Section 5.01(a) or (b) shall impair any right of any Person to enforce this Agreement, any other Transaction Document or any Intercompany Agreement or Intercompany Account that is specified in Section 2.03(b) not to terminate or settle as of the Closing, in each case in accordance with its terms. Nothing contained in Section 5.01(a) and (b) shall release:
(i) any Person from any Liability provided in or resulting from any Intercompany Agreement or Intercompany Account that is specified in Section 2.03(b) not to terminate or settle as of the Closing;
(ii) any Person from any Liability, contingent or otherwise, assumed, accepted, transferred, assigned or allocated to the Group of which such Person is a member in accordance with, or any other Liability of any member of any Group under, this Agreement or any other Transaction Document;
(iii) any Person from any Liability provided in or resulting from any other Contract that is entered into after the Closing between one Party (or a member of such Party’s Group), on the one hand, and the other Party (or a member of such Party’s Group), on the other hand;
(iv) any Person from any Liability that the Parties may have with respect to indemnification, contribution or reimbursement pursuant to this Agreement or any other Transaction Document for claims brought against the Parties, the members of their respective Groups or any of their respective directors, officers, members, employees or agents, by third parties, which Liability shall be governed by the provisions of this Article V or, if applicable, the appropriate provisions of the relevant other Transaction Document; or
(v) any Person from any Liability the release of which would result in the release of any Person not otherwise intended to be released pursuant to this Section 5.01.
In addition, nothing contained in Section 5.01(a) shall release: (A) Vista Outdoor from indemnifying any director, officer or employee of the Revelyst Group who was a director, officer or employee of Vista Outdoor or any of its Affiliates at or prior to the Closing, to the extent such director, officer or employee is or becomes a named defendant in any Action with respect to which he or she was entitled to such indemnification from a member of the Vista Outdoor Group pursuant to then-existing obligations, it being understood that if the underlying obligation giving rise to such Action is a Revelyst Liability, Revelyst shall indemnify Vista Outdoor for such Liability (including Vista Outdoor’s costs to indemnify such director, officer or employee) in accordance with the provisions set forth in this Article V; and (B) Revelyst from indemnifying any director, officer or employee of the Vista Outdoor Group who was a director, officer or employee of Vista Outdoor or any of its Affiliates at or prior to the Closing, to the extent such director, officer or employee is or becomes a named defendant in any Action with respect to which he or she was entitled to such indemnification from a member of the Revelyst Group pursuant to then-existing obligations, it being understood that if the underlying obligation giving rise to such Action is a Vista Outdoor Liability, Vista Outdoor shall indemnify Revelyst for such Liability (including Revelyst’s costs to indemnify such director, officer or employee) in accordance with the provisions set forth in this Article V.
(e) Revelyst shall not make, and shall not permit any other member of the Revelyst Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution, indemnification or reimbursement, against Vista Outdoor or any other member of the Vista Outdoor Group, or any other Person released pursuant to Section
5.01(a), with respect to any Liabilities released pursuant to Section 5.01(a). Vista Outdoor shall not make, and shall not permit any other member of the Vista Outdoor Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution, indemnification or reimbursement, against Revelyst or any other member of the Revelyst Group, or any other Person released pursuant to Section 5.01(b), with respect to any Liabilities released pursuant to Section 5.01(b).
(f) It is the intent of each Party, by virtue of the provisions of this Section 5.02, to provide for a full and complete release and discharge of all Liabilities existing or arising from all acts and events occurring or failing to occur, or alleged to have occurred or to have failed to occur, and all conditions, facts or circumstances existing or alleged to have existed at or before the Closing, between or among Revelyst or any other member of the Revelyst Group, on the one hand, and Vista Outdoor or any other member of the Vista Outdoor Group, on the other hand (including any contractual agreements or arrangements existing or alleged to exist between or among any such members at or before the Closing), except as expressly set forth in Section 5.01(d) or elsewhere in this Agreement or in any other Transaction Document. At any time, at the request of the other Party, each Party shall cause each member of its respective Group to execute and deliver releases reflecting the provisions hereof.
Section 5.02 Indemnification by Revelyst. Subject to Section 5.04, Revelyst shall indemnify, defend and hold harmless Vista Outdoor, each other member of the Vista Outdoor Group and each of their respective former and current directors, officers and employees, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “Vista Outdoor Indemnitees”), from and against any and all Liabilities of the Vista Outdoor Indemnitees relating to, arising out of or resulting from any of the following items (without duplication):
(a) the Revelyst Liabilities, including the failure of Revelyst or any other member of the Revelyst Group or any other Person to pay, perform or otherwise promptly discharge any Revelyst Liability in accordance with its terms; and
(b) any breach by Revelyst or any other member of the Revelyst Group of this Agreement (including any breach of the representations in Section 11.01(c)) or any Ancillary Agreement unless such Ancillary Agreement expressly provides for separate or conflicting indemnification therein (which shall be controlling).
Section 5.03 Indemnification by Vista Outdoor. Subject to Section 5.04, Vista Outdoor shall indemnify, defend and hold harmless Revelyst, each other member of the Revelyst Group and each of their respective former and current directors, officers and employees, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “Revelyst Indemnitees”), from and against any and all Liabilities of the Revelyst Indemnitees relating to, arising out of or resulting from any of the following items (without duplication):
(a) the Vista Outdoor Liabilities, including the failure of Vista Outdoor or any other member of the Vista Outdoor Group or any other Person to pay, perform or otherwise promptly discharge any Vista Outdoor Liability in accordance with its terms; and
(b) any breach by Vista Outdoor or any other member of the Vista Outdoor Group of this Agreement (including any breach of the representations in Section 11.01(c)) or any Ancillary Agreement unless such Ancillary Agreement expressly provides for separate or conflicting indemnification therein (which shall be controlling).
Section 5.04 Indemnification Obligations Net of Insurance Proceeds and Third-Party Proceeds; Mitigation. (a) The Parties intend that any Liability subject to indemnification or reimbursement pursuant to this Agreement (including, for the avoidance of doubt, pursuant to Section 4.01) will be net of (i) Insurance Proceeds that actually reduce the amount of, or are paid to the applicable Indemnitee in respect of, such Liability and (ii) other amounts recovered from any third party (net of any out-of-pocket costs or expenses incurred in, or Taxes imposed with respect to, the collection thereof) that actually reduce the amount of, or are paid to the applicable Indemnitee in respect of, such Liability (“Third-Party Proceeds”). Accordingly, the amount that either Party (an “Indemnifying Party”) is required to pay to any Person entitled to indemnification or reimbursement pursuant to this Agreement (an “Indemnitee”) will be reduced by any Insurance Proceeds or Third-Party Proceeds theretofore actually recovered by or on behalf of the Indemnitee from a third party in respect of the related Liability. If an Indemnitee receives a payment required by this Agreement from an Indemnifying Party in respect of any Liability (which, for the avoidance of doubt, shall include any payment under Section 4.01(a)) (an “Indemnity Payment”) and subsequently receives Insurance Proceeds or Third-Party Proceeds in respect of such Liability, then the Indemnitee will pay to the Indemnifying Party an amount equal to the excess of the Indemnity Payment received over the amount of the Indemnity Payment that would have been due if such Insurance Proceeds or Third-Party Proceeds had been received, realized or recovered before the Indemnity Payment was made; provided, that for the avoidance of doubt, such amount shall not exceed the amount of the Indemnity Payment.
(b) An insurer that would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or have any subrogation rights with respect thereto by virtue of the indemnification provisions hereof, it being expressly understood and agreed that no insurer or any other third party shall be entitled to a “wind-fall” (i.e., a benefit to which an insurer or any other third party would not be entitled to receive in the absence of the indemnification provisions) by virtue of the indemnification provisions hereof. Subject to Section 5.12, each member of the Vista Outdoor Group and each member of the Revelyst Group shall use commercially reasonable efforts to seek to collect or recover any Insurance Proceeds and any Third-Party Proceeds to which such Person is entitled in connection with any Liability for which such Person seeks indemnification pursuant to this Article V; provided, however, that such Person’s inability to collect or recover any such Insurance Proceeds or Third-Party Proceeds shall not limit the Indemnifying Party’s obligations hereunder and such Person shall not be required to seek any Insurance Proceeds or any Third-Party Proceeds prior to seeking indemnification hereunder.
(c) The amount of any Indemnity Payment shall be (i) reduced to take into account any Tax benefit actually realized by the Indemnitee resulting from the incurrence of the liability in respect of which the Indemnity Payment is made (as a reduction in cash Taxes otherwise payable for the taxable year in which such liability is incurred, the subsequent taxable year or a prior taxable year) and (ii) increased to take into account any Tax cost actually realized by the Indemnitee resulting from the receipt or accrual of the Indemnity Payment (as an increase in cash
Taxes otherwise payable for the taxable year in which the Indemnity Payment is made), including any Tax cost arising from such Indemnity Payment having resulted in income or gain to either Party, and any Taxes imposed on additional amounts payable pursuant to this clause (ii).
(d) Upon becoming aware of any event that would reasonably be expected to, or does, give rise to any Liability subject to indemnification by Vista Outdoor pursuant to this Agreement, Revelyst shall take, or shall cause the Revelyst Indemnitees entitled to such indemnification to take, commercially reasonable steps to mitigate any such Liability. Upon becoming aware of any event that would reasonably be expected to, or does, give rise to any Liability subject to indemnification by Revelyst pursuant to this Agreement, Vista Outdoor shall take, or shall cause the Vista Outdoor Indemnitees entitled to such indemnification to take, commercially reasonable steps to mitigate any such Liability. The reasonable and documented out-of-pocket costs and expenses of any such mitigation shall constitute Liabilities for purposes of this Agreement. Notwithstanding the foregoing, this Section 5.04(d) shall not require any Party to take any actions inconsistent with such Party’s rights and obligations under Article IV.
Section 5.05 Procedures for Indemnification of Third-Party Claims. (a) If an Indemnitee shall receive notice or otherwise learn of a Third-Party Claim with respect to which an Indemnifying Party may be obligated to provide indemnification to such Indemnitee pursuant to this Agreement or any Ancillary Agreement, such Indemnitee shall give such Indemnifying Party written notice thereof as soon as reasonably practicable, but no later than thirty (30) days after becoming aware of such Third-Party Claim. Any such notice shall describe the Third-Party Claim in reasonable detail and include copies of all notices and documents (including demand letters and motions, pleadings and other court papers) received by the Indemnitee relating to the Third-Party Claim. Notwithstanding the foregoing, the failure of any Indemnitee or other Person to give notice as provided in this Section 5.05(a) shall not relieve the Indemnifying Party from which indemnification hereunder is sought of its obligations under this Article V, except to the extent that such Indemnifying Party is actually prejudiced by such failure to give notice in accordance with this Section 5.05(a).
(b) The Indemnifying Party shall have the right, exercisable by written notice to the Indemnitee, which notice shall acknowledge in writing the indemnification obligation, within 30 days after receipt of notice from an Indemnitee in accordance with Section 5.05(a) (or sooner, if the nature of such Third-Party Claim so requires), to assume and conduct the defense of such Third-Party Claim in accordance with the limits set forth in this Agreement with counsel selected by the Indemnifying Party and reasonably acceptable to the Indemnitee; provided, however, that (x) Mixed Actions shall be managed in accordance with Section 5.12(c) and (y) the Indemnifying Party shall not have the right to control the defense of any Third-Party Claim (i) to the extent such Third-Party Claim seeks criminal penalties or injunctive or other equitable relief (other than any such injunctive or other equitable relief that is solely incidental to the granting of money damages) or (ii) if the Indemnitee has reasonably determined in good faith that the Indemnifying Party controlling such defense will affect the Indemnitee or its Group in a materially adverse manner.
(c) If the Indemnifying Party elects not to assume the defense of a Third-Party Claim (or is not permitted to assume the defense of such Third-Party Claim) in accordance with this Agreement, or fails to notify an Indemnitee of its election as provided in Section 5.05(b), such
Indemnitee may defend such Third-Party Claim. If the Indemnifying Party elects (and is permitted) to assume the defense of a Third-Party Claim in accordance with the terms of this Agreement, the Indemnitees shall, subject to the terms of this Agreement, cooperate with the Indemnifying Party with respect to the defense of such Third-Party Claim.
(d) If the Indemnifying Party elects (and is permitted) to assume the defense of a Third-Party Claim in accordance with the terms of this Agreement, the Indemnifying Party will not be liable for any additional legal expenses subsequently incurred by the Indemnitee in connection with the defense of the Third-Party Claim; provided, however, that if (x) the Indemnifying Party fails to take reasonable steps necessary to defend diligently such Third-Party Claim, (y) the nature of such Third-Party Claim changes such that the Indemnifying Party would no longer be entitled to assume the defense of such Third-Party Claim pursuant to Section 5.05(b) or (z) the Indemnitee reasonably determines that representation by counsel to the Indemnifying Party of both the Indemnifying Party and the Indemnitee could reasonably be expected to present such counsel with a conflict of interest, the Indemnitee may assume its own defense, and the Indemnifying Party will be liable for all reasonable costs or expenses paid or incurred in connection with such defense. The Indemnifying Party or the Indemnitee, as the case may be, shall have the right to participate in (but, subject to the prior sentence, not control), at its own expense, the defense of any Third-Party Claim that the other is defending as provided in this Agreement.
(e) No Indemnifying Party shall consent to entry of any judgment or enter into any settlement of any Third-Party Claim without the prior written consent of the applicable Indemnitee or Indemnitees; provided, however, that such consent shall not be required if the judgment or settlement: (i) contains no finding or admission of Liability with respect to any such Indemnitee or Indemnitees; (ii) involves only monetary relief which the Indemnifying Party has agreed to pay; and (iii) includes a full and unconditional release of the Indemnitee or Indemnitees. Notwithstanding the foregoing, the consent of an Indemnitee (not to be unreasonably withheld, conditioned or delayed) shall be required for any entry of judgment or settlement if the effect thereof is to permit any injunction, declaratory judgment or other non-monetary relief to be entered, directly or indirectly, against such Indemnitee (other than any such injunctive or other non-monetary relief that is immaterial and solely incidental to the granting of money damages).
(f) Whether or not the Indemnifying Party assumes the defense of a Third-Party Claim, no Indemnitee shall admit any liability with respect to, or settle, compromise or discharge, such Third-Party Claim without the Indemnifying Party’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed).
Section 5.06 Additional Matters. (a) Any claim on account of a Liability that does not result from a Third-Party Claim shall be asserted by written notice given by the Indemnitee to the Indemnifying Party from which indemnification hereunder is sought. Any failure by an Indemnitee to give notice shall not relieve the Indemnifying Party’s indemnification obligations under this Agreement, except to the extent that the Indemnifying Party shall have been actually prejudiced by such failure. Such Indemnifying Party shall have a period of 60 days after the receipt of such notice within which to respond thereto. If such Indemnifying Party does not respond within such 60-day period, such Indemnifying Party shall be deemed to have refused to
accept responsibility to make payment. If such Indemnifying Party does not respond within such 60-day period or rejects such claim in whole or in part, such Indemnitee shall be free to pursue such remedies as may be available to such Party.
(b) In the event of payment by or on behalf of any Indemnifying Party to any Indemnitee in connection with any Third-Party Claim, such Indemnifying Party shall be subrogated to, and shall stand in the place of, such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right, defense or claim relating to such Third-Party Claim against any claimant or plaintiff asserting such Third-Party Claim or against any other Person. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right, defense or claim.
(c) In the event of an Action with respect to which indemnification may be sought hereunder and in which the Indemnifying Party is not a named defendant, if either the Indemnitee or Indemnifying Party shall so request, the Parties shall endeavor to substitute the Indemnifying Party for the named defendant. If such substitution or addition cannot be achieved for any reason or is not requested, the Parties shall use commercially reasonable efforts to cause the named defendant to allow the Indemnifying Party to manage the Action as set forth in Section 5.12, and the Indemnifying Party shall fully indemnify the named defendant against all costs of defending the Action (including court costs, sanctions imposed by a court, attorneys’ fees, experts fees and all other external expenses), the costs of any judgment or settlement and the cost of any interest or penalties relating to any judgment or settlement.
(d) If (i) a Party incurs any Liability arising out of this Agreement or any Ancillary Agreement, (ii) an adequate legal or equitable remedy is not available for any reason against the other Party to satisfy the Liability incurred by the incurring Party and (iii) a legal or equitable remedy may be available to the other Party against a third party for such Liability, then the other Party shall use its commercially reasonable efforts to cooperate with the incurring Party, at the incurring Party’s expense, to permit the incurring Party to obtain the benefits of such legal or equitable remedy against such third party.
Section 5.07 Right to Contribution. (a) If any right of indemnification contained in Section 5.02 or Section 5.03 is held unenforceable or is unavailable for any reason, or is insufficient to hold harmless any Indemnitee in respect of any Liability for which such Indemnitee is entitled to indemnification hereunder, then the Indemnifying Party shall contribute to the amounts paid or payable by any Indemnitees as a result of such Liability (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and the other members of its Group, on the one hand, and such Indemnitee and any other Indemnitees entitled to contribution in respect of such Liability, on the other hand, as well as any other relevant equitable considerations.
(b) Solely for purposes of determining relative fault pursuant to this Section 5.07: (i) any fault associated with the Revelyst Business, the Revelyst Assets or the Revelyst Liabilities (except for the gross negligence or willful misconduct of a member of the Vista Outdoor Group) shall be deemed to be the fault of Revelyst and the other members of the Revelyst Group, and no such fault shall be deemed to be the fault of Vista Outdoor or any other
member of the Vista Outdoor Group; and (ii) any fault associated with the Vista Outdoor Business, the Vista Outdoor Assets or the Vista Outdoor Liabilities (except for the gross negligence or willful misconduct of a member of the Revelyst Group) shall be deemed to be the fault of Vista Outdoor and the other members of the Vista Outdoor Group, and no such fault shall be deemed to be the fault of Revelyst or any other member of the Revelyst Group.
Section 5.08 Remedies Cumulative. The remedies provided in this Article V shall be cumulative and, subject to the provisions of Section 5.10 and Article X, shall not preclude assertion by any Indemnitee of any other rights or the seeking of any and all other remedies against any Indemnifying Party.
Section 5.09 Survival of Indemnities. The rights and obligations of Vista Outdoor, Revelyst and their respective Indemnitees under this Article V shall survive the sale or other transfer by any Party or its Affiliates of any Assets or businesses or the assignment by it of any Liabilities.
Section 5.10 Limitation on Liability. Except as expressly set forth in this Agreement (including, for purposes of clarity, in connection with clause (f) of the definition of Revelyst Liabilities), (x) no member of the Vista Outdoor Group shall in any event have any Liability to any member of the Revelyst Group or any other Revelyst Indemnitee, and (y) no member of the Revelyst Group shall in any event have any Liability to any member of the Vista Outdoor Group or any other Vista Outdoor Indemnitee, in each case under this Agreement (i) with respect to any matter to the extent that the Party seeking indemnification has engaged in any violation of Law or fraud in connection therewith or (ii) for any damages that are not reasonably foreseeable or any punitive damages, whether or not caused by or resulting from negligence or breach of obligations hereunder and whether or not informed of the possibility of the existence of such damages; provided, however, that the provisions of this clause (ii) shall not limit an Indemnifying Party’s indemnification obligations hereunder with respect to any Liability any Indemnitee may have to any third party not affiliated with any member of the Vista Outdoor Group or the Revelyst Group, as applicable, for any damages that are not reasonably foreseeable or any punitive damages. Notwithstanding the foregoing, nothing in this Section 5.10 shall limit the Liability of the members of the Vista Outdoor Group to the members of the Revelyst Group and the other Revelyst Indemnitees or the Liability of the members of the Revelyst Group to the members of the Vista Outdoor Group or the other Vista Outdoor Indemnitees, as applicable, with respect to breaches of Section 6.01, Section 6.04, Section 6.05, Section 6.07 or Section 6.09.
Section 5.11 Covenant Not to Sue. Each Party hereby covenants and agrees that none of it, the members of such Party’s Group or any Person claiming on behalf of such Party or such Group shall bring suit or otherwise assert any claim against any Indemnitee, or assert a defense against any claim asserted by any Indemnitee, before any Governmental Authority, alleging that: (a) the assumption or acceptance of any Revelyst Liabilities by Revelyst or any other member of the Revelyst Group on the terms and conditions set forth in this Agreement and the Ancillary Agreements is void or unenforceable for any reason; (b) the retention of any Vista Outdoor Liabilities by Vista Outdoor or any other member of the Vista Outdoor Group on the terms and conditions set forth in this Agreement and the Ancillary Agreements is void or unenforceable for any reason; or (c) the provisions of this Article V are void or unenforceable for any reason.
Section 5.12 Management of Actions. This Section 5.12 shall govern the management and direction of pending and future Actions in which members of the Vista Outdoor Group or the Revelyst Group are named as parties, but shall not alter the allocation of Liabilities set forth in Article II unless otherwise expressly set forth in this Section 5.12.
(a) From and after the Closing, the Revelyst Group shall direct the defense or prosecution of any (i) Actions set forth on Schedule 5.12(a) and (ii) Actions (other than Actions set forth on Schedule 5.12(a) or Schedule 5.12(b)) that constitute only Revelyst Liabilities or involve only Revelyst Assets.
(b) From and after the Closing, the Vista Outdoor Group shall direct the defense or prosecution of any (i) Actions set forth on Schedule 5.12(b) and (ii) Actions (other than Actions set forth on Schedule 5.12(a) or Schedule 5.12(b)) that constitute only Vista Outdoor Liabilities or involve only Vista Outdoor Assets.
(c) The Party controlling the defense of any Action will keep the non-controlling Party reasonably advised of the status of such Action, and the Parties shall cooperate with each other in all reasonable respects in connection with the defense of such Action. The Indemnitee shall have the right to participate in the defense of any Action with counsel selected by it subject to the Indemnifying Party’s right to control the defense thereof. The fees and disbursements of such counsel shall be at the expense of the Indemnitee. Notwithstanding anything to the contrary contained herein, the Indemnifying Party shall not be entitled to control the defense or settlement of, or appoint defense counsel with respect to the defense or settlement of, but may participate in, at its own expense, any Action that (i) seeks a temporary restraining order, a preliminary or permanent injunction, specific performance or equitable relief against the Indemnitee, (ii) involves criminal allegations relating to the Indemnitee Party or any of its affiliates, (iii) seeks to unwind the Transactions or the Revelyst Transactions, (iv) the Indemnifying Party does not diligently conduct the defense of the Action (in the reasonable opinion of the Indemnitee), or (v) there exists a reasonably apparent conflict of interest in the conduct of the defense between the Indemnifying Party and the Indemnitee, other than any conflict of interest arising out of the Parties’ relationship under this Agreement.
(d) From and after the Closing, any Actions (other than Actions set forth on Schedule 5.12(a) or Schedule 5.12(b)) that involve or constitute both a Vista Outdoor Asset or Vista Outdoor Liability, on the one hand, and a Revelyst Asset or a Revelyst Liability, on the other hand (such Actions, the “Mixed Actions”) shall be managed by the Party with the greater financial exposure with respect thereto (taking into account the provisions of this Article V), as determined in good faith by the Parties; provided that if a Mixed Action involves the pursuit of criminal penalties or injunctive or other equitable relief (other than any such injunctive or other equitable relief that is solely incidental to the granting of money damages) against the other Party, any other member of the other Party’s Group or any of their respective stockholders, directors, officers, members, agents or employees, the other Party shall be entitled to control the defense of the applicable claims against the other Party, any other member of the other Party’s Group or any of their respective stockholders, directors, officers, members, agents or employees. The Parties shall cooperate in good faith and take all reasonable actions to provide for any appropriate joinder or change in named parties to such Mixed Actions such that the appropriate Party or member of such Party’s Group is party thereto. The Parties shall reasonably cooperate
and consult with each other and, to the extent permissible and necessary or advisable, maintain a joint defense in a manner that would preserve for both Parties and their respective Affiliates any attorney-client privilege, joint defense or other privilege with respect to any Mixed Action. The Party managing a Mixed Action shall, on a quarterly basis, or if a material development occurs as soon as reasonably practicable thereafter, inform the other Party of the status of and developments relating to such Mixed Action and provide copies of any material documents, notices or other materials related to such Mixed Action; provided that the failure to provide any such documents, notices or other materials shall not be a basis for liability of a Party managing such Mixed Action except and solely to the extent that the other Party shall have been actually prejudiced thereby. Notwithstanding anything to the contrary herein, the Parties may jointly retain counsel (in which case the cost of counsel shall be shared equally by the Parties) or retain separate counsel (in which case each Party will bear the cost of its separate counsel) with respect to any Mixed Action; provided that the Parties shall share discovery and other joint litigation costs in proportion to their respective expected financial exposure or respective expected financial recovery, as applicable. In any Mixed Action, each of Vista Outdoor and Revelyst may pursue separate defenses, claims, counterclaims or settlements to those claims relating to the Vista Outdoor Business or the Revelyst Business, respectively; provided that each Party shall in good faith make commercially reasonable efforts to avoid adverse effects on the other Party.
(e) To the maximum extent permitted by applicable Law, the rights to recovery of each Party’s Subsidiaries in respect of any past, present or future Action are hereby delegated to such Party. It is the intent of the Parties that the foregoing delegation shall satisfy any Law requiring such delegation to be effected pursuant to a power of attorney or similar instrument. The Parties and their respective Subsidiaries shall execute such further instruments or documents as may be necessary to effect such delegation.
Section 5.13 Settlement of Actions. No Party managing a Mixed Action or any Action where the Indemnitee is a named party (the “Managing Party”) pursuant to Section 5.12(c) shall consent to entry of any judgment or enter into any settlement of any such Action without the prior written consent of the other Party (the “Non-Managing Party”), not to be unreasonably withheld, conditioned or delayed; provided, however, that such Non-Managing Party shall be required to consent to such entry of judgment or to such settlement that the Managing Party may recommend if the judgment or settlement: (i) contains no finding or admission of any violation of Law or any violation of the rights of the Non-Managing Party and its applicable related Persons and otherwise contains no admission of any liability of the Non-Managing Party and such related Persons; (ii) involves only monetary relief which the Managing Party has agreed to pay; and (iii) includes a full and unconditional release of the Non-Managing Party and its applicable related Persons. Notwithstanding the foregoing, in no event shall a Non-Managing Party be required to consent to an entry of judgment or settlement if the effect thereof is to permit any injunction, declaratory judgment or other non-monetary relief to be entered, directly or indirectly, against any member of the Non-Managing Party’s Group (other than any such injunctive or other non-monetary relief that is immaterial and solely incidental to the granting of money damages).
Section 5.14 Interpretation. This Article V (except for Section 5.04) shall not apply to any indemnification claim in respect of Taxes pursuant to Section 4.01 or any Tax Contest, each of which shall instead be governed by Article IV.
ARTICLE VI
Access to Information; Privilege; Confidentiality
Section 6.01 Agreement for Exchange of Information; Archives. (a) Except in the case of an Adversarial Action or threatened Adversarial Action, and subject to Section 6.01(b), from and after the Closing until the seventh anniversary of the Closing Date, each Party, on behalf of its Group, shall provide, or cause to be provided, to the other Party, at any time after the Closing, as soon as reasonably practicable after written request therefor, any Information relating to time periods at or prior to the Closing in the possession or under the control of such Group, which the other Party or any other member of its Group reasonably needs (i) to comply with reporting, disclosure, filing or other requirements imposed on such other Party or any other member of its Group (including under applicable securities Laws) by any national securities exchange or any Governmental Authority having jurisdiction over such other Party or any other member of its Group, (ii) for use in any other judicial, regulatory, administrative or other proceeding or in order to satisfy audit, accounting, regulatory, litigation or other similar requirements or (iii) to comply with its obligations under this Agreement or any other Transaction Document; provided, that any request for information pursuant to this Section 6.01 shall be made in good faith and limited to the extent reasonable to satisfy the good faith basis for such request. The receiving Party shall use any Information received pursuant to this Section 6.01(a) solely to the extent reasonably necessary to satisfy the applicable obligations or requirements described in clause (i), (ii) or (iii) of the immediately preceding sentence.
(b) In the event that either Vista Outdoor or Revelyst reasonably determines that the disclosure of any Information pursuant to Section 6.01(a) could be commercially detrimental, violate any Law or Contract or waive or jeopardize any attorney-client privilege, attorney work product protection or other similar privilege or doctrine, such Party shall not be required to provide access to or furnish such Information to the other Party; provided, however, that both Vista Outdoor and Revelyst shall take all commercially reasonable measures to permit compliance with Section 6.01(a) in a manner that avoids any such harm or consequence. Both Vista Outdoor and Revelyst intend that any provision of access to or the furnishing of Information pursuant to this Section 6.01 that would otherwise be within the ambit of any legal privilege shall not operate as waiver of such privilege.
(c) Each Party agrees, on behalf of itself and each other member of its Group, not to disclose or otherwise waive any privilege or protection attaching to any privileged Information relating to a member of the other Group or relating to or arising in connection with the relationship between the Groups at or prior to the Closing, without providing prompt written notice to and obtaining the prior written consent of the other Party (not to be unreasonably withheld, conditioned or delayed).
(d) Each Party agrees, on behalf of itself and each other member of its Group, that it will only Process Personal Information provided to it by the other Group in accordance with all applicable Privacy and Data Security Requirements and will implement and maintain at all times commercially reasonable technical and organizational measures to protect such Personal Information against unauthorized or unlawful Processing and accidental loss, destruction, damage, alteration and disclosure. In addition, each Party agrees to provide commercially
reasonable assistance to the other Party in respect of any obligations under applicable Privacy and Data Security Requirements affecting the disclosure of such Personal Information to the other Party and will not knowingly Process such Personal Information in such a way as to cause the other Party to violate any of its obligations under any applicable Privacy and Data Security Requirements.
Section 6.02 Ownership of Information. Any Information owned by one Group that is provided to the requesting Party hereunder shall be deemed to remain the property of the providing Party. Except as specifically set forth herein or in any other Transaction Document, nothing herein shall be construed as granting or conferring rights of license or other rights in any such Information.
Section 6.03 Compensation for Providing Information. Each Party shall reimburse the other Party for the reasonable costs of such other Party, if any, in complying with a request for Information pursuant to this Article VI. Except as may be otherwise specifically provided elsewhere in this Agreement, such costs shall be computed in accordance with the providing Party’s standard methodology and procedures, but shall not include any mark-up above actual reasonable costs.
Section 6.04 Record Retention. To facilitate the possible exchange of Information pursuant to this Article VI and other provisions of this Agreement, from and after the Closing until the seventh anniversary of the Closing Date, each Party shall use its commercially reasonable efforts to retain all Information in such Party’s possession relating to the other Party or its businesses, Assets or Liabilities, this Agreement or any other Transaction Document (the “Retained Information”) in accordance with such Party’s record retention policies as in effect on the date hereof or such longer period as required by Law, this Agreement or any other Transaction Document. Each Party shall use its commercially reasonable efforts to maintain and continue its Group’s compliance with all “litigation holds” applicable to any Information in its possession for the pendency of the applicable matter.
Section 6.05 Accounting Information. Without limiting the generality of Section 6.01 but subject to Section 6.01(b):
(a) Until the end of the first full fiscal year occurring after the Closing Date (and for a reasonable period of time afterwards or as required by Law), Vista Outdoor shall use commercially reasonable efforts to enable and assist Revelyst to meet its timetable for dissemination of its financial statements and to enable and assist Revelyst’s auditors to timely complete their annual audit and quarterly reviews of financial statements. As part of such efforts, to the extent reasonably necessary for the preparation of financial statements or completing an audit or review of financial statements or an audit of internal control over financial reporting, (i) Vista Outdoor shall authorize and direct its auditors to make available to Revelyst’s auditors, within a reasonable time prior to the date of Revelyst’s auditors’ opinion or review report, both (x) the personnel who performed or will perform the annual audits and quarterly reviews of Vista Outdoor and (y) work papers related to such annual audits and quarterly reviews, to enable and assist Revelyst’s auditors to perform any procedures they consider reasonably necessary to take responsibility for the work of Vista Outdoor’s auditors as it relates to Revelyst’s auditors’ opinion or report and (ii) Vista Outdoor shall provide reasonable
access during normal business hours for Revelyst’s internal auditors, counsel and other designated representatives to (x) the premises of Vista Outdoor and its Subsidiaries and all Information (and duplicating rights) within the knowledge, possession or control of Vista Outdoor and its Subsidiaries and (y) the officers and employees of Vista Outdoor and its Subsidiaries, so that Revelyst may conduct reasonable audits relating to the financial statements provided by Vista Outdoor and its Subsidiaries; provided, however, that such access shall not be unreasonably disruptive to the business and affairs of the Vista Outdoor Group.
(b) Vista Outdoor shall cooperate with Revelyst in such manner as is reasonably necessary to enable the principal executive officer and principal financial officer (as such terms are defined in the rules and regulations of the Commission) of Revelyst to make the certifications required of them under Sections 302, 404 and 906 of the Sarbanes-Oxley Act of 2002. Without limiting the generality of the foregoing, Vista Outdoor shall, within a reasonable period of time following a request from Revelyst in anticipation of filing such reports, cause Vista Outdoor’s principal executive officer and principal financial officer to provide Revelyst with certifications of such officers in support of the certifications of Revelyst’s principal executive officer and principal financial officer required under Section 302, 404 or 906 of the Sarbanes-Oxley Act of 2002 with respect to Revelyst’s (i) Quarterly Report on Form 10-Q filed with respect to the fiscal quarter during which the Closing Date occurs (unless such quarter is the fourth fiscal quarter), (ii) to the extent applicable, Quarterly Report on Form 10-Q filed with respect to each subsequent fiscal quarter through the third fiscal quarter of the year in which the Closing Date occurs and (iii) Annual Report on Form 10-K filed with respect to the fiscal year during which the Closing Date occurs. Such certifications shall be provided in substantially the same forms and manners as the officers of Vista Outdoor provided prior to the Closing (reflecting any changes in certifications necessitated by the Transactions, the Revelyst Transactions or any other transactions related thereto) or as otherwise agreed upon between the Parties.
Section 6.06 Limitations of Liability. (a) Each of Vista Outdoor (on behalf of itself and each other member of the Vista Outdoor Group) and Revelyst (on behalf of itself and each other member of the Revelyst Group) understands and agrees that neither Party is representing or warranting in any way as to the accuracy or sufficiency of any Information exchanged or disclosed under this Agreement, in each case except to the extent set forth in the Merger Agreement.
(b) Neither Party shall have any Liability to the other Party in the event that any Information exchanged or provided pursuant to this Agreement that is an estimate or forecast, or that is based on an estimate or forecast, is found to be inaccurate in the absence of willful misconduct by the providing Person. Neither Party shall have any Liability to the other Party if any Information is destroyed after commercially reasonable efforts by such Party to comply with the provisions of Section 6.04.
Section 6.07 Production of Witnesses; Records; Cooperation. (a) Without limiting any of the rights or obligations of the Parties pursuant to Section 6.01 or Section 6.04, after the Closing, except in the case of an Adversarial Action or threatened or contemplated Adversarial Action, each Party shall use its commercially reasonable efforts to make available, upon written request, (i) the former, current and future directors, officers, employees, other personnel and agents of the members of its Group and (ii) any books, records or other documents within its
control or that it otherwise has the ability to make available, in each case, to the extent that such Person (giving consideration to business demands of such directors, officers, employees, other personnel and agents) or books, records or other documents may reasonably be required in connection with any Action, Commission comment or review or threatened or contemplated Action, Commission comment or review (including preparation for any such Action, Commission comment or review) in which the other Party or any other member of its Group may from time to time be involved, regardless of whether such Action, Commission comment or review or threatened or contemplated Action, Commission comment or review is a matter with respect to which indemnification may be sought hereunder, in each case, until the later of (x) the statute of limitations applicable, if any, to such Action, Commission comment or review and (y) with respect to any Action, Commission comment or review commenced prior to the applicable statute of limitations, if any, final resolution of such Action, Commission comment or review. The requesting Party shall bear all reasonable out-of-pocket costs and expenses incurred in connection therewith.
(b) Without limiting the foregoing, Vista Outdoor and Revelyst shall use their commercially reasonable efforts to reasonably cooperate and consult with each other to the extent reasonably necessary with respect to any Actions or threatened or contemplated Actions (including in connection with preparation for any such Action), other than an Adversarial Action or threatened or contemplated Adversarial Action.
(c) The obligation of Vista Outdoor and Revelyst to use their commercially reasonable efforts to make available former, current and future directors, officers, employees and other personnel and agents pursuant to this Section 6.07 is intended, other than in respect of an Adversarial Action or threatened or contemplated Adversarial Action, to be interpreted in a manner to facilitate cooperation and shall include the obligation to make available employees and other officers without regard to whether such individual or the employer of such individual could assert a possible business conflict. Without limiting the foregoing, each Party agrees that neither it nor any member of its Group will take any adverse action against any such former, current or future director, officer, employee or other personnel or agent of its Group based on such individual’s provision of assistance or information to the other Party pursuant to this Section 6.07.
Section 6.08 Privileged Matters. (a) The Parties recognize that legal and other professional services that have been and will be provided prior to the Closing (whether by outside counsel, in-house counsel or other legal professionals) have been and will be rendered for the collective benefit of each of the members of the Vista Outdoor Group and the Revelyst Group, and that each of the members of the Vista Outdoor Group and the Revelyst Group shall be deemed to be the client with respect to such services for the purposes of asserting all privileges which may be asserted under applicable Law in connection therewith. The Parties recognize that legal and other professional services will be provided following the Closing, which services will be rendered solely for the benefit of the Vista Outdoor Group or the Revelyst Group, as the case may be.
(b) The Parties agree as follows:
(i) Vista Outdoor shall be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any privileged Information that relates solely to the Vista Outdoor Business and not to the Revelyst Business, whether or not the privileged Information is in the possession or under the control of any member of the Vista Outdoor Group or any member of the Revelyst Group. Vista Outdoor shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any privileged Information that relates solely to any Vista Outdoor Assets or Vista Outdoor Liabilities and not any Revelyst Assets or Revelyst Liabilities in connection with any Actions that are now pending or may be asserted in the future, whether or not the privileged Information is in the possession or under the control of any member of the Vista Outdoor Group or any member of the Revelyst Group; and
(ii) Revelyst shall be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any privileged Information that (x) relates solely to the Revelyst Business and not to the Vista Outdoor Business or (y) relates to any of the Transaction Documents, the Transactions or the Revelyst Transactions, in each case whether or not the privileged Information is in the possession or under the control of any member of the Revelyst Group or any member of the Vista Outdoor Group. Revelyst shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any privileged Information that relates solely to any Revelyst Assets or Revelyst Liabilities and not any Vista Outdoor Assets or Vista Outdoor Liabilities in connection with any Actions that are now pending or may be asserted in the future, whether or not the privileged Information is in the possession or under the control of any member of the Revelyst Group or any member of the Vista Outdoor Group.
(c) Subject to the remaining provisions of this Section 6.08, the Parties agree that they shall have a shared privilege or immunity with respect to all privileges and immunities not allocated pursuant to Section 6.08(b) in connection with any Actions or threatened or contemplated Actions or other matters that involve both Parties (or one or more members of their respective Groups) and in respect of which both Parties have Liabilities under this Agreement. Upon the reasonable request of Vista Outdoor or Revelyst, in connection with any Action or threatened or contemplated Action contemplated by this Article VI, other than any Adversarial Action or threatened or contemplated Adversarial Action, Vista Outdoor and Revelyst will enter into a mutually acceptable common interest agreement to maintain to the extent practicable any applicable attorney-client privilege, work product immunity or similar privilege or immunity of any member of either Group. If the Parties do not agree as to whether certain information is privileged Information, then such Information shall be treated as privileged Information, and the Party that believes that such information is privileged Information shall be entitled to control the assertion or waiver of all privileges and immunities in connection with any such information until such time as it is finally judicially determined by a court of competent jurisdiction that such information is not privileged Information or unless the Parties otherwise agree.
(d) If any dispute arises between the Parties or any members of their respective Groups regarding whether a privilege or immunity should be waived to protect or advance the interests of either Party or any member of their respective Groups, each Party agrees that it shall (i) negotiate with the other Party in good faith, (ii) endeavor to minimize any prejudice to the rights of the other Party and the members of its Group and (iii) not unreasonably withhold, delay or condition consent to any request for waiver by the other Party.
(e) Upon receipt by either Party, or by any member of its Group, of any subpoena, discovery or other request (or of written notice that it will receive or has received such subpoena, discovery or other request) that may reasonably be expected to result in the production or disclosure of privileged Information subject to a shared privilege or immunity or as to which the other Party has the sole right hereunder to assert a privilege or immunity, or if either Party obtains knowledge or becomes aware that any of its, or any of its Group’s members’, current or former directors, officers, agents or employees have received any subpoena, discovery or other requests (or have received written notice that they will receive or have received such subpoena, discovery or other requests) that may reasonably be expected to result in the production or disclosure of such privileged Information, such Party shall promptly notify the other Party of the existence of any such subpoena, discovery or other request and shall provide the other Party a reasonable opportunity to review the privileged Information and to assert any rights it or they may have, under this Section 6.08 or otherwise, to prevent the production or disclosure of such privileged Information; provided that if such Party is prohibited by applicable Law from disclosing the existence of such subpoena, discovery or other request, such Party shall provide written notice of such related information for which disclosure is not prohibited by applicable Law and use commercially reasonable efforts to inform the other Party of any related information such Party reasonably determines is necessary or appropriate for the other Party to be informed of to enable the other Party to have a reasonable opportunity to review the privileged Information and to assert its rights, under this Section 6.08 or otherwise, to prevent the production or disclosure of such privileged Information.
(f) The Parties agree that their respective rights to any access to Information, witnesses and other Persons, the furnishing of notices and documents and other cooperative efforts between the Parties contemplated by this Agreement and the transfer of privileged Information between the Parties and members of their respective Groups pursuant to this Agreement shall not be deemed a waiver of any privilege or immunity that has been or may be asserted under this Agreement or otherwise. The Parties further agree that (i) the exchange by one Party to the other Party of any Information that should not have been exchanged pursuant to the terms of Section 6.09 shall not be deemed to constitute a waiver of any privilege or immunity that has been or may be asserted under this Agreement or otherwise with respect to such privileged Information and (ii) the Party receiving such privileged Information shall promptly return such privileged Information to the Party who has the right to assert the privilege or immunity.
Section 6.09 Confidential Information. (a) Each Party shall hold, and cause the other members of its Group and its and their respective directors, officers, employees, agents, accountants, subcontractors, counsel and other advisors and representatives to hold, in strict confidence, and not release or disclose, and protect with at least the same degree of care, but no less than a reasonable degree of care, that it applies to its own confidential and proprietary
Information pursuant to policies in effect as of the Closing, all Information concerning the other Group or its business that is either in its possession (including Information in its possession prior to the Closing) or furnished by the other Group or its directors, officers, employees, agents, accountants, subcontractors, counsel and other advisors and representatives at any time pursuant to this Agreement, and shall not use any such Information other than for such purposes as shall be expressly permitted hereunder, except, in each case, to the extent that such Information is (i) in the public domain through no fault of such Party, any other member of its Group or any of its or their directors, officers, employees, agents, accountants, subcontractors, counsel or other advisors or representatives, (ii) lawfully acquired from other sources by such Party, any other member of its Group or any of its or their directors, officers, employees, agents, accountants, counsel or other advisors or representatives, which sources are not themselves bound by a confidentiality obligation to the knowledge of such Party or any other members of its Group, (iii) independently generated without reference to any proprietary or confidential Information of the other Group, or (iv) required to be disclosed by Law; provided, however, that the Person required by Law to disclose such Information gives the applicable Person prompt and, to the extent reasonably practicable and legally permissible, prior notice of such disclosure and an opportunity to contest such disclosure and shall use commercially reasonable efforts to cooperate, at the expense of the requesting Person, in seeking any reasonable protective arrangements requested by the requesting Person. In the event that such appropriate protective order or other remedy is not obtained, the Person that is required to disclose such Information shall furnish, or cause to be furnished, only that portion of such Information that is required by Law to be disclosed and shall use commercially reasonable efforts to ensure that confidential treatment is accorded such Information. Notwithstanding the foregoing, each Party may release or disclose, or permit to be released or disclosed, any Information concerning the other Group to its directors, officers, employees, agents, accountants, subcontractors, counsel and other advisors and representatives who need to know such Information (who shall be advised of the obligations hereunder with respect to such Information).
(b) Without limiting the foregoing, when any Information concerning the other Group or its business is no longer needed for the purposes contemplated by this Agreement or any other Transaction Document, each Party will, promptly after the request of the other Party, either return all Information in a tangible form (including all copies thereof and all notes, extracts or summaries based thereon) or certify to the other Party, as applicable, that it has destroyed such Information, other than, in each case, any such Information electronically preserved or recorded within any computerized data storage device or component (including any hard-drive or database) pursuant to automatic or routine backup procedures generally accessible only by legal, IT or compliance personnel.
Section 6.10 Counsel Acknowledgment. Each Party acknowledges, on behalf of itself and each other member of its Group that, notwithstanding Cravath, Swaine & Moore LLP (“Cravath”) acting as counsel to Vista Outdoor prior to the Closing in connection with this Agreement, the other Transaction Documents and the transactions contemplated hereby and thereby, following the Closing, (a) subject to Section 6.08, Cravath will not have any professional obligations to Vista Outdoor arising from the services rendered by Cravath to Vista Outdoor prior to the Closing in connection with this Agreement, the other Transaction Documents and the transactions contemplated hereby and thereby, including with respect to confidentiality or conflicts of interest, and any such professional obligations shall be owed to
Revelyst, (b) none of Vista Outdoor, Parent or any of their respective Affiliates shall assert that Cravath has any conflicts of interest solely based on Cravath’s representation of Vista Outdoor prior to the Closing and (c) none of Vista Outdoor, Parent or any of their respective Affiliates shall object (i) to Cravath acting as counsel to Revelyst, including in any Action involving Vista Outdoor, Parent or any of their respective Affiliates (including any Action relating to this Agreement, any other Transaction Document or any of the transactions contemplated hereby or thereby), solely based on Cravath’s representation of Vista Outdoor prior to the Closing, or (ii) subject to Section 6.08, to Cravath using any information obtained in its representation of Vista Outdoor prior to the Closing, including information relating to this Agreement, the other Transaction Documents and the transactions contemplated hereby and thereby. Each Party, on behalf of itself and each other member of its Group, further agrees that Cravath and its respective partners and employees are third party beneficiaries of this Section 6.10.
ARTICLE VII
Insurance
Section 7.01 Maintenance of Insurance. During the period beginning as of the date hereof and ending at the Closing, Vista Outdoor shall (i) cause the members of the Revelyst Group and their respective employees, officers and directors to continue to be covered as insured parties under Vista Outdoor’s policies of insurance in a manner that is no less favorable than the coverage provided for members of the Vista Outdoor Group and their respective employees, officers and directors and (ii) permit the members of the Revelyst Group and their respective employees, officers and directors to submit claims relating to, arising out of or resulting from facts, circumstances, events or matters that occurred at or prior to the Closing to the extent permitted under such policies and in a manner consistent with past practice. With respect to any policies currently procured by Revelyst for the sole benefit of the Revelyst Group, Revelyst shall continue to maintain such insurance coverage through the Closing in a manner no less favorable than currently provided. Except as otherwise expressly permitted in this Article VII, Vista Outdoor and Revelyst acknowledge that, prior to the Closing, Vista Outdoor intends to take such action as it may deem necessary or desirable to remove the members of the Revelyst Group and their respective employees, officers and directors as insured parties under any policy of insurance issued to any member of the Vista Outdoor Group by any insurance carrier effective as of immediately following the Closing. The Revelyst Group will not be entitled following the Closing to make any claims for insurance thereunder to the extent such claims are based upon facts, circumstances, events or matters occurring after the Closing or to the extent any claims are made pursuant to any Vista Outdoor claims-made policies after the Closing. No member of the Vista Outdoor Group shall be deemed to have made any representation or warranty as to the availability of any coverage under any such insurance policy. Notwithstanding the foregoing, Vista Outdoor shall, and shall cause the other members of the Vista Outdoor Group to, use commercially reasonable efforts to take such actions as are necessary to cause all insurance policies of the Vista Outdoor Group that as of the Closing provide coverage to or with respect to the members of the Revelyst Group and their respective employees, officers and directors (such policies, “Specified Group Insurance Policies”) to continue to provide such coverage with respect to acts, omissions or events occurring at or prior to the Closing in accordance with their terms as if the Closing had not occurred; provided, however, that in no event shall Vista Outdoor or the other members of the Vista Outdoor Group be required to extend or maintain coverage
under claims-made policies with respect to any claims first made against a member of the Revelyst Group or first reported to the insurer after the Closing. Notwithstanding anything to the contrary in this Section 7.01, if requested by Olibre Parent in writing prior to the Closing, Vista Outdoor or Revelyst shall, in connection with the consummation of the Closing, purchase a tail, run-off or equivalent policy with respect to any claims-made insurance policy or any claims-made coverage of any insurance policy of the Vista Outdoor Group or the Revelyst Group, as applicable, in each case, if any such policy is available to purchase; provided, that Olibre Parent shall, within five (5) Business Days following such purchase, reimburse Vista Outdoor or Revelyst as applicable for the cost of such tail, run off or equivalent policy. Olibre Parent is a third-party beneficiary of this Section 7.01.
Section 7.02 Claims Under Vista Outdoor Insurance Policies. (a) After the Closing, the members of each of the Vista Outdoor Group and the Revelyst Group shall have the right to assert Vista Outdoor Policy Pre-Closing Insurance Claims and the members of the Revelyst Group shall have the right to participate with Vista Outdoor to resolve Vista Outdoor Policy Pre-Closing Insurance Claims under the applicable Vista Outdoor insurance policies up to the full extent of the applicable and then-remaining available limits of liability of such policy, but solely to the extent that such policies provided coverage therefor as of immediately prior to the Closing; provided that such claims shall be made in good faith and in a manner consistent with past practice. Vista Outdoor or Revelyst, as the case may be, shall have primary control over those Vista Outdoor Policy Pre-Closing Insurance Claims for which the Vista Outdoor Group or the Revelyst Group, respectively, bears the underlying loss, subject to the terms and conditions of the relevant policy of insurance governing such control; provided that only Vista Outdoor shall have the authority to settle or otherwise resolve any Vista Outdoor Policy Pre-Closing Insurance Claims with the applicable insurer(s), subject, in the case of any Vista Outdoor Policy Pre-Closing Insurance Claims for which the Revelyst Group bears the underlying loss, to the prior written consent of Revelyst. If a member of the Revelyst Group is unable to assert a Vista Outdoor Policy Pre-Closing Insurance Claim because it is no longer an “insured” or “additional insured” under a Vista Outdoor insurance policy, then Vista Outdoor shall, to the extent permitted by applicable Law and the terms of such insurance policy, use commercially reasonable efforts to assert such claim in its own name and deliver the Insurance Proceeds to Revelyst.
(b) With respect to Vista Outdoor Policy Pre-Closing Insurance Claims, whether or not known or reported at or prior to the Closing, Revelyst shall, or shall cause the applicable member of the Revelyst Group to, report such claims arising from the Revelyst Business as soon as practicable to each of Vista Outdoor and the applicable insurer(s), and Revelyst shall, or shall cause the applicable member of Revelyst Group to, individually, and not jointly, assume and be responsible (including, upon the request of Vista Outdoor, by prompt reimbursement to Vista Outdoor for amounts paid or payable by it) for the reimbursement liability (including any deductible, coinsurance or retention payment) related to its portion of the liability, unless otherwise agreed in writing by Vista Outdoor. Each Party shall, and shall cause each member of its Group to, cooperate and assist the applicable member of the other Group with respect to such claims. The applicable member of the Revelyst Group shall provide to Vista Outdoor any collateral (or a letter of credit the face value of which is an amount equal to the value of such collateral) in respect of the reimbursement obligations as may reasonably be requested by the insurers and, upon the request of Vista Outdoor, any other collateral required by the insurers in
respect of insurance policies under which Vista Outdoor Policy Pre-Closing Insurance Claims may be recoverable based upon Vista Outdoor’s reasonable estimate of the proportion of the requested collateral attributable to claims that may be made by the Revelyst Group. Vista Outdoor agrees that Vista Outdoor shall, and shall cause the other members of the Vista Outdoor Group to, use commercially reasonable efforts to cause Vista Outdoor Policy Pre-Closing Insurance Claims of members of the Revelyst Group to receive the same priority as Vista Outdoor Policy Pre-Closing Insurance Claims of members of the Vista Outdoor Group and be treated equitably in all respects, including in connection with deductibles, retentions and coinsurance.
(c) With respect to each Vista Outdoor Policy Pre-Closing Insurance Claim for which a claims service company was engaged at or prior to the Closing, each Party agrees to continue to engage the same claims service company after the Closing with respect to such Vista Outdoor Policy Pre-Closing Insurance Claim, provided that a different claims service company may be engaged if both Parties agree, to the extent authorized by the applicable insurer.
Section 7.03 Insurance Proceeds. Any Insurance Proceeds received by the Vista Outdoor Group for members of the Revelyst Group or by the Revelyst Group for members of the Vista Outdoor Group shall be for the benefit, respectively, of the Revelyst Group and the Vista Outdoor Group, as applicable. Any Insurance Proceeds received for the benefit of both the Vista Outdoor Group and the Revelyst Group shall be distributed pro rata based on its Group’s respective share of the underlying loss. Vista Outdoor (or any other member of the Vista Outdoor Group) shall be entitled to deduct from any Insurance Proceeds that it (or such other member) receives any amount owed or otherwise due to it (or such other member) as reimbursement pursuant to the provisions of this Article VII, prior to distributing any such insurance proceeds to any member of the Revelyst Group.
Section 7.04 Claims Not Reimbursed. Vista Outdoor shall not be liable to Revelyst for claims, or portions of claims, not reimbursed by insurers under any policy for any reason, including coinsurance provisions, deductibles, quota share deductibles, self-insured retentions, bankruptcy or insolvency of any insurance carrier(s), policy limitations or restrictions (including exhaustion of limits), any coverage disputes, any failure to timely file a claim by any member of the Vista Outdoor Group or any member of the Revelyst Group or any defect in such claim or its processing. In the event that insurable claims of both Vista Outdoor and Revelyst (or the members of their respective Groups) exist relating to the same occurrence, the Parties shall jointly defend and waive any conflict of interest necessary to the conduct of the joint defense, and each Party shall not settle or compromise any such claim without the consent of the other Party (which consent shall not be unreasonably withheld, conditioned or delayed subject to the terms and conditions of the applicable insurance policy). Nothing in this Section 7.04 shall be construed to limit or otherwise alter in any way the obligations of the Parties, including those created by this Agreement, by operation of Law or otherwise.
Section 7.05 Additional Insurance. In the event that Parent elects to obtain any additional insurance policy related to the Revelyst Transactions or the Transactions, including a directors’ and officers’ liability insurance policy or contingent risk policy (any such policy, an “Additional Insurance Policy”), Revelyst shall (and shall cause its Subsidiaries to) and, until the Closing Date, Vista Outdoor shall (and shall cause its Subsidiaries to) cooperate with the
reasonable requests of Parent and use commercially reasonable efforts to provide Parent with information, in each case as may be reasonably requested by Parent in connection with obtaining any such Additional Insurance Policy.
Section 7.06 Insurance Cooperation. The Parties shall use commercially reasonable efforts to cooperate with respect to the various insurance matters contemplated by this Article VII.
ARTICLE VIII
Further Assurances and Additional Covenants
Section 8.01 Further Assurances. (a) In addition to the actions specifically provided for elsewhere in this Agreement, but subject to the express limitations of this Agreement and the other Transaction Documents, each Party shall use commercially reasonable efforts, prior to, at and after the Closing, to take, or cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable Laws and agreements to consummate and make effective the transactions contemplated by this Agreement.
(b) Without limiting the foregoing, but subject to the express limitations of this Agreement and the other Transaction Documents, prior to, at and after the Closing, each Party shall cooperate with the other Party, without any further consideration, but at the expense of the requesting Party, (i) to execute and deliver, or cause to be executed and delivered, all instruments of conveyance, assignment and transfer as such Party may reasonably be requested to execute and deliver by the other Party, (ii) to make, or cause to be made, all filings with, and to obtain, or cause to be obtained, all Consents of any Governmental Authority or any other Person under any permit, license, Contract, indenture or other instrument, (iii) to obtain, or cause to be obtained, any Governmental Approvals or other Consents required to effect the Separation and (iv) to take, or cause to be taken, all such other actions as such Party may reasonably be requested to take by the other Party from time to time, consistent with the terms of this Agreement and the other Transaction Documents, in each case in order to effectuate the provisions and purposes of this Agreement, the Ancillary Agreements and any transfers of Assets or assignments and assumptions of Liabilities hereunder and thereunder and the other transactions contemplated hereby and thereby and the preservation and perfection of rights in such Assets and Liabilities; provided that neither Party nor any member of its Group shall be required to contribute capital, pay or grant any consideration or concession in any form (including providing any letter of credit, guaranty or other financial accommodation) to any Person, or expend any money or take any action that would require the expenditure of money, in connection with the foregoing (other than reasonable out-of-pocket expenses, attorneys’ fees and recording or similar fees, all of which shall be reimbursed by the requesting Party as promptly as reasonably practicable).
(c) At or prior to the Closing, Vista Outdoor and Revelyst, in their respective capacities as direct and indirect stockholders of their respective Subsidiaries, shall each ratify any actions that are reasonably necessary or desirable to be taken by Revelyst or any other Subsidiary of Vista Outdoor, as the case may be, to effectuate the transactions contemplated by this Agreement.
ARTICLE IX
Intellectual Property
Section 9.01 Consent To Use Intellectual Property And Duty To Cooperate. (a) Revelyst (i) consents (on behalf of itself and each other member of the Revelyst Group) to the use and registration of the Vista Outdoor IP in the business and operations conducted by each member of the Vista Outdoor Group and its Affiliates and their respective licensees prior to and as of the Closing and (ii) agrees to use commercially reasonable efforts prior to, at and after the Closing to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary, proper or advisable to effect the transfer, assignment, registration or any related recordation of the Vista Outdoor IP contemplated by this Agreement, on a worldwide basis.
(b) Vista Outdoor (i) consents (on behalf of itself and each other member of the Vista Outdoor Group) to the use and registration of the Revelyst IP in the business and operations conducted by each member of the Revelyst Group and its Affiliates and their respective licensees prior to and as of the Closing and (ii) agrees to use commercially reasonable efforts prior to, at and after the Closing to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary, proper or advisable to effect the transfer, assignment, registration or any related recordation of the Revelyst IP contemplated by this Agreement, on a worldwide basis.
(c) Revelyst agrees that it will not, and agrees to cause each other member of the Revelyst Group not to, (i) initiate any Action against any member of the Vista Outdoor Group or its Affiliates for infringement, misappropriation or other violation of any Revelyst IP, (ii) oppose, challenge, petition to cancel, contest or threaten in any way, or assist another party in opposing, challenging, petitioning to cancel, contesting or threatening in any way, any application or registration by the Vista Outdoor Group or its Affiliates or their respective licensees for any Vista Outdoor IP, in each case of (i) and (ii) the use of which is consistent with the use to which Revelyst has consented under this Agreement or (iii) engage in any act, or purposefully omit to perform any act, that impairs or adversely affects the rights of Vista Outdoor or any member of the Vista Outdoor Group in and to any Vista Outdoor IP, in each case, for a period of one year after the Closing Date, without the prior written consent of Vista Outdoor.
(d) Vista Outdoor agrees that it will not, and agrees to cause each other member of the Vista Outdoor Group not to, (i) initiate any Action against any member of the Revelyst Group or its Affiliates for infringement, misappropriation or other violation of any Vista Outdoor IP, (ii) oppose, challenge, petition to cancel, contest or threaten in any way, or assist another party in opposing, challenging, petitioning to cancel, contesting or threatening in any way, any application or registration by Revelyst or its Affiliates or their respective licensees for any Revelyst IP, in each case of (i) and (ii) the use of which is consistent with the use to which Vista Outdoor has consented under this Agreement or (iii) engage in any act, or purposefully omit to perform any act, that impairs or adversely affects the rights of Revelyst or any member of the Revelyst Group in and to any Revelyst IP, in each case, subject to Section 6.18 of the Merger
Agreement and for a period of one year after the Closing Date, without the prior written consent of Revelyst.
(e) Subject to and without limiting Sections 2.01(c) through 2.01(g) and this Section 9.01, Revelyst hereby acknowledges (on behalf of itself and each other member of the Revelyst Group) Vista Outdoor’s right, title and interest in and to the Vista Outdoor IP, and will not in any way, directly or indirectly, do or cause to be done any act or thing contesting any part of such right, title and interest within the business and operations of each member of the Vista Outdoor Group and its Affiliates and their respective licensees, or with respect to goods or services provided in connection with the business and operations conducted by each member of the Vista Outdoor Group and its Affiliates and their respective licensees, in each case for a period of one year after the Closing Date, without the prior written consent of Vista Outdoor.
(f) Subject to and without limiting Sections 2.01(c) through 2.01(g) and this Section 9.01, Vista Outdoor hereby acknowledges (on behalf of itself and each other member of the Vista Outdoor Group) Revelyst’s right, title and interest in and to the Revelyst IP, and will not in any way, directly or indirectly, do or cause to be done any act or thing contesting any part of such right, title and interest within the business and operations conducted by each member of the Revelyst Group and its Affiliates and their respective licensees, or with respect to goods or services provided in connection with the business and operations conducted by each member of the Revelyst Group and its Affiliates and their respective licensees, in each case for a period of one year after the Closing Date, without the prior written consent of Revelyst.
(g) Prior to, at and after the Closing, (i) Vista Outdoor shall cooperate with Revelyst, without any further consideration, but at the expense of Revelyst, to obtain, or cause to be obtained, the Consents of any third parties necessary to effect the assignment, transfer or license of any Revelyst IP contemplated under this Agreement or any Ancillary Agreement and (ii) Revelyst shall cooperate with Vista Outdoor, without any further consideration, but at the expense of Vista Outdoor, to obtain, or cause to be obtained, the Consents of any third parties necessary to effect the assignment, transfer or license of any Vista Outdoor IP contemplated under this Agreement or any Ancillary Agreement. If, for any reason, the assignment, transfer or license of any Intellectual Property assets or rights contemplated under this Agreement or any Ancillary Agreement is otherwise impossible or ineffective, Vista Outdoor and Revelyst shall, and shall cause each member of the Vista Outdoor Group and the Revelyst Group, respectively, to, use their commercially reasonable efforts to work together (and, if necessary and desirable, to work with any applicable third parties) in an effort to sublicense, divide, partially assign, modify or replicate (in whole or in part) the respective rights and obligations under and in respect of any planned assignment, transfer or license.
(h) Prior to, at and after the Closing, Vista Outdoor shall cooperate with Revelyst, without any further consideration and at no expense to Revelyst, to obtain, cause to be obtained or properly record the release of any outstanding Liens attached to any Revelyst IP and to take, or cause to be taken, all actions as Revelyst may reasonably be requested to take in order to obtain, cause to be obtained or properly record such release.
(i) Vista Outdoor agrees not to use, and agrees to cause each member of the Vista Outdoor Group not to use, any of the Revelyst Marks, including any names, Trademarks or
Domain Names that incorporate the Revelyst Marks for any purpose, except where the use is a non-trademark use of “VISTA”, “VISTA OUTDOOR” or “VISTA LABS” (the “Legacy Vista Marks”) (i) in connection with the operation of the Vista Outdoor Retained Assets set forth on Schedule 1.01(i) (the “Legacy Domains”), solely to maintain the legacy information technology infrastructure for Vista Outdoor in a manner not visible to the public until the earlier of (x) the first available opportunity to implement a system upgrade in which it is reasonably practicable to migrate off such Legacy Domains and (y) the date that is five (5) years from the Closing Date, (ii) to maintain the existing (as of the date of this Agreement) legal names of any member of the Vista Outdoor Group; provided Vista Outdoor shall file for such existing legal names to be changed to a name that does not include any Legacy Vista Mark promptly, and in no event within more than sixty (60) days, following Closing, or (iii) on historical legal and business agreements, documents, permits and licenses. Notwithstanding the foregoing and for the avoidance of doubt, (A) Vista Outdoor agrees not to use, and agrees to cause each member of the Vista Outdoor Group not to use, any of the Revelyst Marks in a way that would reasonably be expected to confuse, dilute or tarnish the Revelyst Marks, (B) Vista Outdoor shall not be permitted to transfer or assign the Legacy Domains to any Person, allow the Legacy Domains to expire or otherwise become available for purchase by the public or any third party, or register any other domain names containing or confusingly similar to the Legacy Domains, and (C) at any such time as Vista Outdoor ceases use of a Legacy Domain (and, in any event, as of the expiration of Vista Outdoor’s permitted use thereof in accordance with Section 9.01(i)(i)), Vista Outdoor shall and hereby does assign all right, title and interest in and to such Legacy Domain to Revelyst, and Vista Outdoor shall promptly take all necessary steps to transfer management and operation thereof back to Revelyst.
In the event that, as of the Closing, Revelyst Marks (including any Legacy Vista Marks) appear on any products, signage, vehicles, properties, technical information, stationery, or other publicly available or promoted business or promotional materials used by any member of the Vista Outdoor Group or their Affiliates within the Vista Outdoor Business, Vista Outdoor shall remove, strike or paper over and cease using, and shall cause each member of the Vista Outdoor Group to remove, strike or paper over and cease using, any such marks as soon as reasonably practical following the Closing but in any event within 180 days of the Closing (and with respect to any such prominently appearing marks, sixty (60) days of the Closing Date); provided that, in the case of any such uses of the Revelyst Marks that are non-public-facing, (1) Vista Outdoor will be required to use only commercially reasonable efforts to remove, strike or paper over any such marks in accordance with the foregoing, and (2) subject to compliance with such efforts, Vista Outdoor shall not be in breach of this Section 9.01(i) for any such uses that continue after such 180-day period, so long as such marks are removed, struck or papered over and usage is ceased promptly after discovery, in each case, unless such uses are de minimis or otherwise expressly permitted under this Section 9.01(i).
Notwithstanding anything in this Agreement to the contrary, and without limiting the rights otherwise granted in this Section 9.01(i), the Vista Outdoor Group shall have the right, at all times before, during and after the Closing, to retain records and other historical or archived documents containing or referencing (i) the Revelyst Marks to the extent relating to the Vista Outdoor Business strictly for non-trademark uses as permitted by Law, or (ii) to make non-trademark use of a member of the Revelyst Group’s individual name, or of the individual name of anyone in privity with the Revelyst Group, or of a term or device which is descriptive of and
used fairly and in good faith, in each case only to describe the goods or services of the Revelyst Group for historical purposes. Any and all goodwill arising in connection with the use of the Revelyst Marks by the Vista Outdoor Group shall inure solely to the benefit of the Revelyst Group.
(j) Each Party believes its respective Trademarks are sufficiently distinctive and different to ensure consumers will not be confused as to source or sponsorship, and agrees to employ commercially reasonable efforts to use its respective Trademarks in a manner that does not cause actual confusion or a likelihood of confusion as to source or sponsorship of its respective goods or services in its respective channels of trade. If, despite the Parties’ commercially reasonable efforts, any such material actual confusion shall be brought to the attention of personnel of reasonable seniority of either Party with authority or responsibility to address such matters, the Parties agree to cooperate in good faith regarding steps to be taken to mitigate or correct such actual confusion.
(k) Each Party shall be responsible for policing, protecting and enforcing its own Intellectual Property. Notwithstanding the foregoing, each Party will use commercially reasonable efforts to promptly give notice to the other Party of any actual or threatened material unauthorized use or infringement of the other Party’s Intellectual Property known by personnel of reasonable seniority of either Party with authority or responsibility to address such matters, including infringement of the other Party’s Trademarks, in each case for a period of two (2) years after the Closing Date.
Section 9.02 Intellectual Property Cross-License. The Parties acknowledge that, through the course of a history of integrated operations, they and the members of their respective Groups have each obtained knowledge of and access to Intellectual Property, including certain Know-How, copyrighted content and other unregistered Intellectual Property, in each case other than proprietary Software, Trademarks and any Intellectual Property expressly subject to any Ancillary Agreement (collectively, “Shared Background IP”). With regard to this Shared Background IP, the Parties seek to ensure that each has the freedom to use such Shared Background IP in the future in accordance with this Section 9.02. Accordingly, effective as of the Closing, each Group hereby grants to the other Group a non-exclusive, royalty-free, fully paid-up, perpetual, irrevocable, sublicenseable (through multiple tiers in accordance herewith), worldwide license to use and exercise rights under any Shared Background IP owned by such Group and used in the other Group’s businesses in the period from the date of the Original Agreement though the Closing (the “License Reference Period”) solely for use of the same type, of the same scope and to the same extent as used by such Group prior to the Closing and reasonable extensions thereof, in connection with such Group’s businesses, including, as and to the extent applicable, both internal business activities and distribution and sublicensing through multiple tiers (but not for the independent use and benefit of any third party) carried out in the ordinary course of business. Such license shall be and is on an “as-is, where-is” basis, and each Group hereby expressly disclaims all representations and warranties of any type or nature; provided that the disclaimer set forth in this Section 9.02 is expressly limited to this Section 9.02 and does not limit, supersede or modify any other representation or warranty set forth elsewhere in this Agreement or any other Transaction Document. Notwithstanding anything to the contrary in this Agreement, the license to use Shared Background IP that is contemplated by this Section 9.02 may not be terminated by either Party for any reason following the Effective Time and the
consummation of the Transactions. In the event of a breach or threatened breach of this Section 9.02 by a Party, the other Party shall have the right to pursue all other remedies permitted at Law or in equity (which, for the avoidance of doubt, may not include termination, revocation, recission or any other remedy that includes cancellation or voiding of such license to Shared Background IP), including the right to pursue an injunction or obtain specific performance, without the necessity of posting any bond or making any show of irreparable harm. With respect to any Shared Background IP that constitutes a trade secret under applicable Law or that otherwise constitutes Information subject to the obligations of confidentiality set forth in Section 6.09, each Party, in its capacity as licensee of such Shared Background IP, shall hold in strict confidence and not release or disclose such Shared Background IP, in each case with at least the same degree of care applied to its own confidential and proprietary information. Each Party as the licensee under this Section 9.02 may assign such licenses to a third party, or permit a third party to assume such licenses, in whole or in relevant part, in connection with the acquisition of such licensee Party or a product or business line thereof (whether by equity or asset sale or merger or otherwise).
Section 9.03 Other Licenses. Vista Outdoor hereby grants to the Revelyst Group a limited, non-exclusive, royalty-free, fully-paid, perpetual, non-sublicenseable, worldwide license to all copyrighted or copyrightable standard procedures and other technical publications included in the Vista Outdoor IP used in the Revelyst Business during the License Reference Period. In the event that, as of the Closing, Vista Outdoor Marks prominently appear on any of the procedures or publications described in the immediately preceding sentence, Revelyst shall remove, strike or paper over, and shall cause each other member of the Revelyst Group to remove, strike or paper over, such marks as soon as reasonably practical following the Closing but in any event within 180 days of the Closing Date. Notwithstanding anything in this Agreement to the contrary, and without limiting the rights otherwise granted in this Section 9.03, the Revelyst Group shall have the right, at all times before, during and after the Closing, to (i) retain records and other historical or archived documents containing or referencing the Vista Outdoor Marks to the extent relating to the Revelyst Business strictly for non-trademark uses as permitted by Law, or (ii) to make non-trademark use of a member of the Vista Outdoor Group’s individual name, or of the individual name of anyone in privity with the Vista Outdoor Group, or of a term or device which is descriptive of and used fairly and in good faith, in each case only to describe the goods or services of the Vista Outdoor Group for historical purposes. Any and all goodwill arising in connection with the use of the Vista Outdoor Marks by the Revelyst Group shall inure solely to the benefit of the Vista Outdoor Group.
Section 9.04 Scope. The geographic scope of this Article IX shall be worldwide.
ARTICLE X
Termination
Section 10.01 Termination. Notwithstanding anything herein to the contrary, if the Merger Agreement has been validly terminated in accordance with its terms, this Agreement shall automatically terminate. After the Closing, this Agreement may not be terminated except by an agreement in writing signed by each of the Parties.
Section 10.02 Effect of Termination. In the event of any termination of this Agreement prior to the Closing, neither Party (nor any other member of its Group or any of their respective directors or officers) shall have any Liability or further obligation to the other Party or any member of its Group under this Agreement or the Ancillary Agreements.
ARTICLE XI
Miscellaneous
Section 11.01 Counterparts; Entire Agreement; Corporate Power. (a) This Agreement may be executed and delivered in one or more counterparts, all of which counterparts shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each Party and delivered to the other Party. This Agreement may be executed by electronic or PDF signature and scanned and exchanged by electronic mail, and such electronic or PDF signature shall constitute an original for all purposes.
(b) This Agreement, the other Transaction Documents and any Annexes, Exhibits and Schedules hereto and thereto contain the entire agreement between the Parties with respect to the subject matter hereof and thereof and supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter, and there are no agreements or understandings between the Parties with respect to the subject matter hereof or thereof other than those set forth or referred to herein or therein.
(c) Vista Outdoor represents on behalf of itself and each other member of the Vista Outdoor Group, and Revelyst represents on behalf of itself and each other member of the Revelyst Group, as follows:
(i) each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform each of this Agreement and each Ancillary Agreement to which it is a party and to consummate the transactions contemplated hereby and thereby; and
(ii) this Agreement and each Ancillary Agreement to which it is a party has been (or, in the case of any Ancillary Agreement, will be at or prior to the Closing) duly executed and delivered by it and constitutes (or, in the case of any Ancillary Agreement, will constitute at or prior to the Closing) a valid and binding agreement of it enforceable in accordance with the terms hereof or thereof, except as the same may be limited by bankruptcy, insolvency, and other similar laws affecting the rights of creditors generally and the availability of equitable remedies for the enforcement of certain obligations contained herein and as may be limited by equitable principles generally.
Section 11.02 Governing Law; Jurisdiction. This Agreement and all disputes, controversies or other Actions arising out of or relating to this Agreement or the Separation, including matters of validity, construction, effect, performance and remedies, shall be governed by, and construed in accordance with, the Laws of the State of Delaware applicable to contracts executed in and to be performed entirely within that State, regardless of the Laws that might otherwise govern under any applicable conflict of laws principles. Each Party irrevocably
consents to the exclusive jurisdiction, forum and venue of the Delaware Court of Chancery (and, if the Delaware Court of Chancery shall be unavailable, any Delaware state court or the federal court sitting in the State of Delaware) over any and all claims, disputes, controversies or disagreements between the Parties or any of their respective Subsidiaries, Affiliates, successors and assigns under or related to this Agreement or any document executed pursuant to this Agreement or any of the transactions contemplated hereby or thereby, including their execution, performance or enforcement, whether in contract, tort or otherwise. Each Party hereby agrees that it shall not assert, and hereby waives, any claim or right or defense that it is not subject to the jurisdiction of such courts, that the venue is improper or that the forum is inconvenient or any similar objection, claim or argument. Each Party agrees that a final judgment in any legal proceeding resolved in accordance with this Section 11.02 and Section 11.11 shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN CONNECTION WITH ANY LITIGATION ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT PROVIDED HEREUNDER.
Section 11.03 Assignability. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of Law or otherwise by either Party without the prior written consent of the other Party, Parent and Olibre Parent. Notwithstanding the foregoing, after consummation of the Merger, Vista Outdoor may assign, in its sole discretion, any or all of its rights, interests and obligations under this Agreement to any Affiliate without consent of Revelyst; provided that no such assignment shall relieve Vista Outdoor of any of its obligations hereunder. Any purported assignment without such consent shall be void. Subject to the two immediately preceding sentences, this Agreement will be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns; provided, that if Vista Outdoor or Revelyst, as applicable, or any of their respective successors or assigns, consolidates with or merges into any other entity and is not the continuing or surviving entity of such consolidation or merger, transfers all or substantially all its assets to any other entity or engages in any similar transaction, then, in each case, Vista Outdoor or Revelyst, as applicable, will cause proper provision to be made so that the successors and assigns of Vista Outdoor or Revelyst, as applicable, will expressly assume the obligations thereof as set forth in this Agreement. No assignment permitted by this Section 11.03 shall release the assigning Party from liability for the full performance of its obligations under this Agreement.
Section 11.04 Third-Party Beneficiaries. Except for (x) the indemnification rights under this Agreement of any Vista Outdoor Indemnitee or Revelyst Indemnitee in their respective capacities as such, (y) the rights of Parent and Olibre Parent pursuant to Section 11.03 and Section 11.13 and (z) the rights of Olibre Parent pursuant to Section 2.01(l), Section 2.06(j), Section 7.01 and Schedule 1.01(a), (a) the provisions of this Agreement are solely for the benefit of the Parties hereto and are not intended to confer upon any Person except the Parties hereto any rights or remedies hereunder and (b) there are no third-party beneficiaries of this Agreement and this Agreement shall not provide any third party with any remedy, claim, liability, right to reimbursement, cause of action or other right in excess of those existing without reference to this Agreement.
Section 11.05 Notices. All notices or other communications under this Agreement shall be in writing and shall be deemed to be duly given (a) when delivered in person, (b) on the date received, if sent by a nationally recognized delivery or courier service, (c) on the date of dispatch by the sender in the case of electronic mail (to the extent that no “bounce back” or similar message indicating non-delivery is received with respect thereto) or (d) upon the earlier of confirmed receipt and the fifth Business Day following the date of mailing if sent by registered or certified mail, return receipt requested, postage prepaid and addressed as follows:
If to Vista Outdoor, to:
Vista Outdoor Inc.
900 Ehlen Drive
Anoka, MN 55303
Attn: Jason Vanderbrink, CEO (The Kinetic Group);
Jeffrey Ehrich, General Counsel & Corporate Secretary (The Kinetic Group)
Email: Jason.Vanderbrink@VistaOutdoor.com;
jehrich@tkghunt.com
with a copy to, prior to the Closing:
Cravath, Swaine & Moore LLP
Two Manhattan West
375 Ninth Avenue
New York, NY 10001
Attn: Craig F. Arcella
Aaron M. Gruber
Bethany A. Pfalzgraf
Email: carcella@cravath.com
agruber@cravath.com
bpfalzgraf@cravath.com
and with copies to, following the Closing:
CSG Elevate II Inc.
CZECHOSLOVAK GROUP a.s.
U Rustonky 714/1, CZ-186 00
Prague 8, Czech Republic
Attn: Petr Formánek
Ladislav Štorek
Email: petr.formanek@czechoslovakgroup.com
ladislav.storek@czechoslovakgroup.com and
Clifford Chance US LLP
845 Texas Avenue
Houston, Texas 77002
Attn: David Stringer
Alexandra Wilde
Christine Kim
Email: david.stringer@cliffordchance.com
alexandra.wilde@cliffordchance.com
christine.kim@cliffordchance.com
If to Revelyst, to:
Revelyst, Inc.
900 Ehlen Drive
Anoka, MN 5530
Attn: Eric Nyman, Chief Executive Officer
Jung Choi, General Counsel & Corporate Secretary
Email: eric.nyman@revelyst.com; and
jung.choi@revelyst.com
with a copy to, prior to the closing of the Revelyst Merger:
Cravath, Swaine & Moore LLP
Two Manhattan West
375 Ninth Avenue
New York, NY 10001
Attn: Craig F. Arcella
Aaron M. Gruber
Bethany A. Pfalzgraf
Email: carcella@cravath.com
agruber@cravath.com
bpfalzgraf@cravath.com
and with copy to, following the closing of the Revelyst Merger:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019
Attn: Benjamin M. Goodchild
Robert A. Kindler
Nickolas Bogdanovich
Email: bgoodchild@paulweiss.com
rkindler@paulweiss.com
nbogdanovich@paulweiss.com
Either Party may, by notice to the other Party, change the address and identity of the Person to which such notices and copies of such notices are to be given. Each Party agrees that nothing in
this Agreement shall affect the other Party’s right to serve process in any other manner permitted by Law.
Section 11.06 Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid, void or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the Transactions or Revelyst Transactions is not affected in any manner materially adverse to either Party. Upon any such determination, any such provision, to the extent determined to be invalid, void or unenforceable, shall be deemed replaced by a provision that such court determines is valid and enforceable and that comes closest to expressing the intention of the invalid, void or unenforceable provision.
Section 11.07 Expenses. Except as expressly set forth in this Agreement or in any other Transaction Document, all third-party fees, costs and expenses paid or incurred in connection with the Separation will be paid by the Party incurring such fees or expenses, whether or not the Closing is consummated, or as otherwise agreed by the Parties, provided that, for the avoidance of doubt, all such third-party fees, costs and expenses that remain unpaid as of the Closing shall be Transaction Expenses.
Section 11.08 Headings. The article, section and paragraph headings contained in this Agreement, including in the table of contents of this Agreement, are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
Section 11.09 Survival of Covenants. Except as expressly set forth in this Agreement, the covenants in this Agreement and the Liabilities for the breach of any obligations in this Agreement shall survive the Closing and shall remain in full force and effect.
Section 11.10 Waivers of Default. No failure or delay of any Party (or the applicable member of its Group) in exercising any right or remedy under this Agreement or any Ancillary Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. Waiver by any Party of any default by the other Party of any provision of this Agreement shall not be deemed a waiver by the waiving Party of any subsequent or other default.
Section 11.11 Remedies.
(a) Each Party acknowledges and agrees that irreparable harm for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that such Party does not fully and timely perform its obligations under this Agreement in accordance with their terms, including failing to take such actions as are required of such Party under this Agreement to consummate the transactions contemplated hereby. Each Party acknowledges and agrees that: (i) the other Party shall be entitled to receive an injunction, specific performance or
other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, without proof of damages and without posting a bond, this being in addition to any other remedy to which such other Party is entitled under this Agreement; and (ii) the right to obtain an injunction, specific performance or other equitable relief is an integral part of the transactions contemplated by this Agreement and without that right, neither of the Parties would have entered into this Agreement. Each Party agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that the other Party has an adequate remedy at Law, that an award of specific performance is not an appropriate remedy for any reason at Law or in equity or for any other reason.
(b) The pursuit of specific performance or other equitable remedies by either Party hereto will not be deemed an election of remedies or waiver of the right to pursue any other right or remedy (whether at Law or in equity) to which such Party may be entitled at any time. Any and all remedies herein expressly conferred upon a Party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by Law or equity upon such Party, and the exercise by a Party of any one remedy will not preclude the exercise at any time of any other remedy.
Section 11.12 No Admission of Liability. The allocation of Assets and Liabilities herein (including on the Schedules hereto) is solely for the purpose of allocating such Assets and Liabilities between Vista Outdoor and the other members of the Vista Outdoor Group, on the one hand, and Revelyst and the other members of the Revelyst Group, on the other hand, and is not intended as an admission of liability or responsibility for any alleged Liabilities vis-à-vis any third party, including with respect to the Liabilities of any non-wholly owned Subsidiary of Vista Outdoor or Revelyst.
Section 11.13 Amendments. No provisions of this Agreement shall be deemed waived, amended, supplemented or modified by any Party, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of each Party and, (x) prior to the Closing, is consented to in writing by an authorized representative of Parent (with such consent of Parent, solely with respect to any amendment, supplement or modification of Schedule 1.01(a) that would not result in new or increased Vista Outdoor Liabilities or new or increased Liabilities of Parent or any of its Affiliates, in each case, that are not subject to indemnification by Revelyst hereunder, not to be unreasonably withheld, conditioned or delayed) and (y) prior to the closing of the Revelyst Merger, is consented to in writing by an authorized representative of Olibre Parent.
Section 11.14 Interpretation. Words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include any other gender as the context requires. The terms “hereof”, “herein”, “herewith” and words of similar import, unless otherwise stated, shall be construed to refer to this Agreement as a whole (including all of the Annexes, Exhibits and Schedules hereto) and not to any particular provision of this Agreement. Article, Section, Annex, Exhibit or Schedule references are to the articles, sections, annexes, exhibits and schedules of or to this Agreement unless otherwise specified. Any capitalized terms used in any Schedule to this Agreement or to any Ancillary Agreement but not otherwise defined therein shall have the meaning as defined in this Agreement or the Ancillary Agreement to which such Schedule is attached, as applicable. Any definition of or reference to any agreement,
instrument or other document herein (including any reference herein to this Agreement) shall, unless otherwise stated, be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified from time to time (subject to any restrictions on such amendments, supplements or modifications set forth herein). Any definition of or reference to any Law shall be construed as referring to such Law as from time to time amended, restated, supplemented or otherwise modified (including by succession of comparable successor Laws), and all references to any statute shall be construed as referring to all rules, regulations, rulings and official interpretations promulgated or issued thereunder. The word “including” and words of similar import when used in this Agreement shall mean “including, without limitation,” unless otherwise specified. The word “or” shall not be exclusive. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if.” All references to “$” or dollar amounts are to the lawful currency of the United States of America. In the event that an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring either Party by virtue of the authorship of any provisions hereof. References herein to a day or number of days shall refer to calendar days, unless such reference is specifically to a “Business Day”, and the terms “year” and “years” shall refer to calendar years, unless such reference is specifically to a fiscal year. When calculating the period of time before which, within which or following which any act is to be done or step is to be taken pursuant to this Agreement, if the last day of such period is not a Business Day, the period shall end on or such act or step shall be required to be taken on or by, as applicable, the next succeeding Business Day. With respect to the determination of any period of time, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”.
[Signature Page Follows]
IN WITNESS WHEREOF, the Parties have caused this Amended and Restated Separation Agreement to be executed by their duly authorized representatives.
| | | | | | | | |
| VISTA OUTDOOR INC. |
| | |
| | |
| By | /s/ Jason Vanderbrink |
| Name: | Jason Vanderbrink |
| Title: | Co-Chief Executive Officer |
| | |
| | |
| REVELYST, INC. |
| | |
| | |
| By | /s/ Eric Nyman |
| Name: | Eric Nyman |
| Title: | Chief Executive Officer |
[Signature Page to Amended and Restated Separation Agreement]
| | | | | | | | | | | |
| Solely for purposes of consenting to the Amendment: | |
| | | |
| CSG ELEVATE II INC. | |
| | | |
| | | |
| By: | /s/ Ladislav Štorek | |
| | Name: Ladislav Štorek | |
| | Title: Officer | |
[Signature Page to Amended and Restated Separation Agreement]
Schedule 1.01(a)
Transaction Steps
[***]
Schedule 1.01(b)
Revelyst Accounts
[***]
Schedule 1.01(c)
Equity Interests
[***]
Schedule 1.01(d)
Revelyst Assets
[***]
Schedule 1.01(e)
Revelyst Balance Sheet
[***]
Schedule 1.01(f)
Revelyst Liabilities
[***]
Schedule 1.01(g)
Shared Contracts
[***]
Schedule 1.01(h)
Vista Outdoor Accounts
[***]
Schedule 1.01(i)
Vista Outdoor Retained Assets
[***]
Schedule 1.01(j)
Vista Outdoor Retained Liabilities
[***]
Schedule 2.03(b)
Surviving Intercompany Agreements
[***]
Schedule 2.06(k)(i)
Accounting Principles
[***]
Schedule 3.01(a)
Surviving Vista Outdoor Credit Support Instruments
[***]
Schedule 5.12(a)
Revelyst-Managed Actions
[***]
Schedule 5.12(b)
Vista Outdoor-Managed Actions
[***]
Attachment A
Revelyst IP
[***]
Attachment B
Revelyst Marks
[***]
News Release
For Immediate Release
| | | | | | | | |
| Investor Contact: | | Media Contact: |
| | |
| Tyler Lindwall | | Eric Smith |
| Phone: 612-704-0147 | | Phone: 720-772-0877 |
| E-mail: investor.relations@vistaoutdoor.com | | E-mail: media.relations@vistaoutdoor.com |
CSG Increases Purchase Price for The Kinetic Group to $2.225 Billion
SVP Transaction Contingent Upon Close of CSG Transaction
ANOKA, Minn– October 4, 2024 – Vista Outdoor Inc. (“Vista Outdoor” or “the Company”) (NYSE: VSTO) today announced it has entered into a definitive agreement with funds managed by Strategic Value Partners, LLC, and its affiliates (“SVP”), a global alternative investment firm with approximately $19 billion of assets under management, to sell Revelyst in an all-cash transaction based on an enterprise value of $1.125 billion (the “SVP Transaction”). In connection with the SVP Transaction, Vista Outdoor also entered into an amendment to the merger agreement with Czechoslovak Group a.s. (“CSG”) to acquire The Kinetic Group, increasing the purchase price for the Kinetic Group to $2.225 billion (the “CSG Transaction”).
The SVP Transaction is subject to the completion of the CSG Transaction. Together, the CSG Transaction and the SVP Transaction represent an enterprise value of $3.35 billion for Vista Outdoor and will deliver an estimated $45 per share in cash to Vista Outdoor stockholders.
“The Board has worked tirelessly to deliver maximum value to its stockholders, and we are pleased to have reached this agreement with SVP and CSG which helps us achieve that objective,” said Michael Callahan, Chairman of the Vista Outdoor Board of Directors. “The Board engaged in a thorough process to identify the best avenues to unlock value – and through these two separate, but contingent, transactions with SVP and CSG, we have identified a path that reflects the true strength and potential of both Revelyst and The Kinetic Group.”
David Geenberg, Head of SVP’s North American Corporate Investment Team, said, “We are strong believers in the Revelyst story and the potential of this business. With a portfolio of diverse, market-leading brands in the outdoor industry, Revelyst has an unparalleled opportunity to capture market share through its exceptional consumer focus and strengthen its platforms through its operational and supply chain enhancements. We are happy to be partnering with the strong leadership team at Revelyst to help unlock its full potential with SVP’s resources.”
“We look forward to creating long-term value at The Kinetic Group as part of the CSG portfolio,” said Michal Strnad, CEO and Owner of CSG. “The Kinetic Group has a deep heritage of delivering high-quality, innovative products and we will provide significant resources, investment and expertise to continue growing the business and serving its customers with leading ammunition products. We are confident CSG’s acquisition of the Kinetic Group is the best outcome for Vista Outdoor stockholders, employees of the Company and the American economy.”
Transaction Details
The SVP Transaction has been unanimously approved by the Board and is expected to close by January 2025, subject to the completion of the CSG Transaction, as well as the receipt of necessary regulatory approvals and other customary closing conditions. Vista Outdoor and CSG have received all regulatory approvals required under the merger agreement for the CSG Transaction and are prepared to close the CSG Transaction prior to the end of 2024, subject to receipt of stockholder approval and satisfaction of other customary closing conditions. CSG and Vista Outdoor have mutually agreed to extend the termination date of the CSG merger agreement to December 11, 2024.
At the closing of the CSG Transaction, CSG will pay the Company $2.225 billion, subject to certain purchase price adjustments, and Vista Outdoor stockholders will receive $25.75 in cash per Vista Outdoor share and one share of Revelyst common stock for each share of Vista Outdoor common stock. At the closing of the SVP Transaction, SVP will pay Revelyst stockholders an aggregate of $1.125 billion, subject to a net cash adjustment, representing an estimated $19.25 in cash per share of Revelyst common stock, based on current management estimates of expected net cash of Revelyst as of the closing of the SVP Transaction.
As part of the SVP Transaction and the CSG Transaction, Vista Outdoor, CSG and SVP have agreed to certain amendments to the separation agreement currently in place to separate the Kinetic Group and Revelyst. In addition, CSG will no longer be investing in Revelyst at the closing of the CSG Transaction.
In connection with the announcement of the SVP Transaction and the CSG Transaction, the Company will adjourn the special meeting of stockholders currently scheduled for October 9, 2024.
Additional details will be filed with the U.S. Securities and Exchange Commission.
Advisers
Morgan Stanley & Co. LLC is acting as sole financial adviser to Vista Outdoor and Cravath, Swaine & Moore LLP is acting as legal adviser to Vista Outdoor. Moelis & Company LLC is acting as sole financial adviser to the independent directors of Vista Outdoor and Gibson, Dunn & Crutcher LLP is acting as legal adviser to the independent directors of Vista Outdoor.
J.P. Morgan is acting as sole financial adviser to CSG with Clifford Chance LLP acting as legal adviser.
About Vista Outdoor Inc.
Vista Outdoor (NYSE: VSTO) is the parent company of more than three dozen renowned brands that design, manufacture and market sporting and outdoor products. Brands include Bushnell, CamelBak, Bushnell Golf, Foresight Sports, Fox Racing, Bell Helmets, Camp Chef, Giro, Simms Fishing, QuietKat, Stone Glacier, Federal Ammunition, Remington Ammunition and more. Our reporting segments, Outdoor Products and Sporting Products, provide consumers with a wide range of performance-driven, high-quality and innovative outdoor and sporting products. For news and information, visit our website at www.vistaoutdoor.com.
About SVP
SVP is a global alternative investment firm that focuses on special situations, private equity, opportunistic credit and financing opportunities. The firm uses a combination of sourcing, financial and operational expertise to unlock value in its portfolio companies. Today SVP manages approximately $19 billion in assets under management, and since inception, has invested more than $48 billion of capital, including more than $18 billion in Europe. The firm, established by Victor Khosla in 2001, has over 200 employees, including more than 100 investment professionals, across its main offices in Greenwich (CT) and London, and a presence in Tokyo. Learn more at www.svpglobal.com.
About CSG
The global industrial and technological group CSG, owned by Czech entrepreneur Michal Strnad, has key production facilities in the Czech Republic, Slovakia, Spain, Italy, India, the UK, and the U.S. and exports its products worldwide. CSG is continuously investing into the development of its companies while expanding in its core business areas. The Group includes, for example, the Czech truck manufacturer Tatra Trucks, the world's leading manufacturer of small caliber ammunition Fiocchi, and the Czech radar manufacturer Eldis. More than 10,000 employees work in the companies included in the CSG group and in their associated companies. In 2023, the Group's consolidated sales reached USD 1.73 billion. CSG's main fields of activity are the engineering, automotive, rail, aerospace, and defense industries and small caliber ammunition production. CSG's products can be found on all continents thanks to its strong export orientation.
CSG´s companies in Europe are major suppliers of tanks, artillery systems and high caliber ammunition for Ukraine which is co-financed also by the U.S. and other NATO member states.
Forward-Looking Statements
Some of the statements made and information contained in this press release, excluding historical information, are “forward-looking statements,” including those that discuss, among other things: Vista Outdoor Inc.’s (“Vista Outdoor”, “we”, “us” or “our”) plans, objectives, expectations, intentions, strategies, goals, outlook or other non-historical matters; projections with respect to future revenues, income, earnings per share or other financial measures for Vista Outdoor; and the assumptions that underlie these matters. The words “believe,” “expect,” “anticipate,” “intend,” “aim,” “should” and similar expressions are intended to identify such forward-looking statements. To the extent that any such information is forward-looking, it is intended to fit within the safe harbor for forward-looking information provided by the Private Securities Litigation Reform Act of 1995.
Numerous risks, uncertainties and other factors could cause our actual results to differ materially from the expectations described in such forward-looking statements, including the following: risks related to the previously announced transaction among Vista Outdoor, Revelyst, Inc., CSG Elevate II Inc., CSG Elevate III Inc. and CZECHOSLOVAK GROUP a.s. (the “CSG Transaction”) and risks related to the transaction among Vista Outdoor, Revelyst, Olibre LLC and Cabin Ridge, Inc. (the “Revelyst Transaction”) including (i) the failure to receive, on a timely basis or otherwise, the required approval of the CSG Transaction by our stockholders, (ii) the possibility that any or all of the various conditions to the consummation of the CSG Transaction or the Revelyst Transaction may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals), (iii) the possibility that competing offers or acquisition proposals may be made, (iv) the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement relating to the CSG Transaction or the Revelyst Transaction, including in circumstances which would require Vista Outdoor or Revelyst, as applicable, to pay a termination fee, (v) the effect of the announcement or pendency of the CSG Transaction or the Revelyst Transaction on our ability to attract, motivate or retain key executives and employees, our ability to maintain relationships with our customers, vendors, service providers and others with whom we do business, or our operating results and business generally, (vi) risks related to the CSG Transaction or the Revelyst Transaction diverting management’s attention from our ongoing business operations and (vii) that the CSG Transaction or the Revelyst Transaction may not achieve some or all of any anticipated benefits with respect to either business segment and that the CSG Transaction or the Revelyst Transaction may not be completed in accordance with our expected plans or anticipated timelines, or at all;; impacts from the COVID-19 pandemic on our operations, the operations of our customers and suppliers and general economic conditions; supplier capacity constraints, production or shipping disruptions or quality or price issues affecting our operating costs; the supply, availability and costs of raw materials and components; increases in commodity, energy, and production costs; seasonality and weather conditions; our ability to complete acquisitions, realize expected benefits from acquisitions and integrate acquired businesses; reductions in or unexpected changes in or our inability to accurately
forecast demand for ammunition, accessories, or other outdoor sports and recreation products; disruption in the service or significant increase in the cost of our primary delivery and shipping services for our products and components or a significant disruption at shipping ports; risks associated with diversification into new international and commercial markets, including regulatory compliance; our ability to take advantage of growth opportunities in international and commercial markets; our ability to obtain and maintain licenses to third-party technology; our ability to attract and retain key personnel; disruptions caused by catastrophic events; risks associated with our sales to significant retail customers, including unexpected cancellations, delays, and other changes to purchase orders; our competitive environment; our ability to adapt our products to changes in technology, the marketplace and customer preferences, including our ability to respond to shifting preferences of the end consumer from brick and mortar retail to online retail; our ability to maintain and enhance brand recognition and reputation; our association with the firearms industry, others’ use of social media to disseminate negative commentary about us, our products, and boycotts; the outcome of contingencies, including with respect to litigation and other proceedings relating to intellectual property, product liability, warranty liability, personal injury, and environmental remediation; our ability to comply with extensive federal, state and international laws, rules and regulations; changes in laws, rules and regulations relating to our business, such as federal and state ammunition regulations; risks associated with cybersecurity and other industrial and physical security threats; interest rate risk; changes in the current tariff structures; changes in tax rules or pronouncements; capital market volatility and the availability of financing; our debt covenants may limit our ability to complete acquisitions, incur debt, make investments, sell assets, merge or complete other significant transactions; foreign currency exchange rates and fluctuations in those rates; general economic and business conditions in the United States and our markets outside the United States, including as a result of the war in Ukraine and the imposition of sanctions on Russia, the conflict in the Gaza strip, the COVID-19 pandemic or another pandemic, conditions affecting employment levels, consumer confidence and spending, conditions in the retail environment, and other economic conditions affecting demand for our products and the financial health of our customers.
You are cautioned not to place undue reliance on any forward-looking statements we make, which are based only on information currently available to us and speak only as of the date hereof. A more detailed description of risk factors that may affect our operating results can be found in Part 1, Item 1A, Risk Factors, of our Annual Report on Form 10-K for fiscal year 2024, and in the filings we make with the SEC from time to time. We undertake no obligation to update any forward-looking statements, except as otherwise required by law.
No Offer or Solicitation
This communication is neither an offer to sell, nor a solicitation of an offer to buy any securities, the solicitation of any vote, consent or approval in any jurisdiction pursuant to or in connection with the CSG Transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.
Additional Information and Where to Find It
These materials may be deemed to be solicitation material in respect of the CSG Transaction. In connection with the CSG Transaction, Revelyst, a subsidiary of Vista Outdoor, filed with the SEC on January 16, 2024 a registration statement on Form S-4 in connection with the proposed issuance of shares of common stock of Revelyst to Vista Outdoor stockholders pursuant to the CSG Transaction, which Form S-4 includes a proxy statement of Vista Outdoor that also constitutes a prospectus of Revelyst (the “proxy statement/prospectus”). INVESTORS AND STOCKHOLDERS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE PROXY STATEMENT/PROSPECTUS AND ANY AMENDMENTS AND SUPPLEMENTS THERETO, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE CSG TRANSACTION, THE REVELYST TRANSACTION AND THE PARTIES TO EACH TRANSACTION. The registration statement was declared effective by the SEC
on March 22, 2024, and the definitive proxy statement/prospectus was mailed to each of our stockholders entitled to vote at the meeting relating to the approval of the CSG Transaction. Investors and stockholders may obtain the proxy statement/prospectus and any other documents free of charge through the SEC’s website at www.sec.gov. Copies of the documents filed with the SEC by Vista Outdoor are available free of charge on our website at www.vistaoutdoor.com.
Participants in Solicitation
Vista Outdoor, Revelyst, CSG Elevate II Inc., CSG Elevate III Inc. and CZECHOSLOVAK GROUP a.s. and their respective directors, executive officers and certain other members of management and employees, under SEC rules, may be deemed to be “participants” in the solicitation of proxies from our stockholders in respect of the CSG Transaction. Information about our directors and executive officers is set forth in our proxy statement on Schedule 14A for our 2024 Annual Meeting of Stockholders, which was filed with the SEC on July 24, 2024, and subsequent statements of changes in beneficial ownership on file with the SEC. These documents are available free of charge through the SEC’s website at www.sec.gov. Additional information regarding the interests of potential participants in the solicitation of proxies in connection with the CSG Transaction, which may, in some cases, be different than those of our stockholders generally, is also included in the proxy statement/prospectus relating to the CSG Transaction.
| | |
Vista Outdoor Contacts |
|
Investor: |
Tyler Lindwall |
Phone: 612-704-0147 |
| Email: investor.relations@vistaoutdoor.com |
|
Media: |
Eric Smith |
Phone: 720-772-0877 |
Email: media.relations@vistaoutdoor.com |
|
SVP Contacts |
|
Todd Fogarty |
Kekst CNC |
Phone: 917-992-1170 |
Email: todd.fogarty@kekstcnc.com |
|
CSG Contacts |
|
Media Contacts: |
United States: |
Dan Zacchei / Joe Germani |
Longacre Square Partners |
dzacchei@longacresquare.com / JGermani@longacresquare.com |
|
CSG Corporate: |
Andrej Čírtek |
| +420 602 494 208 |
e-mail: andrej.cirtek@czechoslovakgroup.cz |
News Release
For Immediate Release
| | | | | | | | |
| Investor Contact: | | Media Contact: |
| |
| Tyler Lindwall | | Eric Smith |
| Phone: 612-704-0147 | | Phone: 720-772-0877 |
| E-mail: investor.relations@vistaoutdoor.com | | E-mail: media.relations@vistaoutdoor.com |
Revelyst Partners with Strategic Value Partners to Accelerate Growth
SVP’s Acquisition of Vista Outdoor’s Revelyst Segment for $1.125 Billion Expected to Bring New Opportunities through Significant Investment and Expanded Resources
Contingent Upon Close of Vista Outdoor's Transaction with CSG, Which is Pending Stockholder Approval
ANOKA, Minn. and GREENWICH, Conn. – October 4, 2024 – Revelyst, a collective of world-class maker brands that design and manufacture performance gear and precision technologies and a segment of Vista Outdoor Inc. (NYSE: VSTO), and Strategic Value Partners, LLC, (together with its affiliates, “SVP” or the “firm”), a global alternative investment firm with approximately $19 billion of assets under management, today announced that they have entered into an agreement under which SVP-managed funds will acquire Revelyst in an all-cash transaction based on an enterprise value of $1.125 billion. The transaction is expected to close by January 2025, subject to the completion of the $2.225 billion CSG Transaction (separate press release), as well as the receipt of necessary regulatory approvals and other customary closing conditions.
Revelyst’s world-renowned, category-defining maker brands are known for their meticulous craftsmanship and steadfast obsession with creating products and technologies that support consumers in a wide range of pursuits. The company’s purpose is to harness this collective expertise and cross-collaboration to pursue new innovations that redefine what is humanly possible in the outdoors. Revelyst’s power brands include Foresight Sports, Bushnell Golf, Fox, Bell, Giro, CamelBak, Bushnell and Simms Fishing.
After consolidating its real estate footprint in the past year, Revelyst operates three platforms: Revelyst Adventure Sports in Irvine, Calif.; Revelyst Outdoor Performance in Bozeman, Mont.; and Revelyst Precision Sports Technology in San Diego. That consolidation was part of the company’s ongoing GEAR Up transformation initiative in which Revelyst is working to unlock its potential by directing resources to better meet consumer demand, synergizing and prioritizing strength in supply chain and doubling down on the equity and innovation of the company’s industry-leading brands.
The acquisition by SVP will position Revelyst to continue to capitalize on the increasing demand for outdoor activities and gear by leveraging Revelyst’s strong market presence and ability to drive long-term growth and profitability. The strategic partnership is expected to allow Revelyst to unlock new opportunities and propel margin expansion across its integrated international house of brands.
David Geenberg, Head of North American Corporate Investments at SVP, said, “We look forward to working with Eric Nyman and the rest of the team leading this world-class outdoor gear and technology business. For almost a year, we closely followed Revelyst’s progress with this complex transaction. During that time, Revelyst has gained share through a difficult period for consumer spending thanks to the
strength of its leadership, its employees, and efforts like GEAR UP. With this investment, we plan to put SVP’s full operating resources and network behind Revelyst to help accelerate the success of this market leader.”
“We are excited to partner with SVP and believe this acquisition is a positive step for Revelyst’s future,” said Revelyst CEO Eric Nyman. “As I reflect on the last year, I am incredibly appreciative of our management team, our employees and our maker community for getting us here. We couldn’t have done this without everyone’s contribution. I believe the best is yet to come for Revelyst and for our customers, suppliers and retail partners. This partnership with SVP is going to make us a stronger company and afford us more opportunities to innovate and deliver top-tier products to outdoor enthusiasts while enhancing our market leadership in the outdoor recreation industry.”
Goldman Sachs & Co. LLC is acting as sole financial adviser to SVP and Paul, Weiss, Rifkind, Wharton & Garrison LLP is providing legal counsel.
About Revelyst
Revelyst, a segment of Vista Outdoor Inc. (NYSE: VSTO), is a collective of world-class maker brands that design and manufacture performance gear and precision technologies. Our category-defining brands leverage meticulous craftsmanship and cross-collaboration to pursue new innovations that redefine what is humanly possible in the outdoors. Portfolio brands include Foresight Sports, Bushnell Golf, Fox, Bell, Giro, CamelBak, Bushnell, Simms Fishing and more. For more information, visit our website at www.revelyst.com.
About SVP
SVP is a global alternative investment firm that focuses on special situations, private equity, opportunistic credit and financing opportunities. The firm uses a combination of sourcing, financial and operational expertise to unlock value in its portfolio companies. Today SVP manages approximately $19 billion in assets under management, and since inception, has invested more than $48 billion of capital, including more than $18 billion in Europe. The firm, established by Victor Khosla in 2001, has over 200 employees, including more than 100 investment professionals, across its main offices in Greenwich (CT) and London, and a presence in Tokyo. Learn more at www.svpglobal.com.
Forward-Looking Statements
Some of the statements made and information contained in this press release, excluding historical information, are “forward-looking statements,” including those that discuss, among other things: Revelyst’s (“Revelyst”, “we”, “us” or “our”) plans, objectives, expectations, intentions, strategies, goals, outlook or other non-historical matters; projections with respect to future revenues, income, earnings per share or other financial measures for Revelyst; and the assumptions that underlie these matters. The words “believe,” “expect,” “anticipate,” “intend,” “aim,” “should” and similar expressions are intended to identify such forward-looking statements. To the extent that any such information is forward-looking, it is intended to fit within the safe harbor for forward-looking information provided by the Private Securities Litigation Reform Act of 1995.
Numerous risks, uncertainties and other factors could cause our actual results to differ materially from the expectations described in such forward-looking statements, including the following: risks related to the previously announced transaction among Vista Outdoor, Revelyst, Inc., CSG Elevate II Inc., CSG Elevate III Inc. and CZECHOSLOVAK GROUP a.s. (the “CSG Transaction”) and risks related to the transaction among Vista Outdoor, Revelyst, Olibre LLC and Cabin Ridge, Inc. (the “Revelyst Transaction”) including (i) the failure to receive, on a timely basis or otherwise, the required approval of the CSG Transaction by Vista Outdoor’s stockholders, (ii) the possibility that any or all of the various conditions to the consummation of the CSG Transaction or the Revelyst Transaction may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals), (iii) the possibility that competing offers or acquisition proposals may be made, (iv) the occurrence of any event, change or other
circumstance that could give rise to the termination of the merger agreement relating to the CSG Transaction or the Revelyst Transaction, including in circumstances which would require Vista Outdoor or Revelyst, as applicable, to pay a termination fee, (v) the effect of the announcement or pendency of the CSG Transaction or the Revelyst Transaction on and Vista Outdoor’s ability to attract, motivate or retain key executives and employees, our ability to maintain relationships with our customers, vendors, service providers and others with whom we do business, or our operating results and business generally, (vi) risks related to the CSG Transaction or the Revelyst Transaction diverting management’s attention from our ongoing business operations and (vii) that the CSG Transaction or the Revelyst Transaction may not achieve some or all of any anticipated benefits with respect to either business segment and that the CSG Transaction or the Revelyst Transaction may not be completed in accordance with our expected plans or anticipated timelines, or at all;; impacts from the COVID-19 pandemic on our operations, the operations of our customers and suppliers and general economic conditions; our ability to successfully implement the acquisition component of Revelyst’s strategic leverage strategy, particularly if Revelyst is unable to raise the capital necessary to finance acquisitions; our ability to make the changes necessary to operate as an independent, publicly traded company; supplier capacity constraints, supplier production disruptions, supplier quality issues; the supply, availability and costs of raw materials and components; increases in commodity, energy, and production costs; seasonality and weather conditions; the impacts of climate change on our supply chain, product costs and consumer behavior; reductions in or unexpected changes in or our inability to accurately forecast demand for ammunition, accessories, or other outdoor sports and recreation products; impairment related to our goodwill and intangible assets could negatively impact our results of operations and parent company equity; disruption in the service or significant increase in the cost of our primary delivery and shipping services for our products and components or a significant disruption at shipping ports; risks associated with diversification into new international and commercial markets, including regulatory compliance; our ability to take advantage of growth opportunities in international and commercial markets; our ability to obtain and maintain licenses to third-party technology; our ability to attract and retain key personnel; disruptions caused by catastrophic events; risks associated with our sales to significant retailers and distributors, including unexpected cancellations, delays, changes to purchase orders; insolvency or credit problems; our competitive environment; risk associated with retailer or distributor insolvency, credit problems or other financial difficulties; our ability to adapt our products to changes in technology, the marketplace and customer preferences, including our ability to respond to shifting preferences of the end consumer from brick and mortar retail to online retail; our ability to expand our e-commerce business; our ability to maintain and enhance brand recognition and reputation; others’ use of social media to disseminate negative commentary about us, our products, and boycotts; the outcome of contingencies, including with respect to litigation and other proceedings relating to intellectual property, product liability, warranty liability, personal injury, and environmental remediation; our ability to comply with extensive federal, state and international laws, rules and regulations and any changes thereto, including the expectations with respect to climate change and other Environmental, Social and Governance matters and the additional cost associated therewith; risks associated with cybersecurity and other industrial and physical security threats; failure to comply with data privacy and security laws and regulations; interest rate risk; changes in the current tariff structures; changes in tax rules or pronouncements; capital market volatility and the availability of financing; foreign currency exchange rates and fluctuations in those rates; general economic and business conditions in the United States and our markets outside the United States, including as a result of the war in Ukraine and the imposition of sanctions on Russia, the conflict in the Gaza strip, the COVID-19 pandemic or another pandemic, conditions affecting employment levels, consumer confidence and spending, conditions in the retail environment, and other economic conditions affecting demand for our products and the financial health of our customers; and risks relating to the market for Revelyst common stock.
You are cautioned not to place undue reliance on any forward-looking statements we make, which are based only on information currently available to us and speak only as of the date hereof. A more detailed description of risk factors that may affect our operating results can be found in Part 1, Item 1A, Risk Factors, of our Annual Report on Form 10-K for fiscal year 2024, and in the filings we make with the SEC from time to time. We undertake no obligation to update any forward-looking statements, except as otherwise required by law.
No Offer or Solicitation
This communication is neither an offer to sell, nor a solicitation of an offer to buy any securities, the solicitation of any vote, consent or approval in any jurisdiction pursuant to or in connection with the CSG Transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.
Additional Information and Where to Find It
These materials may be deemed to be solicitation material in respect of the CSG Transaction. In connection with the CSG Transaction, Revelyst, a subsidiary of Vista Outdoor, filed with the SEC on January 16, 2024 a registration statement on Form S-4 in connection with the proposed issuance of shares of common stock of Revelyst to Vista Outdoor stockholders pursuant to the CSG Transaction, which Form S-4 includes a proxy statement of Vista Outdoor that also constitutes a prospectus of Revelyst (the “proxy statement/prospectus”). INVESTORS AND STOCKHOLDERS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE PROXY STATEMENT/PROSPECTUS AND ANY AMENDMENTS AND SUPPLEMENTS THERETO, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE CSG TRANSACTION, THE REVELYST TRANSACTION AND THE PARTIES TO EACH TRANSACTION. The registration statement was declared effective by the SEC on March 22, 2024, and the definitive proxy statement/prospectus was mailed to each Vista Outdoor stockholder entitled to vote at the meeting relating to the approval of the CSG Transaction. Investors and stockholders may obtain the proxy statement/prospectus and any other documents free of charge through the SEC’s website at www.sec.gov.
Participants in Solicitation
Vista Outdoor, Revelyst, CSG Elevate II Inc., CSG Elevate III Inc. and CZECHOSLOVAK GROUP a.s. and their respective directors, executive officers and certain other members of management and employees, under SEC rules, may be deemed to be “participants” in the solicitation of proxies from our stockholders in respect of the CSG Transaction. Information about our directors and executive officers is set forth in our Form 10-K/A, which was filed with the SEC on July 29, 2024. These documents are available free of charge through the SEC’s website at www.sec.gov. Additional information regarding the interests of potential participants in the solicitation of proxies in connection with the CSG Transaction, which may, in some cases, be different than those of our stockholders generally, is also included in the proxy statement/prospectus relating to the CSG Transaction.
Revelyst Contacts
Investor Contact:
Tyler Lindwall
Phone: 612-704-0147
Email: investor.relations@vistaoutdoor.com
Media Contact:
Eric Smith
Phone: 720-772-0877
Email: media.relations@revelyst.com
SVP Contact
Todd Fogarty
Kekst CNC
Phone: 917-992-1170
Email: todd.fogarty@kekstcnc.com
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